AIM INVESTMENT FUNDS
485APOS, 1998-08-26
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<PAGE>   1
   
    As filed with the Securities and Exchange Commission on August 26, 1998
    
                                              1933 Act Registration No. 33-19338
                                             1940 Act Registration No. 811-05426

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933             X
                                                                   ---
         Pre-Effective Amendment No.  __                           
                                                                   ---
         Post-Effective Amendment No. 55                            X
                                                                   ---
    

                                     and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940     X
                                                                   ---
   
         Amendment No. 56                                           X
                                                                   ---
    

                        (Check appropriate box or boxes.)

                           AIM INVESTMENT FUNDS, INC.
               --------------------------------------------------
               (Exact name of Registrant as Specified in Charter)

   
                 11 Greenway Plaza, Suite 100, Houston, TX 77046
               ---------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)
    

       Registrant's Telephone Number, including Area Code: (713) 626-1919
                                                           ---------------
                                    Copy to:

   
<TABLE>

<S>                                  <C>                                   <C>
Michael A. Silver, Esq.                Samuel D. Sirko, Esq.                Arthur J. Brown, Esq.
INVESCO (NY), Inc.                     A I M Advisors, Inc.                 R. Darrell Mounts, Esq.
50 California Street, 27th Floor       11 Greenway Plaza, Suite 100         Kirkpatrick & Lockhart LLP
San Francisco, CA 94111                Houston, Texas 77046                 1800 Massachusetts Avenue, N.W.,
(Name and Address of Agent for                                              2nd Floor
 Service)                                                                   Washington, D.C. 20036

Approximate Date of Proposed Public Offering:                 As soon as practicable after the effective date of
                                                              this Amendment
</TABLE>

It is proposed that this filing will become effective (check appropriate box):

             immediately upon filing pursuant to paragraph (b)
      ---
             on (date), pursuant to paragraph (b)
      ---
             60 days after filing pursuant to paragraph (a)(1) 
      ---
       X     on September 8, 1998, pursuant to paragraph (a)(1) 
      ---    
             75 days after filing pursuant to paragraph (a)(2) 
      ---    
             on (date) pursuant to paragraph (a)(2)
      ---

If appropriate, check the following box:

             This post-effective amendment designates a new effective date for a
      ---    previously filed post-effective amendment.

Title of Securities Being Registered: Shares of Common Stock

     Certain Series of the AIM Investment Funds, Inc. are "feeder funds" in a
"master/feeder" fund arrangement. This Post-Effective Amendment No. 55 includes
manually executed signature pages for two master trusts, Global Investment
Portfolio and Global High Income Portfolio.
    

   
Pursuant to Rule 414 under the Securities Act of 1933 (the "Securities Act") 
by this amendment to the registration statement on Form N-1A of AIM Investment
Funds, Inc., a Maryland corporation, the Registrant adopts, effective
September 8, 1998, the Registration Statement of such corporation under the
Securities Act and Notification of Registration and Registration Statement of
such corporation under the Investment Company Act of 1940.
    


<PAGE>   2
                           AIM INVESTMENT FUNDS, INC.
                      CONTENTS OF POST-EFFECTIVE AMENDMENT
   
THIS POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT OF AIM INVESTMENT
FUNDS, INC. CONTAINS THE FOLLOWING DOCUMENTS:


Facing Sheet
Contents of Post-Effective Amendment
Cross-Reference Sheet

Part A             -   Prospectuses - Class A and Class B
                       -     AIM Developing Markets Fund
                       -     AIM Emerging Markets Fund
                       -     AIM Global Consumer Products and Services Fund
                       -     AIM Global Financial Services Fund
                       -     AIM Global Government Income Fund
                       -     AIM Global Growth & Income Fund
                       -     AIM Global Health Care Fund
                       -     AIM Emerging Markets Debt Fund
                       -     AIM Global Infrastructure Fund
                       -     AIM Global Resources Fund
                       -     AIM Global Telecommunications Fund
                       -     AIM Latin American Growth Fund
                       -     AIM Strategic Income Fund
                   -   Prospectuses - Advisor Class
                       -     AIM Developing Markets Fund
                       -     AIM Emerging Markets Fund
                       -     AIM Global Consumer Products and Services Fund
                       -     AIM Global Financial Services Fund
                       -     AIM Global Government Income Fund
                       -     AIM Global Growth & Income Fund
                       -     AIM Global Health Care Fund
                       -     AIM Emerging Markets Debt Fund
                       -     AIM Global Infrastructure Fund
                       -     AIM Global Resources Fund
                       -     AIM Global Telecommunications Fund
                       -     AIM Latin American Growth Fund
                       -     AIM Strategic Income Fund

Part B             -   Statements of Additional Information - Class A and 
                       Class B
                       -     AIM Developing Markets Fund, AIM Emerging Markets 
                             Fund and AIM Latin American Growth Fund
                       -     AIM Global Theme Funds: AIM Global Financial 
                             Services Fund, AIM Global Infrastructure Fund, AIM 
                             Global Resources Fund, AIM Global Consumer Products
                             and Services Fund, AIM Global Health Care Fund and 
                             AIM Global Telecommunications Fund
                       -     AIM Global Government Income Fund, AIM Strategic 
                             Income Fund, AIM Emerging Markets Debt Fund
                             and AIM Global Growth & Income Fund

                   -   Statements of Additional Information - Advisor Class
                       -     AIM Developing Markets Fund, AIM Emerging Markets 
                             Fund and AIM Latin American Growth Fund
                       -     AIM Global Theme Funds: AIM Global Financial
                             Services Fund, AIM Global Infrastructure Fund, AIM 
                             Global Resources Fund, AIM Global Consumer Products
                             and Services Fund, AIM Global Health Care Fund and 
                             AIM Global Telecommunications Fund
                       -     AIM Global Government Income Fund, AIM Strategic 
                             Income Fund, AIM Emerging Markets Debt Fund
                             and AIM Global Growth & Income Fund

Part C             -   Other Information
Signature Pages
                       -     AIM Investment Funds (a Delaware business trust)
                       -     AIM Investment Funds, Inc. (a Maryland corporation)
                       -     Global Investment Portfolio
                       -     Global High Income Portfolio
Exhibits
    

<PAGE>   3





   
                           AIM INVESTMENT FUNDS, INC.
                             CROSS-REFERENCE SHEET
                           (as required by Rule 495)

<TABLE>
<S>               <C> 
N-1A ITEM NO.                                                                                         PROSPECTUS LOCATION
- -------------                                                                                         -------------------
I.  CLASS A AND CLASS B
PART A
    Item 1        Cover Page...................................................................................Cover Page
    Item 2.       Synopsis............................................................Summary; Table of Fees and Expenses
    Item 3.       Condensed Financial Information....................................................Financial Highlights
    Item 4.       General Description of Registrant................Cover Page; Summary; Investment Program; Risk Factors;
                                                               Management; Organization of the Trust; General Information
    Item 5.       Management of the Fund..................................................Management; General Information
    Item 5A.      Management's Discussion of Fund Performance...........................................See Annual Report
    Item 6.       Capital Stock and Other Securities..........Summary; Organization of the Trust; How to Purchase Shares;
                                                            Dividends, Distributions and Tax Matters; General Information
    Item 7.       Purchase of Securities Being Offered......................Management; How to Purchase Shares; Terms and
                                                                  Conditions of Purchase of the AIM Funds; Special Plans;
                                                                     Exchange Privilege; Determination of Net Asset Value
    Item 8.       Redemption or Repurchase...........................................Special Plans; How to Redeem Shares;
                                                                                         Determination of Net Asset Value
    Item 9.       Pending Legal Proceedings................................................................Not applicable


II. ADVISOR CLASS                                                                                     PROSPECTUS LOCATION
                                                                                                      -------------------
PART A
    Item 1        Cover Page...................................................................................Cover Page
    Item 2.       Synopsis............................................................Summary; Table of Fees and Expenses
    Item 3.       Condensed Financial Information....................................................Financial Highlights
    Item 4.       General Description of Registrant................Cover Page; Summary; Investment Program; Risk Factors;
                                                               Management; Organization of the Trust; General Information
    Item 5.       Management of the Fund..................................................Management; General Information
    Item 5A.      Management's Discussion of Fund Performance...........................................See Annual Report
    Item 6.       Capital Stock and Other Securities..........Summary; Organization of the Trust; How to Purchase Shares;
                                                            Dividends, Distributions and Tax Matters; General Information
    Item 7.       Purchase of Securities Being Offered......................Management; How to Purchase Shares; Terms and
                                                                  Conditions of Purchase of the AIM Funds; Special Plans;
                                                                     Exchange Privilege; Determination of Net Asset Value
    Item 8.       Redemption or Repurchase...........................................Special Plans; How to Redeem Shares;
                                                                                         Determination of Net Asset Value
    Item 9.       Pending Legal Proceedings................................................................Not applicable


III.              CLASS A AND CLASS B                                        STATEMENT OF ADDITIONAL INFORMATION LOCATION
                                                                             --------------------------------------------
PART B
    Item 10.      Cover Page...................................................................................Cover Page
    Item 11.      Table of Contents.....................................................................Table of Contents
    Item 12.      General Information and History...........................Cover Page; Introduction; General Information
                                                                               About the Funds; Miscellaneous Information
    Item 13.      Investment Objectives and Policies.......................Investment Objectives and Policies; Investment
                                                                          Limitations; Options and Futures; Risk Factors;
                                                                                      Execution of Portfolio Transactions
    Item 14.      Management of the Funds......................................................................Management
    Item 15.      Control Persons and Principal Holders of Securities...........................Miscellaneous Information
    Item 16.      Investment Advisory and Other Services............................Management; Miscellaneous Information
    Item 17.      Brokerage Allocation and Other Practices............................Execution of Portfolio Transactions
    Item 18.      Capital Stock and Other Securities..................................General Information About the Funds
</TABLE>
    
<PAGE>   4
   
<TABLE>
<S>               <C> 
    Item 19.      Purchase, Redemption and Pricing of
                  Securities Being Offered.............................Net Asset Value Determination; How to Purchase and
                                                                    Redeem Shares; Programs and Services For Shareholders
    Item 20.      Tax Status........................................................................................Taxes
    Item 21.      Underwriters.................................................................................Management
    Item 22.      Calculation of Performance Data......................................................Investment Results
    Item 23.      Financial Statements...............................................................Financial Statements


IV. ADVISOR CLASS                                                            STATEMENT OF ADDITIONAL INFORMATION LOCATION
                                                                             --------------------------------------------
PART B
    Item 10.      Cover Page...................................................................................Cover Page
    Item 11.      Table of Contents.....................................................................Table of Contents
    Item 12.      General Information and History...........................Cover Page; Introduction; General Information
                                                                               About the Funds; Miscellaneous Information
    Item 13.      Investment Objectives and Policies.......................Investment Objectives and Policies; Investment
                                                                          Limitations; Options and Futures; Risk Factors;
                                                                                      Execution of Portfolio Transactions
    Item 14.      Management of the Funds......................................................................Management
    Item 15.      Control Persons and Principal Holders of Securities...........................Miscellaneous Information
    Item 16.      Investment Advisory and Other Services............................Management; Miscellaneous Information
    Item 17.      Brokerage Allocation and Other Practices............................Execution of Portfolio Transactions
    Item 18.      Capital Stock and Other Securities..................................General Information About the Funds
    Item 19.      Purchase, Redemption and Pricing of
                  Securities Being Offered.............................Net Asset Value Determination; How to Purchase and
                                                                    Redeem Shares; Programs and Services For Shareholders
    Item 20.      Tax Status........................................................................................Taxes
    Item 21.      Underwriters.................................................................................Management
    Item 22.      Calculation of Performance Data......................................................Investment Results
    Item 23.      Financial Statements...............................................................Financial Statements


PART C

    Information required to be included in Part C is set forth under the appropriate item, so numbered, in Part C to
    this Registration Statement.
</TABLE>
    





<PAGE>   5
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
   
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
    
 
   
CLASS A AND CLASS B SHARES OF
    
 
   
AIM DEVELOPING MARKETS FUND
    
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
   
PROSPECTUS
    
   
SEPTEMBER 8, 1998
    
 
   
This Prospectus contains information about AIM DEVELOPING MARKETS FUND (the
"Fund"), which is one of several series investment portfolios comprising AIM
Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a non-diversified portfolio which primarily seeks long-
term capital appreciation. Its secondary investment objective is income, to the
extent consistent with seeking capital appreciation. The Fund normally invests
substantially all of its assets in issuers in the developing (or "emerging")
markets of Asia, Europe, Latin America and elsewhere. A majority of the Fund's
assets ordinarily is invested in emerging market equity securities. The Fund
also invests in emerging market debt securities, which are selected based on
their potential to provide a combination of capital appreciation and current
income.
    
 
The Fund is designed for long-term investors and not as a trading vehicle. The
Fund does not represent a complete investment program, nor is it suitable for
all investors. The Fund may invest significantly in equity and high yield, high
risk ("lower quality") debt securities that are predominantly speculative.
Investments of this type are subject to a greater risk of loss of principal and
interest. The Fund's investments in securities of issuers in developing markets
involves special considerations and risks that are not typically associated with
investments in securities of issuers in the United States or in other more
established markets. Investors should carefully assess the risks associated with
an investment in the Fund.
 
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information dated
September 8, 1998 has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   6
 
- --------------------------------------------------------------------------------
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     6
  Investment Program...................     6
  Risk Factors.........................    10
  Management...........................    14
  Organization of the Trust............    16
    
   
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  Introduction to The AIM Family of
     Funds.............................   A-1
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-9
  Exchange Privilege...................  A-12
  How to Redeem Shares.................  A-14
  Determination of Net Asset Value.....  A-19
  Dividends, Distributions and Tax
     Matters...........................  A-19
  General Information..................  A-23
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
   
  The Fund is a non-diversified series of the Trust.
    
 
  INVESTMENT OBJECTIVES. The Fund's primary investment objective is long-term
capital appreciation; its secondary objective is income, to the extent
consistent with seeking capital appreciation.
 
  PRINCIPAL INVESTMENTS. The Fund normally invests a majority of its assets in
emerging market equity securities and also may invest in emerging market debt
securities.
 
   
  INVESTMENT MANAGERS. The Fund is managed by A I M Advisors, Inc. ("AIM") and
is sub-advised and sub-administered by INVESCO (NY), Inc. (the "Sub-advisor").
AIM and the Sub-advisor and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-advisor are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
AIM was organized in 1976 and, together with its subsidiaries, currently advises
approximately 90 investment company portfolios.
    
 
  PURCHASING SHARES. Investors may select Class A or Class B shares of the Fund
which are offered by this Prospectus at an offering price that reflects
differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds Sales Charges and Dealer Concessions." Pursuant to a
separate prospectus, the Fund also offers Advisor Class shares, which represent
interests in the Fund. The Advisor Class has different distribution
arrangements.
 
  CLASS A SHARES -- Shares are offered at net asset value plus any applicable
initial sales charge.
 
  CLASS B SHARES -- Shares are offered at net asset value without an initial
sales charge, and are subject to a maximum contingent deferred sales charge of
5% on certain redemptions made within six years from the date such shares were
purchased. Class B shares automatically convert to Class A shares of the Fund
eight years following the end of the calendar month in which a purchase was
made. Class B shares are subject to higher expenses than Class A shares.
 
  Initial investments in any class of shares must be at least $500 and
additional investments must be at least $50. The minimum initial investment is
modified for investments through tax-qualified retirement plans and accounts
initially established with an Automatic Investment Plan. The distributor of the
Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
 
  SUITABILITY FOR INVESTORS. An investor in Class A or Class B shares of the
Fund should consider the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the shares are expected to
be held, and other circumstances. Investors should consider whether, during the
anticipated life of their investment in the Fund, the accumulated distribution
fees and any applicable contingent deferred sales charges on Class B shares
prior to conversion would be less than the initial sales charge and accumulated
distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares.
To assist investors in making this determination, the table under the caption
"Table of Fees and Expenses" sets forth examples of the charges applicable to
each class of shares. Class A shares will normally be more beneficial than Class
B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase
of more than $250,000 for Class B shares.
 
                                        2
<PAGE>   7
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds"). Class
A and Class B shares of the Fund may be exchanged for shares of other funds in
The AIM Family of Funds in the manner and subject to the policies and charges
set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Class A shareholders of the Fund may redeem all or a portion
of their shares at net asset value on any business day, generally without
charge. A contingent deferred sales charge of 1% may apply to certain
redemptions where a purchase of more than $1 million is made at net asset value.
See "How to Redeem Shares -- Contingent Deferred Sales Charge Program for Large
Purchases."
 
  Class B shareholders of the Fund may redeem all or a portion of their shares
at net asset value on any business day, less a contingent deferred sales charge
for redemptions made within six years from the date such shares were purchased.
Class B shares redeemed after six years from the date such shares were purchased
will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters" and "Special Plans."
    
 
  RISK FACTORS. There is no assurance that the Fund will achieve its investment
objectives. The Fund's net asset value per share will fluctuate, reflecting
fluctuations in the market value of its portfolio holdings.
 
   
  The Fund invests in foreign securities. Investments in foreign securities
involve risks relating to political and economic developments abroad and the
differences between the regulations to which U.S. and foreign issuers are
subject. Individual foreign economies also may differ favorably or unfavorably
from the U.S. economy. Changes in foreign currency exchange rates will affect
the Fund's net asset value, earnings, and gains and losses realized on sales of
securities. Securities of foreign companies may be less liquid and their prices
more volatile than those of securities of comparable U.S. companies. The Fund
normally invests substantially all of its assets in issuers in emerging markets.
Such investments entail greater risks than investing in issuers in developed
markets. The Fund may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs. The value of debt
securities held by the Fund generally fluctuates inversely with interest rate
movements. Certain investment grade debt securities may possess speculative
qualities. The Fund may invest in below investment grade debt securities.
Investments of this type are subject to a greater risk of loss of principal and
interest. See "Investment Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   8
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Class A and Class B shares of the Fund are reflected in the following table(1):
 
<TABLE>
<CAPTION>
                                                              CLASS A   CLASS B
                                                              -------   -------
<S>                                                           <C>       <C>
Shareholder Transaction Costs(2):
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................   4.75%     None
  Sales charges on reinvested distributions to
     shareholders...........................................   None      None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........   None      5.00%
  Redemption Charges........................................   None      None
  Exchange Fees.............................................   None      None
Annual Fund Operating Expenses(3): (as a % of average net
  assets)
  Investment management and administration fees.............   0.98%     0.98%
  12b-1 distribution and service fees.......................   0.50%     1.00%
  Other expenses (after estimated reimbursements and
     waivers)...............................................   0.52%     0.52%
                                                               ----      ----
          Total Fund Operating Expenses.....................   2.00%     2.50%
                                                               ====      ====
</TABLE>
 
   
(1)  This table is intended to assist investors in understanding the various
     costs and expenses associated with investing in the Fund. Long-term
     shareholders may pay more than the economic equivalent of the maximum
     front-end sales charges permitted by National Association of Securities
     Dealers, Inc. rules regarding investment companies.
    
 
(2)  Sales charge waivers are available for Class A and Class B shares, and
     reduced sales charge purchase plans are available for Class A shares. The
     maximum 5% contingent deferred sales charge on Class B shares applies to
     redemptions during the first year after purchase; the charge generally
     declines by 1% annually thereafter, reaching zero after six years. See
     "Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
     Sales Charges."
 
   
(3)  Expenses are estimated based on the fees and expenses the Fund is expected
     to incur during its initial fiscal year as an open-end fund and AIM's
     undertaking to limit the Fund's expenses (exclusive of brokerage
     commissions, taxes, interest and extraordinary expenses) to the annual rate
     of 2.00% and 2.50% of the average daily net assets of the Fund's Class A
     shares and Class B shares, respectively. AIM has voluntarily agreed to
     continue this limitation through May 31, 2000. Without reimbursements and
     waivers, "Other expenses" and "Total Fund Operating Expenses" are estimated
     to be 0.65% and 2.13%, respectively, for Class A shares and 0.65% and
     2.63%, respectively, for Class B shares. "Other expenses" include custody,
     transfer agent, legal and audit fees and other operating expenses. See
     "Management" herein and in the Statement of Additional Information for more
     information.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                     1 YEAR   3 YEARS   5 YEARS   10 YEARS(3)
                                                     ------   -------   -------   -----------
<S>                                                  <C>      <C>       <C>       <C>
Class A Shares(1)..................................   $67      $108      $151        $270
Class B Shares:
  Assuming a complete redemption at end of
period(2)..........................................   $77      $111      $157        $274
  Assuming no redemption...........................   $26      $ 79      $135        $274
</TABLE>
    
 
   
(1)  Assumes payment of maximum sales charge by the investor.
    
 
   
(2)  Assumes deduction of the applicable contingent deferred sales charge.
    
 
   
(3)  For Class B shares, this number reflects the conversion to Class A shares
     eight years following the end of the calendar month in which a purchase was
     made.
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT EXPENSES, MAY
BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE ASSUMPTION IN THE EXAMPLE OF
A 5% ANNUAL RETURN ARE REQUIRED BY REGULATIONS OF THE SEC APPLICABLE TO ALL
MUTUAL FUNDS. THE 5% ANNUAL RETURN IS NOT A PREDICTION OF AND DOES NOT REPRESENT
THE FUND'S PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   9
 
- --------------------------------------------------------------------------------
 
   
FINANCIAL HIGHLIGHTS
    
   
  The table below provides condensed financial information concerning income and
capital changes for Class A and Class B shares of the Fund for the periods
shown. This information is supplemented by the financial statements and
accompanying notes appearing in the Statement of Additional Information. The
financial statements and notes, for the fiscal year ended October 31, 1997 and
the semi-annual period ended April 30, 1998 have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon is
also included in the Statement of Additional Information. The Predecessor Fund
was a closed-end investment company whose single class of shares traded on the
New York Stock Exchange ("NYSE"). On October 31, 1997, the Fund, which had no
previous operating history, acquired the assets and assumed the liabilities of
G.T. Global Developing Markets Fund, Inc. (the "Predecessor Fund"). On that
date, all shareholders of the Predecessor Fund received Class A shares of the
Fund. The fees and expenses of the Fund will differ from those of the
Predecessor Fund. The Fund's fiscal year end will be October 31, rather than
December 31, which was the Predecessor Fund's fiscal year end.
    
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
            (SUCCESSOR TO G.T. GLOBAL DEVELOPING MARKETS FUND, INC.)
   
    
 
   
<TABLE>
<CAPTION>
                                                                             CLASS A+                                  CLASS B++
                                              ----------------------------------------------------------------------   ----------
                                                                                                   JANUARY 11, 1994
                                              SIX MONTHS       TEN MONTHS        YEAR ENDED          (COMMENCEMENT     SIX MONTHS
                                                ENDED             ENDED         DECEMBER 31,       OF OPERATIONS) TO     ENDED
                                              APRIL 30,        OCTOBER 31,   -------------------     DECEMBER 31,      APRIL 30,
                                               1998(D)           1997(E)     1996(E)    1995(E)         1994(E)         1998(D)
                                              ----------       -----------   --------   --------   -----------------   ----------
<S>                                           <C>              <C>           <C>        <C>        <C>                 <C>
Per Share Operating Performance:
Net asset value, beginning of period.........  $  12.56         $  13.84     $ 11.60    $ 12.44        $  15.00         $  12.56
                                               --------         --------     --------   --------       --------         --------
Income from investment operations:
 Net investment income.......................      0.23*O           0.25        0.53       0.72            0.35             0.21*O
 Net realized and unrealized gain (loss) on
   investments...............................        --            (1.53)       2.19      (0.84)          (2.46)           (0.01)
                                               --------         --------     --------   --------       --------         --------
   Net increase (decrease) from investment
     operations..............................      0.23            (1.28)       2.72      (0.12)          (2.11)            0.20
                                               --------         --------     --------   --------       --------         --------
Redemption fees retained (Note 4)............      0.23               --          --         --              --             0.23
                                               --------         --------     --------   --------       --------         --------
Distributions to shareholders:
 From net investment income..................     (0.60)              --       (0.48)     (0.72)          (0.35)           (0.60)
 From net realized gain on investments.......        --               --          --         --           (0.10)              --
                                               --------         --------     --------   --------       --------         --------
   Total distributions.......................     (0.60)              --       (0.48)     (0.72)          (0.45)           (0.60)
                                               --------         --------     --------   --------       --------         --------
Net asset value, end of period...............  $  12.42         $  12.56     $ 13.84    $ 11.60        $  12.44         $  12.39
                                               ========         ========     ========   ========       ========         ========
Market value, end of period..................  $    N/A         $  11.81     $ 11.63    $  9.75            9.75
                                               ========         ========     ========   ========       ========         ========
   Total investment return (based on market
     value)..................................       N/A             1.62%(b)   24.18%      6.60%         (32.16)%(b)
   Total investment return (based on net
     asset value)............................      3.68%(b)(c)     (9.25)%(b)   23.59%    (0.95)%        (14.07)%(b)     3.36%(b)(c)
Ratios and supplemental data:
Net assets, end of period (in 000's).........  $208,169         $457,379     $504,012   $422,348       $452,872         $    207
Ratio of net investment income to average net
 assets:
 With expense reductions and reimbursement...      3.06%(a)         2.03%(a)    4.07%      6.33%           2.75%(a)         2.32%(a)
 Without expense reductions and
   reimbursement.............................      2.56%(a)         1.95%(a)    4.04%      6.30%           2.75%(a)         1.82%(a)
Ratio of operating expenses to average net
 assets:
 With expense reductions and
   reimbursements............................      1.72%(a)         1.71%(a)    1.82%      1.77%           2.01%(a)         2.46%(a)
 Without expense reductions and
   reimbursement.............................      2.22%(a)         1.83%(a)    1.85%      1.80%           2.01%(a)         2.96%(a)
Ratio of interest expense to average net
 assets (Note 1)+++..........................      0.22%(a)          N/A         N/A        N/A             N/A             0.22%(a)
Portfolio turnover rate......................        99%(a)          184%(a)     138%        75%             56%              99%(a)
Average commission rate per share paid on
 portfolio transactions......................  $ 0.0017         $ 0.0023     $0.0022        N/A             N/A         $ 0.0017
</TABLE>
    
 
- ---------------
   
(a) Annualized.
    
   
(b) Not annualized.
    
   
(c) Total investment return does not include sales charges.
    
   
(d) These selected per share data were calculated based upon the average shares
    outstanding during the period.
    
   
(e) These financial highlights provide per share information of G.T. Global
    Developing Markets Fund, Inc. the Predecessor Fund (See Note 1 to Notes to
    Financial Statements) for the periods up to and including October 31, 1997.
    The fees and expenses of the Fund differ from those of the Predecessor Fund.
    
   
 *  Before reimbursement the net investment income per share would have been
    reduced by $0.03 for Class A, and Class B shares.
    
   
 O  Net investment income per share reflects an interest payment received from
    the conversion of Vnesheconombank loan agreements. Without such a payment
    net investment would have been $0.09 and $0.07 per share for Class A and B,
    respectively.
    
   
 +  All capital shares issued and outstanding October 31, 1997 were reclassified
    as Class A shares.
    
   
 ++ Commencing November 1, 1997, the Fund began offering Class B and Advisor
    Class shares.
    
   
+++ Portfolio turnover rate, average commission rate and ratio of interest
    expense to average net assets are calculated on the basis of the Fund as
    whole without distinguishing between the classes of shares issued.
    
   
N/A Not Applicable.
    
                                ---------------
 
   
<TABLE>
<CAPTION>
                                                                                          AVERAGE MONTHLY NUMBER   AVERAGE AMOUNT
                                                   AMOUNT OF DEBT     AVERAGE AMOUNT      OF REGISTRANT'S SHARES    OF DEBT PER
                                                   OUTSTANDING AT   OF DEBT OUTSTANDING        OUTSTANDING          SHARE DURING
YEAR ENDED                                         END OF PERIOD     DURING THE PERIOD      DURING THE PERIOD        THE PERIOD
- ----------                                         --------------   -------------------   ----------------------   --------------
<S>                                                <C>              <C>                   <C>                      <C>
Six Months ended April 30, 1998..................        $--            $3,299,756              21,283,681            $ 0.155
October 31, 1997.................................        $--            $  379,964              36,416,667            $0.0104
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed on a daily
basis.
    
 
                                        5
<PAGE>   10
 
- --------------------------------------------------------------------------------
 
   
PERFORMANCE
    
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return. Standardized total return
for Class A shares reflects the deduction of the Fund's maximum front-end sales
charge at the time of purchase. Standardized total return for Class B shares
reflects the deduction of the maximum applicable contingent deferred sales
charge on a redemption of shares held for the period.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVES. The Fund's primary investment objective is long-term
capital appreciation; its secondary objective is income, to the extent
consistent with seeking capital appreciation. The Fund normally invests
substantially all of its assets in issuers in the developing (or "emerging")
markets of Asia, Europe, Latin America and elsewhere. A majority of the Fund's
assets normally are invested in emerging market equity securities. The Fund may
invest in the following types of equity securities: common stock, preferred
stock, securities convertible into common stock, American Depositary Receipts,
Global Depositary Receipts, rights and warrants to acquire such securities and
substantially similar forms of equity with comparable risk characteristics. The
Fund may also invest in emerging market debt securities that will be selected
based on their potential to provide a combination of capital appreciation and
current income. There can be no assurance the Fund will achieve its investment
objectives.
    
 
   
  INVESTMENT POLICIES. For purposes of the Fund's operations, emerging markets
consist of all countries determined by the Sub-advisor to have developing or
emerging economies and markets. These countries generally include every country
in the world except the United States, Canada, Japan, Australia, New Zealand and
most countries located in Western Europe. See "Investment Objectives and
Policies" in the Statement of Additional Information for a complete list of all
the countries that the Fund does not currently consider to be emerging markets.
    
 
  For purposes of the Fund's policy of normally investing substantially all of
its assets in issuers in emerging markets, the Fund will consider investment in
the following emerging markets:
 
     Algeria
     Argentina
     Bolivia
     Botswana
     Brazil
     Bulgaria
     Chile
     China
     Colombia
     Costa Rica
     Cyprus
     Czech Republic
     Dominican Republic
     Ecuador
     Egypt
     El Salvador
     Finland
     Ghana
     Greece
     Hong Kong
     Hungary
     India
     Indonesia
     Israel
     Ivory Coast
     Jamaica
     Jordan
     Kazakhstan
     Kenya
     Lebanon
     Malaysia
     Mauritius
     Mexico
     Morocco
     Nicaragua
     Nigeria
     Oman
     Pakistan
     Panama
     Paraguay
     Peru
     Philippines
 
                                        6
<PAGE>   11
 
     Poland
     Portugal
     Republic of Slovakia
     Russia
     Singapore
     Slovenia
     South Africa
     South Korea
     Sri Lanka
     Swaziland
     Taiwan
     Thailand
     Turkey
     Ukraine
     Uruguay
     Venezuela
     Zambia
     Zimbabwe
 
  Although the Fund considers each of the above-listed countries eligible for
investment, it will not be invested in all such markets at all times. Moreover,
investing in some of those markets currently may not be desirable or feasible,
due to the lack of adequate custody arrangements for the Fund's assets, overly
burdensome repatriation and similar restrictions, the lack of organized and
liquid securities markets, unacceptable political risks or for other reasons.
 
   
  As used in this Prospectus, an issuer in an emerging market is an entity (1)
for which the principal securities trading market is an emerging market, as
defined above, (2) that (alone or on a consolidated basis) derives 50% or more
of its total revenues from business in emerging markets, provided that, in the
Sub-advisor's view, the value of such issuer's securities will tend to reflect
emerging market developments to a greater extent than developments elsewhere, or
(3) organized under the laws of, or with a principal office in, an emerging
market.
    
 
   
  In selecting investments, the Sub-advisor seeks to identify those countries
and industries where economic and political factors, including currency
movements, are likely to produce above-average growth rates over the long term.
The Sub-advisor seeks those emerging markets that have strongly developing
economies and in which the markets are becoming more sophisticated. The Sub-
advisor then invests in those companies in such countries and industries that it
believes are best positioned and managed to take advantage of these economic and
political factors. The Sub-advisor believes that the issuers of securities in
emerging markets often have sales and earnings growth rates that exceed those in
developed countries and that such growth rates may in turn be reflected in more
rapid share price appreciation.
    
 
   
  As opportunities to invest in securities in other emerging markets develop,
the Fund expects to expand and further broaden the group of emerging markets in
which it invests. In some cases, investments in debt securities could provide
the Fund with access to emerging markets in the early stages of their economic
development, when equity securities are not yet generally available or, in the
Sub-advisor's view, do not yet present an acceptable investment alternative.
While the Fund generally is not restricted in the portion of its assets that may
be invested in a single region, under normal conditions its assets will be
invested in issuers in at least four countries, and it will not invest more than
25% of its assets in issuers in one country. The Fund's holdings of any one
foreign currency together with securities denominated in or indexed to such
currency will not exceed 40% of its assets.
    
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
   
  INVESTMENTS IN DEBT SECURITIES. The Fund may invest up to 50% of its total
assets in the following types of emerging market debt securities: (1) debt
securities issued or guaranteed by governments, their agencies,
instrumentalities or political subdivisions, or by government owned, controlled
or sponsored entities, including central banks (collectively, "Sovereign Debt"),
including Brady Bonds; (2) interests in issuers organized and operated for the
purpose of restructuring the investment characteristics of Sovereign Debt; (3)
debt securities issued by banks and other business entities; and (4) debt
securities denominated in or indexed to the currencies of emerging markets. Debt
securities held by the Fund may take the form of bonds, notes, bills,
debentures, bank debt obligations, short-term paper, loan participations,
assignments and interests issued by entities organized and operated for the
purpose of restructuring the investment characteristics of any of the foregoing.
There is no requirement with respect to the maturity or duration of debt
securities in which the Fund may invest.
    
 
  There is no limitation on the percentage of the Fund's assets that may be
invested in debt securities that are rated below investment grade. Investment in
below investment grade debt securities involves a high degree of risk and can be
speculative. These debt securities are the equivalent of high yield, high risk
bonds, commonly known as "junk bonds." Debt securities in which the Fund will
invest may not be rated; if rated, it is expected that such ratings will be
below investment grade. See "Risk Factors -- Risks Associated with Debt
Securities" and "-- Risks Associated with Below Investment Grade Debt
Securities."
 
  The Fund may invest in "Brady Bonds," which are debt restructurings that
provide for the exchange of cash and loans for newly issued bonds. Brady Bonds
have been issued by the countries of Albania, Argentina, Brazil, Bulgaria, Costa
Rica, Dominican Republic, Ecuador, Ivory Coast, Jordan, Mexico, Nigeria, Panama,
Peru, Philippines, Poland, Uruguay, Venezuela and Vietnam, and are expected to
be issued by other emerging market countries. As of the date of this Prospectus,
the Fund is not aware of the occurrence of any payment defaults on Brady Bonds.
Investors should recognize, however, that Brady Bonds do not have a long payment
history. In addition, Brady Bonds are often rated below investment grade.
 
  The Fund may invest in either collateralized or uncollateralized Brady Bonds.
U.S. dollar-denominated collateralized Brady Bonds, which may be fixed rate par
bonds or floating rate discount bonds, are collateralized in full as to
principal by U.S. Treasury zero coupon bonds having the same maturity as the
bonds. Interest payments on such bonds generally are collateralized by cash or
securities in an amount that, in the case of fixed rate bonds, is equal to at
least one year of rolling interest payments or, in the case of floating rate
 
                                        7
<PAGE>   12
 
bonds, initially is equal to at least one year's rolling interest payments based
on the applicable interest rate at the time of issuance and is adjusted at
regular intervals thereafter.
 
  Capital appreciation in debt securities may arise as a result of a favorable
change in relative foreign exchange rates, relative interest rate levels and/or
the creditworthiness of issuers.
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy
for the Fund if it determines such a strategy to be warranted due to market,
economic or political conditions. Under a defensive strategy, the Fund may hold
cash (U.S. dollars, foreign currencies or multinational currency units such as
Euros) and/or invest any portion or all of its assets in high quality money
market instruments of U.S. or foreign issuers. In addition, for temporary
defensive purposes, most or all of the Fund's investments may be made in the
United States and denominated in U.S. dollars. To the extent the Fund adopts a
temporary defensive posture, it will not be invested so as to directly achieve
its investment objectives. In addition, pending investment of proceeds from new
sales of Fund shares or in order to meet ordinary daily cash needs, the Fund may
hold cash (U.S. dollars, foreign currencies or multinational currency units) and
may invest in foreign or domestic high quality money market instruments. For a
description of money market instruments, see "Temporary Defensive Strategies" in
the "Investment Objectives and Policies" section of the Statement of Additional
Information.
    
 
  BORROWING AND REVERSE REPURCHASE AGREEMENTS. In connection with meeting
requests for the redemption of Fund shares, the Fund may borrow from banks or
may borrow through reverse repurchase agreements. The Fund also may borrow up to
5% of its total assets for temporary or emergency purposes other than to meet
redemptions, but total borrowings may not exceed 33 1/3% of its total assets.
However, the Fund will not purchase securities while borrowings in excess of 5%
of its total assets are outstanding. Any borrowing by the Fund may cause greater
fluctuation in the value of its shares than would be the case if it did not
borrow.
 
  A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed-upon price that includes an interest component.
 
   
  SECURITIES LENDING. The Fund may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Fund to retain ownership of the securities loaned and, at the same time,
enhances the Fund's total return. The Fund limits its loans of portfolio
securities to an aggregate of 30% of the value of its total assets, measured at
the time any such loan is made. While a loan is outstanding, the borrower must
maintain with the Fund's custodian collateral consisting of cash, U.S.
government securities or certain irrevocable letters of credit equal to at least
100% of the value of the borrowed securities plus any accrued interest or such
other collateral as permitted by the Fund's investment program and regulatory
agencies, and as approved by the Board. The risks in lending portfolio
securities, as with other extensions of secured credit, consist of possible
delays in receiving additional collateral or in recovery of the securities and
possible loss of rights in the collateral if the borrower fails financially.
    
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. To attempt to increase
return, the Fund may write call options on securities. This strategy will be
employed only when, in the opinion of the Sub-advisor, the size of the premium
the Fund receives for writing the option is adequate to compensate it against
the risk that appreciation in the underlying security may not be fully realized
if the option is exercised. The Fund also is authorized to write put options to
attempt to enhance return, although it does not currently intend to do so.
    
 
  The Fund may also use forward currency contracts, futures contracts, options
on securities, options on currencies, options on indices and options on futures
contracts to attempt to hedge against the overall level of investment and
currency risk normally associated with its investments. These instruments are
often referred to as "derivatives," which may be defined as financial
instruments whose performance is derived, at least in part, from the performance
of another asset (such as a security, currency or an index of securities). The
Fund may enter into such instruments up to the full value of its portfolio
assets. See "Options, Futures and Currency Strategies" in the Statement of
Additional Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on such futures
contracts to hedge its portfolio against movements in exchange rates.
 
   
  Only a limited market, if any, currently exists for options and futures
transactions relating to currencies of most emerging markets, to securities
denominated in such currencies or to securities of issuers domiciled or
principally engaged in business in such emerging markets. To the extent that
such a market does not exist, the Sub-advisor may not be able to effectively
hedge its investment in such markets.
    
 
   
  In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-advisor intends to include in the
Fund's portfolio. The Fund also may purchase and sell put and call options on
stock indices to hedge against overall fluctuations in the securities markets or
in a specific market sector.
    
 
                                        8
<PAGE>   13
 
  Further, the Fund may sell index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general market or a specific market sector decline that could adversely affect
the Fund's portfolio. The Fund also may purchase index futures contracts and
purchase call options or write put options on such contracts to hedge against a
general market or market sector advance and thereby attempt to lessen the cost
of future securities acquisitions. Similarly, the Fund may use interest rate
futures contracts and options thereon to hedge the debt portion of its portfolio
against changes in the general level of interest rates.
 
   
  INVESTMENT IN OTHER INVESTMENT COMPANIES OR VEHICLES. The Fund may be able to
invest in certain countries solely or primarily through governmentally
authorized investment vehicles or companies, some of which may be investment
vehicles or companies that are advised by the Sub-advisor or its affiliates
("Affiliated Funds"). Pursuant to the Investment Company Act of 1940, as amended
(the "1940 Act"), the Fund generally may invest up to 10% of its total assets in
the aggregate in shares of other investment companies and up to 5% of its total
assets in any one investment company, as long as each investment does not
represent more than 3% of the outstanding voting stock of the acquired
investment company at the time of investment.
    
 
   
  Investment in other investment companies may involve the payment of
substantial premiums above the value of their portfolio securities and multiple
layering of fees and expenses and is subject to limitations under the 1940 Act
and market availability. The Fund does not intend to invest in other investment
companies unless, in the judgment of the Sub-advisor, the potential benefits of
such investment justify the payment of any applicable premium or sales charge.
As a shareholder in another investment company, the Fund would bear its ratable
share of that company's expenses, including its advisory and administration
fees. At the same time the Fund would continue to pay its own management fees
and other expenses. AIM and the Sub-advisor will waive their advisory fees to
the extent that the Fund invests in an Affiliated Fund.
    
 
   
  PRIVATIZATIONS. The governments in some emerging markets have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Fund in privatizations in appropriate
circumstances. In certain emerging markets, the ability of foreign entities such
as the Fund to participate in privatizations may be limited by local law or the
terms on which the Fund may be permitted to participate may be less advantageous
than those afforded local investors. There can be no assurance that governments
in emerging markets will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
    
 
  WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities and forward commitments only with the intention
of actually receiving or delivering the securities, as the case may be. No
income accrues on securities that have been purchased pursuant to a forward
commitment or on a when-issued basis prior to delivery to the Fund. If the Fund
disposes of the right to acquire a when-issued security prior to its acquisition
or disposes of its right to deliver or receive against a forward commitment, it
may incur a gain or loss. At the time the Fund enters into a transaction on a
when-issued or forward commitment basis, the Fund will segregate cash or liquid
securities equal to the value of the when-issued or forward commitment
securities with its custodian bank and will mark to market daily such assets.
There is a risk that the securities may not be delivered and that the Fund may
incur a loss.
 
  LOAN PARTICIPATIONS AND ASSIGNMENTS. The Fund may invest in fixed and floating
rate loans ("Loans") arranged through private negotiations between a foreign
entity and one or more financial institutions ("Lenders"). The majority of the
Fund's investments in Loans in emerging markets is expected to be in the form of
participations in Loans ("Participations") and assignments of portions of Loans
from third parties ("Assignments"). Participations typically will result in the
Fund having a contractual relationship only with the Lender, not with the
borrower. The Fund will have the right to receive payments of principal,
interest and any fees to which it is entitled only from the Lender selling the
Participation and only upon receipt by the Lender of the payments from the
borrower. In connection with purchasing Participations, the Fund generally will
have no right to enforce compliance by the borrower with the terms of the loan
agreement relating to the loan, nor any rights of set-off against the borrower,
and the Fund may not directly benefit from any collateral supporting the Loan in
which it has purchased the Participation. As a result, the Fund will assume the
credit risk of both the borrower and the Lender that is selling the
Participation.
 
   
  In the event of the insolvency of the Lender selling a Participation, the Fund
may be treated as a general creditor of the Lender and may not benefit from any
set-off between the Lender and the borrower. The Fund will acquire
Participations only if the Lender interpositioned between the Fund and the
borrower is determined by the Sub-advisor to be creditworthy. When the Fund
purchases Assignments from Lenders, the Fund will acquire direct rights against
the borrower on the Loan. However, because Assignments are arranged through
private negotiations between potential assignees and assignors, the rights and
obligations acquired by the Fund as the purchaser of an Assignment may differ
from, and be more limited than, those held by the assigning Lender.
    
 
  ZERO COUPON SECURITIES. The Fund may invest in certain zero coupon securities
that are "stripped" U.S. Treasury notes and bonds. The Fund also may invest in
zero coupon and other deep discount securities issued by foreign governments and
domestic and foreign corporations, including certain Brady Bonds and other
foreign debt, and in payment-in-kind securities. Zero coupon securities pay no
interest to holders prior to maturity, and payment-in-kind securities pay
"interest" in the form of additional securities. How-
 
                                        9
<PAGE>   14
 
ever, a portion of the original issue discount on zero coupon securities and the
interest on payment-in-kind securities will be included in the Fund's income.
Accordingly, for the Fund to continue to qualify for tax treatment as a
regulated investment company and to avoid a certain excise tax (see "Taxes" in
the Statement of Additional Information), it may be required to distribute an
amount that is greater than the total amount of cash it actually receives. These
distributions may be made from the Fund's cash assets or, if necessary, from the
proceeds of sales of portfolio securities. The Fund will not be able to purchase
additional income-producing securities with cash used to make such
distributions, and its current income ultimately may be reduced as a result.
Zero coupon and payment-in-kind securities usually trade at a deep discount from
their face or par value and will be subject to greater fluctuations of market
value in response to changing interest rates than debt obligations of comparable
maturities that make current distributions of interest in cash.
 
  INDEXED COMMERCIAL PAPER. The Fund may invest without limitation in commercial
paper that is indexed to certain specific foreign currency exchange rates. The
terms of such commercial paper provide that its principal amount is adjusted
upwards or downwards (but not below zero) at maturity to reflect changes in the
exchange rate between two currencies while the obligation is outstanding. The
Fund will purchase such commercial paper with the currency in which it is
denominated and, at maturity, will receive interest and principal payments
thereon in that currency, but the amount of principal payable by the issuer at
maturity will change in proportion to the change (if any) in the exchange rate
between the two specified currencies between the date the instrument is issued
and the date the instrument matures. While such commercial paper entails the
risk of loss of principal, the potential for realizing gains as a result of
changes in foreign currency exchange rates enables the Fund to hedge against a
decline in the U.S. dollar value of investments denominated in foreign
currencies while seeking to provide an attractive money market rate of return.
The Fund will not purchase such commercial paper for speculation.
 
  OTHER INDEXED SECURITIES. The Fund may invest in certain other indexed
securities, which are securities whose prices are indexed to the prices of other
securities, securities indices, currencies, precious metals or other commodities
or other financial indicators. Indexed securities typically, but not always, are
debt securities or deposits whose value at maturity or coupon rate is determined
by reference to a specific instrument or statistic. The performance of indexed
securities depends to a great extent on the performance of the security,
currency or other instrument to which they are indexed and also may be
influenced by interest rate changes in the United States and abroad. At the same
time, indexed securities are subject to the credit risks associated with the
issuer of the security, and their values may decline substantially if the
issuer's creditworthiness deteriorates. Indexed securities may be more volatile
than the underlying instruments. New forms of indexed securities continue to be
developed. The Fund may invest in such securities to the extent consistent with
its investment objectives.
 
  OTHER INFORMATION. The Fund's investment objectives may not be changed without
the approval of a majority of its outstanding voting securities. A "majority of
its outstanding voting securities" means the lesser of (i) 67% of the shares
represented at a meeting at which more than 50% of the outstanding shares are
represented, or (ii) more than 50% of the outstanding shares. In addition, the
Fund has adopted certain investment limitations that also may not be changed
without shareholder approval. A complete description of these limitations is
included in the Statement of Additional Information. Unless specifically noted,
the Fund's investment policies described in this Prospectus and in the Statement
of Additional Information may be changed by the Trust's Board of Trustees
without shareholder approval. The Fund's policies regarding lending, and the
percentage of Fund assets that may be committed to borrowing, are fundamental
policies and may not be changed without shareholder approval.
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
 
   
  The Fund is authorized to engage in Short Sales, although it currently has no
intention of doing so, and may purchase American Depositary Receipts, American
Depositary Shares, Global Depositary Receipts and European Depositary Receipts.
See "Short Sales" and "Depositary Receipts," respectively, in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
    
- --------------------------------------------------------------------------------
 
   
RISK FACTORS
    
 
  GENERAL. There is no assurance that the Fund will achieve its investment
objectives. Investing in the Fund entails a substantial degree of risk, and an
investment in the Fund should be considered speculative. Investors are strongly
advised to consider carefully the special risks involved in investing in
emerging markets, which are in addition to the usual risks of investing in
developed markets around the world.
 
  The Fund's net asset value will fluctuate, reflecting fluctuations in the
market value of its portfolio positions and its net currency exposure. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. The value of equity securities held by the Fund will fluctuate
in response to general market and economic developments, as well as developments
affecting the particular issuers of such securities.
 
  In addition, the value of debt securities held by the Fund generally will
fluctuate with the perceived creditworthiness of the issuers of such securities
and interest rates.
 
                                       10
<PAGE>   15
 
  NON-DIVERSIFIED CLASSIFICATION. The Fund is classified under the 1940 Act as a
"non-diversified" fund. As a result, the Fund will be able to invest in a
smaller number of issuers than if it was classified under the 1940 Act as a
"diversified" fund. To the extent that the Fund invests in a smaller number of
issuers, the net asset value of its shares may fluctuate more widely and it may
be subject to greater investment and credit risk with respect to its portfolio.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to, the reporting requirements of, the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. In addition, certain costs attributable to
foreign investing, such as custody charges, are higher than those attributable
to domestic investing. Securities of some foreign companies are less liquid and
their prices may be more volatile than securities of comparable domestic
companies. The Fund's net investment income from foreign issuers may be subject
to non-U.S. withholding taxes, thereby reducing that income.
 
  Investing in some foreign countries involves risks relating to potential
political and economic instability within such countries and the risks of
expropriation, nationalization, confiscation of assets and property or the
imposition of restrictions on foreign investment and on repatriation of capital
invested. In the event of such expropriation, nationalization or other
confiscation, the Fund could lose its entire investment in that market.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, currency depreciation,
resource self-sufficiency and balance of payments positions. Investments in
foreign government securities involve special risks, including the risk that the
government issuers may be unable or unwilling to repay principal or interest
when due.
 
   
  INVESTING IN EMERGING MARKETS. Emerging markets generally are dependent
heavily upon international trade and, accordingly, have been and may continue to
be affected adversely by trade barriers, exchange controls, managed adjustments
in relative currency values and other protectionist measures imposed or
negotiated by the countries with which they trade. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain countries with
emerging markets.
    
 
  Disclosure and regulatory standards in many respects are less stringent than
in the United States and other major markets. There also may be a lower level of
monitoring and regulation of emerging markets and the activities of investors in
such markets, and enforcement of existing regulations has been extremely
limited.
 
  In addition, brokerage commissions, custodial services and other costs
relating to investment in foreign markets generally are more expensive than in
the United States, particularly with respect to emerging markets. Such markets
have different settlement and clearance procedures. In certain markets there
have been times when settlements have been unable to keep pace with the volume
of securities transactions, making it difficult to conduct such transactions.
The inability of the Fund to make intended securities purchases due to
settlement problems could cause it to miss attractive investment opportunities.
Inability to dispose of a portfolio security caused by settlement problems could
result either in losses to the Fund due to subsequent declines in value of the
portfolio security or, if the Fund has entered into a contract to sell the
security, could result in possible liability to the purchaser.
 
  The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
developed countries. The risk also exists that an emergency situation may arise
in one or more emerging markets as a result of which trading of securities may
cease or may be substantially curtailed and prices for the Fund's portfolio
securities in such markets may not be readily available. Section 22(e) of the
1940 Act permits a registered investment company, such as the Fund, to suspend
redemption of its shares for any period during which an emergency exists, as
determined by the SEC. Accordingly, when the Fund believes that circumstances
dictate, it will promptly apply to the SEC for a determination that such an
emergency exists. During the period commencing with the Fund's identification of
such conditions until the date of any SEC action, the Fund's portfolio
securities in the affected markets will be valued at fair value determined in
good faith by or under the direction of the Trust's Board of Trustees.
 
  RISKS ASSOCIATED WITH DEBT SECURITIES. The value of the debt securities held
by the Fund generally will vary inversely with market interest rates. If
interest rates in a market fall, the Fund's debt securities issued by
governments or companies in that market ordinarily will increase in value. If
market interest rates increase, however, the debt securities owned by the Fund
in that market will likely decrease in value.
 
  RISKS ASSOCIATED WITH BELOW INVESTMENT GRADE DEBT SECURITIES. The Fund may
invest up to 50% of its total assets in debt securities rated below investment
grade. Such investments involve a high degree of risk.
 
  Debt rated Baa by Moody's Investors Service, Inc. ("Moody's") is considered by
Moody's to have speculative characteristics. Debt rated BB, B, CCC, CC or C by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), and
debt rated Ba, B, Caa, Ca or C by Moody's is regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. While such
lower quality debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions. Debt rated C by Moody's or S&P is the lowest rated debt that is not
in default as to principal or interest, and issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment standing.
Lower quality debt securities are also generally considered to be subject
 
                                       11
<PAGE>   16
 
to greater risk than securities with higher ratings with regard to a
deterioration of general economic conditions. These foreign debt securities are
the equivalent of high yield, high risk bonds, commonly known as "junk bonds."
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting it, such as its inability to meet specific
projected business forecasts or the unavailability of additional financing.
Similarly, certain emerging market governments that issue lower quality debt
securities are among the largest debtors to commercial banks, foreign
governments and supranational organizations such as the World Bank and may not
be able or willing to make principal and/or interest repayments as they come
due. The risk of loss due to default by the issuer is significantly greater for
the holders of lower quality securities because such securities are generally
unsecured and may be subordinated to the claims of other creditors of the
issuer.
 
  Lower quality debt securities frequently have call or buy-back features that
would permit an issuer to call or repurchase the security from the Fund. In
addition, the Fund may have difficulty disposing of lower quality securities
because they may have a thin trading market. There may be no established retail
secondary market for many of these securities, and the Fund anticipates that
such securities could be sold only to a limited number of dealers or
institutional investors. The lack of a liquid secondary market also may have an
adverse impact on market prices of such instruments and may make it more
difficult for the Fund to obtain accurate market quotations for purposes of
valuing its portfolio. The Fund may also acquire lower quality debt securities
during an initial underwriting or that are sold without registration under
applicable securities laws. Such securities involve special considerations and
risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Fund may invest
include (1) potential adverse publicity, (2) heightened sensitivity to general
economic or political conditions and (3) the likely adverse impact of a major
economic recession.
 
  The Fund may also incur additional expenses to the extent it is required to
seek recovery upon a default in the payment of principal or interest on its
portfolio holdings, and the Fund may have limited legal recourse in the event of
a default. Debt securities issued by governments in emerging markets can differ
from debt obligations issued by private entities in that remedies from defaults
generally must be pursued in the courts of the defaulting government, and legal
recourse is therefore somewhat diminished. Political conditions, in terms of a
government's willingness to meet the terms of its debt obligations, also are of
considerable significance. There can be no assurance that the holders of
commercial bank debt may not contest payments to the holders of debt securities
issued by governments in emerging markets in the event of default by the
governments under commercial bank loan agreements.
 
  ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
 
   
  CURRENCY RISK. Because the Fund may invest substantially in securities
denominated in currencies other than the U.S. dollar, and since the Fund may
hold foreign currencies, it will be affected favorably or unfavorably by
exchange control regulations or changes in the exchange rates between such
currencies and the U.S. dollar. Changes in currency exchange rates will affect
the net asset value of the Fund's shares and also may affect the value of
dividends and interest earned by the Fund and gains and losses realized by it.
Currencies generally are evaluated on the basis of fundamental economic criteria
(e.g., relative inflation and interest rate levels and trends, growth rate
forecasts, balance of payments status and economic policies) as well as
technical and political data. Exchange rates are determined by the forces of
supply and demand in the foreign exchange markets. These forces are affected by
the international balance of payments and other economic and financial
conditions, government intervention, speculation and other factors. If the
currency in which a security is denominated appreciates against the U.S. dollar,
the dollar value of the security will increase. Conversely, a decline in the
exchange rate of the currency would adversely affect the value of the security
expressed in dollars.
    
 
  Many of the currencies of emerging market countries have experienced steady
devaluations relative to the U.S. dollar, and major devaluations have
historically occurred in certain countries. Any devaluations in the currencies
in which the Fund's portfolio securities are denominated may have a detrimental
impact on the Fund.
 
  Some countries also may have fixed currencies whose values against the U.S.
dollar are not independently determined. In addition, there is a risk that
certain countries may restrict the free conversion of their currencies into
other currencies. Further, certain currencies may not be internationally traded.
 
                                       12
<PAGE>   17
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
   
  OPTIONS, FUTURES AND FOREIGN CURRENCY TRANSACTIONS. The Fund is authorized to
enter into options, futures and forward currency transactions. These
transactions involve certain risks, which include: (1) dependence on the
Sub-advisor's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets and movements in
interest rates and currency markets; (2) imperfect correlation, or even no
correlation, between movements in the price of forward contracts, options,
futures contracts or options thereon and movements in the price of the currency
or security hedged or used for cover; (3) the fact that skills and techniques
needed to trade options, futures contracts and options thereon or to use forward
currency contracts are different from those needed to select the securities in
which the Fund invests; (4) lack of assurance that a liquid secondary market
will exist for any particular option, futures contract or option thereon at any
particular time; (5) the possible loss of principal under certain conditions;
and (6) the possible inability of the Fund to purchase or sell a portfolio
security at a time when it would otherwise be favorable for it to do so, or the
possible need for the Fund to sell a security at a disadvantageous time, due to
the need for the Fund to maintain "cover" or to set aside securities in
connection with hedging transactions.
    
 
  LOAN PARTICIPATIONS AND ASSIGNMENTS. The Fund may have difficulty disposing of
Assignments and Participations. The liquidity of such securities is limited, and
the Fund anticipates that such securities could be sold only to a limited number
of institutional investors. The lack of a liquid secondary market could have an
adverse impact on the value of such securities and on the Fund's ability to
dispose of particular Assignments or Participations when necessary to meet its
liquidity needs or in response to a specific economic event, such as a
deterioration in the creditworthiness of the borrower. The lack of a liquid
secondary market for Assignments and Participations also may make it more
difficult for the Fund to assign a value to those securities for purposes of
valuing its portfolio and calculating its net asset value.
 
  SOVEREIGN DEBT. The Fund may invest in sovereign debt securities of emerging
market governments, including Brady Bonds. Investments in such securities
involve special risks. The issuer of the debt or the governmental authorities
that control the repayment of the debt may be unable or unwilling to repay
principal or interest when due in accordance with the terms of such debt.
Periods of economic uncertainty may result in the volatility of market prices of
sovereign debt obligations and in turn the Fund's net asset value, to a greater
extent than the volatility inherent in domestic fixed income securities.
 
  A sovereign debtor's willingness or ability to repay principal and pay
interest in a timely manner may be affected by, among other factors, its cash
flow situation, the extent of its foreign reserves, the availability of
sufficient foreign exchange on the date a payment is due, the relative size of
the debt service burden to the economy as a whole, the sovereign debtor's policy
toward principal international lenders and the political constraints to which a
sovereign debtor may be subject. Emerging market governments could default on
their sovereign debt. Such sovereign debtors also may be dependent on expected
disbursements from foreign governments, multilateral agencies and other entities
abroad to reduce principal and interest arrearages on their debt. The commitment
on the part of these governments, agencies and others to make such disbursements
may be conditioned on a sovereign debtor's implementation of economic reforms
and/or economic performance and the timely service of such debtor's obligations.
Failure to implement such reforms, achieve such levels of economic performance
or repay principal or interest when due may result in the cancellation of such
third parties' commitments to lend funds to the sovereign debtor, which may
further impair such debtor's ability or willingness to timely service its debts.
 
   
  The occurrence of political, social or diplomatic changes in one or more of
the countries issuing sovereign debt could adversely affect the Fund's
investments. Emerging markets are faced with social and political issues, and
some of them have experienced high rates of inflation in recent years and have
extensive internal debt. Among other effects, high inflation and internal debt
service requirements may adversely affect the cost and availability of future
domestic sovereign borrowing to finance governmental programs and may have other
adverse social, political and economic consequences. Political changes or a
deterioration of a country's domestic economy or balance of trade may affect its
willingness to service its sovereign debt. Although the Sub-advisor intends to
manage the Fund in a manner that will minimize the exposure to such risks, there
can be no assurance that adverse political changes will not cause the Fund to
suffer a loss of interest or principal on any of its holdings.
    
 
   
  In recent years, some of the emerging market countries in which the Fund
expects to invest have encountered difficulties in servicing their sovereign
debt obligations. Some of these countries have withheld payments of interest
and/or principal of sovereign debt. These difficulties have also led to
agreements to restructure external debt obligations -- in particular, commercial
bank loans -- typically by rescheduling principal payments, reducing interest
rates and extending new credits to finance interest payments on existing
    
 
                                       13
<PAGE>   18
 
debt. In the future, holders of emerging market sovereign debt securities may be
requested to participate in similar rescheduling of such debt. Certain emerging
market countries are among the largest debtors to commercial banks and foreign
governments. Currently, Brazil, Mexico and Argentina are the largest debtors
among developing countries. At times certain emerging market countries have
declared moratoria on the payment of principal and interest on external debt;
such a moratorium is currently in effect in certain emerging market countries.
There is no bankruptcy proceeding by which a creditor may collect in whole or in
part sovereign debt on which an emerging market government has defaulted.
 
  The ability of emerging market governments to make timely payments on their
sovereign debt securities is likely to be influenced strongly by a country's
balance of trade and its access to trade and other international credits. A
country whose exports are concentrated in a few commodities could be vulnerable
to a decline in the international prices of one or more of such commodities.
Increased protectionism on the part of a country's trading partners could also
adversely affect its exports. Such events could diminish a country's trade
account surplus, if any. To the extent that a country receives payment for its
exports in currencies other than hard currencies, its ability to make hard
currency payments could be affected.
 
  As noted above, sovereign debt obligations issued by emerging market
governments generally are deemed to be the equivalent in terms of quality to
securities rated below investment grade by Moody's and S&P. Such securities are
regarded as predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the obligations
and involve major risk exposure to adverse conditions. Some of such securities,
with respect to which the issuer currently may not be paying interest or may be
in payment default, may be comparable to securities rated D by S&P or C by
Moody's. The Fund may have difficulty disposing of and valuing certain sovereign
debt obligations because there may be a limited trading market for such
securities. Because there is no liquid secondary market for many of these
securities, the Fund anticipates that such securities could be sold only to a
limited number of dealers or institutional investors.
- --------------------------------------------------------------------------------
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust on the one side and persons or companies furnishing services
to the Fund on the other, including the investment management and administration
agreement with AIM, the investment sub-advisory and sub-administration agreement
between AIM and the Sub-advisor, the agreements with AIM Distributors regarding
distribution of the Fund's shares, the custody agreement and the transfer agency
agreement. The day-to-day operations of the Fund are delegated to the officers
of the Trust, subject always to the investment objectives and policies of the
Fund and to the general supervision of the Trust's Board of Trustees. See "Board
of Trustees and Executive Officers" in the Statement of Additional Information
for information on the Trust's Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers and administrators include
determining the composition of the Fund's portfolio and placing orders to buy,
sell or hold particular securities; furnishing corporate officers and clerical
staff; providing office space, services and equipment; and supervising all
matters relating to the Fund's operation. For these services, the Fund pays AIM
investment management and administration fees, computed daily and paid monthly,
based on its average daily net assets, at the annualized rate of 0.975% on the
first $500 million, 0.95% on the next $500 million, 0.925% on the next $500
million and 0.90% on amounts thereafter. Out of the aggregate fees payable by
the Fund, AIM pays the Sub-advisor sub-advisory and sub-administration fees
equal to 40% of the aggregate fees AIM receives from the Fund. The investment
management and administration fees paid by the Fund are higher than those paid
by most mutual funds. The Fund pays all expenses not assumed by AIM, the
Sub-advisor, AIM Distributors or other agents. AIM has undertaken to limit the
Fund's expenses (exclusive of brokerage commissions, taxes, interest and
extraordinary expenses) to the annual rate of 2.00% and 2.50% of the average
daily net assets of the Fund's Class A and Class B shares, respectively.
    
 
   
  The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-advisor (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administrative services agreement (the "Advisory Agreement"). AIM was organized
in 1976 and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Fund pursuant to an investment sub-advisory and
sub-administration agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of the Sub-advisor,
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included the Sub-advisor and
certain other affiliates. As a result of this transaction, the Sub-advisor is
now an indirect wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
    
 
                                       14
<PAGE>   19
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Fund, the Sub-advisor employs a team
approach, taking advantage of its investment resources around the world.
    
 
  The investment professionals primarily responsible for the portfolio
management of the Fund are as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
     NAME/OFFICE            THE PORTFOLIO                         PAST FIVE YEARS
     -----------         --------------------                   -------------------
<S>                     <C>                      <C>
Francesco Bertoni       Portfolio Manager        Portfolio Manager for the Sub-advisor since June
London                  since 1998               1998. Investment Director of INVESCO Asset
                                                 Management Ltd. (London) ("INVESCO London"), an
                                                 affiliate of the Sub-advisor, since 1994.
                                                 Portfolio Manager for INVESCO London from 1990 to
                                                 1994.
Cheng-Hock Lau          Portfolio Manager        Chief Investment Officer for Global Fixed Income
New York                since 1997               and Portfolio Manager for the Sub-advisor since
                                                 October 1996. Senior Portfolio Manager for
                                                 Global/International Fixed Income for the
                                                 Sub-advisor from July 1995 to October 1996.
                                                 Employed by Chancellor Capital Management, Inc., a
                                                 predecessor of the Sub-advisor, from 1995 to
                                                 October 1996. Senior Vice President and Senior
                                                 Portfolio Manager for Fiduciary Trust Company
                                                 International from 1993 to 1995. Vice President at
                                                 Bankers Trust Company from 1991 to 1993.
</TABLE>
    
 
   
  In placing securities orders for the Fund's portfolio transactions, the
Sub-advisor seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-advisor may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions may be executed
through affiliates of AIM or the Sub-advisor. High portfolio turnover (over
100%) involves correspondingly greater brokerage commissions and other
transaction costs that the Fund will bear directly and could result in the
realization of net capital gains which would be taxable when distributed to
shareholders. See "Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement on
behalf of Class A shares of the Fund, and has entered into a Master Distribution
Agreement, on behalf of Class B shares of the Fund (individually referred to as
a "Distribution Agreement" or collectively as the "Distribution Agreements.")
with AIM Distributors, a registered broker-dealer and a wholly owned subsidiary
of AIM, to act as the distributor of Class A and Class B shares of the Fund.
Certain Trustees and officers of the Trust are affiliated with AIM Distributors.
    
 
   
  The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors and its predecessor. In the event the Class B shares Distribution
Agreement is terminated, AIM Distributors would continue to receive payments of
asset based sales charges in respect of the outstanding Class B shares
attributable to the distribution efforts of AIM Distributors and its
predecessor; provided, however, that a complete termination of the Class B
shares master distribution plan (as defined in the plan) would terminate all
payments by the Fund of asset based sales charges and service fees to AIM
Distributors. Termination of the Class B shares distribution plan or
Distribution Agreement does not affect the obligation of Class B shareholders to
pay contingent deferred sales charges.
    
 
  DISTRIBUTION PLANS. Class A Plan. The Trust has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
 
  Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.50% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
 
                                       15
<PAGE>   20
 
  The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
 
  Of the aggregate amount payable under the Class A Plan, payments to dealers
and other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee. Payments pursuant to the
Plans are subject to any applicable limitations imposed by rules of the National
Association of Securities Dealers, Inc.
 
  Class B Plan. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
 
  Both Plans. Activities that may be financed under the Class A Plan and the
Class B Plan (collectively, the "Plans") include, but are not limited to:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders, overhead, preparation and distribution of
advertising material and sales literature, expense of organizing and conducting
sales seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
 
  Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
 
   
  Under the Plans, certain financial institutions which have entered into
service agreements and which sell shares of the Fund on an agency basis, may
receive payments from the Fund pursuant to the respective Plans. AIM
Distributors does not act as principal, but rather as agent, for the Fund in
making such payments. The Fund will obtain a representation from such financial
institutions that they will either be licensed as dealers as required under
applicable state law, or that they will not engage in activities which would
constitute acting as a "dealer" as defined under applicable state law. Financial
intermediaries and any other person entitled to receive compensation for selling
Fund shares may receive different compensation for selling shares of one class
over another.
    
 
  For additional information concerning the operation of the Plans see the
Statement of Additional Information.
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST
    
 
   
  The Trust was organized as a Delaware business trust on May 7, 1998. On
September 8 , 1998, the Trust acquired the assets of and assumed the liabilities
of AIM Investment Funds, Inc., a Maryland corporation. The Fund constitutes one
of thirteen separate and distinct series portfolios of the Trust. From time to
time, the Trust may establish other funds, each corresponding to a distinct
investment portfolio and a distinct series of the Trust's shares of beneficial
interest. Shares of each fund are entitled to one vote per share (with
proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and the
Trust's other
 
                                       16
<PAGE>   21
 
series will be voted in the aggregate on other matters, such as the election of
Trustees and ratification of the selection of the Trust's independent
accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
    
 
                                       17
<PAGE>   22
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
               TO THE AIM FAMILY OF FUNDS--Registered Trademark--
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of the following mutual funds:
   
<TABLE>
            <S>                                           <C>
            AIM ADVISOR FLEX FUND                         AIM GLOBAL INFRASTRUCTURE FUND
            AIM ADVISOR INTERNATIONAL VALUE FUND          AIM GLOBAL RESOURCES FUND
            AIM ADVISOR LARGE CAP VALUE FUND              AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM ADVISOR MULTIFLEX FUND                    AIM GLOBAL TRENDS FUND
            AIM ADVISOR REAL ESTATE FUND                  AIM GLOBAL UTILITIES FUND
            AIM AGGRESSIVE GROWTH FUND                    AIM HIGH INCOME MUNICIPAL FUND
            AIM ASIAN GROWTH FUND                         AIM HIGH YIELD FUND
            AIM BALANCED FUND                             AIM INCOME FUND
            AIM BASIC VALUE FUND                          AIM INTERMEDIATE GOVERNMENT FUND
            AIM BLUE CHIP FUND                            AIM INTERNATIONAL EQUITY FUND
            AIM CAPITAL DEVELOPMENT FUND                  AIM INTERNATIONAL GROWTH FUND
            AIM CHARTER FUND                              AIM JAPAN GROWTH FUND
            AIM CONSTELLATION FUND                        AIM LATIN AMERICAN GROWTH FUND
            AIM DEVELOPING MARKETS FUND                   AIM LIMITED MATURITY TREASURY FUND
            AIM DOLLAR FUND(*)                            AIM MID CAP GROWTH FUND
            AIM EMERGING MARKETS FUND                     AIM MONEY MARKET FUND(*)
            AIM EMERGING MARKET DEBT FUND                 AIM MUNICIPAL BOND FUND
            AIM EUROPEAN DEVELOPMENT FUND                 AIM NEW PACIFIC GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM SELECT GROWTH FUND
            AIM GLOBAL AGGRESSIVE GROWTH FUND             AIM SMALL CAP EQUITY FUND
            AIM GLOBAL CONSUMER PRODUCTS AND              AIM SMALL CAP OPPORTUNITIES FUND
              SERVICES FUND                               AIM STRATEGIC INCOME FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM TAX-EXEMPT CASH FUND(*)
            AIM GLOBAL GROWTH FUND                        AIM TAX-FREE INTERMEDIATE FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM VALUE FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WEINGARTEN FUND
            AIM GLOBAL INCOME FUND                        AIM WORLDWIDE GROWTH FUND
                                                                                                 
</TABLE>
    
 
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
    Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
    asset value, without payment of a sales charge, as described below. Other
    funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
    FUND, are sold with an initial sales charge or subject to a contingent
    deferred sales charge upon redemption, as described below.
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed new Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.
 
   
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment is
$500, except for accounts initially established through an Automatic Investment
Plan, which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an Individual Retirement Arrangement ("IRA") or Roth IRA is $250.
There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such plans is $25 per
fund investment), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM 
    
 
                                       A-1
<PAGE>   23
 
   
Funds account. Notwithstanding the foregoing, the minimum initial investment
applicable to AIM Small Cap Opportunities Fund is $10,000.
    
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Shares of any AIM Funds not named on the cover of this Prospectus, as well as
Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                   OBI:                              Shareholder Name, Shareholder Account Number
                                                     (70 character limit)
</TABLE>
 
   
  HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased directly
through AIM Distributors or through any dealer who has entered into an agreement
with AIM Distributors. The minimum investment for subsequent purchases is $50.
The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. Notwithstanding the foregoing, the minimum subsequent purchases of shares
of AIM Small Cap Opportunities Fund is $1,000. There are no such minimum
investment requirements for investment of dividends and distributions of any of
the AIM Funds into any other existing AIM Funds account.
    
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional shares by electronic funds
transfer, please contact the Client Services Department of AFS for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
   
  Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BASIC
VALUE FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT
FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP EQUITY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND,AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without a
sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over
    
 
                                       A-2
<PAGE>   24
 
another class in the same Multiple Class Fund. Factors an investor should
consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
   
  The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPE
GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL
FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM
GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS
FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN
GROWTH FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
    
 
  The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
 
SALES CHARGES AND DEALER CONCESSIONS
 
   
  GROUP I. Certain AIM Funds are currently sold with a sales charge ranging from
5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM BASIC VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
EQUITY FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
    
 
   
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
      SINGLE TRANSACTION(1)                          PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   25,000                    5.50%          5.82%        4.75%
 $ 25,000 but less than $   50,000                   5.25           5.54         4.50
 $ 50,000 but less than $ 100,000                    4.75           4.99         4.00
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    3.00           3.09         2.50
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
    
 
- ---------------
 
   
(1) AIM Small Cap Opportunities Fund will not accept any single purchase in
    excess of $250,000.
    
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
                                       A-3
<PAGE>   25
   
 GROUP II. Certain AIM Funds are currently sold with a sales charge ranging from
4.75% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND, AIM
BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND
FUND, AIM STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
    
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   50,000                    4.75%          4.99%        4.00%
 $ 50,000 but less than $ 100,000                    4.00           4.17         3.25
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    2.50           2.56         2.00
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
  GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
Less than $ 100,000                                  1.00%          1.01%        0.75%
 $100,000 but less than $ 250,000                    0.75           0.76         0.50
 $250,000 but less than $1,000,000                   0.50           0.50         0.40
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
 
  ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
 
  In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
 
  AIM Distributors may make payments to dealers and institutions who are dealers
of record for purchases of $1 million of more of Class A shares (or shares which
normally involve payment of initial sales charges), which are sold at net asset
value and are subject to
 
                                       A-4
<PAGE>   26
 
a contingent deferred sales charge, for all AIM Funds other than Class A shares
of each of AIM LIMITED MATURITY TREASURY FUND and AIM TAX-FREE INTERMEDIATE FUND
as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next
$1 million of such purchases, plus 0.50% of the next $17 million of such
purchases, plus 0.25% of amounts in excess of $20 million of such purchases. See
"Contingent Deferred Sales Charge Program for Large Purchases." AIM Distributors
may make payments to dealers and institutions who are dealers of record for
purchases of $1 million or more of Class A shares (or shares which normally
involve payment of initial sales charges), and which are sold at net asset value
and are not subject to a contingent deferred sales charge, in an amount up to
0.10% of such purchases of Class A shares of AIM LIMITED MATURITY TREASURY FUND,
and in an amount up to 0.25% of such purchases of Class A shares of AIM TAX-FREE
INTERMEDIATE FUND.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed during the next twelve
months on Saturdays and Sundays and on the days on which New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class Funds
currently offer two or more classes of shares through separate distribution
systems (the "Multiple Distribution System"). Although each class of shares of a
particular Multiple Class Fund represents an interest in the same portfolio of
investments, each class is subject to a different distribution structure and, as
a result, differing expenses. This Multiple Distribution System allows investors
to select the class that is best suited to the investor's needs and objectives.
In considering the options afforded by the Multiple Distribution System,
investors should consider both the applicable initial sales charge or contingent
deferred sales charge, as well as the ongoing expenses borne by each class of
shares and other relevant factors, such as whether his or her investment goals
are long-term or short-term.
 
     CLASS A SHARES generally are sold subject to the initial sales charges
     described above and are subject to the other fees and expenses described
     herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
     needs of an investor who wishes to establish a dollar cost averaging
     program, pursuant to which Class A shares an investor owns may be exchanged
     at net asset value for Class A shares of another Multiple Class Fund or
     shares of another AIM Fund which is not a Multiple Class Fund, subject to
     the terms and conditions described under the caption "Exchange
     Privilege -- Terms and Conditions of Exchanges."
                                       A-5
<PAGE>   27
 
     CLASS B SHARES are sold without an initial sales charge. Thus, the entire
     purchase price of Class B shares is immediately invested in Class B shares.
     Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
     per annum on the average daily net assets of a Multiple Class Fund
     attributable to Class B shares. See the discussion under the caption
     "Management -- Distribution Plans." In addition, Class B shares redeemed
     within six years from the date such shares were purchased are subject to a
     contingent deferred sales charge ranging from 5% for redemptions made
     within the first year to 1% for redemptions made within the sixth year. No
     contingent deferred sales charge will be imposed if Class B shares are
     redeemed after six years from the date such shares were purchased.
     Redemptions of Class B shares and associated charges are further described
     under the caption "How to Redeem Shares -- Multiple Distribution System."
 
     Class B shares will automatically convert into Class A shares of the same
     Multiple Class Fund (together with a pro rata portion of all Class B shares
     acquired through the reinvestment of dividends and other distributions)
     eight years from the end of the calendar month in which the purchase of
     Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
     outstanding on May 29, 1998 and which are continuously held by the
     shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
     FUND seven years from the end of the calendar month in which the purchase
     of such Class B shares was made. If a shareholder exchanges Class B shares
     of AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
     since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
     shares will be subject to the eight year conversion feature applicable to
     Class B shares of all other AIM Funds. Following such conversion of their
     Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
     payments associated with Class B shares. See "Management -- Distribution
     Plans."
 
     AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an
     initial sales charge and are not subject to a contingent deferred sales
     charge; however, they are subject to the other fees and expenses described
     in the prospectus for AIM MONEY MARKET FUND.
 
  TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon Eastern Time or NYSE Close on any
business day of the Fund will be confirmed at the price next determined. Net
asset value is normally determined at 12:00 noon Eastern Time and NYSE Close on
each business day of AIM MONEY MARKET FUND.
 
  SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
REDUCTIONS IN INITIAL SALES CHARGES
 
  Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
 
                                       A-6
<PAGE>   28
 
  The term "purchaser" means:
 
  - an individual and his or her spouse and children, including any trust
    established exclusively for the benefit of any such person; or a pension,
    profit-sharing, or other benefit plan established exclusively for the
    benefit of any such person, such as an IRA, Roth IRA, a single-participant
    money-purchase/profit-sharing plan or an individual participant in a 403(b)
    plan (unless such 403(b) plan qualifies as the purchaser as defined below);
 
  - a 403(b) plan, the employer/sponsor of which is an organization described
    under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
    (the "Code"), provided that:
 
        a. the employer/sponsor must submit contributions for all participating
           employees in a single contribution transmittal (i.e., the funds will
           not accept contributions submitted with respect to individual
           participants);
 
        b. each transmittal must be accompanied by a single check or wire
           transfer; and
 
        c. all new participants must be added to the 403(b) plan by submitting
           an application on behalf of each new participant with the
           contribution transmittal;
 
  - a trustee or fiduciary purchasing for a single trust, estate or single
    fiduciary account (including a pension, profit-sharing or other employee
    benefit trust created pursuant to a plan qualified under Section 401 of the
    Code) and 457 plans, although more than one beneficiary or participant is
    involved;
 
  - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
    Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
    Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
    Distributors in writing that all of its related employee SEP, SARSEP or
    SIMPLE IRA accounts should be linked;
 
  - any other organized group of persons, whether incorporated or not, provided
    the organization has been in existence for at least six months and has some
    purpose other than the purchase at a discount of redeemable securities of a
    registered investment company; or
 
  - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
    Capital Management, Inc. ("AIM Capital").
 
  Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
 
  (1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
 
  Each purchase of fund shares normally subject to an initial sales charge made
during the 13-month period will be made at the public offering price applicable
to a single transaction of the total dollar amount indicated by the LOI, as
described under "Sales Charges and Dealer Concessions." It is the purchaser's
responsibility at the time of purchase to specify the account numbers that
should be considered in determining the appropriate sales charge. The offering
price may be further reduced as described under "Rights of Accumulation" if the
Transfer Agent is advised of all other accounts at the time of the investment.
Shares acquired through reinvestment of dividends and capital gain distributions
will not be applied to the LOI. At any time during the 13-month period after
meeting the original obligation, a purchaser may revise his intended investment
amount upward by submitting a written and signed request. Such a revision will
not change the original expiration date. By signing an LOI, a purchaser is not
making a binding commitment to purchase additional shares, but if purchases made
within the 13-month period do not total the amount specified, the investor will
pay the increased amount of sales charge as described below. Purchases made
within 90 days before signing an LOI will be applied toward completion of the
LOI. The LOI effective date will be the date of the first purchase with the
90-day period. The Transfer Agent will process necessary adjustments upon the
expiration or completion date of the LOI. Purchases made more than 90 days
before signing an LOI will be applied toward completion of the LOI based on the
value of the shares purchased calculated at the public offering price on the
effective date of the LOI.
 
  To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
                                       A-7
<PAGE>   29
 
  If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
 
  Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
 
  (2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
 
  PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at
net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
 
  Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
 
  The following persons may purchase Class A shares of the AIM Funds through AIM
Distributors without payment of an initial sales charge: (a) A I M Management
Group Inc. ("AIM Management") and its affiliated companies; (b) any current or
retired officer, director, trustee or employee, or any member of the immediate
family (including spouse, children, parents and parents of spouse) of any such
person, of AIM Management or its affiliates or of certain mutual funds which are
advised or managed by AIM; or any trust established exclusively for the benefit
of such persons; (c) any employee benefit plan established for employees of AIM
Management or its affiliates; (d) any current or retired officer, director,
trustee or employee, or any member of the immediate family (including spouse,
children, parents and parents of spouse) of any such person, or of CIGNA
Corporation or of any of its affiliated companies, or of First Data Investor
Services Group (formerly The Shareholder Services Group, Inc.); (e) any
investment company sponsored by CIGNA Investments, Inc. or any of its affiliated
companies for the benefit of its directors' deferred compensation plans; (f)
discretionary advised clients of AIM or AIM Capital; (g) registered
representatives and employees of dealers who have entered into agreements with
AIM Distributors (or financial institutions that have arrangements with such
dealers with respect to the sale of shares of the AIM Funds) and any member of
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, provided that purchases at net asset value are permitted by
the policies of such person's employer; (h) certain broker-dealers, investment
advisers or bank trust departments that provide asset allocation, similar
specialized investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services, and that
have entered into an agreement with AIM Distributors with respect to their use
of the AIM Funds in connection with such services; (i) any employee or any
member of the immediate family (including spouse, children, parents and parents
of spouse) of any employee, of Triformis Inc.; (j) shareholders of the AIM/GT
Funds as of April 30, 1987 who since that date continually have owned shares of
one or more of the AIM/GT Funds; and (k) certain former AMA Investment Advisers'
shareholders who became shareholders of the AIM Global Health Care Fund in
October 1989, and who have continuously held shares in the AIM/GT Funds since
that time.
 
   
  In addition, shares of any AIM Fund (except AIM Small Cap Opportunities Fund)
may be purchased at net asset value, without payment of a sales charge, by
pension, profit-sharing or other employee benefit plans created pursuant to a
plan qualified under Section 401 of the Code or plans under Section 457 of the
Code, or employee benefit plans created pursuant to Section 403(b) of the
    
                                       A-8
<PAGE>   30
 
Code and sponsored by nonprofit organizations defined under Section 501(c)(3) of
the Code. Such plans will qualify for purchases at net asset value provided that
(1) the total amount invested in the plan is at least $1,000,000, (2) the
sponsor signs a $1,000,000 LOI, (3) such shares are purchased by an
employer-sponsored plan with at least 100 eligible employees, or (4) all of the
plan's transactions are executed through a single financial institution or
service organization who has entered into an agreement with AIM Distributors
with respect to their use of the AIM Funds in connection with such accounts.
Section 403(b) plans sponsored by public educational institutions will not be
eligible for net asset value purchases based on the aggregate investment made by
the plan or the number of eligible employees. Participants in such plans will be
eligible for reduced sales charges based solely on the aggregate value of their
individual investments in the applicable AIM Fund. PLEASE NOTE THAT TAX-EXEMPT
FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR SUCH PLANS. AIM Distributors may pay
investment dealers or other financial service firms for share purchases of the
Load Funds (as defined under the caption "Exchange Privilege") sold at net asset
value to an employee benefit plan in accordance with this paragraph as follows:
1% of the first $2 million of such purchases, plus 0.80% of the next $1 million
of such purchases, plus 0.50% of the next $17 million of such purchases, plus
0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of
the net asset value of any Class A shares of AIM LIMITED MATURITY TREASURY FUND
sold at net asset value to an employee benefit plan in accordance with this
paragraph.
 
  Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
- --------------------------------------------------------------------------------
 
SPECIAL PLANS
 
  Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
who owns shares which are not subject to a contingent deferred sales charge, can
arrange for monthly, quarterly or annual amounts (but not less than $50) to be
drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that
 
                                       A-9
<PAGE>   31
 
exceed on an annual basis 12% of such account will be subject to a contingent
deferred sales charge on the amounts exceeding 12% of the account value at the
time the shareholder elects to participate in the Systematic Withdrawal Plan.
 
  Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested to shares of the
applicable AIM Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full
and fractional shares at their net asset value in effect at the time of each
such redemption.
 
  Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
 
  The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
 
  AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in the amount specified by
the shareholder (minimum $50 per investment, per account) and on a day or
date(s) specified by the shareholder. The proceeds are invested in shares of the
designated AIM Fund at the applicable offering price determined on the date of
the withdrawal. An Automatic Investment Plan may be discontinued upon 10 days'
prior notice to the Transfer Agent or AIM Distributors.
 
   
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
    
 
  DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
 
  PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination
money-purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans;
SARSEP plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement
accounts"). Information concerning these plans, including the custodian's fees
and the forms necessary to adopt such plans, can be obtained by calling or
writing the AIM Funds or AIM Distributors. Shares of the AIM Funds are also
available for investment through existing 401(k) plans (for both individuals and
employers) adopted under the Code. The plan custodian currently imposes an
annual $10 maintenance fee with respect to each retirement account for which it
serves as the custodian. This fee is generally charged in December. Each AIM
Fund and/or the custodian reserve the right to change this maintenance fee and
to initiate an establishment fee (not to exceed its cost).
 

   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance of $5,000 to
establish and maintain an allocation across a range of AIM Funds. The Program
automatically rebalances holdings of AIM Funds to the established allocation on
a periodic basis. Under the Program, a shareholder may predesig-
    
 
                                      A-10
<PAGE>   32
   
nate, on a percentage basis, how the total value of his or her holdings in a
minimum of two, and a maximum of ten, AIM Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more AIM Funds in the shareholder's Personal Portfolio for shares of
the same class(es) of one or more other AIM Funds in the shareholder's Personal
Portfolio. See "Exchange Privilege." If shares of the AIM Fund(s) in a
shareholder's Personal Portfolio have appreciated during a rebalancing period,
the Program will result in shares of AIM Fund(s) that have appreciated most
during the period being exchanged for shares of AIM Fund(s) that have
appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular AIM Fund would be 2% or less.
In predesignating percentages, shareholders must use whole percentages and
totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an AIM Fund's shares. The
AIM Funds and AIM Distributors reserve the right to modify, suspend, or
terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
    
 
                                      A-11
<PAGE>   33
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, including the Class A shares of the Multiple Class Funds, listed below
and referred to herein as the "Load Funds," are sold at a public offering price
that includes a maximum sales charge of 5.50% or 4.75% of the public offering
price of such shares; Class A shares (or shares which normally involve the
payment of initial sales charges) of certain of the AIM Funds, listed below and
referred to herein as the "Lower Load Funds," are sold at a public offering
price that includes a maximum sales charge of 1.00% of the public offering price
of such shares; and Class A shares or shares of certain other funds, listed
below and referred to herein as the "No Load Funds," are sold at net asset
value, without payment of a sales charge.
 
   
<TABLE>
<S>                                    <C>                                   <C>
                                LOAD FUNDS:                                  LOWER LOAD FUNDS:
   AIM ADVISOR FLEX FUND --            AIM GLOBAL INCOME                     AIM LIMITED MATURITY TREASURY FUND
     CLASS A                           FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR INTERNATIONAL           AIM GLOBAL INFRASTRUCTURE               AIM TAX-FREE INTERMEDIATE FUND
     VALUE FUND -- CLASS A             FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR LARGE CAP               AIM GLOBAL RESOURCES                  NO LOAD FUNDS:
     VALUE FUND -- CLASS A             FUND -- CLASS A
   AIM ADVISOR MULTIFLEX               AIM GLOBAL TELECOMMUNICATIONS         AIM MONEY MARKET FUND
     FUND -- CLASS A                   FUND -- CLASS A                           -- AIM CASH RESERVE SHARES
   AIM ADVISOR REAL ESTATE             AIM GLOBAL TRENDS                       AIM TAX-EXEMPT CASH FUND -- CLASS A
     FUND -- CLASS A                   FUND -- CLASS A                         AIM DOLLAR FUND -- CLASS A
   AIM AGGRESSIVE GROWTH               AIM GLOBAL UTILITIES
     FUND -- CLASS A                   FUND -- CLASS A
   AIM ASIAN GROWTH                    AIM HIGH INCOME MUNICIPAL
     FUND -- CLASS A                   FUND -- CLASS A
   AIM BALANCED FUND -- CLASS A        AIM HIGH YIELD FUND -- CLASS A
   AIM BASIC VALUE                     AIM INCOME FUND -- CLASS A
     FUND -- CLASS A                   AIM INTERMEDIATE GOVERNMENT
   AIM BLUE CHIP FUND -- CLASS A       FUND -- CLASS A
   AIM CAPITAL DEVELOPMENT             AIM INTERNATIONAL EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM CHARTER FUND -- CLASS A         AIM INTERNATIONAL GROWTH
   AIM CONSTELLATION                   FUND -- CLASS A
     FUND -- CLASS A                   AIM JAPAN GROWTH FUND -- CLASS A
   AIM DEVELOPING MARKETS              AIM LATIN AMERICAN GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS                AIM MID CAP EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS DEBT           AIM MONEY MARKET
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPE GROWTH                   AIM MUNICIPAL BOND
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPEAN DEVELOPMENT            AIM NEW PACIFIC GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM GLOBAL AGGRESSIVE GROWTH        AIM SELECT GROWTH FUND -- CLASS A
     FUND -- CLASS A                   AIM SMALL CAP GROWTH
   AIM GLOBAL CONSUMER PRODUCTS        FUND -- CLASS A
     AND SERVICES FUND -- CLASS A      AIM SMALL CAP OPPORTUNITIES
   AIM GLOBAL FINANCIAL SERVICES       FUND -- CLASS A
     FUND -- CLASS A                   AIM STRATEGIC INCOME
   AIM GLOBAL GOVERNMENT INCOME        FUND -- CLASS A
     FUND -- CLASS A                   AIM TAX-EXEMPT BOND FUND
   AIM GLOBAL GROWTH                   OF CONNECTICUT -- CLASS A
     FUND -- CLASS A                   AIM VALUE FUND -- CLASS A
   AIM GLOBAL GROWTH &                 AIM WEINGARTEN FUND -- CLASS A
     INCOME FUND -- CLASS A            AIM WORLDWIDE GROWTH
   AIM GLOBAL HEALTH CARE              FUND -- CLASS A
     FUND -- CLASS A
</TABLE>
    
 
                                      A-12
<PAGE>   34
 
   
  Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE; (iii) Class A shares
may be exchanged for Class A shares; (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A, Class B or Class C shares of AIM MONEY MARKET FUND. Class C shares
of AIM Small Cap Opportunities Fund are currently not available.
    
 
  DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
 
<TABLE>
<CAPTION>
                                                                                                      MULTIPLE CLASS FUNDS:
                                                            LOWER LOAD              NO LOAD       ------------------------------
      FROM:                 TO: LOAD FUNDS                     FUNDS                 FUNDS           CLASS B         CLASS C
      -----                 --------------                  ----------              -------          -------         -------
<S>                <C>                                <C>                      <C>                <C>             <C>
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
 
Lower Load Funds.. Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund or any     Fund or any Lower Load
                   Lower Load Fund.                   Fund; otherwise,
                                                      Offering Price.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
 
  FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS REVISED AS FOLLOWS:
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
Lower Load Funds.. Net Asset Value if shares were     Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
                   acquired upon exchange of any
                   Load Fund. Otherwise, difference
                   in sales charge will apply.
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund.           Fund or any Lower Load
                   Difference in sales charge will    Fund; otherwise,
                   apply if No Load shares were       Offering Price.
                   acquired upon exchange of Lower
                   Load Fund shares.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
  Class C........  Not Applicable                     Not Applicable           Not Applicable     Not Applicable  Net Asset Value
</TABLE>
 
   
  An exchange is permitted only in the following circumstances: (a) if the funds
offer more than one class of shares, the exchange must be between the same class
of shares (e.g., Class A, Class B and Class C shares of a Multiple Class Fund
cannot be exchanged for each other) except that AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may be exchanged for Class A shares of another Multiple Class
Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten busi-
    
 
                                      A-13
<PAGE>   35
 
ness days, and all other shares are held in an account for at least one day,
prior to the exchange; and (h) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the AIM
Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
   
  Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged are
redeemed at their net asset value as determined at NYSE Close on the day that an
exchange request in proper form (described below) is received. Exchange requests
received after NYSE Close will result in the redemption of shares at their net
asset value at NYSE Close on the next business day. See "Terms and Conditions of
Purchase of the AIM Funds -- Timing of Purchase, Exchange and Redemption Orders
(AIM MONEY MARKET FUND only)" for information regarding the timing of exchange
orders for AIM MONEY MARKET FUND. Normally, shares of an AIM Fund to be acquired
by exchange are purchased at their net asset value or applicable offering price,
as the case may be, determined on the date that such request is received, but
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that a fund would be materially disadvantaged
by an immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into a fund paying daily dividends (See "Dividends, Distributions and
Tax Matters -- Dividends and Distributions," below), and the release of the
exchange proceeds is delayed for the foregoing five-day period, such shareholder
will not begin to accrue dividends until the sixth business day after the
exchange. Shares purchased by check may not be exchanged until it is determined
that the check has cleared, which may take up to ten business days from the date
that the check is received. See "Terms and Conditions of Purchase of the AIM
Funds -- Timing of Purchase Orders."
    
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the AIM Funds. AIM Distributors reserves the right to impose conditions on
dealers or investment advisors who make telephone exchanges of shares of the
funds, including the condition that any such dealer or investment advisor enter
into an agreement (which contains additional conditions with respect to
exchanges of shares) with AIM Distributors. To exchange shares by telephone, a
shareholder, dealer or investment advisor who has satisfied the foregoing
conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach
AFS by telephone, he may also request exchanges by telegraph or use overnight
courier services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is received
prior to NYSE Close. The Transfer Agent and AIM Distributors will not be liable
for any loss, expense or cost arising out of any telephone exchange request that
they reasonably believe to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions if they do not follow
reasonable procedures for verification of telephone transactions. Such
reasonable procedures may include recordings of telephone transactions
(maintained for six months), requests for confirmation of the shareholder's
Social Security Number and current address, and mailings of confirmations
promptly after the transaction.
 
  EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
 
                                      A-14
<PAGE>   36
 
  MULTIPLE DISTRIBUTION SYSTEM. Class B Shares. Class B shares purchased under
the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
 
<TABLE>
<CAPTION>
  YEARS                                                     CONTINGENT DEFERRED
  SINCE                                                       SALES CHARGE AS
PURCHASE                                                    % OF DOLLAR AMOUNT
  MADE                                                       SUBJECT TO CHARGE
- --------                                                    -------------------
<S>                                                          <C>
First......................................................         5%
Second.....................................................         4%
Third......................................................         3%
Fourth.....................................................         3%
Fifth......................................................         2%
Sixth......................................................         1%
Seventh and Following......................................        None
</TABLE>
 
  In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
 
  Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
 
  Class C Shares. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
 
  Waivers. Contingent deferred sales charges on Class B and Class C shares will
be waived on redemptions (1) following the death or post-purchase disability, as
defined in Section 72(m)(7) of the Code, of a shareholder or a settlor of a
living trust (provided AIM Distributors is notified of such death or
post-purchase disability at the time of the redemption request and is provided
with satisfactory evidence of such death or post-purchase disability), (2) in
connection with certain distributions from IRAs, custodial accounts maintained
pursuant to Code Section 403(b), deferred compensation plans qualified under
Code Section 457 and plans qualified under Code Section 401 (collectively,
"Retirement Plans"), (3) pursuant to a Systematic Withdrawal Plan, provided that
amounts withdrawn under such plan do not exceed on an annual basis 12% of the
value of the shareholder's investment in Class B or Class C shares at the time
the shareholder elects to participate in the Systematic Withdrawal Plan, (4)
effected pursuant to the right of a Multiple Class Fund to liquidate a
shareholder's account if the aggregate net asset value of shares held in the
account is less than the designated minimum account size described in the
prospectus of such Multiple Class Fund, (5) effected by AIM of its investment in
Class B or Class C shares and (6) of Class C shares where such investor's dealer
of record, due to the nature of the investor's account, notifies AIM
Distributors prior to the time of investment that the dealer waives the payment
otherwise payable to the dealer described in the last paragraph under the
caption "Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM
Funds."
 
  Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
 
  Waiver category (2) above applies only to redemptions resulting from:
 
          (i) required minimum distributions to plan participants or
     beneficiaries who are age 70 1/2 or older, and only with respect to that
     portion of such distributions which does not exceed 12% annually of the
     participant's or beneficiary's account value in a particular AIM Fund;
 
                                      A-15
<PAGE>   37
 
          (ii) in-kind transfers of assets where the participant or beneficiary
     notifies AIM Distributors of such transfer no later than the time such
     transfer occurs;
 
          (iii) tax-free rollovers or transfers of assets to another Retirement
     Plan invested in Class B or Class C shares of one or more Multiple Class
     Funds;
 
          (iv) tax-free returns of excess contributions or returns of excess
     deferral amounts; and
 
          (v) distributions upon the death or disability (as defined in the
     Code) of the participant or beneficiary.
 
   
  CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND or Class A shares
of AIM DOLLAR FUND which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code, or Plans created under Section 403(b) of the
Code and sponsored by nonprofit organizations as defined under Section 501(c)(3)
of the Code, where shares are being redeemed in connection with employee
terminations or withdrawals, and (a) the total amount invested in a Plan is at
least $1,000,000, (b) the sponsor of a Plan signs a letter of intent to invest
at least $1,000,000 in one or more of the AIM Funds, or (c) the shares being
redeemed were purchased by an employer-sponsored Plan with at least 100 eligible
employees; provided, however, that Plans created under Section 403(b) of the
Code which are sponsored by public educational institutions shall qualify under
(a), (b) or (c) above on the basis of the value of each Plan participant's
aggregate investment in the AIM Funds, and not on the aggregate investment made
by the Plan or on the number of eligible employees; (2) redemptions of shares
following the death or post-purchase disability, as defined in Section 72(m)(7)
of the Code, of a shareholder or a settlor of a living trust; (3) redemptions of
shares purchased at net asset value by private foundations or endowment funds
where the initial amount invested was at least $1,000,000; (4) redemptions of
shares purchased by an investor in amounts of $1,000,000 or more where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payments otherwise payable to the dealer as described in the third paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds;" and (5) pursuant to a Systematic Withdrawal Plan, provided
that amounts withdrawn under such plan do not exceed on an annual basis 12% of
the value of the shareholder's investment in Class A shares at the time the
shareholder elects to participate in the Systematic Withdrawal Plan.
    
 
  Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  In addition to these requirements, shareholders who have invested in a fund to
establish as IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares; (a) a statement
as to whether or not the shareholder has attained age 59 1/2, and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.
 
                                      A-16
<PAGE>   38
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
this account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
   
  EXPEDITED REDEMPTIONS (AIM Cash Reserve shares of AIM MONEY MARKET FUND
ONLY). If a redemption order is received prior to 11:30 a.m. Eastern Time, the
redemption will be effective on that day and AIM MONEY MARKET FUND will endeavor
to transmit payment on that same business day. If the redemption order is
received after 11:30 a.m. and prior to NYSE Close, the redemption will be made
at the next determined net asset value and payment will generally be transmitted
on the next business day.
    
 
  REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing the
appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone
 
                                      A-17
<PAGE>   39
 
exchange and telephone redemption authorization forms; (7) changes in previously
designated wiring or electronic funds transfer instructions, and (8) written
redemptions or exchanges of shares previously reported as lost, whether or not
the redemption amount is under $50,000 or the proceeds are to be sent to the
address of record. These requirements may be waived or modified upon notice to
shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
    
 
   
  REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within ninety (90) days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment will not alter the taxes due on any
capital gains, except under the circumstances described below. If there has been
a loss on the redemption and shares of the same fund are repurchased, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in shares of the same fund, or exchanged for
shares of another AIM Fund, at a reduced sales charge within 90 days of the
payment of the sales charge, the shareholder's basis in the fund shares redeemed
may not include the amount of the sales charge paid, thereby reducing the loss
or increasing the gain recognized from the redemption; however, the
shareholder's basis in the fund shares purchased will include the sales charge.
Each AIM Fund may amend, suspend or cease offering the privilege at any time as
to shares redeemed after the date of such amendment, suspension or cessation.
This privilege may only be exercised once each year by a shareholder with
respect to each AIM Fund.
    
 
   
  Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of Class A shares and who subsequently reinvest a portion or
all of the value of the redeemed shares in Class A shares of any AIM Fund within
ninety (90) days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
    
 
                                      A-18

<PAGE>   40
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
   
  The net asset value per share (or share price) of each AIM Fund is determined
as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close with
respect to AIM MONEY MARKET FUND) on each "business day" of a fund as previously
defined. In the event the NYSE closes early (i.e. before 4:00 p.m. Eastern Time)
on a particular day, the net asset value of an AIM Fund's share will be
determined as of the close of the NYSE on such day. For purposes of defining net
asset value per share, futures and options contracts generally will be valued 15
minutes after the close of trading of the NYSE. The net asset value per share is
calculated by subtracting a class' liabilities from its assets and dividing the
result by the total number of class shares outstanding. The determination of net
asset value per share is made in accordance with generally accepted accounting
principles. Among other items, liabilities include accrued expenses and
dividends payable, and total assets include portfolio securities valued at their
market value, as well as income accrued but not yet received. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the fund's officers and
in accordance with methods which are specifically authorized by its governing
Board of Directors or Trustees. Short-term obligations with maturities of 60
days or less, and the securities held by the Money Market Funds, are valued at
amortized cost as reflecting fair value. AIM HIGH INCOME MUNICIPAL FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-FREE
INTERMEDIATE FUND value variable rate securities that have an unconditional
demand or put feature exercisable within seven days or less at par, which
reflects the market value of such securities.
    
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as
set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                DISTRIBUTIONS    DISTRIBUTIONS
                                                                                   OF NET           OF NET
                                                    DIVIDENDS FROM                REALIZED         REALIZED
                                                    NET INVESTMENT               SHORT-TERM        LONG-TERM
                   FUND                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
                   ----                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM ADVISOR FLEX FUND.....................  declared and paid quarterly       quarterly          annually
AIM ADVISOR INTERNATIONAL VALUE FUND......  declared and paid annually        annually           annually
AIM ADVISOR LARGE CAP VALUE FUND..........  declared and paid quarterly       quarterly          annually
AIM ADVISOR MULTIFLEX FUND................  declared and paid quarterly       quarterly          annually
AIM ADVISOR REAL ESTATE FUND..............  declared and paid quarterly       quarterly          annually
AIM AGGRESSIVE GROWTH FUND................  declared and paid annually        annually           annually
AIM ASIAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM BALANCED FUND.........................  declared and paid quarterly       annually           annually
AIM BASIC VALUE FUND......................  declared and paid annually        annually           annually
AIM BLUE CHIP FUND........................  declared and paid annually        annually           annually
AIM CAPITAL DEVELOPMENT FUND..............  declared and paid annually        annually           annually
AIM CHARTER FUND..........................  declared and paid quarterly       annually           annually
AIM CONSTELLATION FUND....................  declared and paid annually        annually           annually
AIM DEVELOPING MARKETS FUND...............  declared and paid annually        annually           annually
AIM DOLLAR FUND...........................  declared daily; paid monthly      annually           annually
AIM EMERGING MARKETS FUND.................  declared and paid annually        annually           annually
AIM EMERGING MARKETS DEBT FUND............  declared and paid monthsly        annually           annually
AIM EUROPE GROWTH FUND....................  declared and paid annually        annually           annually
AIM EUROPEAN DEVELOPMENT FUND.............  declared and paid annually        annually           annually
AIM GLOBAL AGGRESSIVE GROWTH FUND.........  declared and paid annually        annually           annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
  FUND....................................  declared and paid annually        annually           annually
AIM GLOBAL FINANCIAL SERVICES FUND........  declared and paid annually        annually           annually
</TABLE>
    
 
                                      A-19
<PAGE>   41
 
   
<TABLE>
<CAPTION>
                                                                             DISTRIBUTIONS    DISTRIBUTIONS
                                                                                OF NET           OF NET
                                                 DIVIDENDS FROM                REALIZED         REALIZED
                                                 NET INVESTMENT               SHORT-TERM        LONG-TERM
FUND                                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
- ----                                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM GLOBAL GOVERNMENT INCOME FUND.........  declared and paid monthly         annually           annually
AIM GLOBAL GROWTH FUND....................  declared and paid annually        annually           annually
AIM GLOBAL GROWTH & INCOME FUND...........  declared and paid quarterly       annually           annually
AIM GLOBAL HEALTH CARE FUND...............  declared and paid annually        annually           annually
AIM GLOBAL INCOME FUND....................  declared daily; paid monthly      annually           annually
AIM GLOBAL INFRASTRUCTURE FUND............  declared and paid annually        annually           annually
AIM GLOBAL RESOURCES FUND.................  declared and paid annually        annually           annually
AIM GLOBAL TELECOMMUNICATIONS FUND........  declared and paid annually        annually           annually
AIM GLOBAL TRENDS FUND....................  declared and paid annually        annually           annually
AIM GLOBAL UTILITIES FUND.................  declared daily; paid monthly      annually           annually
AIM HIGH INCOME MUNICIPAL FUND............  declared daily; paid monthly      annually           annually
AIM HIGH YIELD FUND.......................  declared daily; paid monthly      annually           annually
AIM INCOME FUND...........................  declared daily; paid monthly      annually           annually
AIM INTERMEDIATE GOVERNMENT FUND..........  declared daily; paid monthly      annually           annually
AIM INTERNATIONAL EQUITY FUND.............  declared and paid annually        annually           annually
AIM INTERNATIONAL GROWTH FUND.............  declared and paid annually        annually           annually
AIM JAPAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM LATIN AMERICAN GROWTH FUND............  declared and paid annually        annually           annually
AIM LIMITED MATURITY TREASURY FUND........  declared daily; paid monthly      annually           annually
AIM MID CAP EQUITY FUND...................  declared and paid annually        annually           annually
AIM MONEY MARKET FUND.....................  declared daily; paid monthly      at least annually  annually
AIM MUNICIPAL BOND FUND...................  declared daily; paid monthly      annually           annually
AIM NEW PACIFIC GROWTH FUND...............  declared and paid annually        annually           annually
AIM SELECT GROWTH FUND....................  declared and paid annually        annually           annually
AIM SMALL CAP GROWTH FUND.................  declared and paid annually        annually           annually
AIM SMALL CAP OPPORTUNITIES FUND..........  declared and paid annually        annually           annually
AIM STRATEGIC INCOME FUND.................  declared and paid monthly         annually           annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT...  declared daily; paid monthly      annually           annually
AIM TAX-EXEMPT CASH FUND..................  declared daily; paid monthly      at least annually  annually
AIM TAX-FREE INTERMEDIATE FUND............  declared daily; paid monthly      annually           annually
AIM VALUE FUND............................  declared and paid annually        annually           annually
AIM WEINGARTEN FUND.......................  declared and paid annually        annually           annually
AIM WORLDWIDE GROWTH FUND.................  declared and paid annually        annually           annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in like shares of another
Multiple Class Fund, to the extent permitted. For funds that do not declare a
dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. For funds that declare
a dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or the
dividend portion thereof, in cash, or to invest such dividends and distributions
in shares of another fund in the AIM Funds; provided that (i) dividends and
distributions attributable to Class B shares may only be reinvested in Class B
shares, (ii) dividends and distributions attributable to Class C shares may only
be reinvested in Class C shares, (iii) dividends and distributions attributable
to Class A shares may not be reinvested in Class B or Class C shares, and (iv)
dividends and distributions attributable to the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may not be reinvested in the Class A shares of that Fund or in
any Class B or Class C shares. Investors who have not previously selected such a
reinvestment option on the account application form may contact the Transfer
Agent at any time to obtain a form to authorize such reinvestments in another
AIM Fund. Such reinvestments into the AIM Funds are not subject to sales
charges, and shares so purchased are automatically credited to the account of
the shareholder.
 
  Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
 
                                      A-20
<PAGE>   42
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares, except for "exempt-interest dividends" paid by
AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND
FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND
(the "Tax-Exempt Funds"), which are exempt from federal income tax. With respect
to tax-exempt shareholders, dividends and distributions from the AIM Funds are
not subject to federal income taxation to the extent permitted under the
applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    
 
   
  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
    
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
                                      A-21
<PAGE>   43
   
 TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
  TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other taxable securities. For
additional information concerning the alternative minimum tax and certain
collateral tax consequences of the receipt of exempt-interest dividends, see the
Statements of Additional Information applicable to the Tax-Exempt Funds.
 
  The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
 
  To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
 
  From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP EQUITY FUND,
AIM SMALL CAP GROWTH FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX INFORMATION.
Certain states exempt from income taxes dividends paid by mutual funds
attributable to interest on U.S. Treasury and certain other U.S. government
obligations. Investors should consult with their own tax advisors concerning the
availability of such exemption.
    
 
  AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH
FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do
so, each of these funds may elect to pass through to its shareholders credits
for foreign taxes paid. If a fund makes such an election, a shareholder who
receives a distribution (1) will be required to include in gross income his
proportionate share of foreign taxes allocable to the distribution and (2) may
claim a credit or deduction for such share for his taxable year in which the
distribution is received, subject to the general limitations imposed on the
allowance of foreign tax credits and deductions. Shareholders should also note
that certain gains or losses attributable to fluctuations in exchange rates or
foreign currency forward contracts may increase or decrease the amount of income
of the fund available for distribution to shareholders and should note that if,
for any fund, such losses exceed other income during a taxable year, the fund
would not be able to pay ordinary income dividends for that year.
 
                                      A-22
<PAGE>   44
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each AIM Fund's transfer agent and dividend
payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-23
<PAGE>   45
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
 
 
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                              GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
      ACCOUNT TYPE            NUMBER OF:                       ACCOUNT TYPE                  NUMBER OF:
      ------------            --------------------             ------------                  ------------------
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary
      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application
      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors
      Legal Guardian          Ward, Minor or
                              Incompetent
      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
 
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   46
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   47
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
 
   
DVM-PRO-1
    
<PAGE>   48
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
CLASS A AND CLASS B SHARES OF
    
 
AIM EMERGING MARKETS FUND
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
PROSPECTUS
SEPTEMBER 8, 1998
 
This Prospectus contains information about AIM EMERGING MARKETS FUND (The
"Fund"), which is one of several series investment portfolios comprising AIM
Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a diversified portfolio which seeks long-term growth of
capital by investing primarily in equity securities of companies in emerging
markets.
 
The Fund is designed for long term investors and not as a trading vehicle. The
Fund does not represent a complete investment program, nor is it suitable for
all investors. The Fund may invest significantly in lower quality and unrated
foreign government bonds whose credit quality is generally considered the
equivalent of U.S. corporate debt securities commonly known as "junk bonds."
Investments of this type are subject to a greater risk of loss of principal and
interest. An investment in the Fund should be considered speculative and subject
to special risk factors, related primarily to the Fund's investments in emerging
markets. Purchasers should carefully assess the risks associated with an
investment in the Fund.
 
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information dated
September 8, 1998 has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   49
 
   
    
 
- --------------------------------------------------------------------------------
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     6
  Investment Program...................     6
  Risk Factors.........................     9
  Management...........................    12
  Organization of the Trust............    14
    
   
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-9
  Exchange Privilege...................  A-12
  How to Redeem Shares.................  A-14
  Determination of Net Asset Value.....  A-19
  Dividends, Distributions and Tax
     Matters...........................  A-19
  General Information..................  A-23
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
  The Fund is a diversified series of the Trust.
 
  INVESTMENT OBJECTIVE. The Fund seeks long-term growth of capital.
 
  PRINCIPAL INVESTMENT. The Fund normally invests at least 65% of its total
assets in equity securities of companies in emerging markets.
 
   
  INVESTMENT MANAGERS. The Fund is managed by A I M Advisors, Inc. ("AIM") and
is sub-advised and sub-administered by INVESCO (NY), Inc. (the "Sub-advisor").
AIM and the Sub-advisor and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-advisor are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
AIM was organized in 1976 and, together with its subsidiaries, currently advises
approximately 90 investment company portfolios.
    
 
   
  PURCHASING SHARES. Investors may select Class A or Class B shares of the Fund
which are offered by this Prospectus at an offering price that reflects
differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to
a separate prospectus, the Fund also offers Advisor Class shares, which
represent interests in the Fund. The Advisor Class has different distribution
arrangements.
    
 
  CLASS A SHARES -- Shares are offered at net asset value plus any applicable
initial sales charge.
 
  CLASS B SHARES -- Shares are offered at net asset value without an initial
sales charge and are subject to a maximum contingent deferred sales charge of 5%
on certain redemptions made within six years from the date such shares were
purchased. Class B shares automatically convert to Class A shares of the Fund
eight years following the end of the calender month in which a purchase was
made. Class B shares are subject to higher expenses than Class A shares.
 
  Initial investments in any class of shares must be at least $500 and
additional investments must be at least $50. The minimum initial investment is
modified for investments through tax-qualified retirement plans and accounts
initially established with an Automatic Investment Plan. The distributor of the
Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
 
  SUITABILITY FOR INVESTORS. An investor in Class A or Class B shares of the
Fund should consider the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the shares are expected to
be held, and other circumstances. Investors should consider whether, during the
anticipated life of their investment in the Fund, the accumulated distribution
fees and any applicable contingent deferred sales charges on Class B shares
prior to conversion would be less than the initial sales charge and accumulated
distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares.
To assist investors in making this determination, the table under the caption
"Table of Fees and Expenses" sets forth examples of the charges applicable to
each class of shares. Class A shares will normally be more beneficial than Class
B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase
of more than $250,000 for Class B shares.
 
                                        2
<PAGE>   50
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds"). Class
A and Class B shares of the Fund may be exchanged for shares of other funds in
The AIM Family of Funds in the manner and subject to the policies and charges
set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Class A shareholders of the Fund may redeem all or a portion
of their shares at net asset value on any business day, generally without
charge. A contingent deferred sales charge of 1% may apply to certain
redemptions where a purchase of more than $1 million is made at net asset value.
See "How to Redeem Shares -- Contingent Deferred Sales Charge Program for Large
Purchases."
 
  Class B shareholders of the Fund may redeem all or a portion of their shares
at net asset value on any business day, less a contingent deferred sales charge
for redemptions made within six years from the date such shares were purchased.
Class B shares redeemed after six years from the date such shares were purchased
will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters" and "Special Plans."
    
 
  RISK FACTORS. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset values will fluctuate, reflecting fluctuations
in the market value of its portfolio holdings.
 
   
  The Fund will invest primarily in foreign securities. Investments in foreign
securities involve risks relating to political and economic developments abroad
and the differences between the regulations to which U.S. and foreign issuers
are subject. Individual foreign economies also may differ favorably or
unfavorably from the U.S. economy. Changes in foreign currency exchange rates
will affect the Fund's net asset value, earnings and gains and losses realized
on sales of securities. Securities of foreign companies may be less liquid and
their prices more volatile than those of securities of comparable U.S.
companies. The Fund may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs. The Fund may invest up
to 20% of its total assets in below investment grade debt securities.
Investments of this type are subject to a greater risk of loss of principal and
interest. See "Investment Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   51
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
   The expenses and maximum transaction costs associated with investing in the
Class A and Class B shares of the Fund are reflected in the following table(1):
 
<TABLE>
<CAPTION>
                                                              CLASS A   CLASS B
                                                              -------   -------
<S>                                                           <C>       <C>
Shareholder Transaction Costs(2):
  Maximum sales charge on purchases (as a % of offering
     price).................................................   4.75%     None
  Sales charges on reinvested distributions to
     shareholders...........................................   None      None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale,
     whichever is less).....................................   None      5.00%
  Redemption charges........................................   None      None
  Exchange fees.............................................   None      None
Annual Fund Operating Expenses(3): (as a % of average net
  assets)
  Investment management and administration fees.............   0.98%     0.98%
  12b-1 distribution and service fees.......................   0.50%     1.00%
  Other expenses (after reimbursements and waivers).........   0.52%     0.52%
                                                               ----      ----
          Total Fund Operating Expenses.....................   2.00%     2.50%
                                                               ====      ====
</TABLE>
 
   
(1)  This table is intended to assist investors in understanding the various
     costs and expenses associated with investing in the Fund. Long-term
     shareholders may pay more than the economic equivalent of the maximum
     front-end sales charges permitted by the National Association of Securities
     Dealers, Inc. ("NASD") rules regarding investment companies.
    
 
(2)  Sales charge waivers are available for Class A and Class B shares, and
     reduced sales charge purchase plans are available for Class A shares. The
     maximum 5% contingent deferred sales charge on Class B shares applies to
     redemptions during the first year after purchase. The charge generally
     declines by 1% annually thereafter, reaching zero after six years. See
     "Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
     Sales Charges."
 
   
(3)  Expenses are based on the Fund's fiscal year ended October 31, 1997
     restated to reflect AIM's undertaking to limit the Fund's expenses
     (exclusive of brokerage commissions, taxes, interest and extraordinary
     expenses) to the annual rate of 2.00% and 2.50% of the average daily net
     assets of the Fund's Class A and Class B shares, respectively. AIM has
     voluntarily agreed to continue this limitation through May 31, 2000. "Other
     expenses" include custody, transfer agency, legal, audit and other
     operating expenses. Without reimbursements and waivers, "Other expenses"
     and "Total Fund Operating Expenses" would have been 0.70% and 2.18%,
     respectively, for Class A Shares and 0.70% and 2.68%, respectively, for
     Class B Shares of the Fund. See "Management" herein and the Statement of
     Additional Information for more information.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                     1 YEAR   3 YEARS   5 YEARS   10 YEARS(3)
                                                     ------   -------   -------   -----------
<S>                                                  <C>      <C>       <C>       <C>
Class A Shares(1)..................................   $67      $108      $151        $289
Class B Shares
  Assuming a complete redemption at end of
     period(2).....................................   $77      $111      $157        $274
  Assuming no redemption...........................   $26      $ 79      $135        $274
</TABLE>
    
 
   
(1)  Assumes payment of maximum sales charge by the investor.
    
 
   
(2)  Assumes deduction of the applicable contingent deferred sales charge.
    
 
   
(3)  For Class B shares, this number reflects the conversion to Class A shares
     eight years following the end of the calendar month in which a purchase was
     made.
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT EXPENSES, MAY
BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE ASSUMPTION IN THE
HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY REGULATION OF THE SEC
APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS NOT A PREDICTION OF AND
DOES NOT REPRESENT THE FUND'S PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   52
 
- --------------------------------------------------------------------------------
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The tables below provide condensed financial information concerning income and
capital changes for one Class A and Class B share of each Fund. This information
is supplemented by the financial statements and accompanying notes appearing in
the Statement of Additional Information. The financial statements and notes for
the fiscal year ended October 31, 1997 and for the semi-annual period ended
April 30, 1998, have been audited by PricewaterhouseCoopers LLP, independent
accountants, whose report thereon also is included in the Statement of
Additional Information.
    
 
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
   
<TABLE>
<CAPTION>
                                           SIX MONTHS                                                              MAY 18, 1992
                                             ENDED                       YEAR ENDED OCTOBER 31,                   (COMMENCEMENT
                                           APRIL 30,      ----------------------------------------------------    OF OPERATIONS)
                                            1998(D)       1997(D)    1996(D)    1995(D)      1994       1993     TO OCT. 31, 1992
                                           ----------     --------   --------   --------   --------   --------   ----------------
<S>                                        <C>            <C>        <C>        <C>        <C>        <C>        <C>
CLASS A+
Per share operating performance:
  Net asset value, beginning of period...   $  12.20      $  14.26   $  13.85   $  18.81   $  14.42   $  11.10        $ 11.43
                                            --------      --------   --------   --------   --------   --------        -------
Income from investment operations:
  Net investment income (loss)...........       0.02**          --       0.11       0.13      (0.02)      0.02*          0.07*
  Net realized and unrealized gain (loss)
    on investments.......................       0.31         (2.05)      0.30      (4.32)      4.68       3.38          (0.40)
                                            --------      --------   --------   --------   --------   --------        -------
    Net increase (decrease) from
      investment operations..............       0.33         (2.05)      0.41      (4.19)      4.66       3.40          (0.33)
                                            --------      --------   --------   --------   --------   --------        -------
Distributions:
  From net investment income.............         --            --         --         --      (0.01)     (0.08)            --
  From net realized gain on
    investments..........................         --            --         --      (0.77)     (0.26)        --             --
  In excess of net investment income.....         --         (0.01)        --         --         --         --             --
                                            --------      --------   --------   --------   --------   --------        -------
    Total distributions..................         --         (0.01)        --      (0.77)     (0.27)     (0.08)            --
                                            --------      --------   --------   --------   --------   --------        -------
Net asset value, end of period...........   $  12.53      $  12.20   $  14.26   $  13.85   $  18.81   $  14.42        $ 11.10
                                            ========      ========   ========   ========   ========   ========        =======
Total investment return(c)...............       2.79%(a)    (14.45)%     2.96%    (23.04)%    32.58%     30.90%          (2.9)%(a)
Ratios and supplemental data:
Net assets, end of period (in 000's).....   $100,648      $113,319   $224,964   $252,457   $417,322   $187,808        $84,558
Ratio of net investment income (loss) to
  average net assets:
  With expense reductions and
    reimbursement........................       0.31%(b)     (0.01)%     0.76%      0.89%     (0.11)%      0.1%*          1.7%*(b)
  Without expense reductions and
    reimbursement........................       0.30%(b)     (0.09)%     0.64%      0.87%       N/A      (0.11)%              N/A
Ratio of operating expenses to average
  net assets:
  With expense reductions................       1.96%(b)      2.10%      1.96%      2.12%      2.06%       2.4%*          2.4%*(b)
  Without expense reductions.............       2.57%(b)      2.18%      2.08%      2.14%       N/A       2.61%           N/A
Ratio of interest expense to average net
  assets++...............................       0.33%(b)       N/A        N/A        N/A        N/A        N/A            N/A
Portfolio turnover rate++................        117%(b)       150%       104%       114%       100%        99%            32%(b)
Average commission rate per share paid on
  portfolio transactions++...............   $ 0.0016      $ 0.0015   $ 0.0040        N/A        N/A        N/A            N/A
</TABLE>
    
 
- ---------------
 
   
+    All capital shares issued and outstanding as of March 31, 1993 were
     reclassified as Class A shares.
    
 
   
++   Portfolio turnover, average commission rates and ratio interest expense to
     average net assets are calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares issued.
    
 
   
*    Includes reimbursement by the Sub-advisor of Fund operating expenses of
     $0.02 for the year ended October 31, 1993 and for the period from May 18,
     1992 (commencement of operations) to October 31, 1992, respectively.
     Without such reimbursements, the expense ratios would have been 2.61% and
     2.91% and the ratio of net investment income to average net assets would
     have been (0.11)% and 1.21% for the year ended October 31, 1993 and for the
     period from May 18, 1992 (commencement of operations) to October 31, 1992,
     respectively.
    
 
   
**   Before reimbursement by the Sub-advisor, the net investment income per
     share would have been reduced by $0.03.
    
 
   
(a)  Not annualized.
    
 
   
(b)  Annualized.
    
 
   
(c)  Total investment return does not include sales charges.
    
 
   
(d)  These selected per share data were calculated based upon average shares
     outstanding during the period.
    
 
   
N/A  Not Applicable.
    
 
                                        5
<PAGE>   53
 
   
<TABLE>
<CAPTION>
                                                         SIX MONTHS
                                                           ENDED                 YEAR ENDED OCTOBER 31,             APRIL 1, 1993
                                                         APRIL 30,      -----------------------------------------        TO
                                                          1998 (D)      1997(D)    1996(D)    1995(D)      1994     OCT. 31, 1993
                                                         ----------     --------   --------   --------   --------   -------------
<S>                                                      <C>            <C>        <C>        <C>        <C>        <C>
CLASS B+
Per share operating performance:
  Net asset value, beginning of period.................   $  11.94      $  14.02   $  13.68   $  18.68   $  14.39      $ 11.47
                                                          --------      --------   --------   --------   --------      -------
Income from investment operations:
  Net investment income (loss).........................      (0.01)**      (0.08)      0.04       0.06      (0.12)          --*
  Net realized and unrealized gain (loss) on
    investments........................................       0.30         (2.00)      0.30      (4.29)      4.67         2.92
                                                          --------      --------   --------   --------   --------      -------
    Net increase (decrease) from investment
      operations.......................................       0.29         (2.08)      0.34      (4.23)      4.55         2.92
                                                          --------      --------   --------   --------   --------      -------
Distributions:
  From net investment income...........................         --            --         --         --         --           --
  From net realized gain on investments................         --            --         --      (0.77)     (0.26)          --
  In excess of net investment income...................         --            --         --         --         --           --
                                                          --------      --------   --------   --------   --------      -------
    Total distributions................................         --            --         --      (0.77)     (0.26)          --
                                                          --------      --------   --------   --------   --------      -------
Net asset value, end of period.........................   $  12.23      $  11.94   $  14.02   $  13.68   $  18.68      $ 14.39
                                                          ========      ========   ========   ========   ========      =======
Total investment return(c).............................       2.51%(a)    (14.91)%     2.49%    (23.37)%    31.77%        25.5%(a)
Ratios and supplemental data:
Net assets, end of period (in 000's)...................   $100,831      $127,658   $216,004   $225,861   $291,289      $32,318
Ratio of net investment income (loss) to average net
  assets:
  With expense reductions and reimbursement:...........      (0.19)%(b)    (0.51)%     0.26%      0.39%     (0.61)%       (0.4)%*(b)
  Without expense reductions and reimbursement:........      (0.80)%(b)    (0.59)%     0.14%      0.37%       N/A        (0.61)%(b)
Ratio of operating expenses to average net assets:
  With expense reductions..............................       2.46%(b)      2.60%      2.46%      2.62%      2.56%         2.9%*(b)
  Without expense reductions...........................       3.07%(b)      2.68%      2.58%      2.64%       N/A         3.11%(b)
Ratio of interest expense to average net assets++......       0.33%(b)       N/A        N/A        N/A        N/A          N/A
Portfolio turnover rate++..............................        117%(b)       150%       104%       114%       100%          99%
Average commission rate per share paid on portfolio
  transactions++.......................................   $ 0.0016      $ 0.0015   $ 0.0040        N/A        N/A          N/A
</TABLE>
    
 
- ---------------
 
   
+    Commencing April 1, 1993, the Fund began offering Class B shares.
    
 
   
++   Portfolio turnover, average commission rates and ratio interest expense to
     average net assets are calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares issued.
    
 
   
*    Includes reimbursement by the Sub-advisor of Fund operating expenses of
     $0.02. Without such reimbursements, the expense ratio would have been
     (3.63)% and the ratio of net investment income to average net assets would
     have been (0.76)%.
    
 
   
**   Before reimbursement by the Sub-advisor, the net investment income per
     share would have been reduced by $0.03.
    
 
   
(a)  Not annualized.
    
 
   
(b)  Annualized.
    
 
   
(c)  Total investment return does not include sales charges.
    
 
   
(d)  These selected per share data were calculated based upon average shares
     outstanding during the period.
    
 
   
N/A  Not Applicable.
    
 
   
<TABLE>
<CAPTION>
                                          AMOUNT OF                               AVERAGE MONTHLY NUMBER   AVERAGE AMOUNT
                                             DEBT            AVERAGE AMOUNT       OF REGISTRANT'S SHARES    OF DEBT PER
                                        OUTSTANDING AT    OF DEBT OUTSTANDING          OUTSTANDING          SHARE DURING
YEAR ENDED                              END OF PERIOD      DURING THE PERIOD        DURING THE PERIOD        THE PERIOD
- ----------                              --------------   ----------------------   ----------------------   --------------
<S>                                     <C>              <C>                      <C>                      <C>
Six months ended April 30, 1998.......    $3,353,000           $5,242,625               18,290,005            $ 0.287
October 31, 1997......................    $6,184,000           $2,568,627               26,177,077            $0.0981
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed on a daily
basis.
    
 
                                        6
<PAGE>   54
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return. Standardized total return
for Class A shares reflects the deduction of the Fund's maximum front-end sales
charge at the time of purchase. Standardized total return for Class B shares
reflects the deduction of the maximum applicable contingent deferred sales
charge on a redemption of shares held for the period.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVE. The Fund's investment objective is long-term growth of
capital. Under normal circumstances, the Fund seeks its objective by investing
at least 65% of its total assets in equity securities of companies in emerging
markets. The Fund may invest in the following types of equity securities: common
stock, preferred stock, securities convertible into common stock, rights and
warrants to acquire such securities and substantially similar forms of equity
with comparable risk characteristics. There can be no assurance that the Fund
will meet its investment objective.
    
 
   
  INVESTMENT POLICIES. For purposes of the Fund's operations, "emerging markets"
consist of all countries determined by the Sub-advisor to have developing or
emerging economies and markets. These countries generally include every country
in the world except the United States, Canada, Japan, Australia, New Zealand and
most countries located in Western Europe. See "Investment Objective and
Policies" in the Statement of Additional Information for a complete list of all
the countries that the Fund does not consider to be emerging markets.
    
 
  For purposes of the Fund's policy of normally investing at least 65% of its
total assets in equity securities of issuers in emerging markets, the Fund will
consider investment in the following emerging markets:
 
Algeria
Argentina
Bolivia
Botswana
Brazil
Bulgaria
Chile
China
Colombia
Costa Rica
Cyprus
Czech Republic
Dominican Republic
Ecuador
Egypt
El Salvador
Finland
Ghana
Greece
Hong Kong
Hungary
India
Indonesia
Israel
Ivory Coast
Jamaica
Jordan
Kazakhstan
Kenya
Lebanon
Malaysia
Mauritius
Mexico
Morocco
Nicaragua
Nigeria
Oman
Pakistan
Panama
Paraguay
Peru
Philippines
Poland
Portugal
Republic of Slovakia
Russia
Singapore
Slovenia
South Africa
South Korea
Sri Lanka
 
                                        7
<PAGE>   55
 
Swazilaka
Taiwan
Thailand
Turkey
Ukraine
Uruguay
Venezuela
Zambia
Zimbabwe
 
  Although the Fund considers each of the above-listed countries eligible for
investment, it will not be invested in all such markets at all times. Moreover,
investing in some of those markets currently may not be desirable or feasible,
due to the lack of adequate custody arrangements for the Fund's assets, overly
burdensome repatriation and similar restrictions, the lack of organized and
liquid securities markets, unacceptable political risks or for other reasons.
 
   
  As used in this Prospectus, an issuer in an emerging market is an entity: (i)
for which the principal securities trading market is an emerging market, as
defined above; (ii) that (alone or on a consolidated basis) derives 50% or more
of its total revenues from business in emerging markets, provided that, in the
Sub-advisor's view, the value of such issuer's securities will tend to reflect
emerging market developments to a greater extent than developments elsewhere; or
(iii) organized under the laws of, or with a principal office in, an emerging
market.
    
 
  The Fund may also invest up to 35% of its total assets in (i) debt securities
of government or corporate issuers in emerging markets; (ii) equity and debt
securities of issuers in developed countries, including the United States; (iii)
securities of issuers in emerging markets not included in the list of emerging
markets above, if investing therein becomes feasible and desirable subsequent to
the date of this Prospectus; and (iv) cash and money market instruments.
 
   
  The Fund invests in those emerging markets that the Sub-advisor believes have
strongly developing economies and in which the markets are becoming more
sophisticated. In selecting investments, the Sub-advisor seeks to identify those
countries and industries where economic and political factors, including
currency movements, are likely to produce above-average growth rates. The Sub-
advisor then invests in those companies in such countries and industries that
are best positioned and managed to take advantage of these economic and
political factors. The Fund ordinarily will be invested in the securities of
issuers in at least three different emerging markets. In evaluating investments
in securities of issuers in developed markets, the Sub-advisor will consider,
among other things, the business activities of the issuer in emerging markets
and the impact that developments in emerging markets are likely to have on the
issuer.
    
 
   
  The Sub-advisor believes that the issuers of securities in emerging markets
often have sales and earnings growth rates that exceed those in developed
countries and that such growth rates may in turn be reflected in more rapid
share price appreciation. Accordingly, the Sub-advisor believes that the Fund's
policy of investing in equity securities of companies in emerging markets may
enable the Fund to achieve results superior to those produced by mutual funds
with similar objectives that invest solely in equity securities of issuers
domiciled in the United States and/or in other developed markets.
    
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
  INVESTMENTS IN DEBT SECURITIES. The Fund may invest in debt securities of
governmental and corporate issuers in emerging markets. Emerging market debt
securities often are rated below investment grade or not rated by U.S. rating
agencies. The Fund may invest up to 20% of its total assets in debt securities
rated below investment grade. Investment in below investment grade debt
securities involves a high degree of risk and can be speculative. These debt
securities are the equivalent of high yield, high risk bonds, commonly known as
"junk bonds." See "Risk Factors -- Risks Associated with Debt Securities."
 
   
  If the rating of a debt security held by the Fund drops below a minimum rating
considered acceptable by the Sub-advisor, the Fund will dispose of any such
security as soon as practicable and consistent with the best interests of the
Fund and its shareholders.
    
 
  Growth of capital in debt securities may arise as a result of favorable
changes in relative foreign exchange rates, in relative interest rate levels
and/or in the creditworthiness of issuers. The receipt of income from debt
securities owned by the Fund is incidental to its objective of long-term growth
of capital.
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic, or
political conditions. Under a defensive strategy, the Fund temporarily may
invest up to 100% of its assets in cash (U.S. dollars, foreign currencies,
multinational currency units such as Euros) and/or high quality debt securities
or money market instruments of U.S. or foreign issuers. In addition, for
temporary defensive purposes, most or all of its investments may be made in the
United States and denominated in U.S. dollars. To the extent the Fund employs a
temporary defensive strategy, it will not be invested so as to achieve directly
its investment objective. In addition, pending investment of proceeds from new
sales of Fund shares or to meet ordinary daily cash needs, the Fund temporarily
may hold cash (U.S. dollars, foreign currencies or multinational currency units)
and may invest any portion of its assets in money market instruments. For a
description of money market instruments in which the Fund may invest, see
"Temporary Defensive Strategies" in the "Investment Objectives and Policies"
section of the Statement of Additional Information.
    
 
   
  INVESTMENT IN OTHER INVESTMENT COMPANIES OR VEHICLES. The Fund may be able to
invest in certain countries solely or primarily through governmentally
authorized investment vehicles or companies, some of which may be investment
vehicles or companies that are advised by the Sub-advisor or its affiliates
("Affiliated Funds"). Pursuant to the Investment Company Act of 1940 (the
    
 
                                        8
<PAGE>   56
 
"1940 Act"), the Fund generally may invest up to 10% of its total assets in the
aggregate in shares of other investment companies and up to 5% of its total
assets in any one investment company, as long as each investment does not
represent more than 3% of the outstanding voting stock of the acquired
investment company at the time of investment.
 
   
  Investment in other investment companies may involve the payment of
substantial premiums above the value of such investment companies' portfolio
securities and is subject to limitations under the 1940 Act and market
availability. The Fund does not intend to invest in such investment companies
unless, in the judgment of the Sub-advisor, the potential benefits of such
investment justify the payment of any applicable premium or sales charge. As a
shareholder in an investment company, the Fund would bear its ratable share of
that investment company's expenses, including its advisory and administration
fees. At the same time the Fund would continue to pay its own management fees
and other expenses. AIM and the Sub-advisor will waive their advisory fees to
the extent that the Fund invests in an Affiliated Fund.
    
 
   
  SECURITIES LENDING. The Fund may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows a
Fund to retain ownership of the securities loaned and, at the same time,
enhances the Fund's total return. At all times a loan is outstanding, the Fund's
borrower must maintain with the Fund's custodian collateral consisting of cash,
U.S. government securities or certain irrevocable letters of credit equal to at
least the value of the borrowed securities plus any accrued interest or such
other collateral as permitted by the Fund's investment program and regulatory
agencies, and as approved by the Board. The Fund limits its loans of portfolio
securities to an aggregate of 30% of the value of its total assets, measured at
the time any such loan is made. The risks in lending portfolio securities, as
with other extensions of secured credit, consist of possible delays in receiving
additional collateral or in recovery of the loaned securities and possible loss
of rights in the collateral should the borrower fail financially.
    
 
   
  PRIVATIZATIONS. The governments in some emerging markets have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Fund in privatizations in appropriate
circumstances. In certain emerging markets, the ability of foreign entities such
as the Fund to participate in privatizations may be limited by local law, or the
terms on which the Fund may be permitted to participate may be less advantageous
than those afforded local investors. There can be no assurance that governments
in emerging markets will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
    
 
  BORROWING. It is a fundamental policy of the Fund that it may borrow an amount
up to 33 1/3% of its total assets in order to meet redemption requests.
Borrowing may cause greater fluctuation in the value of the Fund's shares than
would be the case if the Fund did not borrow, but also may enable the Fund to
retain favorable securities positions rather than liquidating such positions to
meet redemptions. It is a nonfundamental policy of the Fund that the Fund will
not purchase securities during times when outstanding borrowings represent 5% or
more of the Fund's total assets.
 
  WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities and forward commitments only with the intention
of actually receiving or delivering the securities, as the case may be. No
income accrues on securities that have been purchased pursuant to a forward
commitment or on a when-issued basis prior to delivery to the Fund. If the Fund
disposes of the right to acquire a when-issued security prior to its acquisition
or disposes of its right to deliver or receive against a forward commitment, it
may incur a gain or loss. At the time the Fund enters into a transaction on a
when-issued or forward commitment basis, the Fund will segregate cash or liquid
securities equal to the value of the when-issued or forward commitment
securities with its custodian bank and will mark to market daily such assets.
There is a risk that the securities may not be delivered and that the Fund may
incur a loss.
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment risk normally associated with the
portfolio. These instruments are often referred to as "derivatives," which may
be defined as financial instruments whose performance is derived, at least in
part, from the performance of another asset (such as a security, currency or an
index of securities). The Fund may enter into such instruments up to the full
value of its portfolio assets. See "Risk Factors -- Options, Futures and Foreign
Currency Transactions" herein and "Options, Futures and Currency Strategies" in
the Statement of Additional Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on such futures
contracts to hedge against movements in exchange rates.
 
  Only a limited market, if any, currently exists for options and futures
transactions relating to currencies of most emerging markets, to securities
denominated in such currencies or to securities of issuers domiciled or
principally engaged in business in such emerging
 
                                        9
<PAGE>   57
 
   
markets. To the extent that such a market does not exist, the Sub-advisor may
not be able to effectively hedge its investment in such markets.
    
 
   
  The Fund may purchase and sell put and call options on securities to hedge
against the risk of fluctuations in the prices of securities held by the Fund or
that the Sub-advisor intends to include in the Fund's portfolio. The Fund also
may purchase and sell put and call options on indices to hedge against overall
fluctuations in the securities markets generally or in a specific market sector.
    
 
  Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market decline or a decline in a specific market sector that could
adversely affect the Fund's portfolio. The Fund also may purchase stock index
futures contracts and purchase call options or write put options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisitions. The Fund
may use interest rate futures contracts and options thereon to hedge the debt
portion of its portfolios against changes in the general level of interest
rates.
 
  OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations as
fundamental policies which also may not be changed without shareholder approval.
A complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information may be changed by the Trust's Board of Trustees without shareholder
approval. If a percentage restriction on investment or utilization of assets in
an investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
 
   
  The Fund is authorized to engage in Short Sales, although it currently has no
intention of doing so, and may purchase American Depositary Receipts, American
Depositary Shares, Global Depositary Receipts and European Depositary Receipts.
See "Short Sales" and "Depositary Receipts," respectively, in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
    
   
- --------------------------------------------------------------------------------
    
 
RISK FACTORS
 
   
  GENERAL. There is no assurance that the Fund will achieve its investment
objective. Investing in the Fund entails a substantial degree of risk and an
investment in the Fund should be considered speculative. Investors are strongly
advised to consider carefully the special risks involved in emerging markets,
which are in addition to the usual risks of investing in developed markets
around the world.
    
 
  The Fund's net asset value will fluctuate, reflecting fluctuations in the
market value of its portfolio positions and its net currency exposure. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. The value of equity securities held by the Fund will fluctuate
in response to general market and economic developments, as well as developments
affecting the particular issuers of such securities.
 
  Investing in emerging markets involves risks relating to potential political
and economic instability within such markets and the risks of expropriation,
nationalization, confiscation of assets and property or the imposition of
restrictions on foreign investment and on repatriation of capital invested. In
the event of such expropriation, nationalization or other confiscation, the Fund
could lose its entire investment in that market.
 
  Economies in individual emerging markets may differ favorably or unfavorably
from the U.S. economy in such respects as growth of gross domestic product,
rates of inflation, currency depreciation, capital reinvestment, resource
self-sufficiency and balance of payments positions. Many emerging market
countries have experienced high rates of inflation for many years. Inflation and
rapid fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain countries with
emerging markets.
 
  Emerging markets generally are dependent heavily upon international trade and,
accordingly, have been and may continue to be affected adversely by trade
barriers, exchange controls, managed adjustments in relative currency values and
other protectionist measures imposed or negotiated by the countries with which
they trade.
 
  Disclosure and regulatory standards in many respects are less stringent than
in the U.S. and other major markets. There also may be a lower level of
monitoring and regulation of emerging markets and the activities of investors in
such markets, and enforcement of existing regulations has been extremely
limited. In addition, the securities of non-U.S. issuers generally are not
registered with the SEC, nor are the issuers thereof usually subject to the
SEC's reporting requirements. Accordingly, there may be less publicly available
information about foreign securities and issuers than is available with respect
to U.S. securities and issuers. Foreign companies generally are not subject to
uniform accounting, auditing and financial reporting standards, practices and
requirements comparable to
 
                                       10
<PAGE>   58
 
those applicable to U.S. companies. The Fund's net investment income and/or
capital gains from its foreign investment activities may be subject to non-U.S.
withholding taxes.
 
  In addition, brokerage commissions, custodial services and other costs
relating to investment in foreign markets generally are more expensive than in
the United States, particularly with respect to emerging markets. Such markets
have different settlement and clearance procedures. In certain markets there
have been times when settlements have been unable to keep pace with the volume
of securities transactions, making it difficult to conduct such transactions.
The inability of the Fund to make intended securities purchases due to
settlement problems could cause the Fund to miss attractive investment
opportunities. Inability to dispose of a portfolio security caused by settlement
problems could result either in losses to the Fund due to subsequent declines in
value of the portfolio security or, if the Fund has entered into a contract to
sell the security, could result in possible liability to the purchaser.
 
  The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
developed countries. The risk also exists that an emergency situation may arise
in one or more emerging markets as a result of which trading of securities may
cease or may be substantially curtailed and prices for the Fund's portfolio
securities in such markets may not be readily available. Section 22(e) of the
1940 Act permits a registered investment company, such as the Fund, to suspend
redemption of its shares for any period during which an emergency exists, as
determined by the SEC. Accordingly, when the Fund believes that circumstances
dictate, it will promptly apply to the SEC for a determination that such an
emergency exists within the meaning of Section 22(e) of the 1940 Act. During the
period commencing from the Fund's identification of such conditions until the
date of any SEC action, the Fund's portfolio securities in the affected markets
will be valued at fair value determined in good faith by or under the direction
of the Trust's Board of Trustees.
 
  RISKS ASSOCIATED WITH DEBT SECURITIES. The value of the debt securities held
by the Fund generally will vary inversely with market interest rates. If
interest rates in a market fall, the Fund's debt securities issued by
governments or companies in that market ordinarily will increase in value. If
market interest rates increase, however, the debt securities owned by the Fund
in that market will likely decrease in value.
 
  The Fund may invest up to 20% of its total assets in debt securities rated
below investment grade. Such investments involve a high degree of risk.
 
  Debt rated Baa by Moody's Investors Service, Inc. ("Moody's") is considered by
Moody's to have speculative characteristics. Debt rated BB, B, CCC, CC or C by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), and
debt rated Ba, B, Caa, Ca or C by Moody's is regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. While such
lower quality debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions. Debt rated C by Moody's or S&P is the lowest rated debt that is not
in default as to principal or interest and such issues so rated can be regarded
as having extremely poor prospects of ever attaining any real investment
standing. Lower quality debt securities are also generally considered to be
subject to greater risk than securities with higher ratings with regard to a
deterioration of general economic conditions. These foreign debt securities are
the equivalent of high yield, high risk bonds, commonly known as "junk bonds."
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. Similarly, certain emerging market governments that issue lower
quality debt securities are among the largest debtors to commercial banks,
foreign governments and supranational organizations such as the World Bank, and
may not be able or willing to make principal and/or interest repayments as they
come due. The risk of loss due to default by the issuer is significantly greater
for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities frequently have call or buy-back features which
would permit an issuer to call or repurchase the security from the Fund. In
addition, the Fund may have difficulty disposing of lower quality securities
because they may have a thin trading market. There may be no established retail
secondary market for many of these securities, and the Fund anticipates that
such securities could be sold only to a limited number of dealers or
institutional investors. The lack of a liquid secondary market also may have an
adverse impact on market prices of such instruments and may make it more
difficult for the Fund to obtain accurate market quotations
 
                                       11
<PAGE>   59
 
for purposes of valuing the Fund's portfolio. The Fund may also acquire lower
quality debt securities during an initial underwriting or which are sold without
registration under applicable securities laws. Such securities involve special
considerations and risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Fund may invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic recession.
 
  The Fund may also incur additional expenses to the extent it is required to
seek recovery upon a default in the payment of principal or interest on its
portfolio holdings, and the Fund may have limited legal recourse in the event of
a default. Debt securities issued by governments in emerging markets can differ
from debt obligations issued by private entities in that remedies from defaults
generally must be pursued in the courts of the defaulting government, and legal
recourse is therefore somewhat diminished. Political conditions, in terms of a
government's willingness to meet the terms of its debt obligations, also are of
considerable significance. There can be no assurance that the holders of
commercial bank debt may not contest payments to the holders of debt securities
issued by governments in emerging markets in the event of default by the
governments under commercial bank loan agreements.
 
  ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "Illiquid
Securities."
 
  Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at a price
lower than similar securities that are liquid.
 
  CURRENCY RISK. Because the Fund may invest substantially in securities
denominated in currencies other than the U.S. dollar, and since the Fund may
hold foreign currencies, the Fund will be affected favorably or unfavorably by
exchange control regulations or changes in the exchange rates between such
currencies and the U.S. dollar. Changes in currency exchange rates will
influence the value of the Fund's shares, and also may affect the value of
dividends and interest earned by the Fund and gains and losses realized by the
Fund. Currencies generally are evaluated on the basis of fundamental economic
criteria (e.g., relative inflation and interest rate levels and trends, growth
rate forecasts, balance of payments status and economic policies) as well as
technical and political data. Exchange rates are determined by the forces of
supply and demand in the foreign exchange markets. These forces are affected by
the international balance of payments and other economic and financial
conditions, government intervention, speculation and other factors. If the
currency in which a security is denominated appreciates against the U.S. dollar,
the dollar value of the security will increase. Conversely, a decline in the
exchange rate of the currency would adversely affect the value of the security
expressed in dollars.
 
  Many of the currencies of emerging market countries have experienced steady
devaluations relative to the U.S. dollar, and major devaluations have
historically occurred in certain countries. Any devaluations in the currencies
in which the Fund's portfolio securities are denominated may have a detrimental
impact on the Fund.
 
  Some countries also may have fixed currencies whose values against the U.S.
dollar are not independently determined. In addition, there is a risk that
certain countries may restrict the free conversion of their currencies into
other currencies. Further, certain currencies may not be internationally traded.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
   
  OPTIONS, FUTURES AND FOREIGN CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions, the
Fund might not enter into any such transactions. Options, futures and foreign
currency transactions involve certain risks, which include: (1) dependence on
the Sub-advisor's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets and movements in
interest rates and currency markets; (2) imperfect correlation, or even no
correlation, between movements in the price of forward contracts, options,
futures contracts or options thereon and movements in the price of the currency
or security hedged or used for cover; (3) the fact that skills and techniques
needed to trade options, futures contracts and options thereon or to use forward
currency contracts are different from those needed to select the securities in
which the Fund invests; (4) lack of assurance that a liquid secondary market
will exist for any particular option, futures contract or option thereon at any
particular time; (5) the possible loss of principal under certain conditions;
and (6) the possible inability of the Fund to purchase or sell a portfolio
security at a time when it would otherwise be favorable for it to do so, or the
possi-
    
 
                                       12
<PAGE>   60
 
ble need for the Fund to sell a security at a disadvantageous time, due to the
need for the Fund to maintain "cover" or to set aside securities in connection
with hedging transactions.
- --------------------------------------------------------------------------------
 
MANAGEMENT
 
   
  The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust on the one side and persons or companies furnishing services
to the Fund on the other, including the investment management and administration
agreement with AIM, the investment sub-advisory and sub-administration agreement
between AIM and the Sub-advisor, the agreements with AIM Distributors regarding
distribution of the Fund's shares, the custody agreement and the transfer agency
agreement. The day to day operations of the Fund are delegated to the officers
of the Trust, subject always to the investment objective and policies of the
Fund and to the general supervision of the Trust's Board of Trustees. See
"Trustees and Executive Officers" in the Statement of Additional Information for
information on the Trust's Board of Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers and administrators include, but
are not limited to, determining the composition of the Fund's portfolio and
placing orders to buy, sell or hold particular securities; furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operation. For these services,
the Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on its average daily net assets, at the annualized rate
of 0.975% on the first $500 million, 0.95% on the next $500 million, 0.925% on
the next $500 million, and 0.90% on amounts thereafter. Out of the aggregate
fees payable by the Fund, AIM pays the Sub-advisor sub-advisory and
sub-administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administration fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-advisor, AIM Distributors or other agents. AIM has
undertaken to limit each Fund's expenses (exclusive of brokerage commissions,
taxes, interest and extraordinary expenses) to the annual rate of 2.00% and
2.50% of the average daily net assets of the Fund's Class A and Class B shares,
respectively.
    
 
   
  The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-advisor (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement (the "Advisory Agreement"). AIM was organized in 1976
and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Fund pursuant to an investment sub-advisory and
sub-administration agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of the Sub-advisor,
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included the Sub-advisor and
certain other affiliates. As a result of this transaction, the Sub-advisor is
now an indirect wholly-owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Fund, the Sub-advisor employs a team
approach, taking advantage of its investment resources around the world.
    
 
                                       13
<PAGE>   61
 
  The investment professionals primarily responsible for the portfolio
management of the Fund are as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
NAME/OFFICE                    THE FUND                           PAST FIVE YEARS
- -----------              --------------------                   -------------------
<S>                     <C>                      <C>
Francesco Bertoni       Portfolio Manager        Portfolio Manager for the Sub-advisor since June
London                  since 1998               1998. Investment Director of INVESCO Asset
                                                 Management Ltd. (London) ("INVESCO London"), an
                                                 affiliate of the Sub-advisor, since 1994.
                                                 Portfolio Manager for INVESCO London from 1990 to
                                                 1994.
Christine Rowley        Portfolio Manager        Portfolio Manager for the Sub-advisor, INVESCO GT
London                  since 1997               Asset Management PLC (London) and INVESCO GT Asset
                                                 Management Asia Ltd. (Hong Kong), affiliates of
                                                 the Sub-advisor, since 1992.
</TABLE>
    
 
   
  In placing securities orders for the Fund's portfolio transactions, the
Sub-advisor seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-advisor may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions may be executed
through affiliates of AIM or the Sub-advisor. High portfolio turnover (over
100%) involves correspondingly greater brokerage commissions and other
transaction costs that the Fund will bear directly and could result in the
realization of net capital gains which would be taxable when distributed to
shareholders. See "Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement on
behalf of Class A shares of the Fund, and has entered into a Master Distribution
Agreement on behalf of Class B shares of the Fund (individually referred to as a
"Distribution Agreement" or collectively as the "Distribution Agreements.") with
AIM Distributors, a registered broker-dealer and a wholly owned subsidiary of
AIM, to act as the distributor of Class A and Class B shares of the Fund.
Certain Trustees and officers of the Trust are affiliated with AIM Distributors.
    
 
   
  The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors. In the event the Class B shares Distribution Agreement is
terminated, AIM Distributors would continue to receive payments of asset based
sales charges in respect of the outstanding Class B shares attributable to the
distribution efforts of AIM Distributors; provided, however, that a complete
termination of the Class B shares master distribution plan (as defined in the
plan) would terminate all payments by the Fund of asset based sales charges and
services fees to AIM Distributors. Termination of the Class B shares
distribution plan or Distribution Agreement does not affect the obligation of
Class B shareholders to pay contingent deferred sales charges.
    
 
  DISTRIBUTION PLANS. Class A Plan. The Trust has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
 
  Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.50% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
 
  The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
 
  Of the aggregate amount payable under the Class A Plan, payments to dealers
and other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee. Payments pursuant to the
Plans are subject to any applicable limitations imposed by rules of the National
Association of Securities Dealers, Inc.
 
                                       14
<PAGE>   62
 
  Class B Plan. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
 
  Both Plans. Activities that may be financed under the Class A Plan and the
Class B Plan (collectively, the "Plans") include, but are not limited to:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders, overhead, preparation and distribution of
advertising material and sales literature, expense of organizing and conducting
sales seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
 
  Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
 
   
  Under the Plans, certain financial institutions which have entered into
service agreements and which sell shares of the Fund on an agency basis, may
receive payments from the Fund pursuant to the respective Plans. AIM
Distributors does not act as principal, but rather as agent, for the Fund in
making such payments. The Fund will obtain a representation from such financial
institutions that they will either be licensed as dealers as required under
applicable state law, or that they will not engage in activities which would
constitute acting as a "dealer" as defined under applicable state law. Financial
intermediaries and any other person entitled to receive compensation for selling
Fund shares may receive different compensation for selling shares of one class
over another.
    
 
  For additional information concerning the operation of the Plans see the
Statement of Additional Information.
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST
    
 
   
  The Trust was organized as a Delaware business trust on May 7, 1998. On
September 8, 1998, the Trust acquired the assets of and assumed the liabilities
of AIM Investment Funds, Inc., a Maryland corporation. The Fund constitutes one
of the thirteen separate and distinct series portfolios of the Trust. From time
to time, the Trust may establish other funds, each corresponding to a distinct
investment portfolio and a distinct series of the Trust's shares of beneficial
interest. Shares of each fund are entitled to one vote per share (with
proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the fund with other shares of the
Fund and is entitled to such other shares of the Fund and is entitled to such
dividends and distributions out of the income earned and gain realized on the
assets belonging to the Fund as may be declared by the Board of Trustees. Each
share of the Fund is equal in earnings, assets and voting privileges except that
each class normally has exclusive voting rights with respect to its distribution
plan and bears the expenses, if any, related to the distribution of its shares.
Shares of the Fund, when issued, are fully paid and nonassessable.
 
   
  LEGAL COUNSEL The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
    
 
                                       15
<PAGE>   63
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
               TO THE AIM FAMILY OF FUNDS--Registered Trademark--
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of the following mutual funds:
   
<TABLE>
            <S>                                           <C>
            AIM ADVISOR FLEX FUND                         AIM GLOBAL INFRASTRUCTURE FUND
            AIM ADVISOR INTERNATIONAL VALUE FUND          AIM GLOBAL RESOURCES FUND
            AIM ADVISOR LARGE CAP VALUE FUND              AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM ADVISOR MULTIFLEX FUND                    AIM GLOBAL TRENDS FUND
            AIM ADVISOR REAL ESTATE FUND                  AIM GLOBAL UTILITIES FUND
            AIM AGGRESSIVE GROWTH FUND                    AIM HIGH INCOME MUNICIPAL FUND
            AIM ASIAN GROWTH FUND                         AIM HIGH YIELD FUND
            AIM BALANCED FUND                             AIM INCOME FUND
            AIM BASIC VALUE FUND                          AIM INTERMEDIATE GOVERNMENT FUND
            AIM BLUE CHIP FUND                            AIM INTERNATIONAL EQUITY FUND
            AIM CAPITAL DEVELOPMENT FUND                  AIM INTERNATIONAL GROWTH FUND
            AIM CHARTER FUND                              AIM JAPAN GROWTH FUND
            AIM CONSTELLATION FUND                        AIM LATIN AMERICAN GROWTH FUND
            AIM DEVELOPING MARKETS FUND                   AIM LIMITED MATURITY TREASURY FUND
            AIM DOLLAR FUND(*)                            AIM MID CAP GROWTH FUND
            AIM EMERGING MARKETS FUND                     AIM MONEY MARKET FUND(*)
            AIM EMERGING MARKET DEBT FUND                 AIM MUNICIPAL BOND FUND
            AIM EUROPEAN DEVELOPMENT FUND                 AIM NEW PACIFIC GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM SELECT GROWTH FUND
            AIM GLOBAL AGGRESSIVE GROWTH FUND             AIM SMALL CAP EQUITY FUND
            AIM GLOBAL CONSUMER PRODUCTS AND              AIM SMALL CAP OPPORTUNITIES FUND
              SERVICES FUND                               AIM STRATEGIC INCOME FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM TAX-EXEMPT CASH FUND(*)
            AIM GLOBAL GROWTH FUND                        AIM TAX-FREE INTERMEDIATE FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM VALUE FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WEINGARTEN FUND
            AIM GLOBAL INCOME FUND                        AIM WORLDWIDE GROWTH FUND
                                                                                                 
</TABLE>
    
 
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
    Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
    asset value, without payment of a sales charge, as described below. Other
    funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
    FUND, are sold with an initial sales charge or subject to a contingent
    deferred sales charge upon redemption, as described below.
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed new Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.
 
   
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment is
$500, except for accounts initially established through an Automatic Investment
Plan, which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an Individual Retirement Arrangement ("IRA") or Roth IRA is $250.
There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such plans is $25 per
fund investment), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM 
    
 
                                       A-1
<PAGE>   64
 
   
Funds account. Notwithstanding the foregoing, the minimum initial investment
applicable to AIM Small Cap Opportunities Fund is $10,000.
    
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Shares of any AIM Funds not named on the cover of this Prospectus, as well as
Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                   OBI:                              Shareholder Name, Shareholder Account Number
                                                     (70 character limit)
</TABLE>
 
   
  HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased directly
through AIM Distributors or through any dealer who has entered into an agreement
with AIM Distributors. The minimum investment for subsequent purchases is $50.
The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. Notwithstanding the foregoing, the minimum subsequent purchases of shares
of AIM Small Cap Opportunities Fund is $1,000. There are no such minimum
investment requirements for investment of dividends and distributions of any of
the AIM Funds into any other existing AIM Funds account.
    
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional shares by electronic funds
transfer, please contact the Client Services Department of AFS for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
   
  Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BASIC
VALUE FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT
FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP EQUITY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND,AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without a
sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over
    
 
                                       A-2
<PAGE>   65
 
another class in the same Multiple Class Fund. Factors an investor should
consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
   
  The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPE
GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL
FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM
GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS
FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN
GROWTH FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
    
 
  The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
 
SALES CHARGES AND DEALER CONCESSIONS
 
   
  GROUP I. Certain AIM Funds are currently sold with a sales charge ranging from
5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM BASIC VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
EQUITY FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
    
 
   
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
      SINGLE TRANSACTION(1)                          PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   25,000                    5.50%          5.82%        4.75%
 $ 25,000 but less than $   50,000                   5.25           5.54         4.50
 $ 50,000 but less than $ 100,000                    4.75           4.99         4.00
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    3.00           3.09         2.50
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
    
 
- ---------------
 
   
(1) AIM Small Cap Opportunities Fund will not accept any single purchase in
    excess of $250,000.
    
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
                                       A-3
<PAGE>   66
   
 GROUP II. Certain AIM Funds are currently sold with a sales charge ranging from
4.75% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND, AIM
BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND
FUND, AIM STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
    
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   50,000                    4.75%          4.99%        4.00%
 $ 50,000 but less than $ 100,000                    4.00           4.17         3.25
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    2.50           2.56         2.00
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
  GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
Less than $ 100,000                                  1.00%          1.01%        0.75%
 $100,000 but less than $ 250,000                    0.75           0.76         0.50
 $250,000 but less than $1,000,000                   0.50           0.50         0.40
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
 
  ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
 
  In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
 
  AIM Distributors may make payments to dealers and institutions who are dealers
of record for purchases of $1 million of more of Class A shares (or shares which
normally involve payment of initial sales charges), which are sold at net asset
value and are subject to
 
                                       A-4
<PAGE>   67
 
a contingent deferred sales charge, for all AIM Funds other than Class A shares
of each of AIM LIMITED MATURITY TREASURY FUND and AIM TAX-FREE INTERMEDIATE FUND
as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next
$1 million of such purchases, plus 0.50% of the next $17 million of such
purchases, plus 0.25% of amounts in excess of $20 million of such purchases. See
"Contingent Deferred Sales Charge Program for Large Purchases." AIM Distributors
may make payments to dealers and institutions who are dealers of record for
purchases of $1 million or more of Class A shares (or shares which normally
involve payment of initial sales charges), and which are sold at net asset value
and are not subject to a contingent deferred sales charge, in an amount up to
0.10% of such purchases of Class A shares of AIM LIMITED MATURITY TREASURY FUND,
and in an amount up to 0.25% of such purchases of Class A shares of AIM TAX-FREE
INTERMEDIATE FUND.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed during the next twelve
months on Saturdays and Sundays and on the days on which New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class Funds
currently offer two or more classes of shares through separate distribution
systems (the "Multiple Distribution System"). Although each class of shares of a
particular Multiple Class Fund represents an interest in the same portfolio of
investments, each class is subject to a different distribution structure and, as
a result, differing expenses. This Multiple Distribution System allows investors
to select the class that is best suited to the investor's needs and objectives.
In considering the options afforded by the Multiple Distribution System,
investors should consider both the applicable initial sales charge or contingent
deferred sales charge, as well as the ongoing expenses borne by each class of
shares and other relevant factors, such as whether his or her investment goals
are long-term or short-term.
 
     CLASS A SHARES generally are sold subject to the initial sales charges
     described above and are subject to the other fees and expenses described
     herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
     needs of an investor who wishes to establish a dollar cost averaging
     program, pursuant to which Class A shares an investor owns may be exchanged
     at net asset value for Class A shares of another Multiple Class Fund or
     shares of another AIM Fund which is not a Multiple Class Fund, subject to
     the terms and conditions described under the caption "Exchange
     Privilege -- Terms and Conditions of Exchanges."
                                       A-5
<PAGE>   68
 
     CLASS B SHARES are sold without an initial sales charge. Thus, the entire
     purchase price of Class B shares is immediately invested in Class B shares.
     Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
     per annum on the average daily net assets of a Multiple Class Fund
     attributable to Class B shares. See the discussion under the caption
     "Management -- Distribution Plans." In addition, Class B shares redeemed
     within six years from the date such shares were purchased are subject to a
     contingent deferred sales charge ranging from 5% for redemptions made
     within the first year to 1% for redemptions made within the sixth year. No
     contingent deferred sales charge will be imposed if Class B shares are
     redeemed after six years from the date such shares were purchased.
     Redemptions of Class B shares and associated charges are further described
     under the caption "How to Redeem Shares -- Multiple Distribution System."
 
     Class B shares will automatically convert into Class A shares of the same
     Multiple Class Fund (together with a pro rata portion of all Class B shares
     acquired through the reinvestment of dividends and other distributions)
     eight years from the end of the calendar month in which the purchase of
     Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
     outstanding on May 29, 1998 and which are continuously held by the
     shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
     FUND seven years from the end of the calendar month in which the purchase
     of such Class B shares was made. If a shareholder exchanges Class B shares
     of AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
     since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
     shares will be subject to the eight year conversion feature applicable to
     Class B shares of all other AIM Funds. Following such conversion of their
     Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
     payments associated with Class B shares. See "Management -- Distribution
     Plans."
 
     AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an
     initial sales charge and are not subject to a contingent deferred sales
     charge; however, they are subject to the other fees and expenses described
     in the prospectus for AIM MONEY MARKET FUND.
 
  TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon Eastern Time or NYSE Close on any
business day of the Fund will be confirmed at the price next determined. Net
asset value is normally determined at 12:00 noon Eastern Time and NYSE Close on
each business day of AIM MONEY MARKET FUND.
 
  SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
REDUCTIONS IN INITIAL SALES CHARGES
 
  Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
 
                                       A-6
<PAGE>   69
 
  The term "purchaser" means:
 
  - an individual and his or her spouse and children, including any trust
    established exclusively for the benefit of any such person; or a pension,
    profit-sharing, or other benefit plan established exclusively for the
    benefit of any such person, such as an IRA, Roth IRA, a single-participant
    money-purchase/profit-sharing plan or an individual participant in a 403(b)
    plan (unless such 403(b) plan qualifies as the purchaser as defined below);
 
  - a 403(b) plan, the employer/sponsor of which is an organization described
    under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
    (the "Code"), provided that:
 
        a. the employer/sponsor must submit contributions for all participating
           employees in a single contribution transmittal (i.e., the funds will
           not accept contributions submitted with respect to individual
           participants);
 
        b. each transmittal must be accompanied by a single check or wire
           transfer; and
 
        c. all new participants must be added to the 403(b) plan by submitting
           an application on behalf of each new participant with the
           contribution transmittal;
 
  - a trustee or fiduciary purchasing for a single trust, estate or single
    fiduciary account (including a pension, profit-sharing or other employee
    benefit trust created pursuant to a plan qualified under Section 401 of the
    Code) and 457 plans, although more than one beneficiary or participant is
    involved;
 
  - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
    Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
    Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
    Distributors in writing that all of its related employee SEP, SARSEP or
    SIMPLE IRA accounts should be linked;
 
  - any other organized group of persons, whether incorporated or not, provided
    the organization has been in existence for at least six months and has some
    purpose other than the purchase at a discount of redeemable securities of a
    registered investment company; or
 
  - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
    Capital Management, Inc. ("AIM Capital").
 
  Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
 
  (1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
 
  Each purchase of fund shares normally subject to an initial sales charge made
during the 13-month period will be made at the public offering price applicable
to a single transaction of the total dollar amount indicated by the LOI, as
described under "Sales Charges and Dealer Concessions." It is the purchaser's
responsibility at the time of purchase to specify the account numbers that
should be considered in determining the appropriate sales charge. The offering
price may be further reduced as described under "Rights of Accumulation" if the
Transfer Agent is advised of all other accounts at the time of the investment.
Shares acquired through reinvestment of dividends and capital gain distributions
will not be applied to the LOI. At any time during the 13-month period after
meeting the original obligation, a purchaser may revise his intended investment
amount upward by submitting a written and signed request. Such a revision will
not change the original expiration date. By signing an LOI, a purchaser is not
making a binding commitment to purchase additional shares, but if purchases made
within the 13-month period do not total the amount specified, the investor will
pay the increased amount of sales charge as described below. Purchases made
within 90 days before signing an LOI will be applied toward completion of the
LOI. The LOI effective date will be the date of the first purchase with the
90-day period. The Transfer Agent will process necessary adjustments upon the
expiration or completion date of the LOI. Purchases made more than 90 days
before signing an LOI will be applied toward completion of the LOI based on the
value of the shares purchased calculated at the public offering price on the
effective date of the LOI.
 
  To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
                                       A-7
<PAGE>   70
 
  If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
 
  Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
 
  (2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
 
  PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at
net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
 
  Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
 
  The following persons may purchase Class A shares of the AIM Funds through AIM
Distributors without payment of an initial sales charge: (a) A I M Management
Group Inc. ("AIM Management") and its affiliated companies; (b) any current or
retired officer, director, trustee or employee, or any member of the immediate
family (including spouse, children, parents and parents of spouse) of any such
person, of AIM Management or its affiliates or of certain mutual funds which are
advised or managed by AIM; or any trust established exclusively for the benefit
of such persons; (c) any employee benefit plan established for employees of AIM
Management or its affiliates; (d) any current or retired officer, director,
trustee or employee, or any member of the immediate family (including spouse,
children, parents and parents of spouse) of any such person, or of CIGNA
Corporation or of any of its affiliated companies, or of First Data Investor
Services Group (formerly The Shareholder Services Group, Inc.); (e) any
investment company sponsored by CIGNA Investments, Inc. or any of its affiliated
companies for the benefit of its directors' deferred compensation plans; (f)
discretionary advised clients of AIM or AIM Capital; (g) registered
representatives and employees of dealers who have entered into agreements with
AIM Distributors (or financial institutions that have arrangements with such
dealers with respect to the sale of shares of the AIM Funds) and any member of
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, provided that purchases at net asset value are permitted by
the policies of such person's employer; (h) certain broker-dealers, investment
advisers or bank trust departments that provide asset allocation, similar
specialized investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services, and that
have entered into an agreement with AIM Distributors with respect to their use
of the AIM Funds in connection with such services; (i) any employee or any
member of the immediate family (including spouse, children, parents and parents
of spouse) of any employee, of Triformis Inc.; (j) shareholders of the AIM/GT
Funds as of April 30, 1987 who since that date continually have owned shares of
one or more of the AIM/GT Funds; and (k) certain former AMA Investment Advisers'
shareholders who became shareholders of the AIM Global Health Care Fund in
October 1989, and who have continuously held shares in the AIM/GT Funds since
that time.
 
   
  In addition, shares of any AIM Fund (except AIM Small Cap Opportunities Fund)
may be purchased at net asset value, without payment of a sales charge, by
pension, profit-sharing or other employee benefit plans created pursuant to a
plan qualified under Section 401 of the Code or plans under Section 457 of the
Code, or employee benefit plans created pursuant to Section 403(b) of the
    
                                       A-8
<PAGE>   71
 
Code and sponsored by nonprofit organizations defined under Section 501(c)(3) of
the Code. Such plans will qualify for purchases at net asset value provided that
(1) the total amount invested in the plan is at least $1,000,000, (2) the
sponsor signs a $1,000,000 LOI, (3) such shares are purchased by an
employer-sponsored plan with at least 100 eligible employees, or (4) all of the
plan's transactions are executed through a single financial institution or
service organization who has entered into an agreement with AIM Distributors
with respect to their use of the AIM Funds in connection with such accounts.
Section 403(b) plans sponsored by public educational institutions will not be
eligible for net asset value purchases based on the aggregate investment made by
the plan or the number of eligible employees. Participants in such plans will be
eligible for reduced sales charges based solely on the aggregate value of their
individual investments in the applicable AIM Fund. PLEASE NOTE THAT TAX-EXEMPT
FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR SUCH PLANS. AIM Distributors may pay
investment dealers or other financial service firms for share purchases of the
Load Funds (as defined under the caption "Exchange Privilege") sold at net asset
value to an employee benefit plan in accordance with this paragraph as follows:
1% of the first $2 million of such purchases, plus 0.80% of the next $1 million
of such purchases, plus 0.50% of the next $17 million of such purchases, plus
0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of
the net asset value of any Class A shares of AIM LIMITED MATURITY TREASURY FUND
sold at net asset value to an employee benefit plan in accordance with this
paragraph.
 
  Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
- --------------------------------------------------------------------------------
 
SPECIAL PLANS
 
  Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
who owns shares which are not subject to a contingent deferred sales charge, can
arrange for monthly, quarterly or annual amounts (but not less than $50) to be
drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that
 
                                       A-9
<PAGE>   72
 
exceed on an annual basis 12% of such account will be subject to a contingent
deferred sales charge on the amounts exceeding 12% of the account value at the
time the shareholder elects to participate in the Systematic Withdrawal Plan.
 
  Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested to shares of the
applicable AIM Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full
and fractional shares at their net asset value in effect at the time of each
such redemption.
 
  Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
 
  The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
 
  AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in the amount specified by
the shareholder (minimum $50 per investment, per account) and on a day or
date(s) specified by the shareholder. The proceeds are invested in shares of the
designated AIM Fund at the applicable offering price determined on the date of
the withdrawal. An Automatic Investment Plan may be discontinued upon 10 days'
prior notice to the Transfer Agent or AIM Distributors.
 
   
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
    
 
  DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
 
  PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination
money-purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans;
SARSEP plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement
accounts"). Information concerning these plans, including the custodian's fees
and the forms necessary to adopt such plans, can be obtained by calling or
writing the AIM Funds or AIM Distributors. Shares of the AIM Funds are also
available for investment through existing 401(k) plans (for both individuals and
employers) adopted under the Code. The plan custodian currently imposes an
annual $10 maintenance fee with respect to each retirement account for which it
serves as the custodian. This fee is generally charged in December. Each AIM
Fund and/or the custodian reserve the right to change this maintenance fee and
to initiate an establishment fee (not to exceed its cost).
 

   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance of $5,000 to
establish and maintain an allocation across a range of AIM Funds. The Program
automatically rebalances holdings of AIM Funds to the established allocation on
a periodic basis. Under the Program, a shareholder may predesig-
    
 
                                      A-10
<PAGE>   73
   
nate, on a percentage basis, how the total value of his or her holdings in a
minimum of two, and a maximum of ten, AIM Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more AIM Funds in the shareholder's Personal Portfolio for shares of
the same class(es) of one or more other AIM Funds in the shareholder's Personal
Portfolio. See "Exchange Privilege." If shares of the AIM Fund(s) in a
shareholder's Personal Portfolio have appreciated during a rebalancing period,
the Program will result in shares of AIM Fund(s) that have appreciated most
during the period being exchanged for shares of AIM Fund(s) that have
appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular AIM Fund would be 2% or less.
In predesignating percentages, shareholders must use whole percentages and
totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an AIM Fund's shares. The
AIM Funds and AIM Distributors reserve the right to modify, suspend, or
terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
    
 
                                      A-11
<PAGE>   74
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, including the Class A shares of the Multiple Class Funds, listed below
and referred to herein as the "Load Funds," are sold at a public offering price
that includes a maximum sales charge of 5.50% or 4.75% of the public offering
price of such shares; Class A shares (or shares which normally involve the
payment of initial sales charges) of certain of the AIM Funds, listed below and
referred to herein as the "Lower Load Funds," are sold at a public offering
price that includes a maximum sales charge of 1.00% of the public offering price
of such shares; and Class A shares or shares of certain other funds, listed
below and referred to herein as the "No Load Funds," are sold at net asset
value, without payment of a sales charge.
 
   
<TABLE>
<S>                                    <C>                                   <C>
                                LOAD FUNDS:                                  LOWER LOAD FUNDS:
   AIM ADVISOR FLEX FUND --            AIM GLOBAL INCOME                     AIM LIMITED MATURITY TREASURY FUND
     CLASS A                           FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR INTERNATIONAL           AIM GLOBAL INFRASTRUCTURE               AIM TAX-FREE INTERMEDIATE FUND
     VALUE FUND -- CLASS A             FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR LARGE CAP               AIM GLOBAL RESOURCES                  NO LOAD FUNDS:
     VALUE FUND -- CLASS A             FUND -- CLASS A
   AIM ADVISOR MULTIFLEX               AIM GLOBAL TELECOMMUNICATIONS         AIM MONEY MARKET FUND
     FUND -- CLASS A                   FUND -- CLASS A                           -- AIM CASH RESERVE SHARES
   AIM ADVISOR REAL ESTATE             AIM GLOBAL TRENDS                       AIM TAX-EXEMPT CASH FUND -- CLASS A
     FUND -- CLASS A                   FUND -- CLASS A                         AIM DOLLAR FUND -- CLASS A
   AIM AGGRESSIVE GROWTH               AIM GLOBAL UTILITIES
     FUND -- CLASS A                   FUND -- CLASS A
   AIM ASIAN GROWTH                    AIM HIGH INCOME MUNICIPAL
     FUND -- CLASS A                   FUND -- CLASS A
   AIM BALANCED FUND -- CLASS A        AIM HIGH YIELD FUND -- CLASS A
   AIM BASIC VALUE                     AIM INCOME FUND -- CLASS A
     FUND -- CLASS A                   AIM INTERMEDIATE GOVERNMENT
   AIM BLUE CHIP FUND -- CLASS A       FUND -- CLASS A
   AIM CAPITAL DEVELOPMENT             AIM INTERNATIONAL EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM CHARTER FUND -- CLASS A         AIM INTERNATIONAL GROWTH
   AIM CONSTELLATION                   FUND -- CLASS A
     FUND -- CLASS A                   AIM JAPAN GROWTH FUND -- CLASS A
   AIM DEVELOPING MARKETS              AIM LATIN AMERICAN GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS                AIM MID CAP EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS DEBT           AIM MONEY MARKET
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPE GROWTH                   AIM MUNICIPAL BOND
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPEAN DEVELOPMENT            AIM NEW PACIFIC GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM GLOBAL AGGRESSIVE GROWTH        AIM SELECT GROWTH FUND -- CLASS A
     FUND -- CLASS A                   AIM SMALL CAP GROWTH
   AIM GLOBAL CONSUMER PRODUCTS        FUND -- CLASS A
     AND SERVICES FUND -- CLASS A      AIM SMALL CAP OPPORTUNITIES
   AIM GLOBAL FINANCIAL SERVICES       FUND -- CLASS A
     FUND -- CLASS A                   AIM STRATEGIC INCOME
   AIM GLOBAL GOVERNMENT INCOME        FUND -- CLASS A
     FUND -- CLASS A                   AIM TAX-EXEMPT BOND FUND
   AIM GLOBAL GROWTH                   OF CONNECTICUT -- CLASS A
     FUND -- CLASS A                   AIM VALUE FUND -- CLASS A
   AIM GLOBAL GROWTH &                 AIM WEINGARTEN FUND -- CLASS A
     INCOME FUND -- CLASS A            AIM WORLDWIDE GROWTH
   AIM GLOBAL HEALTH CARE              FUND -- CLASS A
     FUND -- CLASS A
</TABLE>
    
 
                                      A-12
<PAGE>   75
 
   
  Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE; (iii) Class A shares
may be exchanged for Class A shares; (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A, Class B or Class C shares of AIM MONEY MARKET FUND. Class C shares
of AIM Small Cap Opportunities Fund are currently not available.
    
 
  DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
 
<TABLE>
<CAPTION>
                                                                                                      MULTIPLE CLASS FUNDS:
                                                            LOWER LOAD              NO LOAD       ------------------------------
      FROM:                 TO: LOAD FUNDS                     FUNDS                 FUNDS           CLASS B         CLASS C
      -----                 --------------                  ----------              -------          -------         -------
<S>                <C>                                <C>                      <C>                <C>             <C>
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
 
Lower Load Funds.. Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund or any     Fund or any Lower Load
                   Lower Load Fund.                   Fund; otherwise,
                                                      Offering Price.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
 
  FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS REVISED AS FOLLOWS:
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
Lower Load Funds.. Net Asset Value if shares were     Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
                   acquired upon exchange of any
                   Load Fund. Otherwise, difference
                   in sales charge will apply.
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund.           Fund or any Lower Load
                   Difference in sales charge will    Fund; otherwise,
                   apply if No Load shares were       Offering Price.
                   acquired upon exchange of Lower
                   Load Fund shares.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
  Class C........  Not Applicable                     Not Applicable           Not Applicable     Not Applicable  Net Asset Value
</TABLE>
 
   
  An exchange is permitted only in the following circumstances: (a) if the funds
offer more than one class of shares, the exchange must be between the same class
of shares (e.g., Class A, Class B and Class C shares of a Multiple Class Fund
cannot be exchanged for each other) except that AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may be exchanged for Class A shares of another Multiple Class
Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten busi-
    
 
                                      A-13
<PAGE>   76
 
ness days, and all other shares are held in an account for at least one day,
prior to the exchange; and (h) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the AIM
Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
   
  Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged are
redeemed at their net asset value as determined at NYSE Close on the day that an
exchange request in proper form (described below) is received. Exchange requests
received after NYSE Close will result in the redemption of shares at their net
asset value at NYSE Close on the next business day. See "Terms and Conditions of
Purchase of the AIM Funds -- Timing of Purchase, Exchange and Redemption Orders
(AIM MONEY MARKET FUND only)" for information regarding the timing of exchange
orders for AIM MONEY MARKET FUND. Normally, shares of an AIM Fund to be acquired
by exchange are purchased at their net asset value or applicable offering price,
as the case may be, determined on the date that such request is received, but
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that a fund would be materially disadvantaged
by an immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into a fund paying daily dividends (See "Dividends, Distributions and
Tax Matters -- Dividends and Distributions," below), and the release of the
exchange proceeds is delayed for the foregoing five-day period, such shareholder
will not begin to accrue dividends until the sixth business day after the
exchange. Shares purchased by check may not be exchanged until it is determined
that the check has cleared, which may take up to ten business days from the date
that the check is received. See "Terms and Conditions of Purchase of the AIM
Funds -- Timing of Purchase Orders."
    
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the AIM Funds. AIM Distributors reserves the right to impose conditions on
dealers or investment advisors who make telephone exchanges of shares of the
funds, including the condition that any such dealer or investment advisor enter
into an agreement (which contains additional conditions with respect to
exchanges of shares) with AIM Distributors. To exchange shares by telephone, a
shareholder, dealer or investment advisor who has satisfied the foregoing
conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach
AFS by telephone, he may also request exchanges by telegraph or use overnight
courier services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is received
prior to NYSE Close. The Transfer Agent and AIM Distributors will not be liable
for any loss, expense or cost arising out of any telephone exchange request that
they reasonably believe to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions if they do not follow
reasonable procedures for verification of telephone transactions. Such
reasonable procedures may include recordings of telephone transactions
(maintained for six months), requests for confirmation of the shareholder's
Social Security Number and current address, and mailings of confirmations
promptly after the transaction.
 
  EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
 
                                      A-14
<PAGE>   77
 
  MULTIPLE DISTRIBUTION SYSTEM. Class B Shares. Class B shares purchased under
the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
 
<TABLE>
<CAPTION>
  YEARS                                                     CONTINGENT DEFERRED
  SINCE                                                       SALES CHARGE AS
PURCHASE                                                    % OF DOLLAR AMOUNT
  MADE                                                       SUBJECT TO CHARGE
- --------                                                    -------------------
<S>                                                          <C>
First......................................................         5%
Second.....................................................         4%
Third......................................................         3%
Fourth.....................................................         3%
Fifth......................................................         2%
Sixth......................................................         1%
Seventh and Following......................................        None
</TABLE>
 
  In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
 
  Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
 
  Class C Shares. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
 
  Waivers. Contingent deferred sales charges on Class B and Class C shares will
be waived on redemptions (1) following the death or post-purchase disability, as
defined in Section 72(m)(7) of the Code, of a shareholder or a settlor of a
living trust (provided AIM Distributors is notified of such death or
post-purchase disability at the time of the redemption request and is provided
with satisfactory evidence of such death or post-purchase disability), (2) in
connection with certain distributions from IRAs, custodial accounts maintained
pursuant to Code Section 403(b), deferred compensation plans qualified under
Code Section 457 and plans qualified under Code Section 401 (collectively,
"Retirement Plans"), (3) pursuant to a Systematic Withdrawal Plan, provided that
amounts withdrawn under such plan do not exceed on an annual basis 12% of the
value of the shareholder's investment in Class B or Class C shares at the time
the shareholder elects to participate in the Systematic Withdrawal Plan, (4)
effected pursuant to the right of a Multiple Class Fund to liquidate a
shareholder's account if the aggregate net asset value of shares held in the
account is less than the designated minimum account size described in the
prospectus of such Multiple Class Fund, (5) effected by AIM of its investment in
Class B or Class C shares and (6) of Class C shares where such investor's dealer
of record, due to the nature of the investor's account, notifies AIM
Distributors prior to the time of investment that the dealer waives the payment
otherwise payable to the dealer described in the last paragraph under the
caption "Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM
Funds."
 
  Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
 
  Waiver category (2) above applies only to redemptions resulting from:
 
          (i) required minimum distributions to plan participants or
     beneficiaries who are age 70 1/2 or older, and only with respect to that
     portion of such distributions which does not exceed 12% annually of the
     participant's or beneficiary's account value in a particular AIM Fund;
 
                                      A-15
<PAGE>   78
 
          (ii) in-kind transfers of assets where the participant or beneficiary
     notifies AIM Distributors of such transfer no later than the time such
     transfer occurs;
 
          (iii) tax-free rollovers or transfers of assets to another Retirement
     Plan invested in Class B or Class C shares of one or more Multiple Class
     Funds;
 
          (iv) tax-free returns of excess contributions or returns of excess
     deferral amounts; and
 
          (v) distributions upon the death or disability (as defined in the
     Code) of the participant or beneficiary.
 
   
  CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND or Class A shares
of AIM DOLLAR FUND which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code, or Plans created under Section 403(b) of the
Code and sponsored by nonprofit organizations as defined under Section 501(c)(3)
of the Code, where shares are being redeemed in connection with employee
terminations or withdrawals, and (a) the total amount invested in a Plan is at
least $1,000,000, (b) the sponsor of a Plan signs a letter of intent to invest
at least $1,000,000 in one or more of the AIM Funds, or (c) the shares being
redeemed were purchased by an employer-sponsored Plan with at least 100 eligible
employees; provided, however, that Plans created under Section 403(b) of the
Code which are sponsored by public educational institutions shall qualify under
(a), (b) or (c) above on the basis of the value of each Plan participant's
aggregate investment in the AIM Funds, and not on the aggregate investment made
by the Plan or on the number of eligible employees; (2) redemptions of shares
following the death or post-purchase disability, as defined in Section 72(m)(7)
of the Code, of a shareholder or a settlor of a living trust; (3) redemptions of
shares purchased at net asset value by private foundations or endowment funds
where the initial amount invested was at least $1,000,000; (4) redemptions of
shares purchased by an investor in amounts of $1,000,000 or more where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payments otherwise payable to the dealer as described in the third paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds;" and (5) pursuant to a Systematic Withdrawal Plan, provided
that amounts withdrawn under such plan do not exceed on an annual basis 12% of
the value of the shareholder's investment in Class A shares at the time the
shareholder elects to participate in the Systematic Withdrawal Plan.
    
 
  Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  In addition to these requirements, shareholders who have invested in a fund to
establish as IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares; (a) a statement
as to whether or not the shareholder has attained age 59 1/2, and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.
 
                                      A-16
<PAGE>   79
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
this account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
   
  EXPEDITED REDEMPTIONS (AIM Cash Reserve shares of AIM MONEY MARKET FUND
ONLY). If a redemption order is received prior to 11:30 a.m. Eastern Time, the
redemption will be effective on that day and AIM MONEY MARKET FUND will endeavor
to transmit payment on that same business day. If the redemption order is
received after 11:30 a.m. and prior to NYSE Close, the redemption will be made
at the next determined net asset value and payment will generally be transmitted
on the next business day.
    
 
  REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing the
appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone
 
                                      A-17
<PAGE>   80
 
exchange and telephone redemption authorization forms; (7) changes in previously
designated wiring or electronic funds transfer instructions, and (8) written
redemptions or exchanges of shares previously reported as lost, whether or not
the redemption amount is under $50,000 or the proceeds are to be sent to the
address of record. These requirements may be waived or modified upon notice to
shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
    
 
   
  REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within ninety (90) days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment will not alter the taxes due on any
capital gains, except under the circumstances described below. If there has been
a loss on the redemption and shares of the same fund are repurchased, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in shares of the same fund, or exchanged for
shares of another AIM Fund, at a reduced sales charge within 90 days of the
payment of the sales charge, the shareholder's basis in the fund shares redeemed
may not include the amount of the sales charge paid, thereby reducing the loss
or increasing the gain recognized from the redemption; however, the
shareholder's basis in the fund shares purchased will include the sales charge.
Each AIM Fund may amend, suspend or cease offering the privilege at any time as
to shares redeemed after the date of such amendment, suspension or cessation.
This privilege may only be exercised once each year by a shareholder with
respect to each AIM Fund.
    
 
   
  Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of Class A shares and who subsequently reinvest a portion or
all of the value of the redeemed shares in Class A shares of any AIM Fund within
ninety (90) days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
    
 
                                      A-18

<PAGE>   81
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
   
  The net asset value per share (or share price) of each AIM Fund is determined
as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close with
respect to AIM MONEY MARKET FUND) on each "business day" of a fund as previously
defined. In the event the NYSE closes early (i.e. before 4:00 p.m. Eastern Time)
on a particular day, the net asset value of an AIM Fund's share will be
determined as of the close of the NYSE on such day. For purposes of defining net
asset value per share, futures and options contracts generally will be valued 15
minutes after the close of trading of the NYSE. The net asset value per share is
calculated by subtracting a class' liabilities from its assets and dividing the
result by the total number of class shares outstanding. The determination of net
asset value per share is made in accordance with generally accepted accounting
principles. Among other items, liabilities include accrued expenses and
dividends payable, and total assets include portfolio securities valued at their
market value, as well as income accrued but not yet received. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the fund's officers and
in accordance with methods which are specifically authorized by its governing
Board of Directors or Trustees. Short-term obligations with maturities of 60
days or less, and the securities held by the Money Market Funds, are valued at
amortized cost as reflecting fair value. AIM HIGH INCOME MUNICIPAL FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-FREE
INTERMEDIATE FUND value variable rate securities that have an unconditional
demand or put feature exercisable within seven days or less at par, which
reflects the market value of such securities.
    
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as
set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                DISTRIBUTIONS    DISTRIBUTIONS
                                                                                   OF NET           OF NET
                                                    DIVIDENDS FROM                REALIZED         REALIZED
                                                    NET INVESTMENT               SHORT-TERM        LONG-TERM
                   FUND                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
                   ----                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM ADVISOR FLEX FUND.....................  declared and paid quarterly       quarterly          annually
AIM ADVISOR INTERNATIONAL VALUE FUND......  declared and paid annually        annually           annually
AIM ADVISOR LARGE CAP VALUE FUND..........  declared and paid quarterly       quarterly          annually
AIM ADVISOR MULTIFLEX FUND................  declared and paid quarterly       quarterly          annually
AIM ADVISOR REAL ESTATE FUND..............  declared and paid quarterly       quarterly          annually
AIM AGGRESSIVE GROWTH FUND................  declared and paid annually        annually           annually
AIM ASIAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM BALANCED FUND.........................  declared and paid quarterly       annually           annually
AIM BASIC VALUE FUND......................  declared and paid annually        annually           annually
AIM BLUE CHIP FUND........................  declared and paid annually        annually           annually
AIM CAPITAL DEVELOPMENT FUND..............  declared and paid annually        annually           annually
AIM CHARTER FUND..........................  declared and paid quarterly       annually           annually
AIM CONSTELLATION FUND....................  declared and paid annually        annually           annually
AIM DEVELOPING MARKETS FUND...............  declared and paid annually        annually           annually
AIM DOLLAR FUND...........................  declared daily; paid monthly      annually           annually
AIM EMERGING MARKETS FUND.................  declared and paid annually        annually           annually
AIM EMERGING MARKETS DEBT FUND............  declared and paid monthsly        annually           annually
AIM EUROPE GROWTH FUND....................  declared and paid annually        annually           annually
AIM EUROPEAN DEVELOPMENT FUND.............  declared and paid annually        annually           annually
AIM GLOBAL AGGRESSIVE GROWTH FUND.........  declared and paid annually        annually           annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
  FUND....................................  declared and paid annually        annually           annually
AIM GLOBAL FINANCIAL SERVICES FUND........  declared and paid annually        annually           annually
</TABLE>
    
 
                                      A-19
<PAGE>   82
 
   
<TABLE>
<CAPTION>
                                                                             DISTRIBUTIONS    DISTRIBUTIONS
                                                                                OF NET           OF NET
                                                 DIVIDENDS FROM                REALIZED         REALIZED
                                                 NET INVESTMENT               SHORT-TERM        LONG-TERM
FUND                                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
- ----                                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM GLOBAL GOVERNMENT INCOME FUND.........  declared and paid monthly         annually           annually
AIM GLOBAL GROWTH FUND....................  declared and paid annually        annually           annually
AIM GLOBAL GROWTH & INCOME FUND...........  declared and paid quarterly       annually           annually
AIM GLOBAL HEALTH CARE FUND...............  declared and paid annually        annually           annually
AIM GLOBAL INCOME FUND....................  declared daily; paid monthly      annually           annually
AIM GLOBAL INFRASTRUCTURE FUND............  declared and paid annually        annually           annually
AIM GLOBAL RESOURCES FUND.................  declared and paid annually        annually           annually
AIM GLOBAL TELECOMMUNICATIONS FUND........  declared and paid annually        annually           annually
AIM GLOBAL TRENDS FUND....................  declared and paid annually        annually           annually
AIM GLOBAL UTILITIES FUND.................  declared daily; paid monthly      annually           annually
AIM HIGH INCOME MUNICIPAL FUND............  declared daily; paid monthly      annually           annually
AIM HIGH YIELD FUND.......................  declared daily; paid monthly      annually           annually
AIM INCOME FUND...........................  declared daily; paid monthly      annually           annually
AIM INTERMEDIATE GOVERNMENT FUND..........  declared daily; paid monthly      annually           annually
AIM INTERNATIONAL EQUITY FUND.............  declared and paid annually        annually           annually
AIM INTERNATIONAL GROWTH FUND.............  declared and paid annually        annually           annually
AIM JAPAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM LATIN AMERICAN GROWTH FUND............  declared and paid annually        annually           annually
AIM LIMITED MATURITY TREASURY FUND........  declared daily; paid monthly      annually           annually
AIM MID CAP EQUITY FUND...................  declared and paid annually        annually           annually
AIM MONEY MARKET FUND.....................  declared daily; paid monthly      at least annually  annually
AIM MUNICIPAL BOND FUND...................  declared daily; paid monthly      annually           annually
AIM NEW PACIFIC GROWTH FUND...............  declared and paid annually        annually           annually
AIM SELECT GROWTH FUND....................  declared and paid annually        annually           annually
AIM SMALL CAP GROWTH FUND.................  declared and paid annually        annually           annually
AIM SMALL CAP OPPORTUNITIES FUND..........  declared and paid annually        annually           annually
AIM STRATEGIC INCOME FUND.................  declared and paid monthly         annually           annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT...  declared daily; paid monthly      annually           annually
AIM TAX-EXEMPT CASH FUND..................  declared daily; paid monthly      at least annually  annually
AIM TAX-FREE INTERMEDIATE FUND............  declared daily; paid monthly      annually           annually
AIM VALUE FUND............................  declared and paid annually        annually           annually
AIM WEINGARTEN FUND.......................  declared and paid annually        annually           annually
AIM WORLDWIDE GROWTH FUND.................  declared and paid annually        annually           annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in like shares of another
Multiple Class Fund, to the extent permitted. For funds that do not declare a
dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. For funds that declare
a dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or the
dividend portion thereof, in cash, or to invest such dividends and distributions
in shares of another fund in the AIM Funds; provided that (i) dividends and
distributions attributable to Class B shares may only be reinvested in Class B
shares, (ii) dividends and distributions attributable to Class C shares may only
be reinvested in Class C shares, (iii) dividends and distributions attributable
to Class A shares may not be reinvested in Class B or Class C shares, and (iv)
dividends and distributions attributable to the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may not be reinvested in the Class A shares of that Fund or in
any Class B or Class C shares. Investors who have not previously selected such a
reinvestment option on the account application form may contact the Transfer
Agent at any time to obtain a form to authorize such reinvestments in another
AIM Fund. Such reinvestments into the AIM Funds are not subject to sales
charges, and shares so purchased are automatically credited to the account of
the shareholder.
 
  Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
 
                                      A-20
<PAGE>   83
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares, except for "exempt-interest dividends" paid by
AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND
FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND
(the "Tax-Exempt Funds"), which are exempt from federal income tax. With respect
to tax-exempt shareholders, dividends and distributions from the AIM Funds are
not subject to federal income taxation to the extent permitted under the
applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    
 
   
  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
    
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
                                      A-21
<PAGE>   84
   
 TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
  TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other taxable securities. For
additional information concerning the alternative minimum tax and certain
collateral tax consequences of the receipt of exempt-interest dividends, see the
Statements of Additional Information applicable to the Tax-Exempt Funds.
 
  The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
 
  To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
 
  From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP EQUITY FUND,
AIM SMALL CAP GROWTH FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX INFORMATION.
Certain states exempt from income taxes dividends paid by mutual funds
attributable to interest on U.S. Treasury and certain other U.S. government
obligations. Investors should consult with their own tax advisors concerning the
availability of such exemption.
    
 
  AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH
FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do
so, each of these funds may elect to pass through to its shareholders credits
for foreign taxes paid. If a fund makes such an election, a shareholder who
receives a distribution (1) will be required to include in gross income his
proportionate share of foreign taxes allocable to the distribution and (2) may
claim a credit or deduction for such share for his taxable year in which the
distribution is received, subject to the general limitations imposed on the
allowance of foreign tax credits and deductions. Shareholders should also note
that certain gains or losses attributable to fluctuations in exchange rates or
foreign currency forward contracts may increase or decrease the amount of income
of the fund available for distribution to shareholders and should note that if,
for any fund, such losses exceed other income during a taxable year, the fund
would not be able to pay ordinary income dividends for that year.
 
                                      A-22
<PAGE>   85
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each AIM Fund's transfer agent and dividend
payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-23
<PAGE>   86
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
 
 
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                              GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
      ACCOUNT TYPE            NUMBER OF:                       ACCOUNT TYPE                  NUMBER OF:
      ------------            --------------------             ------------                  ------------------
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary
      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application
      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors
      Legal Guardian          Ward, Minor or
                              Incompetent
      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
 
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   87
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   88
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
Sub-Advisor
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
<PAGE>   89
 
                                                           APPLICATION INSIDE
 
[AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
CLASS A AND CLASS B SHARES OF
    
 
AIM GLOBAL CONSUMER PRODUCTS
AND SERVICES FUND
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
 
PROSPECTUS
SEPTEMBER 8, 1998
 
   
This Prospectus contains information about AIM GLOBAL CONSUMER PRODUCTS AND
SERVICES FUND (the "Fund"), which is one of several series investment portfolios
comprising AIM Investment Funds (the "Trust"), an open-end, series, management
investment company. The Fund is a diversified portfolio which seeks long-term
capital growth by investing all of its investable assets in the Global Consumer
Products and Services Portfolio (the "Portfolio"), which, in turn, invests
primarily in equity securities of companies throughout the world that
manufacture, market, retail or distribute consumer products and services. The
Portfolio's investment objective is identical to that of the Fund. The
investment experience of the Fund will correspond directly with the investment
experience of the Portfolio.
    
 
   
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   90
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                            PAGE
                                            ----
<S>                                         <C>
SUMMARY...................................     2
THE FUND..................................     4
  Table of Fees and Expenses..............     4
  Financial Highlights....................     5
  Performance.............................     8
  Investment Program......................     8
  Risk Factors............................    11
  Management..............................    13
  Organization of the Trust and the
     Portfolio............................    16
INVESTOR'S GUIDE TO THE AIM FAMILY
  OF FUNDS--Registered Trademark--........   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                            PAGE
                                            ----
<S>                                         <C>
  Introduction of The AIM Family of
     Funds................................   A-1
  How to Purchase Shares..................   A-1
  Terms and Conditions of Purchase of the
     AIM Funds............................   A-2
  Special Plans...........................   A-4
  Exchange Privilege......................   A-4
  How to Redeem Shares....................   A-5
  Determination of Net Asset Value........   A-7
  Dividends, Distributions and Tax
     Matters..............................   A-8
  General Information.....................  A-10
APPLICATION INSTRUCTIONS..................   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND AND THE PORTFOLIO
    
 
  The Fund is a diversified series of the Trust. The Portfolio is a diversified
series of Global Investment Portfolio.
 
   
  INVESTMENT OBJECTIVE. The Fund and the Portfolio each seeks long-term capital
growth.
    
 
  PRINCIPAL INVESTMENTS. The Fund invests all of its investable assets in the
Portfolio, which, in turn, invests primarily in equity securities of companies
throughout the world that manufacture, market, retail or distribute consumer
products and services.
 
   
  INVESTMENT MANAGERS. The Portfolio is managed by AIM Advisors, Inc. ("AIM"),
and is sub-advised and sub-administered by INVESCO (NY), Inc. (the
"Sub-advisor"). AIM and the Sub-advisor and their worldwide asset management
affiliates provide investment management and/or administrative services to
institutional, corporate and individual clients around the world. AIM and the
Sub-advisor are both indirect wholly owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC and its subsidiaries are an independent investment management group
that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing
presence in Asia. AIM was organized in 1976 and, together with its subsidiaries,
currently advises approximately 90 investment company portfolios.
    
 
  PURCHASING SHARES. Investors may select Class A or Class B shares of the Fund
which are offered by this Prospectus at an offering price that reflects
differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to
a separate prospectus, the Fund also offers Advisor Class shares, which
represent interests in the Fund. The Advisor Class has different distribution
arrangements.
 
  CLASS A SHARES -- Shares are offered at net asset value plus any applicable
initial sales charge.
 
  CLASS B SHARES -- Shares are offered at net asset value without an initial
sales charge, and are subject to a maximum contingent deferred sales charge of
5% on certain redemptions made within six years from the date such shares were
purchased. Class B shares automatically convert to Class A shares of the Fund
eight years following the end of the calendar month in which a purchase was
made. Class B shares are subject to higher expenses than Class A shares.
 
  Initial investments in any class of shares must be at least $500 and
additional investments must be at least $50. The minimum initial investment is
modified for investments through tax-qualified retirement plans and accounts
initially established with an Automatic Investment Plan. The distributor of the
Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
 
  SUITABILITY FOR INVESTORS. An investor in Class A or Class B shares of the
Fund should consider the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the shares are expected to
be held, and other circumstances. Investors should consider whether, during the
anticipated life of their investment in the Fund, the accumulated distribution
fees and any applicable contingent deferred sales charges on Class B shares
prior to conversion would be less than the initial sales charge and accumulated
distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares.
To assist investors in making this determination, the table under the caption
"Table of Fees and Expenses" sets forth examples of the charges applicable to
each class of shares. Class A shares will normally be more beneficial than Class
B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase
of more than $250,000 for Class B shares.
 
                                        2
<PAGE>   91
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds"), Class
A and Class B shares of the Fund may be exchanged for shares of other funds in
The AIM Family of Funds in the manner and subject to the policies and charges
set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Class A shareholders of the Fund may redeem all or a portion
of their shares at net asset value on any business day, generally without
charge. A contingent deferred sales charge of 1% may apply to certain
redemptions where a purchase of more than $1 million is made at net asset value.
See "How to Redeem Shares -- Contingent Deferred Sales Charge Program for Large
Purchases."
 
  Class B shareholders of the Fund may redeem all or a portion of their shares
at net asset value on any business day, less a contingent deferred sales charge
for redemptions made within six years from the date such shares were purchased.
Class B shares redeemed after six years from the date such shares were purchased
will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters" and "Special Plans."
    
 
  RISK FACTORS. There is no assurance that the Fund or the Portfolio will
achieve its investment objective. The Fund's net asset value will fluctuate,
reflecting fluctuations in the market value of the Portfolio's portfolio
holdings. The Portfolio's policy of concentrating its investments in companies
in the consumer products and services industries may cause the Fund's net asset
value to fluctuate more than if it invested in a greater number of industries.
The Portfolio may invest in foreign securities. Investments in foreign
securities involve risks relating to political and economic developments abroad
and the differences between the regulations to which U.S. and foreign issuers
are subject. Individual foreign economies also may differ favorably or
unfavorably from the U.S. economy. Changes in foreign currency exchange rates
will affect the Fund's net asset value, earnings and gains and losses realized
on sales of securities. Securities of foreign companies may be less liquid and
their prices more volatile than those of securities of comparable U.S.
companies.
 
   
  The Portfolio may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs. The Portfolio may
invest up to 20% of its total assets in below investment grade debt securities.
Investments of this type are subject to a greater risk of loss of principal and
interest. See "Investment Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   92
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Class A and Class B shares of the Fund are reflected in the following table(1):
 
<TABLE>
<CAPTION>
                                                              CLASS A   CLASS B
                                                              -------   -------
<S>                                                           <C>       <C>
Shareholder Transaction Costs(2):
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................   4.75%     None
  Sales charges on reinvested distributions to
     shareholders...........................................   None      None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........   None      5.00%
  Redemption charges........................................   None      None
  Exchange fees:............................................   None      None
Annual Fund Operating Expenses(3):
  (as a % of average net assets)
  Investment management and administration fees.............   0.98%     0.98%
  12b-1 distribution and service fees.......................   0.50%     1.00%
  Other expenses (after reimbursements and waivers).........   0.51%     0.51%
                                                               ----      ----
          Total Fund Operating Expenses.....................   1.99%     2.49%
                                                               ====      ====
</TABLE>
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                                                       10
                                                       1 YEAR   3 YEARS   5 YEARS   YEARS(6)
                                                       ------   -------   -------   --------
<S>                                                    <C>      <C>       <C>       <C>
Class A Shares(4)....................................   $67      $107      $150       $269
Class B Shares:
  Assuming a complete redemption at end of
     period(5).......................................   $77      $111      $157       $273
  Assuming no redemption.............................   $26      $ 78      $134       $273
</TABLE>
    
 
(1) This table is intended to assist investors in understanding the various
    costs and expenses associated with investing in the Fund. Long-term
    shareholders may pay more than the economic equivalent of the maximum
    front-end sales charge permitted by the National Association of Securities
    Dealers, Inc. rules regarding investment companies.
 
(2) Sales charge waivers are available for Class A and Class B shares, and
    reduced sales charge purchase plans are available for Class A shares. The
    maximum 5% contingent deferred sales charge on Class B shares applies to
    redemptions during the first year after purchase. The charge generally
    declines by 1% annually thereafter, reaching zero after six years. See
    "Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
    Sales Charges."
 
   
(3) Expenses are based on the Fund's fiscal year ended October 31, 1997 restated
    to reflect AIM's undertaking to limit the Fund's expenses (exclusive of
    brokerage commissions, taxes, interest and extraordinary expenses) to the
    annual rate of 2.00% and 2.50% of the average daily net assets of the Fund's
    Class A and Class B shares, respectively. AIM has voluntarily agreed to
    continue this limitation through May 31, 2000. "Other expenses" include
    custody, transfer agency, legal, audit and other operating expenses. See
    "Management" herein and the Statement of Additional Information for more
    information.
    
 
    The Board of Trustees of the Trust believes that the aggregate per share
    expenses of the Fund and the Portfolio will be approximately equal to the
    expenses the Fund would incur if its assets were invested directly in the
    type of securities being held by the Portfolio.
 
   
(4) Assumes payment of maximum sales charge by the investor.
    
 
   
(5) Assumes deduction of the applicable contingent deferred sales charge.
    
 
   
(6) For Class B shares, this number reflects the conversion to Class A shares
    eight years following the end of the calendar month in which a purchase was
    made.
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S AND THE PORTFOLIO'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND
INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE
ASSUMPTION IN THE HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY
REGULATION OF THE SEC APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS
NOT A PREDICTION OF AND DOES NOT REPRESENT THE FUND'S OR THE PORTFOLIO'S
PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   93
 
- --------------------------------------------------------------------------------
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The tables below provide condensed financial information concerning income and
capital changes for Class A and Class B shares of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statements and notes for the
fiscal year ended October 31, 1997 have been audited by PricewaterhouseCoopers
LLP, independent accountants, whose report thereon also is included in the
Statement of Additional Information. The unaudited financial statements and
notes for the semi-annual period ended April 30, 1998 are also included in the
Statement of Additional Information.
    
 
   
                 AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
    
   
            (FORMERLY GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND)
    
 
   
<TABLE>
<CAPTION>
                                                          SIX MONTHS          YEAR ENDED         DECEMBER 30, 1994
                                                            ENDED            OCTOBER 31,         (COMMENCEMENT OF
                                                        APRIL 30, 1998    ------------------      OPERATIONS) TO
                       CLASS A                          (UNAUDITED)(D)    1997(D)    1996(D)    OCTOBER 31, 1990(D)
                       -------                          --------------    -------    -------    -------------------
<S>                                                     <C>               <C>        <C>        <C>
Per Share Operating Performance:
  Net asset value, beginning of period................     $ 22.19        $20.98     $14.59           $ 11.43
                                                           -------        -------    -------          -------
Income from investment operations:
  Net investment income (loss)........................       (0.12)        (0.15)     (0.22)             0.02*
  Net realized and unrealized gain on investments.....        4.80          2.27       7.13              3.14
                                                           -------        -------    -------          -------
         Net increase from investment operations......        4.68          2.12       6.91              3.16
                                                           -------        -------    -------          -------
Distributions to shareholders:
  From net realized gain on investments...............       (1.89)        (0.91)     (0.52)               --
                                                           -------        -------    -------          -------
         Total distributions..........................       (1.89)        (0.91)     (0.52)               --
                                                           -------        -------    -------          -------
Net asset value, end of period........................     $ 24.98        $22.19      20.98           $ 14.59
                                                           =======        =======    =======          =======
         Total investment return(c)...................       22.48%(b)     10.55%     48.82%            27.65%(b)
                                                           =======        =======    =======          =======
Ratios and supplemental data:
Net assets, end of period (in 000's)..................     $70,547        $62,637    $76,900          $ 4,082
Ratio of net investment income (loss) to average net
  assets:
  With expense reductions and reimbursement by the
    Sub-advisor.......................................       (1.00)%(a)    (0.72)%    (1.14)%            0.20%(a)
  Without expense reductions and reimbursement by the
    Sub-advisor.......................................       (1.02)%(a)    (0.87)%    (1.24)%          (11.11)%(a)
Ratio of operating expenses to average net assets:
  With expense reductions and reimbursement by the
    Sub-advisor.......................................       (1.92)%(a)     1.84%      2.24%             2.32%(a)
  Without expense reductions and reimbursement by the
    Sub-advisor.......................................        1.94%(a)      1.99%      2.34%            13.63%(a)
Portfolio turnover rate+..............................         169%(a)       392%       169%              240%(a)
Average commission rate per share paid on portfolio
  transactions+.......................................     $0.0423        $0.0319    $0.0545              N/A
</TABLE>
    
 
- ---------------
 
   
(a)   Annualized.
    
 
   
(b)   Not annualized.
    
 
   
(c)   Total investment return does not include sales charges.
    
 
   
(d)   These selected per share operating data were calculated based upon average
      shares outstanding during the period.
    
 
   
  *   Before reimbursement by the Sub-advisor, net investment income per share
      would have been reduced by $1.12.
    
 
   
  +
    
   
    
   
      Portfolio turnover and average commission rates are calculated on the
      basis of the Portfolio as a whole without distinguishing between the
      classes of shares issued.
    
 
   
N/A   Not Applicable.
    
 
                                        5
<PAGE>   94
 
   
    
 
   
<TABLE>
<CAPTION>
                                                                SIX MONTHS            YEAR ENDED          DECEMBER 30, 1994
                                                                  ENDED              OCTOBER 31,          (COMMENCEMENT OF
                                                              APRIL 30, 1998    ----------------------       OPERATIONS)
                                                              (UNAUDITED)(D)    1997(D)       1996(D)    OCTOBER 31, 1995(D)
                                                              --------------    --------      --------   -------------------
<S>                                                           <C>               <C>           <C>        <C>
CLASS B
Per Share Operating Performance:
  Net asset value, beginning of period......................     $  21.86       $  20.79      $  14.53        $  14.43
                                                                 --------       --------      --------        --------
Income from investment operations:
  Net investment income (loss)..............................        (0.17)         (0.24)        (0.31)          (0.04)*
  Net realized and unrealized gain on investments...........         4.71           2.22          7.09            3.14
                                                                 --------       --------      --------        --------
  Net increase from investment operations...................         4.54           1.98          6.78            3.10
                                                                 --------       --------      --------        --------
Distributions to shareholders:
  From net realized gain on investment......................        (1.89)         (0.91)        (0.52)             --
                                                                 --------       --------      --------        --------
        Total distributions.................................        (1.89)         (0.91)        (0.52)             --
                                                                 --------       --------      --------        --------
Net asset value, end of period..............................     $  24.51       $  21.86      $  20.79        $  14.53
                                                                 ========       ========      ========        ========
        Total investment return(c)..........................        22.21%(b)       9.95%        48.11%          27.12%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)........................     $106,836       $ 93,978      $ 87,904        $  2,959
Ratio of net investment income to average net assets:
  With expense reductions and reimbursement by Chancellor
    LGT Asset Management, Inc. (Notes 1 & 5.................        (1.50)%(a)      1.22%        (1.64)%         (0.30)%(a)
  Without expense reductions and reimbursement by Chancellor
    LGT Asset Management, Inc. .............................        (1.52)%(a)      1.37%        (1.74)%        (11.61)%(a)
Ratio of expenses to average net assets:
  With expense reductions and reimbursement by Chancellor
    LGT Asset Management, Inc. (Notes 1 & 5) ...............         2.42%(a)       2.34%         2.74%           2.82%(a)
  Without expense reductions and reimbursement by Chancellor
    LGT Asset Management, Inc. .............................         2.44%(a)       2.49%         2.84%          14.13%(a)
Portfolio turnover rate++...................................          169%(a)        392%          169%            240%(a)
Average commission rate per share paid on portfolio
  transactions++............................................     $ 0.0423       $ 0.0319      $ 0.0545             N/A
</TABLE>
    
 
- ---------------
 
   
(a)  Annualized
    
 
   
(b)  Not annualized
    
 
   
(c)  Total investment return does not include sales charges.
    
 
   
(d)  These selected per share operating data were calculated based upon average
     shares outstanding during the period.
    
 
   
*    Before reimbursement by Chancellor LGT Asset Management, Inc., net
     investment income per share would have been reduced by $1.12, $1.04 and
     $0.61 for Class A, Class B and Advisor Class, respectively.
    
 
   
+    Commencing June 1, 1995, the Fund began offering Advisor Class shares.
    
 
   
++   Portfolio turnover and average commission rates are calculated on the basis
     of the Portfolio as a whole without distinguishing between the classes of
     shares issued.
    
 
   
N/A  Not Applicable.
    
 
                                ---------------
 
   
<TABLE>
<CAPTION>
                                                                                 AVERAGE MONTHLY
                                                                AVERAGE             NUMBER OF        AVERAGE AMOUNT
                                          AMOUNT OF DEBT    AMOUNT OF DEBT     REGISTRANT'S SHARES    OF DEBT PER
                                          OUTSTANDING AT      OUTSTANDING          OUTSTANDING        SHARE DURING
YEAR ENDED                                END OF PERIOD    DURING THE PERIOD    DURING THE PERIOD      THE PERIOD
- ----------                                --------------   -----------------   -------------------   --------------
<S>                                       <C>              <C>                 <C>                   <C>
Six months ended April 30, 1998.........      $  --            $115,397             7,894,281           $ 0.015
October 31, 1997........................      $  --            $103,293             8,302,173           $0.0124
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed daily.
    
 
                                        6
<PAGE>   95
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return. Standardized total return
for Class A shares reflects the deduction of the Fund's maximum front-end sales
charge at the time of purchase. Standardized total return for Class B shares
reflects the deduction of the maximum applicable contingent deferred sales
charge on a redemption of shares held for the period.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all of a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVE. The Fund's investment objective is long-term capital
growth. It seeks its objective by investing all of its investable assets in the
Portfolio, which, in turn, invests primarily in equity securities of companies
throughout the world that manufacture, market, retail or distribute consumer
products and services. The Portfolio's investment objective is identical to that
of the Fund. There can be no assurance that the Fund or Portfolio will achieve
its investment objective.
    
 
   
  INVESTMENT POLICIES. At least 65% of the Portfolio's total assets normally
will be invested in common and preferred stocks and warrants to acquire such
securities issued by consumer products and services companies. A "consumer
products or services' company is an entity in which (i) at least 50% of either
the revenues or earnings was derived from activities relating to consumer
products or services, or (ii) at least 50% of the assets was devoted to such
activities, based on the company's most recent fiscal year. The remainder of the
Portfolio's assets may be invested in debt securities issued by consumer
products or services companies and/or equity and debt securities of companies
outside the consumer products or services industries, which, in the opinion of
the Sub-advisor, stand to benefit from developments in such industries.
    
 
   
  Examples of consumer products and services companies include those that
manufacture, market, retail, or distribute: durable goods (such as homes,
household goods, automobiles, boats, furniture and appliances, and computers);
non-durable goods (such as food and beverages and apparel); media,
entertainment, broadcasting, publishing and sports-related goods and services
(such as television and radio broadcast, motion pictures, wireless
communications, gaming casinos, theme parks, restaurants and lodging); and goods
and services to companies in the foregoing industries (such as advertisers,
textile companies and distribution and shipping companies).
    
 
   
  The Portfolio expects that a significant portion of its assets may be invested
in the securities of U.S. issuers from time to time, particularly those that
market their products globally. However, consumer products and services
companies of a particular nation or region of the world are often operated and
owned in their local markets, close to their customers. These companies, the
Sub-advisor believes, may offer superior opportunities for capital growth as
compared to their larger, multinational counterparts. Certain global markets may
be more attractive than others from time to time; companies dependent on U.S.
markets, for example, may be outperformed by companies not dependent on U.S.
markets.
    
 
   
  The Sub-advisor also believes that the demand for consumer products and
services worldwide will increase along with rising disposable incomes in both
developed and developing nations. Emerging economies, such as those in China,
Southeast Asia, Eastern Europe and Latin America, offer opportunities for the
growth and expansion of consumer markets. These regions currently comprise a
growing source of inexpensive consumer products for export and a growing source
of demand for consumer products and services as the disposable incomes of their
populations increase. In the Sub-advisor's view, these changes are likely to
create investment opportuni-
    
 
                                        7
<PAGE>   96
 
ties in companies, both local and multinational, that are able to employ
innovative manufacturing, marketing, retailing and distribution methods to open
new markets and/or expand existing markets.
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objective and
policies, the Portfolio may employ one or more of the following strategies in
order to enhance investment results:
    
 
   
  SELECTION OF INVESTMENTS AND ASSET ALLOCATION. The Portfolio expects that,
from time to time, a significant portion of its assets may be invested in the
securities of domestic issuers. The industry represented in the Portfolio,
however, is a global industry with significant, growing markets outside of the
United States. A sizeable proportion of the companies which comprise the
consumer products and services industries are headquartered outside of the
United States.
    
 
   
  For these reasons, the Sub-advisor believes that a portfolio composed only of
securities of U.S. issuers does not provide the greatest potential for return
from an investment by the Portfolio. The Sub-advisor uses its financial
expertise in markets located throughout the world and the substantial global
resources of AMVESCAP PLC in attempting to identify those countries and
companies then providing the greatest potential for long-term capital
appreciation. In this fashion, the Sub-advisor seeks to enable shareholders to
capitalize on the substantial investment opportunities and the potential for
long-term growth of capital presented by the global consumer products and
services industries represented in the Portfolio.
    
 
   
  The Sub-advisor allocates the Portfolio's assets among securities of countries
and in currency denominations where opportunities for meeting the Portfolio's
investment objective are expected to be the most attractive. The Portfolio may
invest substantially in securities denominated in one or more currencies. Under
normal conditions, the Portfolio invests in the securities of issuers located in
at least three countries, including the United States; investments in securities
of issuers in any one country, other than the United States, will represent no
more than 50% of the Portfolio's total assets.
    
 
   
  In analyzing specific companies for possible investment, the Sub-advisor
ordinarily looks for several of the following characteristics: above-average per
share earnings growth; high return on invested capital; a healthy balance sheet;
sound financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; development of new technologies; efficient service; pricing
flexibility; strong management; and general operating characteristics that will
enable the companies to compete successfully in their respective markets.
    
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. Under a defensive strategy, the Portfolio may invest up to
100% of its total assets in cash (U.S. dollars, foreign currencies or
multinational currency units such as euros) and/or high quality debt securities
or money market instruments of U.S. or foreign issuers. In addition, for
temporary defensive purposes, most or all of the Portfolio's investments may be
made in the United States and denominated in U.S. dollars. To the extent the
Portfolio adopts a temporary defensive posture, it will not be invested so as to
achieve directly its investment objective. In addition, pending investment of
proceeds from new sales of Fund shares or to meet its ordinary daily cash needs,
the Portfolio may hold cash (U.S. dollars, foreign currencies or multinational
currency units) and may invest in foreign or domestic high quality money market
instruments. For a full description of money market instruments, see "Money
Market Instruments" in the "Investment Objectives and Policies" section of the
Statement of Additional Information.
    
 
   
  PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Portfolio in privatizations in appropriate
circumstances. In certain foreign countries, the ability of foreign entities
such as the Portfolio to participate in privatizations may be limited by local
law, or the terms on which the Portfolio may be permitted to participate may be
less advantageous than those for local investors. There can be no assurance that
foreign governments will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
    
 
   
  INVESTMENTS IN OTHER INVESTMENT COMPANIES. The Portfolio may invest up to 10%
of its total assets in other investment companies, some of which may be
investment vehicles or companies that are advised by the Sub-advisor or its
affiliates ("Affiliated Funds"). As a shareholder in an investment company, the
Portfolio would bear its ratable share of that investment company's expenses,
including its advisory and administration fees. At the same time, the Portfolio
would continue to pay its own management fees and other expenses. AIM and the
Sub-advisor will waive their advisory fees to the extent that the Portfolio
invests in an Affiliated Fund.
    
 
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Portfolio
may borrow from banks or may borrow through reverse repurchase agreements and
"roll" transactions in connection with meeting requests for the redemptions of
the Fund's shares. The Portfolio also may borrow up to 5% of its total assets
for temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Portfolio may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Portfolio's borrowings exceed 5% of
its total assets. Any borrowing by the Portfolio may cause greater fluctuation
in the value of its shares than would be the case if the Portfolio did not
borrow.
 
  A reverse repurchase agreement is a borrowing transaction in which the
Portfolio transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash, and agrees to repurchase the security in the
future at an agreed upon price
 
                                        8
<PAGE>   97
 
which includes an interest component. A "roll" borrowing transaction involves
the Portfolio's sale of securities together with its commitment (for which the
Portfolio may receive a fee) to purchase similar, but not identical, securities
at a future date.
 
   
  SECURITIES LENDING. The Portfolio may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Portfolios to retain ownership of the securities loaned and, at the same
time, enhances the Fund's total return. The Portfolio limits its loans of
portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. While a loan is outstanding, the
borrower must maintain with the Portfolio's custodian collateral consisting of
cash, U.S. government securities or certain irrevocable letters of credit equal
to at least the value of the borrowed securities, plus any accrued interest or
such other collateral as permitted by the Portfolio's investment program and
regulatory agencies, and as approved by the Board. The risks in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delays in receiving additional collateral or in recovery of the
securities and possible loss of rights in the collateral should the borrower
fail financially.
    
 
  WHEN-ISSUED OR FORWARD COMMITMENT SECURITIES. The Portfolio may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Portfolio will
purchase or sell when-issued securities or enter into forward commitments only
with the intention of actually receiving or delivering the securities, as the
case may be. No income accrues on securities that have been purchased pursuant
to a forward commitment or on a when-issued basis prior to delivery to the
Portfolio. If the Portfolio disposes of the right to acquire a when-issued
security prior to its acquisition or disposes of its right to deliver or receive
against a forward commitment, it may incur a gain or loss. At the time the
Portfolio enters into a transaction on a when-issued or forward commitment
basis, the Portfolio will segregate cash or liquid securities equal to the value
of the when-issued or forward commitment securities with its custodian and will
mark to market daily such assets. There is a risk that the securities may not be
delivered and that the Portfolio may incur a loss.
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Portfolio may use
forward currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the portfolio. These instruments are often referred to as
"derivatives," which may be defined as financial instruments whose performance
is derived, at least in part, from the performance of another asset (such as a
security, currency or an index of securities). The Portfolio may enter into such
instruments up to the full value of its portfolio assets. See "Risk
Factors -- Options, Futures and Forward Currency Transactions" herein and
"Options, Futures and Currency Strategies" in the Statement of Additional
Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Portfolio may enter into forward currency contracts for the
purchase or sale of a specified currency at a specified future date. Such
contracts may involve the purchase or sale of a foreign currency against the
U.S. dollar or may involve two foreign currencies. The Portfolio may enter into
forward currency contracts either with respect to specific transactions or with
respect to its portfolio positions. The Portfolio also may purchase and sell put
and call options on currencies, futures contracts on currencies and options on
such futures contracts to hedge against movements in exchange rates.
 
   
  In addition, the Portfolio may purchase and sell put and call options on
equity and debt securities to hedge against the risk of fluctuations in the
prices of securities held by the Portfolio or that the Sub-advisor intends to
include in the Portfolio's holdings. The Portfolio also may purchase and sell
put and call options on stock indexes to hedge against overall fluctuations in
the securities markets generally or in a specific market sector.
    
 
  Further, the Portfolio may sell stock index futures contracts and may purchase
put options or write call options on such futures contracts to protect against a
general stock market decline or a decline in a specific market sector that could
affect adversely the Portfolio's holdings. The Portfolio also may purchase stock
index futures contracts and purchase call options or write put options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisitions. The
Portfolio may use interest rate futures contracts and options thereon to hedge
the debt portion of its portfolio against changes in the general level of
interest rates.
 
   
  OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this Prospectus
and in the Statement of Additional Information may be changed by the Trust's
Board of Trustees without shareholder approval. The Fund's policies regarding
concentration and lending, and the percentage of the Fund's assets that may be
committed to borrowing, are fundamental policies and may not be changed without
shareholder approval. The investment policies of the Fund are identical to the
investment policies of the Portfolio.
    
 
   
  The approval of the Fund and of other investors in the Portfolio, if any, is
not required to change the investment objective, policies or limitations of the
Portfolio, unless otherwise specified. Written notice shall be provided to
shareholders of the Fund thirty days prior to any changes in the Portfolio's
investment objective.
    
 
                                        9
<PAGE>   98
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's or Portfolio's investment policies or
restrictions.
 
   
  The Portfolio is authorized to engage in Short Sales, although it currently
has no intention of doing so, and may purchase American Depositary Receipts,
American Depositary Shares, Global Depositary Receipts and European Depositary
Receipts. See "Short Sales" and "Depositary Receipts," respectively, in the
Investment Objectives and Policies section of the Statement of Additional
Information.
    
 
   
  OTHER INFORMATION REGARDING THE PORTFOLIO. As previously described, the Fund,
unlike mutual funds that directly acquire and manage their own portfolios of
securities, seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio, which is a separate investment company.
Because the Fund will invest only in the Portfolio, the Fund's shareholders will
acquire only an indirect interest in the investments of the Portfolio.
    
 
   
  The Fund may redeem its investment in the Portfolio at any time, if the Board
of Trustees of the Trust determines that it is in the best interests of the Fund
and its shareholders to do so. A change in the Portfolio's investment objective,
policies or limitations that is not approved by the Board or the shareholders of
the Fund could require the Fund to redeem its interest in the Portfolio. Any
such redemption could result in a distribution in kind of portfolio securities
(as opposed to a cash distribution) by the Portfolio. Should such a distribution
occur, the Fund could incur brokerage fees or other transaction costs in
converting such securities to cash. In addition, a distribution in kind could
result in a less diversified portfolio of investments for the Fund and could
adversely affect its liquidity. Upon redemption, the Board would consider what
action might be taken, including the investment of all the investable assets of
the Fund in another pooled investment entity having substantially the same
investment objective as the Fund or the retention by the Fund of its own
investment advisor to manage its assets in accordance with its investment
objective, policies and limitations discussed herein.
    
 
  In addition to selling an interest therein to the Fund, the Portfolio may sell
interests therein to other non-affiliated investment companies and/or other
institutional investors. All institutional investors in the Portfolio will pay a
proportionate share of the Portfolio's expenses and will invest in the Portfolio
on the same terms and conditions. However, if another investment company invests
any or all of its assets in a Portfolio, it would not be required to sell its
shares at the same public offering price as the Fund and may charge different
sales commissions. Therefore, investors in the Fund may experience different
returns than investors in another investment company that invests exclusively in
the Portfolio. As of the date of this Prospectus, the Fund is the only
institutional investor in the Portfolio.
 
  The Fund may be materially affected by the actions of other large investors,
if any, in the Portfolio. For example, as with all open-end investment
companies, if a large investor were to redeem its interest in the Portfolio, (1)
the Portfolio's remaining investors could experience higher pro rata operating
expenses, thereby producing lower returns and (2) the Portfolio's security
holdings may become less diverse, resulting in increased risk. Institutional
investors in the Portfolio that have a greater pro rata ownership interest in
the Portfolio than the Fund could have effective voting control over the
operation of the Portfolio.
- --------------------------------------------------------------------------------
 
   
RISK FACTORS
    
 
   
  GENERAL. There is no assurance that the Fund or the Portfolio will achieve its
investment objective. The Fund's net asset value will fluctuate reflecting
fluctuations in the market value of the Portfolio's securities. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure, and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. The value of equity securities held by the Portfolio will
fluctuate in response to general market and economic developments, as well as
developments affecting the particular issuers of such securities. In addition,
the value of debt securities held by the Portfolio generally will fluctuate with
changes in the perceived creditworthiness of the issuers of such securities and
interest rates.
    
 
  Because the Portfolio focuses its investments on the consumer products and
services industries, an investment in it may be more volatile than that of other
investment companies that do not concentrate their investments in such a manner.
Moreover, the value of the shares of the Fund will be especially susceptible to
factors affecting the consumer products and services industries. Accordingly,
the Fund should not be considered a complete investment program.
 
  CONSUMER PRODUCTS AND SERVICES INDUSTRIES. The performance of consumer
products and services companies, relates closely to the actual or perceived
performance of the overall economy, interest rates and consumer confidence. In
addition, changes in demographics and consumer tastes may also affect the demand
for, and success of, particular consumer products and services. Many consumer
products and services companies have unpredictable earnings, due in part to
changes in consumer tastes and intense competition. As a result, such companies
may be subject to increased share price volatility. The consumer products and
services industries may also be subject to greater government regulation,
including trade regulation, than many other industries. Changes in governmental
policy and the need for regulatory approvals may have a material effect on the
products and services offered by companies in the consumer products and services
industries. Such governmental regulations may also hamper the development of new
business opportunities.
 
                                       10
<PAGE>   99
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to, the reporting requirements of the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. In addition, certain costs attributable to
foreign investing, such as custody charges, are higher than those attributable
to domestic investing. Securities of some foreign companies are less liquid and
their prices may be more volatile than securities of comparable domestic
companies. The Portfolio's interest and dividends from foreign issuers may be
subject to non-U.S. withholding taxes, thereby reducing the Portfolio's net
investment income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Portfolio, political or social instability, or diplomatic
developments which could affect the Portfolio's investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
 
  The Portfolio may invest in issuers domiciled in "emerging markets." Investing
in emerging market countries involves risks in addition to those risks involved
in foreign investing. Many emerging market countries have experienced high rates
of inflation for many years. In addition, emerging markets generally are
dependent heavily upon international trade and, accordingly, have been and
continue to be affected adversely by trade barriers, exchange controls, managed
adjustments in relative currency values and other protectionist measures imposed
or negotiated by the countries with which they trade. The securities markets of
emerging market countries are substantially smaller, less developed, less liquid
and more volatile than the securities markets of the developed countries. In
addition, issuers in emerging markets typically are subject to a greater degree
of change in earnings and business prospects than issuers in developed
countries.
 
  The Portfolio will also be affected favorably or unfavorably by exchange
control regulations or changes in the exchange rates between foreign currencies
and the U.S. dollar. Changes in currency exchange rates will influence the value
of the Fund's shares, and also may affect the value of dividends and interest
earned by the Portfolio and gains and losses realized by the Portfolio.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
   
  LOWER QUALITY DEBT SECURITIES. The Portfolio may invest up to 20%, of its
total assets in below investment grade debt securities, that is, rated below BBB
by Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or
Baa by Moody's Investors Service, Inc. ("Moody's") or, if unrated, deemed to be
of equivalent quality in the judgment of the Sub-advisor. Such investments
involve a high degree of risk. However, the Portfolio will not invest in debt
securities that are in default as to payment of principal and interest.
    
 
  Debt rated Baa by Moody's is considered by Moody's to have speculative
characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B,
Caa, Ca or C by Moody's is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such lower quality debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Debt rated C
by Moody's or S&P is the lowest rated debt that is not in default as to
principal or interest, and such issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Lower
quality debt securities are also generally considered to be subject to greater
risk than securities with higher ratings with regard to a deterioration of
general economic conditions. These lower quality debt securities are the
equivalent of high yield, high risk bonds, commonly known as "junk bonds."
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates. See "Description of Debt Ratings" in the Statement of Additional
Information for a full discussion of Moody's and S&P's ratings.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt
 
                                       11
<PAGE>   100
 
securities tend to be more sensitive to economic conditions and generally have
more volatile prices than higher quality securities. Issuers of lower quality
securities are often highly leveraged and may not have available to them more
traditional methods of financing. For example, during an economic downturn or a
sustained period of rising interest rates, highly leveraged issuers of lower
quality securities may experience financial stress. During such periods, such
issuers may not have sufficient revenues to meet their interest payment
obligations. The issuer's ability to service its debt obligations may also be
adversely affected by specific developments affecting the issuer, such as the
issuer's inability to meet specific projected business forecasts or the
unavailability of additional financing. The risk of loss due to default by the
issuer is significantly greater for the holders of lower quality securities
because such securities are generally unsecured and may be subordinated to the
claims of other creditors of the issuer.
 
  Lower quality debt securities of corporate issuers frequently have call or
buy-back features which would permit an issuer to call or repurchase the
security from the Portfolio. If an issuer exercises these provisions in a
declining interest rate market, the Portfolio may have to replace the security
with a lower yielding security, resulting in a decreased return for investors.
In addition, the Portfolio may have difficulty disposing of lower quality
securities because they may have a thin trading market. There may be no
established retail secondary market for many of these securities, and the
Portfolio anticipates that such securities could be sold only to a limited
number of dealers or institutional investors. The lack of a liquid secondary
market also may have an adverse impact on market prices of such instruments and
may make it more difficult for the Portfolio to obtain accurate market
quotations for purposes of valuing its investments. The Portfolio may also
acquire lower quality debt securities during an initial underwriting or which
are sold without registration under applicable securities laws. Such securities
involve special considerations and risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Portfolio may invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic recession. The Portfolio may also incur additional expenses to the
extent it is required to seek recovery upon a default in the payment of
principal or interest on portfolio holdings, and the Portfolio may have limited
legal recourse in the event of a default.
 
   
  ILLIQUID SECURITIES. The Portfolio may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." The Sub-advisor believes that carefully selected investments in
joint ventures, cooperatives, partnerships and state enterprises which are
illiquid (collectively, "Special Situations") could enable the Portfolio to
achieve capital appreciation substantially exceeding the appreciation the
Portfolio would realize if it did not make such investments. However, in order
to attempt to limit investment risk, the Portfolio will invest no more than 5%
of its total assets in Special Situations.
    
 
  Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at a price
lower than similar securities that are liquid.
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Portfolio is
authorized to enter into options, futures and forward currency transactions, the
Portfolio might not enter into any such transactions. Options, futures and
foreign currency transactions involve certain risks, which include: (1)
dependence on the Sub-advisor's ability to predict movements in the prices of
individual securities, fluctuations in the general securities markets or in the
appropriate market sector and movements in interest rates and currency markets;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, forward contracts, futures contracts or options thereon and
movements in the price of the currency or security hedged or used for cover; (3)
the fact that skills and techniques needed to trade options, futures contracts
and options thereon or to use forward currency contracts are different from
those needed to select the securities in which the Portfolio invests; (4) lack
of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time; (5) the
possible loss of principal under certain conditions; and (6) the possible
inability of the Portfolio to purchase or sell a portfolio security at a time
when it would otherwise be favorable for it to do so, or the possible need for
the Portfolio to sell a security at a disadvantageous time, due to the need for
the Portfolio to maintain "cover" or to set aside securities in connection with
hedging transactions.
    
 
  INVESTING IN SMALLER COMPANIES. While the Portfolio's holdings normally will
include securities of established suppliers of traditional products and
services, the Portfolio may invest in smaller companies which can benefit from
the development of new products and services. These smaller companies may
present greater opportunities for capital appreciation, but may also involve
greater risks than large, established issuers. Such smaller companies may have
limited product lines, markets or financial resources, and their securities may
trade less frequently and in more limited volume than the securities of larger,
more established companies. As a result, the prices of the securities of such
smaller companies may fluctuate to a greater degree than the prices of the
securities of other issuers.
- --------------------------------------------------------------------------------
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees and the Board of Trustees of the Portfolio have
overall responsibility for the operation of the Fund and the Portfolio,
respectively. The Boards have approved all significant agreements between the
Trust and the Portfolio on the one side and persons or companies furnishing
services to the Fund and the Portfolio on the other, including the investment
management and administration agreement with AIM, the investment sub-advisory
and sub-administration agreement between AIM and the Sub-advisor, the agreements
with AIM Distributors regarding distribution of the Fund's shares, the custody
agreement and the transfer agency agreement. The day-to-day operations of the
Fund and the Portfolio are delegated to the officers of the Trust and the
Portfolio,
    
 
                                       12
<PAGE>   101
 
subject always to the investment objective and policies of the Fund and the
Portfolio and to the general supervision of the Boards. See "Trustees and
Executive Officers" in the Statement of Additional Information for information
on the Trust's and the Portfolio's Trustees.
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the investment managers and administrators to the Fund and the
Portfolio include, but are not limited to, determining the composition of the
investment holdings of the Portfolio and placing orders to buy, sell or hold
particular securities. In addition, AIM and the Sub-advisor provide the
following administration services to the Portfolio and the Fund: furnishing
corporate officers and clerical staff; providing office space, services and
equipment; and supervising all matters relating to the Portfolio's and the
Fund's operation.
    
 
   
  For administration services, the Fund pays AIM administration fees computed
daily and payable monthly at the annualized rate of 0.25% of the Fund's average
daily net assets. AIM has appointed the Sub-advisor as the Fund's
sub-administrator. In addition, the Fund bears its pro rata portion of the
investment management and administration fees paid by its corresponding
Portfolio to AIM and the Sub-advisor. The Portfolio pays AIM a fee, based on the
Portfolio's average daily net assets at the annualized rate of 0.725% on the
first $500 million, 0.70% on the next $500 million, 0.675% on the next $500
million and 0.65% on all amounts thereafter. Out of its aggregate fees payable
by the Fund and the Portfolio, AIM pays the Sub-advisor sub-advisory and
sub-administration fees equal to 40% of the aggregate fees AIM receives from the
Fund and the Portfolio. The investment management and administration fees paid
by the Fund and the Portfolio are higher than those paid by most mutual funds.
The Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM Distributors
or other agents. AIM has undertaken to limit the Fund's expenses (exclusive of
brokerage commissions, taxes, interest and extraordinary expenses) to the annual
rate of 2.00% and 2.50% of the average daily net assets of the Fund's Class A
and Class B shares, respectively.
    
 
   
  The Sub-advisor also serves as the Fund's and the Portfolio's pricing and
accounting agent. For these services the Sub-advisor receives a fee consisting
of 0.03% of the first $5 billion of assets, and 0.02% of the assets in excess of
$5 billion, of the AIM Funds that are sub-advised by the Sub-advisor (other than
AIM Eastern Europe Fund). Each of these funds, including the Fund and the
Portfolio, pays an amount based upon its relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Portfolio pursuant to a master investment management
and administration agreement (the "Advisory Agreement"). AIM was organized in
1976 and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Portfolio pursuant to an investment
sub-advisory and sub-administration agreement. Prior to May 29, 1998, the
Sub-advisor was known as Chancellor LGT Asset Management, Inc. On May 29, 1998,
Liechtenstein Global Trust AG ("LGT"), the former indirect parent organization
of the Sub-advisor, consummated a purchase agreement with AMVESCAP PLC pursuant
to which AMVESCAP PLC acquired LGT's Asset Management Division, which included
the Sub-advisor and certain other affiliates. As a result of this transaction,
the Sub-advisor is now an indirect wholly owned subsidiary of AMVESCAP PLC.
Prior to the sale, the Sub-advisor and its worldwide asset management affiliates
provided investment management and/or administrative services to institutional,
corporate and individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Portfolio, the Sub-advisor employs a
team approach, taking advantage of its investment resources around the world.
    
 
  The investment professional primarily responsible for the portfolio management
of the Portfolio is as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
     NAME/OFFICE            THE PORTFOLIO                         PAST FIVE YEARS
     -----------         --------------------                   -------------------
<S>                     <C>                      <C>
Derek H. Webb           Portfolio Manager        Head of the Theme Funds for the Sub-advisor since
San Francisco           since Portfolio          1997. Portfolio Manager for the Sub-advisor since
                        inception in 1994        1994. Analyst for the Sub- advisor from 1992 to
                                                 1994.
</TABLE>
    
 
   
  In placing orders for the Portfolio's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions may be executed through
affiliates of AIM or the Sub-advisor. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Fund will bear directly and could result in the realization of
net capital gains which would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
    
 
                                       13
<PAGE>   102
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement on
behalf of Class A shares of the Fund, and has entered into a Master Distribution
Agreement on behalf of Class B shares of the Fund (individually referred to as a
"Distribution Agreement" or collectively as the "Distribution Agreements.") with
AIM Distributors, a registered broker-dealer and a wholly owned subsidiary of
AIM, to act as the distributor of Class A and Class B shares of the Fund.
Certain trustees and officers of the Trust are affiliated with AIM Distributors.
    
 
   
  The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors and its predecessor. In the event the Class B shares Distribution
Agreement is terminated, AIM Distributors would continue to receive payments of
asset based sales charges in respect of the outstanding Class B shares
attributable to the distribution efforts of AIM Distributors and its
predecessor; provided, however, that a complete termination of the Class B
shares master distribution plan (as defined in the plan) would terminate all
payments by the Fund of asset based sales charges and service fees to AIM
Distributors. Termination of the Class B shares distribution plan or
Distribution Agreement does not affect the obligation of Class B shareholders to
pay contingent deferred sales charges.
    
 
  DISTRIBUTION PLANS. Class A Plan. The Trust has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
 
  Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.50% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
 
  The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
 
   
  Of the aggregate amount payable under the Class A Plan, payments to dealers
and other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee.
    
 
  Class B Plan. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
 
  Both Plans. Activities that may be financed under the Class A Plan and the
Class B Plan (collectively, the "Plans") include, but are not limited to:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders, overhead, preparation and distribution of
advertising material and sales literature, expense of organizing and conducting
sales seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
 
                                       14
<PAGE>   103
 
  Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
 
   
  Under the Plans, certain financial institutions which have entered into
service agreements and which sell shares of the Fund on an agency basis, may
receive payments from the Fund pursuant to the respective Plans. AIM
Distributors does not act as principal, but rather as agent for the Fund in
making such payments. The Fund will obtain a representation from such financial
institutions that they will either be licensed as dealers as required under
applicable state law, or that they will not engage in activities which would
constitute acting as a "dealer" as defined under applicable state law. Financial
intermediaries and any other person entitled to receive compensation for selling
Fund shares may receive different compensation for selling shares of one class
over another.
    
 
  For additional information concerning the operation of the Plans see the
Statement of Additional Information.
 
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST AND THE PORTFOLIO
    
 
   
  ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business
trust on May 7, 1998. On September 8, 1998, the Trust acquired the assets of and
assumed the liabilities of AIM Investment Funds, Inc., a Maryland corporation.
The Fund constitutes one of the thirteen separate and distinct series portfolios
of the Trust. From time to time, the Trust may continue to establish other
funds, each corresponding to a distinct investment portfolio and a distinct
series of the Trust's shares of beneficial interest. Shares of each fund are
entitled to one vote per share (with proportional voting for fractional shares)
and are freely transferable. Shareholders have no preemptive rights. Other than
the automatic conversion of Class B shares to Class A shares, there are no
conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other shares
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
 
  ORGANIZATION OF THE PORTFOLIO. The Portfolio is organized as a subtrust of
Global Investment Portfolio, a Delaware business trust. Under Delaware law, the
Fund and other entities investing in the Portfolio enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances an investor in
the Portfolio may be held liable for the Portfolio's obligations. However, the
Agreement and Declaration of Trust of Global Investment Portfolio disclaims
shareholder liability for acts or obligations of the Portfolio and requires that
notice of such disclaimer be given in each agreement, obligation or instrument
entered into or executed by the Portfolio or a trustee. The Agreement and
Declaration of Trust also provides for indemnification from the Portfolio
property for all losses and expenses of any shareholder held personally liable
for the Portfolio's obligations. Thus the risk of an investor incurring
financial loss on account of such liability is limited to circumstances in which
the Portfolio itself would be unable to meet its obligations and where the other
party was held not to be bound by the disclaimer.
 
  Whenever the Fund is requested to vote on any proposal of the Portfolio, the
Fund will hold a meeting of the Fund's shareholders and will cast its vote as
instructed by its shareholders. Shares for which no voting instructions are
received will be voted in the same proportion as the shares for which voting
instructions are received.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust, to the
Fund and to the Portfolio.
    
   
    
 
                                       15
<PAGE>   104
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
               TO THE AIM FAMILY OF FUNDS--Registered Trademark--
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of the following mutual funds:
   
<TABLE>
            <S>                                           <C>
            AIM ADVISOR FLEX FUND                         AIM GLOBAL INFRASTRUCTURE FUND
            AIM ADVISOR INTERNATIONAL VALUE FUND          AIM GLOBAL RESOURCES FUND
            AIM ADVISOR LARGE CAP VALUE FUND              AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM ADVISOR MULTIFLEX FUND                    AIM GLOBAL TRENDS FUND
            AIM ADVISOR REAL ESTATE FUND                  AIM GLOBAL UTILITIES FUND
            AIM AGGRESSIVE GROWTH FUND                    AIM HIGH INCOME MUNICIPAL FUND
            AIM ASIAN GROWTH FUND                         AIM HIGH YIELD FUND
            AIM BALANCED FUND                             AIM INCOME FUND
            AIM BASIC VALUE FUND                          AIM INTERMEDIATE GOVERNMENT FUND
            AIM BLUE CHIP FUND                            AIM INTERNATIONAL EQUITY FUND
            AIM CAPITAL DEVELOPMENT FUND                  AIM INTERNATIONAL GROWTH FUND
            AIM CHARTER FUND                              AIM JAPAN GROWTH FUND
            AIM CONSTELLATION FUND                        AIM LATIN AMERICAN GROWTH FUND
            AIM DEVELOPING MARKETS FUND                   AIM LIMITED MATURITY TREASURY FUND
            AIM DOLLAR FUND(*)                            AIM MID CAP GROWTH FUND
            AIM EMERGING MARKETS FUND                     AIM MONEY MARKET FUND(*)
            AIM EMERGING MARKET DEBT FUND                 AIM MUNICIPAL BOND FUND
            AIM EUROPEAN DEVELOPMENT FUND                 AIM NEW PACIFIC GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM SELECT GROWTH FUND
            AIM GLOBAL AGGRESSIVE GROWTH FUND             AIM SMALL CAP EQUITY FUND
            AIM GLOBAL CONSUMER PRODUCTS AND              AIM SMALL CAP OPPORTUNITIES FUND
              SERVICES FUND                               AIM STRATEGIC INCOME FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM TAX-EXEMPT CASH FUND(*)
            AIM GLOBAL GROWTH FUND                        AIM TAX-FREE INTERMEDIATE FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM VALUE FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WEINGARTEN FUND
            AIM GLOBAL INCOME FUND                        AIM WORLDWIDE GROWTH FUND
                                                                                                 
</TABLE>
    
 
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
    Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
    asset value, without payment of a sales charge, as described below. Other
    funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
    FUND, are sold with an initial sales charge or subject to a contingent
    deferred sales charge upon redemption, as described below.
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed new Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.
 
   
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment is
$500, except for accounts initially established through an Automatic Investment
Plan, which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an Individual Retirement Arrangement ("IRA") or Roth IRA is $250.
There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such plans is $25 per
fund investment), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM 
    
 
                                       A-1
<PAGE>   105
 
   
Funds account. Notwithstanding the foregoing, the minimum initial investment
applicable to AIM Small Cap Opportunities Fund is $10,000.
    
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Shares of any AIM Funds not named on the cover of this Prospectus, as well as
Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                   OBI:                              Shareholder Name, Shareholder Account Number
                                                     (70 character limit)
</TABLE>
 
   
  HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased directly
through AIM Distributors or through any dealer who has entered into an agreement
with AIM Distributors. The minimum investment for subsequent purchases is $50.
The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. Notwithstanding the foregoing, the minimum subsequent purchases of shares
of AIM Small Cap Opportunities Fund is $1,000. There are no such minimum
investment requirements for investment of dividends and distributions of any of
the AIM Funds into any other existing AIM Funds account.
    
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional shares by electronic funds
transfer, please contact the Client Services Department of AFS for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
   
  Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BASIC
VALUE FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT
FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP EQUITY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND,AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without a
sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over
    
 
                                       A-2
<PAGE>   106
 
another class in the same Multiple Class Fund. Factors an investor should
consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
   
  The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPE
GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL
FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM
GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS
FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN
GROWTH FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
    
 
  The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
 
SALES CHARGES AND DEALER CONCESSIONS
 
   
  GROUP I. Certain AIM Funds are currently sold with a sales charge ranging from
5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM BASIC VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
EQUITY FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
    
 
   
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
      SINGLE TRANSACTION(1)                          PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   25,000                    5.50%          5.82%        4.75%
 $ 25,000 but less than $   50,000                   5.25           5.54         4.50
 $ 50,000 but less than $ 100,000                    4.75           4.99         4.00
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    3.00           3.09         2.50
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
    
 
- ---------------
 
   
(1) AIM Small Cap Opportunities Fund will not accept any single purchase in
    excess of $250,000.
    
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
                                       A-3
<PAGE>   107
   
 GROUP II. Certain AIM Funds are currently sold with a sales charge ranging from
4.75% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND, AIM
BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND
FUND, AIM STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
    
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   50,000                    4.75%          4.99%        4.00%
 $ 50,000 but less than $ 100,000                    4.00           4.17         3.25
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    2.50           2.56         2.00
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
  GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
Less than $ 100,000                                  1.00%          1.01%        0.75%
 $100,000 but less than $ 250,000                    0.75           0.76         0.50
 $250,000 but less than $1,000,000                   0.50           0.50         0.40
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
 
  ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
 
  In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
 
  AIM Distributors may make payments to dealers and institutions who are dealers
of record for purchases of $1 million of more of Class A shares (or shares which
normally involve payment of initial sales charges), which are sold at net asset
value and are subject to
 
                                       A-4
<PAGE>   108
 
a contingent deferred sales charge, for all AIM Funds other than Class A shares
of each of AIM LIMITED MATURITY TREASURY FUND and AIM TAX-FREE INTERMEDIATE FUND
as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next
$1 million of such purchases, plus 0.50% of the next $17 million of such
purchases, plus 0.25% of amounts in excess of $20 million of such purchases. See
"Contingent Deferred Sales Charge Program for Large Purchases." AIM Distributors
may make payments to dealers and institutions who are dealers of record for
purchases of $1 million or more of Class A shares (or shares which normally
involve payment of initial sales charges), and which are sold at net asset value
and are not subject to a contingent deferred sales charge, in an amount up to
0.10% of such purchases of Class A shares of AIM LIMITED MATURITY TREASURY FUND,
and in an amount up to 0.25% of such purchases of Class A shares of AIM TAX-FREE
INTERMEDIATE FUND.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed during the next twelve
months on Saturdays and Sundays and on the days on which New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class Funds
currently offer two or more classes of shares through separate distribution
systems (the "Multiple Distribution System"). Although each class of shares of a
particular Multiple Class Fund represents an interest in the same portfolio of
investments, each class is subject to a different distribution structure and, as
a result, differing expenses. This Multiple Distribution System allows investors
to select the class that is best suited to the investor's needs and objectives.
In considering the options afforded by the Multiple Distribution System,
investors should consider both the applicable initial sales charge or contingent
deferred sales charge, as well as the ongoing expenses borne by each class of
shares and other relevant factors, such as whether his or her investment goals
are long-term or short-term.
 
     CLASS A SHARES generally are sold subject to the initial sales charges
     described above and are subject to the other fees and expenses described
     herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
     needs of an investor who wishes to establish a dollar cost averaging
     program, pursuant to which Class A shares an investor owns may be exchanged
     at net asset value for Class A shares of another Multiple Class Fund or
     shares of another AIM Fund which is not a Multiple Class Fund, subject to
     the terms and conditions described under the caption "Exchange
     Privilege -- Terms and Conditions of Exchanges."
                                       A-5
<PAGE>   109
 
     CLASS B SHARES are sold without an initial sales charge. Thus, the entire
     purchase price of Class B shares is immediately invested in Class B shares.
     Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
     per annum on the average daily net assets of a Multiple Class Fund
     attributable to Class B shares. See the discussion under the caption
     "Management -- Distribution Plans." In addition, Class B shares redeemed
     within six years from the date such shares were purchased are subject to a
     contingent deferred sales charge ranging from 5% for redemptions made
     within the first year to 1% for redemptions made within the sixth year. No
     contingent deferred sales charge will be imposed if Class B shares are
     redeemed after six years from the date such shares were purchased.
     Redemptions of Class B shares and associated charges are further described
     under the caption "How to Redeem Shares -- Multiple Distribution System."
 
     Class B shares will automatically convert into Class A shares of the same
     Multiple Class Fund (together with a pro rata portion of all Class B shares
     acquired through the reinvestment of dividends and other distributions)
     eight years from the end of the calendar month in which the purchase of
     Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
     outstanding on May 29, 1998 and which are continuously held by the
     shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
     FUND seven years from the end of the calendar month in which the purchase
     of such Class B shares was made. If a shareholder exchanges Class B shares
     of AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
     since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
     shares will be subject to the eight year conversion feature applicable to
     Class B shares of all other AIM Funds. Following such conversion of their
     Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
     payments associated with Class B shares. See "Management -- Distribution
     Plans."
 
     AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an
     initial sales charge and are not subject to a contingent deferred sales
     charge; however, they are subject to the other fees and expenses described
     in the prospectus for AIM MONEY MARKET FUND.
 
  TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon Eastern Time or NYSE Close on any
business day of the Fund will be confirmed at the price next determined. Net
asset value is normally determined at 12:00 noon Eastern Time and NYSE Close on
each business day of AIM MONEY MARKET FUND.
 
  SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
REDUCTIONS IN INITIAL SALES CHARGES
 
  Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
 
                                       A-6
<PAGE>   110
 
  The term "purchaser" means:
 
  - an individual and his or her spouse and children, including any trust
    established exclusively for the benefit of any such person; or a pension,
    profit-sharing, or other benefit plan established exclusively for the
    benefit of any such person, such as an IRA, Roth IRA, a single-participant
    money-purchase/profit-sharing plan or an individual participant in a 403(b)
    plan (unless such 403(b) plan qualifies as the purchaser as defined below);
 
  - a 403(b) plan, the employer/sponsor of which is an organization described
    under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
    (the "Code"), provided that:
 
        a. the employer/sponsor must submit contributions for all participating
           employees in a single contribution transmittal (i.e., the funds will
           not accept contributions submitted with respect to individual
           participants);
 
        b. each transmittal must be accompanied by a single check or wire
           transfer; and
 
        c. all new participants must be added to the 403(b) plan by submitting
           an application on behalf of each new participant with the
           contribution transmittal;
 
  - a trustee or fiduciary purchasing for a single trust, estate or single
    fiduciary account (including a pension, profit-sharing or other employee
    benefit trust created pursuant to a plan qualified under Section 401 of the
    Code) and 457 plans, although more than one beneficiary or participant is
    involved;
 
  - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
    Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
    Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
    Distributors in writing that all of its related employee SEP, SARSEP or
    SIMPLE IRA accounts should be linked;
 
  - any other organized group of persons, whether incorporated or not, provided
    the organization has been in existence for at least six months and has some
    purpose other than the purchase at a discount of redeemable securities of a
    registered investment company; or
 
  - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
    Capital Management, Inc. ("AIM Capital").
 
  Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
 
  (1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
 
  Each purchase of fund shares normally subject to an initial sales charge made
during the 13-month period will be made at the public offering price applicable
to a single transaction of the total dollar amount indicated by the LOI, as
described under "Sales Charges and Dealer Concessions." It is the purchaser's
responsibility at the time of purchase to specify the account numbers that
should be considered in determining the appropriate sales charge. The offering
price may be further reduced as described under "Rights of Accumulation" if the
Transfer Agent is advised of all other accounts at the time of the investment.
Shares acquired through reinvestment of dividends and capital gain distributions
will not be applied to the LOI. At any time during the 13-month period after
meeting the original obligation, a purchaser may revise his intended investment
amount upward by submitting a written and signed request. Such a revision will
not change the original expiration date. By signing an LOI, a purchaser is not
making a binding commitment to purchase additional shares, but if purchases made
within the 13-month period do not total the amount specified, the investor will
pay the increased amount of sales charge as described below. Purchases made
within 90 days before signing an LOI will be applied toward completion of the
LOI. The LOI effective date will be the date of the first purchase with the
90-day period. The Transfer Agent will process necessary adjustments upon the
expiration or completion date of the LOI. Purchases made more than 90 days
before signing an LOI will be applied toward completion of the LOI based on the
value of the shares purchased calculated at the public offering price on the
effective date of the LOI.
 
  To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
                                       A-7
<PAGE>   111
 
  If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
 
  Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
 
  (2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
 
  PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at
net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
 
  Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
 
  The following persons may purchase Class A shares of the AIM Funds through AIM
Distributors without payment of an initial sales charge: (a) A I M Management
Group Inc. ("AIM Management") and its affiliated companies; (b) any current or
retired officer, director, trustee or employee, or any member of the immediate
family (including spouse, children, parents and parents of spouse) of any such
person, of AIM Management or its affiliates or of certain mutual funds which are
advised or managed by AIM; or any trust established exclusively for the benefit
of such persons; (c) any employee benefit plan established for employees of AIM
Management or its affiliates; (d) any current or retired officer, director,
trustee or employee, or any member of the immediate family (including spouse,
children, parents and parents of spouse) of any such person, or of CIGNA
Corporation or of any of its affiliated companies, or of First Data Investor
Services Group (formerly The Shareholder Services Group, Inc.); (e) any
investment company sponsored by CIGNA Investments, Inc. or any of its affiliated
companies for the benefit of its directors' deferred compensation plans; (f)
discretionary advised clients of AIM or AIM Capital; (g) registered
representatives and employees of dealers who have entered into agreements with
AIM Distributors (or financial institutions that have arrangements with such
dealers with respect to the sale of shares of the AIM Funds) and any member of
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, provided that purchases at net asset value are permitted by
the policies of such person's employer; (h) certain broker-dealers, investment
advisers or bank trust departments that provide asset allocation, similar
specialized investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services, and that
have entered into an agreement with AIM Distributors with respect to their use
of the AIM Funds in connection with such services; (i) any employee or any
member of the immediate family (including spouse, children, parents and parents
of spouse) of any employee, of Triformis Inc.; (j) shareholders of the AIM/GT
Funds as of April 30, 1987 who since that date continually have owned shares of
one or more of the AIM/GT Funds; and (k) certain former AMA Investment Advisers'
shareholders who became shareholders of the AIM Global Health Care Fund in
October 1989, and who have continuously held shares in the AIM/GT Funds since
that time.
 
   
  In addition, shares of any AIM Fund (except AIM Small Cap Opportunities Fund)
may be purchased at net asset value, without payment of a sales charge, by
pension, profit-sharing or other employee benefit plans created pursuant to a
plan qualified under Section 401 of the Code or plans under Section 457 of the
Code, or employee benefit plans created pursuant to Section 403(b) of the
    
                                       A-8
<PAGE>   112
 
Code and sponsored by nonprofit organizations defined under Section 501(c)(3) of
the Code. Such plans will qualify for purchases at net asset value provided that
(1) the total amount invested in the plan is at least $1,000,000, (2) the
sponsor signs a $1,000,000 LOI, (3) such shares are purchased by an
employer-sponsored plan with at least 100 eligible employees, or (4) all of the
plan's transactions are executed through a single financial institution or
service organization who has entered into an agreement with AIM Distributors
with respect to their use of the AIM Funds in connection with such accounts.
Section 403(b) plans sponsored by public educational institutions will not be
eligible for net asset value purchases based on the aggregate investment made by
the plan or the number of eligible employees. Participants in such plans will be
eligible for reduced sales charges based solely on the aggregate value of their
individual investments in the applicable AIM Fund. PLEASE NOTE THAT TAX-EXEMPT
FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR SUCH PLANS. AIM Distributors may pay
investment dealers or other financial service firms for share purchases of the
Load Funds (as defined under the caption "Exchange Privilege") sold at net asset
value to an employee benefit plan in accordance with this paragraph as follows:
1% of the first $2 million of such purchases, plus 0.80% of the next $1 million
of such purchases, plus 0.50% of the next $17 million of such purchases, plus
0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of
the net asset value of any Class A shares of AIM LIMITED MATURITY TREASURY FUND
sold at net asset value to an employee benefit plan in accordance with this
paragraph.
 
  Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
- --------------------------------------------------------------------------------
 
SPECIAL PLANS
 
  Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
who owns shares which are not subject to a contingent deferred sales charge, can
arrange for monthly, quarterly or annual amounts (but not less than $50) to be
drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that
 
                                       A-9
<PAGE>   113
 
exceed on an annual basis 12% of such account will be subject to a contingent
deferred sales charge on the amounts exceeding 12% of the account value at the
time the shareholder elects to participate in the Systematic Withdrawal Plan.
 
  Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested to shares of the
applicable AIM Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full
and fractional shares at their net asset value in effect at the time of each
such redemption.
 
  Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
 
  The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
 
  AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in the amount specified by
the shareholder (minimum $50 per investment, per account) and on a day or
date(s) specified by the shareholder. The proceeds are invested in shares of the
designated AIM Fund at the applicable offering price determined on the date of
the withdrawal. An Automatic Investment Plan may be discontinued upon 10 days'
prior notice to the Transfer Agent or AIM Distributors.
 
   
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
    
 
  DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
 
  PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination
money-purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans;
SARSEP plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement
accounts"). Information concerning these plans, including the custodian's fees
and the forms necessary to adopt such plans, can be obtained by calling or
writing the AIM Funds or AIM Distributors. Shares of the AIM Funds are also
available for investment through existing 401(k) plans (for both individuals and
employers) adopted under the Code. The plan custodian currently imposes an
annual $10 maintenance fee with respect to each retirement account for which it
serves as the custodian. This fee is generally charged in December. Each AIM
Fund and/or the custodian reserve the right to change this maintenance fee and
to initiate an establishment fee (not to exceed its cost).
 

   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance of $5,000 to
establish and maintain an allocation across a range of AIM Funds. The Program
automatically rebalances holdings of AIM Funds to the established allocation on
a periodic basis. Under the Program, a shareholder may predesig-
    
 
                                      A-10
<PAGE>   114
   
nate, on a percentage basis, how the total value of his or her holdings in a
minimum of two, and a maximum of ten, AIM Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more AIM Funds in the shareholder's Personal Portfolio for shares of
the same class(es) of one or more other AIM Funds in the shareholder's Personal
Portfolio. See "Exchange Privilege." If shares of the AIM Fund(s) in a
shareholder's Personal Portfolio have appreciated during a rebalancing period,
the Program will result in shares of AIM Fund(s) that have appreciated most
during the period being exchanged for shares of AIM Fund(s) that have
appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular AIM Fund would be 2% or less.
In predesignating percentages, shareholders must use whole percentages and
totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an AIM Fund's shares. The
AIM Funds and AIM Distributors reserve the right to modify, suspend, or
terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
    
 
                                      A-11
<PAGE>   115
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, including the Class A shares of the Multiple Class Funds, listed below
and referred to herein as the "Load Funds," are sold at a public offering price
that includes a maximum sales charge of 5.50% or 4.75% of the public offering
price of such shares; Class A shares (or shares which normally involve the
payment of initial sales charges) of certain of the AIM Funds, listed below and
referred to herein as the "Lower Load Funds," are sold at a public offering
price that includes a maximum sales charge of 1.00% of the public offering price
of such shares; and Class A shares or shares of certain other funds, listed
below and referred to herein as the "No Load Funds," are sold at net asset
value, without payment of a sales charge.
 
   
<TABLE>
<S>                                    <C>                                   <C>
                                LOAD FUNDS:                                  LOWER LOAD FUNDS:
   AIM ADVISOR FLEX FUND --            AIM GLOBAL INCOME                     AIM LIMITED MATURITY TREASURY FUND
     CLASS A                           FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR INTERNATIONAL           AIM GLOBAL INFRASTRUCTURE               AIM TAX-FREE INTERMEDIATE FUND
     VALUE FUND -- CLASS A             FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR LARGE CAP               AIM GLOBAL RESOURCES                  NO LOAD FUNDS:
     VALUE FUND -- CLASS A             FUND -- CLASS A
   AIM ADVISOR MULTIFLEX               AIM GLOBAL TELECOMMUNICATIONS         AIM MONEY MARKET FUND
     FUND -- CLASS A                   FUND -- CLASS A                           -- AIM CASH RESERVE SHARES
   AIM ADVISOR REAL ESTATE             AIM GLOBAL TRENDS                       AIM TAX-EXEMPT CASH FUND -- CLASS A
     FUND -- CLASS A                   FUND -- CLASS A                         AIM DOLLAR FUND -- CLASS A
   AIM AGGRESSIVE GROWTH               AIM GLOBAL UTILITIES
     FUND -- CLASS A                   FUND -- CLASS A
   AIM ASIAN GROWTH                    AIM HIGH INCOME MUNICIPAL
     FUND -- CLASS A                   FUND -- CLASS A
   AIM BALANCED FUND -- CLASS A        AIM HIGH YIELD FUND -- CLASS A
   AIM BASIC VALUE                     AIM INCOME FUND -- CLASS A
     FUND -- CLASS A                   AIM INTERMEDIATE GOVERNMENT
   AIM BLUE CHIP FUND -- CLASS A       FUND -- CLASS A
   AIM CAPITAL DEVELOPMENT             AIM INTERNATIONAL EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM CHARTER FUND -- CLASS A         AIM INTERNATIONAL GROWTH
   AIM CONSTELLATION                   FUND -- CLASS A
     FUND -- CLASS A                   AIM JAPAN GROWTH FUND -- CLASS A
   AIM DEVELOPING MARKETS              AIM LATIN AMERICAN GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS                AIM MID CAP EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS DEBT           AIM MONEY MARKET
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPE GROWTH                   AIM MUNICIPAL BOND
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPEAN DEVELOPMENT            AIM NEW PACIFIC GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM GLOBAL AGGRESSIVE GROWTH        AIM SELECT GROWTH FUND -- CLASS A
     FUND -- CLASS A                   AIM SMALL CAP GROWTH
   AIM GLOBAL CONSUMER PRODUCTS        FUND -- CLASS A
     AND SERVICES FUND -- CLASS A      AIM SMALL CAP OPPORTUNITIES
   AIM GLOBAL FINANCIAL SERVICES       FUND -- CLASS A
     FUND -- CLASS A                   AIM STRATEGIC INCOME
   AIM GLOBAL GOVERNMENT INCOME        FUND -- CLASS A
     FUND -- CLASS A                   AIM TAX-EXEMPT BOND FUND
   AIM GLOBAL GROWTH                   OF CONNECTICUT -- CLASS A
     FUND -- CLASS A                   AIM VALUE FUND -- CLASS A
   AIM GLOBAL GROWTH &                 AIM WEINGARTEN FUND -- CLASS A
     INCOME FUND -- CLASS A            AIM WORLDWIDE GROWTH
   AIM GLOBAL HEALTH CARE              FUND -- CLASS A
     FUND -- CLASS A
</TABLE>
    
 
                                      A-12
<PAGE>   116
 
   
  Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE; (iii) Class A shares
may be exchanged for Class A shares; (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A, Class B or Class C shares of AIM MONEY MARKET FUND. Class C shares
of AIM Small Cap Opportunities Fund are currently not available.
    
 
  DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
 
<TABLE>
<CAPTION>
                                                                                                      MULTIPLE CLASS FUNDS:
                                                            LOWER LOAD              NO LOAD       ------------------------------
      FROM:                 TO: LOAD FUNDS                     FUNDS                 FUNDS           CLASS B         CLASS C
      -----                 --------------                  ----------              -------          -------         -------
<S>                <C>                                <C>                      <C>                <C>             <C>
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
 
Lower Load Funds.. Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund or any     Fund or any Lower Load
                   Lower Load Fund.                   Fund; otherwise,
                                                      Offering Price.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
 
  FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS REVISED AS FOLLOWS:
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
Lower Load Funds.. Net Asset Value if shares were     Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
                   acquired upon exchange of any
                   Load Fund. Otherwise, difference
                   in sales charge will apply.
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund.           Fund or any Lower Load
                   Difference in sales charge will    Fund; otherwise,
                   apply if No Load shares were       Offering Price.
                   acquired upon exchange of Lower
                   Load Fund shares.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
  Class C........  Not Applicable                     Not Applicable           Not Applicable     Not Applicable  Net Asset Value
</TABLE>
 
   
  An exchange is permitted only in the following circumstances: (a) if the funds
offer more than one class of shares, the exchange must be between the same class
of shares (e.g., Class A, Class B and Class C shares of a Multiple Class Fund
cannot be exchanged for each other) except that AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may be exchanged for Class A shares of another Multiple Class
Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten busi-
    
 
                                      A-13
<PAGE>   117
 
ness days, and all other shares are held in an account for at least one day,
prior to the exchange; and (h) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the AIM
Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
   
  Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged are
redeemed at their net asset value as determined at NYSE Close on the day that an
exchange request in proper form (described below) is received. Exchange requests
received after NYSE Close will result in the redemption of shares at their net
asset value at NYSE Close on the next business day. See "Terms and Conditions of
Purchase of the AIM Funds -- Timing of Purchase, Exchange and Redemption Orders
(AIM MONEY MARKET FUND only)" for information regarding the timing of exchange
orders for AIM MONEY MARKET FUND. Normally, shares of an AIM Fund to be acquired
by exchange are purchased at their net asset value or applicable offering price,
as the case may be, determined on the date that such request is received, but
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that a fund would be materially disadvantaged
by an immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into a fund paying daily dividends (See "Dividends, Distributions and
Tax Matters -- Dividends and Distributions," below), and the release of the
exchange proceeds is delayed for the foregoing five-day period, such shareholder
will not begin to accrue dividends until the sixth business day after the
exchange. Shares purchased by check may not be exchanged until it is determined
that the check has cleared, which may take up to ten business days from the date
that the check is received. See "Terms and Conditions of Purchase of the AIM
Funds -- Timing of Purchase Orders."
    
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the AIM Funds. AIM Distributors reserves the right to impose conditions on
dealers or investment advisors who make telephone exchanges of shares of the
funds, including the condition that any such dealer or investment advisor enter
into an agreement (which contains additional conditions with respect to
exchanges of shares) with AIM Distributors. To exchange shares by telephone, a
shareholder, dealer or investment advisor who has satisfied the foregoing
conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach
AFS by telephone, he may also request exchanges by telegraph or use overnight
courier services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is received
prior to NYSE Close. The Transfer Agent and AIM Distributors will not be liable
for any loss, expense or cost arising out of any telephone exchange request that
they reasonably believe to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions if they do not follow
reasonable procedures for verification of telephone transactions. Such
reasonable procedures may include recordings of telephone transactions
(maintained for six months), requests for confirmation of the shareholder's
Social Security Number and current address, and mailings of confirmations
promptly after the transaction.
 
  EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
 
                                      A-14
<PAGE>   118
 
  MULTIPLE DISTRIBUTION SYSTEM. Class B Shares. Class B shares purchased under
the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
 
<TABLE>
<CAPTION>
  YEARS                                                     CONTINGENT DEFERRED
  SINCE                                                       SALES CHARGE AS
PURCHASE                                                    % OF DOLLAR AMOUNT
  MADE                                                       SUBJECT TO CHARGE
- --------                                                    -------------------
<S>                                                          <C>
First......................................................         5%
Second.....................................................         4%
Third......................................................         3%
Fourth.....................................................         3%
Fifth......................................................         2%
Sixth......................................................         1%
Seventh and Following......................................        None
</TABLE>
 
  In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
 
  Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
 
  Class C Shares. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
 
  Waivers. Contingent deferred sales charges on Class B and Class C shares will
be waived on redemptions (1) following the death or post-purchase disability, as
defined in Section 72(m)(7) of the Code, of a shareholder or a settlor of a
living trust (provided AIM Distributors is notified of such death or
post-purchase disability at the time of the redemption request and is provided
with satisfactory evidence of such death or post-purchase disability), (2) in
connection with certain distributions from IRAs, custodial accounts maintained
pursuant to Code Section 403(b), deferred compensation plans qualified under
Code Section 457 and plans qualified under Code Section 401 (collectively,
"Retirement Plans"), (3) pursuant to a Systematic Withdrawal Plan, provided that
amounts withdrawn under such plan do not exceed on an annual basis 12% of the
value of the shareholder's investment in Class B or Class C shares at the time
the shareholder elects to participate in the Systematic Withdrawal Plan, (4)
effected pursuant to the right of a Multiple Class Fund to liquidate a
shareholder's account if the aggregate net asset value of shares held in the
account is less than the designated minimum account size described in the
prospectus of such Multiple Class Fund, (5) effected by AIM of its investment in
Class B or Class C shares and (6) of Class C shares where such investor's dealer
of record, due to the nature of the investor's account, notifies AIM
Distributors prior to the time of investment that the dealer waives the payment
otherwise payable to the dealer described in the last paragraph under the
caption "Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM
Funds."
 
  Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
 
  Waiver category (2) above applies only to redemptions resulting from:
 
          (i) required minimum distributions to plan participants or
     beneficiaries who are age 70 1/2 or older, and only with respect to that
     portion of such distributions which does not exceed 12% annually of the
     participant's or beneficiary's account value in a particular AIM Fund;
 
                                      A-15
<PAGE>   119
 
          (ii) in-kind transfers of assets where the participant or beneficiary
     notifies AIM Distributors of such transfer no later than the time such
     transfer occurs;
 
          (iii) tax-free rollovers or transfers of assets to another Retirement
     Plan invested in Class B or Class C shares of one or more Multiple Class
     Funds;
 
          (iv) tax-free returns of excess contributions or returns of excess
     deferral amounts; and
 
          (v) distributions upon the death or disability (as defined in the
     Code) of the participant or beneficiary.
 
   
  CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND or Class A shares
of AIM DOLLAR FUND which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code, or Plans created under Section 403(b) of the
Code and sponsored by nonprofit organizations as defined under Section 501(c)(3)
of the Code, where shares are being redeemed in connection with employee
terminations or withdrawals, and (a) the total amount invested in a Plan is at
least $1,000,000, (b) the sponsor of a Plan signs a letter of intent to invest
at least $1,000,000 in one or more of the AIM Funds, or (c) the shares being
redeemed were purchased by an employer-sponsored Plan with at least 100 eligible
employees; provided, however, that Plans created under Section 403(b) of the
Code which are sponsored by public educational institutions shall qualify under
(a), (b) or (c) above on the basis of the value of each Plan participant's
aggregate investment in the AIM Funds, and not on the aggregate investment made
by the Plan or on the number of eligible employees; (2) redemptions of shares
following the death or post-purchase disability, as defined in Section 72(m)(7)
of the Code, of a shareholder or a settlor of a living trust; (3) redemptions of
shares purchased at net asset value by private foundations or endowment funds
where the initial amount invested was at least $1,000,000; (4) redemptions of
shares purchased by an investor in amounts of $1,000,000 or more where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payments otherwise payable to the dealer as described in the third paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds;" and (5) pursuant to a Systematic Withdrawal Plan, provided
that amounts withdrawn under such plan do not exceed on an annual basis 12% of
the value of the shareholder's investment in Class A shares at the time the
shareholder elects to participate in the Systematic Withdrawal Plan.
    
 
  Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  In addition to these requirements, shareholders who have invested in a fund to
establish as IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares; (a) a statement
as to whether or not the shareholder has attained age 59 1/2, and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.
 
                                      A-16
<PAGE>   120
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
this account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
   
  EXPEDITED REDEMPTIONS (AIM Cash Reserve shares of AIM MONEY MARKET FUND
ONLY). If a redemption order is received prior to 11:30 a.m. Eastern Time, the
redemption will be effective on that day and AIM MONEY MARKET FUND will endeavor
to transmit payment on that same business day. If the redemption order is
received after 11:30 a.m. and prior to NYSE Close, the redemption will be made
at the next determined net asset value and payment will generally be transmitted
on the next business day.
    
 
  REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing the
appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone
 
                                      A-17
<PAGE>   121
 
exchange and telephone redemption authorization forms; (7) changes in previously
designated wiring or electronic funds transfer instructions, and (8) written
redemptions or exchanges of shares previously reported as lost, whether or not
the redemption amount is under $50,000 or the proceeds are to be sent to the
address of record. These requirements may be waived or modified upon notice to
shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
    
 
   
  REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within ninety (90) days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment will not alter the taxes due on any
capital gains, except under the circumstances described below. If there has been
a loss on the redemption and shares of the same fund are repurchased, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in shares of the same fund, or exchanged for
shares of another AIM Fund, at a reduced sales charge within 90 days of the
payment of the sales charge, the shareholder's basis in the fund shares redeemed
may not include the amount of the sales charge paid, thereby reducing the loss
or increasing the gain recognized from the redemption; however, the
shareholder's basis in the fund shares purchased will include the sales charge.
Each AIM Fund may amend, suspend or cease offering the privilege at any time as
to shares redeemed after the date of such amendment, suspension or cessation.
This privilege may only be exercised once each year by a shareholder with
respect to each AIM Fund.
    
 
   
  Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of Class A shares and who subsequently reinvest a portion or
all of the value of the redeemed shares in Class A shares of any AIM Fund within
ninety (90) days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
    
 
                                      A-18

<PAGE>   122
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
   
  The net asset value per share (or share price) of each AIM Fund is determined
as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close with
respect to AIM MONEY MARKET FUND) on each "business day" of a fund as previously
defined. In the event the NYSE closes early (i.e. before 4:00 p.m. Eastern Time)
on a particular day, the net asset value of an AIM Fund's share will be
determined as of the close of the NYSE on such day. For purposes of defining net
asset value per share, futures and options contracts generally will be valued 15
minutes after the close of trading of the NYSE. The net asset value per share is
calculated by subtracting a class' liabilities from its assets and dividing the
result by the total number of class shares outstanding. The determination of net
asset value per share is made in accordance with generally accepted accounting
principles. Among other items, liabilities include accrued expenses and
dividends payable, and total assets include portfolio securities valued at their
market value, as well as income accrued but not yet received. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the fund's officers and
in accordance with methods which are specifically authorized by its governing
Board of Directors or Trustees. Short-term obligations with maturities of 60
days or less, and the securities held by the Money Market Funds, are valued at
amortized cost as reflecting fair value. AIM HIGH INCOME MUNICIPAL FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-FREE
INTERMEDIATE FUND value variable rate securities that have an unconditional
demand or put feature exercisable within seven days or less at par, which
reflects the market value of such securities.
    
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as
set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                DISTRIBUTIONS    DISTRIBUTIONS
                                                                                   OF NET           OF NET
                                                    DIVIDENDS FROM                REALIZED         REALIZED
                                                    NET INVESTMENT               SHORT-TERM        LONG-TERM
                   FUND                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
                   ----                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM ADVISOR FLEX FUND.....................  declared and paid quarterly       quarterly          annually
AIM ADVISOR INTERNATIONAL VALUE FUND......  declared and paid annually        annually           annually
AIM ADVISOR LARGE CAP VALUE FUND..........  declared and paid quarterly       quarterly          annually
AIM ADVISOR MULTIFLEX FUND................  declared and paid quarterly       quarterly          annually
AIM ADVISOR REAL ESTATE FUND..............  declared and paid quarterly       quarterly          annually
AIM AGGRESSIVE GROWTH FUND................  declared and paid annually        annually           annually
AIM ASIAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM BALANCED FUND.........................  declared and paid quarterly       annually           annually
AIM BASIC VALUE FUND......................  declared and paid annually        annually           annually
AIM BLUE CHIP FUND........................  declared and paid annually        annually           annually
AIM CAPITAL DEVELOPMENT FUND..............  declared and paid annually        annually           annually
AIM CHARTER FUND..........................  declared and paid quarterly       annually           annually
AIM CONSTELLATION FUND....................  declared and paid annually        annually           annually
AIM DEVELOPING MARKETS FUND...............  declared and paid annually        annually           annually
AIM DOLLAR FUND...........................  declared daily; paid monthly      annually           annually
AIM EMERGING MARKETS FUND.................  declared and paid annually        annually           annually
AIM EMERGING MARKETS DEBT FUND............  declared and paid monthsly        annually           annually
AIM EUROPE GROWTH FUND....................  declared and paid annually        annually           annually
AIM EUROPEAN DEVELOPMENT FUND.............  declared and paid annually        annually           annually
AIM GLOBAL AGGRESSIVE GROWTH FUND.........  declared and paid annually        annually           annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
  FUND....................................  declared and paid annually        annually           annually
AIM GLOBAL FINANCIAL SERVICES FUND........  declared and paid annually        annually           annually
</TABLE>
    
 
                                      A-19
<PAGE>   123
 
   
<TABLE>
<CAPTION>
                                                                             DISTRIBUTIONS    DISTRIBUTIONS
                                                                                OF NET           OF NET
                                                 DIVIDENDS FROM                REALIZED         REALIZED
                                                 NET INVESTMENT               SHORT-TERM        LONG-TERM
FUND                                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
- ----                                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM GLOBAL GOVERNMENT INCOME FUND.........  declared and paid monthly         annually           annually
AIM GLOBAL GROWTH FUND....................  declared and paid annually        annually           annually
AIM GLOBAL GROWTH & INCOME FUND...........  declared and paid quarterly       annually           annually
AIM GLOBAL HEALTH CARE FUND...............  declared and paid annually        annually           annually
AIM GLOBAL INCOME FUND....................  declared daily; paid monthly      annually           annually
AIM GLOBAL INFRASTRUCTURE FUND............  declared and paid annually        annually           annually
AIM GLOBAL RESOURCES FUND.................  declared and paid annually        annually           annually
AIM GLOBAL TELECOMMUNICATIONS FUND........  declared and paid annually        annually           annually
AIM GLOBAL TRENDS FUND....................  declared and paid annually        annually           annually
AIM GLOBAL UTILITIES FUND.................  declared daily; paid monthly      annually           annually
AIM HIGH INCOME MUNICIPAL FUND............  declared daily; paid monthly      annually           annually
AIM HIGH YIELD FUND.......................  declared daily; paid monthly      annually           annually
AIM INCOME FUND...........................  declared daily; paid monthly      annually           annually
AIM INTERMEDIATE GOVERNMENT FUND..........  declared daily; paid monthly      annually           annually
AIM INTERNATIONAL EQUITY FUND.............  declared and paid annually        annually           annually
AIM INTERNATIONAL GROWTH FUND.............  declared and paid annually        annually           annually
AIM JAPAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM LATIN AMERICAN GROWTH FUND............  declared and paid annually        annually           annually
AIM LIMITED MATURITY TREASURY FUND........  declared daily; paid monthly      annually           annually
AIM MID CAP EQUITY FUND...................  declared and paid annually        annually           annually
AIM MONEY MARKET FUND.....................  declared daily; paid monthly      at least annually  annually
AIM MUNICIPAL BOND FUND...................  declared daily; paid monthly      annually           annually
AIM NEW PACIFIC GROWTH FUND...............  declared and paid annually        annually           annually
AIM SELECT GROWTH FUND....................  declared and paid annually        annually           annually
AIM SMALL CAP GROWTH FUND.................  declared and paid annually        annually           annually
AIM SMALL CAP OPPORTUNITIES FUND..........  declared and paid annually        annually           annually
AIM STRATEGIC INCOME FUND.................  declared and paid monthly         annually           annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT...  declared daily; paid monthly      annually           annually
AIM TAX-EXEMPT CASH FUND..................  declared daily; paid monthly      at least annually  annually
AIM TAX-FREE INTERMEDIATE FUND............  declared daily; paid monthly      annually           annually
AIM VALUE FUND............................  declared and paid annually        annually           annually
AIM WEINGARTEN FUND.......................  declared and paid annually        annually           annually
AIM WORLDWIDE GROWTH FUND.................  declared and paid annually        annually           annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in like shares of another
Multiple Class Fund, to the extent permitted. For funds that do not declare a
dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. For funds that declare
a dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or the
dividend portion thereof, in cash, or to invest such dividends and distributions
in shares of another fund in the AIM Funds; provided that (i) dividends and
distributions attributable to Class B shares may only be reinvested in Class B
shares, (ii) dividends and distributions attributable to Class C shares may only
be reinvested in Class C shares, (iii) dividends and distributions attributable
to Class A shares may not be reinvested in Class B or Class C shares, and (iv)
dividends and distributions attributable to the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may not be reinvested in the Class A shares of that Fund or in
any Class B or Class C shares. Investors who have not previously selected such a
reinvestment option on the account application form may contact the Transfer
Agent at any time to obtain a form to authorize such reinvestments in another
AIM Fund. Such reinvestments into the AIM Funds are not subject to sales
charges, and shares so purchased are automatically credited to the account of
the shareholder.
 
  Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
 
                                      A-20
<PAGE>   124
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares, except for "exempt-interest dividends" paid by
AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND
FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND
(the "Tax-Exempt Funds"), which are exempt from federal income tax. With respect
to tax-exempt shareholders, dividends and distributions from the AIM Funds are
not subject to federal income taxation to the extent permitted under the
applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    
 
   
  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
    
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
                                      A-21
<PAGE>   125
   
 TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
  TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other taxable securities. For
additional information concerning the alternative minimum tax and certain
collateral tax consequences of the receipt of exempt-interest dividends, see the
Statements of Additional Information applicable to the Tax-Exempt Funds.
 
  The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
 
  To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
 
  From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP EQUITY FUND,
AIM SMALL CAP GROWTH FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX INFORMATION.
Certain states exempt from income taxes dividends paid by mutual funds
attributable to interest on U.S. Treasury and certain other U.S. government
obligations. Investors should consult with their own tax advisors concerning the
availability of such exemption.
    
 
  AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH
FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do
so, each of these funds may elect to pass through to its shareholders credits
for foreign taxes paid. If a fund makes such an election, a shareholder who
receives a distribution (1) will be required to include in gross income his
proportionate share of foreign taxes allocable to the distribution and (2) may
claim a credit or deduction for such share for his taxable year in which the
distribution is received, subject to the general limitations imposed on the
allowance of foreign tax credits and deductions. Shareholders should also note
that certain gains or losses attributable to fluctuations in exchange rates or
foreign currency forward contracts may increase or decrease the amount of income
of the fund available for distribution to shareholders and should note that if,
for any fund, such losses exceed other income during a taxable year, the fund
would not be able to pay ordinary income dividends for that year.
 
                                      A-22
<PAGE>   126
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each AIM Fund's transfer agent and dividend
payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-23
<PAGE>   127
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
 
 
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                              GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
      ACCOUNT TYPE            NUMBER OF:                       ACCOUNT TYPE                  NUMBER OF:
      ------------            --------------------             ------------                  ------------------
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary
      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application
      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors
      Legal Guardian          Ward, Minor or
                              Incompetent
      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
 
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   128
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   129
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
 
   
GCPS-PRO-1
    
<PAGE>   130
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
CLASS A AND CLASS B SHARES OF
    
 
AIM GLOBAL FINANCIAL SERVICES FUND
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
PROSPECTUS
SEPTEMBER 8, 1998
 
   
This Prospectus contains information about AIM GLOBAL FINANCIAL SERVICES FUND
(the "Fund"), which is one of several series investment portfolios comprising
AIM Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a diversified portfolio which seeks long-term capital
growth by investing all of its investable assets in the Global Financial
Services Portfolio (the "Portfolio"), which, in turn, invests primarily in
equity securities of companies throughout the world that operate in the
financial services industries. The Portfolio's investment objective is identical
to that of the Fund. The investment experience of the Fund will correspond
directly with the investment experience of the Portfolio.
    
 
   
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   131
- --------------------------------------------------------------------------------
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     7
  Investment Program...................     7
  Risk Factors.........................    10
  Management...........................    13
  Organization of the Trust and
     Portfolio.........................    15
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-9
  Exchange Privilege...................  A-12
  How to Redeem Shares.................  A-14
  Determination of Net Asset Value.....  A-19
  Dividends, Distributions and Tax
     Matters...........................  A-19
  General Information..................  A-23
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND AND THE PORTFOLIO
    
 
  The Fund is a diversified series of the Trust. The Portfolio is a diversified
series of Global Investment Portfolio.
 
   
  INVESTMENT OBJECTIVE. The Fund and the Portfolio each seeks long-term capital
growth.
    
 
  PRINCIPAL INVESTMENTS. The Fund invests all of its investable assets in the
Portfolio, which, in turn, invests primarily in equity securities of companies
throughout the world that operate in the financial services industries.
 
   
  INVESTMENT MANAGERS. The Portfolio is managed by A I M Advisors, Inc. ("AIM")
and is sub-advised and sub-administered by INVESCO (NY), Inc. (the
"Sub-advisor"). AIM and the Sub-advisor and their worldwide asset management
affiliates provide investment management and/or administrative services to
institutional, corporate and individual clients around the world. AIM and the
Sub-advisor are both indirect wholly owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC and its subsidiaries are an independent investment management group
that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing
presence in Asia. AIM was organized in 1976 and, together with its subsidiaries,
currently advises approximately 90 investment company portfolios.
    
 
  PURCHASING SHARES. Investors may select Class A or Class B shares of the Fund
which are offered by this Prospectus at an offering price that reflects
differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to
a separate prospectus, the Fund also offers Advisor Class shares, which
represent interests in the Fund. The Advisor Class has different distribution
arrangements.
 
  CLASS A SHARES -- Shares are offered at net asset value plus any applicable
initial sales charge.
 
  CLASS B SHARES -- Shares are offered at net asset value without an initial
sales charge, and are subject to a maximum contingent deferred sales charge of
5% on certain redemptions made within six years from the date such shares were
purchased. Class B shares automatically convert to Class A shares of the Fund
eight years following the end of the calendar month in which a purchase was
made. Class B shares are subject to higher expenses than Class A shares. Initial
investments in any class of shares must be at least $500 and additional
investments must be at least $50. The minimum initial investment is modified for
investments through tax-qualified retirement plans and accounts initially
established with an Automatic Investment Plan. The distributor of the Fund's
shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739, Houston,
TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
 
  SUITABILITY FOR INVESTORS. An investor in Class A or Class B shares of the
Fund should consider the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the shares are expected to
be held, and other circumstances. Investors should consider whether, during the
anticipated life of their investment in the Fund, the accumulated distribution
fees and any applicable contingent deferred sales charges on Class B shares
prior to conversion would be less than the initial sales charge and accumulated
distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares.
To assist investors in making this determination, the table under the caption
"Table of Fees and Expenses" sets forth examples of the charges applicable to
each class of shares. Class A shares will normally be more beneficial than Class
B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase
of more than $250,000 for Class B shares.
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds"). Class
A and Class B shares of the Fund may be exchanged for shares of other funds in
The AIM Family of Funds in the manner and subject to the policies and charges
set forth herein. See "Exchange Privilege."
    
 
                                        2
<PAGE>   132
 
  REDEEMING SHARES. Class A shareholders of the Fund may redeem all or a portion
of their shares at net asset value on any business day, generally without
charge. A contingent deferred sales charge of 1% may apply to certain
redemptions where a purchase of more than $1 million is made at net asset value.
See "How to Redeem Shares -- Contingent Deferred Sales Charge Program for Large
Purchases." Class B shareholders of the Fund may redeem all or a portion of
their shares at net asset value on any business day, less a contingent deferred
sales charge for redemptions made within six years from the date such shares
were purchased. Class B shares redeemed after six years from the date such
shares were purchased will not be subject to any contingent deferred sales
charge. See "How to Redeem Shares -- Multiple Distribution System."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters" and "Special Plans."
    
 
   
  RISK FACTORS. There is no assurance that the Fund or the Portfolio will
achieve its investment objective. The Fund's net asset value will fluctuate,
reflecting fluctuations in the market value of the Portfolio's portfolio
holdings. The Portfolio's policy of concentrating its investments in companies
in the financial services industries may cause the Fund's net asset value to
fluctuate more than if it invested in a greater number of industries. The
Portfolio may invest in foreign securities. Investments in foreign securities
involve risks relating to political and economic developments abroad and the
differences between the regulations to which U.S. and foreign issuers are
subject. Individual foreign economies also may differ favorably or unfavorably
from the U.S. economy. Changes in foreign currency exchange rates will affect
the Fund's net asset value, earnings and gains and losses realized on sales of
securities. Securities of foreign companies may be less liquid and their prices
more volatile than those of securities of comparable U.S. companies. The
Portfolio may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs. The Portfolio may
invest up to 5% of its total assets in below investment grade debt securities.
Investments of this type are subject to a greater risk of loss of principal and
interest. See "Investment Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   133
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Class A and Class B shares of the Fund are reflected in the following table(1):
 
<TABLE>
<CAPTION>
                                                              CLASS A   CLASS B
                                                              -------   -------
<S>                                                           <C>       <C>
Shareholder Transaction Costs(2):
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................   4.75%     None
  Sales charges on reinvested distributions to
     shareholders...........................................   None      None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........   None      5.00%
  Redemption charges........................................   None      None
  Exchange fees.............................................   None      None
Annual Fund Operating Expenses(3): (as a % of average net
  assets)
  Investment management and administration fees.............   0.98%     0.98%
  12b-1 distribution and service fees.......................   0.50%     1.00%
  Other expenses (after reimbursements and waivers).........   0.52%     0.52%
                                                               ----      ----
          Total Fund Operating Expenses.....................   2.00%     2.50%
                                                               ====      ====
</TABLE>
 
   
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Fund. Long-term shareholders
   may pay more than the economic equivalent of the maximum front-end sales
   charge permitted by the National Association of Securities Dealers, Inc.
   rules regarding investment companies.
    
 
(2)Sales charge waivers are available for Class A and Class B shares, and
   reduced sales charge purchase plans are available for Class A shares. The
   maximum 5% contingent deferred sales charge on Class B shares applies to
   redemptions during the first year after purchase. The charge generally
   declines by 1% annually thereafter, reaching zero after six years. See "Terms
   and Conditions of Purchase of the AIM Funds -- Reductions in Initial Sales
   Charges."
 
   
(3)Expenses are based on the Fund's fiscal year ended October 31, 1997 restated
   to reflect AIM's undertaking to limit the Fund's expenses (exclusive of
   brokerage commissions, taxes, interest and extraordinary expenses) to the
   annual rate of 2.00% and 2.50% of the average daily net assets of the Fund's
   Class A and Class B shares, respectively. AIM has voluntarily agreed to
   continue this limitation through May 31, 2000. Without reimbursements and
   waivers, "Other Expenses" and "Total Fund Operating Expenses" would have been
   0.88% and 2.36%, respectively, for Class A shares and 0.88% and 2.86%,
   respectively, for Class B shares of the Fund. "Other expenses" include
   custody, transfer agency, legal, audit and other operating expenses. See
   "Management" herein and the Statement of Additional Information for more
   information.
    
 
   The Board of Trustees of the Trust believes that the aggregate per share
   expenses of the Fund and the Portfolio will be approximately equal to the
   expenses the Fund would incur if its assets were invested directly in the
   type of securities being held by the Portfolio.
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                     1 YEAR   3 YEARS   5 YEARS   10 YEARS(3)
                                                     ------   -------   -------   -----------
<S>                                                  <C>      <C>       <C>       <C>
Class A Shares(1)..................................   $67      $108      $151        $270
Class B Shares:
  Assuming a complete redemption at end of
     period(2).....................................   $77      $111      $157        $274
  Assuming no redemption...........................   $26      $ 79      $135        $274
</TABLE>
    
 
   
(1)Assumes payment of maximum sales charge by the investor.
    
 
   
(2)Assumes deduction of the applicable contingent deferred sales charge.
    
 
   
(3)For Class B shares, this number reflects the conversion to Class A shares
   eight years following the end of the calendar month in which a purchase was
   made.
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S AND THE PORTFOLIO'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND
INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE
ASSUMPTION IN THE HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY
REGULATION OF THE SEC APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS
NOT A PREDICTION OF AND DOES NOT REPRESENT THE FUND'S OR THE PORTFOLIO'S
PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   134
- --------------------------------------------------------------------------------
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The table below provides condensed financial information concerning income and
capital changes for one Class A and Class B share of the Fund. This information
is supplemented by the financial statements and accompanying notes appearing in
the Statement of Additional Information. The financial statements and notes for
the fiscal year ended October 31, 1997, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon also
is included in the Statement of Additional Information. The unaudited financial
statements and notes for the semi-annual period ended April 30, 1998, are also
available in the Statement of Additional Information.
    
 
   
                       AIM GLOBAL FINANCIAL SERVICES FUND
    
                  (FORMERLY GT GLOBAL FINANCIAL SERVICES FUND)
 
   
<TABLE>
<CAPTION>
                                                                SIX MONTHS                                     MAY 31, 1994
                                                                  ENDED          YEAR ENDED OCTOBER 31,        (COMMENCEMENT
                                                              APRIL 30, 1998   ---------------------------   OF OPERATIONS) TO
                                                              (UNAUDITED)(D)   1997(D)   1996(D)   1995(D)   OCTOBER 31, 1994
                                                              --------------   -------   -------   -------   -----------------
<S>                                                           <C>              <C>       <C>       <C>       <C>
CLASS A:
Per Share Operating Performance:
  Net asset value, beginning of period......................     $ 17.22       $ 14.20    $11.92    $11.62         $11.43
                                                                 -------       -------   -------    ------         ------
Income from investment operations:
  Net investment income (loss)+.............................        0.02          0.04      0.05      0.17           0.02
  Net realized and unrealized gain (loss) on investments....        3.54          3.97      2.36      0.13           0.17
                                                                 -------       -------   -------    ------         ------
  Net increase (decrease) from investment operations........        3.56          4.01      2.41      0.30           0.19
                                                                 -------       -------   -------    ------         ------
Distributions:
  From net investment income................................          --           --      (0.12)       --             --
  From net realized gain on investments.....................       (0.61)        (0.99)    (0.01)       --             --
                                                                 -------       -------   -------    ------         ------
        Total distributions.................................       (0.61)        (0.99)    (0.13)       --             --
                                                                 -------       -------   -------    ------         ------
Net asset value, end of period..............................     $ 20.17       $ 17.22   $ 14.20    $11.92         $11.62
                                                                 =======       =======   =======    ======         ======
        Total investment return(c)..........................       21.29%(b)     29.91%    20.21%     2.58%          1.66%(b)
                                                                 =======       =======   =======    ======         ======
Ratios and supplemental data:
  Net assets, end of period (in 000's)......................     $38,146       $29,639   $ 7,302    $5,687         $3,175
Ratio of net investment income (loss) to average net assets:
  With expense reductions and reimbursement from the
    Sub-advisor.............................................        0.25%(a)      0.23%     0.41%     1.46%          0.66%(a)
  Without expense reductions and reimbursement from the
    Sub-advisor.............................................        0.20%(a)      0.16%    (0.66)%   (5.34)%        (7.26)%(a)
Ratio of expenses to average net assets:
  With expense reductions and reimbursement from the
    Sub-advisor.............................................        1.98%(a)      2.29%     2.32%     2.34%          2.40%(a)
  Without expense reductions and reimbursement from the
    Sub-advisor.............................................        2.03%(a)      2.36%     3.39%     9.14%         10.32%(a)
Portfolio turnover rate++...................................         106%(a)        91%      103%      170%            53%(a)
Average commission rate per share paid on portfolio
  transactions++............................................     $0.0015        $0.0014  $0.0080       N/A            N/A
</TABLE>
    
 
- ---------------
 
 +    Before reimbursement by the Sub-advisor, the net investment income per
      share for Class A and Class B of the Financial Services Fund would have
      been reduced by $0.13 and $0.13, respectively, for the year ended Oct. 31,
      1996, $0.59 and $0.59, respectively, for the year ended Oct. 31, 1995, and
      $0.23 and $0.23, respectively, from May 31, 1994 to Oct. 31, 1994.
 
++    Portfolio turnover and average commission rates are calculated on the
      basis of the Fund as a whole without distinguishing among the class of
      shares issued. The Fund invests only in the Financial Services Portfolio
      and does not engage in securities transactions. Accordingly, the portfolio
      turnover and average commission rates presented are for the Financial
      Services Portfolio.
 
   
(a)   Annualized.
    
 
   
(b)   Not annualized.
    
 
   
(c)   Total investment return does not include sales charges.
    
 
   
(d)   These selected per share data were calculated based upon average shares
      outstanding during the period.
    
 
   
N/A   Not Applicable.
    
 
                                        5
<PAGE>   135
 
   
    
 
   
<TABLE>
<CAPTION>
                                                                SIX MONTHS                                     MAY 31, 1994
                                                                  ENDED          YEAR ENDED OCTOBER 31,        (COMMENCEMENT
                                                              APRIL 30, 1998   ---------------------------   OF OPERATIONS) TO
                                                              (UNAUDITED)(D)   1997(D)   1996(D)   1995(D)   OCTOBER 31, 1994
                                                              --------------   -------   -------   -------   -----------------
<S>                                                           <C>              <C>       <C>       <C>       <C>
CLASS B:
Per Share Operating Performance:
  Net asset value, beginning of period......................     $ 16.97       $14.06    $11.83    $11.60         $11.43
                                                                 -------       -------   -------   ------         ------
Income from investment operations:
  Net investment income (loss)+.............................       (0.02)       (0.04)    (0.01)     0.11             --
  Net realized and unrealized gain (loss) on investments....        3.47         3.94      2.34      0.12           0.17
                                                                 -------       -------   -------   ------         ------
Net increase (decrease) from investment operations..........        3.45         3.90      2.33      0.23           0.17
                                                                 -------       -------   -------   ------         ------
Distributions:
  From net investment income................................          --           --     (0.09)       --             --
  From net realized gain on investments.....................       (0.61)       (0.99)    (0.01)       --             --
                                                                 -------       -------   -------   ------         ------
        Total distributions.................................       (0.61)       (0.99)    (0.10)       --             --
                                                                 -------       -------   -------   ------         ------
Net asset value, end of period..............................     $ 19.81       $16.97    $14.06    $11.83         $11.60
                                                                 =======       =======   =======   ======         ======
Total investment return(c)..................................       21.02%(b)    29.13%    19.81%     1.98%          1.49%(b)
                                                                 =======       =======   =======   ======         ======
Ratios and supplemental data:
  Net assets, end of period (in 000's)......................     $64,747       $47,585   $9,886    $4,548         $2,235
Ratio of net investment income (loss) to average net assets:
  With expense reductions and reimbursement from the
    Sub-advisor.............................................       (0.25)%(a)   (0.27)%   (0.09)%    0.96%          0.16%(a)
  Without expense reductions and reimbursement from the
    Sub-advisor.............................................       (0.30)%(a)   (0.34)%   (1.16)%   (5.84)%        (7.76)%(a)
Ratio of operating expenses to average net assets:
  With expense reductions and reimbursement from the
    Sub-advisor.............................................        2.48%(a)     2.79%     2.82%     2.84%          2.90%(a)
  Without expense reductions and reimbursement from the
    Sub-advisor.............................................        2.53%(a)     2.86%     3.89%     9.64%         10.82%(a)
Portfolio turnover rate++...................................         106%(a)       91%      103%      170%            53%(a)
Average commission rate per share paid on portfolio
  transactions++............................................     $0.0015       $0.0014   $0.0080      N/A            N/A
</TABLE>
    
 
- ---------------
 
 +    Before reimbursement by the Sub-advisor, the net investment income per
      share for Class A and Class B of the Financial Services Fund would have
      been reduced by $0.13 and $0.13, respectively, for the year ended Oct. 31,
      1996, $0.59 and $0.59, respectively, for the year ended Oct. 31, 1995, and
      $0.23 and $0.23, respectively, from May 31, 1994 to Oct. 31, 1994.
 
++    Portfolio turnover and average commission rates are calculated on the
      basis of the Fund as a whole without distinguishing among the class of
      shares issued. The Fund invests only in the Financial Services Portfolio
      and does not engage in securities transactions. Accordingly, the portfolio
      turnover and average commission rates presented are for the Financial
      Services Portfolio.
 
   
(a)   Annualized.
    
 
   
(b)   Not annualized.
    
 
   
(c)   Total investment return does not include sales charges.
    
 
   
(d)   These selected per share data were calculated based upon average shares
      outstanding during the period.
    
 
   
N/A   Not Applicable.
    
 
   
<TABLE>
<CAPTION>
                                                                                 AVERAGE MONTHLY
                                                                                    NUMBER OF        AVERAGE AMOUNT
                                        AMOUNT OF DEBT     AVERAGE AMOUNT      REGISTRANT'S SHARES    OF DEBT PER
                                        OUTSTANDING AT   OF DEBT OUTSTANDING       OUTSTANDING        SHARE DURING
YEAR                                    END OF PERIOD     DURING THE PERIOD     DURING THE PERIOD      THE PERIOD
- ----                                    --------------   -------------------   -------------------   --------------
<S>                                     <C>              <C>                   <C>                   <C>
Six months ended April 30, 1998.......       $--               $35,342              5,369,134            $0.007
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed on a daily
basis.
    
 
                                        6
<PAGE>   136
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return. Standardized total return
for Class A shares reflects the deduction of the Fund's maximum front-end sales
charge at the time of purchase. Standardized total return for Class B shares
reflects the deduction of the maximum applicable contingent deferred sales
charge on a redemption of shares held for the period.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVES. The Fund's investment objective is long-term capital
growth. It seeks its objective by investing all of its investable assets in the
Portfolio, which, in turn, invests primarily in equity securities of companies
throughout the world that operate in the financial services industries. The
Portfolio's investment objective is identical to that of the Fund. There can be
no assurance that the Fund or Portfolio will achieve its investment objectives.
    
 
   
  INVESTMENT POLICIES. At least 65% of the Portfolio's total assets normally
will be invested in common and preferred stocks and warrants to acquire such
securities issued by financial services companies. A "financial services"
company is an entity in which (i) at least 50% of either the revenues or
earnings was derived from financial services activities, or (ii) at least 50% of
the assets was devoted to such activities, based on the company's most recent
fiscal year. The remainder of the Portfolio's assets may be invested in debt
securities issued by financial services companies and/or equity and debt
securities of companies outside of the financial services industries, which, in
the opinion of the Sub-advisor, stand to benefit from developments in the
financial services industries.
    
 
   
  Examples of financial services companies include commercial banks and savings
institutions and loan associations and their holding companies; consumer and
industrial finance companies; diversified financial services companies;
investment banks; insurance brokerages; securities brokerage and investment
advisory companies; real estate-related companies; leasing companies; and a
variety of firms in all segments of the insurance field such as multi-line,
property and casualty and life insurance and insurance holding companies.
    
 
   
  The Sub-advisor believes an accelerating rate of global economic
interdependence will lead to significant growth in the demand for financial
services. In addition, in the Sub-advisor's view, as the industries evolve,
opportunities will emerge for those companies positioned for the future. Thus,
the Sub-advisor expects that banking and related financial institution
consolidation in the developed countries, increased demand for retail borrowing
in developing countries, a growing need for international trade-based financing,
a rising demand for sophisticated risk management, the proliferating number of
liquid securities markets around the world, and larger concentrations of
investable assets should lead to growth in financial service companies that are
positioned for the future.
    
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objective and
policies, the Portfolio may employ one or more of the following strategies in
order to enhance investment results:
    
 
   
  SELECTION OF INVESTMENTS AND ASSET ALLOCATION. The Portfolio expects that,
from time to time, a significant portion of its assets may be invested in the
securities of domestic issuers. The industry represented in the Portfolio,
however, is a global industry with significant, growing markets outside of the
United States. A sizeable proportion of the companies which comprise the
financial services industries are headquartered outside of the United States.
    
 
                                        7
<PAGE>   137
 
   
  For these reasons, the Sub-advisor believes that a portfolio composed only of
securities of U.S. issuers does not provide the greatest potential for return
from an investment by the Portfolio. The Sub-advisor uses its financial
expertise in markets located throughout the world and the substantial global
resources of AMVESCAP PLC in attempting to identify those countries and
companies then providing the greatest potential for long-term capital
appreciation. In this fashion, the Sub-advisor seeks to enable shareholders to
capitalize on the substantial investment opportunities and the potential for
long-term growth of capital presented by the global financial services
industries represented in the Portfolio.
    
 
   
  The Sub-advisor allocates the Portfolio's assets among securities of countries
and in currency denominations where opportunities for meeting the Portfolio's
investment objective are expected to be the most attractive. The Portfolio may
invest substantially in securities denominated in one or more currencies. Under
normal conditions, the Portfolio invests in the securities of issuers located in
at least three countries, including the United States; investments in securities
of issuers in any one country, other than the United States, will represent no
more than 40% of the Portfolio's total assets.
    
 
   
  In analyzing specific companies for possible investment, the Sub-advisor
ordinarily looks for several of the following characteristics: above-average per
share earnings growth; high return on invested capital; a healthy balance sheet;
sound financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; development of new technologies; efficient service; pricing
flexibility; strong management; and general operating characteristics that will
enable the companies to compete successfully in their respective markets.
    
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. Under a defensive strategy, the Portfolio may invest up to
100% of its total assets in cash (U.S. dollars, foreign currencies or
multinational currency units such as euros) and/or high quality debt securities
or money market instruments of U.S. or foreign issuers. In addition, for
temporary defensive purposes, most or all of the Portfolio's investments may be
made in the United States and denominated in U.S. dollars. To the extent the
Portfolio adopts a temporary defensive posture, it will not be invested so as to
achieve directly its investment objective. In addition, pending investment of
proceeds from new sales of Fund shares or to meet its ordinary daily cash needs,
the Portfolio may hold cash (U.S. dollars, foreign currencies or multinational
currency units) and may invest in foreign or domestic high quality money market
instruments. For a full description of money market instruments, see "Money
Market Instruments" in the "Investment Objectives and Policies" section of the
Statement of Additional Information.
    
 
   
  PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Portfolio in privatizations in appropriate
circumstances. In certain foreign countries, the ability of foreign entities
such as the Portfolio to participate in privatizations may be limited by local
law, or the terms on which the Portfolio may be permitted to participate may be
less advantageous than those for local investors. There can be no assurance that
foreign governments will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
    
 
   
  INVESTMENTS IN OTHER INVESTMENT COMPANIES. The Portfolio may invest up to 10%
of its total assets in other investment companies, some of which may be
investment vehicles or companies that are advised by the Sub-advisor or its
affiliates ("Affiliated Funds"). As a shareholder in an investment company, the
Portfolio would bear its ratable share of that investment company's expenses,
including its advisory and administration fees. At the same time, the Portfolio
would continue to pay its own management fees and other expenses. AIM and the
Sub-advisor will waive their advisory fees to the extent that the Portfolio
invests in an Affiliated Fund.
    
 
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Portfolio
may borrow from banks or may borrow through reverse repurchase agreements and
"roll" transactions in connection with meeting requests for the redemptions of
the Fund's shares. The Portfolio also may borrow up to 5% of its total assets
for temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Portfolio may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Portfolio's borrowings exceed 5% of
its total assets. Any borrowing by the Portfolio may cause greater fluctuation
in the value of its shares than would be the case if the Portfolio did not
borrow.
 
  A reverse repurchase agreement is a borrowing transaction in which the
Portfolio transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash, and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Portfolio's sale of securities together with
its commitment (for which the Portfolio may receive a fee) to purchase similar,
but not identical, securities at a future date.
 
   
  SECURITIES LENDING. The Portfolio may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Portfolio to retain ownership of the securities loaned and, at the same
time, enhances the Fund's total return. The Portfolio limits its loans of
portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. While a loan is outstanding, the
borrower must maintain with the Portfolio's custodian collateral consisting of
cash, U.S. government securities or certain irrevocable letters of credit equal
to at least the value of the borrowed securities, plus any accrued interest or
such other collateral as permitted by the Portfolio's investment program and
regulatory agencies, and as approved by the Board. The risks in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delays in receiving additional collateral or in recovery of the
securities and possible loss of rights in the collateral should the borrower
fail financially.
    
 
                                        8
<PAGE>   138
 
  WHEN-ISSUED OR FORWARD COMMITMENT SECURITIES. The Portfolio may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Portfolio will
purchase or sell when-issued securities or enter into forward commitments only
with the intention of actually receiving or delivering the securities, as the
case may be. No income accrues on securities that have been purchased pursuant
to a forward commitment or on a when-issued basis prior to delivery to the
Portfolio. If the Portfolio disposes of the right to acquire a when-issued
security prior to its acquisition or disposes of its right to deliver or receive
against a forward commitment, it may incur a gain or loss. At the time the
Portfolio enters into a transaction on a when-issued or forward commitment
basis, the Portfolio will segregate cash or liquid securities equal to the value
of the when-issued or forward commitment securities with its custodian and will
mark to market daily such assets. There is a risk that the securities may not be
delivered and that the Portfolio may incur a loss.
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Portfolio may use
forward currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the portfolio. These instruments are often referred to as
"derivatives," which may be defined as financial instruments whose performance
is derived, at least in part, from the performance of another asset (such as a
security, currency or an index of securities). The Portfolio may enter into such
instruments up to the full value of its portfolio assets. See "Risk
Factors -- Options, Futures and Forward Currency Transactions" herein and
"Options, Futures and Currency Strategies" in the Statement of Additional
Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Portfolio may enter into forward currency contracts for the
purchase or sale of a specified currency at a specified future date. Such
contracts may involve the purchase or sale of a foreign currency against the
U.S. dollar or may involve two foreign currencies. The Portfolio may enter into
forward currency contracts either with respect to specific transactions or with
respect to its portfolio positions. The Portfolio also may purchase and sell put
and call options on currencies, futures contracts on currencies and options on
such futures contracts to hedge against movements in exchange rates.
 
   
  In addition, the Portfolio may purchase and sell put and call options on
equity and debt securities to hedge against the risk of fluctuations in the
prices of securities held by the Portfolio or that the Sub-advisor intends to
include in the Portfolio's holdings. The Portfolio also may purchase and sell
put and call options on stock indexes to hedge against overall fluctuations in
the securities markets generally or in a specific market sector.
    
 
  Further, the Portfolio may sell stock index futures contracts and may purchase
put options or write call options on such futures contracts to protect against a
general stock market decline or a decline in a specific market sector that could
affect adversely the Portfolio's holdings. The Portfolio also may purchase stock
index futures contracts and purchase call options or write put options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisitions. The
Portfolio may use interest rate futures contracts and options thereon to hedge
the debt portion of its portfolio against changes in the general level of
interest rates.
 
  OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this Prospectus
and in the Statement of Additional Information may be changed by the Trust's
Board of Trustees without shareholder approval. The Fund's policies regarding
concentration and lending, and the percentage of the Fund's assets that may be
committed to borrowing, are fundamental policies and may not be changed without
shareholder approval. The investment policies of the Fund are identical to the
investment policies of the Portfolio.
 
  The approval of the Fund and of other investors in the Portfolio, if any, is
not required to change the investment objective, policies or limitations of the
Portfolio, unless otherwise specified. Written notice shall be provided to
shareholders of the Fund thirty days prior to any changes in the Portfolio's
investment objective.
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's or Portfolio's investment policies or
restrictions.
 
   
  The Portfolio is authorized to engage in Short Sales, although it currently
has no intention of doing so, and may purchase American Depositary Receipts,
American Depositary Shares, Global Depositary Receipts and European Depositary
Receipts. See "Short Sales" and "Depositary Receipts" in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
    
 
  OTHER INFORMATION REGARDING THE PORTFOLIO. As previously described, the Fund,
unlike mutual funds that directly acquire and manage their own portfolios of
securities, seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio, which is a separate investment company.
Because the Fund will invest only in the Portfolio, the Fund's shareholders will
acquire only an indirect interest in the investments of the Portfolio.
 
                                        9
<PAGE>   139
 
   
  The Fund may redeem its investment in the Portfolio at any time, if the Board
of Trustees of the Trust determines that it is in the best interests of the Fund
and its shareholders to do so. A change in the Portfolio's investment objective,
policies or limitations that is not approved by the Board or the shareholders of
the Fund could require the Fund to redeem its interest in the Portfolio. Any
such redemption could result in a distribution in kind of portfolio securities
(as opposed to a cash distribution) by the Portfolio. Should such a distribution
occur, the Fund could incur brokerage fees or other transaction costs in
converting such securities to cash. In addition, a distribution in kind could
result in a less diversified portfolio of investments for the Fund and could
adversely affect its liquidity. Upon redemption, the Board would consider what
action might be taken, including the investment of all the investable assets of
the Fund in another pooled investment entity having substantially the same
investment objective as the Fund or the retention by the Fund of its own
investment advisor to manage its assets in accordance with its investment
objective, policies and limitations discussed herein.
    
 
  In addition to selling an interest therein to the Fund, the Portfolio may sell
interests therein to other non-affiliated investment companies and/or other
institutional investors. All institutional investors in the Portfolio will pay a
proportionate share of the Portfolio's expenses and will invest in the Portfolio
on the same terms and conditions. However, if another investment company invests
any or all of its assets in the Portfolio, it would not be required to sell its
shares at the same public offering price as the Fund and may charge different
sales commissions. Therefore, investors in the Fund may experience different
returns than investors in another investment company that invests exclusively in
the Portfolio. As of the date of this Prospectus, the Fund is the only
institutional investor in the Portfolio.
 
  The Fund may be materially affected by the actions of other large investors,
if any, in the Portfolio. For example, as with all open-end investment
companies, if a large investor were to redeem its interest in the Portfolio, (1)
the Portfolio's remaining investors could experience higher pro rata operating
expenses, thereby producing lower returns and (2) the Portfolio's security
holdings may become less diverse, resulting in increased risk. Institutional
investors in the Portfolio that have a greater pro rata ownership interest in
the Portfolio than the Fund could have effective voting control over the
operation of the Portfolio.
- --------------------------------------------------------------------------------
 
   
RISK FACTORS
    
 
   
  GENERAL. There is no assurance that the Fund or the Portfolio will achieve its
investment objective. The Fund's net asset value will fluctuate reflecting
fluctuations in the market value of the Portfolio's securities positions. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure, and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. The value of equity securities held by the Portfolio will
fluctuate in response to general market and economic developments, as well as
developments affecting the particular issuers of such securities. In addition,
the value of debt securities held by the Portfolio generally will fluctuate with
changes in the perceived creditworthiness of the issuers of such securities and
interest rates.
    
 
  Because the Portfolio focuses its investments on the financial services
industries, an investment in it may be more volatile than that of other
investment companies that do not concentrate their investments in such a manner.
Moreover, the value of the shares of the Fund will be especially susceptible to
factors affecting the financial services industries. Accordingly, the Fund
should not be considered a complete investment program.
 
  FINANCIAL SERVICES INDUSTRIES. Financial services industries may be subject to
greater governmental regulation than many other industries and changes in
governmental policies and the need for regulatory approvals may have a material
effect on the services offered by companies in the financial services
industries. Governmental regulation may limit both the financial commitments
banks can make, including the amounts and types of loans, and the interest rates
and fees they can charge. In addition, governmental regulation in certain
foreign countries may impose interest rate controls, credit controls and price
controls.
 
  Companies in the financial services sector are subject to rapid business
changes, significant competition, value fluctuations due to the concentration of
loans in particular industries significantly affected by economic conditions
(such as real estate or energy) and volatile performance dependent upon the
availability and cost of capital and prevailing interest rates. In addition,
general economic conditions significantly affect these companies. Credit and
other losses resulting from the financial difficulty of borrowers or other third
parties potentially may have an adverse effect on companies in these industries.
Foreign banks, particularly those of Japan, have reported financial difficulties
attributed to increased competition, regulatory changes, and general economic
difficulties.
 
  The financial services area in the United States currently is changing
relatively rapidly as existing distinctions between various financial service
segments become less clear. For instance, recent business combinations have
included insurance, finance, and securities brokerage under single ownership.
Some primarily retail corporations have expanded into securities and insurance
fields. Investment banking, securities brokerage and investment advisory
companies are subject to government regulation and risk due to securities
trading and underwriting activities.
 
  Many of the investment considerations discussed in connection with banks,
savings institutions and loan associations, and finance companies also apply to
insurance companies. The performance of insurance company investments will be
subject to risk from several factors. The earnings of insurance companies will
be affected by interest rates, pricing (including severe pricing competition
from time to time), claims activity, marketing competition and general economic
conditions. Particular insurance lines also will be influenced by specific
matters. Property and casualty insurer profits may be affected by certain
weather catastrophes and other disasters.
 
                                       10
<PAGE>   140
 
Life and health insurer profits may be affected by mortality and morbidity
rates. Individual companies may be exposed to material risks, including reserve
inadequacy, problems in investment portfolios (due to real estate or "junk" bond
holdings, for example), and the inability to collect from reinsurance carriers.
Insurance companies are subject to extensive governmental regulation, including
the imposition of maximum rate levels, which may not be adequate for some lines
of business. Proposed or potential anti-trust or tax law changes also may affect
adversely insurance companies' policy sales, tax obligations and profitability.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to, the reporting requirements of the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. In addition, certain costs attributable to
foreign investing, such as custody charges, are higher than those attributable
to domestic investing. Securities of some foreign companies are less liquid and
their prices may be more volatile than securities of comparable domestic
companies. The Portfolio's interest and dividends from foreign issuers may be
subject to non-U.S. withholding taxes, thereby reducing the Portfolio's net
investment income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Portfolio, political or social instability, or diplomatic
developments which could affect the Portfolio's investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
 
  The Portfolio may invest in issuers domiciled in "emerging markets." Investing
in emerging market countries involves risks in addition to those risks involved
in foreign investing. Many emerging market countries have experienced high rates
of inflation for many years. In addition, emerging markets generally are
dependent heavily upon international trade and, accordingly, have been and
continue to be affected adversely by trade barriers, exchange controls, managed
adjustments in relative currency values and other protectionist measures imposed
or negotiated by the countries with which they trade. The securities markets of
emerging market countries are substantially smaller, less developed, less liquid
and more volatile than the securities markets of the developed countries. In
addition, issuers in emerging markets typically are subject to a greater degree
of change in earnings and business prospects than issuers in developed
countries.
 
  The Portfolio will also be affected favorably or unfavorably by exchange
control regulations or changes in the exchange rates between foreign currencies
and the U.S. dollar. Changes in currency exchange rates will influence the value
of the Fund's shares, and also may affect the value of dividends and interest
earned by the Portfolio and gains and losses realized by the Portfolio.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
   
  LOWER QUALITY DEBT SECURITIES. The Portfolio may invest up to 5% of its total
assets in below investment grade debt securities, that is, rated below BBB by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or Baa
by Moody's Investors Service, Inc. ("Moody's") or, if unrated, deemed to be of
equivalent quality in the judgment of the Sub-advisor. Such investments involve
a high degree of risk. However, the Portfolio will not invest in debt securities
that are in default as to payment of principal and interest.
    
 
  Debt rated Baa by Moody's is considered by Moody's to have speculative
characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B,
Caa, Ca or C by Moody's is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such lower quality debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Debt rated C
by Moody's or S&P is the lowest rated debt that is not in default as to
principal or interest, and such issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Lower
quality debt securities are also generally considered to be subject to greater
risk than securities with higher ratings with regard to a deterioration of
general economic conditions. These lower quality debt securities are the
equivalent of high yield, high risk bonds, commonly known as "junk bonds."
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market
 
                                       11
<PAGE>   141
 
value. Also, rating agencies may fail to make timely changes in credit ratings
in response to subsequent events, so that an issuer's current financial
condition may be better or worse than a rating indicates. See "Description of
Debt Ratings" in the Statement of Additional Information for a full discussion
of Moody's and S&P's ratings.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities of corporate issuers frequently have call or
buy-back features which would permit an issuer to call or repurchase the
security from the Portfolio. If an issuer exercises these provisions in a
declining interest rate market, the Portfolio may have to replace the security
with a lower yielding security, resulting in a decreased return for investors.
In addition, the Portfolio may have difficulty disposing of lower quality
securities because they may have a thin trading market. There may be no
established retail secondary market for many of these securities, and the
Portfolio anticipates that such securities could be sold only to a limited
number of dealers or institutional investors. The lack of a liquid secondary
market also may have an adverse impact on market prices of such instruments and
may make it more difficult for the Portfolio to obtain accurate market
quotations for purposes of valuing its investments. The Portfolio may also
acquire lower quality debt securities during an initial underwriting or which
are sold without registration under applicable securities laws. Such securities
involve special considerations and risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Portfolio may invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic recession. The Portfolio may also incur additional expenses to the
extent it is required to seek recovery upon a default in the payment of
principal or interest on portfolio holdings, and the Portfolio may have limited
legal recourse in the event of a default.
 
   
  ILLIQUID SECURITIES. The Portfolio may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." The Sub-advisor believes that carefully selected investments in
joint ventures, cooperatives, partnerships and state enterprises which are
illiquid (collectively, "Special Situations") could enable the Portfolio to
achieve capital appreciation substantially exceeding the appreciation the
Portfolio would realize if it did not make such investments. However, in order
to attempt to limit investment risk, the Portfolio will invest no more than 5%
of its total assets in Special Situations.
    
 
  Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at a price
lower than similar securities that are liquid.
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Portfolio is
authorized to enter into options, futures and forward currency transactions, the
Portfolio might not enter into any such transactions. Options, futures and
foreign currency transactions involve certain risks, which include: (1)
dependence on the Sub-advisor's ability to predict movements in the prices of
individual securities, fluctuations in the general securities markets or in the
appropriate market sector and movements in interest rates and currency markets;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, forward contracts, futures contracts or options thereon and
movements in the price of the currency or security hedged or used for cover; (3)
the fact that skills and techniques needed to trade options, futures contracts
and options thereon or to use forward currency contracts are different from
those needed to select the securities in which the Portfolio invests; (4) lack
of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time; (5) the
possible loss of principal under certain conditions; and (6) the possible
inability of the Portfolio to purchase or sell a portfolio security at a time
when it would otherwise be favorable for it to do so, or the possible need for
the Portfolio to sell a security at a disadvantageous time, due to the need for
the Portfolio to maintain "cover" or to set aside securities in connection with
hedging transactions.
    
 
  INVESTING IN SMALLER COMPANIES. While the Portfolio's holdings normally will
include securities of established suppliers of traditional products and
services, the Portfolio may invest in smaller companies which can benefit from
the development of new products and services. These smaller companies may
present greater opportunities for capital appreciation, but may also involve
greater risks than large, established issuers. Such smaller companies may have
limited product lines, markets or financial resources, and their securities may
trade less frequently and in more limited volume than the securities of larger,
more established companies. As a result, the prices of the securities of such
smaller companies may fluctuate to a greater degree than the prices of the
securities of other issuers.
 
                                       12
<PAGE>   142
 
- --------------------------------------------------------------------------------
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees and the Board of Trustees of the Portfolio have
overall responsibility for the operation of the Fund and the Portfolio,
respectively. The Boards have approved all significant agreements between the
Trust and the Portfolio on the one side and persons or companies furnishing
services to the Fund and the Portfolio on the other, including the investment
management and administration agreement with AIM, the investment sub-advisory
and sub-administration agreement between AIM and the Sub-advisor, the agreements
with AIM Distributors regarding distribution of the Fund's shares, the custody
agreement and the transfer agency agreement. The day-to-day operations of the
Fund and the Portfolio are delegated to the officers of the Trust and the
Portfolio, subject always to the investment objective and policies of the Fund
and the Portfolio and to the general supervision of the Boards. See "Trustees
and Executive Officers" in the Statement of Additional Information for
information on the Trust's and the Portfolio's Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the investment managers and the administrators to the Fund and
the Portfolio include, but are not limited to, determining the composition of
the investment holdings of the Portfolio and placing orders to buy, sell or hold
particular securities. In addition, AIM and the Sub-advisor provide the
following administration services to the Portfolio and the Fund: furnishing
corporate officers and clerical staff; providing office space, services and
equipment; and supervising all matters relating to the Portfolio's and the
Fund's operation.
    
 
   
  For administration services, the Fund pays AIM administration fees computed
daily and payable monthly at the annualized rate of 0.25% of the Fund's average
daily net assets. AIM has appointed the Sub-advisor as the Fund's
sub-administrator. In addition, the Fund bears its pro rata portion of the
investment management and administration fees paid by the Portfolio to AIM and
the Sub-advisor. The Portfolio pays AIM a fee, based on the Portfolio's average
daily net assets at the annualized rate of 0.725% on the first $500 million,
0.70% on the next $500 million, 0.675% on the next $500 million and 0.65% on all
amounts thereafter. Out of its aggregate fees payable by the Fund and the
Portfolio, AIM pays the Sub-advisor sub-advisory and sub-administration fees
equal to 40% of the aggregate fees AIM receives from the Fund and the Portfolio.
The investment management and administration fees paid by the Fund and the
Portfolio are higher than those paid by most mutual funds. The Fund pays all
expenses not assumed by AIM, the Sub-advisor, AIM Distributors or other agents.
AIM has undertaken to limit the Fund's expenses (exclusive of brokerage
commissions, taxes, interest and extraordinary expenses) to the annual rate of
2.00% and 2.50% of the average daily net assets of the Fund's Class A and Class
B shares, respectively.
    
 
   
  The Sub-advisor also serves as the Fund's and the Portfolio's pricing and
accounting agent. For these services the Sub-advisor receives a fee consisting
of 0.03% of the first $5 billion of assets, and 0.02% of the assets in excess of
$5 billion, of the AIM Funds that are sub-advised by the Sub-advisor (other than
AIM Eastern Europe Fund). Each of these funds, including the Fund and the
Portfolio, pays an amount based upon its relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Portfolio pursuant to a master investment management
and administration agreement (the "Advisory Agreement"). AIM was organized in
1976 and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Portfolio pursuant to an investment
sub-advisory and sub-administration agreement. Prior to May 29, 1998, the
Sub-advisor was known as Chancellor LGT Asset Management, Inc. On May 29, 1998,
Liechtenstein Global Trust AG ("LGT"), the former indirect parent organization
of the Sub-advisor, consummated a purchase agreement with AMVESCAP PLC pursuant
to which AMVESCAP PLC acquired LGT's Asset Management Division, which included
the Sub-advisor and certain other affiliates. As a result of this transaction,
the Sub-advisor is now an indirect wholly owned subsidiary of AMVESCAP PLC.
Prior to the sale, the Sub-advisor and its worldwide asset management affiliates
provided investment management and/or administrative services to institutional,
corporate and individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Portfolio, the Sub-advisor employs a
team approach, taking advantage of its investment resources around the world.
    
 
                                       13
<PAGE>   143
 
  The investment professional primarily responsible for the portfolio management
of the Portfolio is as follows:
 
   
<TABLE>
<CAPTION>
                     RESPONSIBILITIES FOR                      BUSINESS EXPERIENCE
  NAME/OFFICE           THE PORTFOLIO                            PAST FIVE YEARS
  -----------        --------------------                      -------------------
<S>                <C>                         <C>
A. James Ellman    Portfolio Manager since     Portfolio Manager for the Sub-Advisor since 1995.
San Francisco      1995                        Analyst for the Sub- advisor from 1994 to 1995.
</TABLE>
    
 
   
  In placing orders for the Portfolio's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions may be executed through
affiliates of AIM or the Sub-advisor. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Fund will bear directly and could result in the realization of
net capital gains which would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement on
behalf of Class A shares of the Fund, and has entered into a Master Distribution
Agreement on behalf of Class B shares of the Fund (individually referred to as a
"Distribution Agreement" or collectively as the "Distribution Agreements.") with
AIM Distributors, a registered broker-dealer and a wholly owned subsidiary of
AIM, to act as the distributor of Class A and Class B shares of the Fund.
Certain Trustees and officers of the Trust are affiliated with AIM Distributors.
    
 
   
  The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors and its predecessor. In the event the Class B shares Distribution
Agreement is terminated, AIM Distributors would continue to receive payments of
asset based sales charges in respect of the outstanding Class B shares
attributable to the distribution efforts of AIM Distributors and its
predecessor; provided, however, that a complete termination of the Class B
shares master distribution plan (as defined in the plan) would terminate all
payments by the Fund of asset based sales charges and service fees to AIM
Distributors. Termination of the Class B shares distribution plan or
Distribution Agreement does not affect the obligation of Class B shareholders to
pay contingent deferred sales charges.
    
 
  DISTRIBUTION PLANS. Class A Plan. The Trust has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
 
  Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.50% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
 
  The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
 
   
  Of the aggregate amount payable under the Class A Plan, payments to dealers
and other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee.
    
 
  Class B Plan. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers
 
                                       14
<PAGE>   144
 
who purchase and own Class B shares of the Fund. Any amounts not paid as a
service fee would constitute an asset-based sales charge. Amounts paid in
accordance with the Class B Plan with respect to the Fund may be used to finance
any activity primarily intended to result in the sale of Class B shares of the
Fund.
 
  Both Plans. Activities that may be financed under the Class A Plan and the
Class B Plan (collectively, the "Plans") include, but are not limited to:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders, overhead, preparation and distribution of
advertising material and sales literature, expense of organizing and conducting
sales seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
 
  Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
 
   
  Under the Plans, certain financial institutions which have entered into
service agreements and which sell shares of the Fund on an agency basis, may
receive payments from the Fund pursuant to the respective Plans. AIM
Distributors does not act as principal, but rather as agent for the Fund in
making such payments. The Fund will obtain a representation from such financial
institutions that they will either be licensed as dealers as required under
applicable state law, or that they will not engage in activities which would
constitute acting as a "dealer" as defined under applicable state law. Financial
intermediaries and any other person entitled to receive compensation for selling
Fund shares may receive different compensation for selling shares of one class
over another.
    
 
  For additional information concerning the operation of the Plans see the
Statement of Additional Information.
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST AND PORTFOLIO
    
 
   
  ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business
trust on May 7, 1998. On September 8, 1998, the Trust acquired the assets of and
assumed the liabilities of AIM Investment Funds, Inc., a Maryland corporation.
The Fund constitutes one of the thirteen separate and distinct series portfolios
of the Trust. From time to time, the Trust may establish other funds, each
corresponding to a distinct investment portfolio and a distinct series of the
Trust's shares of beneficial interest. Shares of each fund are entitled to one
vote per share (with proportional voting for fractional shares) and are freely
transferable. Shareholders have no preemptive rights. Other than the automatic
conversion of Class B shares to Class A shares, there are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Company's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund when issued are
fully paid and nonassessable.
 
  ORGANIZATION OF THE PORTFOLIO. The Portfolio is organized as a subtrust of
Global Investment Portfolio, a Delaware business trust. Under Delaware law, the
Fund and other entities investing in the Portfolio enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances an investor in
the Portfolio may be held liable for the Portfolio's obligations. However, the
Agreement and Declaration of Trust of Global Investment Portfolio disclaims
shareholder liability for acts or obligations of the Portfolio and requires that
notice of such disclaimer be given in each agreement, obligation or instrument
entered into or executed by the Portfolio or a trustee. The Agreement and
Declaration of Trust also provides for indemnification from the Portfolio
property for all losses and expenses of any shareholder held personally liable
for the Portfolio's obligations. Thus the risk of an investor incurring
financial loss on account of such liability is limited to
 
                                       15
<PAGE>   145
 
circumstances in which the Portfolio itself would be unable to meet its
obligations and where the other party was held not to be bound by the
disclaimer.
 
  Whenever the Fund is requested to vote on any proposal of the Portfolio, the
Fund will hold a meeting of the Fund's shareholders and will cast its vote as
instructed by its shareholders. Shares for which no voting instructions are
received will be voted in the same proportion as the shares for which voting
instructions are received.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust, to the
Fund and to the Portfolio.
    
 
                                       16
<PAGE>   146
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
               TO THE AIM FAMILY OF FUNDS--Registered Trademark--
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of the following mutual funds:
   
<TABLE>
            <S>                                           <C>
            AIM ADVISOR FLEX FUND                         AIM GLOBAL INFRASTRUCTURE FUND
            AIM ADVISOR INTERNATIONAL VALUE FUND          AIM GLOBAL RESOURCES FUND
            AIM ADVISOR LARGE CAP VALUE FUND              AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM ADVISOR MULTIFLEX FUND                    AIM GLOBAL TRENDS FUND
            AIM ADVISOR REAL ESTATE FUND                  AIM GLOBAL UTILITIES FUND
            AIM AGGRESSIVE GROWTH FUND                    AIM HIGH INCOME MUNICIPAL FUND
            AIM ASIAN GROWTH FUND                         AIM HIGH YIELD FUND
            AIM BALANCED FUND                             AIM INCOME FUND
            AIM BASIC VALUE FUND                          AIM INTERMEDIATE GOVERNMENT FUND
            AIM BLUE CHIP FUND                            AIM INTERNATIONAL EQUITY FUND
            AIM CAPITAL DEVELOPMENT FUND                  AIM INTERNATIONAL GROWTH FUND
            AIM CHARTER FUND                              AIM JAPAN GROWTH FUND
            AIM CONSTELLATION FUND                        AIM LATIN AMERICAN GROWTH FUND
            AIM DEVELOPING MARKETS FUND                   AIM LIMITED MATURITY TREASURY FUND
            AIM DOLLAR FUND(*)                            AIM MID CAP GROWTH FUND
            AIM EMERGING MARKETS FUND                     AIM MONEY MARKET FUND(*)
            AIM EMERGING MARKET DEBT FUND                 AIM MUNICIPAL BOND FUND
            AIM EUROPEAN DEVELOPMENT FUND                 AIM NEW PACIFIC GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM SELECT GROWTH FUND
            AIM GLOBAL AGGRESSIVE GROWTH FUND             AIM SMALL CAP EQUITY FUND
            AIM GLOBAL CONSUMER PRODUCTS AND              AIM SMALL CAP OPPORTUNITIES FUND
              SERVICES FUND                               AIM STRATEGIC INCOME FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM TAX-EXEMPT CASH FUND(*)
            AIM GLOBAL GROWTH FUND                        AIM TAX-FREE INTERMEDIATE FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM VALUE FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WEINGARTEN FUND
            AIM GLOBAL INCOME FUND                        AIM WORLDWIDE GROWTH FUND
                                                                                                 
</TABLE>
    
 
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
    Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
    asset value, without payment of a sales charge, as described below. Other
    funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
    FUND, are sold with an initial sales charge or subject to a contingent
    deferred sales charge upon redemption, as described below.
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed new Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.
 
   
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment is
$500, except for accounts initially established through an Automatic Investment
Plan, which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an Individual Retirement Arrangement ("IRA") or Roth IRA is $250.
There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such plans is $25 per
fund investment), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM 
    
 
                                       A-1
<PAGE>   147
 
   
Funds account. Notwithstanding the foregoing, the minimum initial investment
applicable to AIM Small Cap Opportunities Fund is $10,000.
    
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Shares of any AIM Funds not named on the cover of this Prospectus, as well as
Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                   OBI:                              Shareholder Name, Shareholder Account Number
                                                     (70 character limit)
</TABLE>
 
   
  HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased directly
through AIM Distributors or through any dealer who has entered into an agreement
with AIM Distributors. The minimum investment for subsequent purchases is $50.
The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. Notwithstanding the foregoing, the minimum subsequent purchases of shares
of AIM Small Cap Opportunities Fund is $1,000. There are no such minimum
investment requirements for investment of dividends and distributions of any of
the AIM Funds into any other existing AIM Funds account.
    
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional shares by electronic funds
transfer, please contact the Client Services Department of AFS for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
   
  Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BASIC
VALUE FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT
FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP EQUITY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND,AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without a
sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over
    
 
                                       A-2
<PAGE>   148
 
another class in the same Multiple Class Fund. Factors an investor should
consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
   
  The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPE
GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL
FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM
GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS
FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN
GROWTH FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
    
 
  The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
 
SALES CHARGES AND DEALER CONCESSIONS
 
   
  GROUP I. Certain AIM Funds are currently sold with a sales charge ranging from
5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM BASIC VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
EQUITY FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
    
 
   
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
      SINGLE TRANSACTION(1)                          PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   25,000                    5.50%          5.82%        4.75%
 $ 25,000 but less than $   50,000                   5.25           5.54         4.50
 $ 50,000 but less than $ 100,000                    4.75           4.99         4.00
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    3.00           3.09         2.50
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
    
 
- ---------------
 
   
(1) AIM Small Cap Opportunities Fund will not accept any single purchase in
    excess of $250,000.
    
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
                                       A-3
<PAGE>   149
   
 GROUP II. Certain AIM Funds are currently sold with a sales charge ranging from
4.75% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND, AIM
BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND
FUND, AIM STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
    
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   50,000                    4.75%          4.99%        4.00%
 $ 50,000 but less than $ 100,000                    4.00           4.17         3.25
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    2.50           2.56         2.00
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
  GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
Less than $ 100,000                                  1.00%          1.01%        0.75%
 $100,000 but less than $ 250,000                    0.75           0.76         0.50
 $250,000 but less than $1,000,000                   0.50           0.50         0.40
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
 
  ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
 
  In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
 
  AIM Distributors may make payments to dealers and institutions who are dealers
of record for purchases of $1 million of more of Class A shares (or shares which
normally involve payment of initial sales charges), which are sold at net asset
value and are subject to
 
                                       A-4
<PAGE>   150
 
a contingent deferred sales charge, for all AIM Funds other than Class A shares
of each of AIM LIMITED MATURITY TREASURY FUND and AIM TAX-FREE INTERMEDIATE FUND
as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next
$1 million of such purchases, plus 0.50% of the next $17 million of such
purchases, plus 0.25% of amounts in excess of $20 million of such purchases. See
"Contingent Deferred Sales Charge Program for Large Purchases." AIM Distributors
may make payments to dealers and institutions who are dealers of record for
purchases of $1 million or more of Class A shares (or shares which normally
involve payment of initial sales charges), and which are sold at net asset value
and are not subject to a contingent deferred sales charge, in an amount up to
0.10% of such purchases of Class A shares of AIM LIMITED MATURITY TREASURY FUND,
and in an amount up to 0.25% of such purchases of Class A shares of AIM TAX-FREE
INTERMEDIATE FUND.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed during the next twelve
months on Saturdays and Sundays and on the days on which New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class Funds
currently offer two or more classes of shares through separate distribution
systems (the "Multiple Distribution System"). Although each class of shares of a
particular Multiple Class Fund represents an interest in the same portfolio of
investments, each class is subject to a different distribution structure and, as
a result, differing expenses. This Multiple Distribution System allows investors
to select the class that is best suited to the investor's needs and objectives.
In considering the options afforded by the Multiple Distribution System,
investors should consider both the applicable initial sales charge or contingent
deferred sales charge, as well as the ongoing expenses borne by each class of
shares and other relevant factors, such as whether his or her investment goals
are long-term or short-term.
 
     CLASS A SHARES generally are sold subject to the initial sales charges
     described above and are subject to the other fees and expenses described
     herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
     needs of an investor who wishes to establish a dollar cost averaging
     program, pursuant to which Class A shares an investor owns may be exchanged
     at net asset value for Class A shares of another Multiple Class Fund or
     shares of another AIM Fund which is not a Multiple Class Fund, subject to
     the terms and conditions described under the caption "Exchange
     Privilege -- Terms and Conditions of Exchanges."
                                       A-5
<PAGE>   151
 
     CLASS B SHARES are sold without an initial sales charge. Thus, the entire
     purchase price of Class B shares is immediately invested in Class B shares.
     Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
     per annum on the average daily net assets of a Multiple Class Fund
     attributable to Class B shares. See the discussion under the caption
     "Management -- Distribution Plans." In addition, Class B shares redeemed
     within six years from the date such shares were purchased are subject to a
     contingent deferred sales charge ranging from 5% for redemptions made
     within the first year to 1% for redemptions made within the sixth year. No
     contingent deferred sales charge will be imposed if Class B shares are
     redeemed after six years from the date such shares were purchased.
     Redemptions of Class B shares and associated charges are further described
     under the caption "How to Redeem Shares -- Multiple Distribution System."
 
     Class B shares will automatically convert into Class A shares of the same
     Multiple Class Fund (together with a pro rata portion of all Class B shares
     acquired through the reinvestment of dividends and other distributions)
     eight years from the end of the calendar month in which the purchase of
     Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
     outstanding on May 29, 1998 and which are continuously held by the
     shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
     FUND seven years from the end of the calendar month in which the purchase
     of such Class B shares was made. If a shareholder exchanges Class B shares
     of AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
     since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
     shares will be subject to the eight year conversion feature applicable to
     Class B shares of all other AIM Funds. Following such conversion of their
     Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
     payments associated with Class B shares. See "Management -- Distribution
     Plans."
 
     AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an
     initial sales charge and are not subject to a contingent deferred sales
     charge; however, they are subject to the other fees and expenses described
     in the prospectus for AIM MONEY MARKET FUND.
 
  TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon Eastern Time or NYSE Close on any
business day of the Fund will be confirmed at the price next determined. Net
asset value is normally determined at 12:00 noon Eastern Time and NYSE Close on
each business day of AIM MONEY MARKET FUND.
 
  SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
REDUCTIONS IN INITIAL SALES CHARGES
 
  Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
 
                                       A-6
<PAGE>   152
 
  The term "purchaser" means:
 
  - an individual and his or her spouse and children, including any trust
    established exclusively for the benefit of any such person; or a pension,
    profit-sharing, or other benefit plan established exclusively for the
    benefit of any such person, such as an IRA, Roth IRA, a single-participant
    money-purchase/profit-sharing plan or an individual participant in a 403(b)
    plan (unless such 403(b) plan qualifies as the purchaser as defined below);
 
  - a 403(b) plan, the employer/sponsor of which is an organization described
    under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
    (the "Code"), provided that:
 
        a. the employer/sponsor must submit contributions for all participating
           employees in a single contribution transmittal (i.e., the funds will
           not accept contributions submitted with respect to individual
           participants);
 
        b. each transmittal must be accompanied by a single check or wire
           transfer; and
 
        c. all new participants must be added to the 403(b) plan by submitting
           an application on behalf of each new participant with the
           contribution transmittal;
 
  - a trustee or fiduciary purchasing for a single trust, estate or single
    fiduciary account (including a pension, profit-sharing or other employee
    benefit trust created pursuant to a plan qualified under Section 401 of the
    Code) and 457 plans, although more than one beneficiary or participant is
    involved;
 
  - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
    Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
    Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
    Distributors in writing that all of its related employee SEP, SARSEP or
    SIMPLE IRA accounts should be linked;
 
  - any other organized group of persons, whether incorporated or not, provided
    the organization has been in existence for at least six months and has some
    purpose other than the purchase at a discount of redeemable securities of a
    registered investment company; or
 
  - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
    Capital Management, Inc. ("AIM Capital").
 
  Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
 
  (1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
 
  Each purchase of fund shares normally subject to an initial sales charge made
during the 13-month period will be made at the public offering price applicable
to a single transaction of the total dollar amount indicated by the LOI, as
described under "Sales Charges and Dealer Concessions." It is the purchaser's
responsibility at the time of purchase to specify the account numbers that
should be considered in determining the appropriate sales charge. The offering
price may be further reduced as described under "Rights of Accumulation" if the
Transfer Agent is advised of all other accounts at the time of the investment.
Shares acquired through reinvestment of dividends and capital gain distributions
will not be applied to the LOI. At any time during the 13-month period after
meeting the original obligation, a purchaser may revise his intended investment
amount upward by submitting a written and signed request. Such a revision will
not change the original expiration date. By signing an LOI, a purchaser is not
making a binding commitment to purchase additional shares, but if purchases made
within the 13-month period do not total the amount specified, the investor will
pay the increased amount of sales charge as described below. Purchases made
within 90 days before signing an LOI will be applied toward completion of the
LOI. The LOI effective date will be the date of the first purchase with the
90-day period. The Transfer Agent will process necessary adjustments upon the
expiration or completion date of the LOI. Purchases made more than 90 days
before signing an LOI will be applied toward completion of the LOI based on the
value of the shares purchased calculated at the public offering price on the
effective date of the LOI.
 
  To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
                                       A-7
<PAGE>   153
 
  If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
 
  Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
 
  (2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
 
  PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at
net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
 
  Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
 
  The following persons may purchase Class A shares of the AIM Funds through AIM
Distributors without payment of an initial sales charge: (a) A I M Management
Group Inc. ("AIM Management") and its affiliated companies; (b) any current or
retired officer, director, trustee or employee, or any member of the immediate
family (including spouse, children, parents and parents of spouse) of any such
person, of AIM Management or its affiliates or of certain mutual funds which are
advised or managed by AIM; or any trust established exclusively for the benefit
of such persons; (c) any employee benefit plan established for employees of AIM
Management or its affiliates; (d) any current or retired officer, director,
trustee or employee, or any member of the immediate family (including spouse,
children, parents and parents of spouse) of any such person, or of CIGNA
Corporation or of any of its affiliated companies, or of First Data Investor
Services Group (formerly The Shareholder Services Group, Inc.); (e) any
investment company sponsored by CIGNA Investments, Inc. or any of its affiliated
companies for the benefit of its directors' deferred compensation plans; (f)
discretionary advised clients of AIM or AIM Capital; (g) registered
representatives and employees of dealers who have entered into agreements with
AIM Distributors (or financial institutions that have arrangements with such
dealers with respect to the sale of shares of the AIM Funds) and any member of
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, provided that purchases at net asset value are permitted by
the policies of such person's employer; (h) certain broker-dealers, investment
advisers or bank trust departments that provide asset allocation, similar
specialized investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services, and that
have entered into an agreement with AIM Distributors with respect to their use
of the AIM Funds in connection with such services; (i) any employee or any
member of the immediate family (including spouse, children, parents and parents
of spouse) of any employee, of Triformis Inc.; (j) shareholders of the AIM/GT
Funds as of April 30, 1987 who since that date continually have owned shares of
one or more of the AIM/GT Funds; and (k) certain former AMA Investment Advisers'
shareholders who became shareholders of the AIM Global Health Care Fund in
October 1989, and who have continuously held shares in the AIM/GT Funds since
that time.
 
   
  In addition, shares of any AIM Fund (except AIM Small Cap Opportunities Fund)
may be purchased at net asset value, without payment of a sales charge, by
pension, profit-sharing or other employee benefit plans created pursuant to a
plan qualified under Section 401 of the Code or plans under Section 457 of the
Code, or employee benefit plans created pursuant to Section 403(b) of the
    
                                       A-8
<PAGE>   154
 
Code and sponsored by nonprofit organizations defined under Section 501(c)(3) of
the Code. Such plans will qualify for purchases at net asset value provided that
(1) the total amount invested in the plan is at least $1,000,000, (2) the
sponsor signs a $1,000,000 LOI, (3) such shares are purchased by an
employer-sponsored plan with at least 100 eligible employees, or (4) all of the
plan's transactions are executed through a single financial institution or
service organization who has entered into an agreement with AIM Distributors
with respect to their use of the AIM Funds in connection with such accounts.
Section 403(b) plans sponsored by public educational institutions will not be
eligible for net asset value purchases based on the aggregate investment made by
the plan or the number of eligible employees. Participants in such plans will be
eligible for reduced sales charges based solely on the aggregate value of their
individual investments in the applicable AIM Fund. PLEASE NOTE THAT TAX-EXEMPT
FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR SUCH PLANS. AIM Distributors may pay
investment dealers or other financial service firms for share purchases of the
Load Funds (as defined under the caption "Exchange Privilege") sold at net asset
value to an employee benefit plan in accordance with this paragraph as follows:
1% of the first $2 million of such purchases, plus 0.80% of the next $1 million
of such purchases, plus 0.50% of the next $17 million of such purchases, plus
0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of
the net asset value of any Class A shares of AIM LIMITED MATURITY TREASURY FUND
sold at net asset value to an employee benefit plan in accordance with this
paragraph.
 
  Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
- --------------------------------------------------------------------------------
 
SPECIAL PLANS
 
  Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
who owns shares which are not subject to a contingent deferred sales charge, can
arrange for monthly, quarterly or annual amounts (but not less than $50) to be
drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that
 
                                       A-9
<PAGE>   155
 
exceed on an annual basis 12% of such account will be subject to a contingent
deferred sales charge on the amounts exceeding 12% of the account value at the
time the shareholder elects to participate in the Systematic Withdrawal Plan.
 
  Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested to shares of the
applicable AIM Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full
and fractional shares at their net asset value in effect at the time of each
such redemption.
 
  Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
 
  The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
 
  AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in the amount specified by
the shareholder (minimum $50 per investment, per account) and on a day or
date(s) specified by the shareholder. The proceeds are invested in shares of the
designated AIM Fund at the applicable offering price determined on the date of
the withdrawal. An Automatic Investment Plan may be discontinued upon 10 days'
prior notice to the Transfer Agent or AIM Distributors.
 
   
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
    
 
  DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
 
  PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination
money-purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans;
SARSEP plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement
accounts"). Information concerning these plans, including the custodian's fees
and the forms necessary to adopt such plans, can be obtained by calling or
writing the AIM Funds or AIM Distributors. Shares of the AIM Funds are also
available for investment through existing 401(k) plans (for both individuals and
employers) adopted under the Code. The plan custodian currently imposes an
annual $10 maintenance fee with respect to each retirement account for which it
serves as the custodian. This fee is generally charged in December. Each AIM
Fund and/or the custodian reserve the right to change this maintenance fee and
to initiate an establishment fee (not to exceed its cost).
 

   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance of $5,000 to
establish and maintain an allocation across a range of AIM Funds. The Program
automatically rebalances holdings of AIM Funds to the established allocation on
a periodic basis. Under the Program, a shareholder may predesig-
    
 
                                      A-10
<PAGE>   156
   
nate, on a percentage basis, how the total value of his or her holdings in a
minimum of two, and a maximum of ten, AIM Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more AIM Funds in the shareholder's Personal Portfolio for shares of
the same class(es) of one or more other AIM Funds in the shareholder's Personal
Portfolio. See "Exchange Privilege." If shares of the AIM Fund(s) in a
shareholder's Personal Portfolio have appreciated during a rebalancing period,
the Program will result in shares of AIM Fund(s) that have appreciated most
during the period being exchanged for shares of AIM Fund(s) that have
appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular AIM Fund would be 2% or less.
In predesignating percentages, shareholders must use whole percentages and
totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an AIM Fund's shares. The
AIM Funds and AIM Distributors reserve the right to modify, suspend, or
terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
    
 
                                      A-11
<PAGE>   157
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, including the Class A shares of the Multiple Class Funds, listed below
and referred to herein as the "Load Funds," are sold at a public offering price
that includes a maximum sales charge of 5.50% or 4.75% of the public offering
price of such shares; Class A shares (or shares which normally involve the
payment of initial sales charges) of certain of the AIM Funds, listed below and
referred to herein as the "Lower Load Funds," are sold at a public offering
price that includes a maximum sales charge of 1.00% of the public offering price
of such shares; and Class A shares or shares of certain other funds, listed
below and referred to herein as the "No Load Funds," are sold at net asset
value, without payment of a sales charge.
 
   
<TABLE>
<S>                                    <C>                                   <C>
                                LOAD FUNDS:                                  LOWER LOAD FUNDS:
   AIM ADVISOR FLEX FUND --            AIM GLOBAL INCOME                     AIM LIMITED MATURITY TREASURY FUND
     CLASS A                           FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR INTERNATIONAL           AIM GLOBAL INFRASTRUCTURE               AIM TAX-FREE INTERMEDIATE FUND
     VALUE FUND -- CLASS A             FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR LARGE CAP               AIM GLOBAL RESOURCES                  NO LOAD FUNDS:
     VALUE FUND -- CLASS A             FUND -- CLASS A
   AIM ADVISOR MULTIFLEX               AIM GLOBAL TELECOMMUNICATIONS         AIM MONEY MARKET FUND
     FUND -- CLASS A                   FUND -- CLASS A                           -- AIM CASH RESERVE SHARES
   AIM ADVISOR REAL ESTATE             AIM GLOBAL TRENDS                       AIM TAX-EXEMPT CASH FUND -- CLASS A
     FUND -- CLASS A                   FUND -- CLASS A                         AIM DOLLAR FUND -- CLASS A
   AIM AGGRESSIVE GROWTH               AIM GLOBAL UTILITIES
     FUND -- CLASS A                   FUND -- CLASS A
   AIM ASIAN GROWTH                    AIM HIGH INCOME MUNICIPAL
     FUND -- CLASS A                   FUND -- CLASS A
   AIM BALANCED FUND -- CLASS A        AIM HIGH YIELD FUND -- CLASS A
   AIM BASIC VALUE                     AIM INCOME FUND -- CLASS A
     FUND -- CLASS A                   AIM INTERMEDIATE GOVERNMENT
   AIM BLUE CHIP FUND -- CLASS A       FUND -- CLASS A
   AIM CAPITAL DEVELOPMENT             AIM INTERNATIONAL EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM CHARTER FUND -- CLASS A         AIM INTERNATIONAL GROWTH
   AIM CONSTELLATION                   FUND -- CLASS A
     FUND -- CLASS A                   AIM JAPAN GROWTH FUND -- CLASS A
   AIM DEVELOPING MARKETS              AIM LATIN AMERICAN GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS                AIM MID CAP EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS DEBT           AIM MONEY MARKET
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPE GROWTH                   AIM MUNICIPAL BOND
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPEAN DEVELOPMENT            AIM NEW PACIFIC GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM GLOBAL AGGRESSIVE GROWTH        AIM SELECT GROWTH FUND -- CLASS A
     FUND -- CLASS A                   AIM SMALL CAP GROWTH
   AIM GLOBAL CONSUMER PRODUCTS        FUND -- CLASS A
     AND SERVICES FUND -- CLASS A      AIM SMALL CAP OPPORTUNITIES
   AIM GLOBAL FINANCIAL SERVICES       FUND -- CLASS A
     FUND -- CLASS A                   AIM STRATEGIC INCOME
   AIM GLOBAL GOVERNMENT INCOME        FUND -- CLASS A
     FUND -- CLASS A                   AIM TAX-EXEMPT BOND FUND
   AIM GLOBAL GROWTH                   OF CONNECTICUT -- CLASS A
     FUND -- CLASS A                   AIM VALUE FUND -- CLASS A
   AIM GLOBAL GROWTH &                 AIM WEINGARTEN FUND -- CLASS A
     INCOME FUND -- CLASS A            AIM WORLDWIDE GROWTH
   AIM GLOBAL HEALTH CARE              FUND -- CLASS A
     FUND -- CLASS A
</TABLE>
    
 
                                      A-12
<PAGE>   158
 
   
  Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE; (iii) Class A shares
may be exchanged for Class A shares; (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A, Class B or Class C shares of AIM MONEY MARKET FUND. Class C shares
of AIM Small Cap Opportunities Fund are currently not available.
    
 
  DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
 
<TABLE>
<CAPTION>
                                                                                                      MULTIPLE CLASS FUNDS:
                                                            LOWER LOAD              NO LOAD       ------------------------------
      FROM:                 TO: LOAD FUNDS                     FUNDS                 FUNDS           CLASS B         CLASS C
      -----                 --------------                  ----------              -------          -------         -------
<S>                <C>                                <C>                      <C>                <C>             <C>
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
 
Lower Load Funds.. Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund or any     Fund or any Lower Load
                   Lower Load Fund.                   Fund; otherwise,
                                                      Offering Price.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
 
  FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS REVISED AS FOLLOWS:
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
Lower Load Funds.. Net Asset Value if shares were     Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
                   acquired upon exchange of any
                   Load Fund. Otherwise, difference
                   in sales charge will apply.
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund.           Fund or any Lower Load
                   Difference in sales charge will    Fund; otherwise,
                   apply if No Load shares were       Offering Price.
                   acquired upon exchange of Lower
                   Load Fund shares.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
  Class C........  Not Applicable                     Not Applicable           Not Applicable     Not Applicable  Net Asset Value
</TABLE>
 
   
  An exchange is permitted only in the following circumstances: (a) if the funds
offer more than one class of shares, the exchange must be between the same class
of shares (e.g., Class A, Class B and Class C shares of a Multiple Class Fund
cannot be exchanged for each other) except that AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may be exchanged for Class A shares of another Multiple Class
Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten busi-
    
 
                                      A-13
<PAGE>   159
 
ness days, and all other shares are held in an account for at least one day,
prior to the exchange; and (h) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the AIM
Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
   
  Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged are
redeemed at their net asset value as determined at NYSE Close on the day that an
exchange request in proper form (described below) is received. Exchange requests
received after NYSE Close will result in the redemption of shares at their net
asset value at NYSE Close on the next business day. See "Terms and Conditions of
Purchase of the AIM Funds -- Timing of Purchase, Exchange and Redemption Orders
(AIM MONEY MARKET FUND only)" for information regarding the timing of exchange
orders for AIM MONEY MARKET FUND. Normally, shares of an AIM Fund to be acquired
by exchange are purchased at their net asset value or applicable offering price,
as the case may be, determined on the date that such request is received, but
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that a fund would be materially disadvantaged
by an immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into a fund paying daily dividends (See "Dividends, Distributions and
Tax Matters -- Dividends and Distributions," below), and the release of the
exchange proceeds is delayed for the foregoing five-day period, such shareholder
will not begin to accrue dividends until the sixth business day after the
exchange. Shares purchased by check may not be exchanged until it is determined
that the check has cleared, which may take up to ten business days from the date
that the check is received. See "Terms and Conditions of Purchase of the AIM
Funds -- Timing of Purchase Orders."
    
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the AIM Funds. AIM Distributors reserves the right to impose conditions on
dealers or investment advisors who make telephone exchanges of shares of the
funds, including the condition that any such dealer or investment advisor enter
into an agreement (which contains additional conditions with respect to
exchanges of shares) with AIM Distributors. To exchange shares by telephone, a
shareholder, dealer or investment advisor who has satisfied the foregoing
conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach
AFS by telephone, he may also request exchanges by telegraph or use overnight
courier services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is received
prior to NYSE Close. The Transfer Agent and AIM Distributors will not be liable
for any loss, expense or cost arising out of any telephone exchange request that
they reasonably believe to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions if they do not follow
reasonable procedures for verification of telephone transactions. Such
reasonable procedures may include recordings of telephone transactions
(maintained for six months), requests for confirmation of the shareholder's
Social Security Number and current address, and mailings of confirmations
promptly after the transaction.
 
  EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
 
                                      A-14
<PAGE>   160
 
  MULTIPLE DISTRIBUTION SYSTEM. Class B Shares. Class B shares purchased under
the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
 
<TABLE>
<CAPTION>
  YEARS                                                     CONTINGENT DEFERRED
  SINCE                                                       SALES CHARGE AS
PURCHASE                                                    % OF DOLLAR AMOUNT
  MADE                                                       SUBJECT TO CHARGE
- --------                                                    -------------------
<S>                                                          <C>
First......................................................         5%
Second.....................................................         4%
Third......................................................         3%
Fourth.....................................................         3%
Fifth......................................................         2%
Sixth......................................................         1%
Seventh and Following......................................        None
</TABLE>
 
  In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
 
  Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
 
  Class C Shares. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
 
  Waivers. Contingent deferred sales charges on Class B and Class C shares will
be waived on redemptions (1) following the death or post-purchase disability, as
defined in Section 72(m)(7) of the Code, of a shareholder or a settlor of a
living trust (provided AIM Distributors is notified of such death or
post-purchase disability at the time of the redemption request and is provided
with satisfactory evidence of such death or post-purchase disability), (2) in
connection with certain distributions from IRAs, custodial accounts maintained
pursuant to Code Section 403(b), deferred compensation plans qualified under
Code Section 457 and plans qualified under Code Section 401 (collectively,
"Retirement Plans"), (3) pursuant to a Systematic Withdrawal Plan, provided that
amounts withdrawn under such plan do not exceed on an annual basis 12% of the
value of the shareholder's investment in Class B or Class C shares at the time
the shareholder elects to participate in the Systematic Withdrawal Plan, (4)
effected pursuant to the right of a Multiple Class Fund to liquidate a
shareholder's account if the aggregate net asset value of shares held in the
account is less than the designated minimum account size described in the
prospectus of such Multiple Class Fund, (5) effected by AIM of its investment in
Class B or Class C shares and (6) of Class C shares where such investor's dealer
of record, due to the nature of the investor's account, notifies AIM
Distributors prior to the time of investment that the dealer waives the payment
otherwise payable to the dealer described in the last paragraph under the
caption "Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM
Funds."
 
  Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
 
  Waiver category (2) above applies only to redemptions resulting from:
 
          (i) required minimum distributions to plan participants or
     beneficiaries who are age 70 1/2 or older, and only with respect to that
     portion of such distributions which does not exceed 12% annually of the
     participant's or beneficiary's account value in a particular AIM Fund;
 
                                      A-15
<PAGE>   161
 
          (ii) in-kind transfers of assets where the participant or beneficiary
     notifies AIM Distributors of such transfer no later than the time such
     transfer occurs;
 
          (iii) tax-free rollovers or transfers of assets to another Retirement
     Plan invested in Class B or Class C shares of one or more Multiple Class
     Funds;
 
          (iv) tax-free returns of excess contributions or returns of excess
     deferral amounts; and
 
          (v) distributions upon the death or disability (as defined in the
     Code) of the participant or beneficiary.
 
   
  CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND or Class A shares
of AIM DOLLAR FUND which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code, or Plans created under Section 403(b) of the
Code and sponsored by nonprofit organizations as defined under Section 501(c)(3)
of the Code, where shares are being redeemed in connection with employee
terminations or withdrawals, and (a) the total amount invested in a Plan is at
least $1,000,000, (b) the sponsor of a Plan signs a letter of intent to invest
at least $1,000,000 in one or more of the AIM Funds, or (c) the shares being
redeemed were purchased by an employer-sponsored Plan with at least 100 eligible
employees; provided, however, that Plans created under Section 403(b) of the
Code which are sponsored by public educational institutions shall qualify under
(a), (b) or (c) above on the basis of the value of each Plan participant's
aggregate investment in the AIM Funds, and not on the aggregate investment made
by the Plan or on the number of eligible employees; (2) redemptions of shares
following the death or post-purchase disability, as defined in Section 72(m)(7)
of the Code, of a shareholder or a settlor of a living trust; (3) redemptions of
shares purchased at net asset value by private foundations or endowment funds
where the initial amount invested was at least $1,000,000; (4) redemptions of
shares purchased by an investor in amounts of $1,000,000 or more where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payments otherwise payable to the dealer as described in the third paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds;" and (5) pursuant to a Systematic Withdrawal Plan, provided
that amounts withdrawn under such plan do not exceed on an annual basis 12% of
the value of the shareholder's investment in Class A shares at the time the
shareholder elects to participate in the Systematic Withdrawal Plan.
    
 
  Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  In addition to these requirements, shareholders who have invested in a fund to
establish as IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares; (a) a statement
as to whether or not the shareholder has attained age 59 1/2, and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.
 
                                      A-16
<PAGE>   162
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
this account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
   
  EXPEDITED REDEMPTIONS (AIM Cash Reserve shares of AIM MONEY MARKET FUND
ONLY). If a redemption order is received prior to 11:30 a.m. Eastern Time, the
redemption will be effective on that day and AIM MONEY MARKET FUND will endeavor
to transmit payment on that same business day. If the redemption order is
received after 11:30 a.m. and prior to NYSE Close, the redemption will be made
at the next determined net asset value and payment will generally be transmitted
on the next business day.
    
 
  REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing the
appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone
 
                                      A-17
<PAGE>   163
 
exchange and telephone redemption authorization forms; (7) changes in previously
designated wiring or electronic funds transfer instructions, and (8) written
redemptions or exchanges of shares previously reported as lost, whether or not
the redemption amount is under $50,000 or the proceeds are to be sent to the
address of record. These requirements may be waived or modified upon notice to
shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
    
 
   
  REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within ninety (90) days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment will not alter the taxes due on any
capital gains, except under the circumstances described below. If there has been
a loss on the redemption and shares of the same fund are repurchased, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in shares of the same fund, or exchanged for
shares of another AIM Fund, at a reduced sales charge within 90 days of the
payment of the sales charge, the shareholder's basis in the fund shares redeemed
may not include the amount of the sales charge paid, thereby reducing the loss
or increasing the gain recognized from the redemption; however, the
shareholder's basis in the fund shares purchased will include the sales charge.
Each AIM Fund may amend, suspend or cease offering the privilege at any time as
to shares redeemed after the date of such amendment, suspension or cessation.
This privilege may only be exercised once each year by a shareholder with
respect to each AIM Fund.
    
 
   
  Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of Class A shares and who subsequently reinvest a portion or
all of the value of the redeemed shares in Class A shares of any AIM Fund within
ninety (90) days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
    
 
                                      A-18

<PAGE>   164
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
   
  The net asset value per share (or share price) of each AIM Fund is determined
as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close with
respect to AIM MONEY MARKET FUND) on each "business day" of a fund as previously
defined. In the event the NYSE closes early (i.e. before 4:00 p.m. Eastern Time)
on a particular day, the net asset value of an AIM Fund's share will be
determined as of the close of the NYSE on such day. For purposes of defining net
asset value per share, futures and options contracts generally will be valued 15
minutes after the close of trading of the NYSE. The net asset value per share is
calculated by subtracting a class' liabilities from its assets and dividing the
result by the total number of class shares outstanding. The determination of net
asset value per share is made in accordance with generally accepted accounting
principles. Among other items, liabilities include accrued expenses and
dividends payable, and total assets include portfolio securities valued at their
market value, as well as income accrued but not yet received. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the fund's officers and
in accordance with methods which are specifically authorized by its governing
Board of Directors or Trustees. Short-term obligations with maturities of 60
days or less, and the securities held by the Money Market Funds, are valued at
amortized cost as reflecting fair value. AIM HIGH INCOME MUNICIPAL FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-FREE
INTERMEDIATE FUND value variable rate securities that have an unconditional
demand or put feature exercisable within seven days or less at par, which
reflects the market value of such securities.
    
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as
set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                DISTRIBUTIONS    DISTRIBUTIONS
                                                                                   OF NET           OF NET
                                                    DIVIDENDS FROM                REALIZED         REALIZED
                                                    NET INVESTMENT               SHORT-TERM        LONG-TERM
                   FUND                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
                   ----                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM ADVISOR FLEX FUND.....................  declared and paid quarterly       quarterly          annually
AIM ADVISOR INTERNATIONAL VALUE FUND......  declared and paid annually        annually           annually
AIM ADVISOR LARGE CAP VALUE FUND..........  declared and paid quarterly       quarterly          annually
AIM ADVISOR MULTIFLEX FUND................  declared and paid quarterly       quarterly          annually
AIM ADVISOR REAL ESTATE FUND..............  declared and paid quarterly       quarterly          annually
AIM AGGRESSIVE GROWTH FUND................  declared and paid annually        annually           annually
AIM ASIAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM BALANCED FUND.........................  declared and paid quarterly       annually           annually
AIM BASIC VALUE FUND......................  declared and paid annually        annually           annually
AIM BLUE CHIP FUND........................  declared and paid annually        annually           annually
AIM CAPITAL DEVELOPMENT FUND..............  declared and paid annually        annually           annually
AIM CHARTER FUND..........................  declared and paid quarterly       annually           annually
AIM CONSTELLATION FUND....................  declared and paid annually        annually           annually
AIM DEVELOPING MARKETS FUND...............  declared and paid annually        annually           annually
AIM DOLLAR FUND...........................  declared daily; paid monthly      annually           annually
AIM EMERGING MARKETS FUND.................  declared and paid annually        annually           annually
AIM EMERGING MARKETS DEBT FUND............  declared and paid monthsly        annually           annually
AIM EUROPE GROWTH FUND....................  declared and paid annually        annually           annually
AIM EUROPEAN DEVELOPMENT FUND.............  declared and paid annually        annually           annually
AIM GLOBAL AGGRESSIVE GROWTH FUND.........  declared and paid annually        annually           annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
  FUND....................................  declared and paid annually        annually           annually
AIM GLOBAL FINANCIAL SERVICES FUND........  declared and paid annually        annually           annually
</TABLE>
    
 
                                      A-19
<PAGE>   165
 
   
<TABLE>
<CAPTION>
                                                                             DISTRIBUTIONS    DISTRIBUTIONS
                                                                                OF NET           OF NET
                                                 DIVIDENDS FROM                REALIZED         REALIZED
                                                 NET INVESTMENT               SHORT-TERM        LONG-TERM
FUND                                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
- ----                                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM GLOBAL GOVERNMENT INCOME FUND.........  declared and paid monthly         annually           annually
AIM GLOBAL GROWTH FUND....................  declared and paid annually        annually           annually
AIM GLOBAL GROWTH & INCOME FUND...........  declared and paid quarterly       annually           annually
AIM GLOBAL HEALTH CARE FUND...............  declared and paid annually        annually           annually
AIM GLOBAL INCOME FUND....................  declared daily; paid monthly      annually           annually
AIM GLOBAL INFRASTRUCTURE FUND............  declared and paid annually        annually           annually
AIM GLOBAL RESOURCES FUND.................  declared and paid annually        annually           annually
AIM GLOBAL TELECOMMUNICATIONS FUND........  declared and paid annually        annually           annually
AIM GLOBAL TRENDS FUND....................  declared and paid annually        annually           annually
AIM GLOBAL UTILITIES FUND.................  declared daily; paid monthly      annually           annually
AIM HIGH INCOME MUNICIPAL FUND............  declared daily; paid monthly      annually           annually
AIM HIGH YIELD FUND.......................  declared daily; paid monthly      annually           annually
AIM INCOME FUND...........................  declared daily; paid monthly      annually           annually
AIM INTERMEDIATE GOVERNMENT FUND..........  declared daily; paid monthly      annually           annually
AIM INTERNATIONAL EQUITY FUND.............  declared and paid annually        annually           annually
AIM INTERNATIONAL GROWTH FUND.............  declared and paid annually        annually           annually
AIM JAPAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM LATIN AMERICAN GROWTH FUND............  declared and paid annually        annually           annually
AIM LIMITED MATURITY TREASURY FUND........  declared daily; paid monthly      annually           annually
AIM MID CAP EQUITY FUND...................  declared and paid annually        annually           annually
AIM MONEY MARKET FUND.....................  declared daily; paid monthly      at least annually  annually
AIM MUNICIPAL BOND FUND...................  declared daily; paid monthly      annually           annually
AIM NEW PACIFIC GROWTH FUND...............  declared and paid annually        annually           annually
AIM SELECT GROWTH FUND....................  declared and paid annually        annually           annually
AIM SMALL CAP GROWTH FUND.................  declared and paid annually        annually           annually
AIM SMALL CAP OPPORTUNITIES FUND..........  declared and paid annually        annually           annually
AIM STRATEGIC INCOME FUND.................  declared and paid monthly         annually           annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT...  declared daily; paid monthly      annually           annually
AIM TAX-EXEMPT CASH FUND..................  declared daily; paid monthly      at least annually  annually
AIM TAX-FREE INTERMEDIATE FUND............  declared daily; paid monthly      annually           annually
AIM VALUE FUND............................  declared and paid annually        annually           annually
AIM WEINGARTEN FUND.......................  declared and paid annually        annually           annually
AIM WORLDWIDE GROWTH FUND.................  declared and paid annually        annually           annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in like shares of another
Multiple Class Fund, to the extent permitted. For funds that do not declare a
dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. For funds that declare
a dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or the
dividend portion thereof, in cash, or to invest such dividends and distributions
in shares of another fund in the AIM Funds; provided that (i) dividends and
distributions attributable to Class B shares may only be reinvested in Class B
shares, (ii) dividends and distributions attributable to Class C shares may only
be reinvested in Class C shares, (iii) dividends and distributions attributable
to Class A shares may not be reinvested in Class B or Class C shares, and (iv)
dividends and distributions attributable to the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may not be reinvested in the Class A shares of that Fund or in
any Class B or Class C shares. Investors who have not previously selected such a
reinvestment option on the account application form may contact the Transfer
Agent at any time to obtain a form to authorize such reinvestments in another
AIM Fund. Such reinvestments into the AIM Funds are not subject to sales
charges, and shares so purchased are automatically credited to the account of
the shareholder.
 
  Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
 
                                      A-20
<PAGE>   166
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares, except for "exempt-interest dividends" paid by
AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND
FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND
(the "Tax-Exempt Funds"), which are exempt from federal income tax. With respect
to tax-exempt shareholders, dividends and distributions from the AIM Funds are
not subject to federal income taxation to the extent permitted under the
applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    
 
   
  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
    
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
                                      A-21
<PAGE>   167
   
 TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
  TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other taxable securities. For
additional information concerning the alternative minimum tax and certain
collateral tax consequences of the receipt of exempt-interest dividends, see the
Statements of Additional Information applicable to the Tax-Exempt Funds.
 
  The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
 
  To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
 
  From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP EQUITY FUND,
AIM SMALL CAP GROWTH FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX INFORMATION.
Certain states exempt from income taxes dividends paid by mutual funds
attributable to interest on U.S. Treasury and certain other U.S. government
obligations. Investors should consult with their own tax advisors concerning the
availability of such exemption.
    
 
  AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH
FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do
so, each of these funds may elect to pass through to its shareholders credits
for foreign taxes paid. If a fund makes such an election, a shareholder who
receives a distribution (1) will be required to include in gross income his
proportionate share of foreign taxes allocable to the distribution and (2) may
claim a credit or deduction for such share for his taxable year in which the
distribution is received, subject to the general limitations imposed on the
allowance of foreign tax credits and deductions. Shareholders should also note
that certain gains or losses attributable to fluctuations in exchange rates or
foreign currency forward contracts may increase or decrease the amount of income
of the fund available for distribution to shareholders and should note that if,
for any fund, such losses exceed other income during a taxable year, the fund
would not be able to pay ordinary income dividends for that year.
 
                                      A-22
<PAGE>   168
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each AIM Fund's transfer agent and dividend
payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-23
<PAGE>   169
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
 
 
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                              GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
      ACCOUNT TYPE            NUMBER OF:                       ACCOUNT TYPE                  NUMBER OF:
      ------------            --------------------             ------------                  ------------------
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary
      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application
      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors
      Legal Guardian          Ward, Minor or
                              Incompetent
      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
 
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   170
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   171
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
 
   
GFS-PRO-1
    
<PAGE>   172
 
                                                            [APPLICATION INSIDE]

 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
CLASS A AND CLASS B SHARES OF
    
 
AIM GLOBAL GOVERNMENT INCOME FUND
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
 
P
PROSPECTUS
SEPTEMBER 8, 1998
 
   
This Prospectus contains information about AIM GLOBAL GOVERNMENT INCOME FUND
(the "Fund"), which is one of several series investment portfolios comprising
AIM Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a non-diversified portfolio which seeks a high level of
current income by investing primarily in high quality U.S. and foreign
government debt securities. The Fund's secondary objectives are capital
appreciation and protection of principal through active management of its
maturity structure and currency exposure.
    
 
   
This Prospectus sets forth concisely information about the Fund that prospective
investors should know before investing. It should be read and retained for
future reference. A Statement of Additional Information, dated September 8,
1998, has been filed with the Securities and Exchange Commission (the "SEC") and
is incorporated herein by reference. The Statement of Additional Information is
available without charge upon written request to the Trust at 11 Greenway Plaza,
Suite 100, Houston, Texas 77046-1173 or by calling 1-800-347-4246. The SEC
maintains a Web site at http://www.sec.gov that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding the Fund. Additional information about the Fund may also
be obtained from http://www.aimfunds.com.
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   173
 
- --------------------------------------------------------------------------------
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     7
  Investment Program...................     7
  Risk Factors.........................    11
  Management...........................    13
  Organization of the Trust............    16
    
   
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-9
  Exchange Privilege...................  A-12
  How to Redeem Shares.................  A-14
  Determination of Net Asset Value.....  A-19
  Dividends, Distributions and Tax
     Matters...........................  A-19
  General Information..................  A-23
  Appendix A...........................  A-24
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
   
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
  THE FUND. The Fund is a non-diversified series of the Trust.
 
  INVESTMENT OBJECTIVES. The Fund primarily seeks high current income and
secondarily seeks capital appreciation and protection of principal.
 
  PRINCIPAL INVESTMENTS. The Fund invests primarily in high quality U.S. and
foreign government debt obligations.
 
   
  INVESTMENT MANAGERS. The Fund is managed by A I M Advisors, Inc. ("AIM") and
is sub-advised and sub-administered by INVESCO (NY), Inc. (the "Sub-advisor").
AIM and the Sub-advisor and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-advisor are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
AIM was organized in 1976 and, together with its subsidiaries, currently advises
approximately 90 investment company portfolios.
    
 
  PURCHASING SHARES. Investors may select Class A or Class B shares of the Fund
which are offered by this Prospectus at an offering price that reflects
differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to
a separate prospectus, the Fund also offers Advisor Class shares, which
represent interests in the Fund. The Advisor Class has different distribution
arrangements.
 
  CLASS A SHARES -- Shares are offered at net asset value plus any applicable
initial sales charge.
 
  CLASS B SHARES -- Shares are offered at net asset value without an initial
sales charge, and are subject to a maximum contingent deferred sales charge of
5% on certain redemptions made within six years from the date such shares were
purchased. Class B shares automatically convert to Class A shares of the Fund
eight years following the end of the calendar month in which a purchase was
made. Class B shares are subject to higher expenses than Class A shares.
 
  Initial investments in any class of shares must be at least $500 and
additional investments must be at least $50. The minimum initial investment is
modified for investments through tax-qualified retirement plans and accounts
initially established with an Automatic Investment Plan. The distributor of the
Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
 
  SUITABILITY FOR INVESTORS. An investor in Class A or Class B shares of the
Fund should consider the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the shares are expected to
be held, and other circumstances. Investors should consider whether, during the
anticipated life of their investment in the Fund, the accumulated distribution
fees and any applicable contingent deferred sales charges on Class B shares
prior to conversion would be less than the initial sales charge and accumulated
distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares.
To assist investors in making this determination, the table under the caption
"Table of Fees and Expenses" sets forth examples of the charges applicable to
each class of shares. Class A shares will normally be more beneficial than Class
B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase
of more than $250,000 for Class B shares.
 
                                        2
<PAGE>   174
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds"), Class
A and Class B shares of the Fund may be exchanged for shares of other funds in
The AIM Family of Funds in the manner and subject to the policies and charges
set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Class A shareholders of the Fund may redeem all or a portion
of their shares at net asset value on any business day, generally without
charge. A contingent deferred sales charge of 1% may apply to certain
redemptions where a purchase of more than $1 million is made at net asset value.
See "How to Redeem Shares -- Contingent Deferred Sales Charge Program for Large
Purchases."
 
  Class B shareholders of the Fund may redeem all or a portion of their shares
at net asset value on any business day, less a contingent deferred sales charge
for redemptions made within six years from the date such shares were purchased.
Class B shares redeemed after six years from the date such shares were purchased
will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on a monthly basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters" and "Special Plans."
    
 
  RISK FACTORS. There is no assurance that the Fund will achieve its investment
objectives. The Fund's net asset value will fluctuate, reflecting fluctuations
in the market value of its portfolio holdings. The value of debt securities held
by the Fund generally fluctuates inversely with interest rate movements.
 
  The Fund will invest in foreign securities. Investments in foreign securities
involve risks relating to political and economic developments abroad and the
differences between the regulations to which U.S. and foreign issuers are
subject. Individual foreign economies also may differ favorably or unfavorably
from the U.S. economy. Changes in foreign currency exchange rates will affect
the Fund's net asset value, earnings and gains and losses realized on sales of
securities. Securities of foreign companies may be less liquid and their prices
more volatile than those of securities of comparable U.S. companies.
 
   
  The Fund may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs. See "Investment
Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   175
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Class A and Class B shares of the Fund are reflected in the following table(1):
 
<TABLE>
<CAPTION>
                                                              CLASS A   CLASS B
                                                              -------   -------
<S>                                                           <C>       <C>
Shareholder Transaction Costs(2):
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................   4.75%     None
  Sales charges on reinvested distributions to
     shareholders...........................................   None      None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........   None      5.00%
  Redemption charges........................................   None      None
  Exchange fees.............................................   None      None
Annual Fund Operating Expenses(3): (as a % of average net
  assets)
  Investment management and administration fees.............   0.73%     0.73%
  12b-1 distribution and service fees.......................   0.35%     1.00%
  Other expenses............................................   0.43%     0.43%
                                                               ----      ----
          Total Fund Operating Expenses.....................   1.51%     2.16%
                                                               ====      ====
</TABLE>
 
   
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Fund. Long-term shareholders
   may pay more than the economic equivalent of the maximum front-end sales
   charge permitted by the National Association of Securities Dealers, Inc.
   rules regarding investment companies.
    
 
(2)Sales charge waivers are available for Class A and Class B shares, and
   reduced sales charge purchase plans are available for Class A shares. The
   maximum 5% contingent deferred sales charge on Class B shares applies to
   redemptions during the first year after purchase. The charge generally
   declines by 1% annually thereafter, reaching zero after six years. See "Terms
   and Conditions of Purchase of the AIM Funds -- Reductions in Initial Sales
   Charges."
 
   
(3)Expenses are based on the Fund's fiscal year ended October 31, 1997. "Other
   expenses" include custody, transfer agency, legal, audit and other operating
   expenses. See "Management" herein and the Statement of Additional Information
   for more information. Effective November 1, 1997, AIM has voluntarily agreed
   to limit the Fund's expenses (exclusive of brokerage commissions, taxes,
   interest and extraordinary expenses) to the annual rates of 1.75% and 2.40%
   of the average daily net assets of the Fund's Class A and Class B shares,
   respectively, through May 31, 2000.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                     1 YEAR   3 YEARS   5 YEARS   10 YEARS(3)
                                                     ------   -------   -------   -----------
<S>                                                  <C>      <C>       <C>       <C>
Class A Shares(1)..................................   $62      $ 93      $126        $220
Class B Shares
  Assuming a complete redemption at end of
     period(2).....................................   $74      $101      $140        $235
  Assuming no redemption...........................   $22      $ 68      $117        $235
</TABLE>
    
 
   
(1)
    
  Assumes payment of maximum sales charge by the investor.
 
   
(2)Assumes deduction of the applicable contingent deferred sales charge.
    
 
   
(3)For Class B shares, this number reflects the conversion to Class A shares
   eight years following the end of the calendar month in which a purchase was
   made.
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND
THE ASSUMPTION IN THE HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY
REGULATION OF THE SEC APPLICABLE TO ALL MUTUAL FUNDS; THE 5% ANNUAL RETURN IS
NOT A PREDICTION OF AND DOES NOT REPRESENT THE FUND'S PROJECTED OR ACTUAL
PERFORMANCE.
    
 
                                        4
<PAGE>   176
 
- --------------------------------------------------------------------------------
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The tables below provide condensed financial information concerning income and
capital changes for Class A and Class B shares of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statements and notes for
fiscal year ended October 31, 1997 have been audited by PricewaterhouseCoopers
LLP, independent accountants, whose report thereon also is included in the
Statement of Additional Information. The unaudited financial statements and
notes, for the semi-annual period April 30, 1998, are also included in the
Statement of Additional Information.
    
 
   
                       AIM GLOBAL GOVERNMENT INCOME FUND
    
   
                  (FORMERLY GT GLOBAL GOVERNMENT INCOME FUND)
    
   
<TABLE>
<CAPTION>
 
                             SIX MONTHS ENDED                       YEAR ENDED OCTOBER 31,
                              APRIL 30, 1998    ---------------------------------------------------------------
                              (UNAUDITED)(C)    1997(C)    1996(C)    1995(C)    1994(C)    1993(C)      1992
                             ----------------   --------   --------   --------   --------   --------   --------
<S>                          <C>                <C>        <C>        <C>        <C>        <C>        <C>
CLASS A+
Per Share Operating
 Performance:
Net asset value, beginning
 of period..................     $   8.62       $   8.74   $   8.81   $   8.63   $  11.07   $   9.83   $  10.29
                                 --------       --------   --------   --------   --------   --------   --------
Income from investment
 operations:
 Net investment income......         0.29           0.52       0.57       0.62       0.65       0.74       0.92
 Net realized and unrealized
   gain (loss) on
   investments..............         0.07          (0.13)      0.03       0.15      (1.52)      1.34      (0.31)
                                 --------       --------   --------   --------   --------   --------   --------
 Net increase (decrease)
   resulting from investment
   operations...............         0.36           0.39       0.60       0.77      (0.87)      2.08       0.61
                                 --------       --------   --------   --------   --------   --------   --------
Distributions:
 From net investment
   income...................        (0.26)         (0.31)     (0.57)     (0.59)     (0.65)     (0.74)     (0.83)
 From net realized gain on
   investments..............           --             --      (0.10)        --      (0.27)        --      (0.13)
 In excess of net investment
   income...................           --          (0.20)        --         --         --         --         --
 In excess of net realized
   gain on investments......           --             --         --         --      (0.55)        --         --
 Return of capital..........           --             --         --         --      (0.10)        --         --
 From sources other than net
   investment income........           --             --         --         --         --      (0.10)     (0.11)
                                 --------       --------   --------   --------   --------   --------   --------
       Total
         distributions......        (0.26)         (0.51)     (0.67)     (0.59)     (1.57)     (0.84)     (1.07)
                                 --------       --------   --------   --------   --------   --------   --------
Net asset value, end of
 period.....................     $   8.72       $   8.62   $   8.74   $   8.81   $   8.63   $  11.07   $   9.83
                                 ========       ========   ========   ========   ========   ========   ========
       Total investment
         return(d)..........         4.05%(a)       4.78%      7.11%      9.22%     (8.87)%     21.9%       6.3%
                                 ========       ========   ========   ========   ========   ========   ========
Ratios and supplemental
 data:
Net assets, end of period
 (in 000's).................     $130,246       $154,272   $240,945   $385,404   $502,094   $708,301   $623,387
Ratio of net investment
 income to average net
 assets.....................         6.69%(b)       6.04%      6.52%      6.98%      6.87%       7.1%       9.0%
Ratio of operating expenses
 to average net assets:
 With expense reductions....         1.50%(b)       1.34%      1.34%      1.35%      1.33%       1.4%       1.6%
 Without expense
   reductions...............         1.50%(b)       1.51%      1.39%      1.38%       N/A        N/A        N/A
Ratio of interest expense to
 average net assets:........         0.32(b)         N/A        N/A        N/A        N/A        N/A        N/A
Portfolio turnover rate++...          211%(b)        241%       268%       385%       625%       495%       351%
 
<CAPTION>
                                                                    MARCH 29,
                                                                       1988
                                                                    (COMMENCE-
                                                                     MENT OF
                                   YEAR ENDED OCTOBER 31,         OPERATIONS) TO
                              ---------------------------------    OCTOBER 31,
                                1991       1990        1989            1988
                              --------   --------   -----------   --------------
<S>                           <C>        <C>        <C>           <C>
CLASS A+
Per Share Operating
 Performance:
Net asset value, beginning
 of period..................  $  10.46   $  10.45    $  10.86         $ 11.43
                              --------   --------    --------         -------
Income from investment
 operations:
 Net investment income......      0.99       1.18        1.15            0.49*
 Net realized and unrealized
   gain (loss) on
   investments..............     (0.07)     (0.02)      (0.35)          (0.44)
                              --------   --------    --------         -------
 Net increase (decrease)
   resulting from investment
   operations...............      0.92       1.16        0.80            0.05
                              --------   --------    --------         -------
Distributions:
 From net investment
   income...................     (1.00)     (1.15)      (1.20)          (0.49)
 From net realized gain on
   investments..............     (0.09)        --          --           (0.12)
 In excess of net investment
   income...................        --         --          --              --
 In excess of net realized
   gain on investments......        --         --          --              --
 Return of capital..........        --         --          --              --
 From sources other than net
   investment income........        --         --       (0.01)          (0.01)
                              --------   --------    --------         -------
       Total
         distributions......     (1.09)     (1.15)      (1.21)          (0.62)
                              --------   --------    --------         -------
Net asset value, end of
 period.....................  $  10.29   $  10.46    $  10.45         $ 10.86
                              ========   ========    ========         =======
       Total investment
         return(d)..........       9.4%      11.9%        7.2%            1.1%(a)
                              ========   ========    ========         =======
Ratios and supplemental
 data:
Net assets, end of period
 (in 000's).................  $399,200   $259,726    $122,526         $57,063
Ratio of net investment
 income to average net
 assets.....................       9.5%      11.4%       10.7%           7.41%(b)*
Ratio of operating expenses
 to average net assets:
 With expense reductions....       1.6%       1.8%        1.7%           1.80%(b)*
 Without expense
   reductions...............       N/A        N/A         N/A             N/A
Ratio of interest expense to
 average net assets:........       N/A        N/A         N/A             N/A
Portfolio turnover rate++...       326%       334%        413%            291%(b)
</TABLE>
    
 
- ---------------
 
   
  +   All capital shares issued and outstanding as of October 21, 1992 were
      reclassified as Class A shares.
    
 
   
 ++   Portfolio turnover and ratio of interest expense to average net assets are
      calculated on the basis of the Fund as a whole without distinguishing
      between the classes of shares issued.
    
 
   
  *   Net of $0.01 per share of Fund operating expenses reimbursed by the
      Sub-advisor.
    
 
   
 (a)  Not annualized.
    
 
   
 (b)  Annualized.
    
 
   
 (c)  These selected per share data were calculated based upon average shares
      outstanding during the period.
    
 
   
 (d)  Total investment return does not include sales charges.
    
 
   
N/A   Not Applicable.
    
 
                                        5
<PAGE>   177
 
   
    
 
   
<TABLE>
<CAPTION>
                                              SIX MONTHS                                                              OCTOBER 22,
                                            ENDED APRIL 30,                  YEAR ENDED OCTOBER 31,                     1992 TO
                                                 1998         -----------------------------------------------------   OCTOBER 31,
                                            (UNAUDITED)(c)    1997(c)    1996(c)    1995(c)    1994(c)     1993(c)       1992
                                            ---------------   --------   --------   --------   --------    --------   -----------
<S>                                         <C>               <C>        <C>        <C>        <C>         <C>        <C>
CLASS B+
Per Share Operating Performance:
  Net asset value, beginning of period....     $   8.62       $   8.74   $   8.80   $   8.64   $  11.07    $   9.83     $  9.87
                                               --------       --------   --------   --------   --------    --------     -------
Income from investment operations:
  Net investment income...................         0.26           0.46       0.51       0.55       0.59        0.67        0.02
  Net realized and unrealized gain (loss)
    on investments........................         0.07          (0.12)      0.04       0.14      (1.52)       1.34       (0.06)
                                               --------       --------   --------   --------   --------    --------     -------
  Net increase (decrease) resulting from
    investment operations.................         0.33           0.34       0.55       0.69      (0.93)       2.01       (0.04)
                                               --------       --------   --------   --------   --------    --------     -------
Distributions:
  From net investment income..............        (0.23)         (0.28)     (0.51)     (0.53)     (0.59)      (0.67)         --
  From net realized gain on investments...           --             --      (0.10)        --      (0.27)         --          --
  In excess of net investment income......           --          (0.18)        --         --         --          --          --
  In excess of net realized gain on
    investments...........................           --             --         --         --      (0.54)         --          --
  Return of capital.......................           --             --         --         --      (0.10)         --          --
  From sources other than net investment
    income................................           --             --         --         --         --       (0.10)         --
                                               --------       --------   --------   --------   --------    --------     -------
        Total distributions...............        (0.23)         (0.46)     (0.61)     (0.53)     (1.50)      (0.77)         --
                                               --------       --------   --------   --------   --------    --------     -------
Net asset value, end of period............     $   8.72       $   8.62   $   8.74   $   8.80   $   8.64    $  11.07     $  9.83
                                               ========       ========   ========   ========   ========    ========     =======
        Total investment return(d)........         3.85%(a)       4.00%      6.54%      8.22%     (9.39)%      21.1%       (0.4)%(a)
                                               ========       ========   ========   ========   ========    ========     =======
Ratios and supplemental data:
  Net assets, end of period (in 000's)....     $102,299       $127,722   $166,577   $235,481   $262,405    $182,972     $ 2,624
  Ratio of net investment income to
    average net assets....................         6.04%(b)       5.39%      5.87%      6.33%      6.22%        6.5%        8.0%(b)
Ratio of operating expenses to average net
  assets:
  With expense reductions.................         2.15%(b)       1.99%      1.99%      2.00%      1.98%        2.0%        1.9%(b)
  Without expense reductions..............         2.15%(b)       2.16%      2.04%      2.03%       N/A         N/A         N/A
Ratio of interest expense to average net
  assets:.................................         0.32%(b)        N/A        N/A        N/A        N/A         N/A         N/A
Portfolio turnover rate++.................          211%(b)        241%       268%       385%       625%        495%        351%
</TABLE>
    
 
- ---------------
 
   
  +   Commencing October 22, 1992, the Fund began offering Class B shares.
    
 
   
 ++   Portfolio turnover is calculated on the basis of the Fund as a whole
      without distinguishing between the classes of shares issued.
    
 
   
  *   Net of $0.01 per share of Fund operating expenses reimbursed by the
      Sub-advisor.
    
 
   
 (a)  Not annualized.
    
 
   
 (b)  Annualized.
    
 
   
 (c)  These selected per share data were calculated based upon average shares
      outstanding during the period.
    
 
   
 (d)  Total investment return does not include sales charges.
    
 
   
N/A   Not Applicable.
    
 
                                ---------------
 
   
<TABLE>
<CAPTION>
                                                                                 AVERAGE MONTHLY
                                                                AVERAGE             NUMBER OF             AVERAGE
                                          AMOUNT OF DEBT    AMOUNT OF DEBT     REGISTRANT'S SHARES    AMOUNT OF DEBT
                                          OUTSTANDING AT      OUTSTANDING          OUTSTANDING           PER SHARE
YEAR ENDED                                END OF PERIOD    DURING THE PERIOD    DURING THE PERIOD    DURING THE PERIOD
- ----------                                --------------   -----------------   -------------------   -----------------
<S>                                       <C>              <C>                 <C>                   <C>
Six months ended April 30, 1998.........   $21,178,000        $12,376,724          30,907,029             $0.4000
Year ended October 31, 1997.............   $ 4,451,000        $ 1,616,315          38,476,908             $0.0420
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed daily.
    
 
                                        6
<PAGE>   178
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return. Standardized total return
for Class A shares reflects the deduction of the Fund's maximum front-end sales
charge at the time of purchase. Standardized total return for Class B shares
reflects the deduction of the maximum applicable contingent deferred sales
charge on a redemption of shares held for the period.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  Yield is computed in accordance with standardized formulas described in the
Statement of Additional Information and can be expected to fluctuate from time
to time and is not necessarily indicative of future results. Accordingly, yield
information may not provide a basis for comparison with investments which pay a
fixed rate of interest for a stated period of time. Yield reflects investment
income net of expenses over the relevant period attributable to a Fund share,
expressed as an annualized percentage of the maximum offering price per share
for Class A shares and net asset value per share for Class B shares.
 
  Yield is a function of the type and quality of the Fund's investments, the
maturity of the securities held in the Fund's portfolio and the operating
expense ratio of the Fund. A shareholder's investment in the Fund is not insured
or guaranteed. These factors should be carefully considered by the investor
before making an investment in the Fund.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of any Fund. Such practices will
have the effect of increasing the Fund's yield and total return. The performance
of the Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
 
   
- --------------------------------------------------------------------------------
    
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVE. The Fund seeks a high level of current income by
investing primarily in high quality debt securities of the U.S. and foreign
governments, their agencies and instrumentalities. Its secondary objectives are
capital appreciation and protection of principal through active management of
its maturity structure and currency exposure. There can be no assurance that the
Fund will achieve its investment objective.
    
 
   
  INVESTMENT POLICIES. At least 65% of the Fund's total assets normally are
invested in debt obligations issued or guaranteed by the U.S. or foreign
governments (including foreign states, provinces or municipalities) or their
agencies, authorities or instrumentalities including mortgage-backed securities
issued by agencies or instrumentalities of the U.S. Government or by foreign
governments. For purposes of this policy, the Fund considers debt obligations of
supranational entities organized or supported by several national governments,
such as the World Bank and the Asian Development Bank, to be "government
securities."
    
 
   
  The Fund invests primarily in high quality government debt securities. "High
quality" debt securities are those rated in the top two ratings categories of
Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's, a division of
The McGraw-Hill Companies, Inc. ("S&P"), or, if not rated, determined to be of
comparable quality by the Sub-advisor. A description of Moody's and S&P ratings
is included in the Appendix to this Prospectus.
    
 
   
  The Fund currently contemplates that it will invest principally in obligations
of the United States, Canada, Japan, the Western European nations, New Zealand
and Australia, as well as in multinational currency units. Under normal market
conditions, the Fund invests in issues of not less than three different
countries; investments in the securities of any one country, other than the
United States, normally represent no more than 40% of the Fund's total assets.
The Fund will not invest in a foreign currency or in securities denominated in a
foreign currency if such currency is not at the time of investment considered by
the Sub-advisor to be fully exchangeable into U.S. dollars (or a multinational
currency unit) without legal restriction.
    
 
                                        7
<PAGE>   179
 
   
  The Fund may also invest up to 35% of its total assets in: (1) foreign
government securities that are not high quality but are rated at least
"investment grade," (i.e., rated within the four highest ratings categories of
Moody's or S&P or, if not rated, determined by the Sub-advisor to be of
comparable quality); (2) corporate debt obligations of U.S. or foreign issuers
rated at least investment grade by Moody's or S&P, including debt obligations
convertible into equity securities or having attached warrants or rights to
purchase equity securities; (3) privately issued mortgage-backed and
asset-backed securities that are rated at least investment grade by Moody's or
S&P, or if unrated, determined by the Sub-advisor to be of comparable quality;
and (4) common stocks, preferred stocks and warrants to acquire such securities,
provided that the Fund will not invest more than 20% of its total assets in such
securities.
    
 
   
  CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
  ASSET ALLOCATION. The Fund invests in debt obligations allocated among diverse
markets and denominated in various currencies, including U.S. dollars, or in
multinational currency units such as Euros. The Fund is designed for investors
who wish to accept the risks entailed in such investments, which are different
from those associated with a portfolio consisting entirely of securities of U.S.
issuers denominated in U.S. dollars. The Fund may purchase securities that are
issued by the government or a company or financial institution of one country
but denominated in the currency of another country (or a multinational currency
unit).
 
   
  The Sub-advisor allocates the assets of the Fund in securities of issuers in
countries and in currency denominations where the combination of fixed income
market returns, the price appreciation potential of fixed income securities and
currency exchange rate movements will present opportunities primarily for high
current income and secondarily for capital appreciation (and in the case of the
Fund, secondarily for capital appreciation and protection of principal). In so
doing, the Sub-advisor intends to take full advantage of the different yield,
risk and return characteristics that investment in the fixed income markets of
different countries can provide for U.S. investors. Fundamental economic
strength, credit quality and currency and interest rate trends are the principal
determinants of the emphasis given to various country, geographic and industry
sectors within the Fund. Securities held by the Fund may be invested without
limitation as to maturity.
    
 
   
  The Sub-advisor selects securities of particular issuers on the basis of its
views as to the best values then currently available in the marketplace. Such
values are a function of yield, maturity, issue classification and quality
characteristics, coupled with expectations regarding the local and world
economies, movements in the general level and term of interest rates, currency
values, political developments and variations in the supply of funds available
for investment in the world bond market relative to the demands placed upon it.
    
 
   
  The Sub-advisor generally evaluates currencies on the basis of fundamental
economic criteria (e.g., relative inflation, interest rate levels and trends,
growth rate forecasts, balance of payments status and economic policies) as well
as technical and political data. The Sub-advisor may seek to protect the Fund
against such negative currency movements through the use of sophisticated
investment techniques. See "Options, Futures and Forward Currency Transactions."
    
 
   
  According to the Sub-advisor, as of the date of this Prospectus, more than 50%
of the value of all outstanding government debt obligations throughout the world
is represented by obligations denominated in currencies other than the U.S.
dollar. Moreover, from time to time, the debt securities of issuers located
outside the United States have substantially outperformed the debt obligations
of U.S. issuers. Accordingly, the Sub-advisor believes that the Fund's policy of
investing in debt securities throughout the world may enable the achievement of
results superior to those produced by mutual funds with similar objectives to
those of the Fund that invest solely in debt securities of U.S. issuers.
    
 
  The Fund is designed for investors who wish to accept the risks entailed in
such investments, which are different from those associated with a portfolio
consisting entirely of securities of U.S. issuers denominated in U.S. dollars.
 
   
  TEMPORARY DEFENSIVE STRATEGIES. The Sub-advisor may employ a temporary
defensive investment strategy if it determines such a strategy to be warranted
due to market, economic or political conditions. Pursuant to such a defensive
strategy, the Fund temporarily may hold cash (U.S. dollars, foreign currencies
or multinational currency units such as euros) and/or invest up to 100% of its
assets in high quality debt securities or money market instruments of U.S. or
foreign issuers. In addition, for temporary defensive purposes, most or all of
the Fund's investments may be made in the United States and denominated in U.S.
dollars. To the extent the Fund employs a temporary defensive strategy, it will
not be invested so as to achieve directly its investment objectives. In
addition, pending investment of proceeds from new sales of Fund shares or to
meet ordinary daily cash needs, the Fund may hold cash (U.S. dollars, foreign
currencies or multinational currency units) and may invest in high quality
foreign or domestic money market instruments. For a full description of money
market instruments, see "Selection of Debt Investments" in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
    
 
  BRADY BONDS. The Fund may invest in "Brady Bonds," which are debt
restructurings that provide for the exchange of cash and loans for newly issued
bonds. Brady Bonds have been issued by the countries of Albania, Argentina,
Brazil, Bulgaria, Costa Rica, Dominican Republic, Ecuador, Ivory Coast, Jordan,
Mexico, Nigeria, Panama, Peru, Philippines, Poland, Uruguay, Venezuela and
Vietnam and are expected to be issued by other emerging market countries. As of
the date of this Prospectus, the Fund is not aware of the occurrence of any
payment defaults on Brady Bonds. Investors should recognize, however, that Brady
Bonds do not have a long payment history. In addition, Brady Bonds are often
rated below investment grade.
 
                                        8
<PAGE>   180
 
  The Fund may invest in either collateralized or uncollateralized Brady Bonds.
U.S. dollar-denominated, collateralized Brady Bonds, which may be fixed rate par
bonds or floating rate discount bonds, are collateralized in full as to
principal by U.S. Treasury zero coupon bonds having the same maturity as the
bonds. Interest payments on such bonds generally are collateralized by cash or
securities in an amount that, in the case of fixed rate bonds, is equal to at
least one year of rolling interest payments or, in the case of floating rate
bonds, initially is equal to at least one year's rolling interest payments based
on the applicable interest rate at the time of issuance and is adjusted at
regular intervals thereafter.
 
  MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The Fund may invest in
mortgage-backed and asset-backed securities of U.S. and foreign issuers,
including privately issued mortgage-backed and asset-backed securities.
Mortgage-backed securities represent direct or indirect interests in pools of
underlying mortgage loans that are secured by real property. Investors typically
receive payments out of the interest on and principal of the underlying
mortgages. Asset-backed securities are similar to mortgage-backed securities,
except that the underlying assets are other financial assets or financial
receivables, such as motor vehicle installment sales contracts, home equity
loans, leases of various types of real and personal property, and receivables
from credit cards. Any mortgage-backed and asset-backed securities purchased by
the Fund will be subject to the same rating requirements that apply to its other
investments. In addition, privately issued mortgage-backed and asset-backed
securities purchased by the Fund will be subject to the limitation of the Fund
which allows no more than 35% of its total assets to be invested in securities
of non-governmental issuers.
 
  WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities and forward commitments only with the intention
of actually receiving or delivering the securities, as the case may be. No
income accrues on securities that have been purchased pursuant to a forward
commitment or on a when-issued basis prior to delivery of the securities. If the
Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, the Fund will
segregate cash or liquid securities equal to the value of the when-issued or
forward commitment securities with its custodian and will mark to market daily
such assets. There is a risk that the securities may not be delivered and that
the Fund may incur a loss. The Fund may invest up to 5% of its total assets in a
combination of securities purchased on a when-issued basis or with respect to
which it has entered into forward commitment agreements.
 
   
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemption of Fund
shares. The Fund also may borrow up to 5% of its total assets for temporary or
emergency purposes other than to meet redemptions. However, the Fund will not
borrow for investment purposes, nor will the Fund purchase securities while
borrowings in excess of 5% of its total assets are outstanding.
    
 
  The Fund may also enter into reverse repurchase agreements with a bank or
recognized securities dealer. Under a reverse repurchase agreement, the Fund
would sell securities and agree to repurchase them at a particular price at a
future date. At the time the Fund enters into a reverse repurchase agreement, it
will establish and maintain a segregated account with an approved custodian
containing cash or liquid securities having a value not less than the repurchase
price, including accrued interest. Reverse repurchase agreements involve the
risk that the market value of the securities retained in lieu of sale by the
Fund may decline below the price of the securities the Fund has sold but is
obligated to repurchase. In the event the buyer of securities under a reverse
repurchase agreement files for bankruptcy or becomes insolvent, such buyer or
its trustee or receiver may receive an extension of time to determine whether to
enforce the Fund's obligation to repurchase the securities, and the Fund's use
of the proceeds of the reverse repurchase agreement may effectively be
restricted pending such decision.
 
  The Fund also may enter into "dollar rolls," in which the Fund sells fixed
income securities for delivery in the current month and simultaneously contracts
to repurchase substantially similar (same type, coupon and maturity) securities
on a specified future date. During the roll period, the Fund would forego
principal and interest paid on such securities. The Fund would be compensated by
the difference between the current sales price and the forward price for the
future purchase, as well as by the interest earned on the cash proceeds of the
initial sale. See "Investment Objectives and Policies" in the Statement of
Additional Information.
 
  Reverse repurchase agreements and dollar rolls will be treated as borrowings
and will be deducted from the Fund's assets for purposes of calculating
compliance with the Fund's borrowing limitation. See "Investment Limitations" in
the Statement of Additional Information.
 
   
  SECURITIES LENDING. The Fund may lend its respective portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Fund to retain ownership of the securities loaned and, at the same time,
enhances the Fund's total return. At all times a loan is outstanding, the Fund
requires the borrower to maintain with the Fund's custodian, collateral
consisting of cash, U.S. government securities or certain irrevocable letters of
credit equal to at least the value of the borrowed securities, plus any accrued
interest or such other collateral as permitted by the Fund's investment program
and regulatory agencies, and as approved by the Board. The Fund limits its loans
of portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. The risks in lending portfolio
securities, as with other extensions of secured credit, consist of possible
delays in
    
 
                                        9
<PAGE>   181
 
receiving additional collateral or in recovery of the loaned securities and
possible loss of rights in the collateral should the borrower fail financially.
 
  ZERO COUPON SECURITIES. The Fund may invest in certain zero coupon securities
that are "stripped" U.S. Treasury notes and bonds. It may also invest in zero
coupon and other deep discount securities issued by foreign governments and
domestic and foreign corporations, including certain Brady Bonds and other
foreign debt and in payment-in-kind securities. Zero coupon securities pay no
interest to holders prior to maturity, and payment-in-kind securities pay
interest in the form of additional securities. However, a portion of the
original issue discount on zero coupon securities and the "interest" on
payment-in-kind securities will be included in the Fund's income. Accordingly,
for the Fund to continue to qualify for tax treatment as a regulated investment
company and to avoid a certain excise tax (see "Taxes" in the Statement of
Additional Information), it may be required to distribute an amount that is
greater than the total amount of cash it actually receives. These distributions
must be made from the Fund's cash assets or, if necessary, from the proceeds of
sales of portfolio securities. The Fund will not be able to purchase additional
income-producing securities with cash used to make such distributions, and its
current income ultimately may be reduced as a result. Zero coupon and
payment-in-kind securities usually trade at a deep discount from their face or
par value and will be subject to greater fluctuations of market value in
response to changing interest rates than debt obligations of comparable
maturities that make current distributions of interest in cash.
 
  SYNTHETIC SECURITY POSITIONS. The Fund may utilize combinations of futures on
bonds and forward currency contracts to create investment positions that have
substantially the same characteristics as bonds of the same type as those on
which the futures contracts are written. Investment positions of this type are
generally referred to as "synthetic securities."
 
   
  For example, in order to establish a synthetic security position for the Fund
that is comparable to owning a Japanese government bond, the Sub-advisor might
purchase futures contracts on Japanese government bonds in the desired principal
amount and purchase forward currency contracts for Japanese Yen in an amount
equal to the then current purchase price for such bonds in the Japanese cash
market, with each contract having approximately the same delivery date.
    
 
   
  The Sub-advisor might roll over the futures and forward currency contract
positions before taking delivery in order to continue the Fund's investment
position, or the Sub-advisor might close out those positions, thus effectively
selling the synthetic security. Further, the amount of each contract might be
adjusted in response to market conditions and the forward currency contract
might be changed in amount or eliminated in order to hedge against currency
fluctuations.
    
 
   
  The Sub-advisor would create synthetic security positions for the Fund when it
believes that it can obtain a better yield or achieve cost savings in comparison
to purchasing actual bonds or when comparable bonds are not readily available in
the market. Synthetic security positions are subject to the risk that changes in
the value of purchased futures contracts may differ from changes in the value of
the bonds that might otherwise have been purchased in the cash market. Also,
while the Sub-advisor believes that the cost of creating synthetic security
positions generally will be materially lower than the cost of acquiring
comparable bonds in the cash market, the Fund will incur transaction costs in
connection with each purchase of a futures or forward currency contract. The use
of futures contracts and forward currency contracts to create synthetic security
positions also is subject to substantially the same risks as those that exist
when these instruments are used in connection with hedging strategies. See
"Options, Futures and Forward Currency Transactions" below and "Options, Futures
and Currency Strategies" in the Statement of Additional Information.
    
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies, and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the Fund's investment. The Fund may enter into such instruments
up to the full value of its portfolio assets. See "Risk Factors -- Options,
Futures and Currency Transactions" herein and "Options, Futures and Currency
Strategies" in the Statement of Additional Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to the
Fund's portfolio positions. The Fund may also purchase and sell put and call
options on currencies, futures contracts on currencies and options on such
futures contracts to hedge against movements in exchange rates.
 
   
  In addition, the Fund may purchase and sell put and call options on securities
to hedge against the risk of fluctuations in the prices of securities held by
the Fund or that the Sub-advisor intends to include in the Fund's portfolio. The
Fund also may purchase and sell put and call options on indices to hedge against
overall fluctuations in the securities markets generally or in a specific market
sector.
    
 
  Further, the Fund may sell index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general market or market sector decline that could adversely affect the Fund's
portfolio. The Fund also may purchase index futures contracts and purchase call
options or write put options on such contracts to hedge against a general market
or market sector advance and thereby attempt to lessen the cost of future
securities acquisitions. The Fund may use interest rate futures contracts and
options thereon to hedge its portfolio against changes in the general level of
interest rates.
 
   
  INDEXED SECURITIES. The Fund may invest in certain indexed securities, which
are securities whose prices are indexed to the prices of other securities,
securities indices, currencies, precious metals or other commodities, or other
financial indicators. Indexed
    
 
                                       10
<PAGE>   182
 
securities typically, but not always, are debt securities or deposits whose
value at maturity or coupon rate is determined by reference to a specific
instrument or statistic. The performance of indexed securities depends to a
great extent on the performance of the security, currency, or other instrument
to which they are indexed, and may also be influenced by interest rate changes
in the United States and abroad. At the same time, indexed securities are
subject to the credit risks associated with the issuer of the security, and
their values may decline substantially if the issuer's creditworthiness
deteriorates. Indexed securities may be more volatile than the underlying
instruments. New forms of indexed securities continue to be developed. The Fund
may invest in such securities to the extent consistent with its investment
objectives.
 
  OTHER INFORMATION. The Fund's investment objectives may not be changed without
the approval of a majority of the Fund's outstanding voting securities. A
"majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. The
Fund's other investment policies described herein and in the Statement of
Additional Information may be changed by the Trust's Board of Trustees without
shareholder approval.
 
  The Fund is authorized to make short sales of securities, although it has no
current intention of doing so. See "Investment Objectives and Policies -- Short
Sales" in the Statement of Additional Information.
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
 
   
- --------------------------------------------------------------------------------
    
 
   
RISK FACTORS
    
 
  GENERAL. There is no assurance that the Fund will achieve its investment
objectives. The Fund's net asset value will fluctuate, reflecting fluctuations
in the market value of its portfolio positions and its net currency exposure.
The value of fixed income securities held by the Fund generally fluctuates
inversely with interest rate movements. Longer term bonds held by the Fund are
subject to greater interest rate risk.
 
  NON-DIVERSIFIED CLASSIFICATION. The Fund is classified under the Investment
Company Act of 1940 (the "1940 Act") as a "non-diversified" fund. As a result,
the Fund will be able to invest in a fewer number of issuers than if it were
classified under the 1940 Act as a "diversified" fund. To the extent that the
Fund invests in a smaller number of issuers, the value of the Fund's shares may
fluctuate more widely and the Fund may be subject to greater investment and
credit risk with respect to its portfolio.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally are not registered with the SEC, nor
are the issuers thereof usually subject to the SEC's reporting requirements.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available with respect to U.S. securities and
issuers. Foreign companies generally are not subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to U.S. companies. In addition, certain costs
attributable to foreign investing, such as custody charges, are higher than
those attributable to domestic investing. Securities of some foreign companies
are less liquid and their prices may be more volatile than securities of
comparable domestic companies. The Fund's interest and dividends from foreign
issuers may be subject to non-U.S. withholding taxes, thereby reducing its net
investment income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Fund, political or social instability, or diplomatic
developments which could affect the investments of the Fund in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
 
  CURRENCY RISK. Since the Fund normally invests substantially in securities
denominated in currencies other than the U.S. dollar, and because it may hold
foreign currencies, it will be affected favorably or unfavorably by exchange
control regulations or changes in the exchange rates between such currencies and
the U.S. dollar. Changes in currency exchange rates will influence the value of
the Fund's shares, and also may affect the value of dividends and interest
earned by the Fund and gains and losses realized by the Fund. Currencies
generally are evaluated on the basis of fundamental economic criteria (e.g.,
relative inflation and interest rate levels and trends, growth rate forecasts,
balance of payments status and economic policies) as well as technical and
political data. The exchange rates between the U.S. dollar and other currencies
are determined by supply and demand in the currency exchange markets, the
international balance of payments, governmental intervention, speculation and
other economic and political conditions. If the currency in which a security is
denominated appreciates against the U.S. dollar, the dollar value of the
security will increase. Conversely, a decline in the exchange rate of the
currency would adversely affect the value of the security expressed in U.S.
dollars.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participat-
    
 
                                       11
<PAGE>   183
 
   
ing countries which will be known as the "euro." It is anticipated that each
participating country will supplement its existing currency with the euro on
January 1, 1999, and will replace its existing currency with the euro on July 1,
2002. Any other European country which is a member of the EEMU may elect to
participate in the EEMU and may supplement its existing currency with the euro
after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Portfolio.
    
 
  MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The yield characteristics of
mortgage-backed and asset-backed securities differ from those of traditional
bonds. Among the major differences are that interest and principal payments are
made more frequently (usually monthly) and that principal may be prepaid at any
time because the underlying mortgage loans or other assets generally may be
prepaid at any time. Generally, prepayments on fixed-rate mortgage loans will
increase during a period of falling interest rates and decrease during a period
of rising interest rates. Mortgage-backed and asset-backed securities may also
decrease in value as a result of increasing market interest rates and, because
of prepayments, may benefit less than other bonds from declining interest rates.
Reinvestments of prepayments may occur at lower interest rates than the original
investment, thus adversely affecting the yield of the Fund. Actual prepayment
experience may cause the yield of a mortgage-backed security to differ from what
was assumed when the Fund purchased the security. The market for privately
issued mortgage-backed and asset-backed securities is smaller and less liquid
than the market for U.S. government mortgage-backed securities.
 
  Foreign mortgage-backed securities markets are substantially smaller than U.S.
markets, but have been established in several countries, including Germany,
Denmark, Sweden, Canada and Australia, and may be developed elsewhere. Foreign
mortgage-backed securities generally are structured similar to domestic
mortgage-backed securities, and they normally present substantially similar
investment risks as well as the other risks normally associated with foreign
securities.
 
  SOVEREIGN DEBT. The Fund may invest in sovereign debt securities of emerging
market governments, including Brady Bonds. Investments in such securities
involve special risks. The issuer of the debt or the governmental authorities
that control the repayment of the debt may be unable or unwilling to repay
principal or interest when due in accordance with the terms of such debt.
Periods of economic uncertainty may result in the volatility of market prices of
sovereign debt obligations and in turn the Fund's net asset value, to a greater
extent than the volatility inherent in domestic fixed income securities.
 
  A sovereign debtor's willingness or ability to repay principal and pay
interest in a timely manner may be affected by, among other factors, its cash
flow situation, the extent of its foreign reserves, the availability of
sufficient foreign exchange on the date a payment is due, the relative size of
the debt service burden to the economy as a whole, the sovereign debtor's policy
toward principal international lenders and the political constraints to which a
sovereign debtor may be subject. Emerging market governments could default on
their sovereign debt. Such sovereign debtors also may be dependent on expected
disbursements from foreign governments, multilateral agencies and other entities
abroad to reduce principal and interest arrearages on their debt. The commitment
on the part of these governments, agencies and others to make such disbursements
may be conditioned on a sovereign debtor's implementation of economic reforms
and/or economic performance and the timely service of such debtor's obligations.
Failure to implement such reforms, achieve such levels of economic performance
or repay principal or interest when due, may result in the cancellation of such
third parties' commitments to lend funds to the sovereign debtor, which may
further impair such debtor's ability or willingness to timely service its debts.
 
   
  The occurrence of political, social or diplomatic changes in one or more of
the countries issuing sovereign debt could adversely affect the Fund's
investments. Emerging markets are faced with social and political issues and
some of them have experienced high rates of inflation in recent years and have
extensive internal debt. Among other effects, high inflation and internal debt
service requirements may adversely affect the cost and availability of future
domestic sovereign borrowing to finance governmental programs, and may have
other adverse social, political and economic consequences. Political changes or
a deterioration of a country's domestic economy or balance of trade may affect
the willingness of countries to service their sovereign debt. Although the
Sub-advisor intends to manage the Fund in a manner that will minimize the
exposure to such risks, there can be no assurance that adverse political changes
will not cause the Fund to suffer a loss of interest or principal on any of its
holdings.
    
 
  In recent years, some of the emerging market countries in which the Fund
expects to invest have encountered difficulties in servicing their sovereign
debt obligations. Some of these countries have withheld payments of interest
and/or principal of sovereign debt. These difficulties have also led to
agreements to restructure external debt obligations -- in particular, commercial
bank loans, typically by rescheduling principal payments, reducing interest
rates and extending new credits to finance interest payments on existing debt.
In the future, holders of emerging market sovereign debt securities may be
requested to participate in similar rescheduling of such debt. Certain emerging
market countries are among the largest debtors to commercial banks and foreign
governments. Currently, Brazil, Mexico and Argentina are the largest debtors
among developing countries. At times certain emerging market countries have
declared moratoria on the payment of principal and interest on external debt;
such a moratorium is currently in effect in certain emerging market countries.
There is no bankruptcy proceeding by which a creditor may collect in whole or in
part sovereign debt on which an emerging market government has defaulted.
 
                                       12
<PAGE>   184
 
  The ability of emerging market governments to make timely payments on their
sovereign debt securities is likely to be influenced strongly by a country's
balance of trade and its access to trade and other international credits. A
country whose exports are concentrated in a few commodities could be vulnerable
to a decline in the international prices of one or more of such commodities.
Increased protectionism on the part of a country's trading partners could also
adversely affect its exports. Such events could diminish a country's trade
account surplus, if any. To the extent that a country receives payment for its
exports in currencies other than hard currencies, its ability to make hard
currency payments could be affected.
 
  Investors should also be aware that certain sovereign debt instruments in
which the Fund may invest involve great risk. As noted above, sovereign debt
obligations issued by emerging market governments generally are deemed to be the
equivalent in terms of quality to securities rated below investment grade by
Moody's and S&P. Such securities are regarded as predominantly speculative with
respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligations and involve major risk exposure to
adverse conditions. Some of such securities, with respect to which the issuer
currently may not be paying interest or may be in payment default, may be
comparable to securities rated D by S&P or C by Moody's. The Fund may have
difficulty disposing of and valuing certain sovereign debt obligations because
there may be a limited trading market for such securities. Because there is no
liquid secondary market for many of these securities, the Fund anticipates that
such securities could be sold only to a limited number of dealers or
institutional investors.
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions, the
Fund might not enter into any such transactions. Options, futures and foreign
currency transactions involve certain risks, which include: (1) dependence on
the Sub-advisor's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets or in the appropriate
market sector and movements in interest rates and currency markets; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, forward contracts, futures contracts or options thereon and movements
in the price of the currency or security hedged or used for cover; (3) the fact
that skills and techniques needed to trade options, futures contracts and
options thereon or to use forward currency contracts are different from those
needed to select the securities in which the Fund invests; (4) lack of assurance
that a liquid secondary market will exist for any particular option, futures
contract or option thereon at any particular time; (5) the possible loss of
principal under certain conditions; and (6) the possible inability of the Fund
to purchase or sell a portfolio security at a time when it would otherwise be
favorable for it to do so, or the possible need for the Fund to sell a security
at a disadvantageous time, due to the need for the Fund to maintain "cover" or
to set aside securities in connection with hedging transactions.
    
 
  ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets, in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
 
   
- --------------------------------------------------------------------------------
    
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust and persons or companies furnishing services to the Fund,
including the investment management and administrative services agreement with
AIM, the investment sub-advisory and sub-administration agreement between AIM
and the Sub-advisor, the agreements with AIM Distributors regarding distribution
of the Fund's shares, the custody agreement and the transfer agency agreement.
The day-to-day operations of the Fund are delegated to the officers of the
Trust, subject always to the investment objectives and policies of the Fund and
to the general supervision of the Trust's Board. See "Trustees and Executive
Officers" in the Statement of Additional Information for information on the
Trustees of the Trust.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers and administrators include, but
are not limited to, determining the composition of the investment portfolio of
the Fund and placing orders to buy, sell or hold particular securities. In
addition, AIM and the Sub-advisor provide the following administration services
to the Fund: furnishing corporate officers and clerical staff; providing office
space, services and equipment; and supervising all matters relating to the
Fund's operation.
    
 
   
  The Fund pays AIM investment management and administration fees computed daily
and payable monthly, based on the average daily net assets, for such services at
the annualized rate of 0.725% on the first $500 million, 0.70% on the next $1
billion, 0.675% on the next $1 billion, and 0.65% on amounts thereafter. Out of
the aggregate fees payable by the Fund, AIM pays the Sub-advisor sub-advisory
and sub-administration fees equal to 40% of the aggregate fees AIM receives from
the Fund. The investment management and administration fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-advisor, AIM Distributors or other agents. Effective
November 1, 1997, AIM has undertaken to limit the expenses of the Class A and
Class B shares of the Fund (exclusive of brokerage commissions, taxes, interest
and extraordinary expenses) to the maximum annual rate of 1.75% and 2.40% of the
average daily net assets of the Fund's Class A and Class B shares.
    
 
   
  The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the
    
 
                                       13
<PAGE>   185
 
   
Sub-advisor (other than AIM Eastern Europe Fund). Each of these funds, including
the Fund, pays an amount based upon its relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement (the "Advisory Agreement"). AIM was organized in 1976
and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Fund pursuant to an investment sub-advisory and
sub-administration agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of the Sub-advisor,
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included the Sub-advisor and
certain other affiliates. As a result of this transaction, the Sub-advisor is
now an indirect wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices, including investment offices in Atlanta,
Boston, Dallas, Denver, Louisville, Miami, Portland (Oregon), Frankfurt, Hong
Kong, London, Singapore, Sydney, Tokyo and Toronto. In managing the Fund, the
Sub-advisor employs a team approach, taking advantage of its investment
resources around the world.
    
 
  The investment professionals primarily responsible for the portfolio
management of the Fund are as follows:
 
   
<TABLE>
<CAPTION>
                          RESPONSIBILITIES FOR                 BUSINESS EXPERIENCE
      NAME/OFFICE               THE FUND                         PAST FIVE YEARS
      -----------         --------------------                 -------------------
<S>                       <C>                    <C>
Cheng-Hock Lau              Portfolio Manager    Chief Investment Officer for Global Fixed Income
  New York                  since 1996           and Portfolio Manager for the Sub-advisor since
                                                 October 1996. Senior Portfolio Manager for
                                                 Global/International Fixed Income for the
                                                 Sub-advisor from July 1995 to October 1996.
                                                 Employed by Chancellor Capital Management, Inc.
                                                 ("Chancellor Capital"), a predecessor of the
                                                 Sub-Advisor, from 1995 to October 1996. Senior
                                                 Vice President and Senior Portfolio Manager for
                                                 Fiduciary Trust Company International from 1993
                                                 to 1995. Vice President at Bankers Trust Company
                                                 from 1991 to 1993.
David B. Hughes             Portfolio Manager    Head of Global Fixed Income, North America, and
  New York                  since 1998           Portfolio Manager for the Sub-advisor since
                                                 January 1998. Senior Portfolio Manager for
                                                 Global/International Fixed Income for the
                                                 Sub-advisor from July 1995 to December 1997.
                                                 Employed by Chancellor Capital from July 1995 to
                                                 October 1996. Assistant Vice President of
                                                 Fiduciary Trust Company International from 1994
                                                 to 1995. Assistant Treasurer at the Bankers
                                                 Trust Company from 1991 to 1994.
</TABLE>
    
 
   
  In placing orders for the Fund's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions for the Fund may be
executed through affiliates of AIM or the Sub-advisor. High portfolio turnover
(over 100%) involves correspondingly greater brokerage commissions and other
transaction costs that the Fund will bear directly and could result in the
realization of net capital gains which would be taxable when distributed to
shareholders. See "Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement on
behalf of Class A shares of the Fund, and has entered into a Master Distribution
Agreement on behalf of Class B shares of the Fund (individually referred to as a
"Distribution Agreement" or collectively as the "Distribution Agreements") with
AIM Distributors, a registered broker-dealer and a wholly owned subsidiary of
AIM, to act as the distributor of Class A and Class B shares of the Fund.
Certain Trustees and officers of the Trust are affiliated with AIM Distributors.
    
 
                                       14
<PAGE>   186
 
   
  The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors and its predecessors. In the event the Class B shares Distribution
Agreement is terminated, AIM Distributors would continue to receive payments of
asset based sales charges in respect of the outstanding Class B shares
attributable to the distribution efforts of AIM Distributors and its
predecessors; provided, however, that a complete termination of the Class B
shares master distribution plan (as defined in the plan) would terminate all
payments by the Fund of asset based sales charges and service fees to AIM
Distributors. Termination of the Class B shares distribution plan or
Distribution Agreement does not affect the obligation of Class B shareholders to
pay contingent deferred sales charges.
    
 
  DISTRIBUTION PLANS. Class A Plan. The Trust has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
 
  Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.35% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
 
  The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
 
   
  Of the aggregate amount payable under the Class A Plan, payments to dealers
and other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee.
    
 
  Class B Plan. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
 
  Both Plans. Activities that may be financed under the Class A Plan and the
Class B Plan (collectively, the "Plans") include, but are not limited to:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders, overhead, preparation and distribution of
advertising material and sales literature, expense of organizing and conducting
sales seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
 
  Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
 
   
  Under the Plans, certain financial institutions which have entered into
service agreements and which sell shares of the Fund on an agency basis, may
receive payments from the Fund pursuant to the respective Plans. AIM
Distributors does not act as principal, but rather as agent for the Fund in
making such payments. The Fund will obtain a representation from such financial
institutions that they will either be licensed as dealers as required under
applicable state law, or that they will not engage in activities which would
consti-
    
 
                                       15
<PAGE>   187
 
tute acting as a "dealer" as defined under applicable state law. Financial
intermediaries and any other person entitled to receive compensation for selling
Fund shares may receive different compensation for selling shares of one class
over another.
 
  For additional information concerning the operation of the Plans see the
Statement of Additional Information.
 
   
- --------------------------------------------------------------------------------
    
 
   
ORGANIZATION OF THE TRUST
    
 
   
  The Trust was organized as a Delaware business trust on May 7, 1998. On
September 4, 1998, the Trust acquired the assets of and assumed the liabilities
of AIM Investment Funds, Inc., a Maryland corporation. The Fund constitutes one
of the thirteen separate and distinct series portfolios of the Trust. From time
to time, the Trust may establish other funds, each corresponding to a distinct
investment portfolio and a distinct series of the Trust's shares. Shares of each
fund are entitled to one vote per share (with proportional voting for fractional
shares) and are freely transferable. Shareholders have no preemptive rights.
Other than the automatic conversion of Class B shares to Class A shares, there
are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that Class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
   
    
 
                                       16
<PAGE>   188
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
               TO THE AIM FAMILY OF FUNDS--Registered Trademark--
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of the following mutual funds:
   
<TABLE>
            <S>                                           <C>
            AIM ADVISOR FLEX FUND                         AIM GLOBAL INFRASTRUCTURE FUND
            AIM ADVISOR INTERNATIONAL VALUE FUND          AIM GLOBAL RESOURCES FUND
            AIM ADVISOR LARGE CAP VALUE FUND              AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM ADVISOR MULTIFLEX FUND                    AIM GLOBAL TRENDS FUND
            AIM ADVISOR REAL ESTATE FUND                  AIM GLOBAL UTILITIES FUND
            AIM AGGRESSIVE GROWTH FUND                    AIM HIGH INCOME MUNICIPAL FUND
            AIM ASIAN GROWTH FUND                         AIM HIGH YIELD FUND
            AIM BALANCED FUND                             AIM INCOME FUND
            AIM BASIC VALUE FUND                          AIM INTERMEDIATE GOVERNMENT FUND
            AIM BLUE CHIP FUND                            AIM INTERNATIONAL EQUITY FUND
            AIM CAPITAL DEVELOPMENT FUND                  AIM INTERNATIONAL GROWTH FUND
            AIM CHARTER FUND                              AIM JAPAN GROWTH FUND
            AIM CONSTELLATION FUND                        AIM LATIN AMERICAN GROWTH FUND
            AIM DEVELOPING MARKETS FUND                   AIM LIMITED MATURITY TREASURY FUND
            AIM DOLLAR FUND(*)                            AIM MID CAP GROWTH FUND
            AIM EMERGING MARKETS FUND                     AIM MONEY MARKET FUND(*)
            AIM EMERGING MARKET DEBT FUND                 AIM MUNICIPAL BOND FUND
            AIM EUROPEAN DEVELOPMENT FUND                 AIM NEW PACIFIC GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM SELECT GROWTH FUND
            AIM GLOBAL AGGRESSIVE GROWTH FUND             AIM SMALL CAP EQUITY FUND
            AIM GLOBAL CONSUMER PRODUCTS AND              AIM SMALL CAP OPPORTUNITIES FUND
              SERVICES FUND                               AIM STRATEGIC INCOME FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM TAX-EXEMPT CASH FUND(*)
            AIM GLOBAL GROWTH FUND                        AIM TAX-FREE INTERMEDIATE FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM VALUE FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WEINGARTEN FUND
            AIM GLOBAL INCOME FUND                        AIM WORLDWIDE GROWTH FUND
                                                                                                 
</TABLE>
    
 
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
    Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
    asset value, without payment of a sales charge, as described below. Other
    funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
    FUND, are sold with an initial sales charge or subject to a contingent
    deferred sales charge upon redemption, as described below.
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed new Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.
 
   
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment is
$500, except for accounts initially established through an Automatic Investment
Plan, which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an Individual Retirement Arrangement ("IRA") or Roth IRA is $250.
There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such plans is $25 per
fund investment), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM 
    
 
                                       A-1
<PAGE>   189
 
   
Funds account. Notwithstanding the foregoing, the minimum initial investment
applicable to AIM Small Cap Opportunities Fund is $10,000.
    
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Shares of any AIM Funds not named on the cover of this Prospectus, as well as
Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                   OBI:                              Shareholder Name, Shareholder Account Number
                                                     (70 character limit)
</TABLE>
 
   
  HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased directly
through AIM Distributors or through any dealer who has entered into an agreement
with AIM Distributors. The minimum investment for subsequent purchases is $50.
The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. Notwithstanding the foregoing, the minimum subsequent purchases of shares
of AIM Small Cap Opportunities Fund is $1,000. There are no such minimum
investment requirements for investment of dividends and distributions of any of
the AIM Funds into any other existing AIM Funds account.
    
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional shares by electronic funds
transfer, please contact the Client Services Department of AFS for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
   
  Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BASIC
VALUE FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT
FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP EQUITY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND,AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without a
sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over
    
 
                                       A-2
<PAGE>   190
 
another class in the same Multiple Class Fund. Factors an investor should
consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
   
  The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPE
GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL
FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM
GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS
FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN
GROWTH FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
    
 
  The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
 
SALES CHARGES AND DEALER CONCESSIONS
 
   
  GROUP I. Certain AIM Funds are currently sold with a sales charge ranging from
5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM BASIC VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
EQUITY FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
    
 
   
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
      SINGLE TRANSACTION(1)                          PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   25,000                    5.50%          5.82%        4.75%
 $ 25,000 but less than $   50,000                   5.25           5.54         4.50
 $ 50,000 but less than $ 100,000                    4.75           4.99         4.00
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    3.00           3.09         2.50
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
    
 
- ---------------
 
   
(1) AIM Small Cap Opportunities Fund will not accept any single purchase in
    excess of $250,000.
    
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
                                       A-3
<PAGE>   191
   
 GROUP II. Certain AIM Funds are currently sold with a sales charge ranging from
4.75% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND, AIM
BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND
FUND, AIM STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
    
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   50,000                    4.75%          4.99%        4.00%
 $ 50,000 but less than $ 100,000                    4.00           4.17         3.25
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    2.50           2.56         2.00
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
  GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
Less than $ 100,000                                  1.00%          1.01%        0.75%
 $100,000 but less than $ 250,000                    0.75           0.76         0.50
 $250,000 but less than $1,000,000                   0.50           0.50         0.40
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
 
  ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
 
  In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
 
  AIM Distributors may make payments to dealers and institutions who are dealers
of record for purchases of $1 million of more of Class A shares (or shares which
normally involve payment of initial sales charges), which are sold at net asset
value and are subject to
 
                                       A-4
<PAGE>   192
 
a contingent deferred sales charge, for all AIM Funds other than Class A shares
of each of AIM LIMITED MATURITY TREASURY FUND and AIM TAX-FREE INTERMEDIATE FUND
as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next
$1 million of such purchases, plus 0.50% of the next $17 million of such
purchases, plus 0.25% of amounts in excess of $20 million of such purchases. See
"Contingent Deferred Sales Charge Program for Large Purchases." AIM Distributors
may make payments to dealers and institutions who are dealers of record for
purchases of $1 million or more of Class A shares (or shares which normally
involve payment of initial sales charges), and which are sold at net asset value
and are not subject to a contingent deferred sales charge, in an amount up to
0.10% of such purchases of Class A shares of AIM LIMITED MATURITY TREASURY FUND,
and in an amount up to 0.25% of such purchases of Class A shares of AIM TAX-FREE
INTERMEDIATE FUND.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed during the next twelve
months on Saturdays and Sundays and on the days on which New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class Funds
currently offer two or more classes of shares through separate distribution
systems (the "Multiple Distribution System"). Although each class of shares of a
particular Multiple Class Fund represents an interest in the same portfolio of
investments, each class is subject to a different distribution structure and, as
a result, differing expenses. This Multiple Distribution System allows investors
to select the class that is best suited to the investor's needs and objectives.
In considering the options afforded by the Multiple Distribution System,
investors should consider both the applicable initial sales charge or contingent
deferred sales charge, as well as the ongoing expenses borne by each class of
shares and other relevant factors, such as whether his or her investment goals
are long-term or short-term.
 
     CLASS A SHARES generally are sold subject to the initial sales charges
     described above and are subject to the other fees and expenses described
     herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
     needs of an investor who wishes to establish a dollar cost averaging
     program, pursuant to which Class A shares an investor owns may be exchanged
     at net asset value for Class A shares of another Multiple Class Fund or
     shares of another AIM Fund which is not a Multiple Class Fund, subject to
     the terms and conditions described under the caption "Exchange
     Privilege -- Terms and Conditions of Exchanges."
                                       A-5
<PAGE>   193
 
     CLASS B SHARES are sold without an initial sales charge. Thus, the entire
     purchase price of Class B shares is immediately invested in Class B shares.
     Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
     per annum on the average daily net assets of a Multiple Class Fund
     attributable to Class B shares. See the discussion under the caption
     "Management -- Distribution Plans." In addition, Class B shares redeemed
     within six years from the date such shares were purchased are subject to a
     contingent deferred sales charge ranging from 5% for redemptions made
     within the first year to 1% for redemptions made within the sixth year. No
     contingent deferred sales charge will be imposed if Class B shares are
     redeemed after six years from the date such shares were purchased.
     Redemptions of Class B shares and associated charges are further described
     under the caption "How to Redeem Shares -- Multiple Distribution System."
 
     Class B shares will automatically convert into Class A shares of the same
     Multiple Class Fund (together with a pro rata portion of all Class B shares
     acquired through the reinvestment of dividends and other distributions)
     eight years from the end of the calendar month in which the purchase of
     Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
     outstanding on May 29, 1998 and which are continuously held by the
     shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
     FUND seven years from the end of the calendar month in which the purchase
     of such Class B shares was made. If a shareholder exchanges Class B shares
     of AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
     since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
     shares will be subject to the eight year conversion feature applicable to
     Class B shares of all other AIM Funds. Following such conversion of their
     Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
     payments associated with Class B shares. See "Management -- Distribution
     Plans."
 
     AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an
     initial sales charge and are not subject to a contingent deferred sales
     charge; however, they are subject to the other fees and expenses described
     in the prospectus for AIM MONEY MARKET FUND.
 
  TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon Eastern Time or NYSE Close on any
business day of the Fund will be confirmed at the price next determined. Net
asset value is normally determined at 12:00 noon Eastern Time and NYSE Close on
each business day of AIM MONEY MARKET FUND.
 
  SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
REDUCTIONS IN INITIAL SALES CHARGES
 
  Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
 
                                       A-6
<PAGE>   194
 
  The term "purchaser" means:
 
  - an individual and his or her spouse and children, including any trust
    established exclusively for the benefit of any such person; or a pension,
    profit-sharing, or other benefit plan established exclusively for the
    benefit of any such person, such as an IRA, Roth IRA, a single-participant
    money-purchase/profit-sharing plan or an individual participant in a 403(b)
    plan (unless such 403(b) plan qualifies as the purchaser as defined below);
 
  - a 403(b) plan, the employer/sponsor of which is an organization described
    under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
    (the "Code"), provided that:
 
        a. the employer/sponsor must submit contributions for all participating
           employees in a single contribution transmittal (i.e., the funds will
           not accept contributions submitted with respect to individual
           participants);
 
        b. each transmittal must be accompanied by a single check or wire
           transfer; and
 
        c. all new participants must be added to the 403(b) plan by submitting
           an application on behalf of each new participant with the
           contribution transmittal;
 
  - a trustee or fiduciary purchasing for a single trust, estate or single
    fiduciary account (including a pension, profit-sharing or other employee
    benefit trust created pursuant to a plan qualified under Section 401 of the
    Code) and 457 plans, although more than one beneficiary or participant is
    involved;
 
  - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
    Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
    Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
    Distributors in writing that all of its related employee SEP, SARSEP or
    SIMPLE IRA accounts should be linked;
 
  - any other organized group of persons, whether incorporated or not, provided
    the organization has been in existence for at least six months and has some
    purpose other than the purchase at a discount of redeemable securities of a
    registered investment company; or
 
  - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
    Capital Management, Inc. ("AIM Capital").
 
  Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
 
  (1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
 
  Each purchase of fund shares normally subject to an initial sales charge made
during the 13-month period will be made at the public offering price applicable
to a single transaction of the total dollar amount indicated by the LOI, as
described under "Sales Charges and Dealer Concessions." It is the purchaser's
responsibility at the time of purchase to specify the account numbers that
should be considered in determining the appropriate sales charge. The offering
price may be further reduced as described under "Rights of Accumulation" if the
Transfer Agent is advised of all other accounts at the time of the investment.
Shares acquired through reinvestment of dividends and capital gain distributions
will not be applied to the LOI. At any time during the 13-month period after
meeting the original obligation, a purchaser may revise his intended investment
amount upward by submitting a written and signed request. Such a revision will
not change the original expiration date. By signing an LOI, a purchaser is not
making a binding commitment to purchase additional shares, but if purchases made
within the 13-month period do not total the amount specified, the investor will
pay the increased amount of sales charge as described below. Purchases made
within 90 days before signing an LOI will be applied toward completion of the
LOI. The LOI effective date will be the date of the first purchase with the
90-day period. The Transfer Agent will process necessary adjustments upon the
expiration or completion date of the LOI. Purchases made more than 90 days
before signing an LOI will be applied toward completion of the LOI based on the
value of the shares purchased calculated at the public offering price on the
effective date of the LOI.
 
  To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
                                       A-7
<PAGE>   195
 
  If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
 
  Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
 
  (2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
 
  PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at
net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
 
  Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
 
  The following persons may purchase Class A shares of the AIM Funds through AIM
Distributors without payment of an initial sales charge: (a) A I M Management
Group Inc. ("AIM Management") and its affiliated companies; (b) any current or
retired officer, director, trustee or employee, or any member of the immediate
family (including spouse, children, parents and parents of spouse) of any such
person, of AIM Management or its affiliates or of certain mutual funds which are
advised or managed by AIM; or any trust established exclusively for the benefit
of such persons; (c) any employee benefit plan established for employees of AIM
Management or its affiliates; (d) any current or retired officer, director,
trustee or employee, or any member of the immediate family (including spouse,
children, parents and parents of spouse) of any such person, or of CIGNA
Corporation or of any of its affiliated companies, or of First Data Investor
Services Group (formerly The Shareholder Services Group, Inc.); (e) any
investment company sponsored by CIGNA Investments, Inc. or any of its affiliated
companies for the benefit of its directors' deferred compensation plans; (f)
discretionary advised clients of AIM or AIM Capital; (g) registered
representatives and employees of dealers who have entered into agreements with
AIM Distributors (or financial institutions that have arrangements with such
dealers with respect to the sale of shares of the AIM Funds) and any member of
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, provided that purchases at net asset value are permitted by
the policies of such person's employer; (h) certain broker-dealers, investment
advisers or bank trust departments that provide asset allocation, similar
specialized investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services, and that
have entered into an agreement with AIM Distributors with respect to their use
of the AIM Funds in connection with such services; (i) any employee or any
member of the immediate family (including spouse, children, parents and parents
of spouse) of any employee, of Triformis Inc.; (j) shareholders of the AIM/GT
Funds as of April 30, 1987 who since that date continually have owned shares of
one or more of the AIM/GT Funds; and (k) certain former AMA Investment Advisers'
shareholders who became shareholders of the AIM Global Health Care Fund in
October 1989, and who have continuously held shares in the AIM/GT Funds since
that time.
 
   
  In addition, shares of any AIM Fund (except AIM Small Cap Opportunities Fund)
may be purchased at net asset value, without payment of a sales charge, by
pension, profit-sharing or other employee benefit plans created pursuant to a
plan qualified under Section 401 of the Code or plans under Section 457 of the
Code, or employee benefit plans created pursuant to Section 403(b) of the
    
                                       A-8
<PAGE>   196
 
Code and sponsored by nonprofit organizations defined under Section 501(c)(3) of
the Code. Such plans will qualify for purchases at net asset value provided that
(1) the total amount invested in the plan is at least $1,000,000, (2) the
sponsor signs a $1,000,000 LOI, (3) such shares are purchased by an
employer-sponsored plan with at least 100 eligible employees, or (4) all of the
plan's transactions are executed through a single financial institution or
service organization who has entered into an agreement with AIM Distributors
with respect to their use of the AIM Funds in connection with such accounts.
Section 403(b) plans sponsored by public educational institutions will not be
eligible for net asset value purchases based on the aggregate investment made by
the plan or the number of eligible employees. Participants in such plans will be
eligible for reduced sales charges based solely on the aggregate value of their
individual investments in the applicable AIM Fund. PLEASE NOTE THAT TAX-EXEMPT
FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR SUCH PLANS. AIM Distributors may pay
investment dealers or other financial service firms for share purchases of the
Load Funds (as defined under the caption "Exchange Privilege") sold at net asset
value to an employee benefit plan in accordance with this paragraph as follows:
1% of the first $2 million of such purchases, plus 0.80% of the next $1 million
of such purchases, plus 0.50% of the next $17 million of such purchases, plus
0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of
the net asset value of any Class A shares of AIM LIMITED MATURITY TREASURY FUND
sold at net asset value to an employee benefit plan in accordance with this
paragraph.
 
  Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
- --------------------------------------------------------------------------------
 
SPECIAL PLANS
 
  Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
who owns shares which are not subject to a contingent deferred sales charge, can
arrange for monthly, quarterly or annual amounts (but not less than $50) to be
drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that
 
                                       A-9
<PAGE>   197
 
exceed on an annual basis 12% of such account will be subject to a contingent
deferred sales charge on the amounts exceeding 12% of the account value at the
time the shareholder elects to participate in the Systematic Withdrawal Plan.
 
  Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested to shares of the
applicable AIM Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full
and fractional shares at their net asset value in effect at the time of each
such redemption.
 
  Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
 
  The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
 
  AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in the amount specified by
the shareholder (minimum $50 per investment, per account) and on a day or
date(s) specified by the shareholder. The proceeds are invested in shares of the
designated AIM Fund at the applicable offering price determined on the date of
the withdrawal. An Automatic Investment Plan may be discontinued upon 10 days'
prior notice to the Transfer Agent or AIM Distributors.
 
   
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
    
 
  DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
 
  PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination
money-purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans;
SARSEP plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement
accounts"). Information concerning these plans, including the custodian's fees
and the forms necessary to adopt such plans, can be obtained by calling or
writing the AIM Funds or AIM Distributors. Shares of the AIM Funds are also
available for investment through existing 401(k) plans (for both individuals and
employers) adopted under the Code. The plan custodian currently imposes an
annual $10 maintenance fee with respect to each retirement account for which it
serves as the custodian. This fee is generally charged in December. Each AIM
Fund and/or the custodian reserve the right to change this maintenance fee and
to initiate an establishment fee (not to exceed its cost).
 

   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance of $5,000 to
establish and maintain an allocation across a range of AIM Funds. The Program
automatically rebalances holdings of AIM Funds to the established allocation on
a periodic basis. Under the Program, a shareholder may predesig-
    
 
                                      A-10
<PAGE>   198
   
nate, on a percentage basis, how the total value of his or her holdings in a
minimum of two, and a maximum of ten, AIM Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more AIM Funds in the shareholder's Personal Portfolio for shares of
the same class(es) of one or more other AIM Funds in the shareholder's Personal
Portfolio. See "Exchange Privilege." If shares of the AIM Fund(s) in a
shareholder's Personal Portfolio have appreciated during a rebalancing period,
the Program will result in shares of AIM Fund(s) that have appreciated most
during the period being exchanged for shares of AIM Fund(s) that have
appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular AIM Fund would be 2% or less.
In predesignating percentages, shareholders must use whole percentages and
totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an AIM Fund's shares. The
AIM Funds and AIM Distributors reserve the right to modify, suspend, or
terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
    
 
                                      A-11
<PAGE>   199
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, including the Class A shares of the Multiple Class Funds, listed below
and referred to herein as the "Load Funds," are sold at a public offering price
that includes a maximum sales charge of 5.50% or 4.75% of the public offering
price of such shares; Class A shares (or shares which normally involve the
payment of initial sales charges) of certain of the AIM Funds, listed below and
referred to herein as the "Lower Load Funds," are sold at a public offering
price that includes a maximum sales charge of 1.00% of the public offering price
of such shares; and Class A shares or shares of certain other funds, listed
below and referred to herein as the "No Load Funds," are sold at net asset
value, without payment of a sales charge.
 
   
<TABLE>
<S>                                    <C>                                   <C>
                                LOAD FUNDS:                                  LOWER LOAD FUNDS:
   AIM ADVISOR FLEX FUND --            AIM GLOBAL INCOME                     AIM LIMITED MATURITY TREASURY FUND
     CLASS A                           FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR INTERNATIONAL           AIM GLOBAL INFRASTRUCTURE               AIM TAX-FREE INTERMEDIATE FUND
     VALUE FUND -- CLASS A             FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR LARGE CAP               AIM GLOBAL RESOURCES                  NO LOAD FUNDS:
     VALUE FUND -- CLASS A             FUND -- CLASS A
   AIM ADVISOR MULTIFLEX               AIM GLOBAL TELECOMMUNICATIONS         AIM MONEY MARKET FUND
     FUND -- CLASS A                   FUND -- CLASS A                           -- AIM CASH RESERVE SHARES
   AIM ADVISOR REAL ESTATE             AIM GLOBAL TRENDS                       AIM TAX-EXEMPT CASH FUND -- CLASS A
     FUND -- CLASS A                   FUND -- CLASS A                         AIM DOLLAR FUND -- CLASS A
   AIM AGGRESSIVE GROWTH               AIM GLOBAL UTILITIES
     FUND -- CLASS A                   FUND -- CLASS A
   AIM ASIAN GROWTH                    AIM HIGH INCOME MUNICIPAL
     FUND -- CLASS A                   FUND -- CLASS A
   AIM BALANCED FUND -- CLASS A        AIM HIGH YIELD FUND -- CLASS A
   AIM BASIC VALUE                     AIM INCOME FUND -- CLASS A
     FUND -- CLASS A                   AIM INTERMEDIATE GOVERNMENT
   AIM BLUE CHIP FUND -- CLASS A       FUND -- CLASS A
   AIM CAPITAL DEVELOPMENT             AIM INTERNATIONAL EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM CHARTER FUND -- CLASS A         AIM INTERNATIONAL GROWTH
   AIM CONSTELLATION                   FUND -- CLASS A
     FUND -- CLASS A                   AIM JAPAN GROWTH FUND -- CLASS A
   AIM DEVELOPING MARKETS              AIM LATIN AMERICAN GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS                AIM MID CAP EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS DEBT           AIM MONEY MARKET
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPE GROWTH                   AIM MUNICIPAL BOND
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPEAN DEVELOPMENT            AIM NEW PACIFIC GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM GLOBAL AGGRESSIVE GROWTH        AIM SELECT GROWTH FUND -- CLASS A
     FUND -- CLASS A                   AIM SMALL CAP GROWTH
   AIM GLOBAL CONSUMER PRODUCTS        FUND -- CLASS A
     AND SERVICES FUND -- CLASS A      AIM SMALL CAP OPPORTUNITIES
   AIM GLOBAL FINANCIAL SERVICES       FUND -- CLASS A
     FUND -- CLASS A                   AIM STRATEGIC INCOME
   AIM GLOBAL GOVERNMENT INCOME        FUND -- CLASS A
     FUND -- CLASS A                   AIM TAX-EXEMPT BOND FUND
   AIM GLOBAL GROWTH                   OF CONNECTICUT -- CLASS A
     FUND -- CLASS A                   AIM VALUE FUND -- CLASS A
   AIM GLOBAL GROWTH &                 AIM WEINGARTEN FUND -- CLASS A
     INCOME FUND -- CLASS A            AIM WORLDWIDE GROWTH
   AIM GLOBAL HEALTH CARE              FUND -- CLASS A
     FUND -- CLASS A
</TABLE>
    
 
                                      A-12
<PAGE>   200
 
   
  Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE; (iii) Class A shares
may be exchanged for Class A shares; (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A, Class B or Class C shares of AIM MONEY MARKET FUND. Class C shares
of AIM Small Cap Opportunities Fund are currently not available.
    
 
  DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
 
<TABLE>
<CAPTION>
                                                                                                      MULTIPLE CLASS FUNDS:
                                                            LOWER LOAD              NO LOAD       ------------------------------
      FROM:                 TO: LOAD FUNDS                     FUNDS                 FUNDS           CLASS B         CLASS C
      -----                 --------------                  ----------              -------          -------         -------
<S>                <C>                                <C>                      <C>                <C>             <C>
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
 
Lower Load Funds.. Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund or any     Fund or any Lower Load
                   Lower Load Fund.                   Fund; otherwise,
                                                      Offering Price.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
 
  FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS REVISED AS FOLLOWS:
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
Lower Load Funds.. Net Asset Value if shares were     Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
                   acquired upon exchange of any
                   Load Fund. Otherwise, difference
                   in sales charge will apply.
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund.           Fund or any Lower Load
                   Difference in sales charge will    Fund; otherwise,
                   apply if No Load shares were       Offering Price.
                   acquired upon exchange of Lower
                   Load Fund shares.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
  Class C........  Not Applicable                     Not Applicable           Not Applicable     Not Applicable  Net Asset Value
</TABLE>
 
   
  An exchange is permitted only in the following circumstances: (a) if the funds
offer more than one class of shares, the exchange must be between the same class
of shares (e.g., Class A, Class B and Class C shares of a Multiple Class Fund
cannot be exchanged for each other) except that AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may be exchanged for Class A shares of another Multiple Class
Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten busi-
    
 
                                      A-13
<PAGE>   201
 
ness days, and all other shares are held in an account for at least one day,
prior to the exchange; and (h) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the AIM
Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
   
  Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged are
redeemed at their net asset value as determined at NYSE Close on the day that an
exchange request in proper form (described below) is received. Exchange requests
received after NYSE Close will result in the redemption of shares at their net
asset value at NYSE Close on the next business day. See "Terms and Conditions of
Purchase of the AIM Funds -- Timing of Purchase, Exchange and Redemption Orders
(AIM MONEY MARKET FUND only)" for information regarding the timing of exchange
orders for AIM MONEY MARKET FUND. Normally, shares of an AIM Fund to be acquired
by exchange are purchased at their net asset value or applicable offering price,
as the case may be, determined on the date that such request is received, but
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that a fund would be materially disadvantaged
by an immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into a fund paying daily dividends (See "Dividends, Distributions and
Tax Matters -- Dividends and Distributions," below), and the release of the
exchange proceeds is delayed for the foregoing five-day period, such shareholder
will not begin to accrue dividends until the sixth business day after the
exchange. Shares purchased by check may not be exchanged until it is determined
that the check has cleared, which may take up to ten business days from the date
that the check is received. See "Terms and Conditions of Purchase of the AIM
Funds -- Timing of Purchase Orders."
    
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the AIM Funds. AIM Distributors reserves the right to impose conditions on
dealers or investment advisors who make telephone exchanges of shares of the
funds, including the condition that any such dealer or investment advisor enter
into an agreement (which contains additional conditions with respect to
exchanges of shares) with AIM Distributors. To exchange shares by telephone, a
shareholder, dealer or investment advisor who has satisfied the foregoing
conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach
AFS by telephone, he may also request exchanges by telegraph or use overnight
courier services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is received
prior to NYSE Close. The Transfer Agent and AIM Distributors will not be liable
for any loss, expense or cost arising out of any telephone exchange request that
they reasonably believe to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions if they do not follow
reasonable procedures for verification of telephone transactions. Such
reasonable procedures may include recordings of telephone transactions
(maintained for six months), requests for confirmation of the shareholder's
Social Security Number and current address, and mailings of confirmations
promptly after the transaction.
 
  EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
 
                                      A-14
<PAGE>   202
 
  MULTIPLE DISTRIBUTION SYSTEM. Class B Shares. Class B shares purchased under
the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
 
<TABLE>
<CAPTION>
  YEARS                                                     CONTINGENT DEFERRED
  SINCE                                                       SALES CHARGE AS
PURCHASE                                                    % OF DOLLAR AMOUNT
  MADE                                                       SUBJECT TO CHARGE
- --------                                                    -------------------
<S>                                                          <C>
First......................................................         5%
Second.....................................................         4%
Third......................................................         3%
Fourth.....................................................         3%
Fifth......................................................         2%
Sixth......................................................         1%
Seventh and Following......................................        None
</TABLE>
 
  In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
 
  Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
 
  Class C Shares. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
 
  Waivers. Contingent deferred sales charges on Class B and Class C shares will
be waived on redemptions (1) following the death or post-purchase disability, as
defined in Section 72(m)(7) of the Code, of a shareholder or a settlor of a
living trust (provided AIM Distributors is notified of such death or
post-purchase disability at the time of the redemption request and is provided
with satisfactory evidence of such death or post-purchase disability), (2) in
connection with certain distributions from IRAs, custodial accounts maintained
pursuant to Code Section 403(b), deferred compensation plans qualified under
Code Section 457 and plans qualified under Code Section 401 (collectively,
"Retirement Plans"), (3) pursuant to a Systematic Withdrawal Plan, provided that
amounts withdrawn under such plan do not exceed on an annual basis 12% of the
value of the shareholder's investment in Class B or Class C shares at the time
the shareholder elects to participate in the Systematic Withdrawal Plan, (4)
effected pursuant to the right of a Multiple Class Fund to liquidate a
shareholder's account if the aggregate net asset value of shares held in the
account is less than the designated minimum account size described in the
prospectus of such Multiple Class Fund, (5) effected by AIM of its investment in
Class B or Class C shares and (6) of Class C shares where such investor's dealer
of record, due to the nature of the investor's account, notifies AIM
Distributors prior to the time of investment that the dealer waives the payment
otherwise payable to the dealer described in the last paragraph under the
caption "Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM
Funds."
 
  Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
 
  Waiver category (2) above applies only to redemptions resulting from:
 
          (i) required minimum distributions to plan participants or
     beneficiaries who are age 70 1/2 or older, and only with respect to that
     portion of such distributions which does not exceed 12% annually of the
     participant's or beneficiary's account value in a particular AIM Fund;
 
                                      A-15
<PAGE>   203
 
          (ii) in-kind transfers of assets where the participant or beneficiary
     notifies AIM Distributors of such transfer no later than the time such
     transfer occurs;
 
          (iii) tax-free rollovers or transfers of assets to another Retirement
     Plan invested in Class B or Class C shares of one or more Multiple Class
     Funds;
 
          (iv) tax-free returns of excess contributions or returns of excess
     deferral amounts; and
 
          (v) distributions upon the death or disability (as defined in the
     Code) of the participant or beneficiary.
 
   
  CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND or Class A shares
of AIM DOLLAR FUND which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code, or Plans created under Section 403(b) of the
Code and sponsored by nonprofit organizations as defined under Section 501(c)(3)
of the Code, where shares are being redeemed in connection with employee
terminations or withdrawals, and (a) the total amount invested in a Plan is at
least $1,000,000, (b) the sponsor of a Plan signs a letter of intent to invest
at least $1,000,000 in one or more of the AIM Funds, or (c) the shares being
redeemed were purchased by an employer-sponsored Plan with at least 100 eligible
employees; provided, however, that Plans created under Section 403(b) of the
Code which are sponsored by public educational institutions shall qualify under
(a), (b) or (c) above on the basis of the value of each Plan participant's
aggregate investment in the AIM Funds, and not on the aggregate investment made
by the Plan or on the number of eligible employees; (2) redemptions of shares
following the death or post-purchase disability, as defined in Section 72(m)(7)
of the Code, of a shareholder or a settlor of a living trust; (3) redemptions of
shares purchased at net asset value by private foundations or endowment funds
where the initial amount invested was at least $1,000,000; (4) redemptions of
shares purchased by an investor in amounts of $1,000,000 or more where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payments otherwise payable to the dealer as described in the third paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds;" and (5) pursuant to a Systematic Withdrawal Plan, provided
that amounts withdrawn under such plan do not exceed on an annual basis 12% of
the value of the shareholder's investment in Class A shares at the time the
shareholder elects to participate in the Systematic Withdrawal Plan.
    
 
  Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  In addition to these requirements, shareholders who have invested in a fund to
establish as IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares; (a) a statement
as to whether or not the shareholder has attained age 59 1/2, and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.
 
                                      A-16
<PAGE>   204
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
this account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
   
  EXPEDITED REDEMPTIONS (AIM Cash Reserve shares of AIM MONEY MARKET FUND
ONLY). If a redemption order is received prior to 11:30 a.m. Eastern Time, the
redemption will be effective on that day and AIM MONEY MARKET FUND will endeavor
to transmit payment on that same business day. If the redemption order is
received after 11:30 a.m. and prior to NYSE Close, the redemption will be made
at the next determined net asset value and payment will generally be transmitted
on the next business day.
    
 
  REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing the
appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone
 
                                      A-17
<PAGE>   205
 
exchange and telephone redemption authorization forms; (7) changes in previously
designated wiring or electronic funds transfer instructions, and (8) written
redemptions or exchanges of shares previously reported as lost, whether or not
the redemption amount is under $50,000 or the proceeds are to be sent to the
address of record. These requirements may be waived or modified upon notice to
shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
    
 
   
  REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within ninety (90) days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment will not alter the taxes due on any
capital gains, except under the circumstances described below. If there has been
a loss on the redemption and shares of the same fund are repurchased, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in shares of the same fund, or exchanged for
shares of another AIM Fund, at a reduced sales charge within 90 days of the
payment of the sales charge, the shareholder's basis in the fund shares redeemed
may not include the amount of the sales charge paid, thereby reducing the loss
or increasing the gain recognized from the redemption; however, the
shareholder's basis in the fund shares purchased will include the sales charge.
Each AIM Fund may amend, suspend or cease offering the privilege at any time as
to shares redeemed after the date of such amendment, suspension or cessation.
This privilege may only be exercised once each year by a shareholder with
respect to each AIM Fund.
    
 
   
  Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of Class A shares and who subsequently reinvest a portion or
all of the value of the redeemed shares in Class A shares of any AIM Fund within
ninety (90) days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
    
 
                                      A-18

<PAGE>   206
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
   
  The net asset value per share (or share price) of each AIM Fund is determined
as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close with
respect to AIM MONEY MARKET FUND) on each "business day" of a fund as previously
defined. In the event the NYSE closes early (i.e. before 4:00 p.m. Eastern Time)
on a particular day, the net asset value of an AIM Fund's share will be
determined as of the close of the NYSE on such day. For purposes of defining net
asset value per share, futures and options contracts generally will be valued 15
minutes after the close of trading of the NYSE. The net asset value per share is
calculated by subtracting a class' liabilities from its assets and dividing the
result by the total number of class shares outstanding. The determination of net
asset value per share is made in accordance with generally accepted accounting
principles. Among other items, liabilities include accrued expenses and
dividends payable, and total assets include portfolio securities valued at their
market value, as well as income accrued but not yet received. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the fund's officers and
in accordance with methods which are specifically authorized by its governing
Board of Directors or Trustees. Short-term obligations with maturities of 60
days or less, and the securities held by the Money Market Funds, are valued at
amortized cost as reflecting fair value. AIM HIGH INCOME MUNICIPAL FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-FREE
INTERMEDIATE FUND value variable rate securities that have an unconditional
demand or put feature exercisable within seven days or less at par, which
reflects the market value of such securities.
    
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as
set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                DISTRIBUTIONS    DISTRIBUTIONS
                                                                                   OF NET           OF NET
                                                    DIVIDENDS FROM                REALIZED         REALIZED
                                                    NET INVESTMENT               SHORT-TERM        LONG-TERM
                   FUND                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
                   ----                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM ADVISOR FLEX FUND.....................  declared and paid quarterly       quarterly          annually
AIM ADVISOR INTERNATIONAL VALUE FUND......  declared and paid annually        annually           annually
AIM ADVISOR LARGE CAP VALUE FUND..........  declared and paid quarterly       quarterly          annually
AIM ADVISOR MULTIFLEX FUND................  declared and paid quarterly       quarterly          annually
AIM ADVISOR REAL ESTATE FUND..............  declared and paid quarterly       quarterly          annually
AIM AGGRESSIVE GROWTH FUND................  declared and paid annually        annually           annually
AIM ASIAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM BALANCED FUND.........................  declared and paid quarterly       annually           annually
AIM BASIC VALUE FUND......................  declared and paid annually        annually           annually
AIM BLUE CHIP FUND........................  declared and paid annually        annually           annually
AIM CAPITAL DEVELOPMENT FUND..............  declared and paid annually        annually           annually
AIM CHARTER FUND..........................  declared and paid quarterly       annually           annually
AIM CONSTELLATION FUND....................  declared and paid annually        annually           annually
AIM DEVELOPING MARKETS FUND...............  declared and paid annually        annually           annually
AIM DOLLAR FUND...........................  declared daily; paid monthly      annually           annually
AIM EMERGING MARKETS FUND.................  declared and paid annually        annually           annually
AIM EMERGING MARKETS DEBT FUND............  declared and paid monthsly        annually           annually
AIM EUROPE GROWTH FUND....................  declared and paid annually        annually           annually
AIM EUROPEAN DEVELOPMENT FUND.............  declared and paid annually        annually           annually
AIM GLOBAL AGGRESSIVE GROWTH FUND.........  declared and paid annually        annually           annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
  FUND....................................  declared and paid annually        annually           annually
AIM GLOBAL FINANCIAL SERVICES FUND........  declared and paid annually        annually           annually
</TABLE>
    
 
                                      A-19
<PAGE>   207
 
   
<TABLE>
<CAPTION>
                                                                             DISTRIBUTIONS    DISTRIBUTIONS
                                                                                OF NET           OF NET
                                                 DIVIDENDS FROM                REALIZED         REALIZED
                                                 NET INVESTMENT               SHORT-TERM        LONG-TERM
FUND                                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
- ----                                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM GLOBAL GOVERNMENT INCOME FUND.........  declared and paid monthly         annually           annually
AIM GLOBAL GROWTH FUND....................  declared and paid annually        annually           annually
AIM GLOBAL GROWTH & INCOME FUND...........  declared and paid quarterly       annually           annually
AIM GLOBAL HEALTH CARE FUND...............  declared and paid annually        annually           annually
AIM GLOBAL INCOME FUND....................  declared daily; paid monthly      annually           annually
AIM GLOBAL INFRASTRUCTURE FUND............  declared and paid annually        annually           annually
AIM GLOBAL RESOURCES FUND.................  declared and paid annually        annually           annually
AIM GLOBAL TELECOMMUNICATIONS FUND........  declared and paid annually        annually           annually
AIM GLOBAL TRENDS FUND....................  declared and paid annually        annually           annually
AIM GLOBAL UTILITIES FUND.................  declared daily; paid monthly      annually           annually
AIM HIGH INCOME MUNICIPAL FUND............  declared daily; paid monthly      annually           annually
AIM HIGH YIELD FUND.......................  declared daily; paid monthly      annually           annually
AIM INCOME FUND...........................  declared daily; paid monthly      annually           annually
AIM INTERMEDIATE GOVERNMENT FUND..........  declared daily; paid monthly      annually           annually
AIM INTERNATIONAL EQUITY FUND.............  declared and paid annually        annually           annually
AIM INTERNATIONAL GROWTH FUND.............  declared and paid annually        annually           annually
AIM JAPAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM LATIN AMERICAN GROWTH FUND............  declared and paid annually        annually           annually
AIM LIMITED MATURITY TREASURY FUND........  declared daily; paid monthly      annually           annually
AIM MID CAP EQUITY FUND...................  declared and paid annually        annually           annually
AIM MONEY MARKET FUND.....................  declared daily; paid monthly      at least annually  annually
AIM MUNICIPAL BOND FUND...................  declared daily; paid monthly      annually           annually
AIM NEW PACIFIC GROWTH FUND...............  declared and paid annually        annually           annually
AIM SELECT GROWTH FUND....................  declared and paid annually        annually           annually
AIM SMALL CAP GROWTH FUND.................  declared and paid annually        annually           annually
AIM SMALL CAP OPPORTUNITIES FUND..........  declared and paid annually        annually           annually
AIM STRATEGIC INCOME FUND.................  declared and paid monthly         annually           annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT...  declared daily; paid monthly      annually           annually
AIM TAX-EXEMPT CASH FUND..................  declared daily; paid monthly      at least annually  annually
AIM TAX-FREE INTERMEDIATE FUND............  declared daily; paid monthly      annually           annually
AIM VALUE FUND............................  declared and paid annually        annually           annually
AIM WEINGARTEN FUND.......................  declared and paid annually        annually           annually
AIM WORLDWIDE GROWTH FUND.................  declared and paid annually        annually           annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in like shares of another
Multiple Class Fund, to the extent permitted. For funds that do not declare a
dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. For funds that declare
a dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or the
dividend portion thereof, in cash, or to invest such dividends and distributions
in shares of another fund in the AIM Funds; provided that (i) dividends and
distributions attributable to Class B shares may only be reinvested in Class B
shares, (ii) dividends and distributions attributable to Class C shares may only
be reinvested in Class C shares, (iii) dividends and distributions attributable
to Class A shares may not be reinvested in Class B or Class C shares, and (iv)
dividends and distributions attributable to the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may not be reinvested in the Class A shares of that Fund or in
any Class B or Class C shares. Investors who have not previously selected such a
reinvestment option on the account application form may contact the Transfer
Agent at any time to obtain a form to authorize such reinvestments in another
AIM Fund. Such reinvestments into the AIM Funds are not subject to sales
charges, and shares so purchased are automatically credited to the account of
the shareholder.
 
  Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
 
                                      A-20
<PAGE>   208
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares, except for "exempt-interest dividends" paid by
AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND
FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND
(the "Tax-Exempt Funds"), which are exempt from federal income tax. With respect
to tax-exempt shareholders, dividends and distributions from the AIM Funds are
not subject to federal income taxation to the extent permitted under the
applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    
 
   
  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
    
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
                                      A-21
<PAGE>   209
   
 TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
  TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other taxable securities. For
additional information concerning the alternative minimum tax and certain
collateral tax consequences of the receipt of exempt-interest dividends, see the
Statements of Additional Information applicable to the Tax-Exempt Funds.
 
  The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
 
  To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
 
  From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP EQUITY FUND,
AIM SMALL CAP GROWTH FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX INFORMATION.
Certain states exempt from income taxes dividends paid by mutual funds
attributable to interest on U.S. Treasury and certain other U.S. government
obligations. Investors should consult with their own tax advisors concerning the
availability of such exemption.
    
 
  AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH
FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do
so, each of these funds may elect to pass through to its shareholders credits
for foreign taxes paid. If a fund makes such an election, a shareholder who
receives a distribution (1) will be required to include in gross income his
proportionate share of foreign taxes allocable to the distribution and (2) may
claim a credit or deduction for such share for his taxable year in which the
distribution is received, subject to the general limitations imposed on the
allowance of foreign tax credits and deductions. Shareholders should also note
that certain gains or losses attributable to fluctuations in exchange rates or
foreign currency forward contracts may increase or decrease the amount of income
of the fund available for distribution to shareholders and should note that if,
for any fund, such losses exceed other income during a taxable year, the fund
would not be able to pay ordinary income dividends for that year.
 
                                      A-22
<PAGE>   210
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each AIM Fund's transfer agent and dividend
payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-23
<PAGE>   211
 
   
APPENDIX A
- --------------------------------------------------------------------------------
    
 
                          DESCRIPTION OF DEBT RATINGS
 
DESCRIPTION OF BOND RATINGS
 
  Moody's Investors Service, Inc. ("Moody's") rates the debt securities issued
by various entities from "Aaa" to "C." Investment grade ratings are the four
categories shown: Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
 
  ABSENCE OF RATING. Where no rating has been assigned or where a rating has
been suspended or withdrawn, it may be for reasons unrelated to the quality of
the issue.
 
  Should no rating be assigned, the reason may be one of the following:
 
          1. An application for rating was not received or accepted.
 
          2. The issue or issuer belongs to a group of securities or companies
     that are not rated as a matter of policy.
 
          3. There is a lack of essential data pertaining to the issue or
     issuer.
 
          4. The issue was privately placed, in which case the rating is not
     published in Moody's publications.
 
  Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.
 
  Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the Company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the Company ranks in the
lower end of its generic rating category.
 
  Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"),
rates the securities debt of various entities in categories ranging from "AAA"
to "D" according to quality. Investment grade ratings are the four categories
shown:
 
  AAA -- An obligation rated "AAA" has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong. AA -- An obligation rated "AA" differs from the highest rated
obligations only in a small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong. A -- An obligation rated "A" is
somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions than obligations in higher rated categories. BBB -- An
obligation rated "BBB" exhibits adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the
obligation.
 
  PLUS (+) OR MINUS (-). The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
 
  NR. Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
 
DESCRIPTION OF COMMERCIAL PAPER RATINGS
 
  Moody's employs the designation "Prime-1" to indicate commercial paper having
a superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. Issues rated Prime-2
 
                                      A-24
<PAGE>   212
 
have a strong ability for repayment of senior short-term debt obligations. This
normally will be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.
 
  S&P ratings of commercial paper are graded into several categories ranging
from "A1" for the highest quality obligations to "D" for the lowest. Issues in
the "A" category are delineated with numbers 1, 2, and 3 to indicate the
relative degree of safety. A-1 - This highest category indicates that the degree
of safety regarding timely payment is strong. Those issues determined to possess
extremely strong safety characteristics will be denoted with a plus sign (+)
designation. A-2 - Capacity for timely payments on issues with this designation
is satisfactory; however, the relative degree of safety is not as high as for
issues designated "A-1."
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
    
 
                                      A-25
<PAGE>   213
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
 
 
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                              GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
      ACCOUNT TYPE            NUMBER OF:                       ACCOUNT TYPE                  NUMBER OF:
      ------------            --------------------             ------------                  ------------------
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary
      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application
      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors
      Legal Guardian          Ward, Minor or
                              Incompetent
      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
 
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   214
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   215
 
[AIM LOGO APPEARS HERE]        THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
<PAGE>   216
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
   
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
    
 
   
CLASS A AND CLASS B SHARES OF
    
 
   
AIM GLOBAL GROWTH & INCOME FUND
    
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
   
PROSPECTUS
    
   
SEPTEMBER 8, 1998
    
 
   
  This Prospectus contains information about AIM GLOBAL GROWTH & INCOME FUND
(the "Fund"), which is one of several series investment portfolios comprising
AIM Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a non-diversified portfolio which seeks long-term capital
appreciation together with current income. The Fund invests in a global
portfolio of both equity and debt securities, in such relative proportions as
deemed most appropriate by the Fund's investment sub-advisor, INVESCO (NY), Inc.
(the "Sub-advisor"), in view of then-current economic and market conditions.
    
 
   
  This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information dated
September 8, 1998 has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
    
 
  THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
  THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   217
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                            PAGE
                                            ----
<S>                                         <C>
SUMMARY...................................     2
THE FUND..................................     4
  Table of Fees and Expenses..............     4
  Financial Highlights....................     5
  Performance.............................     7
  Investment Program......................     7
  Management..............................    11
  Organization of the Trust...............    13
    
   
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registration Trademark--.........   A-1
  Introduction to The AIM Family of
     Funds................................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                            PAGE
                                            ----
<S>                                         <C>
  How to Purchase Shares..................   A-1
  Terms and Conditions of Purchase of the
     AIM Funds............................   A-2
  Special Plans...........................   A-9
  Exchange Privilege......................  A-12
  How to Redeem Shares....................  A-14
  Determination of Net Asset Value........  A-19
  Dividends, Distributions and Tax
     Matters..............................  A-19
  General Information.....................  A-23
APPLICATION INSTRUCTIONS..................   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
   
  The Fund is a non-diversified series of the Trust.
    
 
  INVESTMENT OBJECTIVE. The Fund seeks long-term capital appreciation together
with current income.
 
  PRINCIPAL INVESTMENTS. The Fund invests primarily in blue-chip equity
securities and high quality government bonds of issuers located in the United
States and throughout the world.
 
   
  INVESTMENT MANAGERS. The Fund is managed by A I M Advisors, Inc. ("AIM") and
is sub-advised and sub-administered by the Sub-advisor. AIM and the Sub-advisor
and their worldwide asset management affiliates provide investment management
and/or administrative services to institutional, corporate and individual
clients around the world. AIM and the Sub-advisor are both indirect wholly owned
subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an
independent investment management group that has a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia. AIM was organized in 1976
and, together with its subsidiaries, currently advises approximately 90
investment company portfolios.
    
 
  PURCHASING SHARES. Investors may select Class A or Class B shares of the Fund
which are offered by this Prospectus at an offering price that reflects
differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to
a separate prospectus, the Fund also offers Advisor Class shares, which
represent interests in the Fund. The Advisor Class has different distribution
arrangements.
 
  CLASS A SHARES -- Shares are offered at net asset value plus any applicable
initial sales charge.
 
  CLASS B SHARES -- Shares are offered at net asset value without an initial
sales charge, and are subject to a maximum contingent deferred sales charge of
5% on certain redemptions made within six years from the date such shares were
purchased. Class B shares automatically convert to Class A shares of the Fund
eight years following the end of the calendar month in which a purchase was
made. Class B shares are subject to higher expenses than Class A shares.
 
  Initial investments in any class of shares must be at least $500 and
additional investments must be at least $50. The minimum initial investment is
modified for investments through tax-qualified retirement plans and accounts
initially established with an Automatic Investment Plan.
 
  The distributor of the Fund's shares is A I M Distributors, Inc. ("AIM
Distributors"), P.O. Box 4739, Houston, TX 77210-4739. See "How to Purchase
Shares" and "Special Plans."
 
  SUITABILITY FOR INVESTORS. An investor in Class A or Class B shares of the
Fund should consider the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the shares are expected to
be held, and other circumstances. Investors should consider whether, during the
anticipated life of their investment in the Fund, the accumulated distribution
fees and any applicable contingent deferred sales charges on Class B shares
prior to conversion would be less than the initial sales charge and accumulated
distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares.
To assist investors in making this determination, the table under the caption
"Table of Fees and Expenses" sets forth examples of the charges applicable to
each class of shares. Class A shares will normally be more beneficial than Class
B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase
of more than $250,000 for Class B shares.
 
                                        2
<PAGE>   218
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds"), Class
A and Class B shares of the Fund may be exchanged for shares of other funds in
The AIM Family of Funds in the manner and subject to the policies and charges
set forth herein. See "Exchange Privilege."
    
 
   
  REDEEMING SHARES. Class A shareholders of the Fund may redeem all or a portion
of their shares at net asset value on any business day, generally without
charge. A contingent deferred sales charge of 1% may apply to certain
redemptions where a purchase of more than $1 million is made at net asset value.
See "How to Redeem Shares -- Contingent Deferred Sales Charge Program for Large
Purchases."
    
 
   
  Class B shareholders of the Fund may redeem all or a portion of their shares
at net asset value on any business day, less a contingent deferred sales charge
for redemptions made within six years from the date such shares were purchased.
Class B shares redeemed after six years from the date such shares were purchased
will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
    
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on a quarterly basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters" and "Special Plans."
    
 
  RISK FACTORS. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its portfolio holdings. The value of debt securities held by
the Fund generally fluctuates inversely with interest rate movements. Certain
investment grade debt securities may possess speculative qualities.
 
  The Fund may invest in foreign securities. Investments in foreign securities
involve risks relating to political and economic developments abroad and the
differences between the regulations to which U.S. and foreign issuers are
subject. Individual foreign economies also may differ favorably or unfavorably
from the U.S. economy. Changes in foreign currency exchange rates will affect
the Fund's net asset value, earnings and gains and losses realized on sales of
securities. Securities of foreign companies may be less liquid and their prices
more volatile than those of securities of comparable U.S. companies.
 
   
  The Fund may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs. See "Investment
Program."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   219
 
                                    THE FUND
- --------------------------------------------------------------------------------
 
   
TABLE OF FEES AND EXPENSES
    
 
  The expenses and maximum transaction costs associated with investing in the
Class A and Class B shares of the Fund are reflected in the following table(1):
 
<TABLE>
<CAPTION>
                                                              CLASS A   CLASS B
                                                              -------   -------
<S>                                                           <C>       <C>
Shareholder Transaction Costs(2):
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................     5.50%     None
  Sales charges on reinvested distributions to
     shareholders...........................................     None      None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........     None      5.00%
  Redemption charges........................................     None      None
  Exchange Fees.............................................     None      None
Annual Fund Operating Expenses(3): (as a % of average net
  assets)
  Investment management and administration fees.............     0.97%     0.97%
  12b-1 distribution and service fees.......................     0.35%     1.00%
  Other expenses (after reimbursements and waivers).........     0.32%     0.32%
                                                              -------   -------
          Total Fund Operating Expenses.....................     1.64%     2.29%
                                                              =======   =======
</TABLE>
 
   
- ---------------
    
 
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Fund. Long-term shareholders
   may pay more than the economic equivalent of the maximum front-end sales
   charges permitted by the National Association of Securities Dealers, Inc.
   rules regarding investment companies.
 
   
(2)Sales charge waivers are available for Class A and Class B shares, and
   reduced sales charge purchase plans are available for Class A shares. The
   maximum 5% contingent deferred sales charge on Class B shares applies to
   redemptions during the first year after purchase; the charge generally
   declines by 1% annually thereafter, reaching zero after six years. See "Terms
   and Conditions of Purchase of the AIM Funds -- Reductions in Initial Sales
   Charges."
    
 
   
(3)Expenses are based on the Fund's fiscal year ended October 31, 1997. "Other
   expenses" include custody, transfer agent, legal, audit and other operating
   expenses. See "Management" herein and the Statement of Additional Information
   for more information. Effective November 1, 1997, AIM has voluntarily agreed
   to limit the Fund's expenses (exclusive of brokerage commissions, taxes,
   interest and extraordinary expenses) to the annual rates of 1.75% and 2.40%
   of the average daily net assets of the Fund's Class A and Class B shares,
   respectively, through May 31, 2000.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                    1 YEAR   3 YEARS   5 YEARS   10 YEARS(3)
                                                    ------   -------   -------   -----------
<S>                                                 <C>      <C>       <C>       <C>
Class A Shares(1).................................   $71      $104      $140        $240
Class B Shares:
  Assuming a complete redemption at end of
     period(2)....................................   $75      $105      $147        $248
  Assuming no redemption..........................   $23      $ 72      $124        $248
</TABLE>
    
 
- ---------------
 
   
(1)Assumes payment of maximum sales charge by the investor.
    
 
   
(2)Assumes deduction of the applicable contingent deferred sales charge.
    
 
   
(3)For Class B shares, this number reflects the conversion to Class A shares
   eight years following the end of the calendar month in which a purchase was
   made.
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT EXPENSES, MAY
BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE ASSUMPTION IN THE EXAMPLE OF
A 5% ANNUAL RETURN ARE REQUIRED BY REGULATION OF THE SEC APPLICABLE TO ALL
MUTUAL FUNDS. THE 5% ANNUAL RETURN IS NOT A PREDICTION OF AND DOES NOT REPRESENT
THE FUND'S PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   220
 
- --------------------------------------------------------------------------------
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The tables below provide condensed financial information concerning income and
capital changes for one Class A and Class B share of the Fund. This information
is supplemented by the financial statements and accompanying notes appearing in
the Statement of Additional Information. The financial statements and notes for
the fiscal year ended October 31, 1997 have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon also
is included in the Statement of Additional Information. The financial statements
and notes for the semi-annual period ended April 30, 1998, are also included in
the Statement of Additional Information.
    
 
   
                        AIM GLOBAL GROWTH & INCOME FUND
    
   
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
    
   
<TABLE>
<CAPTION>
                                      SIX MONTHS
                                        ENDED                                 YEAR ENDED OCTOBER 31,
                                    APRIL 30, 1998   ------------------------------------------------------------------------
                                    (UNAUDITED)(A)   1997(A)      1996       1995       1994     1993(A)     1992      1991
                                    --------------   --------   --------   --------   --------   --------   -------   -------
<S>                                 <C>              <C>        <C>        <C>        <C>        <C>        <C>       <C>
CLASS A+
Per Share Operating Performance:
Net asset value, beginning of
 period...........................     $   8.21      $   7.11   $   6.35   $   6.21   $   6.29   $   5.28   $  5.25   $  4.77
                                       --------      --------   --------   --------   --------   --------   -------   -------
Income from investment operations:
 Net investment income............         0.07          0.21       0.22       0.24       0.22       0.24*     0.21*     0.27*
 Net realized and unrealized gain
   (loss) on investments..........         1.32          1.12       0.82       0.13      (0.03)      1.05      0.10      0.47
                                       --------      --------   --------   --------   --------   --------   -------   -------
   Net increase (decrease) from
     investment operations........         1.39          1.33       1.04       0.37       0.19       1.29      0.31      0.74
                                       --------      --------   --------   --------   --------   --------   -------   -------
Distributions:
 From net investment income.......        (0.07)        (0.21)     (0.24)     (0.22)     (0.21)     (0.24)    (0.14)    (0.26)
 From net realized gain on
   investments....................        (0.15)        (0.02)     (0.04)     (0.01)     (0.06)        --     (0.14)       --
 In excess of net investment
   income.........................        (0.05)           --         --         --         --         --        --        --
 From sources other than net
   investment income..............           --            --         --         --         --      (0.04)       --        --
                                       --------      --------   --------   --------   --------   --------   -------   -------
       Total distributions........        (0.27)        (0.23)     (0.28)     (0.23)     (0.27)     (0.28)    (0.28)    (0.26)
                                       ========      ========   ========   ========   ========   ========   =======   =======
Net asset value, end of period....     $   9.33      $   8.21   $   7.11   $   6.35   $   6.21   $   6.29   $  5.28   $  5.25
                                       ========      ========   ========   ========   ========   ========   =======   =======
Total investment return (d).......        17.41%(b)     19.01%     16.80%      6.27%      3.14%      25.1%      5.9%    15.68%
Ratios and supplemental data:
Net assets, end of period (in
 000's)...........................     $324,300      $292,528   $286,203   $284,069   $317,847   $251,428   $27,754   $71,376
Ratio of net investment income to
 average net assets...............         1.52%(c)      2.74%      3.17%      3.85%      3.30%       3.3%*     4.1%*     5.0%*
Ratio of operating expenses to
 average net assets:
 With expense reduction...........         1.66%(c)      1.50%      1.59%      1.70%      1.67%       1.8%*     1.9%*     1.9%*
 Without expense reduction........         1.66%(c)      1.64%      1.66%      1.74%       N/A        N/A       N/A       N/A
Portfolio turnover rate ++........           63%(c)        50%        39%        83%       117%        24%       53%       46%
Average commission rate per share
 paid on portfolio transactions
 ++...............................     $ 0.0131      $ 0.0151   $ 0.0139        N/A        N/A        N/A       N/A       N/A
 
<CAPTION>
                                     SEPT. 25, 1990
                                      (COMMENCEMENT
                                    OF OPERATIONS) TO
                                      OCT. 31, 1990
                                    -----------------
<S>                                 <C>
CLASS A+
Per Share Operating Performance:
Net asset value, beginning of
 period...........................       $ 4.76
                                         ------
Income from investment operations:
 Net investment income............         0.01*
 Net realized and unrealized gain
   (loss) on investments..........           --
                                         ------
   Net increase (decrease) from
     investment operations........         0.01
                                         ------
Distributions:
 From net investment income.......           --
 From net realized gain on
   investments....................           --
 In excess of net investment
   income.........................           --
 From sources other than net
   investment income..............           --
                                         ------
       Total distributions........           --
                                         ======
Net asset value, end of period....       $ 4.77
                                         ======
Total investment return (d).......          0.2%(b)
Ratios and supplemental data:
Net assets, end of period (in
 000's)...........................       $9,486
Ratio of net investment income to
 average net assets...............          2.9%*(c)
Ratio of operating expenses to
 average net assets:
 With expense reduction...........          0.6%*(c)
 Without expense reduction........          N/A
Portfolio turnover rate ++........         None
Average commission rate per share
 paid on portfolio transactions
 ++...............................          N/A
</TABLE>
    
 
- ---------------
 
   
<TABLE>
<C>  <S>
  +  All capital shares issued and outstanding as of October 21,
     1992 were reclassified as Class A shares.
 ++  Portfolio turnover and average commission rates are
     calculated on the basis of the Fund as a whole without
     distinguishing between the classes of shares issued.
  *  Includes reimbursement by the Sub-advisor of Fund operating
     expenses of $0.005, $0.02, $0.03 and $0.01 for the years
     ended October 31, 1993, 1992, 1991 and for the period from
     September 25, 1990 to October 31, 1990, respectively.
     Without such reimbursements, the expense ratios would have
     been 1.93%, 2.20%, 2.46% and 2.40% and the net investment
     income to average net assets would have been 3.20%, 3.70%,
     4.40% and 1.04% for the years ended October 31, 1993, 1992,
     1991 and for the period from September 25, 1990 to October
     31, 1990, respectively.
(a)  These selected per share data were calculated based upon
     average shares outstanding during the year.
(b)  Not annualized.
(c)  Annualized.
(d)  Total investment return does not include sales charges.
N/A  Not Applicable.
</TABLE>
    
 
                                        5
<PAGE>   221
 
- --------------------------------------------------------------------------------
 
   
<TABLE>
<CAPTION>
                                             SIX MONTHS                                                             OCT. 22,
                                               ENDED                       YEAR ENDED OCTOBER 31,                   1992 TO
                                           APRIL 30, 1998   ----------------------------------------------------    OCT. 31,
                                           (UNAUDITED)(A)   1997(A)      1996       1995       1994     1993(A)     1992(A)
                                           --------------   --------   --------   --------   --------   --------    --------
<S>                                        <C>              <C>        <C>        <C>        <C>        <C>         <C>
CLASS B+
Per Share Operating Performance:
Net asset value, beginning of period.....     $   8.21      $   7.11   $   6.35   $   6.21   $   6.29   $   5.28     $ 5.29
                                              --------      --------   --------   --------   --------   --------     ------
Income from investment operations:
  Net investment income..................         0.04          0.16       0.17       0.20       0.18       0.20*      0.01
  Net realized and unrealized gain (loss)
    on investments.......................         1.31          1.13       0.82       0.13      (0.03)      1.05      (0.02)
                                              --------      --------   --------   --------   --------   --------     ------
    Net increase (decrease) from
      investment operations..............         1.35          1.29       0.99       0.33       0.15       1.25       0.01
                                              --------      --------   --------   --------   --------   --------     ------
Distributions:
  From net investment income.............        (0.04)        (0.17)     (0.20)     (0.18)     (0.17)     (0.20)        --
  From net realized gain on
    investments..........................        (0.15)        (0.02)     (0.03)     (0.01)     (0.06)        --         --
  In excess of net investment income.....        (0.05)           --         --         --         --         --         --
  From sources other than net investment
    income...............................           --            --         --         --         --      (0.04)        --
                                              --------      --------   --------   --------   --------   --------     ------
        Total distributions..............        (0.24)        (0.19)     (0.23)     (0.19)     (0.23)     (0.24)        --
                                              --------      --------   --------   --------   --------   --------     ------
Net asset value, end of period...........     $   9.32      $   8.21   $   7.11   $   6.35   $   6.21   $   6.29     $ 5.28
                                              ========      ========   ========   ========   ========   ========     ======
Total investment return (e)..............        16.97%(b)     18.28%     16.06%      5.57%      2.48%      24.3%      (0.2)%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).....     $517,679      $456,893   $383,966   $356,796   $359,242   $150,768     $  280
Ratio of net investment income to average
  net assets.............................         0.87%(c)      2.09%      2.52%      3.20%      2.65%       2.6%*      N/A(d)
Ratio of operating expenses to average
  net assets:
  With expense reduction.................         2.31%(c)      2.15%      2.24%      2.35%      2.32%       2.5%*      N/A(d)
  Without expense reduction..............         2.31%(c)      2.29%      2.31%      2.39%       N/A        N/A        N/A
Portfolio turnover rate ++...............           63%(c)        50%        39%        83%       117%        24%        53%
Average commission rate per share paid on
  portfolio transactions ++..............     $ 0.0131      $ 0.0151   $ 0.0139        N/A        N/A        N/A        N/A
</TABLE>
    
 
- ---------------
 
   
<TABLE>
<C>  <S>
  +  Commencing October 22, 1992 the Fund began offering Class B
     shares.
 ++  Portfolio turnover and average commission rates are
     calculated on the basis of the Fund as a whole without
     distinguishing between the classes of shares issued.
  *  Includes reimbursement by the Sub-advisor of Fund operating
     expenses of $0.005. Without such reimbursements, the expense
     ratio would have been 1.9%, and the net investment income to
     average net assets would have been 3.2%.
(a)  These selected per share data were calculated based upon
     average shares outstanding during the year.
(b)  Not annualized.
(c)  Annualized.
(d)  Ratios not meaningful due to short period of operation of
     Class B shares.
(e)  Total investment return does not include sales charges.
N/A  Not Applicable.
</TABLE>
    
 
                            ------------------------
 
   
<TABLE>
<CAPTION>
                                                               AVERAGE           AVERAGE MONTHLY
                                                           AMOUNT OF DEBT           NUMBER OF          AVERAGE AMOUNT
                                         AMOUNT OF DEBT      OUTSTANDING       REGISTRANT'S SHARES      OF DEBT PER
                                         OUTSTANDING AT        DURING           OUTSTANDING DURING      SHARE DURING
                                         END OF PERIOD       THE PERIOD             THE PERIOD           THE PERIOD
                                         --------------   -----------------   ----------------------   --------------
<S>                                      <C>              <C>                 <C>                      <C>
Six months ended April 30, 1998........   $31,902,000        $1,715,293             91,959,757            $0.0187
Year ended October 31, 1997............   $   --             $   77,178             92,456,411            $0.0008
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed on a daily
basis.
    
 
                                        6
<PAGE>   222
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return. Standardized total return
for Class A shares reflects the deduction of the Fund's maximum front-end sales
charge at the time of purchase. Standardized total return for Class B shares
reflects the deduction of the maximum applicable contingent deferred sales
charge on a redemption of shares held for the period.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  Yield is computed in accordance with standardized formulas described in the
Statement of Additional Information and can be expected to fluctuate from time
to time and is not necessarily indicative of future results. Accordingly, yield
information may not provide a basis for comparison with investments which pay a
fixed rate of interest for a stated period of time. Yield reflects investment
income net of expenses over the relevant period attributable to a Fund share,
expressed as an annualized percentage of the maximum offering price per share
for Class A shares and net asset value per share for Class B shares.
 
  Yield is a function of the type and quality of the Fund's investments, the
maturity of the securities held in the Fund's portfolio and the operating
expense ratio of the Fund. A shareholder's investment in the Fund is not insured
or guaranteed. These factors should be carefully considered by the investor
before making an investment in the Fund.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's yield and total return. The performance
of the Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
 
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVES. The Fund's investment objective is long-term capital
appreciation together with current income. The Fund seeks its objective by
investing in a global portfolio of both equity and debt securities, allocated
among diverse international markets. There is no assurance that the Fund will
achieve its investment objectives.
    
 
   
  INVESTMENT POLICIES. At least 65% of the Fund's total assets normally will be
invested in a combination of blue-chip equity securities and high quality
government bonds. The Fund considers an equity security to be "blue chip" if:
(i) during the issuer's most recent fiscal year the security offered an above
average dividend yield relative to the latest reported dividend yield on the
Morgan Stanley Capital International World Index; and (ii) the total equity
market capitalization of the issuer is at least $1 billion. Government bonds are
deemed to be high quality if at the time of the Fund's investment they are rated
within one of the two highest ratings categories of Moody's Investors Service,
Inc. ("Moody's") or by Standard & Poor's, a division of The McGraw-Hill
Companies, Inc. ("S&P"), or, if not rated, are deemed to be of equivalent
quality in the judgment of the Sub-advisor.
    
 
   
  Up to 35% of the Fund's total assets may be invested in other equity
securities and investment grade government and corporate debt obligations which
the Sub-advisor believes will assist the Fund in achieving its objective.
"Investment grade" debt securities are those rated within one of the four
highest ratings categories of Moody's or S&P, or, if not rated, deemed to be of
equivalent quality in the judgment of the Sub-advisor.
    
 
  Equity securities that the Fund may purchase include common stocks, preferred
stocks and warrants to acquire such stocks and other equity securities.
Government bonds that the Fund may purchase include debt obligations issued or
guaranteed by the United States or foreign governments (including foreign
states, provinces or municipalities) or their agencies, authorities or
instrumentalities and debt obligations of supranational entities organized or
supported by several national governments, such as the World Bank and the Asian
Development Bank. The debt obligations held by the Fund may include debt
obligations convertible into equity securi-
 
                                        7
<PAGE>   223
 
ties or having attached warrants or rights to purchase equity securities. The
Fund may purchase securities that are issued by the government or a corporation
or financial institution of one nation but denominated in the currency of
another nation (or a multinational currency unit).
 
   
  According to the Sub-advisor, as of the date of this Prospectus, more than 50%
of the total equity market capitalization worldwide is represented by non-U.S.
equity securities, and more than 50% of the value of all outstanding government
debt obligations throughout the world is represented by obligations denominated
in currencies other than the U.S. dollar. Moreover, from time to time the equity
and debt securities of issuers located outside the United States have
substantially outperformed the equity and debt securities of U.S. issuers.
Accordingly, the Sub-advisor believes that the Fund's policy of investing in a
global portfolio of equity and debt securities may enable the achievement of
long-term results superior to those produced by mutual funds with similar
objectives to that of the Fund that invest solely in U.S. equity and debt
securities.
    
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
   
  SELECTION OF INVESTMENTS AND ASSET ALLOCATION. Consistent with the Fund's
investment objective, the Sub-advisor employs a conservative investment style in
managing the Fund's assets. In so doing the Sub-advisor attempts to limit
volatility and risk to capital. The Sub-advisor allocates the Fund's assets
among securities of countries and in currency denominations where opportunities
for meeting the Fund's investment objective are expected to be the most
attractive. The Sub-advisor attempts to identify those countries and industries
where economic and political factors are likely to produce above-average growth
rates and to further identify companies in such countries and industries that
are best positioned and managed to benefit from these factors.
    
 
  The Fund currently contemplates that it will invest principally in securities
of issuers in the United States, Canada, Japan, Western Europe, New Zealand and
Australia. The Fund may invest substantially in securities denominated in one or
more currencies. Under normal conditions, the Fund invests in issuers of not
less than three different countries and issuers of any one country, other than
the United States, will represent no more than 40% of the Fund's total assets.
 
   
  The relative proportions of equity and debt securities held by the Fund at any
one time will vary, depending upon the Sub-advisor's assessment of global
political and economic conditions and the relative strengths and weaknesses of
the world equity and debt markets. To enable the Fund to respond to general
economic changes and market conditions around the world, the Fund is authorized
to invest up to 100% of its total assets in either equity securities or debt
securities.
    
 
   
  In selecting equity securities for investment, the Sub-advisor attempts to
identify and acquire only securities it deems to represent high or improving
investment quality. Securities representing high investment quality generally
will include those of well-known, established and successful issuers that the
Sub-advisor believes will continue to be successful in the future. Securities
representing improving investment quality may include those of an issuer that
has improved its sales or earnings or of an issuer the balance sheet and
financial condition of which is improving. The Sub-advisor seeks to avoid
investing in equity securities that appear overly speculative or risky, even if
they have attractive features or investment potential.
    
 
   
  In evaluating debt securities considered for the Fund, the Sub-advisor
analyzes their yield, maturity, issue classification and quality
characteristics, coupled with expectations regarding local and world economies,
movements in the general level and term of interest rates, currency values,
political developments, and variations in the supply of funds available for
investment in the world bond market relative to the demands placed upon it.
There are no limitations on the maximum or minimum maturities of the debt
securities considered by the Fund or on the average weighted maturity of the
debt portion of the Fund's portfolio. Should the rating of a debt security be
revised while such security is owned by the Fund, the Sub-advisor will evaluate
what action, if any, is appropriate with respect to such security.
    
 
   
  The Sub-advisor generally evaluates currencies on the basis of fundamental
economic criteria (e.g., relative inflation and interest rate levels and trends,
growth rate forecasts, balance of payments status and economic policies) as well
as technical and political data. The Fund may seek to protect itself against
negative currency movements by engaging in hedging techniques through the use of
options, futures and forward currency contracts.
    
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. Under a defensive strategy, the Fund may hold cash (U.S.
dollars, foreign currencies or multinational currency units such as euros)
and/or invest any portion or all of its assets in high quality money market
instruments of U.S. or foreign issuers. In addition, for temporary defensive
purposes, most or all of the Fund's investments may be made in the United States
and denominated in U.S. dollars. To the extent the Fund adopts a temporary
defensive posture, it will not be invested so as to directly achieve its
investment objective. In addition, pending investment of proceeds from new sales
of Fund shares or in order to meet ordinary daily cash needs, the Fund may hold
cash (U.S. dollars, foreign currencies or multinational currency units) and may
invest in foreign or domestic high quality money market instruments. For a full
description of money market instruments, see "Money Market Instruments" in the
"Investment Objectives and Policies" section of the Statement of Additional
Information.
    
 
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemption of Fund
 
                                        8
<PAGE>   224
 
shares. The Fund also may borrow up to 5% of its total assets for temporary or
emergency purposes other than to meet redemptions. The Fund may borrow up to
33 1/3% of its total assets. However, the Fund will not purchase securities
while borrowings in excess of 5% of the Fund's total assets are outstanding. Any
borrowing by the Fund may cause greater fluctuation in the value of its shares
than would be the case if the Fund did not borrow.
 
  A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash, and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's sale of securities together with its
commitment (for which the Fund may receive a fee) to purchase similar, but not
identical, securities at a future date.
 
   
  SECURITIES LENDING. The Fund may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Fund to retain ownership of the securities loaned and, at the same time,
enhances the Fund's total return. The Fund limits its loans of portfolio
securities to an aggregate of 30% of the value of its total assets, measured at
the time any such loan is made. While a loan is outstanding, the borrower must
maintain with the Fund's custodian collateral consisting of cash, U.S.
government securities or certain irrevocable letters of credit equal to at least
100% of the value of the borrowed securities, plus any accrued interest or such
other collateral as permitted by the Fund's investment program and regulatory
agencies, and as approved by the Board. The risks in lending portfolio
securities, as with other extensions of secured credit, consist of possible
delays in receiving additional collateral or in recovery of the securities and
possible loss of rights in the collateral should the borrower fail financially.
    
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to the reporting requirements of the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. In addition, certain costs attributable to
foreign investing, such as custody charges, are higher than those attributable
to domestic investing. Securities of some foreign companies are less liquid and
their prices may be more volatile than securities of comparable domestic
companies. The Fund's net investment income from foreign issuers may be subject
to non-U.S. withholding taxes, thereby reducing the Fund's net investment
income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Fund, political or social instability, or diplomatic or
economic developments which could affect the Fund's investments in those
countries. Moreover, individual foreign economies may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross national
product, rate of inflation, rate of savings and capital reinvestment, resource
self-sufficiency and balance of payments positions. Investments in foreign
government securities involve special risks, including the risk that the
government issuers may be unable or unwilling to repay principal and interest
when due.
 
  The Fund will also be affected favorably or unfavorably by exchange control
regulations or changes in the exchange rates between such currencies and the
U.S. dollar. Changes in currency exchange rates will influence the value of the
Fund's shares, and also may affect the value of dividends and interest earned by
the Fund and gains and losses realized by the Fund.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. To attempt to increase
return, the Fund may write call options on securities. This strategy will be
employed only when, in the opinion of the Sub-advisor, the size of the premium
the Fund receives for writing the option is adequate to compensate the Fund
against the risk that appreciation in the underlying security may not be fully
realized if the option is exercised. The Fund also is authorized to write put
options to attempt to enhance return, although it does not have the current
intention of so doing.
    
 
  The Fund may also use forward currency contracts, futures contracts, options
on securities, options on currencies, options on indices and options on futures
contracts to attempt to hedge against the overall level of investment and
currency risk normally associated with the Fund's investments. These instruments
are often referred to as "derivatives," which may be defined as financial
instruments whose performance is derived, at least in part, from the performance
of another asset (such as a security, currency, or an index of securities). The
Fund may enter into such instruments up to the full value of its portfolio
assets. See "Options, Futures and Currency Strategies" in the Statement of
Additional Information.
 
                                        9
<PAGE>   225
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar, or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to the
Fund's portfolio positions. The Fund also may purchase and sell put and call
options on currencies, futures contracts on currencies and options on such
futures contracts to hedge the Fund's portfolio against movements in exchange
rates.
 
   
  In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-advisor intends to include in the
Fund's portfolio. The Fund also may purchase and sell put and call options on
stock indices to hedge against overall fluctuations in the securities markets or
in a specific market sector.
    
 
  Further, the Fund may sell index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general market or a specific market sector decline that could adversely affect
the Fund's portfolio. The Fund also may purchase index futures contracts and
purchase call options or write put options on such contracts to hedge against a
general market or market sector advance and thereby attempt to lessen the cost
of future securities acquisitions. Similarly, the Fund may use interest rate
futures contracts and options thereon to hedge the debt portion of its portfolio
against changes in the general level of interest rates.
 
   
  Although the Fund is authorized to enter into options, futures and forward
currency transactions, the Fund might not enter into any such transactions.
Options, futures and foreign currency transactions involve certain risks, which
include: (1) dependence on the Sub-advisor's ability to predict movements in the
prices of individual securities, fluctuations in the general securities markets
and movements in interest rates and currency markets; (2) imperfect correlation,
or even no correlation, between movements in the price of forward contracts,
options, futures contracts or options thereon and movements in the price of the
currency or security hedged or used for cover; (3) the fact that the skills and
techniques needed to trade options, futures contracts and options thereon or to
use forward currency contracts are different from those needed to select the
securities in which the Fund invests; (4) the lack of assurance that a liquid
secondary market will exist for any particular option, futures contract or
option thereon at any particular time; (5) the possible loss of principal under
certain conditions; and (6) the possible inability of the Fund to purchase or
sell a portfolio security at a time when it would otherwise be favorable for it
to do so, or the possible need for the Fund to sell a security at a
disadvantageous time, due to the need for the Fund to maintain "cover" or to set
aside securities in connection with hedging transactions.
    
 
  OTHER POLICIES AND RISKS. The Fund's net asset value will fluctuate,
reflecting fluctuations in the market value of its portfolio positions. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure, and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. The value of equity securities held by the Fund will fluctuate
in response to general market and economic developments, as well as developments
affecting the particular issuers of such securities. In addition, the value of
debt securities held by the Fund generally will fluctuate with changes in the
perceived creditworthiness of the issuers of such securities and movements in
interest rates. Investment grade debt securities rated Baa by Moody's are
described by Moody's as having speculative characteristics, and therefore may be
affected by economic conditions and changes in the circumstances of their
issuers to a greater extent than higher rated bonds.
 
  The Fund may invest up to 15% of its net assets in illiquid securities and
other securities for which no readily available market exists. The Fund may also
invest up to 5% of its total assets in a combination of securities purchased on
a when-issued basis or with respect to which it has entered into forward
commitment agreements.
 
  The Fund is classified under the Investment Company Act of 1940, as amended
("1940 Act") as a "non-diversified" fund. As a result, the Fund will be able to
invest in a fewer number of issuers than if it were classified under the 1940
Act as a "diversified" fund. To the extent that the Fund invests in a smaller
number of issuers, the value of the Fund's shares may fluctuate more widely and
the Fund may be subject to greater investment and credit risk with respect to
its portfolio.
 
  OTHER INFORMATION. The Fund's investment objective may not be changed without
the approval of a majority of the Fund's outstanding voting securities. A
"majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this Prospectus
and in the Statement of Additional Information may be changed by the Trust's
Board of Trustees without shareholder approval. The Fund's policies regarding
lending, and the percentage of Fund assets that may be committed to borrowing,
are fundamental policies and may not be changed without shareholder approval. If
a percentage restriction on investment or utilization of assets in an investment
policy or restriction is adhered to at the time an investment is made, a later
change in percentage ownership of a security or kind of securities resulting
from changing market values or a similar type of event will not be considered a
violation of the Fund's investment policies or restrictions.
 
   
  The Fund is authorized to engage in Short Sales, although it currently has no
intention of doing so, and may purchase American Depositary Receipts, American
Depositary Shares, Global Depositary Receipts and European Depositary Receipts.
See "Short Sales"
    
 
                                       10
<PAGE>   226
 
   
and "Depositary Receipts," respectively, in the "Investment Objectives and
Policies" section of the Statement of Additional Information.
    
 
   
- --------------------------------------------------------------------------------
    
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust on the one side and persons or companies furnishing services
to the Fund on the other, including the investment management and administration
agreement with AIM, the investment sub-advisory and sub-administration agreement
between AIM and the Sub-advisor, the agreements with AIM Distributors regarding
distribution of the Fund's shares, the custody agreement and the transfer agency
agreement. The day-to-day operations of the Fund are delegated to the officers
of the Trust, subject always to the investment objective and policies of the
Fund and to the general supervision of the Trust's Board of Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers and administrators include, but
are not limited to, determining the composition of the Fund's portfolio and
placing orders to buy, sell or hold particular securities; furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operation. For these services,
the Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on the average daily net assets, at the annualized rate
of 0.975% on the first $500 million, 0.95% on the next $500 million, 0.925% on
the next $500 million and 0.90% on amounts thereafter. Out of the aggregate fees
payable by the Fund, AIM pays the Sub-advisor sub-advisory and
sub-administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administration fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-advisor, AIM Distributors or other agents. Effective
November 1, 1997, AIM has undertaken to limit the Fund's expenses (exclusive of
brokerage commissions, taxes, interest and extraordinary expenses) to the annual
rate of 1.75% and 2.40% of the average daily net assets of the Fund's Class A
and Class B shares, respectively.
    
 
   
  The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-advisor (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement (the "Advisory Agreement"). AIM was organized in 1976
and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Fund pursuant to an investment sub-advisory and
sub-administration agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of the Sub-advisor,
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included the Sub-advisor and
certain other affiliates. As a result of this transaction, the Sub-advisor is
now an indirect wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Fund, the Sub-advisor employs a team
approach, taking advantage of its investment resources around the world.
    
 
                                       11
<PAGE>   227
 
  The investment professionals primarily responsible for the portfolio
management of the Fund are as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
NAME/OFFICE                    THE FUND                           LAST FIVE YEARS
- -----------              --------------------                   -------------------
<S>                     <C>                      <C>
Paul Griffiths          Portfolio Manager        Head of Global Fixed Income and Portfolio Manager
London                  since 1995               for the Sub- advisor and INVESCO GT Asset
                                                 Management PLC (London) ("GT London") since June
                                                 1997. Portfolio Manager from 1994 to 1997. Global
                                                 Bond Fund Manager for Lazard Investors from 1993
                                                 to 1994. Global Bond Fund Manager for Sanwa
                                                 International PLC from 1991 to 1993.
Michael Lindsell        Portfolio Manager        Head of Investment Strategy for Global Equities
London                  since 1998               and Portfolio Manager for the Sub-advisor and GT
                                                 London since 1996. Chief Investment Officer for
                                                 Japan for INVESCO GT Asset Management Asia Ltd.
                                                 (Hong Kong) ("GT Asia") and for the Sub-advisor
                                                 from 1992 to 1996. Director of Warburg Asset
                                                 Management (Tokyo) prior thereto. GT London and
                                                 GT Asia are affiliates of the Sub-advisor.
John Nadell             Portfolio Manager        Portfolio Manager for the Sub-advisor since July
London                  since 1998               1998 and for INVESCO GT Asset Management Japan
                                                 Ltd. (Tokyo) ("GT Tokyo") since 1996. Joined GT
                                                 Tokyo in 1994 as an Investment Analyst.
                                                 Investment Analyst at Pacific Equity Management
                                                 (Oakland, California) from 1990 to 1994. GT Tokyo
                                                 is also an affiliate of the Sub-advisor.
</TABLE>
    
 
   
  In placing securities orders for the Fund's portfolio transactions, the
Sub-advisor seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-advisor may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions may be executed
through affiliates of AIM or the Sub-advisor.
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement on
behalf of Class A shares of the Fund, and has entered into a Master Distribution
Agreement on behalf of Class B shares of the Fund (individually referred to as a
"Distribution Agreement" or collectively as the "Distribution Agreements.") with
AIM Distributors, a registered broker-dealer and a wholly owned subsidiary of
AIM, to act as the distributor of Class A and Class B shares of the Fund.
Certain Trustees and officers of the Trust are affiliated with AIM Distributors.
    
 
   
  The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors and its predecessor. In the event the Class B shares Distribution
Agreement is terminated, AIM Distributors would continue to receive payments of
asset based sales charges in respect of the outstanding Class B shares
attributable to the distribution efforts of AIM Distributors and its
predecessor; provided, however, that a complete termination of the Class B
shares master distribution plan (as defined in the plan) would terminate all
payments by the Fund of asset based sales charges and service fees to AIM
Distributors. Termination of the Class B shares distribution plan or
Distribution Agreement does not affect the obligation of Class B shareholders to
pay contingent deferred sales charges.
    
 
  DISTRIBUTION PLANS. Class A Plan. The Trust has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
 
  Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.35% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
 
  The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected insti-
 
                                       12
<PAGE>   228
 
tutions are calculated at the annual rate of 0.25% of the average daily net
asset value of those Fund shares that are held in such institution's customers'
accounts which were purchased on or after a prescribed date set forth in the
Plan.
 
   
  Of the aggregate amount payable under the Class A Plan, payments to dealers
and other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee.
    
 
  Class B Plan. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
 
  Both Plans. Activities that may be financed under the Class A Plan and the
Class B Plan (collectively, the "Plans") include, but are not limited to:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders, overhead, preparation and distribution of
advertising material and sales literature, expense of organizing and conducting
sales seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
 
   
  Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding voting securities of the applicable
class.
    
 
   
  Under the Plans, certain financial institutions which have entered into
service agreements and which sell shares of the Fund on an agency basis, may
receive payments from the Fund pursuant to the respective Plans. AIM
Distributors does not act as principal, but rather as agent for the Fund in
making such payments. The Fund will obtain a representation from such financial
institutions that they will either be licensed as dealers as required under
applicable state law, or that they will not engage in activities which would
constitute acting as a "dealer" as defined under applicable state law. Financial
intermediaries and any other person entitled to receive compensation for selling
Fund shares may receive different compensation for selling shares of one class
over another.
    
 
  For additional information concerning the operation of the Plans see the
Statement of Additional Information.
 
   
- --------------------------------------------------------------------------------
    
 
   
ORGANIZATION OF THE TRUST
    
 
   
  The Trust was organized as a Delaware business trust on May 7, 1998. On
September 8, 1998 the Trust acquired the assets of and assumed the liabilities
of AIM Investment Funds, Inc., a Maryland corporation. The Fund constitutes one
of the thirteen separate and distinct series portfolios of the Trust. From time
to time, the Trust may establish other funds, each corresponding to a distinct
investment portfolio and a distinct series of the Trust's shares of beneficial
interest. Shares of each fund are entitled to one vote per share (with
proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that Class. The shares of the Fund and the
Trust's other funds will be voted in the aggregate on other matters, such as the
election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for
 
                                       13
<PAGE>   229
 
any purpose. Furthermore, Trustees shall promptly call a meeting of shareholders
solely for the purpose of removing one or more Trustees when requested in
writing to do so by shareholders holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
    
 
                                       14
<PAGE>   230
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
               TO THE AIM FAMILY OF FUNDS--Registered Trademark--
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of the following mutual funds:
   
<TABLE>
            <S>                                           <C>
            AIM ADVISOR FLEX FUND                         AIM GLOBAL INFRASTRUCTURE FUND
            AIM ADVISOR INTERNATIONAL VALUE FUND          AIM GLOBAL RESOURCES FUND
            AIM ADVISOR LARGE CAP VALUE FUND              AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM ADVISOR MULTIFLEX FUND                    AIM GLOBAL TRENDS FUND
            AIM ADVISOR REAL ESTATE FUND                  AIM GLOBAL UTILITIES FUND
            AIM AGGRESSIVE GROWTH FUND                    AIM HIGH INCOME MUNICIPAL FUND
            AIM ASIAN GROWTH FUND                         AIM HIGH YIELD FUND
            AIM BALANCED FUND                             AIM INCOME FUND
            AIM BASIC VALUE FUND                          AIM INTERMEDIATE GOVERNMENT FUND
            AIM BLUE CHIP FUND                            AIM INTERNATIONAL EQUITY FUND
            AIM CAPITAL DEVELOPMENT FUND                  AIM INTERNATIONAL GROWTH FUND
            AIM CHARTER FUND                              AIM JAPAN GROWTH FUND
            AIM CONSTELLATION FUND                        AIM LATIN AMERICAN GROWTH FUND
            AIM DEVELOPING MARKETS FUND                   AIM LIMITED MATURITY TREASURY FUND
            AIM DOLLAR FUND(*)                            AIM MID CAP GROWTH FUND
            AIM EMERGING MARKETS FUND                     AIM MONEY MARKET FUND(*)
            AIM EMERGING MARKET DEBT FUND                 AIM MUNICIPAL BOND FUND
            AIM EUROPEAN DEVELOPMENT FUND                 AIM NEW PACIFIC GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM SELECT GROWTH FUND
            AIM GLOBAL AGGRESSIVE GROWTH FUND             AIM SMALL CAP EQUITY FUND
            AIM GLOBAL CONSUMER PRODUCTS AND              AIM SMALL CAP OPPORTUNITIES FUND
              SERVICES FUND                               AIM STRATEGIC INCOME FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM TAX-EXEMPT CASH FUND(*)
            AIM GLOBAL GROWTH FUND                        AIM TAX-FREE INTERMEDIATE FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM VALUE FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WEINGARTEN FUND
            AIM GLOBAL INCOME FUND                        AIM WORLDWIDE GROWTH FUND
                                                                                                 
</TABLE>
    
 
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
    Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
    asset value, without payment of a sales charge, as described below. Other
    funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
    FUND, are sold with an initial sales charge or subject to a contingent
    deferred sales charge upon redemption, as described below.
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed new Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.
 
   
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment is
$500, except for accounts initially established through an Automatic Investment
Plan, which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an Individual Retirement Arrangement ("IRA") or Roth IRA is $250.
There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such plans is $25 per
fund investment), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM 
    
 
                                       A-1
<PAGE>   231
 
   
Funds account. Notwithstanding the foregoing, the minimum initial investment
applicable to AIM Small Cap Opportunities Fund is $10,000.
    
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Shares of any AIM Funds not named on the cover of this Prospectus, as well as
Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                   OBI:                              Shareholder Name, Shareholder Account Number
                                                     (70 character limit)
</TABLE>
 
   
  HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased directly
through AIM Distributors or through any dealer who has entered into an agreement
with AIM Distributors. The minimum investment for subsequent purchases is $50.
The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. Notwithstanding the foregoing, the minimum subsequent purchases of shares
of AIM Small Cap Opportunities Fund is $1,000. There are no such minimum
investment requirements for investment of dividends and distributions of any of
the AIM Funds into any other existing AIM Funds account.
    
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional shares by electronic funds
transfer, please contact the Client Services Department of AFS for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
   
  Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BASIC
VALUE FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT
FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP EQUITY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND,AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without a
sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over
    
 
                                       A-2
<PAGE>   232
 
another class in the same Multiple Class Fund. Factors an investor should
consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
   
  The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPE
GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL
FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM
GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS
FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN
GROWTH FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
    
 
  The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
 
SALES CHARGES AND DEALER CONCESSIONS
 
   
  GROUP I. Certain AIM Funds are currently sold with a sales charge ranging from
5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM BASIC VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
EQUITY FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
    
 
   
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
      SINGLE TRANSACTION(1)                          PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   25,000                    5.50%          5.82%        4.75%
 $ 25,000 but less than $   50,000                   5.25           5.54         4.50
 $ 50,000 but less than $ 100,000                    4.75           4.99         4.00
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    3.00           3.09         2.50
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
    
 
- ---------------
 
   
(1) AIM Small Cap Opportunities Fund will not accept any single purchase in
    excess of $250,000.
    
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
                                       A-3
<PAGE>   233
   
 GROUP II. Certain AIM Funds are currently sold with a sales charge ranging from
4.75% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND, AIM
BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND
FUND, AIM STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
    
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   50,000                    4.75%          4.99%        4.00%
 $ 50,000 but less than $ 100,000                    4.00           4.17         3.25
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    2.50           2.56         2.00
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
  GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
Less than $ 100,000                                  1.00%          1.01%        0.75%
 $100,000 but less than $ 250,000                    0.75           0.76         0.50
 $250,000 but less than $1,000,000                   0.50           0.50         0.40
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
 
  ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
 
  In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
 
  AIM Distributors may make payments to dealers and institutions who are dealers
of record for purchases of $1 million of more of Class A shares (or shares which
normally involve payment of initial sales charges), which are sold at net asset
value and are subject to
 
                                       A-4
<PAGE>   234
 
a contingent deferred sales charge, for all AIM Funds other than Class A shares
of each of AIM LIMITED MATURITY TREASURY FUND and AIM TAX-FREE INTERMEDIATE FUND
as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next
$1 million of such purchases, plus 0.50% of the next $17 million of such
purchases, plus 0.25% of amounts in excess of $20 million of such purchases. See
"Contingent Deferred Sales Charge Program for Large Purchases." AIM Distributors
may make payments to dealers and institutions who are dealers of record for
purchases of $1 million or more of Class A shares (or shares which normally
involve payment of initial sales charges), and which are sold at net asset value
and are not subject to a contingent deferred sales charge, in an amount up to
0.10% of such purchases of Class A shares of AIM LIMITED MATURITY TREASURY FUND,
and in an amount up to 0.25% of such purchases of Class A shares of AIM TAX-FREE
INTERMEDIATE FUND.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed during the next twelve
months on Saturdays and Sundays and on the days on which New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class Funds
currently offer two or more classes of shares through separate distribution
systems (the "Multiple Distribution System"). Although each class of shares of a
particular Multiple Class Fund represents an interest in the same portfolio of
investments, each class is subject to a different distribution structure and, as
a result, differing expenses. This Multiple Distribution System allows investors
to select the class that is best suited to the investor's needs and objectives.
In considering the options afforded by the Multiple Distribution System,
investors should consider both the applicable initial sales charge or contingent
deferred sales charge, as well as the ongoing expenses borne by each class of
shares and other relevant factors, such as whether his or her investment goals
are long-term or short-term.
 
     CLASS A SHARES generally are sold subject to the initial sales charges
     described above and are subject to the other fees and expenses described
     herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
     needs of an investor who wishes to establish a dollar cost averaging
     program, pursuant to which Class A shares an investor owns may be exchanged
     at net asset value for Class A shares of another Multiple Class Fund or
     shares of another AIM Fund which is not a Multiple Class Fund, subject to
     the terms and conditions described under the caption "Exchange
     Privilege -- Terms and Conditions of Exchanges."
                                       A-5
<PAGE>   235
 
     CLASS B SHARES are sold without an initial sales charge. Thus, the entire
     purchase price of Class B shares is immediately invested in Class B shares.
     Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
     per annum on the average daily net assets of a Multiple Class Fund
     attributable to Class B shares. See the discussion under the caption
     "Management -- Distribution Plans." In addition, Class B shares redeemed
     within six years from the date such shares were purchased are subject to a
     contingent deferred sales charge ranging from 5% for redemptions made
     within the first year to 1% for redemptions made within the sixth year. No
     contingent deferred sales charge will be imposed if Class B shares are
     redeemed after six years from the date such shares were purchased.
     Redemptions of Class B shares and associated charges are further described
     under the caption "How to Redeem Shares -- Multiple Distribution System."
 
     Class B shares will automatically convert into Class A shares of the same
     Multiple Class Fund (together with a pro rata portion of all Class B shares
     acquired through the reinvestment of dividends and other distributions)
     eight years from the end of the calendar month in which the purchase of
     Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
     outstanding on May 29, 1998 and which are continuously held by the
     shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
     FUND seven years from the end of the calendar month in which the purchase
     of such Class B shares was made. If a shareholder exchanges Class B shares
     of AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
     since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
     shares will be subject to the eight year conversion feature applicable to
     Class B shares of all other AIM Funds. Following such conversion of their
     Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
     payments associated with Class B shares. See "Management -- Distribution
     Plans."
 
     AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an
     initial sales charge and are not subject to a contingent deferred sales
     charge; however, they are subject to the other fees and expenses described
     in the prospectus for AIM MONEY MARKET FUND.
 
  TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon Eastern Time or NYSE Close on any
business day of the Fund will be confirmed at the price next determined. Net
asset value is normally determined at 12:00 noon Eastern Time and NYSE Close on
each business day of AIM MONEY MARKET FUND.
 
  SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
REDUCTIONS IN INITIAL SALES CHARGES
 
  Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
 
                                       A-6
<PAGE>   236
 
  The term "purchaser" means:
 
  - an individual and his or her spouse and children, including any trust
    established exclusively for the benefit of any such person; or a pension,
    profit-sharing, or other benefit plan established exclusively for the
    benefit of any such person, such as an IRA, Roth IRA, a single-participant
    money-purchase/profit-sharing plan or an individual participant in a 403(b)
    plan (unless such 403(b) plan qualifies as the purchaser as defined below);
 
  - a 403(b) plan, the employer/sponsor of which is an organization described
    under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
    (the "Code"), provided that:
 
        a. the employer/sponsor must submit contributions for all participating
           employees in a single contribution transmittal (i.e., the funds will
           not accept contributions submitted with respect to individual
           participants);
 
        b. each transmittal must be accompanied by a single check or wire
           transfer; and
 
        c. all new participants must be added to the 403(b) plan by submitting
           an application on behalf of each new participant with the
           contribution transmittal;
 
  - a trustee or fiduciary purchasing for a single trust, estate or single
    fiduciary account (including a pension, profit-sharing or other employee
    benefit trust created pursuant to a plan qualified under Section 401 of the
    Code) and 457 plans, although more than one beneficiary or participant is
    involved;
 
  - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
    Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
    Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
    Distributors in writing that all of its related employee SEP, SARSEP or
    SIMPLE IRA accounts should be linked;
 
  - any other organized group of persons, whether incorporated or not, provided
    the organization has been in existence for at least six months and has some
    purpose other than the purchase at a discount of redeemable securities of a
    registered investment company; or
 
  - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
    Capital Management, Inc. ("AIM Capital").
 
  Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
 
  (1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
 
  Each purchase of fund shares normally subject to an initial sales charge made
during the 13-month period will be made at the public offering price applicable
to a single transaction of the total dollar amount indicated by the LOI, as
described under "Sales Charges and Dealer Concessions." It is the purchaser's
responsibility at the time of purchase to specify the account numbers that
should be considered in determining the appropriate sales charge. The offering
price may be further reduced as described under "Rights of Accumulation" if the
Transfer Agent is advised of all other accounts at the time of the investment.
Shares acquired through reinvestment of dividends and capital gain distributions
will not be applied to the LOI. At any time during the 13-month period after
meeting the original obligation, a purchaser may revise his intended investment
amount upward by submitting a written and signed request. Such a revision will
not change the original expiration date. By signing an LOI, a purchaser is not
making a binding commitment to purchase additional shares, but if purchases made
within the 13-month period do not total the amount specified, the investor will
pay the increased amount of sales charge as described below. Purchases made
within 90 days before signing an LOI will be applied toward completion of the
LOI. The LOI effective date will be the date of the first purchase with the
90-day period. The Transfer Agent will process necessary adjustments upon the
expiration or completion date of the LOI. Purchases made more than 90 days
before signing an LOI will be applied toward completion of the LOI based on the
value of the shares purchased calculated at the public offering price on the
effective date of the LOI.
 
  To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
                                       A-7
<PAGE>   237
 
  If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
 
  Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
 
  (2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
 
  PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at
net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
 
  Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
 
  The following persons may purchase Class A shares of the AIM Funds through AIM
Distributors without payment of an initial sales charge: (a) A I M Management
Group Inc. ("AIM Management") and its affiliated companies; (b) any current or
retired officer, director, trustee or employee, or any member of the immediate
family (including spouse, children, parents and parents of spouse) of any such
person, of AIM Management or its affiliates or of certain mutual funds which are
advised or managed by AIM; or any trust established exclusively for the benefit
of such persons; (c) any employee benefit plan established for employees of AIM
Management or its affiliates; (d) any current or retired officer, director,
trustee or employee, or any member of the immediate family (including spouse,
children, parents and parents of spouse) of any such person, or of CIGNA
Corporation or of any of its affiliated companies, or of First Data Investor
Services Group (formerly The Shareholder Services Group, Inc.); (e) any
investment company sponsored by CIGNA Investments, Inc. or any of its affiliated
companies for the benefit of its directors' deferred compensation plans; (f)
discretionary advised clients of AIM or AIM Capital; (g) registered
representatives and employees of dealers who have entered into agreements with
AIM Distributors (or financial institutions that have arrangements with such
dealers with respect to the sale of shares of the AIM Funds) and any member of
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, provided that purchases at net asset value are permitted by
the policies of such person's employer; (h) certain broker-dealers, investment
advisers or bank trust departments that provide asset allocation, similar
specialized investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services, and that
have entered into an agreement with AIM Distributors with respect to their use
of the AIM Funds in connection with such services; (i) any employee or any
member of the immediate family (including spouse, children, parents and parents
of spouse) of any employee, of Triformis Inc.; (j) shareholders of the AIM/GT
Funds as of April 30, 1987 who since that date continually have owned shares of
one or more of the AIM/GT Funds; and (k) certain former AMA Investment Advisers'
shareholders who became shareholders of the AIM Global Health Care Fund in
October 1989, and who have continuously held shares in the AIM/GT Funds since
that time.
 
   
  In addition, shares of any AIM Fund (except AIM Small Cap Opportunities Fund)
may be purchased at net asset value, without payment of a sales charge, by
pension, profit-sharing or other employee benefit plans created pursuant to a
plan qualified under Section 401 of the Code or plans under Section 457 of the
Code, or employee benefit plans created pursuant to Section 403(b) of the
    
                                       A-8
<PAGE>   238
 
Code and sponsored by nonprofit organizations defined under Section 501(c)(3) of
the Code. Such plans will qualify for purchases at net asset value provided that
(1) the total amount invested in the plan is at least $1,000,000, (2) the
sponsor signs a $1,000,000 LOI, (3) such shares are purchased by an
employer-sponsored plan with at least 100 eligible employees, or (4) all of the
plan's transactions are executed through a single financial institution or
service organization who has entered into an agreement with AIM Distributors
with respect to their use of the AIM Funds in connection with such accounts.
Section 403(b) plans sponsored by public educational institutions will not be
eligible for net asset value purchases based on the aggregate investment made by
the plan or the number of eligible employees. Participants in such plans will be
eligible for reduced sales charges based solely on the aggregate value of their
individual investments in the applicable AIM Fund. PLEASE NOTE THAT TAX-EXEMPT
FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR SUCH PLANS. AIM Distributors may pay
investment dealers or other financial service firms for share purchases of the
Load Funds (as defined under the caption "Exchange Privilege") sold at net asset
value to an employee benefit plan in accordance with this paragraph as follows:
1% of the first $2 million of such purchases, plus 0.80% of the next $1 million
of such purchases, plus 0.50% of the next $17 million of such purchases, plus
0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of
the net asset value of any Class A shares of AIM LIMITED MATURITY TREASURY FUND
sold at net asset value to an employee benefit plan in accordance with this
paragraph.
 
  Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
- --------------------------------------------------------------------------------
 
SPECIAL PLANS
 
  Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
who owns shares which are not subject to a contingent deferred sales charge, can
arrange for monthly, quarterly or annual amounts (but not less than $50) to be
drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that
 
                                       A-9
<PAGE>   239
 
exceed on an annual basis 12% of such account will be subject to a contingent
deferred sales charge on the amounts exceeding 12% of the account value at the
time the shareholder elects to participate in the Systematic Withdrawal Plan.
 
  Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested to shares of the
applicable AIM Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full
and fractional shares at their net asset value in effect at the time of each
such redemption.
 
  Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
 
  The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
 
  AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in the amount specified by
the shareholder (minimum $50 per investment, per account) and on a day or
date(s) specified by the shareholder. The proceeds are invested in shares of the
designated AIM Fund at the applicable offering price determined on the date of
the withdrawal. An Automatic Investment Plan may be discontinued upon 10 days'
prior notice to the Transfer Agent or AIM Distributors.
 
   
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
    
 
  DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
 
  PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination
money-purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans;
SARSEP plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement
accounts"). Information concerning these plans, including the custodian's fees
and the forms necessary to adopt such plans, can be obtained by calling or
writing the AIM Funds or AIM Distributors. Shares of the AIM Funds are also
available for investment through existing 401(k) plans (for both individuals and
employers) adopted under the Code. The plan custodian currently imposes an
annual $10 maintenance fee with respect to each retirement account for which it
serves as the custodian. This fee is generally charged in December. Each AIM
Fund and/or the custodian reserve the right to change this maintenance fee and
to initiate an establishment fee (not to exceed its cost).
 

   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance of $5,000 to
establish and maintain an allocation across a range of AIM Funds. The Program
automatically rebalances holdings of AIM Funds to the established allocation on
a periodic basis. Under the Program, a shareholder may predesig-
    
 
                                      A-10
<PAGE>   240
   
nate, on a percentage basis, how the total value of his or her holdings in a
minimum of two, and a maximum of ten, AIM Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more AIM Funds in the shareholder's Personal Portfolio for shares of
the same class(es) of one or more other AIM Funds in the shareholder's Personal
Portfolio. See "Exchange Privilege." If shares of the AIM Fund(s) in a
shareholder's Personal Portfolio have appreciated during a rebalancing period,
the Program will result in shares of AIM Fund(s) that have appreciated most
during the period being exchanged for shares of AIM Fund(s) that have
appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular AIM Fund would be 2% or less.
In predesignating percentages, shareholders must use whole percentages and
totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an AIM Fund's shares. The
AIM Funds and AIM Distributors reserve the right to modify, suspend, or
terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
    
 
                                      A-11
<PAGE>   241
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, including the Class A shares of the Multiple Class Funds, listed below
and referred to herein as the "Load Funds," are sold at a public offering price
that includes a maximum sales charge of 5.50% or 4.75% of the public offering
price of such shares; Class A shares (or shares which normally involve the
payment of initial sales charges) of certain of the AIM Funds, listed below and
referred to herein as the "Lower Load Funds," are sold at a public offering
price that includes a maximum sales charge of 1.00% of the public offering price
of such shares; and Class A shares or shares of certain other funds, listed
below and referred to herein as the "No Load Funds," are sold at net asset
value, without payment of a sales charge.
 
   
<TABLE>
<S>                                    <C>                                   <C>
                                LOAD FUNDS:                                  LOWER LOAD FUNDS:
   AIM ADVISOR FLEX FUND --            AIM GLOBAL INCOME                     AIM LIMITED MATURITY TREASURY FUND
     CLASS A                           FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR INTERNATIONAL           AIM GLOBAL INFRASTRUCTURE               AIM TAX-FREE INTERMEDIATE FUND
     VALUE FUND -- CLASS A             FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR LARGE CAP               AIM GLOBAL RESOURCES                  NO LOAD FUNDS:
     VALUE FUND -- CLASS A             FUND -- CLASS A
   AIM ADVISOR MULTIFLEX               AIM GLOBAL TELECOMMUNICATIONS         AIM MONEY MARKET FUND
     FUND -- CLASS A                   FUND -- CLASS A                           -- AIM CASH RESERVE SHARES
   AIM ADVISOR REAL ESTATE             AIM GLOBAL TRENDS                       AIM TAX-EXEMPT CASH FUND -- CLASS A
     FUND -- CLASS A                   FUND -- CLASS A                         AIM DOLLAR FUND -- CLASS A
   AIM AGGRESSIVE GROWTH               AIM GLOBAL UTILITIES
     FUND -- CLASS A                   FUND -- CLASS A
   AIM ASIAN GROWTH                    AIM HIGH INCOME MUNICIPAL
     FUND -- CLASS A                   FUND -- CLASS A
   AIM BALANCED FUND -- CLASS A        AIM HIGH YIELD FUND -- CLASS A
   AIM BASIC VALUE                     AIM INCOME FUND -- CLASS A
     FUND -- CLASS A                   AIM INTERMEDIATE GOVERNMENT
   AIM BLUE CHIP FUND -- CLASS A       FUND -- CLASS A
   AIM CAPITAL DEVELOPMENT             AIM INTERNATIONAL EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM CHARTER FUND -- CLASS A         AIM INTERNATIONAL GROWTH
   AIM CONSTELLATION                   FUND -- CLASS A
     FUND -- CLASS A                   AIM JAPAN GROWTH FUND -- CLASS A
   AIM DEVELOPING MARKETS              AIM LATIN AMERICAN GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS                AIM MID CAP EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS DEBT           AIM MONEY MARKET
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPE GROWTH                   AIM MUNICIPAL BOND
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPEAN DEVELOPMENT            AIM NEW PACIFIC GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM GLOBAL AGGRESSIVE GROWTH        AIM SELECT GROWTH FUND -- CLASS A
     FUND -- CLASS A                   AIM SMALL CAP GROWTH
   AIM GLOBAL CONSUMER PRODUCTS        FUND -- CLASS A
     AND SERVICES FUND -- CLASS A      AIM SMALL CAP OPPORTUNITIES
   AIM GLOBAL FINANCIAL SERVICES       FUND -- CLASS A
     FUND -- CLASS A                   AIM STRATEGIC INCOME
   AIM GLOBAL GOVERNMENT INCOME        FUND -- CLASS A
     FUND -- CLASS A                   AIM TAX-EXEMPT BOND FUND
   AIM GLOBAL GROWTH                   OF CONNECTICUT -- CLASS A
     FUND -- CLASS A                   AIM VALUE FUND -- CLASS A
   AIM GLOBAL GROWTH &                 AIM WEINGARTEN FUND -- CLASS A
     INCOME FUND -- CLASS A            AIM WORLDWIDE GROWTH
   AIM GLOBAL HEALTH CARE              FUND -- CLASS A
     FUND -- CLASS A
</TABLE>
    
 
                                      A-12
<PAGE>   242
 
   
  Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE; (iii) Class A shares
may be exchanged for Class A shares; (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A, Class B or Class C shares of AIM MONEY MARKET FUND. Class C shares
of AIM Small Cap Opportunities Fund are currently not available.
    
 
  DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
 
<TABLE>
<CAPTION>
                                                                                                      MULTIPLE CLASS FUNDS:
                                                            LOWER LOAD              NO LOAD       ------------------------------
      FROM:                 TO: LOAD FUNDS                     FUNDS                 FUNDS           CLASS B         CLASS C
      -----                 --------------                  ----------              -------          -------         -------
<S>                <C>                                <C>                      <C>                <C>             <C>
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
 
Lower Load Funds.. Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund or any     Fund or any Lower Load
                   Lower Load Fund.                   Fund; otherwise,
                                                      Offering Price.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
 
  FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS REVISED AS FOLLOWS:
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
Lower Load Funds.. Net Asset Value if shares were     Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
                   acquired upon exchange of any
                   Load Fund. Otherwise, difference
                   in sales charge will apply.
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund.           Fund or any Lower Load
                   Difference in sales charge will    Fund; otherwise,
                   apply if No Load shares were       Offering Price.
                   acquired upon exchange of Lower
                   Load Fund shares.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
  Class C........  Not Applicable                     Not Applicable           Not Applicable     Not Applicable  Net Asset Value
</TABLE>
 
   
  An exchange is permitted only in the following circumstances: (a) if the funds
offer more than one class of shares, the exchange must be between the same class
of shares (e.g., Class A, Class B and Class C shares of a Multiple Class Fund
cannot be exchanged for each other) except that AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may be exchanged for Class A shares of another Multiple Class
Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten busi-
    
 
                                      A-13
<PAGE>   243
 
ness days, and all other shares are held in an account for at least one day,
prior to the exchange; and (h) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the AIM
Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
   
  Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged are
redeemed at their net asset value as determined at NYSE Close on the day that an
exchange request in proper form (described below) is received. Exchange requests
received after NYSE Close will result in the redemption of shares at their net
asset value at NYSE Close on the next business day. See "Terms and Conditions of
Purchase of the AIM Funds -- Timing of Purchase, Exchange and Redemption Orders
(AIM MONEY MARKET FUND only)" for information regarding the timing of exchange
orders for AIM MONEY MARKET FUND. Normally, shares of an AIM Fund to be acquired
by exchange are purchased at their net asset value or applicable offering price,
as the case may be, determined on the date that such request is received, but
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that a fund would be materially disadvantaged
by an immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into a fund paying daily dividends (See "Dividends, Distributions and
Tax Matters -- Dividends and Distributions," below), and the release of the
exchange proceeds is delayed for the foregoing five-day period, such shareholder
will not begin to accrue dividends until the sixth business day after the
exchange. Shares purchased by check may not be exchanged until it is determined
that the check has cleared, which may take up to ten business days from the date
that the check is received. See "Terms and Conditions of Purchase of the AIM
Funds -- Timing of Purchase Orders."
    
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the AIM Funds. AIM Distributors reserves the right to impose conditions on
dealers or investment advisors who make telephone exchanges of shares of the
funds, including the condition that any such dealer or investment advisor enter
into an agreement (which contains additional conditions with respect to
exchanges of shares) with AIM Distributors. To exchange shares by telephone, a
shareholder, dealer or investment advisor who has satisfied the foregoing
conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach
AFS by telephone, he may also request exchanges by telegraph or use overnight
courier services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is received
prior to NYSE Close. The Transfer Agent and AIM Distributors will not be liable
for any loss, expense or cost arising out of any telephone exchange request that
they reasonably believe to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions if they do not follow
reasonable procedures for verification of telephone transactions. Such
reasonable procedures may include recordings of telephone transactions
(maintained for six months), requests for confirmation of the shareholder's
Social Security Number and current address, and mailings of confirmations
promptly after the transaction.
 
  EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
 
                                      A-14
<PAGE>   244
 
  MULTIPLE DISTRIBUTION SYSTEM. Class B Shares. Class B shares purchased under
the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
 
<TABLE>
<CAPTION>
  YEARS                                                     CONTINGENT DEFERRED
  SINCE                                                       SALES CHARGE AS
PURCHASE                                                    % OF DOLLAR AMOUNT
  MADE                                                       SUBJECT TO CHARGE
- --------                                                    -------------------
<S>                                                          <C>
First......................................................         5%
Second.....................................................         4%
Third......................................................         3%
Fourth.....................................................         3%
Fifth......................................................         2%
Sixth......................................................         1%
Seventh and Following......................................        None
</TABLE>
 
  In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
 
  Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
 
  Class C Shares. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
 
  Waivers. Contingent deferred sales charges on Class B and Class C shares will
be waived on redemptions (1) following the death or post-purchase disability, as
defined in Section 72(m)(7) of the Code, of a shareholder or a settlor of a
living trust (provided AIM Distributors is notified of such death or
post-purchase disability at the time of the redemption request and is provided
with satisfactory evidence of such death or post-purchase disability), (2) in
connection with certain distributions from IRAs, custodial accounts maintained
pursuant to Code Section 403(b), deferred compensation plans qualified under
Code Section 457 and plans qualified under Code Section 401 (collectively,
"Retirement Plans"), (3) pursuant to a Systematic Withdrawal Plan, provided that
amounts withdrawn under such plan do not exceed on an annual basis 12% of the
value of the shareholder's investment in Class B or Class C shares at the time
the shareholder elects to participate in the Systematic Withdrawal Plan, (4)
effected pursuant to the right of a Multiple Class Fund to liquidate a
shareholder's account if the aggregate net asset value of shares held in the
account is less than the designated minimum account size described in the
prospectus of such Multiple Class Fund, (5) effected by AIM of its investment in
Class B or Class C shares and (6) of Class C shares where such investor's dealer
of record, due to the nature of the investor's account, notifies AIM
Distributors prior to the time of investment that the dealer waives the payment
otherwise payable to the dealer described in the last paragraph under the
caption "Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM
Funds."
 
  Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
 
  Waiver category (2) above applies only to redemptions resulting from:
 
          (i) required minimum distributions to plan participants or
     beneficiaries who are age 70 1/2 or older, and only with respect to that
     portion of such distributions which does not exceed 12% annually of the
     participant's or beneficiary's account value in a particular AIM Fund;
 
                                      A-15
<PAGE>   245
 
          (ii) in-kind transfers of assets where the participant or beneficiary
     notifies AIM Distributors of such transfer no later than the time such
     transfer occurs;
 
          (iii) tax-free rollovers or transfers of assets to another Retirement
     Plan invested in Class B or Class C shares of one or more Multiple Class
     Funds;
 
          (iv) tax-free returns of excess contributions or returns of excess
     deferral amounts; and
 
          (v) distributions upon the death or disability (as defined in the
     Code) of the participant or beneficiary.
 
   
  CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND or Class A shares
of AIM DOLLAR FUND which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code, or Plans created under Section 403(b) of the
Code and sponsored by nonprofit organizations as defined under Section 501(c)(3)
of the Code, where shares are being redeemed in connection with employee
terminations or withdrawals, and (a) the total amount invested in a Plan is at
least $1,000,000, (b) the sponsor of a Plan signs a letter of intent to invest
at least $1,000,000 in one or more of the AIM Funds, or (c) the shares being
redeemed were purchased by an employer-sponsored Plan with at least 100 eligible
employees; provided, however, that Plans created under Section 403(b) of the
Code which are sponsored by public educational institutions shall qualify under
(a), (b) or (c) above on the basis of the value of each Plan participant's
aggregate investment in the AIM Funds, and not on the aggregate investment made
by the Plan or on the number of eligible employees; (2) redemptions of shares
following the death or post-purchase disability, as defined in Section 72(m)(7)
of the Code, of a shareholder or a settlor of a living trust; (3) redemptions of
shares purchased at net asset value by private foundations or endowment funds
where the initial amount invested was at least $1,000,000; (4) redemptions of
shares purchased by an investor in amounts of $1,000,000 or more where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payments otherwise payable to the dealer as described in the third paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds;" and (5) pursuant to a Systematic Withdrawal Plan, provided
that amounts withdrawn under such plan do not exceed on an annual basis 12% of
the value of the shareholder's investment in Class A shares at the time the
shareholder elects to participate in the Systematic Withdrawal Plan.
    
 
  Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  In addition to these requirements, shareholders who have invested in a fund to
establish as IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares; (a) a statement
as to whether or not the shareholder has attained age 59 1/2, and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.
 
                                      A-16
<PAGE>   246
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
this account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
   
  EXPEDITED REDEMPTIONS (AIM Cash Reserve shares of AIM MONEY MARKET FUND
ONLY). If a redemption order is received prior to 11:30 a.m. Eastern Time, the
redemption will be effective on that day and AIM MONEY MARKET FUND will endeavor
to transmit payment on that same business day. If the redemption order is
received after 11:30 a.m. and prior to NYSE Close, the redemption will be made
at the next determined net asset value and payment will generally be transmitted
on the next business day.
    
 
  REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing the
appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone
 
                                      A-17
<PAGE>   247
 
exchange and telephone redemption authorization forms; (7) changes in previously
designated wiring or electronic funds transfer instructions, and (8) written
redemptions or exchanges of shares previously reported as lost, whether or not
the redemption amount is under $50,000 or the proceeds are to be sent to the
address of record. These requirements may be waived or modified upon notice to
shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
    
 
   
  REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within ninety (90) days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment will not alter the taxes due on any
capital gains, except under the circumstances described below. If there has been
a loss on the redemption and shares of the same fund are repurchased, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in shares of the same fund, or exchanged for
shares of another AIM Fund, at a reduced sales charge within 90 days of the
payment of the sales charge, the shareholder's basis in the fund shares redeemed
may not include the amount of the sales charge paid, thereby reducing the loss
or increasing the gain recognized from the redemption; however, the
shareholder's basis in the fund shares purchased will include the sales charge.
Each AIM Fund may amend, suspend or cease offering the privilege at any time as
to shares redeemed after the date of such amendment, suspension or cessation.
This privilege may only be exercised once each year by a shareholder with
respect to each AIM Fund.
    
 
   
  Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of Class A shares and who subsequently reinvest a portion or
all of the value of the redeemed shares in Class A shares of any AIM Fund within
ninety (90) days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
    
 
                                      A-18

<PAGE>   248
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
   
  The net asset value per share (or share price) of each AIM Fund is determined
as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close with
respect to AIM MONEY MARKET FUND) on each "business day" of a fund as previously
defined. In the event the NYSE closes early (i.e. before 4:00 p.m. Eastern Time)
on a particular day, the net asset value of an AIM Fund's share will be
determined as of the close of the NYSE on such day. For purposes of defining net
asset value per share, futures and options contracts generally will be valued 15
minutes after the close of trading of the NYSE. The net asset value per share is
calculated by subtracting a class' liabilities from its assets and dividing the
result by the total number of class shares outstanding. The determination of net
asset value per share is made in accordance with generally accepted accounting
principles. Among other items, liabilities include accrued expenses and
dividends payable, and total assets include portfolio securities valued at their
market value, as well as income accrued but not yet received. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the fund's officers and
in accordance with methods which are specifically authorized by its governing
Board of Directors or Trustees. Short-term obligations with maturities of 60
days or less, and the securities held by the Money Market Funds, are valued at
amortized cost as reflecting fair value. AIM HIGH INCOME MUNICIPAL FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-FREE
INTERMEDIATE FUND value variable rate securities that have an unconditional
demand or put feature exercisable within seven days or less at par, which
reflects the market value of such securities.
    
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as
set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                DISTRIBUTIONS    DISTRIBUTIONS
                                                                                   OF NET           OF NET
                                                    DIVIDENDS FROM                REALIZED         REALIZED
                                                    NET INVESTMENT               SHORT-TERM        LONG-TERM
                   FUND                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
                   ----                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM ADVISOR FLEX FUND.....................  declared and paid quarterly       quarterly          annually
AIM ADVISOR INTERNATIONAL VALUE FUND......  declared and paid annually        annually           annually
AIM ADVISOR LARGE CAP VALUE FUND..........  declared and paid quarterly       quarterly          annually
AIM ADVISOR MULTIFLEX FUND................  declared and paid quarterly       quarterly          annually
AIM ADVISOR REAL ESTATE FUND..............  declared and paid quarterly       quarterly          annually
AIM AGGRESSIVE GROWTH FUND................  declared and paid annually        annually           annually
AIM ASIAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM BALANCED FUND.........................  declared and paid quarterly       annually           annually
AIM BASIC VALUE FUND......................  declared and paid annually        annually           annually
AIM BLUE CHIP FUND........................  declared and paid annually        annually           annually
AIM CAPITAL DEVELOPMENT FUND..............  declared and paid annually        annually           annually
AIM CHARTER FUND..........................  declared and paid quarterly       annually           annually
AIM CONSTELLATION FUND....................  declared and paid annually        annually           annually
AIM DEVELOPING MARKETS FUND...............  declared and paid annually        annually           annually
AIM DOLLAR FUND...........................  declared daily; paid monthly      annually           annually
AIM EMERGING MARKETS FUND.................  declared and paid annually        annually           annually
AIM EMERGING MARKETS DEBT FUND............  declared and paid monthsly        annually           annually
AIM EUROPE GROWTH FUND....................  declared and paid annually        annually           annually
AIM EUROPEAN DEVELOPMENT FUND.............  declared and paid annually        annually           annually
AIM GLOBAL AGGRESSIVE GROWTH FUND.........  declared and paid annually        annually           annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
  FUND....................................  declared and paid annually        annually           annually
AIM GLOBAL FINANCIAL SERVICES FUND........  declared and paid annually        annually           annually
</TABLE>
    
 
                                      A-19
<PAGE>   249
 
   
<TABLE>
<CAPTION>
                                                                             DISTRIBUTIONS    DISTRIBUTIONS
                                                                                OF NET           OF NET
                                                 DIVIDENDS FROM                REALIZED         REALIZED
                                                 NET INVESTMENT               SHORT-TERM        LONG-TERM
FUND                                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
- ----                                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM GLOBAL GOVERNMENT INCOME FUND.........  declared and paid monthly         annually           annually
AIM GLOBAL GROWTH FUND....................  declared and paid annually        annually           annually
AIM GLOBAL GROWTH & INCOME FUND...........  declared and paid quarterly       annually           annually
AIM GLOBAL HEALTH CARE FUND...............  declared and paid annually        annually           annually
AIM GLOBAL INCOME FUND....................  declared daily; paid monthly      annually           annually
AIM GLOBAL INFRASTRUCTURE FUND............  declared and paid annually        annually           annually
AIM GLOBAL RESOURCES FUND.................  declared and paid annually        annually           annually
AIM GLOBAL TELECOMMUNICATIONS FUND........  declared and paid annually        annually           annually
AIM GLOBAL TRENDS FUND....................  declared and paid annually        annually           annually
AIM GLOBAL UTILITIES FUND.................  declared daily; paid monthly      annually           annually
AIM HIGH INCOME MUNICIPAL FUND............  declared daily; paid monthly      annually           annually
AIM HIGH YIELD FUND.......................  declared daily; paid monthly      annually           annually
AIM INCOME FUND...........................  declared daily; paid monthly      annually           annually
AIM INTERMEDIATE GOVERNMENT FUND..........  declared daily; paid monthly      annually           annually
AIM INTERNATIONAL EQUITY FUND.............  declared and paid annually        annually           annually
AIM INTERNATIONAL GROWTH FUND.............  declared and paid annually        annually           annually
AIM JAPAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM LATIN AMERICAN GROWTH FUND............  declared and paid annually        annually           annually
AIM LIMITED MATURITY TREASURY FUND........  declared daily; paid monthly      annually           annually
AIM MID CAP EQUITY FUND...................  declared and paid annually        annually           annually
AIM MONEY MARKET FUND.....................  declared daily; paid monthly      at least annually  annually
AIM MUNICIPAL BOND FUND...................  declared daily; paid monthly      annually           annually
AIM NEW PACIFIC GROWTH FUND...............  declared and paid annually        annually           annually
AIM SELECT GROWTH FUND....................  declared and paid annually        annually           annually
AIM SMALL CAP GROWTH FUND.................  declared and paid annually        annually           annually
AIM SMALL CAP OPPORTUNITIES FUND..........  declared and paid annually        annually           annually
AIM STRATEGIC INCOME FUND.................  declared and paid monthly         annually           annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT...  declared daily; paid monthly      annually           annually
AIM TAX-EXEMPT CASH FUND..................  declared daily; paid monthly      at least annually  annually
AIM TAX-FREE INTERMEDIATE FUND............  declared daily; paid monthly      annually           annually
AIM VALUE FUND............................  declared and paid annually        annually           annually
AIM WEINGARTEN FUND.......................  declared and paid annually        annually           annually
AIM WORLDWIDE GROWTH FUND.................  declared and paid annually        annually           annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in like shares of another
Multiple Class Fund, to the extent permitted. For funds that do not declare a
dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. For funds that declare
a dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or the
dividend portion thereof, in cash, or to invest such dividends and distributions
in shares of another fund in the AIM Funds; provided that (i) dividends and
distributions attributable to Class B shares may only be reinvested in Class B
shares, (ii) dividends and distributions attributable to Class C shares may only
be reinvested in Class C shares, (iii) dividends and distributions attributable
to Class A shares may not be reinvested in Class B or Class C shares, and (iv)
dividends and distributions attributable to the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may not be reinvested in the Class A shares of that Fund or in
any Class B or Class C shares. Investors who have not previously selected such a
reinvestment option on the account application form may contact the Transfer
Agent at any time to obtain a form to authorize such reinvestments in another
AIM Fund. Such reinvestments into the AIM Funds are not subject to sales
charges, and shares so purchased are automatically credited to the account of
the shareholder.
 
  Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
 
                                      A-20
<PAGE>   250
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares, except for "exempt-interest dividends" paid by
AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND
FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND
(the "Tax-Exempt Funds"), which are exempt from federal income tax. With respect
to tax-exempt shareholders, dividends and distributions from the AIM Funds are
not subject to federal income taxation to the extent permitted under the
applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    
 
   
  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
    
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
                                      A-21
<PAGE>   251
   
 TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
  TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other taxable securities. For
additional information concerning the alternative minimum tax and certain
collateral tax consequences of the receipt of exempt-interest dividends, see the
Statements of Additional Information applicable to the Tax-Exempt Funds.
 
  The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
 
  To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
 
  From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP EQUITY FUND,
AIM SMALL CAP GROWTH FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX INFORMATION.
Certain states exempt from income taxes dividends paid by mutual funds
attributable to interest on U.S. Treasury and certain other U.S. government
obligations. Investors should consult with their own tax advisors concerning the
availability of such exemption.
    
 
  AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH
FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do
so, each of these funds may elect to pass through to its shareholders credits
for foreign taxes paid. If a fund makes such an election, a shareholder who
receives a distribution (1) will be required to include in gross income his
proportionate share of foreign taxes allocable to the distribution and (2) may
claim a credit or deduction for such share for his taxable year in which the
distribution is received, subject to the general limitations imposed on the
allowance of foreign tax credits and deductions. Shareholders should also note
that certain gains or losses attributable to fluctuations in exchange rates or
foreign currency forward contracts may increase or decrease the amount of income
of the fund available for distribution to shareholders and should note that if,
for any fund, such losses exceed other income during a taxable year, the fund
would not be able to pay ordinary income dividends for that year.
 
                                      A-22
<PAGE>   252
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each AIM Fund's transfer agent and dividend
payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-23
<PAGE>   253
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
 
 
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                              GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
      ACCOUNT TYPE            NUMBER OF:                       ACCOUNT TYPE                  NUMBER OF:
      ------------            --------------------             ------------                  ------------------
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary
      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application
      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors
      Legal Guardian          Ward, Minor or
                              Incompetent
      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
 
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   254
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   255
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
<PAGE>   256
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
CLASS A AND CLASS B SHARES OF
    
 
AIM GLOBAL HEALTH CARE FUND
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
PROSPECTUS
SEPTEMBER 8, 1998
 
This Prospectus contains information about AIM GLOBAL HEALTH CARE FUND (the
"Fund"), which is one of several series investment portfolios comprising AIM
Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a diversified portfolio which seeks long-term capital
appreciation by investing primarily in equity securities of health care
companies throughout the world.
 
   
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   257
   
    
 
- --------------------------------------------------------------------------------
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     7
  Investment Program...................     7
  Risk Factors.........................    10
  Management...........................    12
  Organization of the Trust............    14
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-9
  Exchange Privilege...................  A-12
  How to Redeem Shares.................  A-14
  Determination of Net Asset Value.....  A-19
  Dividends, Distributions and Tax
     Matters...........................  A-19
  General Information..................  A-23
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
  The Fund is a diversified series of the Trust.
 
  INVESTMENT OBJECTIVE: Fund seeks long-term capital appreciation.
 
  PRINCIPAL INVESTMENTS. The Fund invests primarily in equity securities of
health care companies throughout the world.
 
   
  INVESTMENT MANAGERS. The Fund is managed by A I M Advisors, Inc. ("AIM") and
is sub-advised and sub-administered by INVESCO (NY), Inc. (the "Sub-advisor").
AIM and the Sub-advisor and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-advisor are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
AIM was organized in 1976 and, together with its subsidiaries, currently advises
approximately 90 investment company portfolios.
    
 
   
  PURCHASING SHARES. Investors may select Class A or Class B shares of the Fund
which are offered by this Prospectus at an offering price that reflects
differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to
a separate prospectus, the Fund also offers Advisor Class shares, which
represent interests in the Fund. The Advisor Class has different distribution
arrangements.
    
 
  CLASS A SHARES -- Shares are offered at net asset value plus any applicable
initial sales charge.
 
  CLASS B SHARES -- Shares are offered at net asset value without an initial
sales charge, and are subject to a maximum contingent deferred sales charge of
5% on certain redemptions made within six years from the date such shares were
purchased. Class B shares automatically convert to Class A shares of the Fund
eight years following the end of the calendar month in which a purchase was
made. Class B shares are subject to higher expenses than Class A shares.
 
  Initial investments in any class of shares must be at least $500 and
additional investments must be at least $50. The minimum initial investment is
modified for investments through tax-qualified retirement plans and accounts
initially established with an Automatic Investment Plan. The distributor of the
Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
 
  SUITABILITY FOR INVESTORS. An investor in Class A or Class B shares of the
Fund should consider the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the shares are expected to
be held, and other circumstances. Investors should consider whether, during the
anticipated life of their investment in the Fund, the accumulated distribution
fees and any applicable contingent deferred sales charges on Class B shares
prior to conversion would be less than the initial sales charge and accumulated
distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares.
To assist investors in making this determination, the table under the caption
"Table of Fees and Expenses" sets forth examples of the charges applicable to
each class of shares. Class A shares will normally be more beneficial than Class
B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase
of more than $250,000 for Class B shares.
 
                                        2
<PAGE>   258
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds") Class
A and Class B shares of the Fund may be exchanged for shares of other funds in
The AIM Family of Funds in the manner and subject to the policies and charges
set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Class A shareholders of the Fund may redeem all or a portion
of their shares at net asset value on any business day, generally without
charge. A contingent deferred sales charge of 1% may apply to certain
redemptions where a purchase of more than $1 million is made at net asset value.
See "How to Redeem Shares -- Contingent Deferred Sales Charge Program for Large
Purchases." Class B shareholders of the Fund may redeem all or a portion of
their shares at net asset value on any business day, less a contingent deferred
sales charge for redemptions made within six years from the date such shares
were purchased. Class B shares redeemed after six years from the date such
shares were purchased will not be subject to any contingent deferred sales
charge. See "How to Redeem Shares -- Multiple Distribution System."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters" and "Special Plans."
    
 
  RISK FACTORS. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its portfolio holdings. The Fund's policy of concentrating
its investments in companies in its particular industries may cause the Fund's
net asset value to fluctuate more than if it invested in a greater number of
industries.
 
  The Fund may invest in foreign securities. Investments in foreign securities
involve risks relating to political and economic developments abroad and the
differences between the regulations to which U.S. and foreign issuers are
subject. Individual foreign economies also may differ favorably or unfavorably
from the U.S. economy. Changes in foreign currency exchange rates will affect
the Fund's net asset value, earnings and gains and losses realized on sales of
securities. Securities of foreign companies may be less liquid and their prices
more volatile than those of securities of comparable U.S. companies.
 
   
  The Fund may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs. The Fund may invest up
to 5% of its total assets in below investment grade debt securities. Investments
of this type are subject to a greater risk of loss of principal and interest.
See "Investment Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   259
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Class A and Class B share of the Fund are reflected in the following table(1):
 
<TABLE>
<CAPTION>
                                                              CLASS A   CLASS B
                                                              -------   -------
<S>                                                           <C>       <C>
Shareholder Transaction Costs(2):
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................   4.75%     None
  Sales charges on reinvested distributions to
     shareholders...........................................   None      None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........   None      5.00%
  Redemption charges........................................   None      None
  Exchange fees.............................................   None      None
Annual Fund Operating Expenses(3): (as a % of average net
  assets)
  Investment management and administration fees.............   0.97%     0.97%
  12b-1 distribution and service fees.......................   0.50%     1.00%
  Other expenses (after reimbursements and waivers).........   0.33%     0.33%
                                                               ----      ----
          Total Fund Operating Expenses.....................   1.80%     2.30%
                                                               ====      ====
</TABLE>
 
   
(1) This table is intended to assist investors in understanding the various
    costs and expenses associated with investing in the Fund. Long-term
    shareholders may pay more than the economic equivalent of the maximum
    front-end sales charge permitted by the National Association of Securities
    Dealers, Inc. rules regarding investment companies.
    
 
(2) Sales charge waivers are available for Class A and Class B shares, and
    reduced sales charge purchase plans are available for Class A shares. The
    maximum 5% contingent deferred sales charge on Class B shares applies to
    redemptions during the first year after purchase. The charge generally
    declines by 1% annually thereafter, reaching zero after six years. See
    "Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
    Sales Charges."
 
   
(3) Expenses are based on the Fund's fiscal year ended October 31, 1997. "Other
    expenses" include custody, transfer agency, legal, audit and other operating
    expenses. See "Management" herein and the Statement of Additional
    Information for more information. AIM has voluntarily agreed to limit the
    Fund's expenses (exclusive of brokerage commissions, taxes, interest and
    extraordinary expenses) to the annual rates of 2.00% and 2.50% of the
    average daily net assets of the Fund's Class A and Class B shares,
    respectively, through May 31, 2000.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                      1 YEAR   3 YEARS   5 YEARS   10 Years(3)
                                                      ------   -------   -------   -----------
<S>                                                   <C>      <C>       <C>       <C>
Class A Shares(1)...................................   $65      $102      $141        $250
Class B Shares:
  Assuming a complete redemption at end of
     period(2)......................................   $75      $105      $147        $253
  Assuming no redemption............................   $24      $ 73      $124        $253
</TABLE>
    
 
   
(1) Assumes payment of maximum sales charge by the investor.
    
 
   
(2) Assumes deduction of the applicable contingent deferred sales charge.
    
 
   
(3) For Class B shares, this number reflects the conversion to Class A shares
    eight years following the end of the calendar month in which a purchase was
    made.
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT EXPENSES, MAY
BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE ASSUMPTION IN THE
HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY REGULATION OF THE SEC
APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS NOT A PREDICTION OF AND
DOES NOT REPRESENT THE FUND'S PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   260
- --------------------------------------------------------------------------------
 
FINANCIAL HIGHLIGHTS
 
   
  The tables below provide condensed financial information concerning income and
capital changes for one Class A and Class B share of each Fund. This information
is supplemented by the financial statements and accompanying notes appearing in
the Statement of Additional Information. The financial statements and notes for
the fiscal year ended October 31, 1997, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon is
also included in the Statement of Additional Information. The unaudited
financial statements and notes, for the semi-annual period ended April 30, 1998,
are also included in the Statement of Additional Information.
    
 
                          AIM GLOBAL HEALTH CARE FUND
                     (FORMERLY GT GLOBAL HEALTH CARE FUND)
   
<TABLE>
<CAPTION>
                             SIX MONTHS
                               ENDED                                       YEAR ENDED OCTOBER 31,
                           APRIL 30, 1998   -------------------------------------------------------------------------------------
                            (UNAUDITED)*     1997*      1996*       1995      1994*      1993*       1992       1991       1990
                           --------------   --------   --------   --------   --------   --------   --------   --------   --------
<S>                        <C>              <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
CLASS A+:
Per Share Operating
 Performance:
 Net asset value,
   beginning of period...     $  27.98      $  23.60   $  21.84   $  19.60   $  17.86   $  17.44   $  19.29   $  12.83   $  11.83
                              --------      --------   --------   --------   --------   --------   --------   --------   --------
Income from investment
 operations:
 Net investment income
   (loss)................        (0.11)        (0.25)     (0.17)     (0.15)     (0.22)     (0.15)     (0.18)      0.03       0.06
 Net realized and
   unrealized gain (loss)
   on investments........         0.44          6.48       4.79       3.73       2.02       0.57      (1.53)      6.78       0.97
                              --------      --------   --------   --------   --------   --------   --------   --------   --------
 Net increase (decrease)
   from investment
   operations............         0.33          6.23       4.62       3.58       1.80       0.42      (1.71)      6.81       1.03
                              --------      --------   --------   --------   --------   --------   --------   --------   --------
Distributions:
 From net investment
   income................           --            --         --         --         --         --         --      (0.07)     (0.03)
 From net realized gain
   on investments........        (6.71)        (1.85)     (2.86)     (1.34)        --         --      (0.14)     (0.28)        --
 In excess of net
   realized gain on
   investments...........           --            --         --         --      (0.06)        --         --         --         --
                              --------      --------   --------   --------   --------   --------   --------   --------   --------
       Total             
        distributions....        (6.71)        (1.85)     (2.86)     (1.34)     (0.06)        --      (0.14)     (0.35)     (0.03)
                              --------      --------   --------   --------   --------   --------   --------   --------   --------
Net asset value, end of
 period..................     $  21.60      $  27.98   $  23.60   $  21.84   $  19.60   $  17.86   $  17.44   $  19.29   $  12.83
                              ========      ========   ========   ========   ========   ========   ========   ========   ========
       Total investment
        return(c)........         2.15%(a)     28.36%     23.14%     19.79%     10.11%       2.4%      (8.9)%     54.2%       8.7%
                              ========      ========   ========   ========   ========   ========   ========   ========   ========
Ratios and supplemental
 data:
 Net assets, end of
   period (in 000's).....     $427,300(b)   $472,083   $467,861   $426,380   $438,940   $461,113   $655,867   $552,897   $145,544
Ratio of net investment
 income (loss) to average
 net assets:
 With expense
   reductions............        (1.06)%(b)    (1.00)%    (0.71)%    (0.72)%    (1.23)%    (0.90)%    (0.97)%     0.19%      0.66%
 Without expense
   reductions............        (1.07)%(b)    (1.03)%    (0.75)%    (0.78)%      N/A        N/A        N/A        N/A        N/A
Ratio of operating
 expenses to average net
 assets:
 With expense
   reduction.............         1.80%(b)      1.77%      1.80%      1.85%      1.98%      2.00%      2.05%      2.01%      2.39%
 Without expense
   reduction.............         1.81%(b)      1.80%      1.84%      1.91%       N/A        N/A        N/A        N/A        N/A
Portfolio turnover
 rate+++.................          156%(b)       149%       157%        99%        64%        61%        30%        23%        34%
Average commission rate
 per share paid on
 portfolio
 transactions+++.........     $ 0.0561      $ 0.0490   $ 0.0548        N/A        N/A        N/A        N/A        N/A        N/A
 
<CAPTION>
                            AUGUST 7, 1989
                             (COMMENCEMENT
                           OF OPERATIONS) TO
                           OCTOBER 31, 1989
                           -----------------
<S>                        <C>
CLASS A+:
Per Share Operating
 Performance:
 Net asset value,
   beginning of period...       $ 11.43
                                -------
Income from investment
 operations:
 Net investment income
   (loss)................          0.01
 Net realized and
   unrealized gain (loss)
   on investments........          0.39
                                -------
 Net increase (decrease)
   from investment
   operations............          0.40
                                -------
Distributions:
 From net investment
   income................            --
 From net realized gain
   on investments........            --
 In excess of net
   realized gain on
   investments...........            --
                                -------
       Total
        distributions....            --
                                -------
Net asset value, end of
 period..................       $ 11.83
                                =======
       Total investment
        return(c)........           3.5%(a)
                                =======
Ratios and supplemental
 data:
 Net assets, end of
   period (in 000's).....       $49,903
Ratio of net investment
 income (loss) to average
 net assets:
 With expense reductions.          3.2%(b)
 Without expense
   reductions............           N/A
Ratio of operating
 expenses to average net
 assets:
 With expense reduction..           2.5%(b)
 Without expense
   reduction.............           N/A
Portfolio turnover
 rate+++.................           183%(b)
Average commission rate
 per share paid on
 portfolio
 transactions+++.........           N/A
</TABLE>
    
 
- ---------------
 
   +  All capital shares issued and outstanding as of March 31, 1993, were
      reclassified as Class A shares.
 +++  Portfolio turnover and average commission rates are calculated on the
      basis of the Fund as a whole without distinguishing among the classes of
      shares issued.
   *  These selected per share data were calculated based upon average shares
      outstanding during the period.
  (a) Not annualized.
  (b) Annualized.
  (c) Total investment return does not include sales charges.
 N/A  Not Applicable.
 
                                        5
<PAGE>   261
 
   
    
 
   
<TABLE>
<CAPTION>
                                                      SIX MONTHS                                                   APRIL 1,
                                                        ENDED                 YEAR ENDED OCTOBER 31,               1993 TO
                                                    APRIL 30, 1998    ---------------------------------------    OCTOBER 31,
                                                     (UNAUDITED)*      1997*      1996*      1995*     1994*        1993*
                                                    --------------    --------   --------   -------   -------   --------------
<S>                                                 <C>               <C>        <C>        <C>       <C>       <C>
CLASS B++:
Per Share Operating Performance:
  Net asset value, beginning of period............     $  27.27       $  23.15   $  21.56   $ 19.46   $ 17.80       $15.59
                                                       --------       --------   --------   -------   -------       ------
Income from investment operations:
  Net investment income (loss)....................        (0.16)         (0.37)     (0.27)    (0.25)    (0.32)       (0.14)
  Net realized and unrealized gain (loss) on
    investments...................................         0.42           6.34       4.72      3.69      2.02         2.35
                                                       --------       --------   --------   -------   -------       ------
Net increase (decrease) from investment
  operations......................................         0.26           5.97       4.45      3.44      1.70         2.21
                                                       --------       --------   --------   -------   -------       ------
Distributions:
  From net realized gain on investments...........        (6.71)         (1.85)     (2.86)    (1.34)       --           --
  In excess of net realized gain on investments...           --             --         --        --     (0.04)          --
                                                       --------       --------   --------   -------   -------       ------
        Total distributions.......................        (6.71)         (1.85)     (2.86)    (1.34)    (0.04)          --
                                                       --------       --------   --------   -------   -------       ------
Net asset value, end of period....................     $  20.82       $  27.27   $  23.15   $ 21.56   $ 19.46       $17.80
                                                       ========       ========   ========   =======   =======       ======
        Total investment return(c)................         1.89%(a)      27.75%     22.59%    19.17%     9.55%        14.2%(a)
                                                       ========       ========   ========   =======   =======       ======
Ratios and supplemental data:
  Net assets, end of period (in 000's)............     $121,735       $147,440   $107,622   $70,740   $39,100       $8,604
Ratio of net investment income (loss) to average
  net assets:
  With expense reductions.........................        (1.56)%(b)     (1.50)%    (1.21)%   (1.22)%   (1.73)%       (1.4)%(b)
  Without expense reductions......................        (1.57)%(b)     (1.53)%    (1.25)%   (1.28)%     N/A          N/A
Ratio of operating expenses to average net assets:
  With expense reduction..........................         2.30%(b)       2.27%      2.30%     2.35%     2.48%         2.5%(b)
  Without expense reduction.......................         2.31%(b)       2.30%      2.34%     2.41%      N/A          N/A
Portfolio turnover rate+++........................          156%(b)        149%       157%       99%       64%          61%
Average commission rate per share paid on
  portfolio transactions+++.......................     $ 0.0561       $ 0.0490   $ 0.0548       N/A       N/A          N/A
</TABLE>
    
 
- ---------------
   
  ++  Commencing April 1, 1993, the Fund began offering Class B shares.
    
 +++  Portfolio turnover and average commission rates are calculated on the
      basis of the Fund as a whole without distinguishing among the classes of
      shares issued.
   *  These selected per share data were calculated based upon average shares
      outstanding during the period.
  (a) Not annualized.
  (b) Annualized.
  (c) Total investment return does not include sales charges.
   
 N/A  Not Applicable.
    
 
                                ---------------
 
   
<TABLE>
<CAPTION>
                                                                     AVERAGE MONTHLY
                                                    AVERAGE             NUMBER OF        AVERAGE AMOUNT
                              AMOUNT OF DEBT    AMOUNT OF DEBT     REGISTRANT'S SHARES    OF DEBT PER
                              OUTSTANDING AT      OUTSTANDING          OUTSTANDING        SHARE DURING
         YEAR ENDED           END OF PERIOD    DURING THE PERIOD    DURING THE PERIOD      THE PERIOD
         ----------           --------------   -----------------   -------------------   --------------
<S>                           <C>              <C>                 <C>                   <C>
Six months ended April 30,
  1998......................       $--             $  8,184            25,589,566           $ 0.000
October 31, 1997............       $--             $323,288            24,106,677           $0.0134
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed on a daily
basis.
    
 
                                        6
<PAGE>   262
 
- --------------------------------------------------------------------------------
 
   
PERFORMANCE
    
 
   
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
    
 
   
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return. Standardized total return
for Class A shares reflects the deduction of the Fund's maximum front-end sales
charge at the time of purchase. Standardized total return for Class B shares
reflects the deduction of the maximum applicable contingent deferred sales
charge on a redemption of shares held for the period.
    
 
   
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
    
 
   
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
    
 
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVE. The Fund's investment objective is long-term capital
appreciation. It seeks its objective by investing primarily in equity securities
of health care companies throughout the world. There can be no assurance that
the Fund will achieve its investment objective.
    
 
   
  INVESTMENT POLICIES. At least 65% of the Fund's total assets normally will be
invested in common and preferred stocks, and warrants to acquire such
securities, issued by health care companies. A "health care" company is an
entity in which (i) at least 50% of either the revenues or earnings was derived
from health care activities, or (ii) at least 50% of the assets was devoted to
such activities, based on the company's most recent fiscal year. The remainder
of the Fund's assets may be invested in debt securities issued by health care
companies and/or equity and debt securities of companies outside of the health
care industry, which, in the opinion of the Sub-advisor, stand to benefit from
developments in the health care industries.
    
 
  Global Health Care Industries Investment. Examples of health care companies
include those that are substantially engaged in the design, manufacture or sale
of products or services used for or in connection with health care or medicine.
Such firms may include pharmaceutical companies; firms that design, manufacture,
sell or supply medical, dental and optical products, hardware or services;
companies involved in biotechnology, medical diagnostic, and biochemical
research and development; and companies involved in the ownership and/or
operation of health care facilities.
 
  The Fund expects that, from time to time, a significant portion of its assets
may be invested in the securities of U.S. issuers. Health care industries,
however, are global industries with significant, growing markets outside of the
United States. A sizeable portion of the companies which comprise the health
care industries are headquartered outside of the United States, and many
important pharmaceutical and biotechnology discoveries and technological
breakthroughs have occurred outside of the United States, primarily in Japan,
the United Kingdom and Western Europe.
 
   
  The Sub-advisor believes that the global health care industries offer
attractive long-term supply/demand dynamics. While the United States, Western
Europe, and Japan presently account for a substantial portion of health care
expenditures, this should change dramatically in the coming decade if the
populations of developing countries devote an increasing percentage of income to
health care. Additionally, the Sub-advisor believes demographics on aging point
to a significant increase in demand from the industrialized nations, as the
elderly account for a growing proportion of worldwide health care spending.
Finally, in the Sub-advisor's view, technology will continue to expand the range
of products and services offered, with new drugs, medical devices and surgical
procedures addressing medical conditions previously considered untreatable.
    
 
  In addition to these underlying trends, the United States is presently
experiencing a period of rapid and profound change in its own health care
system, marked by the rise of managed care, the formation of health care
delivery networks, and widespread consolida-
 
                                        7
<PAGE>   263
 
   
tion across all segments of the industry. The Sub-advisor believes that this
transition offers investment opportunities in those companies acting as
consolidators or otherwise gaining market share at the expense of less efficient
competitors.
    
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objective and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
   
  SELECTION OF INVESTMENTS AND ASSET ALLOCATION. The Fund expects that, from
time to time, a significant portion of its assets may be invested in the
securities of domestic issuers. The industry represented in the Fund, however,
is a global industry with significant, growing markets outside of the United
States. A sizeable proportion of the companies which comprise the health care
industries are headquartered outside of the United States.
    
 
   
  For these reasons, the Sub-advisor believes that a portfolio composed only of
securities of U.S. issuers does not provide the greatest potential for return
from an investment by the Fund. The Sub-advisor uses its financial expertise in
markets located throughout the world and the substantial global resources of
AMVESCAP PLC in attempting to identify those countries and companies then
providing the greatest potential for long-term capital appreciation. In this
fashion, the Sub-advisor seeks to enable shareholders to capitalize on the
substantial investment opportunities and the potential for long-term growth of
capital presented by the global industries represented in the Fund.
    
 
   
  The Sub-advisor allocates the Fund's assets among securities of countries and
in currency denominations where opportunities for meeting the Fund's investment
objective are expected to be the most attractive. The Fund may invest
substantially in securities denominated in one or more currencies. Under normal
conditions, the Fund invests in the securities of issuers located in at least
three countries, including the United States; investments in securities of
issuers in any one country, other than the United States, will represent no more
than 50% of the Fund's total assets.
    
 
   
  In analyzing specific companies for possible investment, the Sub-advisor
ordinarily looks for several of the following characteristics: above-average per
share earnings growth; high return on invested capital; a healthy balance sheet;
sound financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; development of new technologies; efficient service; pricing
flexibility; strong management; and general operating characteristics that will
enable the companies to compete successfully in their respective markets.
    
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. Under a defensive strategy, the Fund may invest up to 100%
of its total assets in cash (U.S. dollars, foreign currencies or multinational
currency units such as Euros) and/or high quality debt securities or money
market instruments of U.S. or foreign issuers. In addition, for temporary
defensive purposes, most or all of the Fund's investments may be made in the
United States and denominated in U.S. dollars. To the extent the Fund adopts a
temporary defensive posture, it will not be invested so as to achieve directly
its investment objective. In addition, pending investment of proceeds from new
sales of Fund shares or to meet its ordinary daily cash needs, the Fund may hold
cash (U.S. dollars, foreign currencies or multinational currency units) and may
invest in foreign or domestic high quality money market instruments. For a full
description of money market instruments, see "Money Market Instruments" in the
"Investment Objectives and Policies" section of the Statement of Additional
Information.
    
 
   
  PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Fund in privatizations in appropriate
circumstances. In certain foreign countries, the ability of foreign entities
such as the Fund to participate in privatizations may be limited by local law,
or the terms on which the Fund may be permitted to participate may be less
advantageous than those for local investors. There can be no assurance that
foreign governments will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
    
 
   
  INVESTMENTS IN OTHER INVESTMENT COMPANIES. The Fund may invest up to 10% of
its total assets in other investment companies, some of which may be investment
vehicles or companies that are advised by the Sub-advisor or its affiliates
("Affiliated Funds"). As a shareholder in an investment company, the Fund would
bear its ratable share of that investment company's expenses, including its
advisory and administration fees. At the same time, the Fund would continue to
pay its own management fees and other expenses. AIM and the Sub-advisor will
waive their advisory fees to the extent that the Fund invests in an Affiliated
Fund.
    
 
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemptions of the
Fund's shares. The Fund also may borrow up to 5% of its total assets for
temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Fund may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Fund's borrowings exceed 5% of its
total assets. Any borrowing by the Fund may cause greater fluctuation in the
value of its shares than would be the case if the Fund did not borrow.
 
  A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash, and agrees to repurchase the security in the
future at an agreed upon price which
 
                                        8
<PAGE>   264
 
includes an interest component. A "roll" borrowing transaction involves the
Fund's sale of securities together with its commitment (for which the Fund may
receive a fee) to purchase similar, but not identical, securities at a future
date.
 
   
  SECURITIES LENDING. The Fund may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Fund to retain ownership of the securities loaned and, at the same time,
enhances the Fund's total return. The Fund limits its loans of portfolio
securities to an aggregate of 30% of the value of its total assets, measured at
the time any such loan is made. While a loan is outstanding, the borrower must
maintain with the Fund's custodian collateral consisting of cash, U.S.
government securities or certain irrevocable letters of credit equal to at least
the value of the borrowed securities, plus any accrued interest or such other
collateral as permitted by the Fund's investment program and regulatory
agencies, and as approved by the Board. The risks in lending portfolio
securities, as with other extensions of secured credit, consist of possible
delays in receiving additional collateral or in recovery of the securities and
possible loss of rights in the collateral should the borrower fail financially.
    
 
  WHEN-ISSUED OR FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities or enter into forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If
the Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, the Fund will
segregate cash or liquid securities equal to the value of the when-issued or
forward commitment securities with its custodian and will mark to market daily
such assets. There is a risk that the securities may not be delivered and that
the Fund may incur a loss.
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the portfolio. These instruments are often referred to as
"derivatives," which may be defined as financial instruments whose performance
is derived, at least in part, from the performance of another asset (such as a
security, currency or an index of securities). The Fund may enter into such
instruments up to the full value of its portfolio assets. See "Risk
Factors -- Options, Futures and Forward Currency Transactions" herein and
"Options, Futures and Currency Strategies" in the Statement of Additional
Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on such futures
contracts to hedge against movements in exchange rates.
 
   
  In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-advisor intends to include in the
Fund's portfolio. The Fund also may purchase and sell put and call options on
stock indexes to hedge against overall fluctuations in the securities markets
generally or in a specific market sector.
    
 
  Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market decline or a decline in a specific market sector that could
affect adversely the Fund's holdings. The Fund also may purchase stock index
futures contracts and purchase call options or write put options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisitions. The Fund
may use interest rate futures contracts and options thereon to hedge the debt
portion of its portfolio against changes in the general level of interest rates.
 
  OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this Prospectus
and in the Statement of Additional Information may be changed by the Trust's
Board of Trustees without shareholder approval. The Fund's policies regarding
concentration and lending, and the percentage of the Fund's assets that may be
committed to borrowing, are fundamental policies and may not be changed without
shareholder approval.
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
 
                                        9
<PAGE>   265
 
   
  The Fund is authorized to engage in Short Sales, although it currently has no
intention of doing so, and may purchase American Depositary Receipts, American
Depositary Shares, Global Depositary Receipts and European Depositary Receipts.
See "Short Sales" and "Depositary Receipts," respectively, in the Investment
Objectives and Policies section of the Statement of Additional Information.
    
- --------------------------------------------------------------------------------
 
RISK FACTORS
 
   
  GENERAL. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset values will fluctuate reflecting fluctuations in
the market value of the Fund's portfolio positions. Equity securities,
particularly common stocks, generally represent the most junior position in an
issuer's capital structure, and entitle holders to an interest in the assets of
an issuer, if any, remaining after all more senior claims have been satisfied.
The value of equity securities held by the Fund will fluctuate in response to
general market and economic developments, as well as developments affecting the
particular issuers of such securities. In addition, the value of debt securities
held by the Fund generally will fluctuate with changes in the perceived
creditworthiness of the issuers of such securities and interest rates.
    
 
  Because the Fund focuses its investments on particular industries, an
investment in each may be more volatile than that of other investment companies
that do not concentrate their investments in such a manner. Moreover, the value
of the shares of the Fund will be especially susceptible to factors affecting
the industries in which it focuses. Accordingly, the Fund should not be
considered a complete investment program.
 
  HEALTH CARE INDUSTRIES. Health care industries generally are subject to
substantial governmental regulation. Changes in governmental policy or
regulation could have a material effect on the demand for products and services
offered by companies in the health care industries and therefore could affect
the performance of the Fund. Regulatory approvals are generally required before
new drugs and medical devices or procedures may be introduced and before the
acquisition of additional facilities by health care providers. In addition, the
products and services offered by such companies may be subject to rapid
obsolescence caused by technological and scientific advances.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to, the reporting requirements of the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. In addition, certain costs attributable to
foreign investing, such as custody charges, are higher than those attributable
to domestic investing. Securities of some foreign companies are less liquid and
their prices may be more volatile than securities of comparable domestic
companies. The Fund's interest and dividends from foreign issuers may be subject
to non-U.S. withholding taxes, thereby reducing the Fund's net investment
income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Fund, political or social instability, or diplomatic
developments which could affect the Fund's investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
 
  The Fund may invest in issuers domiciled in "emerging markets." Investing in
emerging market countries involves risks in addition to those risks involved in
foreign investing. Many emerging market countries have experienced high rates of
inflation for many years. In addition, emerging markets generally are dependent
heavily upon international trade and, accordingly, have been and continue to be
affected adversely by trade barriers, exchange controls, managed adjustments in
relative currency values and other protectionist measures imposed or negotiated
by the countries with which they trade. The securities markets of emerging
market countries are substantially smaller, less developed, less liquid and more
volatile than the securities markets of the developed countries. In addition,
issuers in emerging markets typically are subject to a greater degree of change
in earnings and business prospects than issuers in developed countries.
 
  The Fund will also be affected favorably or unfavorably by exchange control
regulations or changes in the exchange rates between foreign currencies and the
U.S. dollar. Changes in currency exchange rates will influence the value of the
Funds' shares, and also may affect the value of dividends and interest earned by
the Fund and gains and losses realized by the Fund.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing
    
                                       10
<PAGE>   266
 
   
and settlement systems for the euro. These and other factors could cause market
disruptions before or after the introduction of the euro and could adversely
affect the value of securities held by the Fund.
    
 
   
  LOWER QUALITY DEBT SECURITIES. The Fund may invest up to 5% of its total
assets in below investment grade debt securities, that is, rated below BBB by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or Baa
by Moody's Investors Service, Inc. ("Moody's") or, if unrated, deemed to be of
equivalent quality in the judgment of the Sub-advisor. Such investments involve
a high degree of risk. However, the Fund will not invest in debt securities that
are in default as to payment of principal and interest.
    
 
  Debt rated Baa by Moody's is considered by Moody's to have speculative
characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B,
Caa, Ca or C by Moody's is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such lower quality debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Debt rated C
by Moody's or S&P is the lowest rated debt that is not in default as to
principal or interest, and such issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Lower
quality debt securities are also generally considered to be subject to greater
risk than securities with higher ratings with regard to a deterioration of
general economic conditions. These lower quality debt securities are the
equivalent of high yield, high risk bonds, commonly known as "junk bonds."
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates. See "Description of Debt Ratings" in the Statement of Additional
Information for a full discussion of Moody's and S&P's ratings.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities of corporate issuers frequently have call or
buy-back features which would permit an issuer to call or repurchase the
security from the Fund. If an issuer exercises these provisions in a declining
interest rate market, the Fund may have to replace the security with a lower
yielding security, resulting in a decreased return for investors. In addition,
the Fund may have difficulty disposing of lower quality securities because they
may have a thin trading market. There may be no established retail secondary
market for many of these securities, and the Fund anticipates that such
securities could be sold only to a limited number of dealers or institutional
investors. The lack of a liquid secondary market also may have an adverse impact
on market prices of such instruments and may make it more difficult for the Fund
to obtain accurate market quotations for purposes of valuing the Fund's
portfolio investments. The Fund may also acquire lower quality debt securities
during an initial underwriting or which are sold without registration under
applicable securities laws. Such securities involve special considerations and
risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Fund may invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic recession. The Fund may also incur additional expenses to the extent it
is required to seek recovery upon a default in the payment of principal or
interest on portfolio holdings, and the Fund may have limited legal recourse in
the event of a default.
 
   
  ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." The Sub-advisor believes that carefully selected investments in
joint ventures, cooperatives, partnerships and state enterprises which are
illiquid (collectively, "Special Situations") could enable the Fund to achieve
capital appreciation substantially exceeding the appreciation the Fund would
realize if it did not make such investments. However, in order to attempt to
limit investment risk, the Fund will invest no more than 5% of its total assets
in Special Situations.
    
 
  Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at a price
lower than similar securities that are liquid.
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions, the
Fund might not enter into any such transactions. Options, futures and foreign
currency transactions involve certain risks, which include: (1) dependence on
the Sub-advisor's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets or in the appropriate
market sector and movements in interest rates and cur-
    
 
                                       11
<PAGE>   267
 
rency markets; (2) imperfect correlation, or even no correlation, between
movements in the price of options, forward contracts, futures contracts or
options thereon and movements in the price of the currency or security hedged or
used for cover; (3) the fact that skills and techniques needed to trade options,
futures contracts and options thereon or to use forward currency contracts are
different from those needed to select the securities in which the Fund invests;
(4) lack of assurance that a liquid secondary market will exist for any
particular option, futures contract or option thereon at any particular time;
(5) the possible loss of principal under certain conditions; and (6) the
possible inability of the Fund to purchase or sell a portfolio security at a
time when it would otherwise be favorable for it to do so, or the possible need
for the Fund to sell a security at a disadvantageous time, due to the need for
the Fund to maintain "cover" or to set aside securities in connection with
hedging transactions.
 
   
  INVESTING IN SMALLER COMPANIES. While the Fund's portfolio normally will
include securities of established suppliers of traditional products and
services, the Fund may invest in smaller companies which can benefit from the
development of new products and services. These smaller companies may present
greater opportunities for capital appreciation, but may also involve greater
risks than large, established issuers. Such smaller companies may have limited
product lines, markets or financial resources, and their securities may trade
less frequently and in more limited volume than the securities of larger, more
established companies. As a result, the prices of the securities of such smaller
companies may fluctuate to a greater degree than the prices of the securities of
other issuers.
    
- --------------------------------------------------------------------------------
 
MANAGEMENT
 
   
  The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust on the one side and persons or companies furnishing services
to the Fund on the other, including the investment management and administration
agreement with AIM, the investment sub-advisory and sub-administration agreement
between AIM and the Sub-advisor, the agreements with AIM Distributors regarding
distribution of the Fund's shares, the custody agreement and the transfer agency
agreement. The day-to-day operations of the Fund is delegated to the officers of
the Trust, subject always to the investment objective and policies of the Fund
and to the general supervision of the Trust's Board of Trustees. See "Trustees
and Executive Officers" in the Statement of Additional Information for
information on the Trust's Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers and administrators include, but
are not limited to, determining the composition of the investment portfolio of
the Fund and placing orders to buy, sell or hold particular securities. In
addition, AIM and the Sub-advisor provide the following administration services
to the Fund: furnishing corporate officers and clerical staff; providing office
space, services and equipment; and supervising all matters relating to the
Funds' operation.
    
 
   
  For investment management and administration services provided to the Fund,
the Fund pays AIM a fee computed daily and paid monthly based on the Fund's
average daily net assets at the annualized rate of 0.975% on the first $500
million, 0.95% on the next $500 million, 0.925% on the next $500 million and
0.90% on amounts thereafter. Out of the aggregate fees payable by the Fund, AIM
pays the Sub-advisor sub-advisory and sub-administration fees equal to 40% of
the aggregate fees AIM receives from the Fund. The investment management and
administration fees paid by the Fund are higher than those paid by most mutual
funds.
    
 
   
  The Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM
Distributors or other agents. AIM has undertaken to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary expenses)
to the annual rate of 2.00% and 2.50% of the average daily net assets of the
Fund's Class A and Class B shares, respectively.
    
 
   
  The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-advisor (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement (the "Advisory Agreement"). AIM was organized in 1976
and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Fund pursuant to an investment sub-advisory and
sub-administration agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of the Sub-advisor,
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included the Sub-advisor and
certain other affiliates. As a result of this transaction, the Sub-advisor is
now an indirect wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
                                       12
<PAGE>   268
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Fund, the Sub-advisor employs a team
approach, taking advantage of its investment resources around the world.
    
 
  The investment professional primarily responsible for the portfolio management
of the Fund is as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
NAME/OFFICE                    THE FUND                           PAST FIVE YEARS
- -----------             ----------------------                  -------------------
<S>                     <C>                      <C>
Michael Yellen          Portfolio Manager        Portfolio Manager for the Sub-advisor since 1996.
San Francisco           since 1996               Research analyst for the Sub-advisor from 1994 to
                                                 1996. Securities analyst and Co-Portfolio Manager
                                                 for Franklin Resources, Inc. (San Mateo, CA) from
                                                 1991 to 1994.
</TABLE>
    
 
   
  In placing orders for the Fund's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions may be executed through
affiliates of AIM or the Sub-advisor. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Funds will bear directly and could result in the realization of
net capital gains which would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into Master Distribution Agreement on
behalf of Class A shares of the Fund, and has entered into a Master Distribution
Agreement, on behalf of Class B shares of the Fund (individually referred to as
a "Distribution Agreement" or collectively as the "Distribution Agreements")
with AIM Distributors, a registered broker-dealer and a wholly owned subsidiary
of AIM, to act as the distributor of Class A and Class B shares of the Fund.
Certain Trustees and officers of the Trust are affiliated with AIM Distributors.
    
 
   
  The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors and its predecessor. In the event the Class B shares Distribution
Agreement is terminated, AIM Distributors would continue to receive payments of
asset based sales charges in respect of the outstanding Class B shares
attributable to the distribution efforts of AIM Distributors and its
predecessor; provided, however, that a complete termination of the Class B
shares master distribution plan (as defined in the plan) would terminate all
payments by the Fund of asset based sales charges and service fees to AIM
Distributors. Termination of the Class B shares distribution plan or
Distribution Agreement does not affect the obligation of Class B shareholders to
pay contingent deferred sales charges.
    
 
  DISTRIBUTION PLANS. Class A Plan. The Trust has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
 
  Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.50% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
 
  The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
 
  Of the aggregate amount payable under the Class A Plan, payments to dealers
and other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Dis-
 
                                       13
<PAGE>   269
 
   
tributors thereunder at any given time, the Fund will not be obligated to pay
more than that fee. If AIM Distributors' expenses are less than the fee it
receives, AIM Distributors will retain the full amount of the fee.
    
 
  Class B Plan. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
 
  Both Plans. Activities that may be financed under the Class A Plan and the
Class B Plan (collectively the "Plans") include, but are not limited to:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders, overhead, preparation and distribution of
advertising material and sales literature, expense of organizing and conducting
sales seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
 
  Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
 
   
  Under the Plans, certain financial institutions which have entered into
service agreements and which sell shares of the Fund on an agency basis, may
receive payments from the Fund pursuant to the respective Plans. AIM
Distributors does not act as principal, but rather as agent, for the Fund in
making such payments. The Fund will obtain a representation from such financial
institutions that they will either be licensed as dealer as required under
applicable state law, or that they will not engage in activities which would
constitute acting as a "dealer" as defined under applicable state law. Financial
intermediaries and any other person entitled to receive compensation for selling
Fund shares may receive different compensation for selling shares of any class
over another.
    
 
  For additional information concerning the operation of the Plans see the
Statement of Additional Information.
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST
    
 
   
  The Trust was organized as a Delaware business trust on May 7, 1998. On
September 8, 1998, the Trust acquired the assets of and assumed the liabilities
of AIM Investment Funds, Inc., a Maryland corporation. The Fund constitutes one
of the thirteen separate and distinct series portfolios of the Trust. From time
to time, the Trust may continue to establish other funds, each corresponding to
a distinct investment portfolio and a distinct series of the Trust's shares at
beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges, except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
    
 
                                       14
<PAGE>   270
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
               TO THE AIM FAMILY OF FUNDS--Registered Trademark--
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of the following mutual funds:
   
<TABLE>
            <S>                                           <C>
            AIM ADVISOR FLEX FUND                         AIM GLOBAL INFRASTRUCTURE FUND
            AIM ADVISOR INTERNATIONAL VALUE FUND          AIM GLOBAL RESOURCES FUND
            AIM ADVISOR LARGE CAP VALUE FUND              AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM ADVISOR MULTIFLEX FUND                    AIM GLOBAL TRENDS FUND
            AIM ADVISOR REAL ESTATE FUND                  AIM GLOBAL UTILITIES FUND
            AIM AGGRESSIVE GROWTH FUND                    AIM HIGH INCOME MUNICIPAL FUND
            AIM ASIAN GROWTH FUND                         AIM HIGH YIELD FUND
            AIM BALANCED FUND                             AIM INCOME FUND
            AIM BASIC VALUE FUND                          AIM INTERMEDIATE GOVERNMENT FUND
            AIM BLUE CHIP FUND                            AIM INTERNATIONAL EQUITY FUND
            AIM CAPITAL DEVELOPMENT FUND                  AIM INTERNATIONAL GROWTH FUND
            AIM CHARTER FUND                              AIM JAPAN GROWTH FUND
            AIM CONSTELLATION FUND                        AIM LATIN AMERICAN GROWTH FUND
            AIM DEVELOPING MARKETS FUND                   AIM LIMITED MATURITY TREASURY FUND
            AIM DOLLAR FUND(*)                            AIM MID CAP GROWTH FUND
            AIM EMERGING MARKETS FUND                     AIM MONEY MARKET FUND(*)
            AIM EMERGING MARKET DEBT FUND                 AIM MUNICIPAL BOND FUND
            AIM EUROPEAN DEVELOPMENT FUND                 AIM NEW PACIFIC GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM SELECT GROWTH FUND
            AIM GLOBAL AGGRESSIVE GROWTH FUND             AIM SMALL CAP EQUITY FUND
            AIM GLOBAL CONSUMER PRODUCTS AND              AIM SMALL CAP OPPORTUNITIES FUND
              SERVICES FUND                               AIM STRATEGIC INCOME FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM TAX-EXEMPT CASH FUND(*)
            AIM GLOBAL GROWTH FUND                        AIM TAX-FREE INTERMEDIATE FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM VALUE FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WEINGARTEN FUND
            AIM GLOBAL INCOME FUND                        AIM WORLDWIDE GROWTH FUND
                                                                                                 
</TABLE>
    
 
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
    Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
    asset value, without payment of a sales charge, as described below. Other
    funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
    FUND, are sold with an initial sales charge or subject to a contingent
    deferred sales charge upon redemption, as described below.
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed new Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.
 
   
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment is
$500, except for accounts initially established through an Automatic Investment
Plan, which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an Individual Retirement Arrangement ("IRA") or Roth IRA is $250.
There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such plans is $25 per
fund investment), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM 
    
 
                                       A-1
<PAGE>   271
 
   
Funds account. Notwithstanding the foregoing, the minimum initial investment
applicable to AIM Small Cap Opportunities Fund is $10,000.
    
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Shares of any AIM Funds not named on the cover of this Prospectus, as well as
Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                   OBI:                              Shareholder Name, Shareholder Account Number
                                                     (70 character limit)
</TABLE>
 
   
  HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased directly
through AIM Distributors or through any dealer who has entered into an agreement
with AIM Distributors. The minimum investment for subsequent purchases is $50.
The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. Notwithstanding the foregoing, the minimum subsequent purchases of shares
of AIM Small Cap Opportunities Fund is $1,000. There are no such minimum
investment requirements for investment of dividends and distributions of any of
the AIM Funds into any other existing AIM Funds account.
    
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional shares by electronic funds
transfer, please contact the Client Services Department of AFS for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
   
  Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BASIC
VALUE FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT
FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP EQUITY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND,AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without a
sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over
    
 
                                       A-2
<PAGE>   272
 
another class in the same Multiple Class Fund. Factors an investor should
consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
   
  The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPE
GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL
FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM
GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS
FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN
GROWTH FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
    
 
  The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
 
SALES CHARGES AND DEALER CONCESSIONS
 
   
  GROUP I. Certain AIM Funds are currently sold with a sales charge ranging from
5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM BASIC VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
EQUITY FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
    
 
   
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
      SINGLE TRANSACTION(1)                          PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   25,000                    5.50%          5.82%        4.75%
 $ 25,000 but less than $   50,000                   5.25           5.54         4.50
 $ 50,000 but less than $ 100,000                    4.75           4.99         4.00
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    3.00           3.09         2.50
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
    
 
- ---------------
 
   
(1) AIM Small Cap Opportunities Fund will not accept any single purchase in
    excess of $250,000.
    
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
                                       A-3
<PAGE>   273
   
 GROUP II. Certain AIM Funds are currently sold with a sales charge ranging from
4.75% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND, AIM
BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND
FUND, AIM STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
    
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   50,000                    4.75%          4.99%        4.00%
 $ 50,000 but less than $ 100,000                    4.00           4.17         3.25
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    2.50           2.56         2.00
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
  GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
Less than $ 100,000                                  1.00%          1.01%        0.75%
 $100,000 but less than $ 250,000                    0.75           0.76         0.50
 $250,000 but less than $1,000,000                   0.50           0.50         0.40
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
 
  ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
 
  In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
 
  AIM Distributors may make payments to dealers and institutions who are dealers
of record for purchases of $1 million of more of Class A shares (or shares which
normally involve payment of initial sales charges), which are sold at net asset
value and are subject to
 
                                       A-4
<PAGE>   274
 
a contingent deferred sales charge, for all AIM Funds other than Class A shares
of each of AIM LIMITED MATURITY TREASURY FUND and AIM TAX-FREE INTERMEDIATE FUND
as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next
$1 million of such purchases, plus 0.50% of the next $17 million of such
purchases, plus 0.25% of amounts in excess of $20 million of such purchases. See
"Contingent Deferred Sales Charge Program for Large Purchases." AIM Distributors
may make payments to dealers and institutions who are dealers of record for
purchases of $1 million or more of Class A shares (or shares which normally
involve payment of initial sales charges), and which are sold at net asset value
and are not subject to a contingent deferred sales charge, in an amount up to
0.10% of such purchases of Class A shares of AIM LIMITED MATURITY TREASURY FUND,
and in an amount up to 0.25% of such purchases of Class A shares of AIM TAX-FREE
INTERMEDIATE FUND.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed during the next twelve
months on Saturdays and Sundays and on the days on which New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class Funds
currently offer two or more classes of shares through separate distribution
systems (the "Multiple Distribution System"). Although each class of shares of a
particular Multiple Class Fund represents an interest in the same portfolio of
investments, each class is subject to a different distribution structure and, as
a result, differing expenses. This Multiple Distribution System allows investors
to select the class that is best suited to the investor's needs and objectives.
In considering the options afforded by the Multiple Distribution System,
investors should consider both the applicable initial sales charge or contingent
deferred sales charge, as well as the ongoing expenses borne by each class of
shares and other relevant factors, such as whether his or her investment goals
are long-term or short-term.
 
     CLASS A SHARES generally are sold subject to the initial sales charges
     described above and are subject to the other fees and expenses described
     herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
     needs of an investor who wishes to establish a dollar cost averaging
     program, pursuant to which Class A shares an investor owns may be exchanged
     at net asset value for Class A shares of another Multiple Class Fund or
     shares of another AIM Fund which is not a Multiple Class Fund, subject to
     the terms and conditions described under the caption "Exchange
     Privilege -- Terms and Conditions of Exchanges."
                                       A-5
<PAGE>   275
 
     CLASS B SHARES are sold without an initial sales charge. Thus, the entire
     purchase price of Class B shares is immediately invested in Class B shares.
     Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
     per annum on the average daily net assets of a Multiple Class Fund
     attributable to Class B shares. See the discussion under the caption
     "Management -- Distribution Plans." In addition, Class B shares redeemed
     within six years from the date such shares were purchased are subject to a
     contingent deferred sales charge ranging from 5% for redemptions made
     within the first year to 1% for redemptions made within the sixth year. No
     contingent deferred sales charge will be imposed if Class B shares are
     redeemed after six years from the date such shares were purchased.
     Redemptions of Class B shares and associated charges are further described
     under the caption "How to Redeem Shares -- Multiple Distribution System."
 
     Class B shares will automatically convert into Class A shares of the same
     Multiple Class Fund (together with a pro rata portion of all Class B shares
     acquired through the reinvestment of dividends and other distributions)
     eight years from the end of the calendar month in which the purchase of
     Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
     outstanding on May 29, 1998 and which are continuously held by the
     shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
     FUND seven years from the end of the calendar month in which the purchase
     of such Class B shares was made. If a shareholder exchanges Class B shares
     of AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
     since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
     shares will be subject to the eight year conversion feature applicable to
     Class B shares of all other AIM Funds. Following such conversion of their
     Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
     payments associated with Class B shares. See "Management -- Distribution
     Plans."
 
     AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an
     initial sales charge and are not subject to a contingent deferred sales
     charge; however, they are subject to the other fees and expenses described
     in the prospectus for AIM MONEY MARKET FUND.
 
  TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon Eastern Time or NYSE Close on any
business day of the Fund will be confirmed at the price next determined. Net
asset value is normally determined at 12:00 noon Eastern Time and NYSE Close on
each business day of AIM MONEY MARKET FUND.
 
  SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
REDUCTIONS IN INITIAL SALES CHARGES
 
  Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
 
                                       A-6
<PAGE>   276
 
  The term "purchaser" means:
 
  - an individual and his or her spouse and children, including any trust
    established exclusively for the benefit of any such person; or a pension,
    profit-sharing, or other benefit plan established exclusively for the
    benefit of any such person, such as an IRA, Roth IRA, a single-participant
    money-purchase/profit-sharing plan or an individual participant in a 403(b)
    plan (unless such 403(b) plan qualifies as the purchaser as defined below);
 
  - a 403(b) plan, the employer/sponsor of which is an organization described
    under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
    (the "Code"), provided that:
 
        a. the employer/sponsor must submit contributions for all participating
           employees in a single contribution transmittal (i.e., the funds will
           not accept contributions submitted with respect to individual
           participants);
 
        b. each transmittal must be accompanied by a single check or wire
           transfer; and
 
        c. all new participants must be added to the 403(b) plan by submitting
           an application on behalf of each new participant with the
           contribution transmittal;
 
  - a trustee or fiduciary purchasing for a single trust, estate or single
    fiduciary account (including a pension, profit-sharing or other employee
    benefit trust created pursuant to a plan qualified under Section 401 of the
    Code) and 457 plans, although more than one beneficiary or participant is
    involved;
 
  - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
    Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
    Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
    Distributors in writing that all of its related employee SEP, SARSEP or
    SIMPLE IRA accounts should be linked;
 
  - any other organized group of persons, whether incorporated or not, provided
    the organization has been in existence for at least six months and has some
    purpose other than the purchase at a discount of redeemable securities of a
    registered investment company; or
 
  - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
    Capital Management, Inc. ("AIM Capital").
 
  Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
 
  (1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
 
  Each purchase of fund shares normally subject to an initial sales charge made
during the 13-month period will be made at the public offering price applicable
to a single transaction of the total dollar amount indicated by the LOI, as
described under "Sales Charges and Dealer Concessions." It is the purchaser's
responsibility at the time of purchase to specify the account numbers that
should be considered in determining the appropriate sales charge. The offering
price may be further reduced as described under "Rights of Accumulation" if the
Transfer Agent is advised of all other accounts at the time of the investment.
Shares acquired through reinvestment of dividends and capital gain distributions
will not be applied to the LOI. At any time during the 13-month period after
meeting the original obligation, a purchaser may revise his intended investment
amount upward by submitting a written and signed request. Such a revision will
not change the original expiration date. By signing an LOI, a purchaser is not
making a binding commitment to purchase additional shares, but if purchases made
within the 13-month period do not total the amount specified, the investor will
pay the increased amount of sales charge as described below. Purchases made
within 90 days before signing an LOI will be applied toward completion of the
LOI. The LOI effective date will be the date of the first purchase with the
90-day period. The Transfer Agent will process necessary adjustments upon the
expiration or completion date of the LOI. Purchases made more than 90 days
before signing an LOI will be applied toward completion of the LOI based on the
value of the shares purchased calculated at the public offering price on the
effective date of the LOI.
 
  To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
                                       A-7
<PAGE>   277
 
  If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
 
  Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
 
  (2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
 
  PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at
net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
 
  Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
 
  The following persons may purchase Class A shares of the AIM Funds through AIM
Distributors without payment of an initial sales charge: (a) A I M Management
Group Inc. ("AIM Management") and its affiliated companies; (b) any current or
retired officer, director, trustee or employee, or any member of the immediate
family (including spouse, children, parents and parents of spouse) of any such
person, of AIM Management or its affiliates or of certain mutual funds which are
advised or managed by AIM; or any trust established exclusively for the benefit
of such persons; (c) any employee benefit plan established for employees of AIM
Management or its affiliates; (d) any current or retired officer, director,
trustee or employee, or any member of the immediate family (including spouse,
children, parents and parents of spouse) of any such person, or of CIGNA
Corporation or of any of its affiliated companies, or of First Data Investor
Services Group (formerly The Shareholder Services Group, Inc.); (e) any
investment company sponsored by CIGNA Investments, Inc. or any of its affiliated
companies for the benefit of its directors' deferred compensation plans; (f)
discretionary advised clients of AIM or AIM Capital; (g) registered
representatives and employees of dealers who have entered into agreements with
AIM Distributors (or financial institutions that have arrangements with such
dealers with respect to the sale of shares of the AIM Funds) and any member of
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, provided that purchases at net asset value are permitted by
the policies of such person's employer; (h) certain broker-dealers, investment
advisers or bank trust departments that provide asset allocation, similar
specialized investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services, and that
have entered into an agreement with AIM Distributors with respect to their use
of the AIM Funds in connection with such services; (i) any employee or any
member of the immediate family (including spouse, children, parents and parents
of spouse) of any employee, of Triformis Inc.; (j) shareholders of the AIM/GT
Funds as of April 30, 1987 who since that date continually have owned shares of
one or more of the AIM/GT Funds; and (k) certain former AMA Investment Advisers'
shareholders who became shareholders of the AIM Global Health Care Fund in
October 1989, and who have continuously held shares in the AIM/GT Funds since
that time.
 
   
  In addition, shares of any AIM Fund (except AIM Small Cap Opportunities Fund)
may be purchased at net asset value, without payment of a sales charge, by
pension, profit-sharing or other employee benefit plans created pursuant to a
plan qualified under Section 401 of the Code or plans under Section 457 of the
Code, or employee benefit plans created pursuant to Section 403(b) of the
    
                                       A-8
<PAGE>   278
 
Code and sponsored by nonprofit organizations defined under Section 501(c)(3) of
the Code. Such plans will qualify for purchases at net asset value provided that
(1) the total amount invested in the plan is at least $1,000,000, (2) the
sponsor signs a $1,000,000 LOI, (3) such shares are purchased by an
employer-sponsored plan with at least 100 eligible employees, or (4) all of the
plan's transactions are executed through a single financial institution or
service organization who has entered into an agreement with AIM Distributors
with respect to their use of the AIM Funds in connection with such accounts.
Section 403(b) plans sponsored by public educational institutions will not be
eligible for net asset value purchases based on the aggregate investment made by
the plan or the number of eligible employees. Participants in such plans will be
eligible for reduced sales charges based solely on the aggregate value of their
individual investments in the applicable AIM Fund. PLEASE NOTE THAT TAX-EXEMPT
FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR SUCH PLANS. AIM Distributors may pay
investment dealers or other financial service firms for share purchases of the
Load Funds (as defined under the caption "Exchange Privilege") sold at net asset
value to an employee benefit plan in accordance with this paragraph as follows:
1% of the first $2 million of such purchases, plus 0.80% of the next $1 million
of such purchases, plus 0.50% of the next $17 million of such purchases, plus
0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of
the net asset value of any Class A shares of AIM LIMITED MATURITY TREASURY FUND
sold at net asset value to an employee benefit plan in accordance with this
paragraph.
 
  Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
- --------------------------------------------------------------------------------
 
SPECIAL PLANS
 
  Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
who owns shares which are not subject to a contingent deferred sales charge, can
arrange for monthly, quarterly or annual amounts (but not less than $50) to be
drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that
 
                                       A-9
<PAGE>   279
 
exceed on an annual basis 12% of such account will be subject to a contingent
deferred sales charge on the amounts exceeding 12% of the account value at the
time the shareholder elects to participate in the Systematic Withdrawal Plan.
 
  Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested to shares of the
applicable AIM Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full
and fractional shares at their net asset value in effect at the time of each
such redemption.
 
  Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
 
  The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
 
  AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in the amount specified by
the shareholder (minimum $50 per investment, per account) and on a day or
date(s) specified by the shareholder. The proceeds are invested in shares of the
designated AIM Fund at the applicable offering price determined on the date of
the withdrawal. An Automatic Investment Plan may be discontinued upon 10 days'
prior notice to the Transfer Agent or AIM Distributors.
 
   
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
    
 
  DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
 
  PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination
money-purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans;
SARSEP plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement
accounts"). Information concerning these plans, including the custodian's fees
and the forms necessary to adopt such plans, can be obtained by calling or
writing the AIM Funds or AIM Distributors. Shares of the AIM Funds are also
available for investment through existing 401(k) plans (for both individuals and
employers) adopted under the Code. The plan custodian currently imposes an
annual $10 maintenance fee with respect to each retirement account for which it
serves as the custodian. This fee is generally charged in December. Each AIM
Fund and/or the custodian reserve the right to change this maintenance fee and
to initiate an establishment fee (not to exceed its cost).
 

   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance of $5,000 to
establish and maintain an allocation across a range of AIM Funds. The Program
automatically rebalances holdings of AIM Funds to the established allocation on
a periodic basis. Under the Program, a shareholder may predesig-
    
 
                                      A-10
<PAGE>   280
   
nate, on a percentage basis, how the total value of his or her holdings in a
minimum of two, and a maximum of ten, AIM Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more AIM Funds in the shareholder's Personal Portfolio for shares of
the same class(es) of one or more other AIM Funds in the shareholder's Personal
Portfolio. See "Exchange Privilege." If shares of the AIM Fund(s) in a
shareholder's Personal Portfolio have appreciated during a rebalancing period,
the Program will result in shares of AIM Fund(s) that have appreciated most
during the period being exchanged for shares of AIM Fund(s) that have
appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular AIM Fund would be 2% or less.
In predesignating percentages, shareholders must use whole percentages and
totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an AIM Fund's shares. The
AIM Funds and AIM Distributors reserve the right to modify, suspend, or
terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
    
 
                                      A-11
<PAGE>   281
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, including the Class A shares of the Multiple Class Funds, listed below
and referred to herein as the "Load Funds," are sold at a public offering price
that includes a maximum sales charge of 5.50% or 4.75% of the public offering
price of such shares; Class A shares (or shares which normally involve the
payment of initial sales charges) of certain of the AIM Funds, listed below and
referred to herein as the "Lower Load Funds," are sold at a public offering
price that includes a maximum sales charge of 1.00% of the public offering price
of such shares; and Class A shares or shares of certain other funds, listed
below and referred to herein as the "No Load Funds," are sold at net asset
value, without payment of a sales charge.
 
   
<TABLE>
<S>                                    <C>                                   <C>
                                LOAD FUNDS:                                  LOWER LOAD FUNDS:
   AIM ADVISOR FLEX FUND --            AIM GLOBAL INCOME                     AIM LIMITED MATURITY TREASURY FUND
     CLASS A                           FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR INTERNATIONAL           AIM GLOBAL INFRASTRUCTURE               AIM TAX-FREE INTERMEDIATE FUND
     VALUE FUND -- CLASS A             FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR LARGE CAP               AIM GLOBAL RESOURCES                  NO LOAD FUNDS:
     VALUE FUND -- CLASS A             FUND -- CLASS A
   AIM ADVISOR MULTIFLEX               AIM GLOBAL TELECOMMUNICATIONS         AIM MONEY MARKET FUND
     FUND -- CLASS A                   FUND -- CLASS A                           -- AIM CASH RESERVE SHARES
   AIM ADVISOR REAL ESTATE             AIM GLOBAL TRENDS                       AIM TAX-EXEMPT CASH FUND -- CLASS A
     FUND -- CLASS A                   FUND -- CLASS A                         AIM DOLLAR FUND -- CLASS A
   AIM AGGRESSIVE GROWTH               AIM GLOBAL UTILITIES
     FUND -- CLASS A                   FUND -- CLASS A
   AIM ASIAN GROWTH                    AIM HIGH INCOME MUNICIPAL
     FUND -- CLASS A                   FUND -- CLASS A
   AIM BALANCED FUND -- CLASS A        AIM HIGH YIELD FUND -- CLASS A
   AIM BASIC VALUE                     AIM INCOME FUND -- CLASS A
     FUND -- CLASS A                   AIM INTERMEDIATE GOVERNMENT
   AIM BLUE CHIP FUND -- CLASS A       FUND -- CLASS A
   AIM CAPITAL DEVELOPMENT             AIM INTERNATIONAL EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM CHARTER FUND -- CLASS A         AIM INTERNATIONAL GROWTH
   AIM CONSTELLATION                   FUND -- CLASS A
     FUND -- CLASS A                   AIM JAPAN GROWTH FUND -- CLASS A
   AIM DEVELOPING MARKETS              AIM LATIN AMERICAN GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS                AIM MID CAP EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS DEBT           AIM MONEY MARKET
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPE GROWTH                   AIM MUNICIPAL BOND
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPEAN DEVELOPMENT            AIM NEW PACIFIC GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM GLOBAL AGGRESSIVE GROWTH        AIM SELECT GROWTH FUND -- CLASS A
     FUND -- CLASS A                   AIM SMALL CAP GROWTH
   AIM GLOBAL CONSUMER PRODUCTS        FUND -- CLASS A
     AND SERVICES FUND -- CLASS A      AIM SMALL CAP OPPORTUNITIES
   AIM GLOBAL FINANCIAL SERVICES       FUND -- CLASS A
     FUND -- CLASS A                   AIM STRATEGIC INCOME
   AIM GLOBAL GOVERNMENT INCOME        FUND -- CLASS A
     FUND -- CLASS A                   AIM TAX-EXEMPT BOND FUND
   AIM GLOBAL GROWTH                   OF CONNECTICUT -- CLASS A
     FUND -- CLASS A                   AIM VALUE FUND -- CLASS A
   AIM GLOBAL GROWTH &                 AIM WEINGARTEN FUND -- CLASS A
     INCOME FUND -- CLASS A            AIM WORLDWIDE GROWTH
   AIM GLOBAL HEALTH CARE              FUND -- CLASS A
     FUND -- CLASS A
</TABLE>
    
 
                                      A-12
<PAGE>   282
 
   
  Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE; (iii) Class A shares
may be exchanged for Class A shares; (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A, Class B or Class C shares of AIM MONEY MARKET FUND. Class C shares
of AIM Small Cap Opportunities Fund are currently not available.
    
 
  DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
 
<TABLE>
<CAPTION>
                                                                                                      MULTIPLE CLASS FUNDS:
                                                            LOWER LOAD              NO LOAD       ------------------------------
      FROM:                 TO: LOAD FUNDS                     FUNDS                 FUNDS           CLASS B         CLASS C
      -----                 --------------                  ----------              -------          -------         -------
<S>                <C>                                <C>                      <C>                <C>             <C>
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
 
Lower Load Funds.. Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund or any     Fund or any Lower Load
                   Lower Load Fund.                   Fund; otherwise,
                                                      Offering Price.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
 
  FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS REVISED AS FOLLOWS:
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
Lower Load Funds.. Net Asset Value if shares were     Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
                   acquired upon exchange of any
                   Load Fund. Otherwise, difference
                   in sales charge will apply.
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund.           Fund or any Lower Load
                   Difference in sales charge will    Fund; otherwise,
                   apply if No Load shares were       Offering Price.
                   acquired upon exchange of Lower
                   Load Fund shares.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
  Class C........  Not Applicable                     Not Applicable           Not Applicable     Not Applicable  Net Asset Value
</TABLE>
 
   
  An exchange is permitted only in the following circumstances: (a) if the funds
offer more than one class of shares, the exchange must be between the same class
of shares (e.g., Class A, Class B and Class C shares of a Multiple Class Fund
cannot be exchanged for each other) except that AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may be exchanged for Class A shares of another Multiple Class
Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten busi-
    
 
                                      A-13
<PAGE>   283
 
ness days, and all other shares are held in an account for at least one day,
prior to the exchange; and (h) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the AIM
Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
   
  Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged are
redeemed at their net asset value as determined at NYSE Close on the day that an
exchange request in proper form (described below) is received. Exchange requests
received after NYSE Close will result in the redemption of shares at their net
asset value at NYSE Close on the next business day. See "Terms and Conditions of
Purchase of the AIM Funds -- Timing of Purchase, Exchange and Redemption Orders
(AIM MONEY MARKET FUND only)" for information regarding the timing of exchange
orders for AIM MONEY MARKET FUND. Normally, shares of an AIM Fund to be acquired
by exchange are purchased at their net asset value or applicable offering price,
as the case may be, determined on the date that such request is received, but
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that a fund would be materially disadvantaged
by an immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into a fund paying daily dividends (See "Dividends, Distributions and
Tax Matters -- Dividends and Distributions," below), and the release of the
exchange proceeds is delayed for the foregoing five-day period, such shareholder
will not begin to accrue dividends until the sixth business day after the
exchange. Shares purchased by check may not be exchanged until it is determined
that the check has cleared, which may take up to ten business days from the date
that the check is received. See "Terms and Conditions of Purchase of the AIM
Funds -- Timing of Purchase Orders."
    
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the AIM Funds. AIM Distributors reserves the right to impose conditions on
dealers or investment advisors who make telephone exchanges of shares of the
funds, including the condition that any such dealer or investment advisor enter
into an agreement (which contains additional conditions with respect to
exchanges of shares) with AIM Distributors. To exchange shares by telephone, a
shareholder, dealer or investment advisor who has satisfied the foregoing
conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach
AFS by telephone, he may also request exchanges by telegraph or use overnight
courier services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is received
prior to NYSE Close. The Transfer Agent and AIM Distributors will not be liable
for any loss, expense or cost arising out of any telephone exchange request that
they reasonably believe to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions if they do not follow
reasonable procedures for verification of telephone transactions. Such
reasonable procedures may include recordings of telephone transactions
(maintained for six months), requests for confirmation of the shareholder's
Social Security Number and current address, and mailings of confirmations
promptly after the transaction.
 
  EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
 
                                      A-14
<PAGE>   284
 
  MULTIPLE DISTRIBUTION SYSTEM. Class B Shares. Class B shares purchased under
the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
 
<TABLE>
<CAPTION>
  YEARS                                                     CONTINGENT DEFERRED
  SINCE                                                       SALES CHARGE AS
PURCHASE                                                    % OF DOLLAR AMOUNT
  MADE                                                       SUBJECT TO CHARGE
- --------                                                    -------------------
<S>                                                          <C>
First......................................................         5%
Second.....................................................         4%
Third......................................................         3%
Fourth.....................................................         3%
Fifth......................................................         2%
Sixth......................................................         1%
Seventh and Following......................................        None
</TABLE>
 
  In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
 
  Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
 
  Class C Shares. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
 
  Waivers. Contingent deferred sales charges on Class B and Class C shares will
be waived on redemptions (1) following the death or post-purchase disability, as
defined in Section 72(m)(7) of the Code, of a shareholder or a settlor of a
living trust (provided AIM Distributors is notified of such death or
post-purchase disability at the time of the redemption request and is provided
with satisfactory evidence of such death or post-purchase disability), (2) in
connection with certain distributions from IRAs, custodial accounts maintained
pursuant to Code Section 403(b), deferred compensation plans qualified under
Code Section 457 and plans qualified under Code Section 401 (collectively,
"Retirement Plans"), (3) pursuant to a Systematic Withdrawal Plan, provided that
amounts withdrawn under such plan do not exceed on an annual basis 12% of the
value of the shareholder's investment in Class B or Class C shares at the time
the shareholder elects to participate in the Systematic Withdrawal Plan, (4)
effected pursuant to the right of a Multiple Class Fund to liquidate a
shareholder's account if the aggregate net asset value of shares held in the
account is less than the designated minimum account size described in the
prospectus of such Multiple Class Fund, (5) effected by AIM of its investment in
Class B or Class C shares and (6) of Class C shares where such investor's dealer
of record, due to the nature of the investor's account, notifies AIM
Distributors prior to the time of investment that the dealer waives the payment
otherwise payable to the dealer described in the last paragraph under the
caption "Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM
Funds."
 
  Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
 
  Waiver category (2) above applies only to redemptions resulting from:
 
          (i) required minimum distributions to plan participants or
     beneficiaries who are age 70 1/2 or older, and only with respect to that
     portion of such distributions which does not exceed 12% annually of the
     participant's or beneficiary's account value in a particular AIM Fund;
 
                                      A-15
<PAGE>   285
 
          (ii) in-kind transfers of assets where the participant or beneficiary
     notifies AIM Distributors of such transfer no later than the time such
     transfer occurs;
 
          (iii) tax-free rollovers or transfers of assets to another Retirement
     Plan invested in Class B or Class C shares of one or more Multiple Class
     Funds;
 
          (iv) tax-free returns of excess contributions or returns of excess
     deferral amounts; and
 
          (v) distributions upon the death or disability (as defined in the
     Code) of the participant or beneficiary.
 
   
  CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND or Class A shares
of AIM DOLLAR FUND which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code, or Plans created under Section 403(b) of the
Code and sponsored by nonprofit organizations as defined under Section 501(c)(3)
of the Code, where shares are being redeemed in connection with employee
terminations or withdrawals, and (a) the total amount invested in a Plan is at
least $1,000,000, (b) the sponsor of a Plan signs a letter of intent to invest
at least $1,000,000 in one or more of the AIM Funds, or (c) the shares being
redeemed were purchased by an employer-sponsored Plan with at least 100 eligible
employees; provided, however, that Plans created under Section 403(b) of the
Code which are sponsored by public educational institutions shall qualify under
(a), (b) or (c) above on the basis of the value of each Plan participant's
aggregate investment in the AIM Funds, and not on the aggregate investment made
by the Plan or on the number of eligible employees; (2) redemptions of shares
following the death or post-purchase disability, as defined in Section 72(m)(7)
of the Code, of a shareholder or a settlor of a living trust; (3) redemptions of
shares purchased at net asset value by private foundations or endowment funds
where the initial amount invested was at least $1,000,000; (4) redemptions of
shares purchased by an investor in amounts of $1,000,000 or more where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payments otherwise payable to the dealer as described in the third paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds;" and (5) pursuant to a Systematic Withdrawal Plan, provided
that amounts withdrawn under such plan do not exceed on an annual basis 12% of
the value of the shareholder's investment in Class A shares at the time the
shareholder elects to participate in the Systematic Withdrawal Plan.
    
 
  Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  In addition to these requirements, shareholders who have invested in a fund to
establish as IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares; (a) a statement
as to whether or not the shareholder has attained age 59 1/2, and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.
 
                                      A-16
<PAGE>   286
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
this account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
   
  EXPEDITED REDEMPTIONS (AIM Cash Reserve shares of AIM MONEY MARKET FUND
ONLY). If a redemption order is received prior to 11:30 a.m. Eastern Time, the
redemption will be effective on that day and AIM MONEY MARKET FUND will endeavor
to transmit payment on that same business day. If the redemption order is
received after 11:30 a.m. and prior to NYSE Close, the redemption will be made
at the next determined net asset value and payment will generally be transmitted
on the next business day.
    
 
  REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing the
appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone
 
                                      A-17
<PAGE>   287
 
exchange and telephone redemption authorization forms; (7) changes in previously
designated wiring or electronic funds transfer instructions, and (8) written
redemptions or exchanges of shares previously reported as lost, whether or not
the redemption amount is under $50,000 or the proceeds are to be sent to the
address of record. These requirements may be waived or modified upon notice to
shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
    
 
   
  REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within ninety (90) days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment will not alter the taxes due on any
capital gains, except under the circumstances described below. If there has been
a loss on the redemption and shares of the same fund are repurchased, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in shares of the same fund, or exchanged for
shares of another AIM Fund, at a reduced sales charge within 90 days of the
payment of the sales charge, the shareholder's basis in the fund shares redeemed
may not include the amount of the sales charge paid, thereby reducing the loss
or increasing the gain recognized from the redemption; however, the
shareholder's basis in the fund shares purchased will include the sales charge.
Each AIM Fund may amend, suspend or cease offering the privilege at any time as
to shares redeemed after the date of such amendment, suspension or cessation.
This privilege may only be exercised once each year by a shareholder with
respect to each AIM Fund.
    
 
   
  Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of Class A shares and who subsequently reinvest a portion or
all of the value of the redeemed shares in Class A shares of any AIM Fund within
ninety (90) days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
    
 
                                      A-18

<PAGE>   288
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
   
  The net asset value per share (or share price) of each AIM Fund is determined
as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close with
respect to AIM MONEY MARKET FUND) on each "business day" of a fund as previously
defined. In the event the NYSE closes early (i.e. before 4:00 p.m. Eastern Time)
on a particular day, the net asset value of an AIM Fund's share will be
determined as of the close of the NYSE on such day. For purposes of defining net
asset value per share, futures and options contracts generally will be valued 15
minutes after the close of trading of the NYSE. The net asset value per share is
calculated by subtracting a class' liabilities from its assets and dividing the
result by the total number of class shares outstanding. The determination of net
asset value per share is made in accordance with generally accepted accounting
principles. Among other items, liabilities include accrued expenses and
dividends payable, and total assets include portfolio securities valued at their
market value, as well as income accrued but not yet received. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the fund's officers and
in accordance with methods which are specifically authorized by its governing
Board of Directors or Trustees. Short-term obligations with maturities of 60
days or less, and the securities held by the Money Market Funds, are valued at
amortized cost as reflecting fair value. AIM HIGH INCOME MUNICIPAL FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-FREE
INTERMEDIATE FUND value variable rate securities that have an unconditional
demand or put feature exercisable within seven days or less at par, which
reflects the market value of such securities.
    
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as
set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                DISTRIBUTIONS    DISTRIBUTIONS
                                                                                   OF NET           OF NET
                                                    DIVIDENDS FROM                REALIZED         REALIZED
                                                    NET INVESTMENT               SHORT-TERM        LONG-TERM
                   FUND                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
                   ----                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM ADVISOR FLEX FUND.....................  declared and paid quarterly       quarterly          annually
AIM ADVISOR INTERNATIONAL VALUE FUND......  declared and paid annually        annually           annually
AIM ADVISOR LARGE CAP VALUE FUND..........  declared and paid quarterly       quarterly          annually
AIM ADVISOR MULTIFLEX FUND................  declared and paid quarterly       quarterly          annually
AIM ADVISOR REAL ESTATE FUND..............  declared and paid quarterly       quarterly          annually
AIM AGGRESSIVE GROWTH FUND................  declared and paid annually        annually           annually
AIM ASIAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM BALANCED FUND.........................  declared and paid quarterly       annually           annually
AIM BASIC VALUE FUND......................  declared and paid annually        annually           annually
AIM BLUE CHIP FUND........................  declared and paid annually        annually           annually
AIM CAPITAL DEVELOPMENT FUND..............  declared and paid annually        annually           annually
AIM CHARTER FUND..........................  declared and paid quarterly       annually           annually
AIM CONSTELLATION FUND....................  declared and paid annually        annually           annually
AIM DEVELOPING MARKETS FUND...............  declared and paid annually        annually           annually
AIM DOLLAR FUND...........................  declared daily; paid monthly      annually           annually
AIM EMERGING MARKETS FUND.................  declared and paid annually        annually           annually
AIM EMERGING MARKETS DEBT FUND............  declared and paid monthsly        annually           annually
AIM EUROPE GROWTH FUND....................  declared and paid annually        annually           annually
AIM EUROPEAN DEVELOPMENT FUND.............  declared and paid annually        annually           annually
AIM GLOBAL AGGRESSIVE GROWTH FUND.........  declared and paid annually        annually           annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
  FUND....................................  declared and paid annually        annually           annually
AIM GLOBAL FINANCIAL SERVICES FUND........  declared and paid annually        annually           annually
</TABLE>
    
 
                                      A-19
<PAGE>   289
 
   
<TABLE>
<CAPTION>
                                                                             DISTRIBUTIONS    DISTRIBUTIONS
                                                                                OF NET           OF NET
                                                 DIVIDENDS FROM                REALIZED         REALIZED
                                                 NET INVESTMENT               SHORT-TERM        LONG-TERM
FUND                                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
- ----                                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM GLOBAL GOVERNMENT INCOME FUND.........  declared and paid monthly         annually           annually
AIM GLOBAL GROWTH FUND....................  declared and paid annually        annually           annually
AIM GLOBAL GROWTH & INCOME FUND...........  declared and paid quarterly       annually           annually
AIM GLOBAL HEALTH CARE FUND...............  declared and paid annually        annually           annually
AIM GLOBAL INCOME FUND....................  declared daily; paid monthly      annually           annually
AIM GLOBAL INFRASTRUCTURE FUND............  declared and paid annually        annually           annually
AIM GLOBAL RESOURCES FUND.................  declared and paid annually        annually           annually
AIM GLOBAL TELECOMMUNICATIONS FUND........  declared and paid annually        annually           annually
AIM GLOBAL TRENDS FUND....................  declared and paid annually        annually           annually
AIM GLOBAL UTILITIES FUND.................  declared daily; paid monthly      annually           annually
AIM HIGH INCOME MUNICIPAL FUND............  declared daily; paid monthly      annually           annually
AIM HIGH YIELD FUND.......................  declared daily; paid monthly      annually           annually
AIM INCOME FUND...........................  declared daily; paid monthly      annually           annually
AIM INTERMEDIATE GOVERNMENT FUND..........  declared daily; paid monthly      annually           annually
AIM INTERNATIONAL EQUITY FUND.............  declared and paid annually        annually           annually
AIM INTERNATIONAL GROWTH FUND.............  declared and paid annually        annually           annually
AIM JAPAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM LATIN AMERICAN GROWTH FUND............  declared and paid annually        annually           annually
AIM LIMITED MATURITY TREASURY FUND........  declared daily; paid monthly      annually           annually
AIM MID CAP EQUITY FUND...................  declared and paid annually        annually           annually
AIM MONEY MARKET FUND.....................  declared daily; paid monthly      at least annually  annually
AIM MUNICIPAL BOND FUND...................  declared daily; paid monthly      annually           annually
AIM NEW PACIFIC GROWTH FUND...............  declared and paid annually        annually           annually
AIM SELECT GROWTH FUND....................  declared and paid annually        annually           annually
AIM SMALL CAP GROWTH FUND.................  declared and paid annually        annually           annually
AIM SMALL CAP OPPORTUNITIES FUND..........  declared and paid annually        annually           annually
AIM STRATEGIC INCOME FUND.................  declared and paid monthly         annually           annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT...  declared daily; paid monthly      annually           annually
AIM TAX-EXEMPT CASH FUND..................  declared daily; paid monthly      at least annually  annually
AIM TAX-FREE INTERMEDIATE FUND............  declared daily; paid monthly      annually           annually
AIM VALUE FUND............................  declared and paid annually        annually           annually
AIM WEINGARTEN FUND.......................  declared and paid annually        annually           annually
AIM WORLDWIDE GROWTH FUND.................  declared and paid annually        annually           annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in like shares of another
Multiple Class Fund, to the extent permitted. For funds that do not declare a
dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. For funds that declare
a dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or the
dividend portion thereof, in cash, or to invest such dividends and distributions
in shares of another fund in the AIM Funds; provided that (i) dividends and
distributions attributable to Class B shares may only be reinvested in Class B
shares, (ii) dividends and distributions attributable to Class C shares may only
be reinvested in Class C shares, (iii) dividends and distributions attributable
to Class A shares may not be reinvested in Class B or Class C shares, and (iv)
dividends and distributions attributable to the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may not be reinvested in the Class A shares of that Fund or in
any Class B or Class C shares. Investors who have not previously selected such a
reinvestment option on the account application form may contact the Transfer
Agent at any time to obtain a form to authorize such reinvestments in another
AIM Fund. Such reinvestments into the AIM Funds are not subject to sales
charges, and shares so purchased are automatically credited to the account of
the shareholder.
 
  Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
 
                                      A-20
<PAGE>   290
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares, except for "exempt-interest dividends" paid by
AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND
FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND
(the "Tax-Exempt Funds"), which are exempt from federal income tax. With respect
to tax-exempt shareholders, dividends and distributions from the AIM Funds are
not subject to federal income taxation to the extent permitted under the
applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    
 
   
  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
    
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
                                      A-21
<PAGE>   291
   
 TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
  TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other taxable securities. For
additional information concerning the alternative minimum tax and certain
collateral tax consequences of the receipt of exempt-interest dividends, see the
Statements of Additional Information applicable to the Tax-Exempt Funds.
 
  The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
 
  To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
 
  From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP EQUITY FUND,
AIM SMALL CAP GROWTH FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX INFORMATION.
Certain states exempt from income taxes dividends paid by mutual funds
attributable to interest on U.S. Treasury and certain other U.S. government
obligations. Investors should consult with their own tax advisors concerning the
availability of such exemption.
    
 
  AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH
FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do
so, each of these funds may elect to pass through to its shareholders credits
for foreign taxes paid. If a fund makes such an election, a shareholder who
receives a distribution (1) will be required to include in gross income his
proportionate share of foreign taxes allocable to the distribution and (2) may
claim a credit or deduction for such share for his taxable year in which the
distribution is received, subject to the general limitations imposed on the
allowance of foreign tax credits and deductions. Shareholders should also note
that certain gains or losses attributable to fluctuations in exchange rates or
foreign currency forward contracts may increase or decrease the amount of income
of the fund available for distribution to shareholders and should note that if,
for any fund, such losses exceed other income during a taxable year, the fund
would not be able to pay ordinary income dividends for that year.
 
                                      A-22
<PAGE>   292
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each AIM Fund's transfer agent and dividend
payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-23
<PAGE>   293
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
 
 
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                              GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
      ACCOUNT TYPE            NUMBER OF:                       ACCOUNT TYPE                  NUMBER OF:
      ------------            --------------------             ------------                  ------------------
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary
      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application
      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors
      Legal Guardian          Ward, Minor or
                              Incompetent
      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
 
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   294
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   295
[AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
<PAGE>   296
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
CLASS A AND CLASS B SHARES OF
    
 
   
AIM EMERGING MARKETS DEBT FUND
    
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
PROSPECTUS
SEPTEMBER 8, 1998
 
   
This Prospectus contains information about AIM EMERGING MARKETS DEBT (FORMERLY
KNOWN AS AIM GLOBAL HIGH INCOME FUND) FUND (the "Fund"), which is one of several
series investment portfolios comprising AIM Investment Funds (the "Trust"), an
open-end, series, management investment company. The Fund is a non-diversified
portfolio which primarily seeks high current income and secondarily seeks
capital appreciation by investing all of its investable assets in the Emerging
Markets Debt Portfolio (formerly known as the Global High Income Portfolio) (the
"Portfolio"), which, in turn, invests primarily in the debt securities of
issuers located in emerging markets. The Portfolio's investment objectives are
identical to those of the Fund.
    
 
The investment experience of the Fund will correspond directly with the
investment experience of the Portfolio.
 
   
This Prospectus sets forth concisely information about the Fund that prospective
investors should know before investing. It should be read and retained for
future reference. A Statement of Additional Information, dated September 8,
1998, has been filed with the Securities and Exchange Commission (the "SEC") and
is incorporated herein by reference. The Statement of Additional Information is
available without charge upon written request to the Trust at 11 Greenway Plaza,
Suite 100, Houston, Texas 77046-1173 or by calling 1-800-347-4246. The SEC
maintains a Web site at http://www.sec.gov that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding the Fund. Additional information about the Fund may also
be obtained from http: //www.aimfunds.com.
    
 
   
THE PORTFOLIO INVESTS UP TO 100% OF ITS TOTAL ASSETS IN LOWER QUALITY AND
UNRATED FOREIGN GOVERNMENT BONDS WHOSE CREDIT QUALITY IS GENERALLY CONSIDERED
THE EQUIVALENT OF U.S. CORPORATE DEBT SECURITIES COMMONLY KNOWN AS "JUNK BONDS."
INVESTMENTS OF THIS TYPE ARE SUBJECT TO A GREATER RISK OF LOSS OF PRINCIPAL AND
INTEREST. PURCHASERS SHOULD CAREFULLY ASSESS THE RISKS ASSOCIATED WITH AN
INVESTMENT IN THE FUND. SEE "INVESTMENT PROGRAM" AND "RISK FACTORS."
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   297
 
- --------------------------------------------------------------------------------
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     7
  Investment Program...................     7
  Risk Factors.........................    13
  Management...........................    17
  Organization of the Trust and the
     Portfolio.........................    19
    
   
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-9
  Exchange Privilege...................  A-12
  How to Redeem Shares.................  A-14
  Determination of Net Asset Value.....  A-19
  Dividends, Distributions and Tax
     Matters...........................  A-19
  General Information..................  A-23
  Appendix A...........................  A-24
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND AND THE PORTFOLIO
    
 
  The Fund is a non-diversified series of the Trust. The Portfolio is a
non-diversified, open-end management investment company.
 
  INVESTMENT OBJECTIVES. The Fund primarily seeks high current income and
secondarily seeks capital appreciation.
 
  PRINCIPAL INVESTMENTS. The Fund invests all of its investable assets in the
Portfolio, which, in turn, invests primarily in debt securities of issuers
located in emerging markets.
 
   
  INVESTMENT MANAGERS. The Portfolio is managed by A I M Advisors, Inc. ("AIM")
and is sub-advised and sub-administered by INVESCO (NY), Inc. (the
"Sub-advisor"). AIM and the Sub-advisor and their worldwide asset management
affiliates provide investment management and/or administrative services to
institutional, corporate and individual clients around the world. AIM and the
Sub-advisor are both indirect wholly owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC and its subsidiaries are an independent investment management group
that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing
presence in Asia. AIM was organized in 1976 and, together with its subsidiaries,
currently advises approximately 90 investment company portfolios.
    
 
  PURCHASING SHARES. Investors may select Class A or Class B shares of the Fund
which are offered by this Prospectus at an offering price that reflects
differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to
a separate prospectus, the Fund also offers Advisor Class shares, which
represent interests in the Fund. The Advisor Class has different distribution
arrangements.
 
  CLASS A SHARES -- Shares are offered at net asset value plus any applicable
initial sales charge.
 
  CLASS B SHARES -- Shares are offered at net asset value without an initial
sales charge, and are subject to a maximum contingent deferred sales charge of
5% on certain redemptions made within six years from the date such shares were
purchased. Class B shares automatically convert to Class A shares of the Fund
eight years following the end of the calendar month in which a purchase was
made. Class B shares are subject to higher expenses than Class A shares.
 
  Initial investments in any class of shares must be at least $500 and
additional investments must be at least $50. The minimum initial investment is
modified for investments through tax-qualified retirement plans and accounts
initially established with an Automatic Investment Plan. The distributor of the
Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
 
  SUITABILITY FOR INVESTORS. An investor in Class A or Class B shares of the
Fund should consider the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the shares are expected to
be held, and other circumstances. Investors should consider whether, during the
anticipated life of their investment in the Fund, the accumulated distribution
fees and any applicable contingent deferred sales charges on Class B shares
prior to conversion would be less than the initial sales charge and accumulated
distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares.
To assist investors in making this determination, the table under the caption
"Table of Fees and Expenses" sets forth examples of the charges applicable to
each class of shares. Class A shares will normally be more beneficial than Class
B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase
of more than $250,000 for Class B shares.
 
                                        2
<PAGE>   298
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, " The AIM Family of Funds or the "AIM Funds"). Class
A and Class B shares of the Fund may be exchanged for shares of other funds in
The AIM Family of Funds in the manner and subject to the policies and charges
set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Class A shareholders of the Fund may redeem all or a portion
of their shares at net asset value on any business day, generally without
charge. A contingent deferred sales charge of 1% may apply to certain
redemptions where a purchase of more than $1 million is made at net asset value.
See "How to Redeem Shares -- Contingent Deferred Sales Charge Program for Large
Purchases."
 
  Class B shareholders of the Fund may redeem all or a portion of their shares
at net asset value on any business day, less a contingent deferred sales charge
for redemptions made within six years from the date such shares were purchased.
Class B shares redeemed after six years from the date such shares were purchased
will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on a monthly basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters" and "Special Plans."
    
 
  RISK FACTORS. There is no assurance that the Fund or the Portfolio will
achieve its investment objectives. The Fund's net asset value will fluctuate,
reflecting fluctuations in the market value of its or its corresponding
Portfolio's portfolio holdings. The value of debt securities held by the
Portfolio generally fluctuates inversely with interest rate movements.
 
  The Portfolio will invest in foreign securities. Investments in foreign
securities involve risks relating to political and economic developments abroad
and the differences between the regulations to which U.S. and foreign issuers
are subject. Individual foreign economies also may differ favorably or
unfavorably from the U.S. economy. Changes in foreign currency exchange rates
will affect the Fund's or the Portfolio's net asset value, earnings and gains
and losses realized on sales of securities. Securities of foreign companies may
be less liquid and their prices more volatile than those of securities of
comparable U.S. companies. The Portfolio will normally invest at least 65% of
its total assets in debt securities of issuers in emerging markets. Such
investments entail greater risks than investing in securities of issuers in
developed markets.
 
  The Portfolio may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs.
 
   
  The Portfolio may invest up to 100% of its total assets in debt securities
rated below investment grade or, if not rated, determined by the Sub-advisor to
be of comparable quality. Investments of this type are subject to greater risk
of loss of principal and interest. See "Investment Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   299
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Class A and Class B shares of the Fund are reflected in the following table(1):
 
<TABLE>
<CAPTION>
                                                              CLASS A   CLASS B
                                                              -------   -------
<S>                                                           <C>       <C>
Shareholder Transaction Costs(2):
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................   4.75%     None
  Sales charges on reinvested distributions to
     shareholders...........................................   None      None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........   None      5.00%
  Redemption charges........................................   None      None
  Exchange fees.............................................   None      None
Annual Fund Operating Expenses(3): (as a % of average net
  assets)
  Investment management and administration fees.............   0.90%     0.90%
  12b-1 distribution and service fees.......................   0.35%     1.00%
  Other expenses............................................   0.33%     0.33%
                                                               ----      ----
          Total Fund Operating Expenses.....................   1.58%     2.23%
                                                               ====      ====
</TABLE>
 
   
(1) This table is intended to assist investors in understanding the various
    costs and expenses associated with investing in the Fund. Long-term
    shareholders may pay more than the economic equivalent of the maximum
    front-end sales charge permitted by the National Association of Securities
    Dealers, Inc. rules regarding investment companies.
    
 
(2) Sales charge waivers are available for Class A and Class B shares, and
    reduced sales charge purchase plans are available for Class A shares. The
    maximum 5% contingent deferred sales charge on Class B shares applies to
    redemptions during the first year after purchase. The charge generally
    declines by 1% annually thereafter, reaching zero after six years. See
    "Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
    Sales Charges."
 
   
(3) Expenses are based on the Fund's fiscal year ended October 31, 1997. "Other
    expenses" include custody, transfer agency, legal, audit and other operating
    expenses. See "Management" herein and the Statement of Additional
    Information for more information. The Board of Trustees of the Trust
    believes that the aggregate per share expenses of the Fund and the Portfolio
    will be less than or approximately equal to the expenses which the Fund
    would incur if the assets of the Fund were invested directly in the type of
    securities being held by the Portfolio. Effective November 1, 1997, AIM has
    voluntarily agreed to limit the Fund's expenses (exclusive of brokerage
    commissions, taxes, interest and extraordinary expenses) to the annual rates
    of 1.75% and 2.40% of the average daily net assets of the Fund's Class A and
    Class B shares, respectively, through May 31, 2000.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                    1 YEAR   3 YEARS   5 YEARS   10 YEARS(3)
                                                    ------   -------   -------   -----------
<S>                                                 <C>      <C>       <C>       <C>
Class A Shares(1).................................   $63      $ 95      $130        $227
Class B Shares
  Assuming a complete redemption at end of
     period(2)....................................   $74      $103      $144        $242
  Assuming no redemption..........................   $23      $ 70      $121        $242
</TABLE>
    
 
   
(1) Assumes payment of maximum sales charge by the investor.
    
 
   
(2) Assumes deduction of the applicable contingent deferred sales charge.
    
 
   
(3) For Class B shares, this number reflects the conversion to Class A shares
    eight years following the end of the calendar month in which a purchase was
    made.
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S AND THE PORTFOLIO'S ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE
SHOWN. THE TABLE AND THE ASSUMPTION IN THE HYPOTHETICAL EXAMPLE OF A 5% ANNUAL
RETURN ARE REQUIRED BY REGULATION OF THE SEC APPLICABLE TO ALL MUTUAL FUNDS; THE
5% ANNUAL RETURN IS NOT A PREDICTION OF AND DOES NOT REPRESENT THE FUND'S OR THE
PORTFOLIO'S PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   300
 
- --------------------------------------------------------------------------------
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The tables below provide condensed financial information concerning income and
capital changes for Class A and Class B shares of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statements and notes for the
fiscal year ended October 31, 1997 and the semi-annual period April 30, 1998,
have been audited by PricewaterhouseCoopers LLP, independent accountants, whose
reports thereon appear in the Statement of Additional Information.
    
 
   
                         AIM EMERGING MARKETS DEBT FUND
    
   
 (FORMERLY AIM GLOBAL HIGH INCOME FUND AND PRIOR TO THAT GT GLOBAL HIGH INCOME
                                     FUND)
    
 
   
<TABLE>
<CAPTION>
                                                                                                                   OCTOBER 22,
                                                                                                                       1992
                                             SIX                                                                  (COMMENCEMENT
                                           MONTHS                                                                 OF OPERATIONS)
                                            ENDED                       YEAR ENDED OCTOBER 31,                          TO
                                          APRIL 30,    --------------------------------------------------------    OCTOBER 31,
                                           1998(C)     1997(C)     1996(C)       1995      1994(C)     1993(C)         1992
                                          ---------    --------    --------    --------    --------    --------   --------------
<S>                                       <C>          <C>         <C>         <C>         <C>         <C>        <C>
CLASS A:
Per Share Operating Performance:
  Net asset value, beginning of
    period..............................  $  15.56     $  14.85    $  11.70    $  12.56    $  14.92    $  11.43       $11.43
                                          --------     --------    --------    --------    --------    --------       ------
Income from investment operations:
  Net investment income.................      0.84*        1.19        1.27        1.35        0.94        0.78           --
  Net realized and unrealized gain
    (loss) on investments...............      0.38         0.93        3.09       (1.09)      (1.87)       3.92           --
                                          --------     --------    --------    --------    --------    --------       ------
  Net increase (decrease) from
    investment operations...............      1.22         2.12        4.36        0.26       (0.93)       4.70           --
                                          --------     --------    --------    --------    --------    --------       ------
Distributions:
  From net investment income............     (0.83)       (1.18)      (1.11)      (1.03)      (0.94)      (0.78)          --
  From net realized gain on
    investments.........................     (2.83)       (0.23)      (0.10)      (0.03)      (0.27)         --           --
  In excess of net realized gain on
    investments.........................        --           --          --          --       (0.22)         --           --
  From sources other than net investment
    income..............................        --           --          --          --          --       (0.43)          --
  Return of capital.....................        --           --          --       (0.06)         --          --           --
                                          --------     --------    --------    --------    --------    --------       ------
        Total distributions.............     (3.66)       (1.41)      (1.21)      (1.12)      (1.43)      (1.21)          --
                                          --------     --------    --------    --------    --------    --------       ------
Net asset value, end of period..........  $  13.12     $  15.56    $  14.85    $  11.70    $  12.56    $  14.92       $11.43
                                          ========     ========    ========    ========    ========    ========       ======
        Total investment return(e)......      9.73%(b)    14.46%      39.05%       2.81%      (6.45)%      43.6%          --%(b)
                                          ========     ========    ========    ========    ========    ========       ======
Ratios and supplemental data:
  Net assets, end of period (in
    000's)..............................  $130,645     $133,973    $178,318    $142,002    $167,974    $143,171       $  207
  Ratio of net investment income (loss)
    to average net assets...............     10.87%(a)     7.39%       9.52%      11.85%       7.00%       6.40%         N/A(d)
Ratio of operating expenses to average
  net assets:
  With expense reductions...............      1.68%(a)     1.53%       1.69%       1.75%       1.57%       2.20%         N/A(d)
  Without expense reductions............      1.68%(a)     1.58%       1.69%       1.75%       1.57%       2.20%         N/A(d)
Ratio of interest expense to average net
  assets(f).............................      0.01%(a)      N/A        0.04%        N/A        0.22%        N/A          N/A(d)
Portfolio turnover rate(f)..............       222%(a)      214%        290%        213%        178%        195%          --%
</TABLE>
    
 
- ---------------
 
   
(a)   Annualized.
    
   
(b)   Not annualized.
    
   
(c)   These selected per share data were calculated based upon average shares
      during the period.
    
   
(d)   Ratios are not meaningful due to short period of operation.
    
   
(e)   Total investment return does not include sales charges.
    
   
(f)   The Fund invests only in the Emerging Markets Debt Portfolio and does not
      engage in securities transactions. Accordingly, the portfolio turnover
      rates presented are for the Portfolio. Portfolio turnover and the ratio of
      interest expense to average net assets is calculated on the basis of the
      fund as a whole without distinguishing among the classes of shares issued.
    
   
*     Net investment income per share reflects an interest payment received from
      the conversion of Vnesheconombank loan agreements. Without such a payment
      net investment income would have been $0.63 and $0.58 per share for Class
      A and B respectively.
    
   
N/A   Not Applicable.
    
 
                                        5
<PAGE>   301
 
   
    
 
   
<TABLE>
<CAPTION>
                                                                                                                   OCTOBER 22,
                                                                                                                      1992
                                       SIX MONTHS                                                                 (COMMENCEMENT
                                         ENDED                        YEAR ENDED OCTOBER 31,                    OF OPERATIONS) TO
                                       APRIL 30,     --------------------------------------------------------      OCTOBER 31,
                                        1998(C)      1997(C)     1996(C)       1995      1994(C)     1993(C)          1992
                                       ----------    --------    --------    --------    --------    --------   -----------------
<S>                                    <C>           <C>         <C>         <C>         <C>         <C>        <C>
CLASS B:
Per Share Operating Performance:
  Net asset value, beginning of
    period...........................   $  15.54     $  14.83    $  11.69    $  12.56    $  14.90    $  11.43        $11.43
                                        --------     --------    --------    --------    --------    --------        ------
Income from investment operations:
  Net investment income..............       0.79*        1.09        1.17        1.27        0.86        0.70            --
  Net realized and unrealized gain
    (loss) on investments............       0.39         0.93        3.09       (1.09)      (1.85)       3.90            --
                                        --------     --------    --------    --------    --------    --------        ------
  Net increase (decrease) from
    investment operations............       1.18         2.02        4.26        0.18       (0.99)       4.60            --
                                        --------     --------    --------    --------    --------    --------        ------
Distributions:
  From net investment income.........      (0.79)       (1.08)      (1.03)      (0.96)      (0.86)      (0.70)           --
  From net realized gain on
    investments......................      (2.83)       (0.23)      (0.09)      (0.03)      (0.27)         --            --
  In excess of net realized gain on
    investments......................         --           --          --          --       (0.22)         --            --
  From sources other than net
    investment income................         --           --          --          --          --       (0.43)           --
  Return of capital..................         --           --          --       (0.06)         --          --            --
                                        --------     --------    --------    --------    --------    --------        ------
        Total distributions..........      (3.62)       (1.31)      (1.12)      (1.05)      (1.35)      (1.13)           --
                                        --------     --------    --------    --------    --------    --------        ------
Net asset value, end of period.......   $  13.10     $  15.54    $  14.83    $  11.69    $  12.56    $  14.90        $11.43
                                        ========     ========    ========    ========    ========    ========        ======
        Total investment return(e)...       9.37%(b)    13.77%      38.16%       2.07%      (6.99)%      42.6%           --%(b)
                                        ========     ========    ========    ========    ========    ========        ======
Ratios and supplemental data:
  Net assets, end of period (in
    000's)...........................   $221,039     $228,101    $251,002    $214,897    $232,423    $127,035        $   53
  Ratio of net investment income
    (loss) to average net assets.....      10.22%(a)     6.74%       8.87%      11.20%       6.35%        5.8%          N/A(d)
Ratio of operating expenses to
  average net assets:
  With expense reductions............       2.33%(a)     2.18%       2.34%       2.40%       2.22%        2.8%          N/A(d)
  Without expense reductions.........       2.33%(a)     2.23%       2.34%       2.40%       2.22%        2.8%          N/A(d)
Ratio of interest expense to average
  net assets(f)......................       0.01%(a)      N/A        0.04%        N/A        0.22%        N/A           N/A(d)
Portfolio turnover rate(f)...........        222%(a)      214%        290%        213%        178%        195%           --%
</TABLE>
    
 
- ---------------
   
(a)   Annualized.
    
   
(b)   Not annualized.
    
   
(c)   These selected per share data were calculated based upon average shares
      during the period.
    
   
(d)   Ratios are not meaningful due to short period of operation.
    
   
(e)   Total investment return does not include sales charges.
    
   
(f)   The Fund invests only in the Emerging Markets Debt Portfolio and does not
      engage in securities transactions. Accordingly, the portfolio turnover
      rates presented are for the Portfolio. Portfolio turnover and ratio of
      interest expense to average net assets is calculated on the basis of the
      fund as a whole without distinguishing among the classes of shares issued.
    
   
 *    Net investment income per share reflects an interest payment received from
      the conversion of Vnesheconombank loan agreements. Without such a payment
      net investment income would have been $0.63 and $0.58 per share for Class
      A and B respectively.
    
   
N/A   Not Applicable.
    
 
                                ---------------
 
   
<TABLE>
<CAPTION>
                                                            AVERAGE MONTHLY       AVERAGE MONTHLY       AVERAGE AMOUNT
                                          AMOUNT OF DEBT    AMOUNT OF DEBT     NUMBER OF REGISTRANT'S    OF DEBT PER
                                          OUTSTANDING AT      OUTSTANDING        SHARES OUTSTANDING      SHARE DURING
                                          END OF PERIOD    DURING THE PERIOD     DURING THE PERIOD        THE PERIOD
     YEAR ENDED                           --------------   -----------------   ----------------------   --------------
<S>                    <C>                <C>              <C>                 <C>                      <C>
Six months ended April 30, 1998........      --$              $   246,575            26,410,544            $  0.009
October 31, 1997.......................      --$              $ 2,526,057            28,093,475            $ 0.0899
October 31, 1996.......................      --$              $ 2,431,693            30,732,727            $ 0.0791
October 31, 1995.......................      --$              $        --                    --            $     --
October 31, 1994.......................      --$              $14,109,589            26,707,829            $ 0.5283
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed on a daily
basis.
    
 
                                        6
<PAGE>   302
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return. Standardized total return
for Class A shares reflects the deduction of the Fund's maximum front-end sales
charge at the time of purchase. Standardized total return for Class B shares
reflects the deduction of the maximum applicable contingent deferred sales
charge on a redemption of shares held for the period.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  Yield is computed in accordance with standardized formulas described in the
Statement of Additional Information and can be expected to fluctuate from time
to time and is not necessarily indicative of future results. Accordingly, yield
information may not provide a basis for comparison with investments which pay a
fixed rate of interest for a stated period of time. Yield reflects investment
income net of expenses over the relevant period attributable to a Fund share,
expressed as an annualized percentage of the maximum offering price per share
for Class A shares and net asset value per share for Class B shares.
 
  Yield is a function of the type and quality of the Fund's investments, the
maturity of the securities held in the Fund's portfolio and the operating
expense ratio of the Fund. A shareholder's investment in the Fund is not insured
or guaranteed. These factors should be carefully considered by the investor
before making an investment in the Fund.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's yield and total return. The performance
of the Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
 
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVES. The Fund primarily seeks high current income, and
secondarily seeks capital appreciation. It seeks its objectives by investing all
of its investable assets in the Portfolio, which in turn seeks the same
objectives as the Fund by normally investing at least 65% of its total assets in
debt securities of issuers in emerging markets. There can be no assurance that
the Fund or the Portfolio will achieve its investment objectives.
    
 
   
  INVESTMENT POLICIES. The Portfolio intends to invest in the following types of
debt securities: bonds, notes and debentures of emerging market governments;
securities issued or guaranteed by such governments' agencies or
instrumentalities; securities issued or guaranteed by the central banks of
emerging market countries; and securities issued by other banks and companies in
such countries and securities denominated in or indexed to the currencies of
emerging markets. Under current market conditions, the Portfolio expects its
investments in emerging market securities to consist substantially of Brady
Bonds (see "General Policies -- Brady Bonds," below) and other sovereign debt
securities.
    
 
   
  The Portfolio may also invest up to 35% of its total assets in (1) equity
securities of issuers in emerging markets included in the list below under the
caption "Emerging Markets"; (2) equity and debt securities of issuers in
developed countries, including the United States; (3) securities of issuers in
emerging markets not included in the emerging markets list, if investing therein
becomes feasible and desirable subsequent to the date of this Prospectus; and
(4) cash and money market instruments. In evaluating investments in securities
of issuers in developed markets, the Sub-advisor will consider, among other
things, the business activities of the issuer in emerging markets and the impact
that developments in emerging markets are likely to have on the issuer's
financial condition.
    
 
  Under normal circumstances, substantially all of the Portfolio's assets will
be invested in debt securities of both governmental and corporate issuers in
emerging markets. Emerging markets debt securities generally are considered to
have a credit quality below investment grade, as defined above. Lower quality
securities involve a high degree of risk and are predominantly speculative.
These debt securities are the equivalent of high yield, high risk bonds,
commonly known as "junk bonds." See "Risk Factors." Many emerging market debt
securities are not rated by U.S. ratings agencies such as Moody's and S&P. The
Portfolio's ability to achieve its investment
 
                                        7
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objectives is thus more dependent on the Sub-advisor's credit analysis. The
Portfolio may invest in securities that are in default as to payment of
principal and/or interest.
    
 
   
  CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Portfolio may employ one or more of the following strategies in
order to enhance investment results:
    
 
   
  OTHER INFORMATION REGARDING THE PORTFOLIO. As previously described, investors
should be aware that the Fund, unlike mutual funds that directly acquire and
manage their own portfolios of securities, seeks to achieve its investment
objectives by investing all of its investable assets in the Portfolio, which is
a separate investment company. Because the Fund will invest only in the
Portfolio, the Fund's shareholders will acquire only an indirect interest in the
investments of the Portfolio.
    
 
   
  The Fund may redeem its investment from the Portfolio at any time, if the
Board of Trustees of the Trust determines that it is in the best interests of
the Fund and its shareholders to do so. A change in the Portfolio's investment
objectives, policies or limitations that is not approved by the Board or the
shareholders of the Fund could require the Fund to redeem its interest in the
Portfolio. Any such redemption could result in a distribution in kind of
portfolio securities (as opposed to a cash distribution) by the Portfolio. In
addition, a distribution in kind could result in a less diversified portfolio of
investments for the Fund and could adversely affect its liquidity. Upon
redemption, the Board would consider what action might be taken, including the
investment of all the investable assets of the Fund in another pooled investment
entity having substantially the same investment objectives as the Fund or the
retention by the Fund of its own investment advisor to manage its assets in
accordance with its investment objectives, policies and limitations discussed
herein.
    
 
   
  In addition to selling an interest therein to the Fund, the Portfolio may sell
interests therein to other non-affiliated investment companies and/or other
institutional investors. All institutional investors in the Portfolio will pay a
proportionate share of the Portfolio's expenses and will invest in the Portfolio
on the same terms and conditions. However, if another investment company invests
any or all of its assets in the Portfolio, it would not be required to sell its
shares at the same public offering price as the Fund and may charge different
sales commissions. Therefore, investors in the Fund may experience different
returns than investors in another investment company that invests exclusively in
the Portfolio. As of the date of this Prospectus, the Fund is the only
institutional investor in the Portfolio.
    
 
   
  Investors in the Fund should be aware that the Fund's investment in the
Portfolio may be materially affected by the actions of other large investors, if
any, in the Portfolio. For example, as with all open-end investment companies,
if a large investor were to redeem its interest in the Portfolio, (1) the
Portfolio's remaining investors could experience higher pro rata operating
expenses, thereby producing lower returns and (2) the Portfolio's security
holdings may become less diverse, resulting in increased risk. Institutional
investors in the Portfolio that have a greater pro rata ownership interest in
the Portfolio than the Fund could have effective voting control over the
operation of the Portfolio.
    
 
   
  ASSET ALLOCATION. The Portfolio invests in debt obligations allocated among
diverse markets and denominated in various currencies, including U.S. dollars,
or in multinational currency units such as euros. The Fund is designed for
investors who wish to accept the risks entailed in such investments, which are
different from those associated with a portfolio consisting entirely of
securities of U.S. issuers denominated in U.S. dollars. The Portfolio may
purchase securities that are issued by the government or a company or financial
institution of one country but denominated in the currency of another country
(or a multinational currency unit).
    
 
   
  The Sub-advisor allocates the assets of the Portfolio in securities of issuers
in countries and in currency denominations where the combination of fixed income
market returns, the price appreciation potential of fixed income securities and
currency exchange rate movements will present opportunities primarily for high
current income and secondarily for capital appreciation. In so doing, the
Sub-advisor intends to take full advantage of the different yield, risk and
return characteristics that investment in the fixed income markets of different
countries can provide for U.S. investors. Fundamental economic strength, credit
quality and currency and interest rate trends are the principal determinants of
the emphasis given to various country, geographic and industry sectors within
the Portfolio. Securities held by the Portfolio may be invested in without
limitation as to maturity.
    
 
   
  The Sub-advisor selects securities of particular issuers on the basis of its
views as to the best values then currently available in the marketplace. Such
values are a function of yield, maturity, issue classification and quality
characteristics, coupled with expectations regarding the local and world
economies, movements in the general level and term of interest rates, currency
values, political developments and variations in the supply of funds available
for investment in the world bond market relative to the demands placed upon it.
    
 
   
  The Sub-advisor generally evaluates currencies on the basis of fundamental
economic criteria (e.g., relative inflation, interest rate levels and trends,
growth rate forecasts, balance of payments status and economic policies) as well
as technical and political data. The Sub-advisor may seek to protect the
Portfolio against such negative currency movements through the use of
sophisticated investment techniques. See "Options, Futures and Forward Currency
Transactions" and "Swaps, Caps, Floors and Collars."
    
 
   
  According to the Sub-advisor, as of the date of this Prospectus, more than 50%
of the value of all outstanding government debt obligations throughout the world
is represented by obligations denominated in currencies other than the U.S.
dollar. Moreover, from time to time, the debt securities of issuers located
outside the United States have substantially outperformed the debt obligations
of U.S. issuers. Accordingly, the Sub-advisor believes that the Portfolio's
policy of investing in debt securities of issuers in emerging mar-
    
 
                                        8
<PAGE>   304
 
kets may enable the achievement of results superior to those produced by mutual
funds with similar objectives to those of the Fund and the Portfolio that invest
solely in debt securities of U.S. issuers.
 
  The Fund is designed for investors who wish to accept the risks entailed in
such investments, which are different from those associated with a portfolio
consisting entirely of securities of U.S. issuers denominated in U.S. dollars.
 
   
  TEMPORARY DEFENSIVE STRATEGIES. The Sub-advisor may employ a temporary
defensive investment strategy if it determines such a strategy to be warranted
due to market, economic or political conditions. Pursuant to such a defensive
strategy, the Portfolio temporarily may hold cash (U.S. dollars, foreign
currencies or multinational currency units such as euros) and/or invest up to
100% of its respective assets in high quality debt securities or money market
instruments of U.S. or foreign issuers. In addition, for temporary defensive
purposes, most or all of the Portfolio's investments may be made in the United
States and denominated in U.S. dollars. To the extent the Portfolio employs a
temporary defensive strategy, it will not invest so as to achieve directly its
investment objectives. In addition, pending investment of proceeds from new
sales of Fund shares or to meet ordinary daily cash needs, the Portfolio may
hold cash (U.S. dollars, foreign currencies or multinational currency units) and
may invest in high quality foreign or domestic money market instruments. For a
full description of money market instruments, see "Selection of Debt
Investments" in the "Investment Objectives and Policies" section of the
Statement of Additional Information.
    
 
   
  EMERGING MARKET SECURITIES. The Portfolio considers "emerging markets" to
consist of all countries determined by the Sub-advisor to have developing or
emerging economies and markets. These countries generally include every country
in the world except the United States, Canada, Japan, Australia, New Zealand and
most countries located in Western Europe. The Portfolio will consider investment
in the following emerging markets:
    
 
     Algeria
     Argentina
     Bolivia
     Botswana
     Brazil
     Bulgaria
     Chile
     China
     Colombia
     Costa Rica
     Cyprus
     Czech Republic
     Dominican Republic
     Ecuador
     Egypt
     El Salvador
     Finland
     Ghana
     Greece
     Hong Kong
     Hungary
     India
     Indonesia
     Israel
     Ivory Coast
     Jamaica
     Jordan
     Kazakhstan
     Kenya
     Lebanon
     Malaysia
     Mauritius
     Mexico
     Morocco
     Nicaragua
     Nigeria
     Oman
     Pakistan
     Panama
     Paraguay
     Peru
     Philippines
     Poland
     Portugal
     Republic of Slovakia
     Russia
     Singapore
     Slovenia
     South Africa
     South Korea
     Sri Lanka
     Swaziland
     Taiwan
     Thailand
     Turkey
     Ukraine
     Uruguay
     Venezuela
     Zambia
     Zimbabwe
 
  The Portfolio will not be invested in all such markets at all times. Moreover,
investing in some of those markets currently may not be desirable or feasible,
due to the lack of adequate custody arrangements, overly burdensome repatriation
requirements and similar restrictions, the lack of organized and liquid
securities markets, unacceptable political risks or for other reasons.
 
  As used in this Prospectus and the Statement of Additional Information, an
issuer in an emerging market is an entity: (i) for which the principal
securities trading market is an emerging market, as defined above; (ii) that
(alone or on a consolidated basis) derives 50% or more of its total revenue from
either goods produced, sales made or services performed in emerging markets; or
(iii) organized under the laws of, or with a principal office in, an emerging
market.
 
  BRADY BONDS. The Portfolio may invest in "Brady Bonds," which are debt
restructurings that provide for the exchange of cash and loans for newly issued
bonds. Brady Bonds have been issued by the countries of Albania, Argentina,
Brazil, Bulgaria, Costa Rica, Dominican Republic, Ecuador, Ivory Coast, Jordan,
Mexico, Nigeria, Panama, Peru, Philippines, Poland, Uruguay, Venezuela and
Vietnam and are expected to be issued by other emerging market countries. As of
the date of this Prospectus, the Portfolio is not aware of the occurrence of any
payment defaults on Brady Bonds. Investors should recognize, however, that Brady
Bonds do not have a long payment history. In addition, Brady Bonds are often
rated below investment grade.
 
  The Portfolio may invest in either collateralized or uncollateralized Brady
Bonds. U.S. dollar-denominated, collateralized Brady Bonds, which may be fixed
rate par bonds or floating rate discount bonds, are collateralized in full as to
principal by U.S. Treasury zero coupon bonds having the same maturity as the
bonds. Interest payments on such bonds generally are collateralized by cash or
securities in an amount that, in the case of fixed rate bonds, is equal to at
least one year of rolling interest payments or, in the case of floating
 
                                        9
<PAGE>   305
 
rate bonds, initially is equal to at least one year's rolling interest payments
based on the applicable interest rate at the time of issuance and is adjusted at
regular intervals thereafter.
 
  LOAN PARTICIPATIONS AND ASSIGNMENTS. The Portfolio may invest in fixed and
floating rate loans ("Loans") arranged through private negotiations between a
foreign entity and one or more financial institutions ("Lenders"). The majority
of the Portfolio's investments in Loans in emerging markets is expected to be in
the form of participations in Loans ("Participations") and assignments of
portions of Loans from third parties ("Assignments"). Participations typically
will result in the Portfolio having a contractual relationship only with the
Lender, not with the borrower government. The Portfolio will have the right to
receive payments of principal, interest and any fees to which it is entitled
only from the Lender selling the Participation and only upon receipt by the
Lender of the payments from the borrower. In connection with purchasing
Participations, the Portfolio generally will have no right to enforce compliance
by the borrower with the terms of the loan agreement relating to the loan ("Loan
Agreement"), nor any rights of set-off against the borrower, and the Portfolio
may not directly benefit from any collateral supporting the Loan in which it has
purchased the Participation. As a result, the Portfolio will assume the credit
risk of both the borrower and the Lender that is selling the Participation.
 
   
  In the event of the insolvency of the Lender selling a Participation, the
Portfolio may be treated as a general creditor of the Lender and may not benefit
from any set-off between the Lender and the borrower. The Portfolio will acquire
Participations only if the Lender interpositioned between the Portfolio and the
borrower is determined by the Sub-advisor to be creditworthy. When the Portfolio
purchases Assignments from Lenders, the Portfolio will acquire direct rights
against the borrower on the Loan. However, since Assignments are arranged
through private negotiations between potential assignees and assignors, the
rights and obligations acquired by the Portfolio as the purchaser of an
Assignment may differ from, and be more limited than, those held by the
assigning Lender.
    
 
  WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. The Portfolio may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Portfolio will
purchase or sell when-issued securities and forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery of the
securities. If the Portfolio disposes of the right to acquire a when-issued
security prior to its acquisition or disposes of its right to deliver or receive
against a forward commitment, it may incur a gain or loss. At the time the
Portfolio enters into a transaction on a when-issued or forward commitment
basis, the Portfolio will segregate cash or liquid securities equal to the value
of the when-issued or forward commitment securities with its custodian and will
mark to market daily such assets. There is a risk that the securities may not be
delivered and that the Portfolio may incur a loss.
 
  The Portfolio may also sell securities on a "when, as and if issued" basis for
hedging purposes. Under such a transaction, the Portfolio is required to deliver
at a future date a security it does not presently hold, but which it has a right
to receive if the security is issued. Issuance of the security may not occur, in
which case the Portfolio would have no obligation to the other party, and would
not receive payment for the sale. Selling securities on a "when, as and if
issued" basis may reduce risk of loss to the extent that such a sale wholly or
partially offsets unfavorable price movements on the investments being hedged.
However, such sales also limit the amount the Portfolio can receive if the
"when, as and if issued" security is in fact issued.
 
   
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Portfolio
is authorized to borrow money from banks in an amount up to 33 1/3% of its total
assets (including the amount borrowed), less all liabilities and indebtedness
other than the borrowings and may use the proceeds of such borrowings for
investment purposes. The Portfolio will borrow for investment purposes only when
the Sub-advisor believes that such borrowings will benefit the Portfolio after
taking into account considerations such as the costs of the borrowing and the
likely investment returns on the securities purchased with the borrowed monies.
    
 
   
  Borrowing for investment purposes is known as leveraging, which is a
speculative practice. Such borrowing by the Portfolio creates the opportunity
for increased net income and appreciation but, at the same time, involves
special risk considerations. For example, leveraging might exaggerate changes in
the net asset value of Fund shares and in the yield realized by the Portfolio.
Although the principal amount of such borrowings will be fixed, the Portfolio's
assets may change in value during the time the borrowing is outstanding. By
leveraging the Portfolio, changes in net asset values, higher or lower, may be
greater in degree than if leverage was not employed. To the extent the income
derived from the assets obtained with borrowed funds exceeds the interest and
other expenses that the Portfolio will have to pay, the Portfolio's net income
will be greater than if borrowing was not used. Conversely, if the income from
the assets obtained with borrowed funds is not sufficient to cover the cost of
borrowing, the net income of the Portfolio will be less than if borrowing were
not used, and therefore the amount available for distribution to shareholders as
dividends will be reduced. The Portfolio expects that some of its borrowings may
be made on a secured basis.
    
 
  In addition to the foregoing borrowings, the Portfolio may borrow money for
temporary or emergency purposes or payments in an amount not exceeding 5% of the
value of its total assets (not including the amount borrowed) provided that the
total amount borrowed by the Portfolio for any purpose does not exceed 33 1/3%
of its total assets.
 
  The Portfolio may also enter into reverse repurchase agreements with a bank or
recognized securities dealer. Under a reverse repurchase agreement, the
Portfolio would sell securities and agree to repurchase them at a particular
price at a future date. At the time the Portfolio enters into a reverse
repurchase agreement, it will establish and maintain a segregated account with
an approved custo-
 
                                       10
<PAGE>   306
 
dian containing cash or liquid securities having a value not less than the
repurchase price, including accrued interest. Reverse repurchase agreements
involve the risk that the market value of the securities retained in lieu of
sale by the Portfolio may decline below the price of the securities the
Portfolio has sold but is obligated to repurchase. In the event the buyer of
securities under a reverse repurchase agreement files for bankruptcy or becomes
insolvent, such buyer or its trustee or receiver may receive an extension of
time to determine whether to enforce the Portfolio's obligation to repurchase
the securities, and the Portfolio's use of the proceeds of the reverse
repurchase agreement may effectively be restricted pending such decision.
 
  The Portfolio also may enter into "dollar rolls," in which the Portfolio sells
fixed income securities for delivery in the current month and simultaneously
contracts to repurchase substantially similar (same type, coupon and maturity)
securities on a specified future date. During the roll period, the Portfolio
would forego principal and interest paid on such securities. The Portfolio would
be compensated by the difference between the current sales price and the forward
price for the future purchase, as well as by the interest earned on the cash
proceeds of the initial sale. See "Investment Objectives and Policies" in the
Statement of Additional Information.
 
  Reverse repurchase agreements and dollar rolls will be treated as borrowings
and will be deducted from the Portfolio's assets for purposes of calculating
compliance with the Portfolio's borrowing limitation. See "Investment
Limitations" in the Statement of Additional Information.
 
   
  SECURITIES LENDING. The Portfolio may lend its respective portfolio securities
to broker/dealers or to other institutional investors. Securities lending allows
a Fund to retain ownership of the securities loaned and, at the same time,
enhances a Fund's total return. At all times a loan is outstanding, the
Portfolio requires the borrower to maintain with the Portfolio's custodian,
collateral consisting of cash, U.S. government securities or certain irrevocable
letters of credit equal to at least the value of the borrowed securities, plus
any accrued interest or such other collateral as permitted by a Fund's
investment program and regulatory agencies, and as approved by the Board. The
Portfolio limits its loans of portfolio securities to an aggregate of 30% of the
value of its total assets, measured at the time any such loan is made. The risks
in lending portfolio securities, as with other extensions of secured credit,
consist of possible delays in receiving additional collateral or in recovery of
the loaned securities and possible loss of rights in the collateral should the
borrower fail financially.
    
 
  ZERO COUPON SECURITIES. The Portfolio may invest in certain zero coupon
securities that are "stripped" U.S. Treasury notes and bonds. They also may
invest in zero coupon and other deep discount securities issued by foreign
governments and domestic and foreign corporations, including certain Brady Bonds
and other foreign debt and in payment-in-kind securities. Zero coupon securities
pay no interest to holders prior to maturity, and payment-in-kind securities pay
interest in the form of additional securities. However, a portion of the
original issue discount on zero coupon securities and the "interest" on
payment-in-kind securities will be included in the Portfolio's income.
Accordingly, for a Fund to continue to qualify for tax treatment as a regulated
investment company and to avoid a certain excise tax (see "Taxes" in the
Statement of Additional Information), it may be required to distribute an amount
that is greater than its share of the total amount of cash the Portfolio
actually receives. These distributions must be made from the Fund's, or its
share of the Portfolio's cash assets or, if necessary, from the proceeds of
sales of portfolio securities. The Portfolio will not be able to purchase
additional income-producing securities with cash used to make such
distributions, and its current income ultimately may be reduced as a result.
Zero coupon and payment-in-kind securities usually trade at a deep discount from
their face or par value and will be subject to greater fluctuations of market
value in response to changing interest rates than debt obligations of comparable
maturities that make current distributions of interest in cash.
 
  SYNTHETIC SECURITY POSITIONS. The Portfolio may utilize combinations of
futures on bonds and forward currency contracts to create investment positions
that have substantially the same characteristics as bonds of the same type as
those on which the futures contracts are written. Investment positions of this
type are generally referred to as "synthetic securities."
 
   
  For example, in order to establish a synthetic security position the Portfolio
that is comparable to owning a Japanese government bond, the Sub-advisor might
purchase futures contracts on Japanese government bonds in the desired principal
amount and purchase forward currency contracts for Japanese Yen in an amount
equal to the then current purchase price for such bonds in the Japanese cash
market, with each contract having approximately the same delivery date.
    
 
   
  The Sub-advisor might roll over the futures and forward currency contract
positions before taking delivery in order to continue the Portfolio's investment
position, or the Sub-advisor might close out those positions, thus effectively
selling the synthetic security. Further, the amount of each contract might be
adjusted in response to market conditions and the forward currency contract
might be changed in amount or eliminated in order to hedge against currency
fluctuations.
    
 
   
  The Sub-advisor would create synthetic security positions for the Portfolio
when it believes that it can obtain a better yield or achieve cost savings in
comparison to purchasing actual bonds or when comparable bonds are not readily
available in the market. Synthetic security positions are subject to the risk
that changes in the value of purchased futures contracts may differ from changes
in the value of the bonds that might otherwise have been purchased in the cash
market. Also, while the Sub-advisor believes that the cost of creating synthetic
security positions generally will be materially lower than the cost of acquiring
comparable bonds in the cash market, the Portfolio will incur transaction costs
in connection with each purchase of a futures or forward currency contract. The
use of futures contracts and forward currency contracts to create synthetic
security positions also is subject to substantially the same risks as those that
exist when these instruments are used in connection with hedging strategies. See
"Options, Futures and Forward Currency Transactions" below and "Options, Futures
and Currency Strategies" in the Statement of Additional Information.
    
 
                                       11
<PAGE>   307
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Portfolio may use
forward currency contracts, futures contracts, options on securities, options on
indices, options on currencies, and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the Portfolio's investment. The Portfolio also may enter into
interest rate, currency and index swaps and purchase or sell related caps,
floors and collars and other similar instruments. See "Swaps, Caps, Floors and
Collars" below. These instruments are often referred to as "derivatives," which
may be defined as financial instruments whose performance is derived, at least
in part, from the performance of another asset (such as a security, currency or
an index of securities). The Portfolio may enter into such instruments up to the
full value of its portfolio assets. See "Risk Factors -- Options, Futures and
Forward Currency Transactions" herein and "Options, Futures and Currency
Strategies" in the Statement of Additional Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Portfolio may enter into forward currency contracts for the
purchase or sale of a specified currency at a specified future date. Such
contracts may involve the purchase or sale of a foreign currency against the
U.S. dollar or may involve two foreign currencies. The Portfolio may enter into
forward currency contracts either with respect to specific transactions or with
respect to the Portfolio's portfolio positions. The Portfolio also may purchase
and sell put and call options on currencies, futures contracts on currencies and
options on such futures contracts to hedge against movements in exchange rates.
 
   
  In addition, the Portfolio may purchase and sell put and call options on
securities to hedge against the risk of fluctuations in the prices of securities
held by the Portfolio or that the Sub-advisor intends to include in the
Portfolio's holdings. The Portfolio also may purchase and sell put and call
options on indices to hedge against overall fluctuations in the securities
markets generally or in a specific market sector.
    
 
  Further, the Portfolio may sell index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general market or market sector decline that could adversely affect the
Portfolio's holdings. The Portfolio also may purchase index futures contracts
and purchase call options or write put options on such contracts to hedge
against a general market or market sector advance and thereby attempt to lessen
the cost of future securities acquisitions. The Portfolio may use interest rate
futures contracts and options thereon to hedge its portfolio against changes in
the general level of interest rates.
 
  SWAPS, CAPS, FLOORS AND COLLARS. The Portfolio may enter into interest rate,
currency and index swaps, and purchase or sell related caps, floors and collars
and other derivative instruments. The Portfolio expects to enter into these
transactions primarily to preserve a return or spread on a particular investment
or portion of its portfolio, to protect against currency fluctuations, as a
technique for managing the portfolio's duration (i.e., the price sensitivity to
changes in interest rates) or to protect against any increase in the price of
securities the Portfolio anticipates purchasing at a later date. The Portfolio
intends to use these transactions as hedges, and neither will sell interest rate
caps or floors if it does not own securities or other instruments providing an
income stream roughly equivalent to what the Portfolio may be obligated to pay.
 
  Interest rate swaps involve the exchange by the Portfolio with another party
of their respective commitments to pay or receive interest (for example, an
exchange of floating rate payments for fixed rate payments) with respect to a
notional amount of principal. A currency swap is an agreement to exchange cash
flows on a notional amount based on changes in the values of the reference
indices.
 
  The purchase of a cap entitles the purchaser to receive payments on a notional
principal amount from the party selling the cap to the extent that a specified
index exceeds a predetermined interest rate. The purchase of an interest rate
floor entitles the purchaser to receive payments on a notional principal amount
from the party selling the floor to the extent that a specified index falls
below a predetermined interest rate or amount. A collar is a combination of a
cap and a floor that preserves a certain return within a predetermined range of
interest rates or values.
 
  INDEXED COMMERCIAL PAPER. The Portfolio may invest without limitation in
commercial paper which is indexed to certain specific foreign currency exchange
rates. The terms of such commercial paper provide that its principal amount is
adjusted upwards or downwards (but not below zero) at maturity to reflect
changes in the exchange rate between two currencies while the obligation is
outstanding. The Portfolio will purchase such commercial paper with the currency
in which it is denominated and, at maturity, will receive interest and principal
payments thereon in that currency, but the amount of principal payable by the
issuer at maturity will change in proportion to the change (if any) in the
exchange rate between the two specified currencies between the date the
instrument is issued and the date the instrument matures. While such commercial
paper entails the risk of loss of principal, the potential for realizing gains
as a result of changes in foreign currency exchange rates enables the Portfolio
to hedge against a decline in the U.S. dollar value of investments denominated
in foreign currencies while seeking to provide an attractive money market rate
of return. The Portfolio will not purchase such commercial paper for
speculation.
 
  OTHER INDEXED SECURITIES. The Portfolio may invest in certain other indexed
securities, which are securities whose prices are indexed to the prices of other
securities, securities indices, currencies, precious metals or other
commodities, or other financial indicators. Indexed securities typically, but
not always, are debt securities or deposits whose value at maturity or coupon
rate is determined by reference to a specific instrument or statistic. The
performance of indexed securities depends to a great extent on the performance
of the security, currency, or other instrument to which they are indexed, and
may also be influenced by interest rate changes in the United States and abroad.
At the same time, indexed securities are subject to the credit risks associated
with the issuer of the security, and their values may decline substantially if
the issuer's creditworthiness deteriorates. Indexed securities may be more
 
                                       12
<PAGE>   308
 
volatile than the underlying instruments. New forms of indexed securities
continue to be developed. The Portfolio may invest in such securities to the
extent consistent with its investment objectives.
 
   
  OTHER INFORMATION. The Fund's investment objectives may not be changed without
the approval of a majority of the Fund's outstanding voting securities. A
"majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this prospectus
and in the Statement of Additional Information are not fundamental policies and
may be changed by the Company's Board of Trustees without shareholder approval.
The investment policies of the Fund are identical to the investment policies of
the Portfolio.
    
 
  The approval of the Fund and of other investors in the Portfolio, if any, is
not required to change the investment objectives, policies or limitations of the
Portfolio, unless otherwise specified. Written notice shall be provided to
shareholders of the Fund thirty days prior to any changes in the Portfolio's
investment objectives.
 
  The Fund is authorized to make short sales of securities, although it has no
current intention of doing so. See "Investment Objectives and Policies -- Short
Sales" in the Statement of Additional Information.
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Portfolio's investment policies or restrictions.
 
- --------------------------------------------------------------------------------
 
   
RISK FACTORS
    
 
  GENERAL. There is no assurance that the Fund or the Portfolio will achieve its
investment objectives. The Portfolio's net asset value will fluctuate,
reflecting fluctuations in the market value of its portfolio positions and its
net currency exposure. The value of fixed income securities held by the
Portfolio generally fluctuates inversely with interest rate movements. Longer
term bonds held by the Portfolio are subject to greater interest rate risk.
 
  NON-DIVERSIFIED CLASSIFICATION. The Fund and the Portfolio are classified
under the Investment Company Act of 1940 (the "1940 Act") as a "non-diversified"
fund. As a result, the Portfolio will be able to invest in a fewer number of
issuers than if it were classified under the 1940 Act as a "diversified" fund.
To the extent that the Portfolio invests in a smaller number of issuers, the
value of the Fund's shares may fluctuate more widely and the Portfolio may be
subject to greater investment and credit risk with respect to the portfolios.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally are not registered with the SEC, nor
are the issuers thereof usually subject to the SEC's reporting requirements.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available with respect to U.S. securities and
issuers. Foreign companies generally are not subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to U.S. companies. In addition, certain costs
attributable to foreign investing, such as custody charges, are higher than
those attributable to domestic investing. Securities of some foreign companies
are less liquid and their prices may be more volatile than securities of
comparable domestic companies. The Portfolio's interest and dividends from
foreign issuers may be subject to non-U.S. withholding taxes, thereby reducing
their net investment income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Portfolio, political or social instability, or diplomatic
developments which could affect the investments of the Portfolio in those
countries. Moreover, individual foreign economies may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross national
product, rate of inflation, rate of savings and capital reinvestment, resource
self-sufficiency and balance of payments positions.
 
  CURRENCY RISK. Since the Portfolio normally invests substantially in
securities denominated in currencies other than the U.S. dollar, and because
they may hold foreign currencies, they will be affected favorably or unfavorably
by exchange control regulations or changes in the exchange rates between such
currencies and the U.S. dollar. Changes in currency exchange rates will
influence the value of the Fund's shares, and also may affect the value of
dividends and interest earned by the Fund and gains and losses realized by the
Fund. Currencies generally are evaluated on the basis of fundamental economic
criteria (e.g., relative inflation and interest rate levels and trends, growth
rate forecasts, balance of payments status and economic policies) as well as
technical and political data. The exchange rates between the U.S. dollar and
other currencies are determined by supply and demand in the currency exchange
markets, the international balance of payments, governmental intervention,
speculation and other economic and political conditions. If the currency in
which a security is denominated appreciates against the U.S. dollar, the dollar
value of the security will increase. Conversely, a decline in the exchange rate
of the currency would adversely affect the value of the security expressed in
U.S. dollars.
 
  In addition, many of the currencies in emerging market countries have
experienced steady devaluations relative to the U.S. dollar and major
devaluations have historically occurred in certain countries.
 
                                       13
<PAGE>   309
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
  INVESTING IN EMERGING MARKETS. Because of the special risks associated with
investing in emerging markets, an investment in the Portfolio should be
considered speculative. Investors are strongly advised to consider carefully the
special risks involved in emerging markets, which are in addition to the usual
risks of investing in developed foreign markets around the world.
 
  Investing in emerging markets involves risks relating to potential political
and economic instability within such markets and the risks of expropriation,
nationalization, confiscation of assets and property or the imposition of
restrictions on foreign investment and on repatriation of capital invested. In
the event of such expropriation, nationalization or other confiscation in any
emerging market, the Portfolio could lose its entire investment in that market.
 
  Many emerging market countries have experienced substantial, and in some
periods extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries.
 
  Economies in emerging markets generally are dependent heavily upon
international trade and, accordingly, have been and may continue to be affected
adversely by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been and may continue
to be affected adversely by economic conditions in the countries in which they
trade.
 
  The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the United States and
other major markets. There also may be a lower level of monitoring and
regulation of emerging securities markets and the activities of investors in
such markets, and enforcement of existing regulations has been extremely
limited.
 
  In addition, brokerage commissions, custodial services and other costs
relating to investment in foreign markets generally are more expensive than in
the United States, particularly with respect to emerging markets. Such markets
have different settlement and clearance procedures. In certain markets there
have been times when settlements have been unable to keep pace with the volume
of securities transactions, making it difficult to conduct such transactions.
The inability of the Portfolio to make intended securities purchases due to
settlement problems could cause the Portfolio to forego attractive investment
opportunities. Inability to dispose of a portfolio security caused by settlement
problems could result either in losses to the Portfolio due to subsequent
declines in value of the portfolio security or, if the Portfolio has entered
into a contract to sell the security, could result in possible liability to the
purchaser.
 
  The risk also exists that an emergency situation may arise in one or more
emerging markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for the Portfolio's portfolio securities in
such markets may not be readily available. Section 22(e) of the 1940 Act permits
a registered investment company to suspend redemption of its shares for any
period during which an emergency exists, as determined by the SEC. Accordingly,
when the Portfolio believes that appropriate circumstances warrant, it will
promptly apply to the SEC for a determination that an emergency exists within
the meaning of Section 22(e) of the 1940 Act. During the period commencing from
the Portfolio's identification of such conditions until the date of SEC action,
the portfolio securities of the Portfolio in the affected markets will be valued
at fair value as determined in good faith by or under the direction of the
Trust's or the Portfolio's Boards of Trustees.
 
  LOAN PARTICIPATIONS AND ASSIGNMENTS. The Portfolio may have difficulty
disposing of Assignments and Participations. The liquidity of such securities is
limited and the Portfolio anticipates that such securities could be sold only to
a limited number of institutional investors. The lack of a liquid secondary
market could have an adverse impact on the value of such securities and on the
Portfolio's ability to dispose of particular Assignments or Participations when
necessary to meet the Portfolio's liquidity needs or in response to a specific
economic event, such as a deterioration in the creditworthiness of the borrower.
The lack of a liquid secondary market for Assignments and Participations also
may make it more difficult for the Portfolio to assign a value to those
securities for purposes of valuing the Portfolio's portfolio and calculating its
net asset value.
 
  SOVEREIGN DEBT. The Portfolio may invest in sovereign debt securities of
emerging market governments, including Brady Bonds. Investments in such
securities involve special risks. The issuer of the debt or the governmental
authorities that control the repayment of the debt may be unable or unwilling to
repay principal or interest when due in accordance with the terms of such debt.
Periods of
 
                                       14
<PAGE>   310
 
economic uncertainty may result in the volatility of market prices of sovereign
debt obligations and in turn a Fund's net asset value, to a greater extent than
the volatility inherent in domestic fixed income securities.
 
  A sovereign debtor's willingness or ability to repay principal and pay
interest in a timely manner may be affected by, among other factors, its cash
flow situation, the extent of its foreign reserves, the availability of
sufficient foreign exchange on the date a payment is due, the relative size of
the debt service burden to the economy as a whole, the sovereign debtor's policy
toward principal international lenders and the political constraints to which a
sovereign debtor may be subject. Emerging market governments could default on
their sovereign debt. Such sovereign debtors also may be dependent on expected
disbursements from foreign governments, multilateral agencies and other entities
abroad to reduce principal and interest arrearages on their debt. The commitment
on the part of these governments, agencies and others to make such disbursements
may be conditioned on a sovereign debtor's implementation of economic reforms
and/or economic performance and the timely service of such debtor's obligations.
Failure to implement such reforms, achieve such levels of economic performance
or repay principal or interest when due, may result in the cancellation of such
third parties' commitments to lend funds to the sovereign debtor, which may
further impair such debtor's ability or willingness to timely service its debts.
 
   
  The occurrence of political, social or diplomatic changes in one or more of
the countries issuing sovereign debt could adversely affect the Portfolio's
investments. Emerging markets are faced with social and political issues and
some of them have experienced high rates of inflation in recent years and have
extensive internal debt. Among other effects, high inflation and internal debt
service requirements may adversely affect the cost and availability of future
domestic sovereign borrowing to finance governmental programs, and may have
other adverse social, political and economic consequences. Political changes or
a deterioration of a country's domestic economy or balance of trade may affect
the willingness of countries to service their sovereign debt. Although the
Sub-advisor intends to manage the Portfolio in a manner that will minimize the
exposure to such risks, there can be no assurance that adverse political changes
will not cause the Portfolio to suffer a loss of interest or principal on any of
its holdings.
    
 
  In recent years, some of the emerging market countries in which the Portfolio
expects to invest have encountered difficulties in servicing their sovereign
debt obligations. Some of these countries have withheld payments of interest
and/or principal of sovereign debt. These difficulties have also led to
agreements to restructure external debt obligations -- in particular, commercial
bank loans, typically by rescheduling principal payments, reducing interest
rates and extending new credits to finance interest payments on existing debt.
In the future, holders of emerging market sovereign debt securities may be
requested to participate in similar rescheduling of such debt. Certain emerging
market countries are among the largest debtors to commercial banks and foreign
governments. Currently, Brazil, Mexico and Argentina are the largest debtors
among developing countries. At times certain emerging market countries have
declared moratoria on the payment of principal and interest on external debt;
such a moratorium is currently in effect in certain emerging market countries.
There is no bankruptcy proceeding by which a creditor may collect in whole or in
part sovereign debt on which an emerging market government has defaulted.
 
  The ability of emerging market governments to make timely payments on their
sovereign debt securities is likely to be influenced strongly by a country's
balance of trade and its access to trade and other international credits. A
country whose exports are concentrated in a few commodities could be vulnerable
to a decline in the international prices of one or more of such commodities.
Increased protectionism on the part of a country's trading partners could also
adversely affect its exports. Such events could diminish a country's trade
account surplus, if any. To the extent that a country receives payment for its
exports in currencies other than hard currencies, its ability to make hard
currency payments could be affected.
 
  Investors should also be aware that certain sovereign debt instruments in
which the Portfolio may invest involve great risk. As noted above, sovereign
debt obligations issued by emerging market governments generally are deemed to
be the equivalent in terms of quality to securities rated below investment grade
by Moody's and S&P. Such securities are regarded as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligations and involve major risk exposure to
adverse conditions. Some of such securities, with respect to which the issuer
currently may not be paying interest or may be in payment default, may be
comparable to securities rated D by S&P or C by Moody's. The Portfolio may have
difficulty disposing of and valuing certain sovereign debt obligations because
there may be a limited trading market for such securities. Because there is no
liquid secondary market for many of these securities, the Portfolio anticipates
that such securities could be sold only to a limited number of dealers or
institutional investors.
 
  LOWER QUALITY DEBT SECURITIES. Under normal market conditions the Portfolio
may invest up to 100% of the Portfolio's total assets in debt securities rated
below investment grade. Such investments involve a high degree of risk.
 
  Debt rated Baa by Moody's is considered by Moody's to have speculative
characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B,
Caa, Ca or C by Moody's is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such lower quality debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Debt rated C
by Moody's or S&P is the lowest quality debt that is not in default as to
principal or interest and such issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Lower
quality debt securities are also generally considered to be subject to greater
risk than higher quality securities with regard to a deterioration of general
economic conditions. These securities are the equivalent of high yield, high
risk bonds, commonly known as "junk bonds." As noted above, the Portfolio may
invest in debt securities rated below C, which are in default as to principal
and/or interest.
 
                                       15
<PAGE>   311
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit quality in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates. See "Appendix A" for a discussion of Moody's and S&P's ratings.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities of corporate issuers frequently have call or
buy-back features which would permit an issuer to call or repurchase the
security from the Portfolio. If an issuer exercises these provisions in a
declining interest rate market, the Portfolio may have to replace the security
with a lower yielding security, resulting in a decreased return for investors.
In addition, the Portfolio may have difficulty disposing of lower quality
securities because there may be a thin trading market for such securities. There
may be no established retail secondary market for many of these securities, and
the Portfolio anticipates that such securities could be sold only to a limited
number of dealers or institutional investors. The lack of a liquid secondary
market also may have an adverse impact on market prices of such instruments and
may make it more difficult for the Portfolio to obtain accurate market
quotations for purposes of valuing the securities in the Portfolio. Adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may also decrease the values and liquidity of lower quality
securities, especially in a thinly traded market. The Portfolio also may acquire
lower quality debt securities during an initial underwriting or may acquire
lower quality debt securities which are sold without registration under
applicable securities laws. Such securities involve special considerations and
risks.
 
  Factors having an adverse effect on the market value of lower rated securities
or their equivalents purchased by the Portfolio will adversely impact net asset
value of the Fund. See "Risk Factors" in the Statement of Additional
Information. In addition to the foregoing, such factors may include: (i)
potential adverse publicity; (ii) heightened sensitivity to general economic or
political conditions; and (iii) the likely adverse impact of a major economic
recession. The Portfolio also may incur additional expenses to the extent it is
required to seek recovery upon a default in the payment of principal or interest
on its portfolio holdings, and the Portfolio may have limited legal recourse in
the event of a default. Debt securities issued by governments in emerging
markets can differ from debt obligations issued by private entities in that
remedies from defaults generally must be pursued in the courts of the defaulting
government, and legal recourse is therefore somewhat diminished. Political
conditions, in terms of a government's willingness to meet the terms of its debt
obligations, also are of considerable significance. There can be no assurance
that the holders of commercial bank debt may not contest payments to the holders
of debt securities issued by governments in emerging markets in the event of
default by the governments under commercial bank loan agreements.
 
   
  As of October 31, 1997, the Portfolio had 86.59% of its total net assets in
debt securities that received a rating from Moody's and 10.29% of its total net
assets in debt securities that were not so rated. In addition, the Portfolio had
3.12%, of its total net assets in cash and net receivables. The Portfolio had
the following percentages of its total net assets invested in rated securities:
Aaa -- 7.99%, Aa -- 0.00%, A -- 0.00%, Baa -- 13.11%, Ba -- 48.56%, B -- 16.93%,
Caa -- 0.00%, Ca -- 0.00%, C -- 0.00%. Included under the unrated category are
securities held by the Portfolio's total net assets which have been determined
by the Sub-advisor to be of comparable quality to securities in the following
rating categories: Ba -- 3.22%; and B -- 7.07%. It should be noted that the
allocation of the investments of the Portfolio by rating on any given date will
vary and should not be considered representative of the future portfolio
composition of the Portfolio.
    
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Portfolio is
authorized to enter into options, futures and forward currency transactions, the
Portfolio might not enter into any such transactions. In addition, issuers in
emerging markets typically are subject to a greater degree of change in earnings
and business prospects than issuers in developed countries. Options, futures and
foreign currency transactions involve certain risks, which include: (1)
dependence on the Sub-advisor's ability to predict movements in the prices of
individual securities, fluctuations in the general securities markets or in the
appropriate market sector and movements in interest rates and currency markets;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, forward contracts, futures contracts or options thereon and
movements in the price of the currency or security hedged or used for cover; (3)
the fact that skills and techniques needed to trade options, futures contracts
and options thereon or to use forward currency contracts are different from
those needed to select the securities in which the Portfolio invests; (4) lack
of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time; (5) the
possible loss of principal under certain conditions; and (6) the possible
inability of the Portfolio to purchase or sell a portfolio security at a time
when it would otherwise be favorable for it to do so, or the possible need for
the Portfolio to sell a security at a
    
 
                                       16
<PAGE>   312
 
   
disadvantageous time, due to the need for the Portfolio to maintain "cover" or
to set aside securities in connection with hedging transactions.
    
 
   
  ILLIQUID SECURITIES. The Portfolio may invest up to 15% of its net assets, in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
    
- --------------------------------------------------------------------------------
 
   
MANAGEMENT
    
 
   
  The Trust's and the Portfolio's Boards of Trustees have overall responsibility
for the operation of the Fund and the Portfolio, respectively. The Trust's and
Portfolio's Boards of Trustees have approved all significant agreements between
the Trust and the Portfolio on the one side and persons or companies furnishing
services to the Fund and the Portfolio on the other, including the investment
management and administration agreement with AIM, the investment sub-advisory
and sub-administration agreement between AIM and the Sub-advisor, the agreements
with AIM Distributors regarding distribution of the Fund's shares, the custody
agreement and the transfer agency agreement. The day-to-day operations of the
Fund and the Portfolio are delegated to the officers of the Trust and the
Portfolio, subject always to the investment objective and policies of the Fund
and the Portfolio and to the general supervision of the Boards. See "Trustees
and Executive Officers" in the Statement of Additional Information for
information on the Trust's and the Portfolio's Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Portfolio's investment managers and administrators include,
but are not limited to, determining the composition of the investment holdings
of the Portfolio and placing orders to buy, sell or hold particular securities.
In addition, AIM and the Sub-advisor provide the following administration
services to the Fund and the Portfolio: furnishing corporate officers and
clerical staff; providing office space, services and equipment; and supervising
all matters relating to the Portfolio's operation.
    
 
   
  The Fund pays AIM administration fees at the annualized rate of 0.25% of the
Fund's average daily net assets. AIM has appointed the Sub-advisor as the Fund's
sub-administrator. In addition, the Fund bears its pro rata portion of the
investment management and administration fees paid by the Portfolio to AIM and
the Sub-advisor. The Portfolio pays AIM such fees, based on the average daily
net assets of the Portfolio at the annualized rate of 0.475% on the first $500
million, 0.45% on the next $1 billion, 0.425% on the next $1 billion and 0.40%
on amounts thereafter, plus 2% of the Portfolio's total investment income as
stated in the Portfolio's Statement of Operations, calculated in accordance with
generally accepted accounting principles, adjusted daily for currency
revaluations, on a marked to market basis, of the Portfolio's assets; provided,
however, that during any fiscal year this amount shall not exceed 2% of the
Portfolio's total investment income calculated in accordance with generally
accepted accounting principles. Out of its aggregate fees payable by the Fund
and the Portfolio, AIM pays the Sub-advisor sub-advisory and sub-administration
fees equal to 40% of the aggregate fees AIM receives from the Fund and the
Portfolio. The investment management and administration fees paid by the Fund
and the Portfolio are higher than those paid by most mutual funds. The Fund and
Portfolio pay all expenses not assumed by AIM, the Sub-advisor, AIM Distributors
or other agents. Effective November 1, 1997, AIM has undertaken to limit the
expenses of the Class A and Class B shares of the Fund (and the Fund's pro-rata
portion of the Portfolio's expenses) to the maximum annual rate of 1.75% and
2.40% of the average daily net assets of the Fund's Class A and Class B shares,
respectively.
    
 
   
  The Sub-advisor also serves as the Fund's and the Portfolio's pricing and
accounting agent. For these services the Sub-advisor receives a fee consisting
of 0.03% of the first $5 billion of assets, and 0.02% of the assets in excess of
$5 billion, of the AIM Funds that are sub-advised by the Sub-advisor (other than
AIM Eastern Europe Fund). Each of these funds, including the Fund and the
Portfolio, pays an amount based upon its relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Portfolio pursuant to a master investment management
and administration agreement (the "Advisory Agreement"). AIM was organized in
1976 and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Portfolio pursuant to an investment
sub-advisory and sub-administration agreement. Prior to May 29, 1998, the
Sub-advisor was known as Chancellor LGT Asset Management, Inc. On May 29, 1998,
Liechtenstein Global Trust AG ("LGT"), the former indirect parent organization
of the Sub-advisor, consummated a purchase agreement with AMVESCAP PLC pursuant
to which AMVESCAP PLC acquired LGT's Asset Management Division, which included
the Sub-advisor and certain other affiliates. As a result of this transaction,
the Sub-advisor is now an indirect wholly owned subsidiary of AMVESCAP PLC.
Prior to the sale, the Sub-advisor and its worldwide asset management affiliates
provided investment management and/or administrative services to institutional,
corporate and individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
                                       17
<PAGE>   313
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices, including investment offices in Atlanta,
Boston, Dallas, Denver, Louisville, Miami, Portland (Oregon), Frankfurt, Hong
Kong, London, Singapore, Sydney, Tokyo and Toronto. In managing the Fund and the
Portfolio, the Sub-advisor employs a team approach, taking advantage of its
investment resources around the world.
    
 
  The investment professionals primarily responsible for the portfolio
management of the Portfolio are as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
NAME/OFFICE                    THE FUND                           PAST FIVE YEARS
- -----------              --------------------                   -------------------
<S>                     <C>                      <C>
Cheng-Hock Lau          Portfolio Manager        Chief Investment Officer and Portfolio Manager for
New York                since 1997               Global Fixed Income for the Sub-advisor since
                                                 October 1996. Senior Portfolio Manager for
                                                 Global/International Fixed Income for the
                                                 Sub-advisor from July 1995 to October 1996.
                                                 Employed by Chancellor Capital Management, Inc., a
                                                 predecessor of the Sub-Advisor, from 1995 to
                                                 October 1996. Senior Vice President and Senior
                                                 Portfolio Manager for Fiduciary Trust Company
                                                 International from 1993 to 1995. Vice President at
                                                 Bankers Trust Company from 1991 to 1993.
Craig Munro             Portfolio Manager        Portfolio Manager for the Sub-advisor since August
New York                since 1998               1997. Vice President and Senior Analyst in the
                                                 Emerging Markets Group of the Global Fixed Income
                                                 Division of Merrill Lynch Asset Management from
                                                 1993 to August 1997.
</TABLE>
    
 
   
  In placing orders for the Portfolio's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions for the Portfolio may be
executed through affiliates of AIM or the Sub-advisor. High portfolio turnover
(over 100%) involves correspondingly greater brokerage commissions and other
transaction costs that the Fund or the Portfolio will bear directly and could
result in the realization of net capital gains which would be taxable when
distributed to shareholders. See "Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement on
behalf of Class A shares of the Fund, and has entered into a Master Distribution
Agreement on behalf of Class B shares of the Fund (individually referred to as a
"Distribution Agreement" or collectively as the "Distribution Agreements.") with
AIM Distributors, a registered broker-dealer and a wholly owned subsidiary of
AIM, to act as the distributor of Class A and Class B shares of the Fund.
Certain Trustees and officers of the Trust are affiliated with AIM Distributors.
    
 
   
  The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors and its predecessors. In the event the Class B shares Distribution
Agreement is terminated, AIM Distributors would continue to receive payments of
asset based sales charges in respect of the outstanding Class B shares
attributable to the distribution efforts of AIM Distributors and its
predecessors; provided, however, that a complete termination of the Class B
shares master distribution plan (as defined in the plan) would terminate all
payments by the Fund of asset based sales charges and services fees to AIM
Distributors. Termination of the Class B shares distribution plan or
Distribution Agreement does not affect the obligation of Class B shareholders to
pay contingent deferred sales charges.
    
 
  DISTRIBUTION PLANS. Class A Plan. The Trust has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
 
  Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.35% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
 
  The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected insti-
 
                                       18
<PAGE>   314
 
tutions are calculated at the annual rate of 0.25% of the average daily net
asset value of those Fund shares that are held in such institution's customers'
accounts which were purchased on or after a prescribed date set forth in the
Plan.
 
   
  Of the aggregate amount payable under the Class A Plan, payments to dealers
and other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee.
    
 
  Class B Plan. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
 
  Both Plans. Activities that may be financed under the Class A Plan and the
Class B Plan (collectively, the "Plans") include, but are not limited to:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders, overhead, preparation and distribution of
advertising material and sales literature, expense of organizing and conducting
sales seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
 
  Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
 
   
  Under the Plans, certain financial institutions which have entered into
service agreements and which sell shares of the Fund on an agency basis, may
receive payments from the Fund pursuant to the respective Plans. AIM
Distributors does not act as principal, but rather as agent for the Fund in
making such payments. The Fund will obtain a representation from such financial
institutions that they will either be licensed as dealers as required under
applicable state law, or that they will not engage in activities which would
constitute acting as a "dealer" as defined under applicable state law. Financial
intermediaries and any other person entitled to receive compensation for selling
Fund shares may receive different compensation for selling shares of one class
over another.
    
 
  For additional information concerning the operation of the Plans see the
Statement of Additional Information.
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST AND THE PORTFOLIO
    
 
   
  The Trust was organized as a Delaware business trust on May 7, 1998. On
September 8, 1998, the Trust acquired the assets of and assumed the liabilities
of AIM Investment Funds, Inc., a Maryland corporation. The Fund constitutes one
of the thirteen separate and distinct series portfolios of the Trust.
    
 
  From time to time, the Trust may establish other funds, each corresponding to
a distinct investment portfolio and a distinct series of the Trust's shares of
beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that Class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
 
                                       19
<PAGE>   315
 
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
 
  ORGANIZATION OF THE PORTFOLIO. The Portfolio is organized as a Delaware
business trust. Under Delaware law, the Fund and other entities that invest in
the Portfolio enjoy the same limitations of liability extended to shareholders
of private, for-profit corporations. There is a remote possibility, however,
that under certain circumstances an investor in the Portfolio may be held liable
for the Portfolio's obligations. However, the Agreement and Declaration of Trust
of the Portfolio disclaims shareholder liability for acts or obligations of the
Portfolio and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Portfolio or
a trustee. The Agreement and Declaration of Trust also provides for
indemnification from the Portfolio property for all losses and expenses of any
shareholder held personally liable for the Portfolio's obligations. Thus the
risk of an investor incurring financial loss on account of such liability is
limited to circumstances in which the Portfolio itself would be unable to meet
its obligations and where the other party was held not to be bound by the
disclaimer.
 
  Whenever the Fund is requested to vote on any proposal of the Portfolio, the
Fund will hold a meeting of Fund shareholders and will cast its vote as
instructed by Fund shareholders. Shares for which no voting instructions are
received will be voted in the same proportion as the shares for which voting
instructions are received.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust, to the
Fund and to the Portfolio.
    
 
                                       20
<PAGE>   316
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
               TO THE AIM FAMILY OF FUNDS--Registered Trademark--
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of the following mutual funds:
   
<TABLE>
            <S>                                           <C>
            AIM ADVISOR FLEX FUND                         AIM GLOBAL INFRASTRUCTURE FUND
            AIM ADVISOR INTERNATIONAL VALUE FUND          AIM GLOBAL RESOURCES FUND
            AIM ADVISOR LARGE CAP VALUE FUND              AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM ADVISOR MULTIFLEX FUND                    AIM GLOBAL TRENDS FUND
            AIM ADVISOR REAL ESTATE FUND                  AIM GLOBAL UTILITIES FUND
            AIM AGGRESSIVE GROWTH FUND                    AIM HIGH INCOME MUNICIPAL FUND
            AIM ASIAN GROWTH FUND                         AIM HIGH YIELD FUND
            AIM BALANCED FUND                             AIM INCOME FUND
            AIM BASIC VALUE FUND                          AIM INTERMEDIATE GOVERNMENT FUND
            AIM BLUE CHIP FUND                            AIM INTERNATIONAL EQUITY FUND
            AIM CAPITAL DEVELOPMENT FUND                  AIM INTERNATIONAL GROWTH FUND
            AIM CHARTER FUND                              AIM JAPAN GROWTH FUND
            AIM CONSTELLATION FUND                        AIM LATIN AMERICAN GROWTH FUND
            AIM DEVELOPING MARKETS FUND                   AIM LIMITED MATURITY TREASURY FUND
            AIM DOLLAR FUND(*)                            AIM MID CAP GROWTH FUND
            AIM EMERGING MARKETS FUND                     AIM MONEY MARKET FUND(*)
            AIM EMERGING MARKET DEBT FUND                 AIM MUNICIPAL BOND FUND
            AIM EUROPEAN DEVELOPMENT FUND                 AIM NEW PACIFIC GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM SELECT GROWTH FUND
            AIM GLOBAL AGGRESSIVE GROWTH FUND             AIM SMALL CAP EQUITY FUND
            AIM GLOBAL CONSUMER PRODUCTS AND              AIM SMALL CAP OPPORTUNITIES FUND
              SERVICES FUND                               AIM STRATEGIC INCOME FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM TAX-EXEMPT CASH FUND(*)
            AIM GLOBAL GROWTH FUND                        AIM TAX-FREE INTERMEDIATE FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM VALUE FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WEINGARTEN FUND
            AIM GLOBAL INCOME FUND                        AIM WORLDWIDE GROWTH FUND
                                                                                                 
</TABLE>
    
 
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
    Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
    asset value, without payment of a sales charge, as described below. Other
    funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
    FUND, are sold with an initial sales charge or subject to a contingent
    deferred sales charge upon redemption, as described below.
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed new Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.
 
   
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment is
$500, except for accounts initially established through an Automatic Investment
Plan, which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an Individual Retirement Arrangement ("IRA") or Roth IRA is $250.
There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such plans is $25 per
fund investment), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM 
    
 
                                       A-1
<PAGE>   317
 
   
Funds account. Notwithstanding the foregoing, the minimum initial investment
applicable to AIM Small Cap Opportunities Fund is $10,000.
    
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Shares of any AIM Funds not named on the cover of this Prospectus, as well as
Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                   OBI:                              Shareholder Name, Shareholder Account Number
                                                     (70 character limit)
</TABLE>
 
   
  HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased directly
through AIM Distributors or through any dealer who has entered into an agreement
with AIM Distributors. The minimum investment for subsequent purchases is $50.
The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. Notwithstanding the foregoing, the minimum subsequent purchases of shares
of AIM Small Cap Opportunities Fund is $1,000. There are no such minimum
investment requirements for investment of dividends and distributions of any of
the AIM Funds into any other existing AIM Funds account.
    
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional shares by electronic funds
transfer, please contact the Client Services Department of AFS for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
   
  Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BASIC
VALUE FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT
FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP EQUITY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND,AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without a
sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over
    
 
                                       A-2
<PAGE>   318
 
another class in the same Multiple Class Fund. Factors an investor should
consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
   
  The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPE
GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL
FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM
GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS
FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN
GROWTH FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
    
 
  The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
 
SALES CHARGES AND DEALER CONCESSIONS
 
   
  GROUP I. Certain AIM Funds are currently sold with a sales charge ranging from
5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM BASIC VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
EQUITY FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
    
 
   
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
      SINGLE TRANSACTION(1)                          PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   25,000                    5.50%          5.82%        4.75%
 $ 25,000 but less than $   50,000                   5.25           5.54         4.50
 $ 50,000 but less than $ 100,000                    4.75           4.99         4.00
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    3.00           3.09         2.50
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
    
 
- ---------------
 
   
(1) AIM Small Cap Opportunities Fund will not accept any single purchase in
    excess of $250,000.
    
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
                                       A-3
<PAGE>   319
   
 GROUP II. Certain AIM Funds are currently sold with a sales charge ranging from
4.75% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND, AIM
BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND
FUND, AIM STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
    
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   50,000                    4.75%          4.99%        4.00%
 $ 50,000 but less than $ 100,000                    4.00           4.17         3.25
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    2.50           2.56         2.00
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
  GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
Less than $ 100,000                                  1.00%          1.01%        0.75%
 $100,000 but less than $ 250,000                    0.75           0.76         0.50
 $250,000 but less than $1,000,000                   0.50           0.50         0.40
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
 
  ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
 
  In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
 
  AIM Distributors may make payments to dealers and institutions who are dealers
of record for purchases of $1 million of more of Class A shares (or shares which
normally involve payment of initial sales charges), which are sold at net asset
value and are subject to
 
                                       A-4
<PAGE>   320
 
a contingent deferred sales charge, for all AIM Funds other than Class A shares
of each of AIM LIMITED MATURITY TREASURY FUND and AIM TAX-FREE INTERMEDIATE FUND
as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next
$1 million of such purchases, plus 0.50% of the next $17 million of such
purchases, plus 0.25% of amounts in excess of $20 million of such purchases. See
"Contingent Deferred Sales Charge Program for Large Purchases." AIM Distributors
may make payments to dealers and institutions who are dealers of record for
purchases of $1 million or more of Class A shares (or shares which normally
involve payment of initial sales charges), and which are sold at net asset value
and are not subject to a contingent deferred sales charge, in an amount up to
0.10% of such purchases of Class A shares of AIM LIMITED MATURITY TREASURY FUND,
and in an amount up to 0.25% of such purchases of Class A shares of AIM TAX-FREE
INTERMEDIATE FUND.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed during the next twelve
months on Saturdays and Sundays and on the days on which New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class Funds
currently offer two or more classes of shares through separate distribution
systems (the "Multiple Distribution System"). Although each class of shares of a
particular Multiple Class Fund represents an interest in the same portfolio of
investments, each class is subject to a different distribution structure and, as
a result, differing expenses. This Multiple Distribution System allows investors
to select the class that is best suited to the investor's needs and objectives.
In considering the options afforded by the Multiple Distribution System,
investors should consider both the applicable initial sales charge or contingent
deferred sales charge, as well as the ongoing expenses borne by each class of
shares and other relevant factors, such as whether his or her investment goals
are long-term or short-term.
 
     CLASS A SHARES generally are sold subject to the initial sales charges
     described above and are subject to the other fees and expenses described
     herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
     needs of an investor who wishes to establish a dollar cost averaging
     program, pursuant to which Class A shares an investor owns may be exchanged
     at net asset value for Class A shares of another Multiple Class Fund or
     shares of another AIM Fund which is not a Multiple Class Fund, subject to
     the terms and conditions described under the caption "Exchange
     Privilege -- Terms and Conditions of Exchanges."
                                       A-5
<PAGE>   321
 
     CLASS B SHARES are sold without an initial sales charge. Thus, the entire
     purchase price of Class B shares is immediately invested in Class B shares.
     Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
     per annum on the average daily net assets of a Multiple Class Fund
     attributable to Class B shares. See the discussion under the caption
     "Management -- Distribution Plans." In addition, Class B shares redeemed
     within six years from the date such shares were purchased are subject to a
     contingent deferred sales charge ranging from 5% for redemptions made
     within the first year to 1% for redemptions made within the sixth year. No
     contingent deferred sales charge will be imposed if Class B shares are
     redeemed after six years from the date such shares were purchased.
     Redemptions of Class B shares and associated charges are further described
     under the caption "How to Redeem Shares -- Multiple Distribution System."
 
     Class B shares will automatically convert into Class A shares of the same
     Multiple Class Fund (together with a pro rata portion of all Class B shares
     acquired through the reinvestment of dividends and other distributions)
     eight years from the end of the calendar month in which the purchase of
     Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
     outstanding on May 29, 1998 and which are continuously held by the
     shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
     FUND seven years from the end of the calendar month in which the purchase
     of such Class B shares was made. If a shareholder exchanges Class B shares
     of AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
     since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
     shares will be subject to the eight year conversion feature applicable to
     Class B shares of all other AIM Funds. Following such conversion of their
     Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
     payments associated with Class B shares. See "Management -- Distribution
     Plans."
 
     AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an
     initial sales charge and are not subject to a contingent deferred sales
     charge; however, they are subject to the other fees and expenses described
     in the prospectus for AIM MONEY MARKET FUND.
 
  TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon Eastern Time or NYSE Close on any
business day of the Fund will be confirmed at the price next determined. Net
asset value is normally determined at 12:00 noon Eastern Time and NYSE Close on
each business day of AIM MONEY MARKET FUND.
 
  SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
REDUCTIONS IN INITIAL SALES CHARGES
 
  Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
 
                                       A-6
<PAGE>   322
 
  The term "purchaser" means:
 
  - an individual and his or her spouse and children, including any trust
    established exclusively for the benefit of any such person; or a pension,
    profit-sharing, or other benefit plan established exclusively for the
    benefit of any such person, such as an IRA, Roth IRA, a single-participant
    money-purchase/profit-sharing plan or an individual participant in a 403(b)
    plan (unless such 403(b) plan qualifies as the purchaser as defined below);
 
  - a 403(b) plan, the employer/sponsor of which is an organization described
    under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
    (the "Code"), provided that:
 
        a. the employer/sponsor must submit contributions for all participating
           employees in a single contribution transmittal (i.e., the funds will
           not accept contributions submitted with respect to individual
           participants);
 
        b. each transmittal must be accompanied by a single check or wire
           transfer; and
 
        c. all new participants must be added to the 403(b) plan by submitting
           an application on behalf of each new participant with the
           contribution transmittal;
 
  - a trustee or fiduciary purchasing for a single trust, estate or single
    fiduciary account (including a pension, profit-sharing or other employee
    benefit trust created pursuant to a plan qualified under Section 401 of the
    Code) and 457 plans, although more than one beneficiary or participant is
    involved;
 
  - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
    Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
    Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
    Distributors in writing that all of its related employee SEP, SARSEP or
    SIMPLE IRA accounts should be linked;
 
  - any other organized group of persons, whether incorporated or not, provided
    the organization has been in existence for at least six months and has some
    purpose other than the purchase at a discount of redeemable securities of a
    registered investment company; or
 
  - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
    Capital Management, Inc. ("AIM Capital").
 
  Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
 
  (1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
 
  Each purchase of fund shares normally subject to an initial sales charge made
during the 13-month period will be made at the public offering price applicable
to a single transaction of the total dollar amount indicated by the LOI, as
described under "Sales Charges and Dealer Concessions." It is the purchaser's
responsibility at the time of purchase to specify the account numbers that
should be considered in determining the appropriate sales charge. The offering
price may be further reduced as described under "Rights of Accumulation" if the
Transfer Agent is advised of all other accounts at the time of the investment.
Shares acquired through reinvestment of dividends and capital gain distributions
will not be applied to the LOI. At any time during the 13-month period after
meeting the original obligation, a purchaser may revise his intended investment
amount upward by submitting a written and signed request. Such a revision will
not change the original expiration date. By signing an LOI, a purchaser is not
making a binding commitment to purchase additional shares, but if purchases made
within the 13-month period do not total the amount specified, the investor will
pay the increased amount of sales charge as described below. Purchases made
within 90 days before signing an LOI will be applied toward completion of the
LOI. The LOI effective date will be the date of the first purchase with the
90-day period. The Transfer Agent will process necessary adjustments upon the
expiration or completion date of the LOI. Purchases made more than 90 days
before signing an LOI will be applied toward completion of the LOI based on the
value of the shares purchased calculated at the public offering price on the
effective date of the LOI.
 
  To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
                                       A-7
<PAGE>   323
 
  If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
 
  Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
 
  (2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
 
  PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at
net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
 
  Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
 
  The following persons may purchase Class A shares of the AIM Funds through AIM
Distributors without payment of an initial sales charge: (a) A I M Management
Group Inc. ("AIM Management") and its affiliated companies; (b) any current or
retired officer, director, trustee or employee, or any member of the immediate
family (including spouse, children, parents and parents of spouse) of any such
person, of AIM Management or its affiliates or of certain mutual funds which are
advised or managed by AIM; or any trust established exclusively for the benefit
of such persons; (c) any employee benefit plan established for employees of AIM
Management or its affiliates; (d) any current or retired officer, director,
trustee or employee, or any member of the immediate family (including spouse,
children, parents and parents of spouse) of any such person, or of CIGNA
Corporation or of any of its affiliated companies, or of First Data Investor
Services Group (formerly The Shareholder Services Group, Inc.); (e) any
investment company sponsored by CIGNA Investments, Inc. or any of its affiliated
companies for the benefit of its directors' deferred compensation plans; (f)
discretionary advised clients of AIM or AIM Capital; (g) registered
representatives and employees of dealers who have entered into agreements with
AIM Distributors (or financial institutions that have arrangements with such
dealers with respect to the sale of shares of the AIM Funds) and any member of
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, provided that purchases at net asset value are permitted by
the policies of such person's employer; (h) certain broker-dealers, investment
advisers or bank trust departments that provide asset allocation, similar
specialized investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services, and that
have entered into an agreement with AIM Distributors with respect to their use
of the AIM Funds in connection with such services; (i) any employee or any
member of the immediate family (including spouse, children, parents and parents
of spouse) of any employee, of Triformis Inc.; (j) shareholders of the AIM/GT
Funds as of April 30, 1987 who since that date continually have owned shares of
one or more of the AIM/GT Funds; and (k) certain former AMA Investment Advisers'
shareholders who became shareholders of the AIM Global Health Care Fund in
October 1989, and who have continuously held shares in the AIM/GT Funds since
that time.
 
   
  In addition, shares of any AIM Fund (except AIM Small Cap Opportunities Fund)
may be purchased at net asset value, without payment of a sales charge, by
pension, profit-sharing or other employee benefit plans created pursuant to a
plan qualified under Section 401 of the Code or plans under Section 457 of the
Code, or employee benefit plans created pursuant to Section 403(b) of the
    
                                       A-8
<PAGE>   324
 
Code and sponsored by nonprofit organizations defined under Section 501(c)(3) of
the Code. Such plans will qualify for purchases at net asset value provided that
(1) the total amount invested in the plan is at least $1,000,000, (2) the
sponsor signs a $1,000,000 LOI, (3) such shares are purchased by an
employer-sponsored plan with at least 100 eligible employees, or (4) all of the
plan's transactions are executed through a single financial institution or
service organization who has entered into an agreement with AIM Distributors
with respect to their use of the AIM Funds in connection with such accounts.
Section 403(b) plans sponsored by public educational institutions will not be
eligible for net asset value purchases based on the aggregate investment made by
the plan or the number of eligible employees. Participants in such plans will be
eligible for reduced sales charges based solely on the aggregate value of their
individual investments in the applicable AIM Fund. PLEASE NOTE THAT TAX-EXEMPT
FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR SUCH PLANS. AIM Distributors may pay
investment dealers or other financial service firms for share purchases of the
Load Funds (as defined under the caption "Exchange Privilege") sold at net asset
value to an employee benefit plan in accordance with this paragraph as follows:
1% of the first $2 million of such purchases, plus 0.80% of the next $1 million
of such purchases, plus 0.50% of the next $17 million of such purchases, plus
0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of
the net asset value of any Class A shares of AIM LIMITED MATURITY TREASURY FUND
sold at net asset value to an employee benefit plan in accordance with this
paragraph.
 
  Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
- --------------------------------------------------------------------------------
 
SPECIAL PLANS
 
  Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
who owns shares which are not subject to a contingent deferred sales charge, can
arrange for monthly, quarterly or annual amounts (but not less than $50) to be
drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that
 
                                       A-9
<PAGE>   325
 
exceed on an annual basis 12% of such account will be subject to a contingent
deferred sales charge on the amounts exceeding 12% of the account value at the
time the shareholder elects to participate in the Systematic Withdrawal Plan.
 
  Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested to shares of the
applicable AIM Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full
and fractional shares at their net asset value in effect at the time of each
such redemption.
 
  Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
 
  The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
 
  AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in the amount specified by
the shareholder (minimum $50 per investment, per account) and on a day or
date(s) specified by the shareholder. The proceeds are invested in shares of the
designated AIM Fund at the applicable offering price determined on the date of
the withdrawal. An Automatic Investment Plan may be discontinued upon 10 days'
prior notice to the Transfer Agent or AIM Distributors.
 
   
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
    
 
  DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
 
  PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination
money-purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans;
SARSEP plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement
accounts"). Information concerning these plans, including the custodian's fees
and the forms necessary to adopt such plans, can be obtained by calling or
writing the AIM Funds or AIM Distributors. Shares of the AIM Funds are also
available for investment through existing 401(k) plans (for both individuals and
employers) adopted under the Code. The plan custodian currently imposes an
annual $10 maintenance fee with respect to each retirement account for which it
serves as the custodian. This fee is generally charged in December. Each AIM
Fund and/or the custodian reserve the right to change this maintenance fee and
to initiate an establishment fee (not to exceed its cost).
 

   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance of $5,000 to
establish and maintain an allocation across a range of AIM Funds. The Program
automatically rebalances holdings of AIM Funds to the established allocation on
a periodic basis. Under the Program, a shareholder may predesig-
    
 
                                      A-10
<PAGE>   326
   
nate, on a percentage basis, how the total value of his or her holdings in a
minimum of two, and a maximum of ten, AIM Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more AIM Funds in the shareholder's Personal Portfolio for shares of
the same class(es) of one or more other AIM Funds in the shareholder's Personal
Portfolio. See "Exchange Privilege." If shares of the AIM Fund(s) in a
shareholder's Personal Portfolio have appreciated during a rebalancing period,
the Program will result in shares of AIM Fund(s) that have appreciated most
during the period being exchanged for shares of AIM Fund(s) that have
appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular AIM Fund would be 2% or less.
In predesignating percentages, shareholders must use whole percentages and
totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an AIM Fund's shares. The
AIM Funds and AIM Distributors reserve the right to modify, suspend, or
terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
    
 
                                      A-11
<PAGE>   327
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, including the Class A shares of the Multiple Class Funds, listed below
and referred to herein as the "Load Funds," are sold at a public offering price
that includes a maximum sales charge of 5.50% or 4.75% of the public offering
price of such shares; Class A shares (or shares which normally involve the
payment of initial sales charges) of certain of the AIM Funds, listed below and
referred to herein as the "Lower Load Funds," are sold at a public offering
price that includes a maximum sales charge of 1.00% of the public offering price
of such shares; and Class A shares or shares of certain other funds, listed
below and referred to herein as the "No Load Funds," are sold at net asset
value, without payment of a sales charge.
 
   
<TABLE>
<S>                                    <C>                                   <C>
                                LOAD FUNDS:                                  LOWER LOAD FUNDS:
   AIM ADVISOR FLEX FUND --            AIM GLOBAL INCOME                     AIM LIMITED MATURITY TREASURY FUND
     CLASS A                           FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR INTERNATIONAL           AIM GLOBAL INFRASTRUCTURE               AIM TAX-FREE INTERMEDIATE FUND
     VALUE FUND -- CLASS A             FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR LARGE CAP               AIM GLOBAL RESOURCES                  NO LOAD FUNDS:
     VALUE FUND -- CLASS A             FUND -- CLASS A
   AIM ADVISOR MULTIFLEX               AIM GLOBAL TELECOMMUNICATIONS         AIM MONEY MARKET FUND
     FUND -- CLASS A                   FUND -- CLASS A                           -- AIM CASH RESERVE SHARES
   AIM ADVISOR REAL ESTATE             AIM GLOBAL TRENDS                       AIM TAX-EXEMPT CASH FUND -- CLASS A
     FUND -- CLASS A                   FUND -- CLASS A                         AIM DOLLAR FUND -- CLASS A
   AIM AGGRESSIVE GROWTH               AIM GLOBAL UTILITIES
     FUND -- CLASS A                   FUND -- CLASS A
   AIM ASIAN GROWTH                    AIM HIGH INCOME MUNICIPAL
     FUND -- CLASS A                   FUND -- CLASS A
   AIM BALANCED FUND -- CLASS A        AIM HIGH YIELD FUND -- CLASS A
   AIM BASIC VALUE                     AIM INCOME FUND -- CLASS A
     FUND -- CLASS A                   AIM INTERMEDIATE GOVERNMENT
   AIM BLUE CHIP FUND -- CLASS A       FUND -- CLASS A
   AIM CAPITAL DEVELOPMENT             AIM INTERNATIONAL EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM CHARTER FUND -- CLASS A         AIM INTERNATIONAL GROWTH
   AIM CONSTELLATION                   FUND -- CLASS A
     FUND -- CLASS A                   AIM JAPAN GROWTH FUND -- CLASS A
   AIM DEVELOPING MARKETS              AIM LATIN AMERICAN GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS                AIM MID CAP EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS DEBT           AIM MONEY MARKET
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPE GROWTH                   AIM MUNICIPAL BOND
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPEAN DEVELOPMENT            AIM NEW PACIFIC GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM GLOBAL AGGRESSIVE GROWTH        AIM SELECT GROWTH FUND -- CLASS A
     FUND -- CLASS A                   AIM SMALL CAP GROWTH
   AIM GLOBAL CONSUMER PRODUCTS        FUND -- CLASS A
     AND SERVICES FUND -- CLASS A      AIM SMALL CAP OPPORTUNITIES
   AIM GLOBAL FINANCIAL SERVICES       FUND -- CLASS A
     FUND -- CLASS A                   AIM STRATEGIC INCOME
   AIM GLOBAL GOVERNMENT INCOME        FUND -- CLASS A
     FUND -- CLASS A                   AIM TAX-EXEMPT BOND FUND
   AIM GLOBAL GROWTH                   OF CONNECTICUT -- CLASS A
     FUND -- CLASS A                   AIM VALUE FUND -- CLASS A
   AIM GLOBAL GROWTH &                 AIM WEINGARTEN FUND -- CLASS A
     INCOME FUND -- CLASS A            AIM WORLDWIDE GROWTH
   AIM GLOBAL HEALTH CARE              FUND -- CLASS A
     FUND -- CLASS A
</TABLE>
    
 
                                      A-12
<PAGE>   328
 
   
  Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE; (iii) Class A shares
may be exchanged for Class A shares; (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A, Class B or Class C shares of AIM MONEY MARKET FUND. Class C shares
of AIM Small Cap Opportunities Fund are currently not available.
    
 
  DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
 
<TABLE>
<CAPTION>
                                                                                                      MULTIPLE CLASS FUNDS:
                                                            LOWER LOAD              NO LOAD       ------------------------------
      FROM:                 TO: LOAD FUNDS                     FUNDS                 FUNDS           CLASS B         CLASS C
      -----                 --------------                  ----------              -------          -------         -------
<S>                <C>                                <C>                      <C>                <C>             <C>
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
 
Lower Load Funds.. Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund or any     Fund or any Lower Load
                   Lower Load Fund.                   Fund; otherwise,
                                                      Offering Price.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
 
  FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS REVISED AS FOLLOWS:
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
Lower Load Funds.. Net Asset Value if shares were     Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
                   acquired upon exchange of any
                   Load Fund. Otherwise, difference
                   in sales charge will apply.
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund.           Fund or any Lower Load
                   Difference in sales charge will    Fund; otherwise,
                   apply if No Load shares were       Offering Price.
                   acquired upon exchange of Lower
                   Load Fund shares.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
  Class C........  Not Applicable                     Not Applicable           Not Applicable     Not Applicable  Net Asset Value
</TABLE>
 
   
  An exchange is permitted only in the following circumstances: (a) if the funds
offer more than one class of shares, the exchange must be between the same class
of shares (e.g., Class A, Class B and Class C shares of a Multiple Class Fund
cannot be exchanged for each other) except that AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may be exchanged for Class A shares of another Multiple Class
Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten busi-
    
 
                                      A-13
<PAGE>   329
 
ness days, and all other shares are held in an account for at least one day,
prior to the exchange; and (h) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the AIM
Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
   
  Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged are
redeemed at their net asset value as determined at NYSE Close on the day that an
exchange request in proper form (described below) is received. Exchange requests
received after NYSE Close will result in the redemption of shares at their net
asset value at NYSE Close on the next business day. See "Terms and Conditions of
Purchase of the AIM Funds -- Timing of Purchase, Exchange and Redemption Orders
(AIM MONEY MARKET FUND only)" for information regarding the timing of exchange
orders for AIM MONEY MARKET FUND. Normally, shares of an AIM Fund to be acquired
by exchange are purchased at their net asset value or applicable offering price,
as the case may be, determined on the date that such request is received, but
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that a fund would be materially disadvantaged
by an immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into a fund paying daily dividends (See "Dividends, Distributions and
Tax Matters -- Dividends and Distributions," below), and the release of the
exchange proceeds is delayed for the foregoing five-day period, such shareholder
will not begin to accrue dividends until the sixth business day after the
exchange. Shares purchased by check may not be exchanged until it is determined
that the check has cleared, which may take up to ten business days from the date
that the check is received. See "Terms and Conditions of Purchase of the AIM
Funds -- Timing of Purchase Orders."
    
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the AIM Funds. AIM Distributors reserves the right to impose conditions on
dealers or investment advisors who make telephone exchanges of shares of the
funds, including the condition that any such dealer or investment advisor enter
into an agreement (which contains additional conditions with respect to
exchanges of shares) with AIM Distributors. To exchange shares by telephone, a
shareholder, dealer or investment advisor who has satisfied the foregoing
conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach
AFS by telephone, he may also request exchanges by telegraph or use overnight
courier services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is received
prior to NYSE Close. The Transfer Agent and AIM Distributors will not be liable
for any loss, expense or cost arising out of any telephone exchange request that
they reasonably believe to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions if they do not follow
reasonable procedures for verification of telephone transactions. Such
reasonable procedures may include recordings of telephone transactions
(maintained for six months), requests for confirmation of the shareholder's
Social Security Number and current address, and mailings of confirmations
promptly after the transaction.
 
  EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
 
                                      A-14
<PAGE>   330
 
  MULTIPLE DISTRIBUTION SYSTEM. Class B Shares. Class B shares purchased under
the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
 
<TABLE>
<CAPTION>
  YEARS                                                     CONTINGENT DEFERRED
  SINCE                                                       SALES CHARGE AS
PURCHASE                                                    % OF DOLLAR AMOUNT
  MADE                                                       SUBJECT TO CHARGE
- --------                                                    -------------------
<S>                                                          <C>
First......................................................         5%
Second.....................................................         4%
Third......................................................         3%
Fourth.....................................................         3%
Fifth......................................................         2%
Sixth......................................................         1%
Seventh and Following......................................        None
</TABLE>
 
  In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
 
  Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
 
  Class C Shares. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
 
  Waivers. Contingent deferred sales charges on Class B and Class C shares will
be waived on redemptions (1) following the death or post-purchase disability, as
defined in Section 72(m)(7) of the Code, of a shareholder or a settlor of a
living trust (provided AIM Distributors is notified of such death or
post-purchase disability at the time of the redemption request and is provided
with satisfactory evidence of such death or post-purchase disability), (2) in
connection with certain distributions from IRAs, custodial accounts maintained
pursuant to Code Section 403(b), deferred compensation plans qualified under
Code Section 457 and plans qualified under Code Section 401 (collectively,
"Retirement Plans"), (3) pursuant to a Systematic Withdrawal Plan, provided that
amounts withdrawn under such plan do not exceed on an annual basis 12% of the
value of the shareholder's investment in Class B or Class C shares at the time
the shareholder elects to participate in the Systematic Withdrawal Plan, (4)
effected pursuant to the right of a Multiple Class Fund to liquidate a
shareholder's account if the aggregate net asset value of shares held in the
account is less than the designated minimum account size described in the
prospectus of such Multiple Class Fund, (5) effected by AIM of its investment in
Class B or Class C shares and (6) of Class C shares where such investor's dealer
of record, due to the nature of the investor's account, notifies AIM
Distributors prior to the time of investment that the dealer waives the payment
otherwise payable to the dealer described in the last paragraph under the
caption "Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM
Funds."
 
  Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
 
  Waiver category (2) above applies only to redemptions resulting from:
 
          (i) required minimum distributions to plan participants or
     beneficiaries who are age 70 1/2 or older, and only with respect to that
     portion of such distributions which does not exceed 12% annually of the
     participant's or beneficiary's account value in a particular AIM Fund;
 
                                      A-15
<PAGE>   331
 
          (ii) in-kind transfers of assets where the participant or beneficiary
     notifies AIM Distributors of such transfer no later than the time such
     transfer occurs;
 
          (iii) tax-free rollovers or transfers of assets to another Retirement
     Plan invested in Class B or Class C shares of one or more Multiple Class
     Funds;
 
          (iv) tax-free returns of excess contributions or returns of excess
     deferral amounts; and
 
          (v) distributions upon the death or disability (as defined in the
     Code) of the participant or beneficiary.
 
   
  CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND or Class A shares
of AIM DOLLAR FUND which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code, or Plans created under Section 403(b) of the
Code and sponsored by nonprofit organizations as defined under Section 501(c)(3)
of the Code, where shares are being redeemed in connection with employee
terminations or withdrawals, and (a) the total amount invested in a Plan is at
least $1,000,000, (b) the sponsor of a Plan signs a letter of intent to invest
at least $1,000,000 in one or more of the AIM Funds, or (c) the shares being
redeemed were purchased by an employer-sponsored Plan with at least 100 eligible
employees; provided, however, that Plans created under Section 403(b) of the
Code which are sponsored by public educational institutions shall qualify under
(a), (b) or (c) above on the basis of the value of each Plan participant's
aggregate investment in the AIM Funds, and not on the aggregate investment made
by the Plan or on the number of eligible employees; (2) redemptions of shares
following the death or post-purchase disability, as defined in Section 72(m)(7)
of the Code, of a shareholder or a settlor of a living trust; (3) redemptions of
shares purchased at net asset value by private foundations or endowment funds
where the initial amount invested was at least $1,000,000; (4) redemptions of
shares purchased by an investor in amounts of $1,000,000 or more where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payments otherwise payable to the dealer as described in the third paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds;" and (5) pursuant to a Systematic Withdrawal Plan, provided
that amounts withdrawn under such plan do not exceed on an annual basis 12% of
the value of the shareholder's investment in Class A shares at the time the
shareholder elects to participate in the Systematic Withdrawal Plan.
    
 
  Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  In addition to these requirements, shareholders who have invested in a fund to
establish as IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares; (a) a statement
as to whether or not the shareholder has attained age 59 1/2, and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.
 
                                      A-16
<PAGE>   332
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
this account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
   
  EXPEDITED REDEMPTIONS (AIM Cash Reserve shares of AIM MONEY MARKET FUND
ONLY). If a redemption order is received prior to 11:30 a.m. Eastern Time, the
redemption will be effective on that day and AIM MONEY MARKET FUND will endeavor
to transmit payment on that same business day. If the redemption order is
received after 11:30 a.m. and prior to NYSE Close, the redemption will be made
at the next determined net asset value and payment will generally be transmitted
on the next business day.
    
 
  REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing the
appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone
 
                                      A-17
<PAGE>   333
 
exchange and telephone redemption authorization forms; (7) changes in previously
designated wiring or electronic funds transfer instructions, and (8) written
redemptions or exchanges of shares previously reported as lost, whether or not
the redemption amount is under $50,000 or the proceeds are to be sent to the
address of record. These requirements may be waived or modified upon notice to
shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
    
 
   
  REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within ninety (90) days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment will not alter the taxes due on any
capital gains, except under the circumstances described below. If there has been
a loss on the redemption and shares of the same fund are repurchased, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in shares of the same fund, or exchanged for
shares of another AIM Fund, at a reduced sales charge within 90 days of the
payment of the sales charge, the shareholder's basis in the fund shares redeemed
may not include the amount of the sales charge paid, thereby reducing the loss
or increasing the gain recognized from the redemption; however, the
shareholder's basis in the fund shares purchased will include the sales charge.
Each AIM Fund may amend, suspend or cease offering the privilege at any time as
to shares redeemed after the date of such amendment, suspension or cessation.
This privilege may only be exercised once each year by a shareholder with
respect to each AIM Fund.
    
 
   
  Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of Class A shares and who subsequently reinvest a portion or
all of the value of the redeemed shares in Class A shares of any AIM Fund within
ninety (90) days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
    
 
                                      A-18

<PAGE>   334
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
   
  The net asset value per share (or share price) of each AIM Fund is determined
as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close with
respect to AIM MONEY MARKET FUND) on each "business day" of a fund as previously
defined. In the event the NYSE closes early (i.e. before 4:00 p.m. Eastern Time)
on a particular day, the net asset value of an AIM Fund's share will be
determined as of the close of the NYSE on such day. For purposes of defining net
asset value per share, futures and options contracts generally will be valued 15
minutes after the close of trading of the NYSE. The net asset value per share is
calculated by subtracting a class' liabilities from its assets and dividing the
result by the total number of class shares outstanding. The determination of net
asset value per share is made in accordance with generally accepted accounting
principles. Among other items, liabilities include accrued expenses and
dividends payable, and total assets include portfolio securities valued at their
market value, as well as income accrued but not yet received. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the fund's officers and
in accordance with methods which are specifically authorized by its governing
Board of Directors or Trustees. Short-term obligations with maturities of 60
days or less, and the securities held by the Money Market Funds, are valued at
amortized cost as reflecting fair value. AIM HIGH INCOME MUNICIPAL FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-FREE
INTERMEDIATE FUND value variable rate securities that have an unconditional
demand or put feature exercisable within seven days or less at par, which
reflects the market value of such securities.
    
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as
set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                DISTRIBUTIONS    DISTRIBUTIONS
                                                                                   OF NET           OF NET
                                                    DIVIDENDS FROM                REALIZED         REALIZED
                                                    NET INVESTMENT               SHORT-TERM        LONG-TERM
                   FUND                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
                   ----                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM ADVISOR FLEX FUND.....................  declared and paid quarterly       quarterly          annually
AIM ADVISOR INTERNATIONAL VALUE FUND......  declared and paid annually        annually           annually
AIM ADVISOR LARGE CAP VALUE FUND..........  declared and paid quarterly       quarterly          annually
AIM ADVISOR MULTIFLEX FUND................  declared and paid quarterly       quarterly          annually
AIM ADVISOR REAL ESTATE FUND..............  declared and paid quarterly       quarterly          annually
AIM AGGRESSIVE GROWTH FUND................  declared and paid annually        annually           annually
AIM ASIAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM BALANCED FUND.........................  declared and paid quarterly       annually           annually
AIM BASIC VALUE FUND......................  declared and paid annually        annually           annually
AIM BLUE CHIP FUND........................  declared and paid annually        annually           annually
AIM CAPITAL DEVELOPMENT FUND..............  declared and paid annually        annually           annually
AIM CHARTER FUND..........................  declared and paid quarterly       annually           annually
AIM CONSTELLATION FUND....................  declared and paid annually        annually           annually
AIM DEVELOPING MARKETS FUND...............  declared and paid annually        annually           annually
AIM DOLLAR FUND...........................  declared daily; paid monthly      annually           annually
AIM EMERGING MARKETS FUND.................  declared and paid annually        annually           annually
AIM EMERGING MARKETS DEBT FUND............  declared and paid monthsly        annually           annually
AIM EUROPE GROWTH FUND....................  declared and paid annually        annually           annually
AIM EUROPEAN DEVELOPMENT FUND.............  declared and paid annually        annually           annually
AIM GLOBAL AGGRESSIVE GROWTH FUND.........  declared and paid annually        annually           annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
  FUND....................................  declared and paid annually        annually           annually
AIM GLOBAL FINANCIAL SERVICES FUND........  declared and paid annually        annually           annually
</TABLE>
    
 
                                      A-19
<PAGE>   335
 
   
<TABLE>
<CAPTION>
                                                                             DISTRIBUTIONS    DISTRIBUTIONS
                                                                                OF NET           OF NET
                                                 DIVIDENDS FROM                REALIZED         REALIZED
                                                 NET INVESTMENT               SHORT-TERM        LONG-TERM
FUND                                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
- ----                                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM GLOBAL GOVERNMENT INCOME FUND.........  declared and paid monthly         annually           annually
AIM GLOBAL GROWTH FUND....................  declared and paid annually        annually           annually
AIM GLOBAL GROWTH & INCOME FUND...........  declared and paid quarterly       annually           annually
AIM GLOBAL HEALTH CARE FUND...............  declared and paid annually        annually           annually
AIM GLOBAL INCOME FUND....................  declared daily; paid monthly      annually           annually
AIM GLOBAL INFRASTRUCTURE FUND............  declared and paid annually        annually           annually
AIM GLOBAL RESOURCES FUND.................  declared and paid annually        annually           annually
AIM GLOBAL TELECOMMUNICATIONS FUND........  declared and paid annually        annually           annually
AIM GLOBAL TRENDS FUND....................  declared and paid annually        annually           annually
AIM GLOBAL UTILITIES FUND.................  declared daily; paid monthly      annually           annually
AIM HIGH INCOME MUNICIPAL FUND............  declared daily; paid monthly      annually           annually
AIM HIGH YIELD FUND.......................  declared daily; paid monthly      annually           annually
AIM INCOME FUND...........................  declared daily; paid monthly      annually           annually
AIM INTERMEDIATE GOVERNMENT FUND..........  declared daily; paid monthly      annually           annually
AIM INTERNATIONAL EQUITY FUND.............  declared and paid annually        annually           annually
AIM INTERNATIONAL GROWTH FUND.............  declared and paid annually        annually           annually
AIM JAPAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM LATIN AMERICAN GROWTH FUND............  declared and paid annually        annually           annually
AIM LIMITED MATURITY TREASURY FUND........  declared daily; paid monthly      annually           annually
AIM MID CAP EQUITY FUND...................  declared and paid annually        annually           annually
AIM MONEY MARKET FUND.....................  declared daily; paid monthly      at least annually  annually
AIM MUNICIPAL BOND FUND...................  declared daily; paid monthly      annually           annually
AIM NEW PACIFIC GROWTH FUND...............  declared and paid annually        annually           annually
AIM SELECT GROWTH FUND....................  declared and paid annually        annually           annually
AIM SMALL CAP GROWTH FUND.................  declared and paid annually        annually           annually
AIM SMALL CAP OPPORTUNITIES FUND..........  declared and paid annually        annually           annually
AIM STRATEGIC INCOME FUND.................  declared and paid monthly         annually           annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT...  declared daily; paid monthly      annually           annually
AIM TAX-EXEMPT CASH FUND..................  declared daily; paid monthly      at least annually  annually
AIM TAX-FREE INTERMEDIATE FUND............  declared daily; paid monthly      annually           annually
AIM VALUE FUND............................  declared and paid annually        annually           annually
AIM WEINGARTEN FUND.......................  declared and paid annually        annually           annually
AIM WORLDWIDE GROWTH FUND.................  declared and paid annually        annually           annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in like shares of another
Multiple Class Fund, to the extent permitted. For funds that do not declare a
dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. For funds that declare
a dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or the
dividend portion thereof, in cash, or to invest such dividends and distributions
in shares of another fund in the AIM Funds; provided that (i) dividends and
distributions attributable to Class B shares may only be reinvested in Class B
shares, (ii) dividends and distributions attributable to Class C shares may only
be reinvested in Class C shares, (iii) dividends and distributions attributable
to Class A shares may not be reinvested in Class B or Class C shares, and (iv)
dividends and distributions attributable to the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may not be reinvested in the Class A shares of that Fund or in
any Class B or Class C shares. Investors who have not previously selected such a
reinvestment option on the account application form may contact the Transfer
Agent at any time to obtain a form to authorize such reinvestments in another
AIM Fund. Such reinvestments into the AIM Funds are not subject to sales
charges, and shares so purchased are automatically credited to the account of
the shareholder.
 
  Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
 
                                      A-20
<PAGE>   336
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares, except for "exempt-interest dividends" paid by
AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND
FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND
(the "Tax-Exempt Funds"), which are exempt from federal income tax. With respect
to tax-exempt shareholders, dividends and distributions from the AIM Funds are
not subject to federal income taxation to the extent permitted under the
applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    
 
   
  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
    
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
                                      A-21
<PAGE>   337
   
 TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
  TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other taxable securities. For
additional information concerning the alternative minimum tax and certain
collateral tax consequences of the receipt of exempt-interest dividends, see the
Statements of Additional Information applicable to the Tax-Exempt Funds.
 
  The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
 
  To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
 
  From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP EQUITY FUND,
AIM SMALL CAP GROWTH FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX INFORMATION.
Certain states exempt from income taxes dividends paid by mutual funds
attributable to interest on U.S. Treasury and certain other U.S. government
obligations. Investors should consult with their own tax advisors concerning the
availability of such exemption.
    
 
  AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH
FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do
so, each of these funds may elect to pass through to its shareholders credits
for foreign taxes paid. If a fund makes such an election, a shareholder who
receives a distribution (1) will be required to include in gross income his
proportionate share of foreign taxes allocable to the distribution and (2) may
claim a credit or deduction for such share for his taxable year in which the
distribution is received, subject to the general limitations imposed on the
allowance of foreign tax credits and deductions. Shareholders should also note
that certain gains or losses attributable to fluctuations in exchange rates or
foreign currency forward contracts may increase or decrease the amount of income
of the fund available for distribution to shareholders and should note that if,
for any fund, such losses exceed other income during a taxable year, the fund
would not be able to pay ordinary income dividends for that year.
 
                                      A-22
<PAGE>   338
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each AIM Fund's transfer agent and dividend
payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-23
<PAGE>   339
                                                                      APPENDIX A
- --------------------------------------------------------------------------------
 
                          DESCRIPTION OF DEBT RATINGS
 
DESCRIPTION OF BOND RATINGS
 
  Moody's Investors Service, Inc. ("Moody's") rates the debt securities issued
by various entities from "Aaa" to "C." Investment grade ratings are the first
four categories: Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. Ba -- Bonds which are rated Ba
are judged to have speculative elements; their future cannot be considered as
well-assured. Often the protection of interest and principal payments may be
very moderate, and thereby not well safeguarded during both good and bad times
over the future. Uncertainty of position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest. Ca -- Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings. C -- Bonds which are rated C are the lowest rated class of
bonds, and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
 
  ABSENCE OF RATING. Where no rating has been assigned or where a rating has
been suspended or withdrawn, it may be for reasons unrelated to the quality of
the issue.
 
  Should no rating be assigned, the reason may be one of the following:
 
          1. An application for rating was not received or accepted.
 
          2. The issue or issuer belongs to a group of securities or companies
     that are not rated as a matter of policy.
 
          3. There is a lack of essential data pertaining to the issue or
     issuer.
 
          4. The issue was privately placed, in which case the rating is not
     published in Moody's publications.
 
  Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.
 
  Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the Company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the Company ranks in the
lower end of its generic rating category.
 
  Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"),
rates the securities debt of various entities in categories ranging from "AAA"
to "D" according to quality. Investment grade ratings are the first four
categories:
 
  AAA -- An obligation rated "AAA" has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong. AA -- An obligation rated "AA" differs from the highest rated
obligations only in a small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong. A -- An obligation rated "A" is
somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions than obligations in higher rated categories. BBB -- An
obligation rated "BBB" exhibits adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the
obligation. BB, B, CCC, CC, C -- Obligations rated "BB," "B," "CCC," "CC," and
"C" are regarded as having significant speculative characteristics. "BB"
indicates the least degree of speculation and "C" the highest. While such
obligations will likely have some quality and protective characteristics, these
may be outweighed by large uncertainties or major exposures to adverse
conditions. BB -- An obligation rated "BB" is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could lead
to the obligor's inadequate capacity to meet its financial commitment on the
obligation. B -- An obligation rated "B" is more vulnerable to nonpayment than
obligations rated "BB,"
 
                                      A-24
<PAGE>   340
 
but the obligor currently has the capacity to meet its financial commitment on
the obligation. Adverse business, financial, or economic conditions will likely
impair the obligor's capacity or willingness to meet its financial commitment on
the obligation. CCC -- An obligation rated "CCC" is currently vulnerable to
nonpayment, and is dependent upon favorable business, financial, and economic
conditions for the obligor to meet its financial commitment on the obligation.
In the event of adverse business, financial, or economic conditions, the obligor
is not likely to have the capacity to meet its financial commitment on the
obligation. CC -- An obligation rated "CC" is currently highly vulnerable to
nonpayment. C -- The "C" rating may be used to cover a situation where a
bankruptcy petition has been filed or similar action has been taken, but
payments on this obligation are being continued. D -- An obligation rated "D" is
in payment default. The "D" rating category is used when payments on an
obligation are not made on the date due even if the applicable grace period has
not expired, unless S&P believes that such payments will be made during such
grace period. The "D" rating also will be used upon the filing of a bankruptcy
petition or the taking of a similar action if payments on an obligation are
jeopardized.
 
  PLUS (+) OR MINUS (-). The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
 
  NR. Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
 
DESCRIPTION OF COMMERCIAL PAPER RATINGS
 
  Moody's employs the designation "Prime-1" to indicate commercial paper having
a superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. Issues rated Prime-2 have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many of
the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
 
  S&P ratings of commercial paper are graded into several categories ranging
from "A1" for the highest quality obligations to "D" for the lowest. Issues in
the "A" category are delineated with numbers 1, 2, and 3 to indicate the
relative degree of safety. A-1 -- This highest category indicates that the
degree of safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics will be denoted with a plus sign
(+) designation. A-2 -- Capacity for timely payments on issues with this
designation is satisfactory; however, the relative degree of safety is not as
high as for issues designated "A-1."
 
                                      A-25
<PAGE>   341
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
 
 
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                              GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
      ACCOUNT TYPE            NUMBER OF:                       ACCOUNT TYPE                  NUMBER OF:
      ------------            --------------------             ------------                  ------------------
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary
      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application
      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors
      Legal Guardian          Ward, Minor or
                              Incompetent
      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
 
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   342
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   343
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
<PAGE>   344
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
CLASS A AND CLASS B SHARES OF
    
 
AIM GLOBAL INFRASTRUCTURE FUND
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
PROSPECTUS
SEPTEMBER 8, 1998
 
   
This Prospectus contains information about AIM GLOBAL INFRASTRUCTURE FUND (the
"Fund"), which is one of several series investment portfolios comprising AIM
Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a diversified portfolio which seeks long-term capital
growth by investing all of its investable assets in the Global Infrastructure
Portfolio (the "Portfolio"), which, in turn, invests primarily in equity
securities of companies throughout the world that design, develop or provide
products and services significant to a country's infrastructure. The Portfolio's
investment objective is identical to that of the Fund. The investment experience
of the Fund will correspond directly with the investment experience of the
Portfolio.
    
 
   
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   345
 
- --------------------------------------------------------------------------------
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     7
  Investment Program...................     7
  Risk Factors.........................    10
  Management...........................    13
  Organization of the Trust and
     Portfolio.........................    15
    
   
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-9
  Exchange Privilege...................  A-12
  How to Redeem Shares.................  A-14
  Determination of Net Asset Value.....  A-19
  Dividends, Distributions and Tax
     Matters...........................  A-19
  General Information..................  A-23
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND AND THE PORTFOLIO
    
 
  The Fund is a diversified series of the Trust. The Portfolio is a diversified
series of Global Investment Portfolio.
 
   
  INVESTMENT OBJECTIVE. The Fund and the Portfolio each seeks long-term capital
growth.
    
 
  PRINCIPAL INVESTMENTS. The Fund invests all of its investable assets in the
Portfolio, which, in turn, invests primarily in equity securities of companies
throughout the world that design, develop or provide products and services
significant to a country's infrastructure.
 
   
  INVESTMENT MANAGERS. The Portfolio is managed by A I M Advisors, Inc. ("AIM")
and is sub-advised and sub-administered by INVESCO (NY), Inc. (the
"Sub-advisor"). AIM and the Sub-advisor and their worldwide asset management
affiliates provide investment management and/or administrative services to
institutional, corporate and individual clients around the world. AIM and the
Sub-advisor are both indirect wholly owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC and its subsidiaries are an independent investment management group
that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing
presence in Asia. AIM was organized in 1976 and, together with its subsidiaries,
currently advises approximately 90 investment company portfolios.
    
 
  PURCHASING SHARES. Investors may select Class A or Class B shares of the Fund
which are offered by this Prospectus at an offering price that reflects
differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to
a separate prospectus, the Fund also offers Advisor Class shares, which
represent interests in the Fund. The Advisor Class has different distribution
agreements.
 
  CLASS A SHARES -- Shares are offered at net asset value plus any applicable
initial sales charge.
 
  CLASS B SHARES -- Shares are offered at net asset value without an initial
sales charge, and are subject to a maximum contingent deferred sales charge of
5% on certain redemptions made within six years from the date such shares were
purchased. Class B shares automatically convert to Class A shares of the Fund
eight years following the end of the calendar month in which a purchase was
made. Class B shares are subject to higher expenses than Class A shares. Initial
investments in any class of shares must be at least $500 and additional
investments must be at least $50.
 
   
  The minimum initial investment is modified for investments through
tax-qualified retirement plans and accounts initially established with an
Automatic Investment Plan. The distributor of the Fund's shares is A I M
Distributors, Inc. ("AIM Distributors"), P.O. Box 4739, Houston, TX 77210-4739.
See "How to Purchase Shares" and "Special Plans."
    
 
  SUITABILITY FOR INVESTORS. An investor in Class A or Class B shares of the
Fund should consider the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the shares are expected to
be held, and other circumstances. Investors should consider whether, during the
anticipated life of their investment in the Fund, the accumulated distribution
fees and any applicable contingent deferred sales charges on Class B shares
prior to conversion would be less than the initial sales charge and accumulated
distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares.
To assist investors in making this determination, the table under the caption
"Table of Fees and Expenses" sets forth examples of the charges applicable to
each class of shares. Class A shares will normally be more benefi-
 
                                        2
<PAGE>   346
 
cial than Class B shares to the investor who qualifies for reduced initial sales
charges, as described below. Therefore, AIM Distributors will reject any order
for purchase of more than $250,000 for Class B shares.
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds"), Class
A and Class B shares of the Fund may be exchanged for shares of other funds in
The AIM Family of Funds in the manner and subject to the policies and charges
set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Class A shareholders of the Fund may redeem all or a portion
of their shares at net asset value on any business day, generally without
charge. A contingent deferred sales charge of 1% may apply to certain
redemptions where a purchase of more than $1 million is made at net asset value.
See "How to Redeem Shares -- Contingent Deferred Sales Charge Program for Large
Purchases."
 
  Class B shareholders of the Fund may redeem all or a portion of their shares
at net asset value on any business day, less a contingent deferred sales charge
for redemptions made within six years from the date such shares were purchased.
Class B shares redeemed after six years from the date such shares were purchased
will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters" and "Special Plans."
    
 
   
  RISK FACTORS. There is no assurance that the Fund or the Portfolio will
achieve its investment objective. The Fund's net asset value will fluctuate,
reflecting fluctuations in the market value of the Portfolio's portfolio
holdings. The Portfolio's policy of concentrating its investments in companies
that design, develop or provide products and services significant to a country's
infrastructure may cause the Fund's net asset value to fluctuate more than if it
invested in a greater number of industries. The Portfolio may invest in foreign
securities. Investments in foreign securities involve risks relating to
political and economic developments abroad and the differences between the
regulations to which U.S. and foreign issuers are subject. Individual foreign
economies also may differ favorably or unfavorably from the U.S. economy.
Changes in foreign currency exchange rates may affect the Fund's net asset
value, earnings and gains and losses realized on sales of securities. Securities
of foreign companies may be less liquid and their prices more volatile than
those of securities of comparable U.S. companies. The Portfolio may engage in
certain foreign currency, options and futures transactions to attempt to hedge
against the overall level of investment and currency risk associated with its
present or planned investments. Such transactions involve certain risks and
transaction costs. The Portfolio may invest up to 20%, of its total assets in
below investment grade debt securities. Investments of this type are subject to
a greater risk of loss of principal and interest. See "Investment Program" and
"Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   347
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Class A and Class B shares of the Fund are reflected in the following table(1):
 
<TABLE>
<CAPTION>
                                                              CLASS A   CLASS B
                                                              -------   -------
<S>                                                           <C>       <C>
Shareholder Transaction Costs(2):
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................   4.75%     None
  Sales charges on reinvested distributions to
     shareholders...........................................   None      None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........   None      5.00%
  Redemption charges........................................   None      None
  Exchange fees.............................................   None      None
Annual Fund Operating Expenses(3): (as a % of average net
  assets)
  Investment management and administration fees.............   0.98%     0.98%
  12b-1 distribution and service fees.......................   0.50%     1.00%
  Other expenses (after reimbursements and waivers).........   0.52%     0.52%
                                                               ----      ----
          Total Fund Operating Expenses.....................   2.00%     2.50%
                                                               ====      ====
</TABLE>
 
   
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Fund. Long-term shareholders
   may pay more than the economic equivalent of the maximum front-end sales
   charge permitted by the National Association of Securities Dealers, Inc.
   rules regarding investment companies.
    
 
(2)Sales charge waivers are available for Class A and Class B shares, and
   reduced sales charge purchase plans are available for Class A shares. The
   maximum 5% contingent deferred sales charge on Class B shares applies to
   redemptions during the first year after purchase. The charge generally
   declines by 1% annually thereafter, reaching zero after six years. See "Terms
   and Conditions of Purchase of the AIM Funds -- Reductions in Initial Sales
   Charges."
 
   
(3)Expenses are based on the Fund's fiscal year ended October 31, 1997 restated
   to reflect AIM's undertaking to limit the Fund's expenses (exclusive of
   brokerage commissions, taxes, interest and extraordinary expenses) to the
   annual rate of 2.00% and 2.50% of the average daily net assets of the Fund's
   Class A and Class B shares, respectively. AIM has voluntarily agreed to
   continue this limitation through May 31, 2000. Without reimbursements and
   waivers, "Other expenses" and "Total Fund Operating Expenses" would have been
   0.60% and 2.08%, respectively, for Class A shares and 0.60% and 2.58%,
   respectively, for Class B shares of the Fund. "Other expenses" include
   custody, transfer agency, legal, audit and other operating expenses. See
   "Management" herein and the Statement of Additional Information for more
   information.
    
 
   The Board of Trustees of the Trust believes that the aggregate per share
   expenses of the Fund and the Portfolio will be approximately equal to the
   expenses the Fund would incur if its assets were invested directly in the
   type of securities being held by the Portfolio.
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                   1 YEAR   3 YEARS   5 YEARS   10 YEARS(3)
                                                   ------   -------   -------   ------------
<S>                                                <C>      <C>       <C>       <C>
Class A Shares(1)................................   $67      $108      $151         $270
Class B Shares:
  Assuming a complete redemption at end of
     period(2)...................................   $77      $111      $157         $274
  Assuming no redemption.........................   $26      $ 79      $135         $274
</TABLE>
    
 
   
(1)Assumes payment of maximum sales charge by the investor.
    
 
   
(2)Assumes deduction of the applicable contingent deferred sales charge.
    
 
   
(3)For Class B shares, this number reflects the conversion to Class A shares
   eight years following the end of the calendar month in which a purchase was
   made.
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S AND THE PORTFOLIO'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND
INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE
ASSUMPTION IN THE HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY
REGULATION OF THE SEC APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS
NOT A PREDICTION OF AND DOES NOT REPRESENT THE FUND'S OR THE PORTFOLIO'S
PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   348
 
- --------------------------------------------------------------------------------
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The tables below provide condensed financial information concerning income and
capital changes for one Class A and Class B shares of the Fund. This information
is supplemented by the financial statements and accompanying notes appearing in
the Statement of Additional Information. The financial statements and notes, for
the fiscal year ended October 31, 1997, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon also
is included in the Statement of Additional Information. The unaudited financial
statements and notes, for the semi-annual period ended April 30, 1998, are also
included in the Statement of Additional Information.
    
 
   
                         AIM GLOBAL INFRASTRUCTURE FUND
    
   
                    (FORMERLY GT GLOBAL INFRASTRUCTURE FUND)
    
 
   
<TABLE>
<CAPTION>
                                                   SIX MONTHS                                     MAY 31, 1994
                                                     ENDED            YEAR ENDED OCT. 31,         (COMMENCEMENT
                                                 APRIL 30, 1998   ---------------------------   OF OPERATIONS) TO
                                                 (UNAUDITED)(d)   1997(d)   1996(d)    1995       OCT. 31, 1994
                                                 --------------   -------   -------   -------   -----------------
<S>                                              <C>              <C>       <C>       <C>       <C>
CLASS A:
Per Share Operating Performance:
Net asset value, beginning of period...........     $ 15.01       $ 14.42   $ 12.11   $ 12.47        $ 11.43
                                                    -------       -------   -------   -------        -------
Income from investment operations:
  Net investment income (loss)+................        0.03         (0.01)    (0.03)    (0.03)          0.01
  Net realized and unrealized gain (loss) on
    investments................................        1.50          1.32      2.34     (0.33)          1.03
                                                    -------       -------   -------   -------        -------
    Net increase (decrease) from investment
      operations...............................        1.53          1.31      2.31     (0.36)          1.04
                                                    -------       -------   -------   -------        -------
Distributions:
  From net realized gain on investments........       (0.11)        (0.72)       --        --             --
                                                    -------       -------   -------   -------        -------
    Total distributions........................       (0.11)        (0.72)       --        --             --
                                                    -------       -------   -------   -------        -------
Net asset value, end of period.................     $ 16.43       $ 15.01   $ 14.42   $ 12.11        $ 12.47
                                                    =======       =======   =======   =======        =======
Total investment return(c).....................       10.29%(b)      9.38%    19.08%    (2.89)%         9.10%(b)
                                                    =======       =======   =======   =======        =======
Ratios and supplemental data:
Net assets, end of period (in 000's)...........     $33,287       $38,281   $38,397   $36,241        $23,615
Ratio of net investment income (loss) to
  average net assets:
  With expense reductions and reimbursement
    from the Sub-advisor.......................        0.51%(a)     (0.09)%   (0.19)%   (0.32)%         0.41%(a)
  Without expense reductions and reimbursement
    from the Sub-advisor.......................        0.32%(a)     (0.17)%   (0.30)%   (0.58)%        (0.47)%(a)
Ratio of operating expenses to average net
  assets:
  With expense reductions and reimbursement
    from the Sub-advisor.......................        1.99%(a)      2.00%     2.14%     2.36%          2.40%(a)
  Without expense reductions and reimbursement
    from the Sub-advisor.......................        2.18%(a)      2.08%     2.25%     2.62%          3.28%(a)
Portfolio turnover rate++......................          95%(a)        41%       41%       45%            18%
Average commission rate per share paid on
  portfolio transactions++.....................     $0.0148       $0.0046   $0.0109     N/A         N/A
</TABLE>
    
 
   
<TABLE>
<S>  <C>
+    Before reimbursement by the Sub-advisor, the net investment
     income per share for Class A of the Fund would have been
     reduced by $0.01, for the six months ended April 30, 1998,
     $0.03, for the year ended Oct. 31, 1995, and $0.02, from May
     31, 1994 to Oct. 31, 1994.
++   Portfolio turnover and average commission rates are
     calculated on the basis of the Fund as a whole without
     distinguishing among the class of shares issued. The Fund
     invests only in the Global Infrastructure Portfolio and does
     not engage in securities transactions. Accordingly, the
     portfolio turnover and commission rates presented are for
     the Global Infrastructure Portfolio.
(a)  Annualized.
(b)  Not annualized.
(c)  Total investment return does not include sales charges.
(d)  These selected per share data were calculated based upon
     average shares outstanding during the period.
N/A  Not Applicable.
</TABLE>
    
 
                                        5
<PAGE>   349
 
   
<TABLE>
<CAPTION>
                                                   SIX MONTHS                                     MAY 31, 1994
                                                     ENDED            YEAR ENDED OCT. 31,         (COMMENCEMENT
                                                 APRIL 30, 1998   ---------------------------   OF OPERATIONS) TO
                                                 (UNAUDITED)(d)   1997(d)   1996(d)    1995       OCT. 31, 1994
                                                 --------------   -------   -------   -------   -----------------
<S>                                              <C>              <C>       <C>       <C>       <C>
CLASS B:
Per Share Operating Performance:
Net asset value, beginning of period...........     $ 14.75       $ 14.24   $ 12.03   $ 12.45        $ 11.43
                                                    -------       -------   -------   -------        -------
Income from investment operations:
  Net investment income (loss)+................          --         (0.09)    (0.09)    (0.09)         (0.01)
  Net realized and unrealized gain (loss) on
    investments................................        1.46          1.32      2.30     (0.33)          1.03
                                                    -------       -------   -------   -------        -------
    Net increase (decrease) from investment
      operations...............................        1.46          1.23      2.21     (0.42)          1.02
                                                    -------       -------   -------   -------        -------
Distributions:
  From net realized gain on investments........       (0.11)        (0.72)       --        --             --
                                                    -------       -------   -------   -------        -------
    Total distributions........................       (0.11)        (0.72)       --        --             --
                                                    -------       -------   -------   -------        -------
Net asset value, end of period.................     $ 16.10       $ 14.75   $ 14.24   $ 12.03        $ 12.45
                                                    =======       =======   =======   =======        =======
Total investment return(c).....................        9.99%(b)      8.83%    18.37%    (3.37)%         8.92%(b)
                                                    =======       =======   =======   =======        =======
Ratios and supplemental data:
Net assets, end of period (in 000's)...........     $47,177       $57,199   $53,678   $50,181        $30,954
Ratio of net investment income (loss) to
  average net assets:
  With expense reductions and reimbursement
    from the Sub-advisor.......................        0.01%(a)     (0.59)%   (0.69)%   (0.82)%        (0.09)%(a)
  Without expense reductions and reimbursement
    from the Sub-advisor.......................       (0.18)%(a)    (0.67)%   (0.80)%   (1.08)%        (0.97)%(a)
Ratio of operating expenses to average net
  assets:
  With expense reductions and reimbursement
    from the Sub-advisor.......................        2.49%(a)      2.50%     2.64%     2.86%          2.90%(a)
  Without expense reductions and reimbursement
    from the Sub-advisor.......................        2.68%(a)      2.58%     2.75%     3.12%          3.78%(a)
Portfolio turnover rate++......................          95%(a)        41%       41%       45%            18%
Average commission rate per share paid on
  portfolio transactions++.....................     $0.0148       $0.0046   $0.0109     N/A         N/A
</TABLE>
    
 
- ---------------
 
   
<TABLE>
<S>  <C>
+    Before reimbursement by the Sub-advisor, the net investment
     income per share for Class B of the Fund would have been
     reduced by $0.01 for the six months ended April 30, 1998,
     $0.03, for the year ended Oct. 31, 1995, and $0.02, from May
     31, 1994 to Oct. 31, 1994.
++   Portfolio turnover average commission rates are calculated
     on the basis of the Fund as a whole without distinguishing
     among the class of shares issued. The Fund invests only in
     the Global Infrastructure Portfolio and does not engage in
     securities transactions. Accordingly, the portfolio turnover
     and commission rates presented are for the Global
     Infrastructure Portfolio.
(a)  Annualized.
(b)  Not annualized.
(c)  Total investment return does not include sales charges.
(d)  These selected per share data were calculated based upon
     average shares outstanding during the period.
N/A  Not Applicable.
</TABLE>
    
 
                                        6
<PAGE>   350
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return. Standardized total return
for Class A shares reflects the deduction of the Fund's maximum front-end sales
charge at the time of purchase. Standardized total return for Class B shares
reflects the deduction of the maximum applicable contingent deferred sales
charge on a redemption of shares held for the period.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVES. The Fund's investment objective is long-term capital
growth. It seeks its objective by investing all of its investable assets in the
Portfolio, which, in turn, invests primarily in equity securities of companies
throughout the world that design, develop or provide products and services
significant to a country's infrastructure. The Portfolio's investment objective
is identical to that of the Fund. There can be no assurance that the Fund or
Portfolio will achieve its investment objectives.
    
 
   
  INVESTMENT POLICIES. At least 65% of the Portfolio's total assets normally
will be invested in common and preferred stocks and warrants to acquire such
securities issued by infrastructure companies. An "infrastructure" company is an
entity in which (i) at least 50% of either the revenues or earnings was derived
from infrastructure activities, or (ii) at least 50% of the assets was devoted
to such activities, based on the company's most recent fiscal year. The
remainder of the Portfolio's assets may be invested in debt securities issued by
infrastructure companies and/or equity and debt securities of companies outside
of the infrastructure industries, which, in the opinion of the Sub-advisor,
stand to benefit from developments in the infrastructure industries.
    
 
   
  Examples of infrastructure companies include those engaged in designing,
developing or providing the following products and services: electricity
production; oil, gas, and coal exploration, development, production and
distribution; water supply, including water treatment facilities; nuclear power
and other alternative energy sources; transportation, including the construction
or operation of transportation systems; steel, concrete, or similar types of
products; communications equipment and services (including equipment and
services for both data and voice transmission); mobile communications and
cellular radio/paging; emerging technologies combining telephone, television
and/or computer systems; and other products and services, which, in the
Sub-advisor's judgment, constitute services significant to the development of a
country's infrastructure.
    
 
   
  The Sub-advisor believes that a country's infrastructure is one key to the
long-term success of that country's economy. The Sub-advisor believes that
adequate energy, transportation, water, and communications systems are essential
elements for long-term economic growth. The Sub-advisor believes that many
developing nations, especially in Asia and Latin America, plan to make
significant expenditures to the development of their infrastructure in the
coming years, which is expected to facilitate increased levels of services and
manufactured goods.
    
 
   
  In the developed countries of North America, Europe, Japan and the Pacific
Rim, the Sub-advisor expects that the replacement and upgrade of transportation
and communications systems should stimulate growth in the infrastructure
industries of those countries. In addition, in the Sub-advisor's view,
deregulation of telecommunications and electric and gas utilities in many
countries is promoting significant changes in these industries.
    
 
   
  The Sub-advisor believes that strong economic growth in developing countries
and infrastructure replacement, upgrade, and deregulation in more developed
countries provide an environment for favorable investment opportunities in
infrastructure companies
    
 
                                        7
<PAGE>   351
 
worldwide. In addition, the long-term growth rates of certain foreign countries'
economies may be substantially higher than the long-term growth rate of the U.S.
economy. An integral aspect of certain foreign countries' economies may be the
development or improvement of their infrastructure.
 
   
  CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objective and
policies, the Portfolio may employ one or more of the following strategies in
order to enhance investment results:
    
 
  SELECTION OF INVESTMENTS AND ASSET ALLOCATION. The Portfolio expects that,
from time to time, a significant portion of its assets may be invested in the
securities of domestic issuers. The industry represented in the Portfolio,
however, is a global industry with significant, growing markets outside of the
United States. A sizeable proportion of the companies which comprise the
infrastructure industries are headquartered outside of the United States.
 
   
  For these reasons, the Sub-advisor believes that a portfolio composed only of
securities of U.S. issuers does not provide the greatest potential for return
from an investment by the Portfolio. The Sub-advisor uses its financial
expertise in markets located throughout the world and the substantial global
resources of AMVESCAP PLC in attempting to identify those countries and
companies then providing the greatest potential for long-term capital
appreciation. In this fashion, the Sub-advisor seeks to enable shareholders to
capitalize on the substantial investment opportunities and the potential for
long-term growth of capital presented by the global infrastructure industry
represented in the Portfolio.
    
 
   
  The Sub-advisor allocates the Portfolio's assets among securities of countries
and in currency denominations where opportunities for meeting the Portfolio's
investment objective are expected to be the most attractive. The Portfolio may
invest substantially in securities denominated in one or more currencies. Under
normal conditions, the Portfolio invests in the securities of issuers located in
at least three countries, including the United States; investments in securities
of issuers in any one country, other than the United States, will represent no
more than 50% of the Portfolio's total assets.
    
 
   
  In analyzing specific companies for possible investment, the Sub-advisor
ordinarily looks for several of the following characteristics: above-average per
share earnings growth; high return on invested capital; a healthy balance sheet;
sound financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; development of new technologies; efficient service; pricing
flexibility; strong management; and general operating characteristics that will
enable the companies to compete successfully in their respective markets.
    
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. Under a defensive strategy, the Portfolio may invest up to
100% of its total assets in cash (U.S. dollars, foreign currencies or
multinational currency units such as euros) and/or high quality debt securities
or money market instruments of U.S. or foreign issuers. In addition, for
temporary defensive purposes, most or all of the Portfolio's investments may be
made in the United States and denominated in U.S. dollars. To the extent the
Portfolio adopts a temporary defensive posture, it will not be invested so as to
achieve directly its investment objective. In addition, pending investment of
proceeds from new sales of Fund shares or to meet its ordinary daily cash needs,
the Portfolio may hold cash (U.S. dollars, foreign currencies or multinational
currency units) and may invest in foreign or domestic high quality money market
instruments. For a full description of money market instruments, see "Money
Market Instruments" in the "Investment Objectives and Policies" section of the
Statement of Additional Information.
    
 
   
  PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Portfolio in privatizations in appropriate
circumstances. In certain foreign countries, the ability of foreign entities
such as the Portfolio to participate in privatizations may be limited by local
law, or the terms on which the Portfolio may be permitted to participate may be
less advantageous than those for local investors. There can be no assurance that
foreign governments will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
    
 
   
  INVESTMENTS IN OTHER INVESTMENT COMPANIES. The Portfolio may invest up to 10%
of its total assets in other investment companies, some of which may be
investment vehicles or companies that are advised by the Sub-advisor or its
affiliates ("Affiliated Funds"). As a shareholder in an investment company, the
Portfolio would bear its ratable share of that investment company's expenses,
including its advisory and administration fees. At the same time, the Portfolio
would continue to pay its own management fees and other expenses. AIM and the
Sub-advisor will waive their advisory fees to the extent that the Portfolio
invests in an Affiliated Fund.
    
 
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Portfolio
may borrow from banks or may borrow through reverse repurchase agreements and
"roll" transactions in connection with meeting requests for the redemptions of
the Fund's shares. The Portfolio also may borrow up to 5% of its total assets
for temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Portfolio may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Portfolio's borrowings exceed 5% of
its total assets. Any borrowing by the Portfolio may cause greater fluctuation
in the value of its shares than would be the case if the Portfolio did not
borrow.
 
  A reverse repurchase agreement is a borrowing transaction in which the
Portfolio transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash, and agrees to repurchase the security in the
future at an agreed upon price
 
                                        8
<PAGE>   352
 
which includes an interest component. A "roll" borrowing transaction involves
the Portfolio's sale of securities together with its commitment (for which the
Portfolio may receive a fee) to purchase similar, but not identical, securities
at a future date.
 
   
  SECURITIES LENDING. The Portfolio may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Portfolio to retain ownership of the securities loaned and, at the same
time, enhances the Fund's total return. The Portfolio limits its loans of
portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. While a loan is outstanding, the
borrower must maintain with the Portfolio's custodian collateral consisting of
cash, U.S. government securities or certain irrevocable letters of credit equal
to at least the value of the borrowed securities, plus any accrued interest or
such other collateral as permitted by the Portfolio's investment program and
regulatory agencies, and as approved by the Board. The risks in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delays in receiving additional collateral or in recovery of the
securities and possible loss of rights in the collateral should the borrower
fail financially.
    
 
  WHEN-ISSUED OR FORWARD COMMITMENT SECURITIES. The Portfolio may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Portfolio will
purchase or sell when-issued securities or enter into forward commitments only
with the intention of actually receiving or delivering the securities, as the
case may be. No income accrues on securities that have been purchased pursuant
to a forward commitment or on a when-issued basis prior to delivery to the
Portfolio. If the Portfolio disposes of the right to acquire a when-issued
security prior to its acquisition or disposes of its right to deliver or receive
against a forward commitment, it may incur a gain or loss. At the time the
Portfolio enters into a transaction on a when-issued or forward commitment
basis, the Portfolio will segregate cash or liquid securities equal to the value
of the when-issued or forward commitment securities with its custodian and will
mark to market daily such assets. There is a risk that the securities may not be
delivered and that the Portfolio may incur a loss.
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Portfolio may use
forward currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the portfolio. These instruments are often referred to as
"derivatives," which may be defined as financial instruments whose performance
is derived, at least in part, from the performance of another asset (such as a
security, currency or an index of securities). The Portfolio may enter into such
instruments up to the full value of its portfolio assets. See "Risk
Factors -- Options, Futures and Forward Currency Transactions" herein and
"Options, Futures and Currency Strategies" in the Statement of Additional
Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Portfolio may enter into forward currency contracts for the
purchase or sale of a specified currency at a specified future date. Such
contracts may involve the purchase or sale of a foreign currency against the
U.S. dollar or may involve two foreign currencies. The Portfolio may enter into
forward currency contracts either with respect to specific transactions or with
respect to its portfolio positions. The Portfolio also may purchase and sell put
and call options on currencies, futures contracts on currencies and options on
such futures contracts to hedge against movements in exchange rates.
 
   
  In addition, the Portfolio may purchase and sell put and call options on
equity and debt securities to hedge against the risk of fluctuations in the
prices of securities held by the Portfolio or that the Sub-advisor intends to
include in the Portfolio's holdings. The Portfolio also may purchase and sell
put and call options on stock indexes to hedge against overall fluctuations in
the securities markets generally or in a specific market sector.
    
 
  Further, the Portfolio may sell stock index futures contracts and may purchase
put options or write call options on such futures contracts to protect against a
general stock market decline or a decline in a specific market sector that could
affect adversely the Portfolio's holdings. The Portfolio also may purchase stock
index futures contracts and purchase call options or write put options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisitions. The
Portfolio may use interest rate futures contracts and options thereon to hedge
the debt portion of its portfolio against changes in the general level of
interest rates.
 
  OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this Prospectus
and in the Statement of Additional Information may be changed by the Trust's
Board of Trustees without shareholder approval. The Fund's policies regarding
concentration and lending, and the percentage of the Fund's assets that may be
committed to borrowing, are fundamental policies and may not be changed without
shareholder approval. The investment policies of the Fund are identical to the
investment policies of the Portfolio.
 
  The approval of the Fund and of other investors in the Portfolio, if any, is
not required to change the investment objective, policies or limitations of the
Portfolio, unless otherwise specified. Written notice shall be provided to
shareholders of the Fund thirty days prior to any changes in the Portfolio's
investment objective.
 
                                        9
<PAGE>   353
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's or Portfolio's investment policies or
restrictions.
 
  The Portfolio is authorized to engage in Short Sales, although it currently
has no intention of doing so, and may purchase American Depository Receipts,
American Depository Shares, Global Depository Receipts and European Depository
Receipts. See "Short Sales" and "Depository Receipts," respectively in the
"Investment Objectives and Policies" section of the Statement of Additional
Information.
 
  OTHER INFORMATION REGARDING THE PORTFOLIO. As previously described, the Fund,
unlike mutual funds that directly acquire and manage their own portfolios of
securities, seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio, which is a separate investment company.
Because the Fund will invest only in the Portfolio, the Fund's shareholders will
acquire only an indirect interest in the investments of the Portfolio.
 
   
  The Fund may redeem its investment in the Portfolio at any time, if the Board
of Trustees of the Trust determines that it is in the best interests of the Fund
and its shareholders to do so. A change in the Portfolio's investment objective,
policies or limitations that is not approved by the Board or the shareholders of
the Fund could require the Fund to redeem its interest in the Portfolio. Any
such redemption could result in a distribution in kind of portfolio securities
(as opposed to a cash distribution) by the Portfolio. Should such a distribution
occur, the Fund could incur brokerage fees or other transaction costs in
converting such securities to cash. In addition, a distribution in kind could
result in a less diversified portfolio of investments for the Fund and could
adversely affect its liquidity. Upon redemption, the Board would consider what
action might be taken, including the investment of all the investable assets of
the Fund in another pooled investment entity having substantially the same
investment objective as the Fund or the retention by the Fund of its own
investment advisor to manage its assets in accordance with its investment
objective, policies and limitations discussed herein.
    
 
  In addition to selling an interest therein to the Fund, the Portfolio may sell
interests therein to other non-affiliated investment companies and/or other
institutional investors. All institutional investors in the Portfolio will pay a
proportionate share of the Portfolio's expenses and will invest in the Portfolio
on the same terms and conditions. However, if another investment company invests
any or all of its assets in the Portfolio, it would not be required to sell its
shares at the same public offering price as the Fund and may charge different
sales commissions. Therefore, investors in the Fund may experience different
returns than investors in another investment company that invests exclusively in
the Portfolio. As of the date of this Prospectus, the Fund is the only
institutional investor in the Portfolio.
 
  The Fund may be materially affected by the actions of other large investors,
if any, in the Portfolio. For example, as with all open-end investment
companies, if a large investor were to redeem its interest in the Portfolio, (1)
the Portfolio's remaining investors could experience higher pro rata operating
expenses, thereby producing lower returns and (2) the Portfolio's security
holdings may become less diverse, resulting in increased risk. Institutional
investors in the Portfolio that have a greater pro rata ownership interest in
the Portfolio than the Fund could have effective voting control over the
operation of the Portfolio.
 
- --------------------------------------------------------------------------------
 
   
RISK FACTORS
    
 
   
  GENERAL. There is no assurance that the Fund or the Portfolio will achieve its
investment objective. The Fund's net asset value will fluctuate reflecting
fluctuations in the market value of the Portfolio's securities positions. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure, and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. The value of equity securities held by the Portfolio will
fluctuate in response to general market and economic developments, as well as
developments affecting the particular issuers of such securities. In addition,
the value of debt securities held by the Portfolio generally will fluctuate with
changes in the perceived creditworthiness of the issuers of such securities and
interest rates.
    
 
  Because the Portfolio focuses its investments on the infrastructure
industries, an investment in it may be more volatile than that of other
investment companies that do not concentrate their investments in such a manner.
Moreover, the value of the shares of the Fund will be especially susceptible to
factors affecting the infrastructure industries. Accordingly, the Fund should be
considered a complete investment program.
 
  INFRASTRUCTURE INDUSTRIES. Infrastructure industries may be subject to greater
political, environmental and other governmental regulation than many other
industries. The nature of such regulation continues to evolve in both the United
States and foreign countries, and changes in governmental policy and the need
for regulatory approvals may have a material effect on the products and services
offered by companies in the infrastructure industries. Electric, gas, water and
most telecommunications companies in the United States, for example, are subject
to both federal and state regulation affecting permitted rates of return and the
kinds of services that may be offered. Governmental regulation may also hamper
the development of new technologies.
 
  In addition, many infrastructure companies have historically been subject to
the risks attendant to increases in fuel and other operating costs, high
interest costs on borrowed funds, costs associated with compliance with
environmental and other safety regulations and changes in the regulatory
climate. Further, competition is intense for many infrastructure companies. As a
result, many of these
 
                                       10
<PAGE>   354
 
companies may be adversely affected in the future and such companies may be
subject to increased share price volatility. In addition, many companies have
diversified into oil and gas exploration and development, and therefore returns
may be more sensitive to energy prices. Other infrastructure companies, such as
water supply companies, are in a highly fragmented industry due to local
ownership. Generally these companies are mature and are experiencing little or
no growth. Changes in prevailing interest rates may also affect the
Infrastructure Fund's share values because prices of equity and debt securities
of infrastructure companies often tend to increase when interest rates decline
and decrease when interest rates rise.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to, the reporting requirements of the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. In addition, certain costs attributable to
foreign investing, such as custody charges, are higher than those attributable
to domestic investing. Securities of some foreign companies are less liquid and
their prices may be more volatile than securities of comparable domestic
companies. The Portfolio's interest and dividends from foreign issuers may be
subject to non-U.S. withholding taxes, thereby reducing the Portfolio's net
investment income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Portfolio, political or social instability, or diplomatic
developments which could affect the Portfolio's investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
 
  The Portfolio may invest in issuers domiciled in "emerging markets." Investing
in emerging market countries involves risks in addition to those risks involved
in foreign investing. Many emerging market countries have experienced high rates
of inflation for many years. In addition, emerging markets generally are
dependent heavily upon international trade and, accordingly, have been and
continue to be affected adversely by trade barriers, exchange controls, managed
adjustments in relative currency values and other protectionist measures imposed
or negotiated by the countries with which they trade. The securities markets of
emerging market countries are substantially smaller, less developed, less liquid
and more volatile than the securities markets of the developed countries. In
addition, issuers in emerging markets typically are subject to a greater degree
of change in earnings and business prospects than issuers in developed
countries.
 
  The Portfolio will also be affected favorably or unfavorably by exchange
control regulations or changes in the exchange rates between foreign currencies
and the U.S. dollar. Changes in currency exchange rates will influence the value
of the Fund's shares, and also may affect the value of dividends and interest
earned by the Portfolio and gains and losses realized by the Portfolio.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Portfolio.
    
 
   
  LOWER QUALITY DEBT SECURITIES. The Portfolio may invest up to 20%, of its
total assets in below investment grade debt securities, that is, rated below BBB
by Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or
Baa by Moody's Investors Service, Inc. ("Moody's") or, if unrated, deemed to be
of equivalent quality in the judgment of the Sub-advisor. Such investments
involve a high degree of risk. However, the Portfolio will not invest in debt
securities that are in default as to payment of principal and interest.
    
 
  Debt rated Baa by Moody's is considered by Moody's to have speculative
characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B,
Caa, Ca or C by Moody's is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such lower quality debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Debt rated C
by Moody's or S&P is the lowest rated debt that is not in default as to
principal or interest, and such issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Lower
quality debt securities are also generally considered to be subject to greater
risk than securities with higher ratings with regard to a deterioration of
general economic conditions. These lower quality debt securities are the
equivalent of high yield, high risk bonds, commonly known as "junk bonds."
 
                                       11
<PAGE>   355
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates. See "Description of Debt Ratings" in the Statement of Additional
Information for a full discussion of Moody's and S&P's ratings.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities of corporate issuers frequently have call or
buy-back features which would permit an issuer to call or repurchase the
security from the Portfolio. If an issuer exercises these provisions in a
declining interest rate market, the Portfolio may have to replace the security
with a lower yielding security, resulting in a decreased return for investors.
In addition, the Portfolio may have difficulty disposing of lower quality
securities because they may have a thin trading market. There may be no
established retail secondary market for many of these securities, and the
Portfolio anticipates that such securities could be sold only to a limited
number of dealers or institutional investors. The lack of a liquid secondary
market also may have an adverse impact on market prices of such instruments and
may make it more difficult for the Portfolio to obtain accurate market
quotations for purposes of valuing its investments. The Portfolio may also
acquire lower quality debt securities during an initial underwriting or which
are sold without registration under applicable securities laws. Such securities
involve special considerations and risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Portfolio may invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic recession. The Portfolio may also incur additional expenses to the
extent it is required to seek recovery upon a default in the payment of
principal or interest on portfolio holdings, and the Portfolio may have limited
legal recourse in the event of a default.
 
   
  ILLIQUID SECURITIES. The Portfolio may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." The Sub-advisor believes that carefully selected investments in
joint ventures, cooperatives, partnerships and state enterprises which are
illiquid (collectively, "Special Situations") could enable the Portfolio to
achieve capital appreciation substantially exceeding the appreciation the
Portfolio would realize if it did not make such investments. However, in order
to attempt to limit investment risk, the Portfolio will invest no more than 5%
of its total assets in Special Situations.
    
 
  Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at a price
lower than similar securities that are liquid.
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Portfolio is
authorized to enter into options, futures and forward currency transactions, the
Portfolio might not enter into any such transactions. Options, futures and
foreign currency transactions involve certain risks, which include: (1)
dependence on the Sub-advisor's ability to predict movements in the prices of
individual securities, fluctuations in the general securities markets or in the
appropriate market sector and movements in interest rates and currency markets;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, forward contracts, futures contracts or options thereon and
movements in the price of the currency or security hedged or used for cover; (3)
the fact that skills and techniques needed to trade options, futures contracts
and options thereon or to use forward currency contracts are different from
those needed to select the securities in which the Portfolio invests; (4) lack
of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time; (5) the
possible loss of principal under certain conditions; and (6) the possible
inability of the Portfolio to purchase or sell a portfolio security at a time
when it would otherwise be favorable for it to do so, or the possible need for
the Portfolio to sell a security at a disadvantageous time, due to the need for
the Portfolio to maintain "cover" or to set aside securities in connection with
hedging transactions.
    
 
  INVESTING IN SMALLER COMPANIES. While the Portfolio's holdings normally will
include securities of established suppliers of traditional products and
services, the Portfolio may invest in smaller companies which can benefit from
the development of new products and services. These smaller companies may
present greater opportunities for capital appreciation, but may also involve
greater risks than large, established issuers. Such smaller companies may have
limited product lines, markets or financial resources, and their securities may
trade less frequently and in more limited volume than the securities of larger,
more established companies. As a result, the prices of the securities of such
smaller companies may fluctuate to a greater degree than the prices of the
securities of other issuers.
 
                                       12
<PAGE>   356
 
- --------------------------------------------------------------------------------
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees and the Board of Trustees of the Portfolio have
overall responsibility for the operation of the Fund and the Portfolio,
respectively. The Boards have approved all significant agreements between the
Trust and the Portfolio on the one side and persons or companies furnishing
services to the Fund and the Portfolio on the other, including the investment
management and administration agreement with AIM, the investment sub-advisory
and sub-administration agreement between AIM and the Sub-advisor, the agreements
with AIM Distributors regarding distribution of the Fund's shares, the custody
agreement and the transfer agency agreement. The day-to-day operations of the
Fund and the Portfolio are delegated to the officers of the Trust and the
Portfolio, subject always to the investment objective and policies of the Fund
and the Portfolio and to the general supervision of the Boards. See "Trustees
and Executive Officers" in the Statement of Additional Information for
information on the Trust's and the Portfolio's Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the investment managers to the Fund and the Portfolio include,
but are not limited to, determining the composition of the investment holdings
of the Portfolio and placing orders to buy, sell or hold particular securities.
In addition, AIM and the Sub-advisor provide the following administration
services to the Portfolio and the Fund: furnishing corporate officers and
clerical staff; providing office space, services and equipment; and supervising
all matters relating to the Portfolio's and the Fund's operation.
    
 
   
  For administration services, the Fund pays AIM administration fees computed
daily and payable monthly at the annualized rate of 0.25% of the Fund's average
daily net assets. AIM has appointed the Sub-advisor as the Fund's
sub-administrator. In addition, the Fund bears its pro rata portion of the
investment management and administration fees paid by its corresponding
Portfolio to AIM and the Sub-advisor. The Portfolio pays AIM a fee, based on the
Portfolio's average daily net assets at the annualized rate of .725% on the
first $500 million, 0.70% on the next $500 million, 0.675% on the next $500
million and 0.65% on all amounts thereafter. Out of its aggregate fees payable
by the Fund and Portfolio, AIM pays the Sub-advisor sub-advisory and
sub-administration fees equal to 40% of the aggregate fees AIM receives from the
Fund and Portfolio. The investment management and administration fees paid by
the Fund and the Portfolio are higher than those paid by most mutual funds. The
Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM Distributors or
other agents. AIM has undertaken to limit the Fund's expenses (exclusive of
brokerage commissions, taxes, interest and extraordinary expenses) to the annual
rate of 2.00% and 2.50% of the average daily net assets of the Fund's Class A
and Class B shares, respectively.
    
 
   
  The Sub-advisor also serves as the Fund's and the Portfolio's pricing and
accounting agent. For these services the Sub-advisor receives a fee consisting
of 0.03% of the first $5 billion of assets, and 0.02% of the assets in excess of
$5 billion, of the AIM Funds that are sub-advised by the Sub-advisor (other than
AIM Eastern Europe Fund). Each of these funds, including the Fund and the
Portfolio, pays an amount based upon its relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Portfolio pursuant to a master investment management
and administration agreement (the "Advisory Agreement"). AIM was organized in
1976 and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Portfolio pursuant to an investment
sub-advisory and sub-administration agreement. Prior to May 29, 1998, the
Sub-advisor was known as Chancellor LGT Asset Management, Inc. On May 29, 1998,
Liechtenstein Global Trust AG ("LGT"), the former indirect parent organization
of the Sub-advisor, consummated a purchase agreement with AMVESCAP PLC pursuant
to which AMVESCAP PLC acquired LGT's Asset Management Division, which included
the Sub-advisor and certain other affiliates. As a result of this transaction,
the Sub-advisor is now an indirect wholly owned subsidiary of AMVESCAP PLC.
Prior to the sale, the Sub-advisor and its worldwide asset management affiliates
provided investment management and/or administrative services to institutional,
corporate and individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Portfolio, the Sub-advisor employs a
team approach, taking advantage of its investment resources around the world.
    
 
                                       13
<PAGE>   357
 
  The investment professional primarily responsible for the portfolio management
of the Portfolio is as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
     NAME/OFFICE            THE PORTFOLIO                         PAST FIVE YEARS
     -----------         --------------------                   -------------------
<S>                     <C>                      <C>
Brian T. Nelson         Portfolio Manager        Portfolio Manager for the Sub-advisor since
San Francisco           since 1997               September 1997. Senior Equity Research Analyst for
                                                 the Sub-advisor from October 1994 to September
                                                 1997. Employed by Chancellor Capital Management,
                                                 Inc., a predecessor of the Sub-advisor, from 1994
                                                 to October 1996. Equity Research Analyst and
                                                 Co-Portfolio Manager for Franklin Resources, Inc.
                                                 (San Mateo, CA) from 1988 to 1994.
</TABLE>
    
 
   
  In placing orders for the Portfolio's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions may be executed through
affiliates of AIM or the Sub-advisor. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Funds will bear directly and could result in the realization of
net capital gains which would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement on
behalf of Class A shares of the Fund, and has entered into a Master Distribution
Agreement, on behalf of Class B shares of the Fund (individually referred to as
a "Distribution Agreement" or collectively as the "Distribution Agreements.")
with AIM Distributors, a registered broker-dealer and a wholly owned subsidiary
of AIM, to act as the distributor of Class A and Class B shares of the Fund.
Certain Trustees and officers of the Trust are affiliated with AIM Distributors.
    
 
   
  The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors and its predecessors. In the event the Class B shares Distribution
Agreement is terminated, AIM Distributors would continue to receive payments of
asset based sales charges in respect of the outstanding Class B shares
attributable to the distribution efforts of AIM Distributors and its
predecessors; provided, however, that a complete termination of the Class B
shares master distribution plan (as defined in the plan) would terminate all
payments by the Fund of asset based sales charges and service fees to AIM
Distributors. Termination of the Class B shares distribution plan or
Distribution Agreement does not affect the obligation of Class B shareholders to
pay contingent deferred sales charges.
    
 
  DISTRIBUTION PLANS. Class A Plan. The Company has adopted a Master
Distribution Plan applicable to Class A shares of the Fund (the "Class A Plan")
pursuant to Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for
the purpose of financing any activity that is intended to result in the sale of
Class A shares of the Fund.
 
  Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.50% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
 
  The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
 
   
  Of the aggregate amount payable under the Class A Plan, payments to dealers
and other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee.
    
 
                                       14
<PAGE>   358
 
  Class B Plan. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
 
  Both Plans. Activities that may be financed under the Class A Plan and the
Class B Plan (collectively, the "Plans") include, but are not limited to:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders, overhead, preparation and distribution of
advertising material and sales literature, expense of organizing and conducting
sales seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
 
  Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
 
   
  Under the Plans, certain financial institutions which have entered into
service agreements and which sell shares of the Fund on an agency basis, may
receive payments from the Fund pursuant to the respective Plans. AIM
Distributors does not act as principal, but rather as agent for the Fund in
making such payments. The Fund will obtain a representation from such financial
institutions that they will either be licensed as dealers as required under
applicable state law, or that they will not engage in activities which would
constitute acting as a "dealer" as defined under applicable state law. Financial
intermediaries and any other person entitled to receive compensation for selling
Fund shares may receive different compensation for selling shares of one class
over another.
    
 
  For additional information concerning the operation of the Plans see the
Statement of Additional Information.
 
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST AND PORTFOLIO
    
 
   
  ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business
trust on May 7, 1998. On September 8, 1998, the Trust acquired the assets of and
assumed the liabilities of AIM Investment Funds, Inc., a Maryland corporation.
The Fund constitutes one of the thirteen separate and distinct series portfolios
of the Trust. From time to time, the Trust may establish other funds, each
corresponding to a distinct investment portfolio and a distinct series of the
Trust's shares of beneficial interest. Shares of each fund are entitled to one
vote per share (with proportional voting for fractional shares) and are freely
transferable. Shareholders have no preemptive rights. Other than the automatic
conversion of Class B shares to Class A shares, there are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
 
  ORGANIZATION OF THE PORTFOLIO. The Portfolio is organized as a subtrust of
Global Investment Portfolio, a Delaware business trust. Under Delaware law, the
Fund and other entities investing in the Portfolio enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances an investor in
the Portfolio may be held liable for the Portfolio's obligations. However, the
Agreement and Declaration of Trust of Global Invest-
 
                                       15
<PAGE>   359
 
ment Portfolio disclaims shareholder liability for acts or obligations of the
Portfolio and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Portfolio or
a trustee. The Agreement and Declaration of Trust also provides for
indemnification from the Portfolio property for all losses and expenses of any
shareholder held personally liable for the Portfolio's obligations. Thus the
risk of an investor incurring financial loss on account of such liability is
limited to circumstances in which the Portfolio itself would be unable to meet
its obligations and where the other party was held not to be bound by the
disclaimer.
 
  Whenever the Fund is requested to vote on any proposal of the Portfolio, the
Fund will hold a meeting of the Fund's shareholders and will cast its vote as
instructed by its shareholders. Shares for which no voting instructions are
received will be voted in the same proportion as the shares for which voting
instructions are received.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust, to the
Fund and to the Portfolio.
    
 
                                       16
<PAGE>   360
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
               TO THE AIM FAMILY OF FUNDS--Registered Trademark--
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of the following mutual funds:
   
<TABLE>
            <S>                                           <C>
            AIM ADVISOR FLEX FUND                         AIM GLOBAL INFRASTRUCTURE FUND
            AIM ADVISOR INTERNATIONAL VALUE FUND          AIM GLOBAL RESOURCES FUND
            AIM ADVISOR LARGE CAP VALUE FUND              AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM ADVISOR MULTIFLEX FUND                    AIM GLOBAL TRENDS FUND
            AIM ADVISOR REAL ESTATE FUND                  AIM GLOBAL UTILITIES FUND
            AIM AGGRESSIVE GROWTH FUND                    AIM HIGH INCOME MUNICIPAL FUND
            AIM ASIAN GROWTH FUND                         AIM HIGH YIELD FUND
            AIM BALANCED FUND                             AIM INCOME FUND
            AIM BASIC VALUE FUND                          AIM INTERMEDIATE GOVERNMENT FUND
            AIM BLUE CHIP FUND                            AIM INTERNATIONAL EQUITY FUND
            AIM CAPITAL DEVELOPMENT FUND                  AIM INTERNATIONAL GROWTH FUND
            AIM CHARTER FUND                              AIM JAPAN GROWTH FUND
            AIM CONSTELLATION FUND                        AIM LATIN AMERICAN GROWTH FUND
            AIM DEVELOPING MARKETS FUND                   AIM LIMITED MATURITY TREASURY FUND
            AIM DOLLAR FUND(*)                            AIM MID CAP GROWTH FUND
            AIM EMERGING MARKETS FUND                     AIM MONEY MARKET FUND(*)
            AIM EMERGING MARKET DEBT FUND                 AIM MUNICIPAL BOND FUND
            AIM EUROPEAN DEVELOPMENT FUND                 AIM NEW PACIFIC GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM SELECT GROWTH FUND
            AIM GLOBAL AGGRESSIVE GROWTH FUND             AIM SMALL CAP EQUITY FUND
            AIM GLOBAL CONSUMER PRODUCTS AND              AIM SMALL CAP OPPORTUNITIES FUND
              SERVICES FUND                               AIM STRATEGIC INCOME FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM TAX-EXEMPT CASH FUND(*)
            AIM GLOBAL GROWTH FUND                        AIM TAX-FREE INTERMEDIATE FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM VALUE FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WEINGARTEN FUND
            AIM GLOBAL INCOME FUND                        AIM WORLDWIDE GROWTH FUND
                                                                                                 
</TABLE>
    
 
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
    Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
    asset value, without payment of a sales charge, as described below. Other
    funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
    FUND, are sold with an initial sales charge or subject to a contingent
    deferred sales charge upon redemption, as described below.
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed new Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.
 
   
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment is
$500, except for accounts initially established through an Automatic Investment
Plan, which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an Individual Retirement Arrangement ("IRA") or Roth IRA is $250.
There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such plans is $25 per
fund investment), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM 
    
 
                                       A-1
<PAGE>   361
 
   
Funds account. Notwithstanding the foregoing, the minimum initial investment
applicable to AIM Small Cap Opportunities Fund is $10,000.
    
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Shares of any AIM Funds not named on the cover of this Prospectus, as well as
Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                   OBI:                              Shareholder Name, Shareholder Account Number
                                                     (70 character limit)
</TABLE>
 
   
  HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased directly
through AIM Distributors or through any dealer who has entered into an agreement
with AIM Distributors. The minimum investment for subsequent purchases is $50.
The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. Notwithstanding the foregoing, the minimum subsequent purchases of shares
of AIM Small Cap Opportunities Fund is $1,000. There are no such minimum
investment requirements for investment of dividends and distributions of any of
the AIM Funds into any other existing AIM Funds account.
    
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional shares by electronic funds
transfer, please contact the Client Services Department of AFS for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
   
  Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BASIC
VALUE FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT
FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP EQUITY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND,AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without a
sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over
    
 
                                       A-2
<PAGE>   362
 
another class in the same Multiple Class Fund. Factors an investor should
consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
   
  The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPE
GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL
FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM
GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS
FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN
GROWTH FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
    
 
  The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
 
SALES CHARGES AND DEALER CONCESSIONS
 
   
  GROUP I. Certain AIM Funds are currently sold with a sales charge ranging from
5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM BASIC VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
EQUITY FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
    
 
   
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
      SINGLE TRANSACTION(1)                          PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   25,000                    5.50%          5.82%        4.75%
 $ 25,000 but less than $   50,000                   5.25           5.54         4.50
 $ 50,000 but less than $ 100,000                    4.75           4.99         4.00
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    3.00           3.09         2.50
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
    
 
- ---------------
 
   
(1) AIM Small Cap Opportunities Fund will not accept any single purchase in
    excess of $250,000.
    
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
                                       A-3
<PAGE>   363
   
 GROUP II. Certain AIM Funds are currently sold with a sales charge ranging from
4.75% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND, AIM
BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND
FUND, AIM STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
    
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   50,000                    4.75%          4.99%        4.00%
 $ 50,000 but less than $ 100,000                    4.00           4.17         3.25
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    2.50           2.56         2.00
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
  GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
Less than $ 100,000                                  1.00%          1.01%        0.75%
 $100,000 but less than $ 250,000                    0.75           0.76         0.50
 $250,000 but less than $1,000,000                   0.50           0.50         0.40
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
 
  ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
 
  In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
 
  AIM Distributors may make payments to dealers and institutions who are dealers
of record for purchases of $1 million of more of Class A shares (or shares which
normally involve payment of initial sales charges), which are sold at net asset
value and are subject to
 
                                       A-4
<PAGE>   364
 
a contingent deferred sales charge, for all AIM Funds other than Class A shares
of each of AIM LIMITED MATURITY TREASURY FUND and AIM TAX-FREE INTERMEDIATE FUND
as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next
$1 million of such purchases, plus 0.50% of the next $17 million of such
purchases, plus 0.25% of amounts in excess of $20 million of such purchases. See
"Contingent Deferred Sales Charge Program for Large Purchases." AIM Distributors
may make payments to dealers and institutions who are dealers of record for
purchases of $1 million or more of Class A shares (or shares which normally
involve payment of initial sales charges), and which are sold at net asset value
and are not subject to a contingent deferred sales charge, in an amount up to
0.10% of such purchases of Class A shares of AIM LIMITED MATURITY TREASURY FUND,
and in an amount up to 0.25% of such purchases of Class A shares of AIM TAX-FREE
INTERMEDIATE FUND.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed during the next twelve
months on Saturdays and Sundays and on the days on which New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class Funds
currently offer two or more classes of shares through separate distribution
systems (the "Multiple Distribution System"). Although each class of shares of a
particular Multiple Class Fund represents an interest in the same portfolio of
investments, each class is subject to a different distribution structure and, as
a result, differing expenses. This Multiple Distribution System allows investors
to select the class that is best suited to the investor's needs and objectives.
In considering the options afforded by the Multiple Distribution System,
investors should consider both the applicable initial sales charge or contingent
deferred sales charge, as well as the ongoing expenses borne by each class of
shares and other relevant factors, such as whether his or her investment goals
are long-term or short-term.
 
     CLASS A SHARES generally are sold subject to the initial sales charges
     described above and are subject to the other fees and expenses described
     herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
     needs of an investor who wishes to establish a dollar cost averaging
     program, pursuant to which Class A shares an investor owns may be exchanged
     at net asset value for Class A shares of another Multiple Class Fund or
     shares of another AIM Fund which is not a Multiple Class Fund, subject to
     the terms and conditions described under the caption "Exchange
     Privilege -- Terms and Conditions of Exchanges."
                                       A-5
<PAGE>   365
 
     CLASS B SHARES are sold without an initial sales charge. Thus, the entire
     purchase price of Class B shares is immediately invested in Class B shares.
     Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
     per annum on the average daily net assets of a Multiple Class Fund
     attributable to Class B shares. See the discussion under the caption
     "Management -- Distribution Plans." In addition, Class B shares redeemed
     within six years from the date such shares were purchased are subject to a
     contingent deferred sales charge ranging from 5% for redemptions made
     within the first year to 1% for redemptions made within the sixth year. No
     contingent deferred sales charge will be imposed if Class B shares are
     redeemed after six years from the date such shares were purchased.
     Redemptions of Class B shares and associated charges are further described
     under the caption "How to Redeem Shares -- Multiple Distribution System."
 
     Class B shares will automatically convert into Class A shares of the same
     Multiple Class Fund (together with a pro rata portion of all Class B shares
     acquired through the reinvestment of dividends and other distributions)
     eight years from the end of the calendar month in which the purchase of
     Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
     outstanding on May 29, 1998 and which are continuously held by the
     shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
     FUND seven years from the end of the calendar month in which the purchase
     of such Class B shares was made. If a shareholder exchanges Class B shares
     of AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
     since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
     shares will be subject to the eight year conversion feature applicable to
     Class B shares of all other AIM Funds. Following such conversion of their
     Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
     payments associated with Class B shares. See "Management -- Distribution
     Plans."
 
     AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an
     initial sales charge and are not subject to a contingent deferred sales
     charge; however, they are subject to the other fees and expenses described
     in the prospectus for AIM MONEY MARKET FUND.
 
  TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon Eastern Time or NYSE Close on any
business day of the Fund will be confirmed at the price next determined. Net
asset value is normally determined at 12:00 noon Eastern Time and NYSE Close on
each business day of AIM MONEY MARKET FUND.
 
  SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
REDUCTIONS IN INITIAL SALES CHARGES
 
  Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
 
                                       A-6
<PAGE>   366
 
  The term "purchaser" means:
 
  - an individual and his or her spouse and children, including any trust
    established exclusively for the benefit of any such person; or a pension,
    profit-sharing, or other benefit plan established exclusively for the
    benefit of any such person, such as an IRA, Roth IRA, a single-participant
    money-purchase/profit-sharing plan or an individual participant in a 403(b)
    plan (unless such 403(b) plan qualifies as the purchaser as defined below);
 
  - a 403(b) plan, the employer/sponsor of which is an organization described
    under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
    (the "Code"), provided that:
 
        a. the employer/sponsor must submit contributions for all participating
           employees in a single contribution transmittal (i.e., the funds will
           not accept contributions submitted with respect to individual
           participants);
 
        b. each transmittal must be accompanied by a single check or wire
           transfer; and
 
        c. all new participants must be added to the 403(b) plan by submitting
           an application on behalf of each new participant with the
           contribution transmittal;
 
  - a trustee or fiduciary purchasing for a single trust, estate or single
    fiduciary account (including a pension, profit-sharing or other employee
    benefit trust created pursuant to a plan qualified under Section 401 of the
    Code) and 457 plans, although more than one beneficiary or participant is
    involved;
 
  - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
    Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
    Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
    Distributors in writing that all of its related employee SEP, SARSEP or
    SIMPLE IRA accounts should be linked;
 
  - any other organized group of persons, whether incorporated or not, provided
    the organization has been in existence for at least six months and has some
    purpose other than the purchase at a discount of redeemable securities of a
    registered investment company; or
 
  - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
    Capital Management, Inc. ("AIM Capital").
 
  Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
 
  (1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
 
  Each purchase of fund shares normally subject to an initial sales charge made
during the 13-month period will be made at the public offering price applicable
to a single transaction of the total dollar amount indicated by the LOI, as
described under "Sales Charges and Dealer Concessions." It is the purchaser's
responsibility at the time of purchase to specify the account numbers that
should be considered in determining the appropriate sales charge. The offering
price may be further reduced as described under "Rights of Accumulation" if the
Transfer Agent is advised of all other accounts at the time of the investment.
Shares acquired through reinvestment of dividends and capital gain distributions
will not be applied to the LOI. At any time during the 13-month period after
meeting the original obligation, a purchaser may revise his intended investment
amount upward by submitting a written and signed request. Such a revision will
not change the original expiration date. By signing an LOI, a purchaser is not
making a binding commitment to purchase additional shares, but if purchases made
within the 13-month period do not total the amount specified, the investor will
pay the increased amount of sales charge as described below. Purchases made
within 90 days before signing an LOI will be applied toward completion of the
LOI. The LOI effective date will be the date of the first purchase with the
90-day period. The Transfer Agent will process necessary adjustments upon the
expiration or completion date of the LOI. Purchases made more than 90 days
before signing an LOI will be applied toward completion of the LOI based on the
value of the shares purchased calculated at the public offering price on the
effective date of the LOI.
 
  To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
                                       A-7
<PAGE>   367
 
  If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
 
  Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
 
  (2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
 
  PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at
net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
 
  Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
 
  The following persons may purchase Class A shares of the AIM Funds through AIM
Distributors without payment of an initial sales charge: (a) A I M Management
Group Inc. ("AIM Management") and its affiliated companies; (b) any current or
retired officer, director, trustee or employee, or any member of the immediate
family (including spouse, children, parents and parents of spouse) of any such
person, of AIM Management or its affiliates or of certain mutual funds which are
advised or managed by AIM; or any trust established exclusively for the benefit
of such persons; (c) any employee benefit plan established for employees of AIM
Management or its affiliates; (d) any current or retired officer, director,
trustee or employee, or any member of the immediate family (including spouse,
children, parents and parents of spouse) of any such person, or of CIGNA
Corporation or of any of its affiliated companies, or of First Data Investor
Services Group (formerly The Shareholder Services Group, Inc.); (e) any
investment company sponsored by CIGNA Investments, Inc. or any of its affiliated
companies for the benefit of its directors' deferred compensation plans; (f)
discretionary advised clients of AIM or AIM Capital; (g) registered
representatives and employees of dealers who have entered into agreements with
AIM Distributors (or financial institutions that have arrangements with such
dealers with respect to the sale of shares of the AIM Funds) and any member of
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, provided that purchases at net asset value are permitted by
the policies of such person's employer; (h) certain broker-dealers, investment
advisers or bank trust departments that provide asset allocation, similar
specialized investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services, and that
have entered into an agreement with AIM Distributors with respect to their use
of the AIM Funds in connection with such services; (i) any employee or any
member of the immediate family (including spouse, children, parents and parents
of spouse) of any employee, of Triformis Inc.; (j) shareholders of the AIM/GT
Funds as of April 30, 1987 who since that date continually have owned shares of
one or more of the AIM/GT Funds; and (k) certain former AMA Investment Advisers'
shareholders who became shareholders of the AIM Global Health Care Fund in
October 1989, and who have continuously held shares in the AIM/GT Funds since
that time.
 
   
  In addition, shares of any AIM Fund (except AIM Small Cap Opportunities Fund)
may be purchased at net asset value, without payment of a sales charge, by
pension, profit-sharing or other employee benefit plans created pursuant to a
plan qualified under Section 401 of the Code or plans under Section 457 of the
Code, or employee benefit plans created pursuant to Section 403(b) of the
    
                                       A-8
<PAGE>   368
 
Code and sponsored by nonprofit organizations defined under Section 501(c)(3) of
the Code. Such plans will qualify for purchases at net asset value provided that
(1) the total amount invested in the plan is at least $1,000,000, (2) the
sponsor signs a $1,000,000 LOI, (3) such shares are purchased by an
employer-sponsored plan with at least 100 eligible employees, or (4) all of the
plan's transactions are executed through a single financial institution or
service organization who has entered into an agreement with AIM Distributors
with respect to their use of the AIM Funds in connection with such accounts.
Section 403(b) plans sponsored by public educational institutions will not be
eligible for net asset value purchases based on the aggregate investment made by
the plan or the number of eligible employees. Participants in such plans will be
eligible for reduced sales charges based solely on the aggregate value of their
individual investments in the applicable AIM Fund. PLEASE NOTE THAT TAX-EXEMPT
FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR SUCH PLANS. AIM Distributors may pay
investment dealers or other financial service firms for share purchases of the
Load Funds (as defined under the caption "Exchange Privilege") sold at net asset
value to an employee benefit plan in accordance with this paragraph as follows:
1% of the first $2 million of such purchases, plus 0.80% of the next $1 million
of such purchases, plus 0.50% of the next $17 million of such purchases, plus
0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of
the net asset value of any Class A shares of AIM LIMITED MATURITY TREASURY FUND
sold at net asset value to an employee benefit plan in accordance with this
paragraph.
 
  Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
- --------------------------------------------------------------------------------
 
SPECIAL PLANS
 
  Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
who owns shares which are not subject to a contingent deferred sales charge, can
arrange for monthly, quarterly or annual amounts (but not less than $50) to be
drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that
 
                                       A-9
<PAGE>   369
 
exceed on an annual basis 12% of such account will be subject to a contingent
deferred sales charge on the amounts exceeding 12% of the account value at the
time the shareholder elects to participate in the Systematic Withdrawal Plan.
 
  Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested to shares of the
applicable AIM Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full
and fractional shares at their net asset value in effect at the time of each
such redemption.
 
  Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
 
  The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
 
  AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in the amount specified by
the shareholder (minimum $50 per investment, per account) and on a day or
date(s) specified by the shareholder. The proceeds are invested in shares of the
designated AIM Fund at the applicable offering price determined on the date of
the withdrawal. An Automatic Investment Plan may be discontinued upon 10 days'
prior notice to the Transfer Agent or AIM Distributors.
 
   
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
    
 
  DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
 
  PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination
money-purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans;
SARSEP plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement
accounts"). Information concerning these plans, including the custodian's fees
and the forms necessary to adopt such plans, can be obtained by calling or
writing the AIM Funds or AIM Distributors. Shares of the AIM Funds are also
available for investment through existing 401(k) plans (for both individuals and
employers) adopted under the Code. The plan custodian currently imposes an
annual $10 maintenance fee with respect to each retirement account for which it
serves as the custodian. This fee is generally charged in December. Each AIM
Fund and/or the custodian reserve the right to change this maintenance fee and
to initiate an establishment fee (not to exceed its cost).
 

   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance of $5,000 to
establish and maintain an allocation across a range of AIM Funds. The Program
automatically rebalances holdings of AIM Funds to the established allocation on
a periodic basis. Under the Program, a shareholder may predesig-
    
 
                                      A-10
<PAGE>   370
   
nate, on a percentage basis, how the total value of his or her holdings in a
minimum of two, and a maximum of ten, AIM Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more AIM Funds in the shareholder's Personal Portfolio for shares of
the same class(es) of one or more other AIM Funds in the shareholder's Personal
Portfolio. See "Exchange Privilege." If shares of the AIM Fund(s) in a
shareholder's Personal Portfolio have appreciated during a rebalancing period,
the Program will result in shares of AIM Fund(s) that have appreciated most
during the period being exchanged for shares of AIM Fund(s) that have
appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular AIM Fund would be 2% or less.
In predesignating percentages, shareholders must use whole percentages and
totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an AIM Fund's shares. The
AIM Funds and AIM Distributors reserve the right to modify, suspend, or
terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
    
 
                                      A-11
<PAGE>   371
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, including the Class A shares of the Multiple Class Funds, listed below
and referred to herein as the "Load Funds," are sold at a public offering price
that includes a maximum sales charge of 5.50% or 4.75% of the public offering
price of such shares; Class A shares (or shares which normally involve the
payment of initial sales charges) of certain of the AIM Funds, listed below and
referred to herein as the "Lower Load Funds," are sold at a public offering
price that includes a maximum sales charge of 1.00% of the public offering price
of such shares; and Class A shares or shares of certain other funds, listed
below and referred to herein as the "No Load Funds," are sold at net asset
value, without payment of a sales charge.
 
   
<TABLE>
<S>                                    <C>                                   <C>
                                LOAD FUNDS:                                  LOWER LOAD FUNDS:
   AIM ADVISOR FLEX FUND --            AIM GLOBAL INCOME                     AIM LIMITED MATURITY TREASURY FUND
     CLASS A                           FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR INTERNATIONAL           AIM GLOBAL INFRASTRUCTURE               AIM TAX-FREE INTERMEDIATE FUND
     VALUE FUND -- CLASS A             FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR LARGE CAP               AIM GLOBAL RESOURCES                  NO LOAD FUNDS:
     VALUE FUND -- CLASS A             FUND -- CLASS A
   AIM ADVISOR MULTIFLEX               AIM GLOBAL TELECOMMUNICATIONS         AIM MONEY MARKET FUND
     FUND -- CLASS A                   FUND -- CLASS A                           -- AIM CASH RESERVE SHARES
   AIM ADVISOR REAL ESTATE             AIM GLOBAL TRENDS                       AIM TAX-EXEMPT CASH FUND -- CLASS A
     FUND -- CLASS A                   FUND -- CLASS A                         AIM DOLLAR FUND -- CLASS A
   AIM AGGRESSIVE GROWTH               AIM GLOBAL UTILITIES
     FUND -- CLASS A                   FUND -- CLASS A
   AIM ASIAN GROWTH                    AIM HIGH INCOME MUNICIPAL
     FUND -- CLASS A                   FUND -- CLASS A
   AIM BALANCED FUND -- CLASS A        AIM HIGH YIELD FUND -- CLASS A
   AIM BASIC VALUE                     AIM INCOME FUND -- CLASS A
     FUND -- CLASS A                   AIM INTERMEDIATE GOVERNMENT
   AIM BLUE CHIP FUND -- CLASS A       FUND -- CLASS A
   AIM CAPITAL DEVELOPMENT             AIM INTERNATIONAL EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM CHARTER FUND -- CLASS A         AIM INTERNATIONAL GROWTH
   AIM CONSTELLATION                   FUND -- CLASS A
     FUND -- CLASS A                   AIM JAPAN GROWTH FUND -- CLASS A
   AIM DEVELOPING MARKETS              AIM LATIN AMERICAN GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS                AIM MID CAP EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS DEBT           AIM MONEY MARKET
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPE GROWTH                   AIM MUNICIPAL BOND
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPEAN DEVELOPMENT            AIM NEW PACIFIC GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM GLOBAL AGGRESSIVE GROWTH        AIM SELECT GROWTH FUND -- CLASS A
     FUND -- CLASS A                   AIM SMALL CAP GROWTH
   AIM GLOBAL CONSUMER PRODUCTS        FUND -- CLASS A
     AND SERVICES FUND -- CLASS A      AIM SMALL CAP OPPORTUNITIES
   AIM GLOBAL FINANCIAL SERVICES       FUND -- CLASS A
     FUND -- CLASS A                   AIM STRATEGIC INCOME
   AIM GLOBAL GOVERNMENT INCOME        FUND -- CLASS A
     FUND -- CLASS A                   AIM TAX-EXEMPT BOND FUND
   AIM GLOBAL GROWTH                   OF CONNECTICUT -- CLASS A
     FUND -- CLASS A                   AIM VALUE FUND -- CLASS A
   AIM GLOBAL GROWTH &                 AIM WEINGARTEN FUND -- CLASS A
     INCOME FUND -- CLASS A            AIM WORLDWIDE GROWTH
   AIM GLOBAL HEALTH CARE              FUND -- CLASS A
     FUND -- CLASS A
</TABLE>
    
 
                                      A-12
<PAGE>   372
 
   
  Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE; (iii) Class A shares
may be exchanged for Class A shares; (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A, Class B or Class C shares of AIM MONEY MARKET FUND. Class C shares
of AIM Small Cap Opportunities Fund are currently not available.
    
 
  DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
 
<TABLE>
<CAPTION>
                                                                                                      MULTIPLE CLASS FUNDS:
                                                            LOWER LOAD              NO LOAD       ------------------------------
      FROM:                 TO: LOAD FUNDS                     FUNDS                 FUNDS           CLASS B         CLASS C
      -----                 --------------                  ----------              -------          -------         -------
<S>                <C>                                <C>                      <C>                <C>             <C>
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
 
Lower Load Funds.. Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund or any     Fund or any Lower Load
                   Lower Load Fund.                   Fund; otherwise,
                                                      Offering Price.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
 
  FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS REVISED AS FOLLOWS:
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
Lower Load Funds.. Net Asset Value if shares were     Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
                   acquired upon exchange of any
                   Load Fund. Otherwise, difference
                   in sales charge will apply.
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund.           Fund or any Lower Load
                   Difference in sales charge will    Fund; otherwise,
                   apply if No Load shares were       Offering Price.
                   acquired upon exchange of Lower
                   Load Fund shares.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
  Class C........  Not Applicable                     Not Applicable           Not Applicable     Not Applicable  Net Asset Value
</TABLE>
 
   
  An exchange is permitted only in the following circumstances: (a) if the funds
offer more than one class of shares, the exchange must be between the same class
of shares (e.g., Class A, Class B and Class C shares of a Multiple Class Fund
cannot be exchanged for each other) except that AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may be exchanged for Class A shares of another Multiple Class
Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten busi-
    
 
                                      A-13
<PAGE>   373
 
ness days, and all other shares are held in an account for at least one day,
prior to the exchange; and (h) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the AIM
Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
   
  Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged are
redeemed at their net asset value as determined at NYSE Close on the day that an
exchange request in proper form (described below) is received. Exchange requests
received after NYSE Close will result in the redemption of shares at their net
asset value at NYSE Close on the next business day. See "Terms and Conditions of
Purchase of the AIM Funds -- Timing of Purchase, Exchange and Redemption Orders
(AIM MONEY MARKET FUND only)" for information regarding the timing of exchange
orders for AIM MONEY MARKET FUND. Normally, shares of an AIM Fund to be acquired
by exchange are purchased at their net asset value or applicable offering price,
as the case may be, determined on the date that such request is received, but
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that a fund would be materially disadvantaged
by an immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into a fund paying daily dividends (See "Dividends, Distributions and
Tax Matters -- Dividends and Distributions," below), and the release of the
exchange proceeds is delayed for the foregoing five-day period, such shareholder
will not begin to accrue dividends until the sixth business day after the
exchange. Shares purchased by check may not be exchanged until it is determined
that the check has cleared, which may take up to ten business days from the date
that the check is received. See "Terms and Conditions of Purchase of the AIM
Funds -- Timing of Purchase Orders."
    
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the AIM Funds. AIM Distributors reserves the right to impose conditions on
dealers or investment advisors who make telephone exchanges of shares of the
funds, including the condition that any such dealer or investment advisor enter
into an agreement (which contains additional conditions with respect to
exchanges of shares) with AIM Distributors. To exchange shares by telephone, a
shareholder, dealer or investment advisor who has satisfied the foregoing
conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach
AFS by telephone, he may also request exchanges by telegraph or use overnight
courier services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is received
prior to NYSE Close. The Transfer Agent and AIM Distributors will not be liable
for any loss, expense or cost arising out of any telephone exchange request that
they reasonably believe to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions if they do not follow
reasonable procedures for verification of telephone transactions. Such
reasonable procedures may include recordings of telephone transactions
(maintained for six months), requests for confirmation of the shareholder's
Social Security Number and current address, and mailings of confirmations
promptly after the transaction.
 
  EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
 
                                      A-14
<PAGE>   374
 
  MULTIPLE DISTRIBUTION SYSTEM. Class B Shares. Class B shares purchased under
the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
 
<TABLE>
<CAPTION>
  YEARS                                                     CONTINGENT DEFERRED
  SINCE                                                       SALES CHARGE AS
PURCHASE                                                    % OF DOLLAR AMOUNT
  MADE                                                       SUBJECT TO CHARGE
- --------                                                    -------------------
<S>                                                          <C>
First......................................................         5%
Second.....................................................         4%
Third......................................................         3%
Fourth.....................................................         3%
Fifth......................................................         2%
Sixth......................................................         1%
Seventh and Following......................................        None
</TABLE>
 
  In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
 
  Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
 
  Class C Shares. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
 
  Waivers. Contingent deferred sales charges on Class B and Class C shares will
be waived on redemptions (1) following the death or post-purchase disability, as
defined in Section 72(m)(7) of the Code, of a shareholder or a settlor of a
living trust (provided AIM Distributors is notified of such death or
post-purchase disability at the time of the redemption request and is provided
with satisfactory evidence of such death or post-purchase disability), (2) in
connection with certain distributions from IRAs, custodial accounts maintained
pursuant to Code Section 403(b), deferred compensation plans qualified under
Code Section 457 and plans qualified under Code Section 401 (collectively,
"Retirement Plans"), (3) pursuant to a Systematic Withdrawal Plan, provided that
amounts withdrawn under such plan do not exceed on an annual basis 12% of the
value of the shareholder's investment in Class B or Class C shares at the time
the shareholder elects to participate in the Systematic Withdrawal Plan, (4)
effected pursuant to the right of a Multiple Class Fund to liquidate a
shareholder's account if the aggregate net asset value of shares held in the
account is less than the designated minimum account size described in the
prospectus of such Multiple Class Fund, (5) effected by AIM of its investment in
Class B or Class C shares and (6) of Class C shares where such investor's dealer
of record, due to the nature of the investor's account, notifies AIM
Distributors prior to the time of investment that the dealer waives the payment
otherwise payable to the dealer described in the last paragraph under the
caption "Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM
Funds."
 
  Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
 
  Waiver category (2) above applies only to redemptions resulting from:
 
          (i) required minimum distributions to plan participants or
     beneficiaries who are age 70 1/2 or older, and only with respect to that
     portion of such distributions which does not exceed 12% annually of the
     participant's or beneficiary's account value in a particular AIM Fund;
 
                                      A-15
<PAGE>   375
 
          (ii) in-kind transfers of assets where the participant or beneficiary
     notifies AIM Distributors of such transfer no later than the time such
     transfer occurs;
 
          (iii) tax-free rollovers or transfers of assets to another Retirement
     Plan invested in Class B or Class C shares of one or more Multiple Class
     Funds;
 
          (iv) tax-free returns of excess contributions or returns of excess
     deferral amounts; and
 
          (v) distributions upon the death or disability (as defined in the
     Code) of the participant or beneficiary.
 
   
  CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND or Class A shares
of AIM DOLLAR FUND which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code, or Plans created under Section 403(b) of the
Code and sponsored by nonprofit organizations as defined under Section 501(c)(3)
of the Code, where shares are being redeemed in connection with employee
terminations or withdrawals, and (a) the total amount invested in a Plan is at
least $1,000,000, (b) the sponsor of a Plan signs a letter of intent to invest
at least $1,000,000 in one or more of the AIM Funds, or (c) the shares being
redeemed were purchased by an employer-sponsored Plan with at least 100 eligible
employees; provided, however, that Plans created under Section 403(b) of the
Code which are sponsored by public educational institutions shall qualify under
(a), (b) or (c) above on the basis of the value of each Plan participant's
aggregate investment in the AIM Funds, and not on the aggregate investment made
by the Plan or on the number of eligible employees; (2) redemptions of shares
following the death or post-purchase disability, as defined in Section 72(m)(7)
of the Code, of a shareholder or a settlor of a living trust; (3) redemptions of
shares purchased at net asset value by private foundations or endowment funds
where the initial amount invested was at least $1,000,000; (4) redemptions of
shares purchased by an investor in amounts of $1,000,000 or more where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payments otherwise payable to the dealer as described in the third paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds;" and (5) pursuant to a Systematic Withdrawal Plan, provided
that amounts withdrawn under such plan do not exceed on an annual basis 12% of
the value of the shareholder's investment in Class A shares at the time the
shareholder elects to participate in the Systematic Withdrawal Plan.
    
 
  Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  In addition to these requirements, shareholders who have invested in a fund to
establish as IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares; (a) a statement
as to whether or not the shareholder has attained age 59 1/2, and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.
 
                                      A-16
<PAGE>   376
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
this account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
   
  EXPEDITED REDEMPTIONS (AIM Cash Reserve shares of AIM MONEY MARKET FUND
ONLY). If a redemption order is received prior to 11:30 a.m. Eastern Time, the
redemption will be effective on that day and AIM MONEY MARKET FUND will endeavor
to transmit payment on that same business day. If the redemption order is
received after 11:30 a.m. and prior to NYSE Close, the redemption will be made
at the next determined net asset value and payment will generally be transmitted
on the next business day.
    
 
  REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing the
appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone
 
                                      A-17
<PAGE>   377
 
exchange and telephone redemption authorization forms; (7) changes in previously
designated wiring or electronic funds transfer instructions, and (8) written
redemptions or exchanges of shares previously reported as lost, whether or not
the redemption amount is under $50,000 or the proceeds are to be sent to the
address of record. These requirements may be waived or modified upon notice to
shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
    
 
   
  REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within ninety (90) days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment will not alter the taxes due on any
capital gains, except under the circumstances described below. If there has been
a loss on the redemption and shares of the same fund are repurchased, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in shares of the same fund, or exchanged for
shares of another AIM Fund, at a reduced sales charge within 90 days of the
payment of the sales charge, the shareholder's basis in the fund shares redeemed
may not include the amount of the sales charge paid, thereby reducing the loss
or increasing the gain recognized from the redemption; however, the
shareholder's basis in the fund shares purchased will include the sales charge.
Each AIM Fund may amend, suspend or cease offering the privilege at any time as
to shares redeemed after the date of such amendment, suspension or cessation.
This privilege may only be exercised once each year by a shareholder with
respect to each AIM Fund.
    
 
   
  Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of Class A shares and who subsequently reinvest a portion or
all of the value of the redeemed shares in Class A shares of any AIM Fund within
ninety (90) days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
    
 
                                      A-18

<PAGE>   378
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
   
  The net asset value per share (or share price) of each AIM Fund is determined
as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close with
respect to AIM MONEY MARKET FUND) on each "business day" of a fund as previously
defined. In the event the NYSE closes early (i.e. before 4:00 p.m. Eastern Time)
on a particular day, the net asset value of an AIM Fund's share will be
determined as of the close of the NYSE on such day. For purposes of defining net
asset value per share, futures and options contracts generally will be valued 15
minutes after the close of trading of the NYSE. The net asset value per share is
calculated by subtracting a class' liabilities from its assets and dividing the
result by the total number of class shares outstanding. The determination of net
asset value per share is made in accordance with generally accepted accounting
principles. Among other items, liabilities include accrued expenses and
dividends payable, and total assets include portfolio securities valued at their
market value, as well as income accrued but not yet received. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the fund's officers and
in accordance with methods which are specifically authorized by its governing
Board of Directors or Trustees. Short-term obligations with maturities of 60
days or less, and the securities held by the Money Market Funds, are valued at
amortized cost as reflecting fair value. AIM HIGH INCOME MUNICIPAL FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-FREE
INTERMEDIATE FUND value variable rate securities that have an unconditional
demand or put feature exercisable within seven days or less at par, which
reflects the market value of such securities.
    
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as
set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                DISTRIBUTIONS    DISTRIBUTIONS
                                                                                   OF NET           OF NET
                                                    DIVIDENDS FROM                REALIZED         REALIZED
                                                    NET INVESTMENT               SHORT-TERM        LONG-TERM
                   FUND                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
                   ----                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM ADVISOR FLEX FUND.....................  declared and paid quarterly       quarterly          annually
AIM ADVISOR INTERNATIONAL VALUE FUND......  declared and paid annually        annually           annually
AIM ADVISOR LARGE CAP VALUE FUND..........  declared and paid quarterly       quarterly          annually
AIM ADVISOR MULTIFLEX FUND................  declared and paid quarterly       quarterly          annually
AIM ADVISOR REAL ESTATE FUND..............  declared and paid quarterly       quarterly          annually
AIM AGGRESSIVE GROWTH FUND................  declared and paid annually        annually           annually
AIM ASIAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM BALANCED FUND.........................  declared and paid quarterly       annually           annually
AIM BASIC VALUE FUND......................  declared and paid annually        annually           annually
AIM BLUE CHIP FUND........................  declared and paid annually        annually           annually
AIM CAPITAL DEVELOPMENT FUND..............  declared and paid annually        annually           annually
AIM CHARTER FUND..........................  declared and paid quarterly       annually           annually
AIM CONSTELLATION FUND....................  declared and paid annually        annually           annually
AIM DEVELOPING MARKETS FUND...............  declared and paid annually        annually           annually
AIM DOLLAR FUND...........................  declared daily; paid monthly      annually           annually
AIM EMERGING MARKETS FUND.................  declared and paid annually        annually           annually
AIM EMERGING MARKETS DEBT FUND............  declared and paid monthsly        annually           annually
AIM EUROPE GROWTH FUND....................  declared and paid annually        annually           annually
AIM EUROPEAN DEVELOPMENT FUND.............  declared and paid annually        annually           annually
AIM GLOBAL AGGRESSIVE GROWTH FUND.........  declared and paid annually        annually           annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
  FUND....................................  declared and paid annually        annually           annually
AIM GLOBAL FINANCIAL SERVICES FUND........  declared and paid annually        annually           annually
</TABLE>
    
 
                                      A-19
<PAGE>   379
 
   
<TABLE>
<CAPTION>
                                                                             DISTRIBUTIONS    DISTRIBUTIONS
                                                                                OF NET           OF NET
                                                 DIVIDENDS FROM                REALIZED         REALIZED
                                                 NET INVESTMENT               SHORT-TERM        LONG-TERM
FUND                                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
- ----                                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM GLOBAL GOVERNMENT INCOME FUND.........  declared and paid monthly         annually           annually
AIM GLOBAL GROWTH FUND....................  declared and paid annually        annually           annually
AIM GLOBAL GROWTH & INCOME FUND...........  declared and paid quarterly       annually           annually
AIM GLOBAL HEALTH CARE FUND...............  declared and paid annually        annually           annually
AIM GLOBAL INCOME FUND....................  declared daily; paid monthly      annually           annually
AIM GLOBAL INFRASTRUCTURE FUND............  declared and paid annually        annually           annually
AIM GLOBAL RESOURCES FUND.................  declared and paid annually        annually           annually
AIM GLOBAL TELECOMMUNICATIONS FUND........  declared and paid annually        annually           annually
AIM GLOBAL TRENDS FUND....................  declared and paid annually        annually           annually
AIM GLOBAL UTILITIES FUND.................  declared daily; paid monthly      annually           annually
AIM HIGH INCOME MUNICIPAL FUND............  declared daily; paid monthly      annually           annually
AIM HIGH YIELD FUND.......................  declared daily; paid monthly      annually           annually
AIM INCOME FUND...........................  declared daily; paid monthly      annually           annually
AIM INTERMEDIATE GOVERNMENT FUND..........  declared daily; paid monthly      annually           annually
AIM INTERNATIONAL EQUITY FUND.............  declared and paid annually        annually           annually
AIM INTERNATIONAL GROWTH FUND.............  declared and paid annually        annually           annually
AIM JAPAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM LATIN AMERICAN GROWTH FUND............  declared and paid annually        annually           annually
AIM LIMITED MATURITY TREASURY FUND........  declared daily; paid monthly      annually           annually
AIM MID CAP EQUITY FUND...................  declared and paid annually        annually           annually
AIM MONEY MARKET FUND.....................  declared daily; paid monthly      at least annually  annually
AIM MUNICIPAL BOND FUND...................  declared daily; paid monthly      annually           annually
AIM NEW PACIFIC GROWTH FUND...............  declared and paid annually        annually           annually
AIM SELECT GROWTH FUND....................  declared and paid annually        annually           annually
AIM SMALL CAP GROWTH FUND.................  declared and paid annually        annually           annually
AIM SMALL CAP OPPORTUNITIES FUND..........  declared and paid annually        annually           annually
AIM STRATEGIC INCOME FUND.................  declared and paid monthly         annually           annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT...  declared daily; paid monthly      annually           annually
AIM TAX-EXEMPT CASH FUND..................  declared daily; paid monthly      at least annually  annually
AIM TAX-FREE INTERMEDIATE FUND............  declared daily; paid monthly      annually           annually
AIM VALUE FUND............................  declared and paid annually        annually           annually
AIM WEINGARTEN FUND.......................  declared and paid annually        annually           annually
AIM WORLDWIDE GROWTH FUND.................  declared and paid annually        annually           annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in like shares of another
Multiple Class Fund, to the extent permitted. For funds that do not declare a
dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. For funds that declare
a dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or the
dividend portion thereof, in cash, or to invest such dividends and distributions
in shares of another fund in the AIM Funds; provided that (i) dividends and
distributions attributable to Class B shares may only be reinvested in Class B
shares, (ii) dividends and distributions attributable to Class C shares may only
be reinvested in Class C shares, (iii) dividends and distributions attributable
to Class A shares may not be reinvested in Class B or Class C shares, and (iv)
dividends and distributions attributable to the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may not be reinvested in the Class A shares of that Fund or in
any Class B or Class C shares. Investors who have not previously selected such a
reinvestment option on the account application form may contact the Transfer
Agent at any time to obtain a form to authorize such reinvestments in another
AIM Fund. Such reinvestments into the AIM Funds are not subject to sales
charges, and shares so purchased are automatically credited to the account of
the shareholder.
 
  Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
 
                                      A-20
<PAGE>   380
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares, except for "exempt-interest dividends" paid by
AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND
FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND
(the "Tax-Exempt Funds"), which are exempt from federal income tax. With respect
to tax-exempt shareholders, dividends and distributions from the AIM Funds are
not subject to federal income taxation to the extent permitted under the
applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    
 
   
  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
    
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
                                      A-21
<PAGE>   381
   
 TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
  TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other taxable securities. For
additional information concerning the alternative minimum tax and certain
collateral tax consequences of the receipt of exempt-interest dividends, see the
Statements of Additional Information applicable to the Tax-Exempt Funds.
 
  The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
 
  To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
 
  From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP EQUITY FUND,
AIM SMALL CAP GROWTH FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX INFORMATION.
Certain states exempt from income taxes dividends paid by mutual funds
attributable to interest on U.S. Treasury and certain other U.S. government
obligations. Investors should consult with their own tax advisors concerning the
availability of such exemption.
    
 
  AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH
FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do
so, each of these funds may elect to pass through to its shareholders credits
for foreign taxes paid. If a fund makes such an election, a shareholder who
receives a distribution (1) will be required to include in gross income his
proportionate share of foreign taxes allocable to the distribution and (2) may
claim a credit or deduction for such share for his taxable year in which the
distribution is received, subject to the general limitations imposed on the
allowance of foreign tax credits and deductions. Shareholders should also note
that certain gains or losses attributable to fluctuations in exchange rates or
foreign currency forward contracts may increase or decrease the amount of income
of the fund available for distribution to shareholders and should note that if,
for any fund, such losses exceed other income during a taxable year, the fund
would not be able to pay ordinary income dividends for that year.
 
                                      A-22
<PAGE>   382
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each AIM Fund's transfer agent and dividend
payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-23
<PAGE>   383
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
 
 
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                              GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
      ACCOUNT TYPE            NUMBER OF:                       ACCOUNT TYPE                  NUMBER OF:
      ------------            --------------------             ------------                  ------------------
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary
      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application
      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors
      Legal Guardian          Ward, Minor or
                              Incompetent
      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
 
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   384
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   385
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
 
   
GIF-PRO-1
    
<PAGE>   386
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
CLASS A AND CLASS B SHARES OF
    
 
AIM GLOBAL RESOURCES FUND
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
 
PROSPECTUS
SEPTEMBER 8, 1998
 
   
This Prospectus contains information about AIM GLOBAL RESOURCES FUND (the
"Fund"), which is one of several series investment portfolios comprising AIM
Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a diversified portfolio which seeks long-term capital
growth by investing all of its investable assets in the Global Resources
Portfolio (the "Portfolio"), which, in turn, invests primarily in equity
securities of companies throughout the world that own, explore or develop
natural resources and other basic commodities or supply goods and services to
such companies. The Portfolio's investment objective is identical to that of the
Fund. The investment experience of the Fund will correspond directly with the
investment experience of the Portfolio.
    
 
   
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   387
- --------------------------------------------------------------------------------
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     7
  Investment Program...................     7
  Risk Factors.........................    10
  Management...........................    13
  Organization of the Trust and the
     Portfolio.........................    15
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  Introduction to The AIM Family of
     Funds.............................   A-1
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-9
  Exchange Privilege...................  A-12
  How to Redeem Shares.................  A-14
  Determination of Net Asset Value.....  A-19
  Dividends, Distributions and Tax
     Matters...........................  A-19
  General Information..................  A-23
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND AND THE PORTFOLIO.
    
 
  The Fund is a diversified series of the Trust. The Portfolio is a diversified
series of the Global Investment Portfolio.
 
  INVESTMENT OBJECTIVE. The Fund seeks long-term capital growth.
 
  PRINCIPAL INVESTMENTS. The Fund invests all of its investable assets in the
Portfolio, which, in turn, invests primarily in equity securities of companies
throughout the world that own, explore or develop natural resources and other
basic commodities or supply goods and services to such companies.
 
   
  INVESTMENT MANAGERS. The Portfolio is managed by A I M Advisors, Inc. ("AIM")
and is sub-advised and sub-administered by INVESCO (NY), Inc. (the
"Sub-advisor"). AIM and the Sub-advisor and their worldwide asset management
affiliates provide investment management and/or administrative services to
institutional, corporate and individual clients around the world. AIM and the
Sub-advisor are both indirect wholly owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC and its subsidiaries are an independent investment management group
that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing
presence in Asia. AIM was organized in 1976 and, together with its subsidiaries,
currently advises approximately 90 investment company portfolios.
    
 
  PURCHASING SHARES. Investors may select Class A or Class B shares of the Fund
which are offered by this Prospectus at an offering price that reflects
differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to
a separate prospectus, the Fund also offers Advisor Class shares, which
represent interests in the Fund. The Advisor Class shares have different
distribution arrangements.
 
  CLASS A SHARES -- Shares are offered at net asset value plus any applicable
initial sales charge.
 
  CLASS B SHARES -- Shares are offered at net asset value without an initial
sales charge, and are subject to a maximum contingent deferred sales charge of
5% on certain redemptions made within six years from the date such shares were
purchased. Class B shares automatically convert to Class A shares of the Fund
eight years following the end of the calendar month in which a purchase was
made. Class B shares are subject to higher expenses than Class A shares.
 
  Initial investments in any class of shares must be at least $500 and
additional investments must be at least $50. The minimum initial investment is
modified for investments through tax-qualified retirement plans and accounts
initially established with an Automatic Investment Plan. The distributor of the
Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
 
  SUITABILITY FOR INVESTORS. An investor in Class A or Class B shares of the
Fund should consider the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the shares are expected to
be held, and other circumstances. Investors should consider whether, during the
anticipated life of their investment in the Fund, the accumulated distribution
fees and any applicable contingent deferred sales charges on Class B shares
prior to conversion would be less than the initial sales charge and accumulated
distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares.
To assist investors in making this determination, the table under the caption
"Table of Fees and Expenses" sets forth examples of the charges applicable to
each class of shares. Class A shares will normally be more beneficial than Class
B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase
of more than $250,000 for Class B shares.
 
                                        2
<PAGE>   388
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds"). Class
A and Class B shares of the Fund may be exchanged for shares of other funds in
The AIM Family of Funds in the manner and subject to the policies and charges
set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Class A shareholders of the Fund may redeem all or a portion
of their shares at net asset value on any business day, generally without
charge. A contingent deferred sales charge of 1% may apply to certain
redemptions where a purchase of more than $1 million is made at net asset value.
See "How to Redeem Shares -- Contingent Deferred Sales Charge Program for Large
Purchases."
 
  Class B shareholders of the Fund may redeem all or a portion of their shares
at net asset value on any business day, less a contingent deferred sales charge
for redemptions made within six years from the date such shares were purchased.
Class B shares redeemed after six years from the date such shares were purchased
will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters" and "Special Plans."
    
 
  RISK FACTORS. There is no assurance that the Fund or the Portfolio will
achieve its investment objective. The Fund's net asset value will fluctuate,
reflecting fluctuations in the market value of the Portfolio's portfolio
holdings. The Portfolio's policy of concentrating its investments in companies
in the natural resources industries may cause the Fund's net asset value to
fluctuate more than if it invested in a greater number of industries. The
Portfolio may invest in foreign securities. Investments in foreign securities
involve risks relating to political and economic developments abroad and the
differences between the regulations to which U.S. and foreign issuers are
subject. Individual foreign economies also may differ favorably or unfavorably
from the U.S. economy. Changes in foreign currency exchange rates will affect
the Fund's net asset value, earnings and gains and losses realized on sales of
securities. Securities of foreign companies may be less liquid and their prices
more volatile than those of securities of comparable U.S. companies.
 
   
  The Portfolio may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs. The Portfolio may
invest up to 20% of its total assets in below investment grade debt securities.
Investments of this type are subject to a greater risk of loss of principal and
interest. See "Investment Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   389
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Class A and Class B shares of the Fund are reflected in the following table(1):
 
<TABLE>
<CAPTION>
                                                              CLASS A   CLASS B
                                                              -------   -------
<S>                                                           <C>       <C>
Shareholder Transaction Costs(2):
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................   4.75%     None
  Sales charges on reinvested distributions to
     shareholders...........................................   None      None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........   None      5.00%
  Redemption charges........................................   None      None
  Exchange fees:............................................   None      None
Annual Fund Operating Expenses(3): (as a % of average net
  assets)
  Investment management and administration fees.............   0.98%     0.98%
  12b-1 distribution and service fees.......................   0.50%     1.00%
  Other expenses (after reimbursements and waivers).........   0.52%     0.52%
                                                               ----      ----
          Total Fund Operating Expenses.....................   2.00%     2.50%
                                                               ====      ====
</TABLE>
 
   
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Fund. Long-term shareholders
   may pay more than the economic equivalent of the maximum front-end sales
   charge permitted by the National Association of Securities Dealers, Inc.
   rules regarding investment companies.
    
 
(2)Sales charge waivers are available for Class A and Class B shares, and
   reduced sales charge purchase plans are available for Class A shares. The
   maximum 5% contingent deferred sales charge on Class B shares applies to
   redemptions during the first year after purchase. The charge generally
   declines by 1% annually thereafter, reaching zero after six years. See "Terms
   and Conditions of Purchase of the AIM Funds -- Reductions in Initial Sales
   Charges."
 
   
(3)Expenses are based on the Fund's fiscal year ended October 31, 1997 restated
   to reflect AIM's undertaking to limit the Fund's expenses (exclusive of
   brokerage commissions, taxes, interest and extraordinary expenses) to the
   annual rate of 2.00% and 2.50% of the average daily net assets of the Fund's
   Class A and Class B shares, respectively. AIM has voluntarily agreed to
   continue this limitation through May 31, 2000. Without reimbursements and
   waivers, "Other Expenses" and "Total Fund Operating Expenses" would have been
   0.65% and 2.13%, respectively, for Class A shares and 0.65% and 2.63%,
   respectively, for Class B shares of the Fund. "Other expenses" include
   custody, transfer agency, legal, audit and other operating expenses. See
   "Management" herein and the Statement of Additional Information for more
   information.
    
 
   
   The Board of Trustees of the Trust believes that the aggregate per share
   expenses of the Fund and the Portfolio will be approximately equal to the
   expenses the Fund would incur if its assets were invested directly in the
   type of securities being held by the Portfolio.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                     1 YEAR   3 YEARS   5 YEARS   10 YEARS(3)
                                                     ------   -------   -------   -----------
<S>                                                  <C>      <C>       <C>       <C>
Class A Shares(1)..................................   $67      $108      $151        $270
Class B Shares:
  Assuming a complete redemption at end of
     period(2).....................................   $77      $111      $157         274
  Assuming no redemption...........................   $26      $ 79      $135         274
</TABLE>
    
 
   
(1)Assumes payment of maximum sales charge by the investor.
    
 
   
(2)Assumes deduction of the applicable contingent deferred sales charge.
    
 
   
(3)For Class B shares, this number reflects the conversion to Class A shares
   eight years following the end of the calendar month in which a purchase was
   made.
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S AND THE PORTFOLIO'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND
INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE
ASSUMPTION IN THE HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY
REGULATION OF THE SEC APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS
NOT A PREDICTION OF AND DOES NOT REPRESENT THE FUND'S OR THE PORTFOLIO'S
PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   390
 
- --------------------------------------------------------------------------------
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The tables below provide condensed financial information concerning income and
capital changes for one Class A and Class B shares of the Fund. This information
is supplemented by the financial statements and accompanying notes appearing in
the Statement of Additional Information. The financial statements and notes, for
the fiscal year ended October 31, 1997, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon also
is included in the Statement of Additional Information. The unaudited financial
statements and notes, for the semi-annual period ended April 30, 1998, are also
included in the Statement of Additional Information.
    
 
   
                           AIM GLOBAL RESOURCES FUND
    
   
                  (FORMERLY GT GLOBAL NATURAL RESOURCES FUND)
    
 
   
<TABLE>
<CAPTION>
                                                    SIX MONTHS                                       MAY 31, 1994
                                                      ENDED              YEAR ENDED OCT. 31,         (COMMENCEMENT
                                                  APRIL 30, 1998     ---------------------------   OF OPERATIONS) TO
                                                  (UNAUDITED)(D)     1997(D)   1996(D)    1995       OCT. 31, 1994
                                                  --------------     -------   -------   -------   -----------------
<S>                                               <C>                <C>       <C>       <C>       <C>
CLASS A
Per Share Operating Performance:
Net asset value, beginning of period............     $ 20.65         $ 17.43   $ 11.44   $ 12.41        $ 11.43
                                                     -------         -------   -------   -------        -------
Income from investment operations:
  Net investment income (loss)+.................       (0.10)          (0.25)    (0.24)     0.04           0.06
  Net realized and unrealized gain (loss) on
    investments.................................       (4.31)           4.08      6.28     (0.98)          0.92
                                                     -------         -------   -------   -------        -------
    Net increase (decrease) from investment
      operations................................       (4.41)           3.83      6.04     (0.94)          0.98
                                                     -------         -------   -------   -------        -------
Distributions:
  From net investment income....................          --              --     (0.04)    (0.03)            --
  From net realized gain on investments.........       (0.68)          (0.61)    (0.01)       --             --
                                                     -------         -------   -------   -------        -------
    Total distributions.........................       (0.68)          (0.61)    (0.05)    (0.03)            --
                                                     -------         -------   -------   -------        -------
Net asset value, end of period..................     $ 15.56         $ 20.65   $ 17.43   $ 11.44        $ 12.41
                                                     =======         =======   =======   =======        =======
Total investment return(c)......................      (21.88)%(b)      22.64%    53.04%    (7.58)%         8.57%(b)
                                                     =======         =======   =======   =======        =======
Ratios and supplemental data:
Net assets, end of period (in 000's)............     $42,093         $69,975   $48,729   $12,598        $14,797
Ratio of net investment income (loss) to average
  net assets:
  With expense reductions and reimbursement from
    the Sub-advisor.............................       (1.14)%(a)      (1.41)%   (1.55)%    0.41%          2.63%(a)
  Without expense reductions and reimbursement
    from the Sub-advisor........................       (1.32)%(a)      (1.51)%   (1.65)%   (0.69)%         0.65%(a)
Ratio of operating expenses to average net
  assets:
  With expense reductions and reimbursement from
    the Sub-advisor.............................        1.99%(a)        2.03%     2.20%     2.37%          2.40%(a)
  Without expense reductions and reimbursement
    from the Sub-advisor........................        2.17%(a)        2.13%     2.30%     3.47%          4.38%(a)
Portfolio turnover rate++.......................         197%(a)         321%       94%       87%           137%
Average commission rate per share paid on
  portfolio transactions++......................     $0.0245         $0.0112   $0.0243       N/A            N/A
</TABLE>
    
 
- ---------------
 
   
 +    Before reimbursement by the Sub-advisor, the net investment income per
      share for Class A and Class B of the Fund would have been reduced by $0.01
      and $0.01, respectively for the six months ended April 30, 1998, $0.14 and
      $0.13, respectively, for the year ended Oct. 31, 1995, and $0.04 and
      $0.04, respectively, from May 31, 1994 to Oct. 31, 1994.
    
 
   
++    Portfolio turnover and average commission rates are calculated on the
      basis of the Fund as a whole without distinguishing among the classes of
      shares issued. The Fund invests only in the AIM Global Resources Portfolio
      and does not engage in securities transactions. Accordingly, the portfolio
      turnover and average commission rates presented are for the AIM Global
      Resources Portfolio.
    
 
   
(a)   Annualized.
    
 
   
(b)   Not annualized.
    
 
   
(c)   Total investment return does not include sales charges.
    
 
   
(d)   These selected per share data were calculated based upon average shares
      outstanding during the period.
    
 
   
N/A   Not Applicable.
    
 
                                        5
<PAGE>   391
 
   
    
 
   
<TABLE>
<CAPTION>
                                                    SIX MONTHS                                       MAY 31, 1994
                                                      ENDED              YEAR ENDED OCT. 31,         (COMMENCEMENT
                                                  APRIL 30, 1998     ---------------------------   OF OPERATIONS) TO
                                                  (UNAUDITED)(D)     1997(D)   1996(D)    1995       OCT. 31, 1994
                                                  --------------     -------   -------   -------   -----------------
<S>                                               <C>                <C>       <C>       <C>       <C>
CLASS B
Per Share Operating Performance:
Net asset value, beginning of period............     $ 20.37         $ 17.29   $ 11.36   $ 12.38        $ 11.43
                                                     -------         -------   -------   -------        -------
Income from investment operations:
  Net investment income (loss)+.................       (0.14)          (0.33)    (0.31)    (0.02)          0.03
  Net realized and unrealized gain (loss) on
    investments.................................       (4.24)           4.02      6.25     (0.98)          0.92
                                                     -------         -------   -------   -------        -------
    Net increase (decrease) from investment
      operations................................       (4.38)           3.69      5.94     (1.00)          0.95
                                                     -------         -------   -------   -------        -------
Distributions:
  From net investment income....................          --              --        --     (0.02)            --
  From net realized gain on investments.........       (0.68)          (0.61)    (0.01)       --             --
                                                     -------         -------   -------   -------        -------
    Total distributions.........................       (0.68)          (0.61)    (0.01)    (0.02)            --
                                                     -------         -------   -------   -------        -------
Net asset value, end of period..................     $ 15.31         $ 20.37   $ 17.29   $ 11.36        $ 12.38
                                                     =======         =======   =======   =======        =======
Total investment return(c)......................      (22.03)%(b)      21.99%    52.39%    (8.05)%         8.31%(b)
                                                     =======         =======   =======   =======        =======
Ratios and supplemental data:
Net assets, end of period (in 000's)............     $52,210         $86,812   $57,749   $13,978        $13,404
Ratio of net investment income (loss) to average
  net assets:
  With expense reductions and reimbursement from
    the Sub-advisor.............................       (1.64)%(a)      (1.91)%   (2.05)%   (0.09)%         2.13%(a)
  Without expense reductions and reimbursement
    from the Sub-advisor........................       (1.82)%(a)      (2.01)%   (2.15)%   (1.19)%         0.15%(a)
Ratio of operating expenses to average net
  assets:
  With expense reductions and reimbursement from
    the Sub-advisor.............................        2.49%(a)        2.53%     2.70%     2.87%          2.90%(a)
  Without expense reductions and reimbursement
    from the Sub-advisor........................        2.67%(a)        2.63%     2.80%     3.97%          4.88%(a)
Portfolio turnover rate++.......................         197%(a)         321%       94%       87%           137%
Average commission rate per share paid on
  portfolio transactions++......................     $0.0245         $0.0112   $0.0243       N/A            N/A
</TABLE>
    
 
- ---------------
 
   
 +    Before reimbursement by the Sub-advisor, the net investment income per
      share for Class A and Class B of the Fund would have been reduced by $0.01
      and $0.01, respectively for the six months ended April 30, 1998; $0.14 and
      $0.13, respectively, for the year ended Oct. 31, 1995, and $0.04 and
      $0.04, respectively, from May 31, 1994 to Oct. 31, 1994.
    
 
   
++    Portfolio turnover and average commission rates are calculated on the
      basis of the Fund as a whole without distinguishing among the classes of
      shares issued. The Fund invests only in the AIM Global Resources Portfolio
      and does not engage in securities transactions. Accordingly, the portfolio
      turnover and average commission rates presented are for the AIM Global
      Resources Portfolio.
    
 
   
(a)   Annualized.
    
 
   
(b)   Not annualized.
    
 
   
(c)   Total investment return does not include sales charges.
    
 
   
(d)   These selected per share data were calculated based upon average shares
      outstanding during the period.
    
 
   
N/A   Not Applicable.
    
 
                                ---------------
 
   
<TABLE>
<CAPTION>
                                                                     AVERAGE MONTHLY
                                                    AVERAGE             NUMBER OF        AVERAGE AMOUNT
                              AMOUNT OF DEBT    AMOUNT OF DEBT     REGISTRANT'S SHARES    OF DEBT PER
                              OUTSTANDING AT      OUTSTANDING          OUTSTANDING        SHARE DURING
                              END OF PERIOD    DURING THE PERIOD    DURING THE PERIOD      THE PERIOD
                              --------------   -----------------   -------------------   --------------
<S>                           <C>              <C>                 <C>                   <C>
Six months ended April 30,
  1998......................    $       --         $331,332             7,240,441           $0.046
Year ended October 31,
  1997......................    $4,670,000         $999,474             7,868,612           $0.1270
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed on a daily
basis.
    
 
                                        6
<PAGE>   392
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return. Standardized total return
for Class A shares reflects the deduction of the Fund's maximum front-end sales
charge at the time of purchase. Standardized total return for Class B shares
reflects the deduction of the maximum applicable contingent deferred sales
charge on a redemption of shares held for the period.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
 
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVES. The Fund's investment objective is long-term capital
growth. It seeks its objective by investing all of its investable assets in the
Portfolio, which, in turn, invests primarily in equity securities of companies
throughout the world that own, explore or develop natural resources and other
basic commodities or supply goods and services to such companies. The
Portfolio's investment objective is identical to that of the Fund. There can be
no assurance that the Fund or Portfolio will achieve its investment objective.
    
 
   
  INVESTMENT POLICIES. At least 65% of the Portfolio's total assets will
normally be invested in common stock and preferred stock, and warrants to
acquire such securities, issued by natural resource companies. A "natural
resource" company is an entity in which (i) at least 50% of either the revenues
or earnings was derived from natural resource activities, or (ii) at least 50%
of the assets was devoted to such activities, based upon the company's most
recent fiscal year. The remainder of the Portfolio's assets may be invested in
debt securities issued by natural resource companies and/or equity and debt
securities of companies outside of the natural resource industries, which, in
the opinion of the Sub-advisor, stand to benefit from developments in the
natural resource industries.
    
 
   
  Examples of natural resource companies include those which own, explore or
develop: energy sources (such as oil, gas and coal); ferrous and non-ferrous
metals (such as iron, aluminum, copper, nickel, zinc and lead), strategic metals
(such as uranium and titanium) and precious metals (such as gold, silver and
platinum); chemicals; forest products (such as timber, coated and uncoated tree
sheet, pulp and newsprint); other basic commodities (such as foodstuffs);
refined products (such as chemicals and steel) and service companies that sell
to these producers and refiners; and other products and services, which, in the
Sub-advisor's opinion are significant to the ownership and development of
natural resources and other basic commodities.
    
 
   
  The Sub-advisor believes that the liberalization of formerly socialist
economies will bring about dramatic changes in both the supply and demand for
natural resources. In addition, rapid industrialization in developing countries
of Asia and Latin America is generating new demands for industrial materials
that are affecting world commodities markets. The Sub-advisor believes these
changes are likely to create investment opportunities that benefit from new
sources of supply and/or from changes in commodities prices.
    
 
   
  The Sub-advisor also believes that investments in natural resource industries
offer an opportunity to protect wealth against the capital-eroding effects of
inflation. During periods of accelerating inflation or currency uncertainty,
worldwide investment demand for natural resources, particularly precious metals,
tends to increase, and during periods of disinflation or currency stability, it
tends to decrease. The Sub-advisor believes that rising commodity prices and
increasing worldwide industrial production may favorably affect share prices of
natural resource companies, and investments in such companies can offer
excellent opportunities to offset the effects of inflation.
    
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objective and
policies, the Portfolio may employ one or more of the following strategies in
order to enhance investment results:
    
 
                                        7
<PAGE>   393
 
   
  SELECTION OF INVESTMENTS AND ASSET ALLOCATION. The Portfolio expects that,
from time to time, a significant portion of its assets may be invested in the
securities of domestic issuers. The industry represented in the Portfolio,
however, is a global industry with significant, growing markets outside of the
United States. A sizeable proportion of the companies which comprise the natural
resources industries are headquartered outside of the United States.
    
 
   
  For these reasons, the Sub-advisor believes that a portfolio composed only of
securities of U.S. issuers does not provide the greatest potential for return
from an investment by the Portfolio. The Sub-advisor uses its financial
expertise in markets located throughout the world and the substantial global
resources of AMVESCAP PLC in attempting to identify those countries and
companies then providing the greatest potential for long-term capital
appreciation. In this fashion, the Sub-advisor seeks to enable shareholders to
capitalize on the substantial investment opportunities and the potential for
long-term growth of capital presented by the global natural resources industries
represented in the Portfolio.
    
 
   
  The Sub-advisor allocates the Portfolio's assets among securities of countries
and in currency denominations where opportunities for meeting the Portfolio's
investment objective are expected to be the most attractive. The Portfolio may
invest substantially in securities denominated in one or more currencies. Under
normal conditions, the Portfolio invests in the securities of issuers located in
at least three countries, including the United States; investments in securities
of issuers in any one country, other than the United States, will represent no
more than 50% of the Portfolio's total assets.
    
 
   
  In analyzing specific companies for possible investment, the Sub-advisor
ordinarily looks for several of the following characteristics: above-average per
share earnings growth; high return on invested capital; a healthy balance sheet;
sound financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; development of new technologies; efficient service; pricing
flexibility; strong management; and general operating characteristics that will
enable the companies to compete successfully in their respective markets.
    
 
   
  In assessing companies for the Portfolio, the Sub-advisor will also evaluate,
among other factors, their capabilities for expanded exploration and production,
superior exploration programs and production techniques and facilities, current
inventories, expected production and demand levels and the potential to
accumulate new resources.
    
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. Under a defensive strategy, the Portfolio may invest up to
100% of its total assets in cash (U.S. dollars, foreign currencies or
multinational currency units such as euros) and/or high quality debt securities
or money market instruments of U.S. or foreign issuers. In addition, for
temporary defensive purposes, most or all of the Portfolio's investments may be
made in the United States and denominated in U.S. dollars. To the extent the
Portfolio adopts a temporary defensive posture, it will not be invested so as to
achieve directly its investment objective. In addition, pending investment of
proceeds from new sales of Fund shares or to meet its ordinary daily cash needs,
the Portfolio may hold cash (U.S. dollars, foreign currencies or multinational
currency units) and may invest in foreign or domestic high quality money market
instruments. For a full description of money market instruments, see "Money
Market Instruments" in the "Investment Objectives and Policies" section of the
Statement of Additional Information.
    
 
   
  PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Portfolio in privatizations in appropriate
circumstances. In certain foreign countries, the ability of foreign entities
such as the Portfolio to participate in privatizations may be limited by local
law, or the terms on which the Portfolio may be permitted to participate may be
less advantageous than those for local investors. There can be no assurance that
foreign governments will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
    
 
   
  INVESTMENTS IN OTHER INVESTMENT COMPANIES. The Portfolio may invest up to 10%
of its total assets in other investment companies, some of which may be
investment vehicles or companies that are advised by the Sub-advisor or its
affiliates ("Affiliated Funds"). As a shareholder in an investment company, the
Portfolio would bear its ratable share of that investment company's expenses,
including its advisory and administration fees. At the same time, the Portfolio
would continue to pay its own management fees and other expenses. AIM and the
Sub-advisor will waive their advisory fees to the extent that the Portfolio
invests in an Affiliated Fund.
    
 
   
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Portfolio
may borrow from banks or may borrow through reverse repurchase agreements and
"roll" transactions in connection with meeting requests for the redemptions of
the Fund's shares. The Portfolio also may borrow up to 5% of its total assets
for temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Portfolio may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Portfolio's borrowings exceed 5% of
its total assets. Any borrowing by the Portfolio may cause greater fluctuation
in the value of its shares than would be the case if the Portfolio did not
borrow.
    
 
  A reverse repurchase agreement is a borrowing transaction in which the
Portfolio transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash, and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Portfolio's sale of securities together with
its commitment (for which the Portfolio may receive a fee) to purchase similar,
but not identical, securities at a future date.
 
                                        8
<PAGE>   394
 
   
  SECURITIES LENDING. The Portfolio may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Portfolio to retain ownership of the securities loaned and, at the same
time, enhances the Fund's total return. The Portfolio limits its loans of
portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. While a loan is outstanding, the
borrower must maintain with the Portfolio's custodian collateral consisting of
cash, U.S. government securities or certain irrevocable letters of credit equal
to at least the value of the borrowed securities, plus any accrued interest or
such other collateral as permitted by the Portfolio's investment program and
regulatory agencies, and as approved by the Board. The risks in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delays in receiving additional collateral or in recovery of the
securities and possible loss of rights in the collateral should the borrower
fail financially.
    
 
  WHEN-ISSUED OR FORWARD COMMITMENT SECURITIES. The Portfolio may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Portfolio will
purchase or sell when-issued securities or enter into forward commitments only
with the intention of actually receiving or delivering the securities, as the
case may be. No income accrues on securities that have been purchased pursuant
to a forward commitment or on a when-issued basis prior to delivery to the
Portfolio. If the Portfolio disposes of the right to acquire a when-issued
security prior to its acquisition or disposes of its right to deliver or receive
against a forward commitment, it may incur a gain or loss. At the time the
Portfolio enters into a transaction on a when-issued or forward commitment
basis, the Portfolio will segregate cash or liquid securities equal to the value
of the when-issued or forward commitment securities with its custodian and will
mark to market daily such assets. There is a risk that the securities may not be
delivered and that the Portfolio may incur a loss.
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Portfolio may use
forward currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the portfolio. These instruments are often referred to as
"derivatives," which may be defined as financial instruments whose performance
is derived, at least in part, from the performance of another asset (such as a
security, currency or an index of securities). The Portfolio may enter into such
instruments up to the full value of its portfolio assets. See "Risk
Factors -- Options, Futures and Forward Currency Transactions" herein and
"Options, Futures and Currency Strategies" in the Statement of Additional
Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Portfolio may enter into forward currency contracts for the
purchase or sale of a specified currency at a specified future date. Such
contracts may involve the purchase or sale of a foreign currency against the
U.S. dollar or may involve two foreign currencies. The Portfolio may enter into
forward currency contracts either with respect to specific transactions or with
respect to its portfolio positions. The Portfolio also may purchase and sell put
and call options on currencies, futures contracts on currencies and options on
such futures contracts to hedge against movements in exchange rates.
 
   
  In addition, the Portfolio may purchase and sell put and call options on
equity and debt securities to hedge against the risk of fluctuations in the
prices of securities held by the Portfolio or that the Sub-advisor intends to
include in the Portfolio's holdings. The Portfolio also may purchase and sell
put and call options on stock indexes to hedge against overall fluctuations in
the securities markets generally or in a specific market sector.
    
 
  Further, the Portfolio may sell stock index futures contracts and may purchase
put options or write call options on such futures contracts to protect against a
general stock market decline or a decline in a specific market sector that could
affect adversely the Portfolio's holdings. The Portfolio also may purchase stock
index futures contracts and purchase call options or write put options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisitions. The
Portfolio may use interest rate futures contracts and options thereon to hedge
the debt portion of its portfolio against changes in the general level of
interest rates.
 
   
  OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this Prospectus
and in the Statement of Additional Information may be changed by the Trust's
Board of Trustees without shareholder approval. The Fund's policies regarding
concentration and lending, and the percentage of the Fund's assets that may be
committed to borrowing, are fundamental policies and may not be changed without
shareholder approval.
    
 
  The approval of the Fund and of other investors in the Portfolio, if any, is
not required to change the investment objective, policies or limitations of the
Portfolio, unless otherwise specified. Written notice shall be provided to
shareholders of the Fund thirty days prior to any changes in the Portfolio's
investment objective.
 
                                        9
<PAGE>   395
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's or Portfolio's investment policies or
restrictions.
 
   
  The Portfolio is authorized to engage in Short Sales, although it currently
has no intention of doing so, and may purchase American Depositary Receipts,
American Depositary Shares, Global Depositary Receipts and European Depositary
Receipts. See "Short Sales" and "Depositary Receipts," respectively, in the
"Investment Objectives and Policies" section of the Statement of Additional
Information.
    
 
  OTHER INFORMATION REGARDING THE PORTFOLIO. As previously described, the Fund,
unlike mutual funds that directly acquire and manage their own portfolios of
securities, seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio, which is a separate investment company.
Because the Fund will invest only in the Portfolio, the Fund's shareholders will
acquire only an indirect interest in the investments of the Portfolio.
 
   
  The Fund may redeem its investment in the Portfolio at any time, if the Board
of Trustees of the Trust determines that it is in the best interests of the Fund
and its shareholders to do so. A change in the Portfolio's investment objective,
policies or limitations that is not approved by the Board or the shareholders of
the Fund could require the Fund to redeem its interest in the Portfolio. Any
such redemption could result in a distribution in kind of portfolio securities
(as opposed to a cash distribution) by the Portfolio. Should such a distribution
occur, the Fund could incur brokerage fees or other transaction costs in
converting such securities to cash. In addition, a distribution in kind could
result in a less diversified portfolio of investments for the Fund and could
adversely affect its liquidity. Upon redemption, the Board would consider what
action might be taken, including the investment of all the investable assets of
the Fund in another pooled investment entity having substantially the same
investment objective as the Fund or the retention by the Fund of its own
investment advisor to manage its assets in accordance with its investment
objective, policies and limitations discussed herein.
    
 
  In addition to selling an interest therein to the Fund, the Portfolio may sell
interests therein to other non-affiliated investment companies and/or other
institutional investors. All institutional investors in the Portfolio will pay a
proportionate share of the Portfolio's expenses and will invest in the Portfolio
on the same terms and conditions. However, if another investment company invests
any or all of its assets in the Portfolio, it would not be required to sell its
shares at the same public offering price as the Fund and may charge different
sales commissions. Therefore, investors in the Fund may experience different
returns than investors in another investment company that invests exclusively in
the Portfolio. As of the date of this Prospectus, the Fund is the only
institutional investor in the Portfolio.
 
  The Fund may be materially affected by the actions of other large investors,
if any, in the Portfolio. For example, as with all open-end investment
companies, if a large investor were to redeem its interest in the Portfolio, (1)
the Portfolio's remaining investors could experience higher pro rata operating
expenses, thereby producing lower returns and (2) the Portfolio's security
holdings may become less diverse, resulting in increased risk. Institutional
investors in the Portfolio that have a greater pro rata ownership interest in
the Portfolio than the Fund could have effective voting control over the
operation of the Portfolio.
 
   
- --------------------------------------------------------------------------------
    
 
   
RISK FACTORS
    
 
   
  GENERAL. There is no assurance that the Fund or the Portfolio will achieve its
investment objective. The Fund's net asset value will fluctuate reflecting
fluctuations in the market value of the Portfolio's securities. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure, and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. The value of equity securities held by the Portfolio will
fluctuate in response to general market and economic developments, as well as
developments affecting the particular issuers of such securities. In addition,
the value of debt securities held by the Portfolio generally will fluctuate with
changes in the perceived creditworthiness of the issuers of such securities and
interest rates.
    
 
  Because the Portfolio focuses its investments on the natural resources
industries, an investment in it may be more volatile than that of other
investment companies that do not concentrate their investments in such a manner.
Moreover, the value of the shares of the Fund will be especially susceptible to
factors affecting the natural resources industries in which it focuses.
Accordingly, the Fund should not be considered a complete investment program.
 
  NATURAL RESOURCES INDUSTRIES. Natural resource industries may be subject to
greater political, environmental and other governmental regulation than many
other industries. The nature of such regulation continues to evolve in both the
United States and foreign countries, and changes in governmental policies and
the need for regulatory approvals may have a material effect on the products and
services offered by companies in the natural resource industries. For example,
the exploration, development and distribution of coal, oil and gas in the United
States are subject to significant federal and state regulation, which may affect
rates of return on such investments and the kinds of services that may be
offered. Governmental regulation may also hamper the development of new
technologies.
 
  In addition, many natural resource companies historically have been subject to
significant costs associated with compliance with environmental and other safety
regulations. Further, competition is intense for many natural resource
companies. As a result, many
 
                                       10
<PAGE>   396
 
of these companies may be adversely affected in the future and the value of the
securities issued by such companies may be subject to increased share price
volatility. Such companies may also be subject to irregular fluctuations in
earnings due to changes in the availability of money, the level of interest
rates, and other factors.
 
  The value of securities of natural resource companies will fluctuate in
response to market conditions for the particular natural resources with which
the issuers are involved. The price of natural resources will fluctuate due to
changes in worldwide levels of inventory, and changes, perceived or actual, in
production and consumption. With respect to precious metals, such price
fluctuations may be substantial over short periods of time. In addition, the
value of natural resources may fluctuate directly with respect to various stages
of the inflationary cycle and perceived inflationary trends and are subject to
numerous factors, including national and international politics.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to, the reporting requirements of the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. In addition, certain costs attributable to
foreign investing, such as custody charges, are higher than those attributable
to domestic investing. Securities of some foreign companies are less liquid and
their prices may be more volatile than securities of comparable domestic
companies. The Portfolio's interest and dividends from foreign issuers may be
subject to non-U.S. withholding taxes, thereby reducing the Portfolio's net
investment income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Portfolio, political or social instability, or diplomatic
developments which could affect the Portfolio's investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
 
  The Portfolio may invest in issuers domiciled in "emerging markets." Investing
in emerging market countries involves risks in addition to those risks involved
in foreign investing. Many emerging market countries have experienced high rates
of inflation for many years. In addition, emerging markets generally are
dependent heavily upon international trade and, accordingly, have been and
continue to be affected adversely by trade barriers, exchange controls, managed
adjustments in relative currency values and other protectionist measures imposed
or negotiated by the countries with which they trade. The securities markets of
emerging market countries are substantially smaller, less developed, less liquid
and more volatile than the securities markets of the developed countries. In
addition, issuers in emerging markets typically are subject to a greater degree
of change in earnings and business prospects than issuers in developed
countries.
 
  The Portfolio will also be affected favorably or unfavorably by exchange
control regulations or changes in the exchange rates between foreign currencies
and the U.S. dollar. Changes in currency exchange rates will influence the value
of the Fund's shares, and also may affect the value of dividends and interest
earned by the Portfolio and gains and losses realized by the Portfolio.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Portfolio.
    
 
   
  LOWER QUALITY DEBT SECURITIES. The Portfolio may invest up to 20% of its total
assets in below investment grade debt securities, that is, rated below BBB by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or Baa
by Moody's Investors Service, Inc. ("Moody's") or, if unrated, deemed to be of
equivalent quality in the judgment of the Sub-advisor. Such investments involve
a high degree of risk. However, the Portfolio will not invest in debt securities
that are in default as to payment of principal and interest.
    
 
  Debt rated Baa by Moody's is considered by Moody's to have speculative
characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B,
Caa, Ca or C by Moody's is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such lower quality debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Debt rated C
by Moody's or S&P is the lowest rated debt that is not in default as to
principal or interest, and such issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Lower
quality debt securities are also generally considered to be subject to greater
risk than securities with higher ratings with regard to a deterioration of
general eco-
 
                                       11
<PAGE>   397
 
nomic conditions. These lower quality debt securities are the equivalent of high
yield, high risk bonds, commonly known as "junk bonds."
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates. See "Description of Debt Ratings" in the Statement of Additional
Information for a full discussion of Moody's and S&P's ratings.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities of corporate issuers frequently have call or
buy-back features which would permit an issuer to call or repurchase the
security from the Portfolio. If an issuer exercises these provisions in a
declining interest rate market, the Portfolio may have to replace the security
with a lower yielding security, resulting in a decreased return for investors.
In addition, the Portfolio may have difficulty disposing of lower quality
securities because they may have a thin trading market. There may be no
established retail secondary market for many of these securities, and the
Portfolio anticipates that such securities could be sold only to a limited
number of dealers or institutional investors. The lack of a liquid secondary
market also may have an adverse impact on market prices of such instruments and
may make it more difficult for the Portfolio to obtain accurate market
quotations for purposes of valuing its investments. The Portfolio may also
acquire lower quality debt securities during an initial underwriting or which
are sold without registration under applicable securities laws. Such securities
involve special considerations and risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Portfolio may invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic recession. The Portfolio may also incur additional expenses to the
extent it is required to seek recovery upon a default in the payment of
principal or interest on portfolio holdings, and the Portfolio may have limited
legal recourse in the event of a default.
 
   
  ILLIQUID SECURITIES. The Portfolio may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." The Sub-advisor believes that carefully selected investments in
joint ventures, cooperatives, partnerships and state enterprises which are
illiquid (collectively, "Special Situations") could enable the Portfolio to
achieve capital appreciation substantially exceeding the appreciation the
Portfolio would realize if they did not make such investments. However, in order
to attempt to limit investment risk, the Portfolio will invest no more than 5%
of its total assets in Special Situations.
    
 
  Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at a price
lower than similar securities that are liquid.
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Portfolio is
authorized to enter into options, futures and forward currency transactions, the
Portfolio might not enter into any such transactions. Options, futures and
foreign currency transactions involve certain risks, which include: (1)
dependence on the Sub-advisor's ability to predict movements in the prices of
individual securities, fluctuations in the general securities markets or in the
appropriate market sector and movements in interest rates and currency markets;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, forward contracts, futures contracts or options thereon and
movements in the price of the currency or security hedged or used for cover; (3)
the fact that skills and techniques needed to trade options, futures contracts
and options thereon or to use forward currency contracts are different from
those needed to select the securities in which the Portfolio invests; (4) lack
of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time; (5) the
possible loss of principal under certain conditions; and (6) the possible
inability of the Portfolio to purchase or sell a portfolio security at a time
when it would otherwise be favorable for it to do so, or the possible need for
the Portfolio to sell a security at a disadvantageous time, due to the need for
the Portfolio to maintain "cover" or to set aside securities in connection with
hedging transactions.
    
 
  INVESTING IN SMALLER COMPANIES. While the Portfolio's holdings normally will
include securities of established suppliers of traditional products and
services, the Portfolio may invest in smaller companies which can benefit from
the development of new products and services. These smaller companies may
present greater opportunities for capital appreciation, but may also involve
greater risks than large, established issuers. Such smaller companies may have
limited product lines, markets or financial resources, and their securities may
trade less frequently and in more limited volume than the securities of larger,
more established companies. As a result,
 
                                       12
<PAGE>   398
 
the prices of the securities of such smaller companies may fluctuate to a
greater degree than the prices of the securities of other issuers.
 
- --------------------------------------------------------------------------------
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees and the Board of Trustees of the Portfolio have
overall responsibility for the operation of the Fund and the Portfolio,
respectively. The Boards have approved all significant agreements between the
Trust and the Portfolio on the one side and persons or companies furnishing
services to the Fund and the Portfolio on the other, including the investment
management and administrative services agreement with AIM, the investment
sub-advisory and sub-administration agreement between AIM and the Sub-advisor,
the agreements with AIM Distributors regarding distribution of the Fund's
shares, the custody agreement and the transfer agency agreement. The day-to-day
operations of the Fund and the Portfolio are delegated to the officers of the
Trust and the Portfolio, subject always to the investment objective and policies
of the Fund and the Portfolio and to the general supervision of the Boards. See
"Trustees and Executive Officers" in the Statement of Additional Information for
information on the Trust's and the Portfolio's Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the investment managers to the Fund and the Portfolio include,
but are not limited to, determining the composition of the investment holdings
of the Portfolio and placing orders to buy, sell or hold particular securities.
In addition, AIM and the Sub-advisor provide the following administration
services to the Portfolio and the Fund: furnishing corporate officers and
clerical staff; providing office space, services and equipment; and supervising
all matters relating to the Portfolio's and the Fund's operation.
    
 
   
  For administration services, the Fund pays AIM administration fees computed
daily and payable monthly at the annualized rate of 0.25% of the Fund's average
daily net assets. AIM has appointed the Sub-advisor as the Fund's
sub-administrator. In addition, the Fund bears its pro rata portion of the
investment management and administration fees paid by its corresponding
Portfolio to AIM and the Sub-advisor. The Portfolio pays AIM a fee, based on the
Portfolio's average daily net assets at the annualized rate of .725% on the
first $500 million, .70% on the next $500 million, .675% on the next $500
million and .65% on all amounts thereafter. Out of its aggregate fees payable by
the Fund and the Portfolio, AIM pays the Sub-advisor sub-advisory and
sub-administration fees equal to 40% of the aggregate fees AIM receives from the
Fund and the Portfolio. The investment management and administration fees paid
by the Fund and the Portfolio are higher than those paid by most mutual funds.
The Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM Distributors
or other agents. AIM has undertaken to limit the Fund's expenses (exclusive of
brokerage commissions, taxes, interest and extraordinary expenses) to the annual
rate of 2.00% and 2.50% of the average daily net assets of the Fund's Class A
and Class B shares, respectively.
    
 
   
  The Sub-advisor also serves as the Fund's and the Portfolio's pricing and
accounting agent. For these services the Sub-advisor receives a fee consisting
of 0.03% of the first $5 billion of assets, and 0.02% of the assets in excess of
$5 billion, of the AIM Funds that are sub-advised by the Sub-advisor (other than
AIM Eastern Europe Fund). Each of these funds, including the Fund and the
Portfolio, pays an amount based upon its relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Portfolio pursuant to a master investment management
and administrative services agreement (the "Advisory Agreement"). AIM was
organized in 1976 and, together with its subsidiaries, manages or advises
approximately 90 investment company portfolios encompassing a broad range of
investment objectives. The Sub-advisor, 50 California Street, 27th Floor, San
Francisco, California 94111, and 1166 Avenue of the Americas, New York, New York
10036, serves as the sub-advisor to the Portfolio pursuant to an investment
sub-advisory and sub-administrative agreement. Prior to May 29, 1998, the
Sub-advisor was known as Chancellor LGT Asset Management, Inc. On May 29, 1998,
Liechtenstein Global Trust AG ("LGT"), the former indirect parent organization
of the Sub-advisor, consummated a purchase agreement with AMVESCAP PLC pursuant
to which AMVESCAP PLC acquired LGT's Asset Management Division, which included
the Sub-advisor and certain other affiliates. As a result of this transaction,
the Sub-advisor is now an indirect wholly owned subsidiary of AMVESCAP PLC.
Prior to the sale, the Sub-advisor and its worldwide asset management affiliates
provided investment management and/or administrative services to institutional,
corporate and individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices, including investment offices in Atlanta,
Boston, Dallas, Denver, Louisville, Miami, Portland (Oregon), Frankfurt, Hong
Kong, London, Singapore, Sydney, Tokyo and Toronto. In managing the Portfolio,
the Sub-advisor employs a team approach, taking advantage of its investment
resources around the world.
    
 
                                       13
<PAGE>   399
 
  The investment professional primarily responsible for the portfolio management
of the Portfolio is as follows:
 
   
<TABLE>
<CAPTION>
                            RESPONSIBILITIES FOR                  BUSINESS EXPERIENCE
      NAME/OFFICE              THE PORTFOLIO                        PAST FIVE YEARS
      -----------           --------------------                  -------------------
<S>                       <C>                        <C>
Derek H. Webb             Portfolio Manager since    Head of the Theme Funds for the Sub-advisor
  San Francisco           Portfolio inception in     since 1997. Portfolio Manager for the
                          1994                       Sub-advisor since 1994. Analyst for the
                                                     Sub-advisor from 1992 to 1994.
</TABLE>
    
 
   
  In placing orders for the Portfolio's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions may be executed through
affiliates of AIM or the Sub-advisor. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Funds will bear directly and could result in the realization of
net capital gains which would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement on
behalf of Class A shares of the Fund, and has entered into a Master Distribution
Agreement on behalf of Class B shares of the Fund (individually referred to as a
"Distribution Agreement" or collectively as the "Distribution Agreements.") with
AIM Distributors, a registered broker-dealer and a wholly owned subsidiary of
AIM, to act as the distributor of Class A and Class B shares of the Fund.
Certain Trustees and officers of the Trust are affiliated with AIM Distributors.
    
 
   
  The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors and its predecessor. In the event the Class B shares Distribution
Agreement is terminated, AIM Distributors would continue to receive payments of
asset based sales charges in respect of the outstanding Class B shares
attributable to the distribution efforts of AIM Distributors and its
predecessor; provided, however, that a complete termination of the Class B
shares master distribution plan (as defined in the plan) would terminate all
payments by the Fund of asset based sales charges and service fees to AIM
Distributors. Termination of the Class B shares distribution plan or
Distribution Agreement does not affect the obligation of Class B shareholders to
pay contingent deferred sales charges.
    
 
  DISTRIBUTION PLANS. Class A Plan. The Company has adopted a Master
Distribution Plan applicable to Class A shares of the Fund (the "Class A Plan")
pursuant to Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for
the purpose of financing any activity that is intended to result in the sale of
Class A shares of the Fund.
 
  Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.50% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
 
  The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
 
   
  Of the aggregate amount payable under the Class A Plan, payments to dealers
and other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee.
    
 
  Class B Plan. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's
 
                                       14
<PAGE>   400
 
Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
 
  Both Plans. Activities that may be financed under the Class A Plan and the
Class B Plan (collectively, the "Plans") include, but are not limited to:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders, overhead, preparation and distribution of
advertising material and sales literature, expense of organizing and conducting
sales seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
 
  Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
 
   
  Under the Plans, certain financial institutions which have entered into
service agreements and which sell shares of the Fund on an agency basis, may
receive payments from the Fund pursuant to the respective Plans. AIM
Distributors does not act as principal, but rather as agent for the Fund in
making such payments. The Fund will obtain a representation from such financial
institutions that they will either be licensed as dealers as required under
applicable state law, or that they will not engage in activities which would
constitute acting as a "dealer" as defined under applicable state law. Financial
intermediaries and any other person entitled to receive compensation for selling
Fund shares may receive different compensation for selling shares of one class
over another.
    
 
  For additional information concerning the operation of the Plans see the
Statement of Additional Information.
 
   
- --------------------------------------------------------------------------------
    
 
   
ORGANIZATION OF THE TRUST AND THE PORTFOLIO
    
 
   
  ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business
trust on May 7, 1998. On September 8, 1998, the Trust acquired the assets of and
liabilities of AIM Investment Funds, Inc., a Maryland corporation. The Fund
constitutes one of the thirteen separate and distinct series or portfolios of
the Trust. From time to time, the Trust may establish other funds, each
corresponding to a distinct investment portfolio and a distinct series of the
Trust's shares of beneficial interest. Shares of each fund are entitled to one
vote per share (with proportional voting for fractional shares) and are freely
transferable. Shareholders have no preemptive rights. Other than the automatic
conversion of Class B shares to Class A shares, there are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other shares
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund when issued are
fully paid and nonassessable.
 
  ORGANIZATION OF THE PORTFOLIO. The Portfolio is organized as a subtrust of
Global Investment Portfolio, a Delaware business trust. Under Delaware law, the
Fund and other entities investing in the Portfolio enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances an investor in
the Portfolio may be held liable for the Portfolio's obligations. However, the
Agreement and Declaration of Trust of Global Investment Portfolio disclaims
shareholder liability for acts or obligations of the Portfolio and requires that
notice of such disclaimer be given in each agreement, obligation or instrument
entered into or executed by the Portfolio or a trustee. The Agreement and
Declaration of Trust also provides for indemnification from the Portfolio
property for all losses and expenses of any shareholder held person-
 
                                       15
<PAGE>   401
 
ally liable for the Portfolio's obligations. Thus the risk of an investor
incurring financial loss on account of such liability is limited to
circumstances in which the Portfolio itself would be unable to meet its
obligations and where the other party was held not to be bound by the
disclaimer.
 
  Whenever the Fund is requested to vote on any proposal of the Portfolio, the
Fund will hold a meeting of the Fund's shareholders and will cast its vote as
instructed by its shareholders. Shares for which no voting instructions are
received will be voted in the same proportion as the shares for which voting
instructions are received.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each Advisor Class Fund's transfer agent and
dividend payment agent.
    
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust, to the
Fund and to the Portfolio.
    
 
                                       16
<PAGE>   402
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
               TO THE AIM FAMILY OF FUNDS--Registered Trademark--
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of the following mutual funds:
   
<TABLE>
            <S>                                           <C>
            AIM ADVISOR FLEX FUND                         AIM GLOBAL INFRASTRUCTURE FUND
            AIM ADVISOR INTERNATIONAL VALUE FUND          AIM GLOBAL RESOURCES FUND
            AIM ADVISOR LARGE CAP VALUE FUND              AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM ADVISOR MULTIFLEX FUND                    AIM GLOBAL TRENDS FUND
            AIM ADVISOR REAL ESTATE FUND                  AIM GLOBAL UTILITIES FUND
            AIM AGGRESSIVE GROWTH FUND                    AIM HIGH INCOME MUNICIPAL FUND
            AIM ASIAN GROWTH FUND                         AIM HIGH YIELD FUND
            AIM BALANCED FUND                             AIM INCOME FUND
            AIM BASIC VALUE FUND                          AIM INTERMEDIATE GOVERNMENT FUND
            AIM BLUE CHIP FUND                            AIM INTERNATIONAL EQUITY FUND
            AIM CAPITAL DEVELOPMENT FUND                  AIM INTERNATIONAL GROWTH FUND
            AIM CHARTER FUND                              AIM JAPAN GROWTH FUND
            AIM CONSTELLATION FUND                        AIM LATIN AMERICAN GROWTH FUND
            AIM DEVELOPING MARKETS FUND                   AIM LIMITED MATURITY TREASURY FUND
            AIM DOLLAR FUND(*)                            AIM MID CAP GROWTH FUND
            AIM EMERGING MARKETS FUND                     AIM MONEY MARKET FUND(*)
            AIM EMERGING MARKET DEBT FUND                 AIM MUNICIPAL BOND FUND
            AIM EUROPEAN DEVELOPMENT FUND                 AIM NEW PACIFIC GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM SELECT GROWTH FUND
            AIM GLOBAL AGGRESSIVE GROWTH FUND             AIM SMALL CAP EQUITY FUND
            AIM GLOBAL CONSUMER PRODUCTS AND              AIM SMALL CAP OPPORTUNITIES FUND
              SERVICES FUND                               AIM STRATEGIC INCOME FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM TAX-EXEMPT CASH FUND(*)
            AIM GLOBAL GROWTH FUND                        AIM TAX-FREE INTERMEDIATE FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM VALUE FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WEINGARTEN FUND
            AIM GLOBAL INCOME FUND                        AIM WORLDWIDE GROWTH FUND
                                                                                                 
</TABLE>
    
 
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
    Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
    asset value, without payment of a sales charge, as described below. Other
    funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
    FUND, are sold with an initial sales charge or subject to a contingent
    deferred sales charge upon redemption, as described below.
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed new Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.
 
   
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment is
$500, except for accounts initially established through an Automatic Investment
Plan, which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an Individual Retirement Arrangement ("IRA") or Roth IRA is $250.
There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such plans is $25 per
fund investment), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM 
    
 
                                       A-1
<PAGE>   403
 
   
Funds account. Notwithstanding the foregoing, the minimum initial investment
applicable to AIM Small Cap Opportunities Fund is $10,000.
    
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Shares of any AIM Funds not named on the cover of this Prospectus, as well as
Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                   OBI:                              Shareholder Name, Shareholder Account Number
                                                     (70 character limit)
</TABLE>
 
   
  HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased directly
through AIM Distributors or through any dealer who has entered into an agreement
with AIM Distributors. The minimum investment for subsequent purchases is $50.
The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. Notwithstanding the foregoing, the minimum subsequent purchases of shares
of AIM Small Cap Opportunities Fund is $1,000. There are no such minimum
investment requirements for investment of dividends and distributions of any of
the AIM Funds into any other existing AIM Funds account.
    
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional shares by electronic funds
transfer, please contact the Client Services Department of AFS for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
   
  Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BASIC
VALUE FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT
FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP EQUITY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND,AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without a
sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over
    
 
                                       A-2
<PAGE>   404
 
another class in the same Multiple Class Fund. Factors an investor should
consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
   
  The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPE
GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL
FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM
GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS
FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN
GROWTH FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
    
 
  The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
 
SALES CHARGES AND DEALER CONCESSIONS
 
   
  GROUP I. Certain AIM Funds are currently sold with a sales charge ranging from
5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM BASIC VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
EQUITY FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
    
 
   
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
      SINGLE TRANSACTION(1)                          PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   25,000                    5.50%          5.82%        4.75%
 $ 25,000 but less than $   50,000                   5.25           5.54         4.50
 $ 50,000 but less than $ 100,000                    4.75           4.99         4.00
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    3.00           3.09         2.50
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
    
 
- ---------------
 
   
(1) AIM Small Cap Opportunities Fund will not accept any single purchase in
    excess of $250,000.
    
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
                                       A-3
<PAGE>   405
   
 GROUP II. Certain AIM Funds are currently sold with a sales charge ranging from
4.75% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND, AIM
BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND
FUND, AIM STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
    
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   50,000                    4.75%          4.99%        4.00%
 $ 50,000 but less than $ 100,000                    4.00           4.17         3.25
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    2.50           2.56         2.00
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
  GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
Less than $ 100,000                                  1.00%          1.01%        0.75%
 $100,000 but less than $ 250,000                    0.75           0.76         0.50
 $250,000 but less than $1,000,000                   0.50           0.50         0.40
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
 
  ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
 
  In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
 
  AIM Distributors may make payments to dealers and institutions who are dealers
of record for purchases of $1 million of more of Class A shares (or shares which
normally involve payment of initial sales charges), which are sold at net asset
value and are subject to
 
                                       A-4
<PAGE>   406
 
a contingent deferred sales charge, for all AIM Funds other than Class A shares
of each of AIM LIMITED MATURITY TREASURY FUND and AIM TAX-FREE INTERMEDIATE FUND
as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next
$1 million of such purchases, plus 0.50% of the next $17 million of such
purchases, plus 0.25% of amounts in excess of $20 million of such purchases. See
"Contingent Deferred Sales Charge Program for Large Purchases." AIM Distributors
may make payments to dealers and institutions who are dealers of record for
purchases of $1 million or more of Class A shares (or shares which normally
involve payment of initial sales charges), and which are sold at net asset value
and are not subject to a contingent deferred sales charge, in an amount up to
0.10% of such purchases of Class A shares of AIM LIMITED MATURITY TREASURY FUND,
and in an amount up to 0.25% of such purchases of Class A shares of AIM TAX-FREE
INTERMEDIATE FUND.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed during the next twelve
months on Saturdays and Sundays and on the days on which New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class Funds
currently offer two or more classes of shares through separate distribution
systems (the "Multiple Distribution System"). Although each class of shares of a
particular Multiple Class Fund represents an interest in the same portfolio of
investments, each class is subject to a different distribution structure and, as
a result, differing expenses. This Multiple Distribution System allows investors
to select the class that is best suited to the investor's needs and objectives.
In considering the options afforded by the Multiple Distribution System,
investors should consider both the applicable initial sales charge or contingent
deferred sales charge, as well as the ongoing expenses borne by each class of
shares and other relevant factors, such as whether his or her investment goals
are long-term or short-term.
 
     CLASS A SHARES generally are sold subject to the initial sales charges
     described above and are subject to the other fees and expenses described
     herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
     needs of an investor who wishes to establish a dollar cost averaging
     program, pursuant to which Class A shares an investor owns may be exchanged
     at net asset value for Class A shares of another Multiple Class Fund or
     shares of another AIM Fund which is not a Multiple Class Fund, subject to
     the terms and conditions described under the caption "Exchange
     Privilege -- Terms and Conditions of Exchanges."
                                       A-5
<PAGE>   407
 
     CLASS B SHARES are sold without an initial sales charge. Thus, the entire
     purchase price of Class B shares is immediately invested in Class B shares.
     Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
     per annum on the average daily net assets of a Multiple Class Fund
     attributable to Class B shares. See the discussion under the caption
     "Management -- Distribution Plans." In addition, Class B shares redeemed
     within six years from the date such shares were purchased are subject to a
     contingent deferred sales charge ranging from 5% for redemptions made
     within the first year to 1% for redemptions made within the sixth year. No
     contingent deferred sales charge will be imposed if Class B shares are
     redeemed after six years from the date such shares were purchased.
     Redemptions of Class B shares and associated charges are further described
     under the caption "How to Redeem Shares -- Multiple Distribution System."
 
     Class B shares will automatically convert into Class A shares of the same
     Multiple Class Fund (together with a pro rata portion of all Class B shares
     acquired through the reinvestment of dividends and other distributions)
     eight years from the end of the calendar month in which the purchase of
     Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
     outstanding on May 29, 1998 and which are continuously held by the
     shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
     FUND seven years from the end of the calendar month in which the purchase
     of such Class B shares was made. If a shareholder exchanges Class B shares
     of AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
     since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
     shares will be subject to the eight year conversion feature applicable to
     Class B shares of all other AIM Funds. Following such conversion of their
     Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
     payments associated with Class B shares. See "Management -- Distribution
     Plans."
 
     AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an
     initial sales charge and are not subject to a contingent deferred sales
     charge; however, they are subject to the other fees and expenses described
     in the prospectus for AIM MONEY MARKET FUND.
 
  TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon Eastern Time or NYSE Close on any
business day of the Fund will be confirmed at the price next determined. Net
asset value is normally determined at 12:00 noon Eastern Time and NYSE Close on
each business day of AIM MONEY MARKET FUND.
 
  SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
REDUCTIONS IN INITIAL SALES CHARGES
 
  Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
 
                                       A-6
<PAGE>   408
 
  The term "purchaser" means:
 
  - an individual and his or her spouse and children, including any trust
    established exclusively for the benefit of any such person; or a pension,
    profit-sharing, or other benefit plan established exclusively for the
    benefit of any such person, such as an IRA, Roth IRA, a single-participant
    money-purchase/profit-sharing plan or an individual participant in a 403(b)
    plan (unless such 403(b) plan qualifies as the purchaser as defined below);
 
  - a 403(b) plan, the employer/sponsor of which is an organization described
    under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
    (the "Code"), provided that:
 
        a. the employer/sponsor must submit contributions for all participating
           employees in a single contribution transmittal (i.e., the funds will
           not accept contributions submitted with respect to individual
           participants);
 
        b. each transmittal must be accompanied by a single check or wire
           transfer; and
 
        c. all new participants must be added to the 403(b) plan by submitting
           an application on behalf of each new participant with the
           contribution transmittal;
 
  - a trustee or fiduciary purchasing for a single trust, estate or single
    fiduciary account (including a pension, profit-sharing or other employee
    benefit trust created pursuant to a plan qualified under Section 401 of the
    Code) and 457 plans, although more than one beneficiary or participant is
    involved;
 
  - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
    Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
    Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
    Distributors in writing that all of its related employee SEP, SARSEP or
    SIMPLE IRA accounts should be linked;
 
  - any other organized group of persons, whether incorporated or not, provided
    the organization has been in existence for at least six months and has some
    purpose other than the purchase at a discount of redeemable securities of a
    registered investment company; or
 
  - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
    Capital Management, Inc. ("AIM Capital").
 
  Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
 
  (1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
 
  Each purchase of fund shares normally subject to an initial sales charge made
during the 13-month period will be made at the public offering price applicable
to a single transaction of the total dollar amount indicated by the LOI, as
described under "Sales Charges and Dealer Concessions." It is the purchaser's
responsibility at the time of purchase to specify the account numbers that
should be considered in determining the appropriate sales charge. The offering
price may be further reduced as described under "Rights of Accumulation" if the
Transfer Agent is advised of all other accounts at the time of the investment.
Shares acquired through reinvestment of dividends and capital gain distributions
will not be applied to the LOI. At any time during the 13-month period after
meeting the original obligation, a purchaser may revise his intended investment
amount upward by submitting a written and signed request. Such a revision will
not change the original expiration date. By signing an LOI, a purchaser is not
making a binding commitment to purchase additional shares, but if purchases made
within the 13-month period do not total the amount specified, the investor will
pay the increased amount of sales charge as described below. Purchases made
within 90 days before signing an LOI will be applied toward completion of the
LOI. The LOI effective date will be the date of the first purchase with the
90-day period. The Transfer Agent will process necessary adjustments upon the
expiration or completion date of the LOI. Purchases made more than 90 days
before signing an LOI will be applied toward completion of the LOI based on the
value of the shares purchased calculated at the public offering price on the
effective date of the LOI.
 
  To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
                                       A-7
<PAGE>   409
 
  If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
 
  Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
 
  (2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
 
  PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at
net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
 
  Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
 
  The following persons may purchase Class A shares of the AIM Funds through AIM
Distributors without payment of an initial sales charge: (a) A I M Management
Group Inc. ("AIM Management") and its affiliated companies; (b) any current or
retired officer, director, trustee or employee, or any member of the immediate
family (including spouse, children, parents and parents of spouse) of any such
person, of AIM Management or its affiliates or of certain mutual funds which are
advised or managed by AIM; or any trust established exclusively for the benefit
of such persons; (c) any employee benefit plan established for employees of AIM
Management or its affiliates; (d) any current or retired officer, director,
trustee or employee, or any member of the immediate family (including spouse,
children, parents and parents of spouse) of any such person, or of CIGNA
Corporation or of any of its affiliated companies, or of First Data Investor
Services Group (formerly The Shareholder Services Group, Inc.); (e) any
investment company sponsored by CIGNA Investments, Inc. or any of its affiliated
companies for the benefit of its directors' deferred compensation plans; (f)
discretionary advised clients of AIM or AIM Capital; (g) registered
representatives and employees of dealers who have entered into agreements with
AIM Distributors (or financial institutions that have arrangements with such
dealers with respect to the sale of shares of the AIM Funds) and any member of
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, provided that purchases at net asset value are permitted by
the policies of such person's employer; (h) certain broker-dealers, investment
advisers or bank trust departments that provide asset allocation, similar
specialized investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services, and that
have entered into an agreement with AIM Distributors with respect to their use
of the AIM Funds in connection with such services; (i) any employee or any
member of the immediate family (including spouse, children, parents and parents
of spouse) of any employee, of Triformis Inc.; (j) shareholders of the AIM/GT
Funds as of April 30, 1987 who since that date continually have owned shares of
one or more of the AIM/GT Funds; and (k) certain former AMA Investment Advisers'
shareholders who became shareholders of the AIM Global Health Care Fund in
October 1989, and who have continuously held shares in the AIM/GT Funds since
that time.
 
   
  In addition, shares of any AIM Fund (except AIM Small Cap Opportunities Fund)
may be purchased at net asset value, without payment of a sales charge, by
pension, profit-sharing or other employee benefit plans created pursuant to a
plan qualified under Section 401 of the Code or plans under Section 457 of the
Code, or employee benefit plans created pursuant to Section 403(b) of the
    
                                       A-8
<PAGE>   410
 
Code and sponsored by nonprofit organizations defined under Section 501(c)(3) of
the Code. Such plans will qualify for purchases at net asset value provided that
(1) the total amount invested in the plan is at least $1,000,000, (2) the
sponsor signs a $1,000,000 LOI, (3) such shares are purchased by an
employer-sponsored plan with at least 100 eligible employees, or (4) all of the
plan's transactions are executed through a single financial institution or
service organization who has entered into an agreement with AIM Distributors
with respect to their use of the AIM Funds in connection with such accounts.
Section 403(b) plans sponsored by public educational institutions will not be
eligible for net asset value purchases based on the aggregate investment made by
the plan or the number of eligible employees. Participants in such plans will be
eligible for reduced sales charges based solely on the aggregate value of their
individual investments in the applicable AIM Fund. PLEASE NOTE THAT TAX-EXEMPT
FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR SUCH PLANS. AIM Distributors may pay
investment dealers or other financial service firms for share purchases of the
Load Funds (as defined under the caption "Exchange Privilege") sold at net asset
value to an employee benefit plan in accordance with this paragraph as follows:
1% of the first $2 million of such purchases, plus 0.80% of the next $1 million
of such purchases, plus 0.50% of the next $17 million of such purchases, plus
0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of
the net asset value of any Class A shares of AIM LIMITED MATURITY TREASURY FUND
sold at net asset value to an employee benefit plan in accordance with this
paragraph.
 
  Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
- --------------------------------------------------------------------------------
 
SPECIAL PLANS
 
  Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
who owns shares which are not subject to a contingent deferred sales charge, can
arrange for monthly, quarterly or annual amounts (but not less than $50) to be
drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that
 
                                       A-9
<PAGE>   411
 
exceed on an annual basis 12% of such account will be subject to a contingent
deferred sales charge on the amounts exceeding 12% of the account value at the
time the shareholder elects to participate in the Systematic Withdrawal Plan.
 
  Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested to shares of the
applicable AIM Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full
and fractional shares at their net asset value in effect at the time of each
such redemption.
 
  Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
 
  The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
 
  AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in the amount specified by
the shareholder (minimum $50 per investment, per account) and on a day or
date(s) specified by the shareholder. The proceeds are invested in shares of the
designated AIM Fund at the applicable offering price determined on the date of
the withdrawal. An Automatic Investment Plan may be discontinued upon 10 days'
prior notice to the Transfer Agent or AIM Distributors.
 
   
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
    
 
  DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
 
  PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination
money-purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans;
SARSEP plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement
accounts"). Information concerning these plans, including the custodian's fees
and the forms necessary to adopt such plans, can be obtained by calling or
writing the AIM Funds or AIM Distributors. Shares of the AIM Funds are also
available for investment through existing 401(k) plans (for both individuals and
employers) adopted under the Code. The plan custodian currently imposes an
annual $10 maintenance fee with respect to each retirement account for which it
serves as the custodian. This fee is generally charged in December. Each AIM
Fund and/or the custodian reserve the right to change this maintenance fee and
to initiate an establishment fee (not to exceed its cost).
 

   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance of $5,000 to
establish and maintain an allocation across a range of AIM Funds. The Program
automatically rebalances holdings of AIM Funds to the established allocation on
a periodic basis. Under the Program, a shareholder may predesig-
    
 
                                      A-10
<PAGE>   412
   
nate, on a percentage basis, how the total value of his or her holdings in a
minimum of two, and a maximum of ten, AIM Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more AIM Funds in the shareholder's Personal Portfolio for shares of
the same class(es) of one or more other AIM Funds in the shareholder's Personal
Portfolio. See "Exchange Privilege." If shares of the AIM Fund(s) in a
shareholder's Personal Portfolio have appreciated during a rebalancing period,
the Program will result in shares of AIM Fund(s) that have appreciated most
during the period being exchanged for shares of AIM Fund(s) that have
appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular AIM Fund would be 2% or less.
In predesignating percentages, shareholders must use whole percentages and
totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an AIM Fund's shares. The
AIM Funds and AIM Distributors reserve the right to modify, suspend, or
terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
    
 
                                      A-11
<PAGE>   413
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, including the Class A shares of the Multiple Class Funds, listed below
and referred to herein as the "Load Funds," are sold at a public offering price
that includes a maximum sales charge of 5.50% or 4.75% of the public offering
price of such shares; Class A shares (or shares which normally involve the
payment of initial sales charges) of certain of the AIM Funds, listed below and
referred to herein as the "Lower Load Funds," are sold at a public offering
price that includes a maximum sales charge of 1.00% of the public offering price
of such shares; and Class A shares or shares of certain other funds, listed
below and referred to herein as the "No Load Funds," are sold at net asset
value, without payment of a sales charge.
 
   
<TABLE>
<S>                                    <C>                                   <C>
                                LOAD FUNDS:                                  LOWER LOAD FUNDS:
   AIM ADVISOR FLEX FUND --            AIM GLOBAL INCOME                     AIM LIMITED MATURITY TREASURY FUND
     CLASS A                           FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR INTERNATIONAL           AIM GLOBAL INFRASTRUCTURE               AIM TAX-FREE INTERMEDIATE FUND
     VALUE FUND -- CLASS A             FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR LARGE CAP               AIM GLOBAL RESOURCES                  NO LOAD FUNDS:
     VALUE FUND -- CLASS A             FUND -- CLASS A
   AIM ADVISOR MULTIFLEX               AIM GLOBAL TELECOMMUNICATIONS         AIM MONEY MARKET FUND
     FUND -- CLASS A                   FUND -- CLASS A                           -- AIM CASH RESERVE SHARES
   AIM ADVISOR REAL ESTATE             AIM GLOBAL TRENDS                       AIM TAX-EXEMPT CASH FUND -- CLASS A
     FUND -- CLASS A                   FUND -- CLASS A                         AIM DOLLAR FUND -- CLASS A
   AIM AGGRESSIVE GROWTH               AIM GLOBAL UTILITIES
     FUND -- CLASS A                   FUND -- CLASS A
   AIM ASIAN GROWTH                    AIM HIGH INCOME MUNICIPAL
     FUND -- CLASS A                   FUND -- CLASS A
   AIM BALANCED FUND -- CLASS A        AIM HIGH YIELD FUND -- CLASS A
   AIM BASIC VALUE                     AIM INCOME FUND -- CLASS A
     FUND -- CLASS A                   AIM INTERMEDIATE GOVERNMENT
   AIM BLUE CHIP FUND -- CLASS A       FUND -- CLASS A
   AIM CAPITAL DEVELOPMENT             AIM INTERNATIONAL EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM CHARTER FUND -- CLASS A         AIM INTERNATIONAL GROWTH
   AIM CONSTELLATION                   FUND -- CLASS A
     FUND -- CLASS A                   AIM JAPAN GROWTH FUND -- CLASS A
   AIM DEVELOPING MARKETS              AIM LATIN AMERICAN GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS                AIM MID CAP EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS DEBT           AIM MONEY MARKET
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPE GROWTH                   AIM MUNICIPAL BOND
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPEAN DEVELOPMENT            AIM NEW PACIFIC GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM GLOBAL AGGRESSIVE GROWTH        AIM SELECT GROWTH FUND -- CLASS A
     FUND -- CLASS A                   AIM SMALL CAP GROWTH
   AIM GLOBAL CONSUMER PRODUCTS        FUND -- CLASS A
     AND SERVICES FUND -- CLASS A      AIM SMALL CAP OPPORTUNITIES
   AIM GLOBAL FINANCIAL SERVICES       FUND -- CLASS A
     FUND -- CLASS A                   AIM STRATEGIC INCOME
   AIM GLOBAL GOVERNMENT INCOME        FUND -- CLASS A
     FUND -- CLASS A                   AIM TAX-EXEMPT BOND FUND
   AIM GLOBAL GROWTH                   OF CONNECTICUT -- CLASS A
     FUND -- CLASS A                   AIM VALUE FUND -- CLASS A
   AIM GLOBAL GROWTH &                 AIM WEINGARTEN FUND -- CLASS A
     INCOME FUND -- CLASS A            AIM WORLDWIDE GROWTH
   AIM GLOBAL HEALTH CARE              FUND -- CLASS A
     FUND -- CLASS A
</TABLE>
    
 
                                      A-12
<PAGE>   414
 
   
  Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE; (iii) Class A shares
may be exchanged for Class A shares; (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A, Class B or Class C shares of AIM MONEY MARKET FUND. Class C shares
of AIM Small Cap Opportunities Fund are currently not available.
    
 
  DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
 
<TABLE>
<CAPTION>
                                                                                                      MULTIPLE CLASS FUNDS:
                                                            LOWER LOAD              NO LOAD       ------------------------------
      FROM:                 TO: LOAD FUNDS                     FUNDS                 FUNDS           CLASS B         CLASS C
      -----                 --------------                  ----------              -------          -------         -------
<S>                <C>                                <C>                      <C>                <C>             <C>
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
 
Lower Load Funds.. Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund or any     Fund or any Lower Load
                   Lower Load Fund.                   Fund; otherwise,
                                                      Offering Price.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
 
  FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS REVISED AS FOLLOWS:
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
Lower Load Funds.. Net Asset Value if shares were     Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
                   acquired upon exchange of any
                   Load Fund. Otherwise, difference
                   in sales charge will apply.
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund.           Fund or any Lower Load
                   Difference in sales charge will    Fund; otherwise,
                   apply if No Load shares were       Offering Price.
                   acquired upon exchange of Lower
                   Load Fund shares.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
  Class C........  Not Applicable                     Not Applicable           Not Applicable     Not Applicable  Net Asset Value
</TABLE>
 
   
  An exchange is permitted only in the following circumstances: (a) if the funds
offer more than one class of shares, the exchange must be between the same class
of shares (e.g., Class A, Class B and Class C shares of a Multiple Class Fund
cannot be exchanged for each other) except that AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may be exchanged for Class A shares of another Multiple Class
Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten busi-
    
 
                                      A-13
<PAGE>   415
 
ness days, and all other shares are held in an account for at least one day,
prior to the exchange; and (h) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the AIM
Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
   
  Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged are
redeemed at their net asset value as determined at NYSE Close on the day that an
exchange request in proper form (described below) is received. Exchange requests
received after NYSE Close will result in the redemption of shares at their net
asset value at NYSE Close on the next business day. See "Terms and Conditions of
Purchase of the AIM Funds -- Timing of Purchase, Exchange and Redemption Orders
(AIM MONEY MARKET FUND only)" for information regarding the timing of exchange
orders for AIM MONEY MARKET FUND. Normally, shares of an AIM Fund to be acquired
by exchange are purchased at their net asset value or applicable offering price,
as the case may be, determined on the date that such request is received, but
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that a fund would be materially disadvantaged
by an immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into a fund paying daily dividends (See "Dividends, Distributions and
Tax Matters -- Dividends and Distributions," below), and the release of the
exchange proceeds is delayed for the foregoing five-day period, such shareholder
will not begin to accrue dividends until the sixth business day after the
exchange. Shares purchased by check may not be exchanged until it is determined
that the check has cleared, which may take up to ten business days from the date
that the check is received. See "Terms and Conditions of Purchase of the AIM
Funds -- Timing of Purchase Orders."
    
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the AIM Funds. AIM Distributors reserves the right to impose conditions on
dealers or investment advisors who make telephone exchanges of shares of the
funds, including the condition that any such dealer or investment advisor enter
into an agreement (which contains additional conditions with respect to
exchanges of shares) with AIM Distributors. To exchange shares by telephone, a
shareholder, dealer or investment advisor who has satisfied the foregoing
conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach
AFS by telephone, he may also request exchanges by telegraph or use overnight
courier services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is received
prior to NYSE Close. The Transfer Agent and AIM Distributors will not be liable
for any loss, expense or cost arising out of any telephone exchange request that
they reasonably believe to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions if they do not follow
reasonable procedures for verification of telephone transactions. Such
reasonable procedures may include recordings of telephone transactions
(maintained for six months), requests for confirmation of the shareholder's
Social Security Number and current address, and mailings of confirmations
promptly after the transaction.
 
  EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
 
                                      A-14
<PAGE>   416
 
  MULTIPLE DISTRIBUTION SYSTEM. Class B Shares. Class B shares purchased under
the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
 
<TABLE>
<CAPTION>
  YEARS                                                     CONTINGENT DEFERRED
  SINCE                                                       SALES CHARGE AS
PURCHASE                                                    % OF DOLLAR AMOUNT
  MADE                                                       SUBJECT TO CHARGE
- --------                                                    -------------------
<S>                                                          <C>
First......................................................         5%
Second.....................................................         4%
Third......................................................         3%
Fourth.....................................................         3%
Fifth......................................................         2%
Sixth......................................................         1%
Seventh and Following......................................        None
</TABLE>
 
  In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
 
  Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
 
  Class C Shares. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
 
  Waivers. Contingent deferred sales charges on Class B and Class C shares will
be waived on redemptions (1) following the death or post-purchase disability, as
defined in Section 72(m)(7) of the Code, of a shareholder or a settlor of a
living trust (provided AIM Distributors is notified of such death or
post-purchase disability at the time of the redemption request and is provided
with satisfactory evidence of such death or post-purchase disability), (2) in
connection with certain distributions from IRAs, custodial accounts maintained
pursuant to Code Section 403(b), deferred compensation plans qualified under
Code Section 457 and plans qualified under Code Section 401 (collectively,
"Retirement Plans"), (3) pursuant to a Systematic Withdrawal Plan, provided that
amounts withdrawn under such plan do not exceed on an annual basis 12% of the
value of the shareholder's investment in Class B or Class C shares at the time
the shareholder elects to participate in the Systematic Withdrawal Plan, (4)
effected pursuant to the right of a Multiple Class Fund to liquidate a
shareholder's account if the aggregate net asset value of shares held in the
account is less than the designated minimum account size described in the
prospectus of such Multiple Class Fund, (5) effected by AIM of its investment in
Class B or Class C shares and (6) of Class C shares where such investor's dealer
of record, due to the nature of the investor's account, notifies AIM
Distributors prior to the time of investment that the dealer waives the payment
otherwise payable to the dealer described in the last paragraph under the
caption "Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM
Funds."
 
  Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
 
  Waiver category (2) above applies only to redemptions resulting from:
 
          (i) required minimum distributions to plan participants or
     beneficiaries who are age 70 1/2 or older, and only with respect to that
     portion of such distributions which does not exceed 12% annually of the
     participant's or beneficiary's account value in a particular AIM Fund;
 
                                      A-15
<PAGE>   417
 
          (ii) in-kind transfers of assets where the participant or beneficiary
     notifies AIM Distributors of such transfer no later than the time such
     transfer occurs;
 
          (iii) tax-free rollovers or transfers of assets to another Retirement
     Plan invested in Class B or Class C shares of one or more Multiple Class
     Funds;
 
          (iv) tax-free returns of excess contributions or returns of excess
     deferral amounts; and
 
          (v) distributions upon the death or disability (as defined in the
     Code) of the participant or beneficiary.
 
   
  CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND or Class A shares
of AIM DOLLAR FUND which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code, or Plans created under Section 403(b) of the
Code and sponsored by nonprofit organizations as defined under Section 501(c)(3)
of the Code, where shares are being redeemed in connection with employee
terminations or withdrawals, and (a) the total amount invested in a Plan is at
least $1,000,000, (b) the sponsor of a Plan signs a letter of intent to invest
at least $1,000,000 in one or more of the AIM Funds, or (c) the shares being
redeemed were purchased by an employer-sponsored Plan with at least 100 eligible
employees; provided, however, that Plans created under Section 403(b) of the
Code which are sponsored by public educational institutions shall qualify under
(a), (b) or (c) above on the basis of the value of each Plan participant's
aggregate investment in the AIM Funds, and not on the aggregate investment made
by the Plan or on the number of eligible employees; (2) redemptions of shares
following the death or post-purchase disability, as defined in Section 72(m)(7)
of the Code, of a shareholder or a settlor of a living trust; (3) redemptions of
shares purchased at net asset value by private foundations or endowment funds
where the initial amount invested was at least $1,000,000; (4) redemptions of
shares purchased by an investor in amounts of $1,000,000 or more where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payments otherwise payable to the dealer as described in the third paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds;" and (5) pursuant to a Systematic Withdrawal Plan, provided
that amounts withdrawn under such plan do not exceed on an annual basis 12% of
the value of the shareholder's investment in Class A shares at the time the
shareholder elects to participate in the Systematic Withdrawal Plan.
    
 
  Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  In addition to these requirements, shareholders who have invested in a fund to
establish as IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares; (a) a statement
as to whether or not the shareholder has attained age 59 1/2, and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.
 
                                      A-16
<PAGE>   418
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
this account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
   
  EXPEDITED REDEMPTIONS (AIM Cash Reserve shares of AIM MONEY MARKET FUND
ONLY). If a redemption order is received prior to 11:30 a.m. Eastern Time, the
redemption will be effective on that day and AIM MONEY MARKET FUND will endeavor
to transmit payment on that same business day. If the redemption order is
received after 11:30 a.m. and prior to NYSE Close, the redemption will be made
at the next determined net asset value and payment will generally be transmitted
on the next business day.
    
 
  REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing the
appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone
 
                                      A-17
<PAGE>   419
 
exchange and telephone redemption authorization forms; (7) changes in previously
designated wiring or electronic funds transfer instructions, and (8) written
redemptions or exchanges of shares previously reported as lost, whether or not
the redemption amount is under $50,000 or the proceeds are to be sent to the
address of record. These requirements may be waived or modified upon notice to
shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
    
 
   
  REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within ninety (90) days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment will not alter the taxes due on any
capital gains, except under the circumstances described below. If there has been
a loss on the redemption and shares of the same fund are repurchased, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in shares of the same fund, or exchanged for
shares of another AIM Fund, at a reduced sales charge within 90 days of the
payment of the sales charge, the shareholder's basis in the fund shares redeemed
may not include the amount of the sales charge paid, thereby reducing the loss
or increasing the gain recognized from the redemption; however, the
shareholder's basis in the fund shares purchased will include the sales charge.
Each AIM Fund may amend, suspend or cease offering the privilege at any time as
to shares redeemed after the date of such amendment, suspension or cessation.
This privilege may only be exercised once each year by a shareholder with
respect to each AIM Fund.
    
 
   
  Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of Class A shares and who subsequently reinvest a portion or
all of the value of the redeemed shares in Class A shares of any AIM Fund within
ninety (90) days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
    
 
                                      A-18

<PAGE>   420
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
   
  The net asset value per share (or share price) of each AIM Fund is determined
as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close with
respect to AIM MONEY MARKET FUND) on each "business day" of a fund as previously
defined. In the event the NYSE closes early (i.e. before 4:00 p.m. Eastern Time)
on a particular day, the net asset value of an AIM Fund's share will be
determined as of the close of the NYSE on such day. For purposes of defining net
asset value per share, futures and options contracts generally will be valued 15
minutes after the close of trading of the NYSE. The net asset value per share is
calculated by subtracting a class' liabilities from its assets and dividing the
result by the total number of class shares outstanding. The determination of net
asset value per share is made in accordance with generally accepted accounting
principles. Among other items, liabilities include accrued expenses and
dividends payable, and total assets include portfolio securities valued at their
market value, as well as income accrued but not yet received. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the fund's officers and
in accordance with methods which are specifically authorized by its governing
Board of Directors or Trustees. Short-term obligations with maturities of 60
days or less, and the securities held by the Money Market Funds, are valued at
amortized cost as reflecting fair value. AIM HIGH INCOME MUNICIPAL FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-FREE
INTERMEDIATE FUND value variable rate securities that have an unconditional
demand or put feature exercisable within seven days or less at par, which
reflects the market value of such securities.
    
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as
set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                DISTRIBUTIONS    DISTRIBUTIONS
                                                                                   OF NET           OF NET
                                                    DIVIDENDS FROM                REALIZED         REALIZED
                                                    NET INVESTMENT               SHORT-TERM        LONG-TERM
                   FUND                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
                   ----                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM ADVISOR FLEX FUND.....................  declared and paid quarterly       quarterly          annually
AIM ADVISOR INTERNATIONAL VALUE FUND......  declared and paid annually        annually           annually
AIM ADVISOR LARGE CAP VALUE FUND..........  declared and paid quarterly       quarterly          annually
AIM ADVISOR MULTIFLEX FUND................  declared and paid quarterly       quarterly          annually
AIM ADVISOR REAL ESTATE FUND..............  declared and paid quarterly       quarterly          annually
AIM AGGRESSIVE GROWTH FUND................  declared and paid annually        annually           annually
AIM ASIAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM BALANCED FUND.........................  declared and paid quarterly       annually           annually
AIM BASIC VALUE FUND......................  declared and paid annually        annually           annually
AIM BLUE CHIP FUND........................  declared and paid annually        annually           annually
AIM CAPITAL DEVELOPMENT FUND..............  declared and paid annually        annually           annually
AIM CHARTER FUND..........................  declared and paid quarterly       annually           annually
AIM CONSTELLATION FUND....................  declared and paid annually        annually           annually
AIM DEVELOPING MARKETS FUND...............  declared and paid annually        annually           annually
AIM DOLLAR FUND...........................  declared daily; paid monthly      annually           annually
AIM EMERGING MARKETS FUND.................  declared and paid annually        annually           annually
AIM EMERGING MARKETS DEBT FUND............  declared and paid monthsly        annually           annually
AIM EUROPE GROWTH FUND....................  declared and paid annually        annually           annually
AIM EUROPEAN DEVELOPMENT FUND.............  declared and paid annually        annually           annually
AIM GLOBAL AGGRESSIVE GROWTH FUND.........  declared and paid annually        annually           annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
  FUND....................................  declared and paid annually        annually           annually
AIM GLOBAL FINANCIAL SERVICES FUND........  declared and paid annually        annually           annually
</TABLE>
    
 
                                      A-19
<PAGE>   421
 
   
<TABLE>
<CAPTION>
                                                                             DISTRIBUTIONS    DISTRIBUTIONS
                                                                                OF NET           OF NET
                                                 DIVIDENDS FROM                REALIZED         REALIZED
                                                 NET INVESTMENT               SHORT-TERM        LONG-TERM
FUND                                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
- ----                                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM GLOBAL GOVERNMENT INCOME FUND.........  declared and paid monthly         annually           annually
AIM GLOBAL GROWTH FUND....................  declared and paid annually        annually           annually
AIM GLOBAL GROWTH & INCOME FUND...........  declared and paid quarterly       annually           annually
AIM GLOBAL HEALTH CARE FUND...............  declared and paid annually        annually           annually
AIM GLOBAL INCOME FUND....................  declared daily; paid monthly      annually           annually
AIM GLOBAL INFRASTRUCTURE FUND............  declared and paid annually        annually           annually
AIM GLOBAL RESOURCES FUND.................  declared and paid annually        annually           annually
AIM GLOBAL TELECOMMUNICATIONS FUND........  declared and paid annually        annually           annually
AIM GLOBAL TRENDS FUND....................  declared and paid annually        annually           annually
AIM GLOBAL UTILITIES FUND.................  declared daily; paid monthly      annually           annually
AIM HIGH INCOME MUNICIPAL FUND............  declared daily; paid monthly      annually           annually
AIM HIGH YIELD FUND.......................  declared daily; paid monthly      annually           annually
AIM INCOME FUND...........................  declared daily; paid monthly      annually           annually
AIM INTERMEDIATE GOVERNMENT FUND..........  declared daily; paid monthly      annually           annually
AIM INTERNATIONAL EQUITY FUND.............  declared and paid annually        annually           annually
AIM INTERNATIONAL GROWTH FUND.............  declared and paid annually        annually           annually
AIM JAPAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM LATIN AMERICAN GROWTH FUND............  declared and paid annually        annually           annually
AIM LIMITED MATURITY TREASURY FUND........  declared daily; paid monthly      annually           annually
AIM MID CAP EQUITY FUND...................  declared and paid annually        annually           annually
AIM MONEY MARKET FUND.....................  declared daily; paid monthly      at least annually  annually
AIM MUNICIPAL BOND FUND...................  declared daily; paid monthly      annually           annually
AIM NEW PACIFIC GROWTH FUND...............  declared and paid annually        annually           annually
AIM SELECT GROWTH FUND....................  declared and paid annually        annually           annually
AIM SMALL CAP GROWTH FUND.................  declared and paid annually        annually           annually
AIM SMALL CAP OPPORTUNITIES FUND..........  declared and paid annually        annually           annually
AIM STRATEGIC INCOME FUND.................  declared and paid monthly         annually           annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT...  declared daily; paid monthly      annually           annually
AIM TAX-EXEMPT CASH FUND..................  declared daily; paid monthly      at least annually  annually
AIM TAX-FREE INTERMEDIATE FUND............  declared daily; paid monthly      annually           annually
AIM VALUE FUND............................  declared and paid annually        annually           annually
AIM WEINGARTEN FUND.......................  declared and paid annually        annually           annually
AIM WORLDWIDE GROWTH FUND.................  declared and paid annually        annually           annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in like shares of another
Multiple Class Fund, to the extent permitted. For funds that do not declare a
dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. For funds that declare
a dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or the
dividend portion thereof, in cash, or to invest such dividends and distributions
in shares of another fund in the AIM Funds; provided that (i) dividends and
distributions attributable to Class B shares may only be reinvested in Class B
shares, (ii) dividends and distributions attributable to Class C shares may only
be reinvested in Class C shares, (iii) dividends and distributions attributable
to Class A shares may not be reinvested in Class B or Class C shares, and (iv)
dividends and distributions attributable to the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may not be reinvested in the Class A shares of that Fund or in
any Class B or Class C shares. Investors who have not previously selected such a
reinvestment option on the account application form may contact the Transfer
Agent at any time to obtain a form to authorize such reinvestments in another
AIM Fund. Such reinvestments into the AIM Funds are not subject to sales
charges, and shares so purchased are automatically credited to the account of
the shareholder.
 
  Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
 
                                      A-20
<PAGE>   422
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares, except for "exempt-interest dividends" paid by
AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND
FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND
(the "Tax-Exempt Funds"), which are exempt from federal income tax. With respect
to tax-exempt shareholders, dividends and distributions from the AIM Funds are
not subject to federal income taxation to the extent permitted under the
applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    
 
   
  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
    
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
                                      A-21
<PAGE>   423
   
 TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
  TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other taxable securities. For
additional information concerning the alternative minimum tax and certain
collateral tax consequences of the receipt of exempt-interest dividends, see the
Statements of Additional Information applicable to the Tax-Exempt Funds.
 
  The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
 
  To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
 
  From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP EQUITY FUND,
AIM SMALL CAP GROWTH FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX INFORMATION.
Certain states exempt from income taxes dividends paid by mutual funds
attributable to interest on U.S. Treasury and certain other U.S. government
obligations. Investors should consult with their own tax advisors concerning the
availability of such exemption.
    
 
  AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH
FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do
so, each of these funds may elect to pass through to its shareholders credits
for foreign taxes paid. If a fund makes such an election, a shareholder who
receives a distribution (1) will be required to include in gross income his
proportionate share of foreign taxes allocable to the distribution and (2) may
claim a credit or deduction for such share for his taxable year in which the
distribution is received, subject to the general limitations imposed on the
allowance of foreign tax credits and deductions. Shareholders should also note
that certain gains or losses attributable to fluctuations in exchange rates or
foreign currency forward contracts may increase or decrease the amount of income
of the fund available for distribution to shareholders and should note that if,
for any fund, such losses exceed other income during a taxable year, the fund
would not be able to pay ordinary income dividends for that year.
 
                                      A-22
<PAGE>   424
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each AIM Fund's transfer agent and dividend
payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-23
<PAGE>   425
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
 
 
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                              GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
      ACCOUNT TYPE            NUMBER OF:                       ACCOUNT TYPE                  NUMBER OF:
      ------------            --------------------             ------------                  ------------------
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary
      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application
      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors
      Legal Guardian          Ward, Minor or
                              Incompetent
      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
 
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   426
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   427
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
 
   
GRS-PRO-1
    
<PAGE>   428
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
CLASS A AND CLASS B SHARES OF
    
 
AIM GLOBAL TELECOMMUNICATIONS FUND
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
PROSPECTUS
SEPTEMBER 8, 1998
 
This Prospectus contains information about AIM GLOBAL TELECOMMUNICATIONS FUND
(the "Fund"), which is one of several series investment portfolios comprising
AIM Investment Funds (the "Trust"), an open-end series, management investment
company. The Fund is a diversified portfolio which seeks long-term growth of
capital by investing primarily in equity securities of companies throughout the
world engaged in the development, manufacture or sale of telecommunications
services or equipment. There can be no assurance that the Fund will achieve its
investment objective.
 
   
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling 1-
800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   429
- --------------------------------------------------------------------------------
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     7
  Investment Program...................     7
  Risk Factors.........................    10
  Management...........................    12
  Organization of the Trust............    14
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-9
  Exchange Privilege...................  A-12
  How to Redeem Shares.................  A-14
  Determination of Net Asset Value.....  A-19
  Dividends, Distributions and Tax
     Matters...........................  A-19
  General Information..................  A-23
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
   
  The Fund is a diversified series of the Trust.
    
 
  INVESTMENT OBJECTIVE. The Fund seeks long-term growth of capital.
 
  PRINCIPAL INVESTMENTS. The Fund invests primarily in equity securities of
companies throughout the world engaged in the development, manufacture or sale
of telecommunications services or equipment.
 
   
  INVESTMENT MANAGERS. The Fund is managed by A I M Advisors, Inc. ("AIM") and
is sub-advised and sub-administered by INVESCO (NY), Inc. (the "Sub-advisor").
AIM and the Sub-advisor and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-advisor are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
AIM was organized in 1976 and, together with its subsidiaries, currently advises
approximately 90 investment company portfolios.
    
 
  PURCHASING SHARES. Investors may select Class A or Class B shares of the Fund
which are offered by this Prospectus at an offering price that reflects
differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to
a separate prospectus, the Fund also offers Advisor Class shares, which
represent interests in the Fund. The Advisor Class has different distribution
arrangements.
 
  CLASS A SHARES -- Shares are offered at net asset value plus any applicable
initial sales charge.
 
   
  CLASS B SHARES -- Shares are offered at net asset value without an initial
sales charge, and are subject to a maximum contingent deferred sales charge of
5% on certain redemptions made within six years from the date such shares were
purchased. Class B shares automatically convert to Class A shares of the Fund
eight years following the end of the calendar month in which a purchase was
made. Class B shares are subject to higher expenses than Class A shares.
    
 
  Initial investments in any class of shares must be at least $500 and
additional investments must be at least $50. The minimum initial investment is
modified for investments through tax-qualified retirement plans and accounts
initially established with an Automatic Investment Plan. The distributor of the
Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
 
  SUITABILITY FOR INVESTORS. An investor in Class A or Class B shares of the
Fund should consider the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the shares are expected to
be held, and other circumstances. Investors should consider whether, during the
anticipated life of their investment in the Fund, the accumulated distribution
fees and any applicable contingent deferred sales charges on Class B shares
prior to conversion would be less than the initial sales charge and accumulated
distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares.
To assist investors in making this determination, the table under the caption
"Table of Fees and Expenses" sets forth examples of the charges applicable to
each class of shares. Class A shares will normally be more beneficial than Class
B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase
of more than $250,000 for Class B shares.
 
                                        2
<PAGE>   430
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds"). Class
A and Class B shares of the Fund may be exchanged for shares of other funds in
The AIM Family of Funds in the manner and subject to the policies and charges
set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Class A shareholders of the Fund may redeem all or a portion
of their shares at net asset value on any business day, generally without
charge. A contingent deferred sales charge of 1% may apply to certain
redemptions where a purchase of more than $1 million is made at net asset value.
See "How to Redeem Shares -- Contingent Deferred Sales Charge Program for Large
Purchases."
 
  Class B shareholders of the Fund may redeem all or a portion of their shares
at net asset value on any business day, less a contingent deferred sales charge
for redemptions made within six years from the date such shares were purchased.
Class B shares redeemed after six years from the date such shares were purchased
will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters" and "Special Plans."
    
 
  RISK FACTORS. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its portfolio holdings.
 
  The Fund's policy of concentrating its investments in companies in its
particular industries may cause the Fund's net asset value to fluctuate more
than if it invested in a greater number of industries. The Fund may invest in
foreign securities. Investments in foreign securities involve risks relating to
political and economic developments abroad and the differences between the
regulations to which U.S. and foreign issuers are subject. Individual foreign
economies also may differ favorably or unfavorably from the U.S. economy.
Changes in foreign currency exchange rates will affect the Fund's net asset
value, earnings and gains and losses realized on sales of securities. Securities
of foreign companies may be less liquid and their prices more volatile than
those of securities of comparable U.S. companies. The Fund may engage in certain
foreign currency, options and futures transactions to attempt to hedge against
the overall level of investment and currency risk associated with its present or
planned investments. Such transactions involve certain risks and transaction
costs. The Fund may invest up to 5% of its total assets in below investment
grade debt securities. Investments of this type are subject to a greater risk of
loss of principal and interest.
 
   
  See "Investment Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   431
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Class A and Class B shares of the Fund are reflected in the following table(1):
 
<TABLE>
<CAPTION>
                                                              CLASS A   CLASS B
                                                              -------   -------
<S>                                                           <C>       <C>
Shareholder Transaction Costs(2):
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................   4.75%     None
  Sales charges on reinvested distributions to
     shareholders...........................................   None      None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........   None      5.00%
  Redemption charges........................................   None      None
  Exchange fees.............................................   None      None
Annual Fund Operating Expenses(3): (as a % of average net
  assets)
  Investment management and administration fees.............   0.94%     0.94%
  12b-1 distribution and service fees.......................   0.50%     1.00%
  Other expenses (after reimbursements and waivers).........   0.40%     0.40%
                                                               ----      ----
          Total Fund Operating Expenses.....................   1.84%     2.34%
                                                               ====      ====
</TABLE>
 
   
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Funds. Long-term shareholders
   may pay more than the economic equivalent of the maximum front-end sales
   charge permitted by the National Association of Securities Dealers, Inc.
   rules regarding investment companies.
    
 
(2)Sales charge waivers are available for Class A and Class B shares, and
   reduced sales charge purchase plans are available for Class A shares. The
   maximum 5% contingent deferred sales charge on Class B shares applies to
   redemptions during the first year after purchase. The charge generally
   declines by 1% annually thereafter, reaching zero after six years. See "Terms
   and Conditions of Purchase of the AIM Funds -- Reductions in Initial Sales
   Charges."
 
   
(3)Expenses are based on the Funds' fiscal year ended October 31, 1997. "Other
   Expenses" include custody, transfer agency, legal, audit and other operating
   expenses. See "Management" herein and the Statement of Additional Information
   for more information. AIM has voluntarily agreed to limit the Fund's expenses
   (exclusive of brokerage commissions, taxes, interest and extraordinary
   expenses) to the annual rates of 2.00% and 2.50% of the average daily net
   assets of the Fund's Class A and Class B shares, respectively, through May
   31, 2000.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                     1 YEAR   3 YEARS   5 YEARS   10 YEARS(3)
                                                     ------   -------   -------   -----------
<S>                                                  <C>      <C>       <C>       <C>
Class A shares(1)..................................   $65      $103      $143        $ 255
Class B shares:
  Assuming a complete redemption at end of
     period(2).....................................   $75      $106      $149        $ 257
  Assuming no redemption...........................   $24      $ 74      $126        $ 257
</TABLE>
    
 
   
(1)Assumes payment of maximum sales charge by the investor.
    
 
   
(2)Assumes deduction of the applicable contingent deferred sales charge.
    
 
   
(3)For Class B shares, this number reflects the conversion to Class A shares
   eight years following the end of the calendar month in which a purchase was
   made.
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT EXPENSES, MAY
BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE ASSUMPTION IN THE
HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY REGULATION OF THE SEC
APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS NOT A PREDICTION OF AND
DOES NOT REPRESENT THE FUND'S PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   432
 
   
- --------------------------------------------------------------------------------
    
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The table below provides condensed financial information concerning income and
capital changes for one Class A and Class B share of the Fund. This information
is supplemented by the financial statements and accompanying notes appearing in
the Statement of Additional Information. The financial statements and notes, for
the fiscal year ended October 31, 1997, have been audited by
PricewaterhouseCoopers LLP, independent accountants whose report thereon also is
included in the Statement of Additional Information. The unaudited financial
statements and notes, for the semi-annual period ended April 30, 1998, are also
included in the Statement of Additional Information.
    
 
                       AIM GLOBAL TELECOMMUNICATIONS FUND
                  (FORMERLY GT GLOBAL TELECOMMUNICATIONS FUND)
 
   
<TABLE>
<CAPTION>
                                 SIX MONTHS                                                                     JANUARY 27, 1992
                                   ENDED                           YEAR ENDED OCTOBER 31,                        (COMMENCEMENT
                               APRIL 30, 1998   ------------------------------------------------------------   OF OPERATIONS) TO
                               (UNAUDITED)(C)   1997(C)     1996(C)        1995       1994(C)        1993       OCTOBER 31, 1992
                               --------------   --------   ----------   ----------   ----------   ----------   ------------------
<S>                            <C>              <C>        <C>          <C>          <C>          <C>          <C>
CLASS A+
Per Share Operating
  Performance:
  Net asset value, beginning
    of period.................    $  18.04      $  16.69   $    16.42   $    17.80   $    16.92   $    11.16        $  11.43
                                  --------      --------   ----------   ----------   ----------   ----------        --------
Income from investment
  operations:
  Net investment income
    (loss)....................       (0.09)        (0.17)       (0.13)       (0.09)       (0.01)        0.08            0.14*
  Net realized and unrealized
    gain (loss) on
    investments...............        3.30          2.93         1.22        (0.43)        1.17         5.83           (0.41)
                                  --------      --------   ----------   ----------   ----------   ----------        --------
  Net increase (decrease) from
    investment operations.....        3.21          2.76         1.09        (0.52)        1.16         5.91           (0.27)
                                  --------      --------   ----------   ----------   ----------   ----------        --------
Distributions:
  From net investment
    income....................          --            --           --           --        (0.01)       (0.15)             --
  From net realized gain on
    investments...............       (1.20)        (1.41)       (0.82)       (0.86)       (0.27)          --              --
                                  --------      --------   ----------   ----------   ----------   ----------        --------
        Total distributions...       (1.20)        (1.41)       (0.82)       (0.86)       (0.28)       (0.15)             --
                                  ========      ========   ==========   ==========   ==========   ==========        ========
Net asset value, end of
  period......................    $  20.05      $  18.04   $    16.69   $    16.42   $    17.80   $    16.92        $  11.16
                                  ========      ========   ==========   ==========   ==========   ==========        ========
        Total investment
          return(d)...........       19.19%(a)     17.70%        7.00%       (2.88)%       7.02%        53.6%           (2.4)%(a)
                                  ========      ========   ==========   ==========   ==========   ==========        ========
Ratios and supplemental data:
  Net assets, end of period
    (in 000's)................    $969,857      $910,801   $1,204,428   $1,353,722   $1,644,402   $1,223,340        $442,862
Ratio of net investment income
  (loss) to average net
  assets:
  With expense reductions.....       (1.08)%(b)    (1.01)%      (0.84)%      (0.49)%      (0.02)%        0.8%            2.1%*(b)
  Without expense
    reductions................       (1.09)%(b)    (1.06)%      (0.89)%      (0.55)%        N/A          N/A             N/A
Ratio of expenses to average
  net assets:
  With expense reductions.....        1.87%(b)      1.79%        1.74%        1.77%         1.8%         2.0%            2.3%*(b)
  Without expense
    reductions................        1.88%(b)      1.84%        1.79%        1.83%         N/A          N/A             N/A
Portfolio turnover rate++.....          56%(b)        35%          37%          62%          57%          41%              4%(b)
Average commission rate per
  share paid on portfolio
  transactions++..............    $ 0.0045      $ 0.0085       0.0165          N/A          N/A          N/A             N/A
</TABLE>
    
 
- ---------------
 
   
+     All capital shares issued and outstanding as of March 31, 1993, were
      reclassified as Class A shares.
    
   
++    Portfolio turnover and average commission rates are calculated on the
      basis of the Fund as a whole without distinguishing between the classes of
      shares issued.
    
   
*     Includes reimbursement by the Sub-Advisor of Fund operating expenses of
      less than $0.01. Without such reimbursement, the annualized expense ratio
      would have been 2.30% and the annualized ratio of net investment income to
      average net assets would have been 2.04%.
    
   
(a)   Not annualized.
    
   
(b)   Annualized.
    
   
(c)   These selected per share data were calculated based upon the average
      shares outstanding during the period.
    
   
(d)   Total investment return does not include sales charges.
    
   
N/A   Not Applicable.
    
   
    
 
                                        5
<PAGE>   433
 
   
<TABLE>
<CAPTION>
                                                 SIX MONTHS                                                        APRIL 1,
                                                   ENDED                    YEAR ENDED OCTOBER 31,                  1993 TO
                                               APRIL 30, 1998   -----------------------------------------------   OCTOBER 31,
                                               (UNAUDITED)(C)   1997(C)     1996(C)        1995       1994(C)        1993
                                               --------------   --------   ----------   ----------   ----------   -----------
<S>                                            <C>              <C>        <C>          <C>          <C>          <C>
CLASS B+
Per Share Operating Performance:
  Net asset value, beginning of period.......     $  17.58      $  16.37   $    16.20   $    17.66   $    16.87    $  12.68
                                                  --------      --------   ----------   ----------   ----------    --------
Income from investment operations:
  Net investment income (loss)...............        (0.13)        (0.25)       (0.23)       (0.17)       (0.10)       0.01
  Net realized and unrealized gain (loss) on
    investments..............................         3.20          2.87         1.22        (0.43)        1.17        4.18
                                                  --------      --------   ----------   ----------   ----------    --------
  Net increase (decrease) from investment
    operations...............................         3.07          2.62         0.99        (0.60)        1.07        4.19
                                                  --------      --------   ----------   ----------   ----------    --------
Distributions:
  From net investment income.................           --            --           --           --        (0.01)         --
  From net realized gain on investments......        (1.20)        (1.41)       (0.82)       (0.86)       (0.27)         --
                                                  --------      --------   ----------   ----------   ----------    --------
        Total distributions..................        (1.20)        (1.41)       (0.82)       (0.86)       (0.28)         --
                                                  --------      --------   ----------   ----------   ----------    --------
Net asset value, end of period...............     $  19.45      $  17.58   $    16.37   $    16.20   $    17.66    $  16.87
                                                  ========      ========   ==========   ==========   ==========    ========
        Total investment return(d)...........        18.88%(a)     17.15%        6.46%       (3.37)%       6.50%       33.0%(a)
                                                  ========      ========   ==========   ==========   ==========    ========
Ratios and supplemental data:
  Net assets, end of period (in 000's).......     $837,576      $805,535   $1,007,654   $1,111,520   $1,184,081    $455,335
Ratio of net investment income (loss) to
  average net assets:
  With expense reductions....................        (1.58)%(b)    (1.51)%      (1.34)%      (0.99)%      (0.52)%       0.3%(b)
  Without expense reductions.................        (1.59)%(b)    (1.56)%      (1.39)%      (1.05)%        N/A         N/A
Ratio of expenses to average net assets:
  With expense reduction.....................         2.37%(b)      2.29%        2.24%        2.27%         2.3%        2.5%(b)
  Without expense reduction..................         2.38%(b)      2.34%        2.29%        2.33%         N/A         N/A
Portfolio turnover rate++....................           56%(b)        35%          37%          62%          57%         41%
Average commission rate per share paid on
  portfolio transactions++...................     $ 0.0045      $ 0.0085   $   0.0165          N/A          N/A         N/A
</TABLE>
    
 
- ---------------
 
   
+    Commencing April 1, 1993, the Fund began offering Class B shares.
    
   
++   Portfolio turnover and average commission rates are calculated on the basis
     of the Fund as a whole without distinguishing between the classes of shares
     issued.
    
   
(a)  Not annualized.
    
   
(b)  Annualized.
    
   
(c)  These per share operating performance data were calculated based upon
     average shares outstanding during the period.
    
   
(d)  Total investment return does not include sales charges.
    
   
N/A  Not Applicable.
    
                            ------------------------
 
   
<TABLE>
<CAPTION>
                                                                                 AMOUNT MONTHLY
                                                            AVERAGE MONTHLY         NUMBER OF         AVERAGE AMOUNT
                                          AMOUNT OF DEBT    AMOUNT OF DEBT     REGISTRANT'S SHARES        OF DEBT
                                          OUTSTANDING AT      OUTSTANDING          OUTSTANDING           PER SHARE
YEAR                                      END OF PERIOD    DURING THE PERIOD    DURING THE PERIOD    DURING THE PERIOD
- ----                                      --------------   -----------------   -------------------   -----------------
<S>                                       <C>              <C>                 <C>                   <C>
Six months ended April 30, 1997.........      $   --          $  776,210            30,210,054            $ 0.026
October 31, 1997........................      $   --          $8,225,969           113,614,232            $0.0724
</TABLE>
    
 
   
  Average monthly amount of debt outstanding during the period is computed on a
daily basis.
    
   
    
 
                                        6
<PAGE>   434
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return. Standardized total return
for Class A shares reflects the deduction of the Fund's maximum front-end sales
charge at the time of purchase. Standardized total return for Class B shares
reflects the deduction of the maximum applicable contingent deferred sales
charge on a redemption of shares held for the period.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
 
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVE. The Fund's investment objective is long-term growth of
capital. It seeks its objective by investing primarily in equity securities of
companies throughout the world engaged in the development, manufacture or sale
of telecommunications services or equipment. There can be no assurance that the
Fund will achieve its investment objective.
    
 
   
  INVESTMENT POLICIES. At least 65% of the Fund's total assets normally will be
invested in common and preferred stocks and warrants to acquire such securities
issued by telecommunications companies. A "telecommunications" company is an
entity in which (i) at least 50% of either its revenues or earnings was derived
from telecommunications activities, or (ii) at least 50% of its assets was
devoted to telecommunications activities, based on the company's most recent
fiscal year. The remainder of the assets of the Fund may be invested in debt
securities issued by telecommunications companies and/or equity and debt
securities of companies outside of the telecommunications industry which, in the
opinion of the Sub-advisor, stand to benefit from developments in the
telecommunications industries.
    
 
   
  Global Telecommunications Industries Investment. Telecommunications companies
cover a variety of sectors, ranging from companies concentrating on established
technologies to those primarily engaged in emerging or developing technologies.
The characteristics of companies focusing on the same technology will vary among
countries depending upon the extent to which the technology is established in
the particular country. The Sub-advisor will allocate the Fund's investments
among these sectors depending upon its assessment of their relative long-term
growth potential.
    
 
  Examples of telecommunications companies include those engaged in designing,
developing or providing the following products and services: communications
equipment and services (including equipment and services for both data and voice
transmission); electronic components and equipment; broadcasting (including
television and radio, satellite, microwave and cable television and
narrowcasting); computer equipment, mobile communications and cellular
radio/paging; electronic mail; local and wide area networking and linkage of
word and data processing systems; publishing and information systems; videotext
and teletext; and emerging technologies combining telephone, television and/or
computer systems.
 
   
  The Sub-advisor believes that there are opportunities for continued growth in
demand for components, products, media and systems to collect, store, retrieve,
transmit, process, distribute, record, reproduce and use information. The
pervasive societal impact of communications and information technologies has
been accelerated by the lower costs and higher efficiencies that result from the
blending of computers with telecommunications systems. Accordingly, companies
engaged in the production of methods for using electronic and, potentially,
video technology to communicate information are expected to be important in the
Fund's portfolio. Older technologies, such as photography and print also may be
represented, however.
    
 
                                        7
<PAGE>   435
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES. In pursuit of its objective and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
   
  SELECTION OF INVESTMENTS AND ASSET ALLOCATION. The Fund expects that, from
time to time, a significant portion of its assets may be invested in the
securities of domestic issuers. The industry represented in the Fund, however,
is a global industry with significant, growing markets outside of the United
States. A sizeable proportion of the companies which comprise the
telecommunications industry are headquartered outside of the United States.
    
 
   
  For these reasons, the Sub-advisor believes that a portfolio composed only of
securities of U.S. issuers does not provide the greatest potential for return
from an investment by the Fund. The Sub-advisor uses its financial expertise in
markets located throughout the world and the substantial global resources of
AMVESCAP PLC in attempting to identify those countries and companies then
providing the greatest potential for long-term capital appreciation. In this
fashion, the Sub-advisor seeks to enable shareholders to capitalize on the
substantial investment opportunities and the potential for long-term growth of
capital presented by the global industry represented in the Fund.
    
 
   
  The Sub-advisor allocates the Fund's assets among securities of countries and
in currency denominations where opportunities for meeting the Fund's investment
objective are expected to be the most attractive. The Fund may invest
substantially in securities denominated in one or more currencies. Under normal
conditions, the Fund invests in the securities of issuers located in at least
three countries, including the United States; investments in securities of
issuers in any one country, other than the United States, will represent no more
than 40% of the Fund's total assets.
    
 
   
  In analyzing specific companies for possible investment, the Sub-advisor
ordinarily looks for several of the following characteristics: above-average per
share earnings growth; high return on invested capital; a healthy balance sheet;
sound financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; development of new technologies; efficient service; pricing
flexibility; strong management; and general operating characteristics that will
enable the companies to compete successfully in their respective markets.
    
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. Under a defensive strategy, the Fund may invest up to 100%
of its total assets in cash (U.S. dollars, foreign currencies or multinational
currency units such as euros) and/or high quality debt securities or money
market instruments of U.S. or foreign issuers. In addition, for temporary
defensive purposes, most or all of the Fund's investments may be made in the
United States and denominated in U.S. dollars. To the extent the Fund adopts a
temporary defensive posture, it will not be invested so as to achieve directly
its investment objective. In addition, pending investment of proceeds from new
sales of Fund shares or to meet its ordinary daily cash needs, the Fund may hold
cash (U.S. dollars, foreign currencies or multinational currency units) and may
invest in foreign or domestic high quality money market instruments. For a full
description of money market instruments, see "Money Market Instruments" in the
"Investment Objectives and Policies" section of the Statement of Additional
Information.
    
 
   
  PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Fund in privatizations in appropriate
circumstances. In certain foreign countries, the ability of foreign entities
such as the Fund to participate in privatizations may be limited by local law,
or the terms on which the Fund may be permitted to participate may be less
advantageous than those for local investors. There can be no assurance that
foreign governments will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
    
 
   
  INVESTMENTS IN OTHER INVESTMENT COMPANIES. The Fund may invest up to 10% of
its total assets in other investment companies, some of which may be investment
vehicles or companies that are advised by the Sub-advisor or its affiliates
("Affiliated Funds"). As a shareholder in an investment company, the Fund would
bear its ratable share of that investment company's expenses, including its
advisory and administration fees. At the same time, the Fund would continue to
pay its own management fees and other expenses. AIM and the Sub-advisor will
waive their advisory fees to the extent that the Fund invests in an Affiliated
Fund.
    
 
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemptions of the
Fund's shares. The Fund also may borrow up to 5% of its total assets for
temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Fund may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Fund's borrowings exceed 5% of its
total assets. Any borrowing by the Fund may cause greater fluctuation in the
value of its shares than would be the case if the Fund did not borrow.
 
  A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash, and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's sale of securities together with its
commitment (for which the Fund may receive a fee) to purchase similar, but not
identical, securities at a future date.
 
                                        8
<PAGE>   436
 
   
  SECURITIES LENDING. The Fund may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Fund to retain ownership of the securities loaned and, at the same time,
enhances the Fund's total return. The Fund limits its loans of portfolio
securities to an aggregate of 30% of the value of its total assets, measured at
the time any such loan is made. While a loan is outstanding, the borrower must
maintain with the Fund's custodian collateral consisting of cash, U.S.
government securities or certain irrevocable letters of credit equal to at least
the value of the borrowed securities, plus any accrued interest or such other
collateral as permitted by the Fund's investment program and regulatory
agencies, and as approved by the Board. The risks in lending portfolio
securities, as with other extensions of secured credit, consist of possible
delays in receiving additional collateral or in recovery of the securities and
possible loss of rights in the collateral should the borrower fail financially.
    
 
  WHEN-ISSUED OR FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities or enter into forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If
the Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, the Fund will
segregate cash or liquid securities equal to the value of the when-issued or
forward commitment securities with its custodian and will mark to market daily
such assets. There is a risk that the securities may not be delivered and that
the Fund may incur a loss.
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the portfolio. These instruments are often referred to as
"derivatives," which may be defined as financial instruments whose performance
is derived, at least in part, from the performance of another asset (such as a
security, currency or an index of securities). The Fund may enter into such
instruments up to the full value of its portfolio assets. See "Risk
Factors -- Options, Futures and Forward Currency Transactions" herein and
"Options, Futures and Currency Strategies" in the Statement of Additional
Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on such futures
contracts to hedge against movements in exchange rates.
 
   
  In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-advisor intends to include in the
Fund's portfolio. The Fund also may purchase and sell put and call options on
stock indexes to hedge against overall fluctuations in the securities markets
generally or in a specific market sector.
    
 
  Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market decline or a decline in a specific market sector that could
affect adversely the Fund's holdings. The Fund also may purchase stock index
futures contracts and purchase call options or write put options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisitions. The Fund
may use interest rate futures contracts and options thereon to hedge the debt
portion of its portfolio against changes in the general level of interest rates.
 
  OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this Prospectus
and in the Statement of Additional Information may be changed by the Trust's
Board of Trustees without shareholder approval. The Fund's policies regarding
concentration and lending, and the percentage of the Fund's assets that may be
committed to borrowing, are fundamental policies and may not be changed without
shareholder approval.
 
   
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
    
 
                                        9
<PAGE>   437
 
   
  The Fund is authorized to engage in Short Sales, although it currently has no
intention of doing so, and may purchase American Depositary Receipts, American
Depositary Shares, Global Depositary Receipts and European Depositary Receipts.
See "Short Sales" and "Depositary Receipts," in the "Investment Objectives and
Policies" section of the Statement of Additional Information.
    
   
- --------------------------------------------------------------------------------
    
 
   
RISK FACTORS
    
 
  GENERAL. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate reflecting fluctuations in
the market value of the Fund's positions. Equity securities, particularly common
stocks, generally represent the most junior position in an issuer's capital
structure, and entitle holders to an interest in the assets of an issuer, if
any, remaining after all more senior claims have been satisfied. The value of
equity securities held by the Fund will fluctuate in response to general market
and economic developments, as well as developments affecting the particular
issuers of such securities. In addition, the value of debt securities held by
the Fund generally will fluctuate with changes in the perceived creditworthiness
of the issuers of such securities and interest rates.
 
   
  Because the Fund focuses its investments on the telecommunications industries,
an investment in the Fund may be more volatile than that of other investment
companies that do not concentrate their investments in such a manner. Moreover,
the value of the shares of the Fund will be especially susceptible to factors
affecting the telecommunications industries in which it focuses. Accordingly,
the Fund should not be considered a complete investment program.
    
 
  TELECOMMUNICATIONS INDUSTRIES. Telecommunications industries may be subject to
greater governmental regulation than many other industries and changes in
governmental policy and the need for regulatory approvals may have a material
effect on the products and services offered by companies in the
telecommunications industries. Telephone operating companies in the United
States, for example, are subject to both federal and state regulation affecting
permitted rates of return and the kinds of services that may be offered. Certain
types of companies in the telecommunications industries are engaged in fierce
competition for market share that could result in increased share price
volatility.
 
   
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to, the reporting requirements of the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. In addition, certain costs attributable to
foreign investing, such as custody charges, are higher than those attributable
to domestic investing. Securities of some foreign issuers are less liquid and
their prices may be more volatile than securities of comparable domestic
issuers. The Fund's interest and dividends from foreign issuers may be subject
to non-U.S. withholding taxes, thereby reducing the Fund's net investment
income.
    
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Fund, political or social instability, or diplomatic
developments which could affect the Fund's investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
 
  The Fund may invest in issuers domiciled in "emerging markets." Investing in
emerging market countries involves risks in addition to those risks involved in
foreign investing. Many emerging market countries have experienced high rates of
inflation for many years. In addition, emerging markets generally are dependent
heavily upon international trade and, accordingly, have been and continue to be
affected adversely by trade barriers, exchange controls, managed adjustments in
relative currency values and other protectionist measures imposed or negotiated
by the countries with which they trade. The securities markets of emerging
market countries are substantially smaller, less developed, less liquid and more
volatile than the securities markets of the developed countries. In addition,
issuers in emerging markets typically are subject to a greater degree of change
in earnings and business prospects than issuers in developed countries.
 
  The Fund will also be affected favorably or unfavorably by exchange control
regulations or changes in the exchange rates between foreign currencies and the
U.S. dollar. Changes in currency exchange rates will influence the value of the
Fund's shares, and also may affect the value of dividends and interest earned by
the Fund and gains and losses realized by the Fund.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing
    
 
                                       10
<PAGE>   438
 
   
and settlement systems for the euro. These and other factors could cause market
disruptions before or after the introduction of the euro and could adversely
affect the value of securities held by the Fund.
    
 
   
  LOWER QUALITY DEBT SECURITIES. The Fund may invest up to 5% of its total
assets in below investment grade debt securities, that is, rated below BBB by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or Baa
by Moody's Investors Service, Inc. ("Moody's") or, if unrated, deemed to be of
equivalent quality in the judgment of the Sub-advisor. Such investments involve
a high degree of risk. However, the Fund will not invest in debt securities that
are in default as to payment of principal and interest.
    
 
  Debt rated Baa by Moody's is considered by Moody's to have speculative
characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B,
Caa, Ca or C by Moody's is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such lower quality debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Debt rated C
by Moody's or S&P is the lowest rated debt that is not in default as to
principal or interest, and such issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Lower
quality debt securities are also generally considered to be subject to greater
risk than securities with higher ratings with regard to a deterioration of
general economic conditions. These lower quality debt securities are the
equivalent of high yield, high risk bonds, commonly known as "junk bonds."
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates. See "Description of Debt Ratings" in the Statement of Additional
Information for a full discussion of Moody's and S&P's ratings.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities of corporate issuers frequently have call or
buy-back features which would permit an issuer to call or repurchase the
security from the Fund. If an issuer exercises these provisions in a declining
interest rate market, the Fund may have to replace the security with a lower
yielding security, resulting in a decreased return for investors. In addition,
the Fund may have difficulty disposing of lower quality securities because they
may have a thin trading market. There may be no established retail secondary
market for many of these securities, and the Fund anticipates that such
securities could be sold only to a limited number of dealers or institutional
investors. The lack of a liquid secondary market also may have an adverse impact
on market prices of such instruments and may make it more difficult for the Fund
to obtain accurate market quotations for purposes of valuing the Fund's
portfolio investments. The Fund may also acquire lower quality debt securities
during an initial underwriting or which are sold without registration under
applicable securities laws. Such securities involve special considerations and
risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Fund may invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic recession. The Fund may also incur additional expenses to the extent it
is required to seek recovery upon a default in the payment of principal or
interest on portfolio holdings, and the Fund may have limited legal recourse in
the event of a default.
 
   
  ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." The Sub-advisor believes that carefully selected investments in
joint ventures, cooperatives, partnerships and state enterprises which are
illiquid (collectively, "Special Situations") could enable the Fund to achieve
capital appreciation substantially exceeding the appreciation the Fund would
realize if it did not make such investments. However, in order to attempt to
limit investment risk, the Fund will invest no more than 5% of its total assets
in Special Situations.
    
 
  Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at a price
lower than similar securities that are liquid.
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions, the
Fund might not enter into any such transactions. Options, futures and foreign
currency transactions involve certain risks, which include: (1) dependence on
the Sub-advisor's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets or in the appropriate
market sector and movements in interest rates and cur-
    
 
                                       11
<PAGE>   439
 
rency markets; (2) imperfect correlation, or even no correlation, between
movements in the price of options, forward contracts, futures contracts or
options thereon and movements in the price of the currency or security hedged or
used for cover; (3) the fact that skills and techniques needed to trade options,
futures contracts and options thereon or to use forward currency contracts are
different from those needed to select the securities in which the Fund invests;
(4) lack of assurance that a liquid secondary market will exist for any
particular option, futures contract or option thereon at any particular time;
(5) the possible loss of principal under certain conditions; and (6) the
possible inability of the Fund to purchase or sell a portfolio security at a
time when it would otherwise be favorable for it to do so, or the possible need
for the Fund to sell a security at a disadvantageous time, due to the need for
the Fund to maintain "cover" or to set aside securities in connection with
hedging transactions.
 
  INVESTING IN SMALLER COMPANIES. While the Fund's portfolio normally will
include securities of established suppliers of traditional products and
services, the Fund may invest in smaller companies which can benefit from the
development of new products and services. These smaller companies may present
greater opportunities for capital appreciation, but may also involve greater
risks than large, established issuers. Such smaller companies may have limited
product lines, markets or financial resources, and their securities may trade
less frequently and in more limited volume than the securities of larger, more
established companies. As a result, the prices of the securities of such smaller
companies may fluctuate to a greater degree than the prices of the securities of
other issuers.
- --------------------------------------------------------------------------------
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust and persons or companies furnishing services to the Fund,
including the investment management and administration agreement with AIM, the
investment sub-advisory and sub-administration agreement between AIM and the
Sub-advisor, the agreements with AIM Distributors regarding distribution of the
Fund's shares, the custody agreement and the transfer agency agreement. The
day-to-day operations of the Fund are delegated to the officers of the Trust,
subject always to the investment objective and policies of the Fund and to the
general supervision of the Trust's Board of Trustees. See "Trustees and
Executive Officers" in the Statement of Additional Information for information
on the Trust's Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers include, but are not limited to,
determining the composition of the investment portfolio of the Fund and placing
orders to buy, sell or hold particular securities. In addition, AIM and the
Sub-advisor provide the following administration services to the Fund:
furnishing corporate officers and clerical staff; providing office space,
services and equipment; and supervising all matters relating to the Fund's
operation.
    
 
   
  For investment management and administration services provided to the Fund,
the Fund pays AIM a fee computed daily and paid monthly based on the Fund's
average daily net assets at the annualized rate of 0.975% on the first $500
million, 0.95% on the next $500 million, 0.925% on the next $500 million and
0.90% on amounts thereafter. Out of the aggregate fees payable by the Fund, AIM
pays the Sub-advisor sub-advisory and sub-administration fees equal to 40% of
the aggregate fees AIM receives from the Fund. The investment management and
administration fees paid by the Fund are higher than those paid by most mutual
funds.
    
 
   
  The Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM
Distributors or other agents. AIM has undertaken to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary expenses)
to the annual rate of 2.00% and 2.50% of the average daily net assets of the
Fund's Class A and Class B shares, respectively.
    
 
   
  The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-advisor (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration services agreement (the "Advisory Agreement"). AIM was organized
in 1976 and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Fund pursuant to an investment sub-advisory and
sub-administration agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of the Sub-advisor,
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included the Sub-advisor and
certain other affiliates. As a result of this transaction, the Sub-advisor is
now an indirect wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a sig-
    
 
                                       12
<PAGE>   440
 
nificant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Fund, the Sub-advisor employs a team
approach, taking advantage of its investment resources around the world.
    
 
  The investment professional primarily responsible for the portfolio management
of the Fund is as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
     NAME/OFFICE               THE FUND                           PAST FIVE YEARS
     -----------         --------------------                   -------------------
<S>                     <C>                      <C>
Michael Mahoney         Portfolio Manager        Portfolio Manager for the Sub-advisor since 1993.
San Francisco           since 1993               Investment Analyst for the Sub-advisor from 1991
                                                 to 1993.
</TABLE>
    
 
   
  In placing orders for the Fund's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions may be executed through
affiliates of AIM or the Sub-advisor. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Funds will bear directly and could result in the realization of
net capital gains which would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement on
behalf of Class A shares of the Fund, and has entered into a Master Distribution
Agreement on behalf of Class B shares of the Fund (individually referred to as a
"Distribution Agreement" or collectively as the "Distribution Agreements.") with
AIM Distributors, a registered broker-dealer and a wholly owned subsidiary of
AIM, to act as the distributor of Class A and Class B shares of the Fund.
Certain Trustees and officers of the Trust are affiliated with AIM Distributors.
    
 
   
  The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors and its predecessor. In the event the Class B shares Distribution
Agreement is terminated, AIM Distributors would continue to receive payments of
asset based sales charges in respect of the outstanding Class B shares
attributable to the distribution efforts of AIM Distributors and its
predecessor; provided, however, that a complete termination of the Class B
shares master distribution plan (as defined in the plan) would terminate all
payments by the Fund of asset based sales charges and service fees to AIM
Distributors. Termination of the Class B shares distribution plan or
Distribution Agreement does not affect the obligation of Class B shareholders to
pay contingent deferred sales charges.
    
 
  DISTRIBUTION PLANS. Class A Plan. The Company has adopted a Master
Distribution Plan applicable to Class A shares of the Fund (the "Class A Plan")
pursuant to Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for
the purpose of financing any activity that is intended to result in the sale of
Class A shares of the Fund.
 
  Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.50% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
 
  The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
 
  Of the aggregate amount payable under the Class A Plan, payments to dealers
and other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A
 
                                       13
<PAGE>   441
 
   
Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee.
    
 
  Class B Plan. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
 
  Both Plans. Activities that may be financed under the Class A Plan and the
Class B Plan (collectively, the "Plans") include, but are not limited to:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders, overhead, preparation and distribution of
advertising material and sales literature, expense of organizing and conducting
sales seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
 
  Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
 
   
  Under the Plans, certain financial institutions which have entered into
service agreements and which sell shares of the Fund on an agency basis may
receive payments from the Fund pursuant to the respective Plans. AIM
Distributors does not act as principal, but rather as agent, for the Fund in
making such payments. The Fund will obtain a representation from such financial
institutions that they will either be licensed as dealers as required under
applicable state law, or that they will not engage in activities which would
constitute acting as a "dealer" as defined under applicable state law. Financial
intermediaries and any other person entitled to receive compensation for selling
Fund shares may receive different compensation for selling shares of one class
over another.
    
 
  For additional information concerning the operation of the Plans see the
Statement of Additional Information.
   
- --------------------------------------------------------------------------------
    
 
   
ORGANIZATION OF THE TRUST
    
 
   
  The Trust was organized as a Delaware business trust on May 7, 1998 . On
September 8, 1998, the Trust acquired the assets of and assumed the liabilities
of AIM Investment Funds, Inc., a Maryland corporation. The Fund constitutes one
of the thirteen separate and distinct series portfolios of the Trust. From time
to time, the Trust may continue to establish other funds, each corresponding to
a distinct investment portfolio and a distinct series of the Trust's shares of
beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Company may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges, except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.

   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
    
 
                                       14
<PAGE>   442
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
               TO THE AIM FAMILY OF FUNDS--Registered Trademark--
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of the following mutual funds:
   
<TABLE>
            <S>                                           <C>
            AIM ADVISOR FLEX FUND                         AIM GLOBAL INFRASTRUCTURE FUND
            AIM ADVISOR INTERNATIONAL VALUE FUND          AIM GLOBAL RESOURCES FUND
            AIM ADVISOR LARGE CAP VALUE FUND              AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM ADVISOR MULTIFLEX FUND                    AIM GLOBAL TRENDS FUND
            AIM ADVISOR REAL ESTATE FUND                  AIM GLOBAL UTILITIES FUND
            AIM AGGRESSIVE GROWTH FUND                    AIM HIGH INCOME MUNICIPAL FUND
            AIM ASIAN GROWTH FUND                         AIM HIGH YIELD FUND
            AIM BALANCED FUND                             AIM INCOME FUND
            AIM BASIC VALUE FUND                          AIM INTERMEDIATE GOVERNMENT FUND
            AIM BLUE CHIP FUND                            AIM INTERNATIONAL EQUITY FUND
            AIM CAPITAL DEVELOPMENT FUND                  AIM INTERNATIONAL GROWTH FUND
            AIM CHARTER FUND                              AIM JAPAN GROWTH FUND
            AIM CONSTELLATION FUND                        AIM LATIN AMERICAN GROWTH FUND
            AIM DEVELOPING MARKETS FUND                   AIM LIMITED MATURITY TREASURY FUND
            AIM DOLLAR FUND(*)                            AIM MID CAP GROWTH FUND
            AIM EMERGING MARKETS FUND                     AIM MONEY MARKET FUND(*)
            AIM EMERGING MARKET DEBT FUND                 AIM MUNICIPAL BOND FUND
            AIM EUROPEAN DEVELOPMENT FUND                 AIM NEW PACIFIC GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM SELECT GROWTH FUND
            AIM GLOBAL AGGRESSIVE GROWTH FUND             AIM SMALL CAP EQUITY FUND
            AIM GLOBAL CONSUMER PRODUCTS AND              AIM SMALL CAP OPPORTUNITIES FUND
              SERVICES FUND                               AIM STRATEGIC INCOME FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM TAX-EXEMPT CASH FUND(*)
            AIM GLOBAL GROWTH FUND                        AIM TAX-FREE INTERMEDIATE FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM VALUE FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WEINGARTEN FUND
            AIM GLOBAL INCOME FUND                        AIM WORLDWIDE GROWTH FUND
                                                                                                 
</TABLE>
    
 
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
    Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
    asset value, without payment of a sales charge, as described below. Other
    funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
    FUND, are sold with an initial sales charge or subject to a contingent
    deferred sales charge upon redemption, as described below.
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed new Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.
 
   
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment is
$500, except for accounts initially established through an Automatic Investment
Plan, which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an Individual Retirement Arrangement ("IRA") or Roth IRA is $250.
There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such plans is $25 per
fund investment), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM 
    
 
                                       A-1
<PAGE>   443
 
   
Funds account. Notwithstanding the foregoing, the minimum initial investment
applicable to AIM Small Cap Opportunities Fund is $10,000.
    
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Shares of any AIM Funds not named on the cover of this Prospectus, as well as
Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                   OBI:                              Shareholder Name, Shareholder Account Number
                                                     (70 character limit)
</TABLE>
 
   
  HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased directly
through AIM Distributors or through any dealer who has entered into an agreement
with AIM Distributors. The minimum investment for subsequent purchases is $50.
The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. Notwithstanding the foregoing, the minimum subsequent purchases of shares
of AIM Small Cap Opportunities Fund is $1,000. There are no such minimum
investment requirements for investment of dividends and distributions of any of
the AIM Funds into any other existing AIM Funds account.
    
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional shares by electronic funds
transfer, please contact the Client Services Department of AFS for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
   
  Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BASIC
VALUE FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT
FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP EQUITY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND,AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without a
sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over
    
 
                                       A-2
<PAGE>   444
 
another class in the same Multiple Class Fund. Factors an investor should
consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
   
  The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPE
GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL
FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM
GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS
FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN
GROWTH FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
    
 
  The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
 
SALES CHARGES AND DEALER CONCESSIONS
 
   
  GROUP I. Certain AIM Funds are currently sold with a sales charge ranging from
5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM BASIC VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
EQUITY FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
    
 
   
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
      SINGLE TRANSACTION(1)                          PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   25,000                    5.50%          5.82%        4.75%
 $ 25,000 but less than $   50,000                   5.25           5.54         4.50
 $ 50,000 but less than $ 100,000                    4.75           4.99         4.00
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    3.00           3.09         2.50
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
    
 
- ---------------
 
   
(1) AIM Small Cap Opportunities Fund will not accept any single purchase in
    excess of $250,000.
    
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
                                       A-3
<PAGE>   445
   
 GROUP II. Certain AIM Funds are currently sold with a sales charge ranging from
4.75% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND, AIM
BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND
FUND, AIM STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
    
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   50,000                    4.75%          4.99%        4.00%
 $ 50,000 but less than $ 100,000                    4.00           4.17         3.25
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    2.50           2.56         2.00
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
  GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
Less than $ 100,000                                  1.00%          1.01%        0.75%
 $100,000 but less than $ 250,000                    0.75           0.76         0.50
 $250,000 but less than $1,000,000                   0.50           0.50         0.40
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
 
  ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
 
  In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
 
  AIM Distributors may make payments to dealers and institutions who are dealers
of record for purchases of $1 million of more of Class A shares (or shares which
normally involve payment of initial sales charges), which are sold at net asset
value and are subject to
 
                                       A-4
<PAGE>   446
 
a contingent deferred sales charge, for all AIM Funds other than Class A shares
of each of AIM LIMITED MATURITY TREASURY FUND and AIM TAX-FREE INTERMEDIATE FUND
as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next
$1 million of such purchases, plus 0.50% of the next $17 million of such
purchases, plus 0.25% of amounts in excess of $20 million of such purchases. See
"Contingent Deferred Sales Charge Program for Large Purchases." AIM Distributors
may make payments to dealers and institutions who are dealers of record for
purchases of $1 million or more of Class A shares (or shares which normally
involve payment of initial sales charges), and which are sold at net asset value
and are not subject to a contingent deferred sales charge, in an amount up to
0.10% of such purchases of Class A shares of AIM LIMITED MATURITY TREASURY FUND,
and in an amount up to 0.25% of such purchases of Class A shares of AIM TAX-FREE
INTERMEDIATE FUND.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed during the next twelve
months on Saturdays and Sundays and on the days on which New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class Funds
currently offer two or more classes of shares through separate distribution
systems (the "Multiple Distribution System"). Although each class of shares of a
particular Multiple Class Fund represents an interest in the same portfolio of
investments, each class is subject to a different distribution structure and, as
a result, differing expenses. This Multiple Distribution System allows investors
to select the class that is best suited to the investor's needs and objectives.
In considering the options afforded by the Multiple Distribution System,
investors should consider both the applicable initial sales charge or contingent
deferred sales charge, as well as the ongoing expenses borne by each class of
shares and other relevant factors, such as whether his or her investment goals
are long-term or short-term.
 
     CLASS A SHARES generally are sold subject to the initial sales charges
     described above and are subject to the other fees and expenses described
     herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
     needs of an investor who wishes to establish a dollar cost averaging
     program, pursuant to which Class A shares an investor owns may be exchanged
     at net asset value for Class A shares of another Multiple Class Fund or
     shares of another AIM Fund which is not a Multiple Class Fund, subject to
     the terms and conditions described under the caption "Exchange
     Privilege -- Terms and Conditions of Exchanges."
                                       A-5
<PAGE>   447
 
     CLASS B SHARES are sold without an initial sales charge. Thus, the entire
     purchase price of Class B shares is immediately invested in Class B shares.
     Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
     per annum on the average daily net assets of a Multiple Class Fund
     attributable to Class B shares. See the discussion under the caption
     "Management -- Distribution Plans." In addition, Class B shares redeemed
     within six years from the date such shares were purchased are subject to a
     contingent deferred sales charge ranging from 5% for redemptions made
     within the first year to 1% for redemptions made within the sixth year. No
     contingent deferred sales charge will be imposed if Class B shares are
     redeemed after six years from the date such shares were purchased.
     Redemptions of Class B shares and associated charges are further described
     under the caption "How to Redeem Shares -- Multiple Distribution System."
 
     Class B shares will automatically convert into Class A shares of the same
     Multiple Class Fund (together with a pro rata portion of all Class B shares
     acquired through the reinvestment of dividends and other distributions)
     eight years from the end of the calendar month in which the purchase of
     Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
     outstanding on May 29, 1998 and which are continuously held by the
     shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
     FUND seven years from the end of the calendar month in which the purchase
     of such Class B shares was made. If a shareholder exchanges Class B shares
     of AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
     since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
     shares will be subject to the eight year conversion feature applicable to
     Class B shares of all other AIM Funds. Following such conversion of their
     Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
     payments associated with Class B shares. See "Management -- Distribution
     Plans."
 
     AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an
     initial sales charge and are not subject to a contingent deferred sales
     charge; however, they are subject to the other fees and expenses described
     in the prospectus for AIM MONEY MARKET FUND.
 
  TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon Eastern Time or NYSE Close on any
business day of the Fund will be confirmed at the price next determined. Net
asset value is normally determined at 12:00 noon Eastern Time and NYSE Close on
each business day of AIM MONEY MARKET FUND.
 
  SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
REDUCTIONS IN INITIAL SALES CHARGES
 
  Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
 
                                       A-6
<PAGE>   448
 
  The term "purchaser" means:
 
  - an individual and his or her spouse and children, including any trust
    established exclusively for the benefit of any such person; or a pension,
    profit-sharing, or other benefit plan established exclusively for the
    benefit of any such person, such as an IRA, Roth IRA, a single-participant
    money-purchase/profit-sharing plan or an individual participant in a 403(b)
    plan (unless such 403(b) plan qualifies as the purchaser as defined below);
 
  - a 403(b) plan, the employer/sponsor of which is an organization described
    under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
    (the "Code"), provided that:
 
        a. the employer/sponsor must submit contributions for all participating
           employees in a single contribution transmittal (i.e., the funds will
           not accept contributions submitted with respect to individual
           participants);
 
        b. each transmittal must be accompanied by a single check or wire
           transfer; and
 
        c. all new participants must be added to the 403(b) plan by submitting
           an application on behalf of each new participant with the
           contribution transmittal;
 
  - a trustee or fiduciary purchasing for a single trust, estate or single
    fiduciary account (including a pension, profit-sharing or other employee
    benefit trust created pursuant to a plan qualified under Section 401 of the
    Code) and 457 plans, although more than one beneficiary or participant is
    involved;
 
  - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
    Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
    Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
    Distributors in writing that all of its related employee SEP, SARSEP or
    SIMPLE IRA accounts should be linked;
 
  - any other organized group of persons, whether incorporated or not, provided
    the organization has been in existence for at least six months and has some
    purpose other than the purchase at a discount of redeemable securities of a
    registered investment company; or
 
  - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
    Capital Management, Inc. ("AIM Capital").
 
  Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
 
  (1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
 
  Each purchase of fund shares normally subject to an initial sales charge made
during the 13-month period will be made at the public offering price applicable
to a single transaction of the total dollar amount indicated by the LOI, as
described under "Sales Charges and Dealer Concessions." It is the purchaser's
responsibility at the time of purchase to specify the account numbers that
should be considered in determining the appropriate sales charge. The offering
price may be further reduced as described under "Rights of Accumulation" if the
Transfer Agent is advised of all other accounts at the time of the investment.
Shares acquired through reinvestment of dividends and capital gain distributions
will not be applied to the LOI. At any time during the 13-month period after
meeting the original obligation, a purchaser may revise his intended investment
amount upward by submitting a written and signed request. Such a revision will
not change the original expiration date. By signing an LOI, a purchaser is not
making a binding commitment to purchase additional shares, but if purchases made
within the 13-month period do not total the amount specified, the investor will
pay the increased amount of sales charge as described below. Purchases made
within 90 days before signing an LOI will be applied toward completion of the
LOI. The LOI effective date will be the date of the first purchase with the
90-day period. The Transfer Agent will process necessary adjustments upon the
expiration or completion date of the LOI. Purchases made more than 90 days
before signing an LOI will be applied toward completion of the LOI based on the
value of the shares purchased calculated at the public offering price on the
effective date of the LOI.
 
  To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
                                       A-7
<PAGE>   449
 
  If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
 
  Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
 
  (2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
 
  PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at
net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
 
  Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
 
  The following persons may purchase Class A shares of the AIM Funds through AIM
Distributors without payment of an initial sales charge: (a) A I M Management
Group Inc. ("AIM Management") and its affiliated companies; (b) any current or
retired officer, director, trustee or employee, or any member of the immediate
family (including spouse, children, parents and parents of spouse) of any such
person, of AIM Management or its affiliates or of certain mutual funds which are
advised or managed by AIM; or any trust established exclusively for the benefit
of such persons; (c) any employee benefit plan established for employees of AIM
Management or its affiliates; (d) any current or retired officer, director,
trustee or employee, or any member of the immediate family (including spouse,
children, parents and parents of spouse) of any such person, or of CIGNA
Corporation or of any of its affiliated companies, or of First Data Investor
Services Group (formerly The Shareholder Services Group, Inc.); (e) any
investment company sponsored by CIGNA Investments, Inc. or any of its affiliated
companies for the benefit of its directors' deferred compensation plans; (f)
discretionary advised clients of AIM or AIM Capital; (g) registered
representatives and employees of dealers who have entered into agreements with
AIM Distributors (or financial institutions that have arrangements with such
dealers with respect to the sale of shares of the AIM Funds) and any member of
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, provided that purchases at net asset value are permitted by
the policies of such person's employer; (h) certain broker-dealers, investment
advisers or bank trust departments that provide asset allocation, similar
specialized investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services, and that
have entered into an agreement with AIM Distributors with respect to their use
of the AIM Funds in connection with such services; (i) any employee or any
member of the immediate family (including spouse, children, parents and parents
of spouse) of any employee, of Triformis Inc.; (j) shareholders of the AIM/GT
Funds as of April 30, 1987 who since that date continually have owned shares of
one or more of the AIM/GT Funds; and (k) certain former AMA Investment Advisers'
shareholders who became shareholders of the AIM Global Health Care Fund in
October 1989, and who have continuously held shares in the AIM/GT Funds since
that time.
 
   
  In addition, shares of any AIM Fund (except AIM Small Cap Opportunities Fund)
may be purchased at net asset value, without payment of a sales charge, by
pension, profit-sharing or other employee benefit plans created pursuant to a
plan qualified under Section 401 of the Code or plans under Section 457 of the
Code, or employee benefit plans created pursuant to Section 403(b) of the
    
                                       A-8
<PAGE>   450
 
Code and sponsored by nonprofit organizations defined under Section 501(c)(3) of
the Code. Such plans will qualify for purchases at net asset value provided that
(1) the total amount invested in the plan is at least $1,000,000, (2) the
sponsor signs a $1,000,000 LOI, (3) such shares are purchased by an
employer-sponsored plan with at least 100 eligible employees, or (4) all of the
plan's transactions are executed through a single financial institution or
service organization who has entered into an agreement with AIM Distributors
with respect to their use of the AIM Funds in connection with such accounts.
Section 403(b) plans sponsored by public educational institutions will not be
eligible for net asset value purchases based on the aggregate investment made by
the plan or the number of eligible employees. Participants in such plans will be
eligible for reduced sales charges based solely on the aggregate value of their
individual investments in the applicable AIM Fund. PLEASE NOTE THAT TAX-EXEMPT
FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR SUCH PLANS. AIM Distributors may pay
investment dealers or other financial service firms for share purchases of the
Load Funds (as defined under the caption "Exchange Privilege") sold at net asset
value to an employee benefit plan in accordance with this paragraph as follows:
1% of the first $2 million of such purchases, plus 0.80% of the next $1 million
of such purchases, plus 0.50% of the next $17 million of such purchases, plus
0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of
the net asset value of any Class A shares of AIM LIMITED MATURITY TREASURY FUND
sold at net asset value to an employee benefit plan in accordance with this
paragraph.
 
  Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
- --------------------------------------------------------------------------------
 
SPECIAL PLANS
 
  Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
who owns shares which are not subject to a contingent deferred sales charge, can
arrange for monthly, quarterly or annual amounts (but not less than $50) to be
drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that
 
                                       A-9
<PAGE>   451
 
exceed on an annual basis 12% of such account will be subject to a contingent
deferred sales charge on the amounts exceeding 12% of the account value at the
time the shareholder elects to participate in the Systematic Withdrawal Plan.
 
  Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested to shares of the
applicable AIM Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full
and fractional shares at their net asset value in effect at the time of each
such redemption.
 
  Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
 
  The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
 
  AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in the amount specified by
the shareholder (minimum $50 per investment, per account) and on a day or
date(s) specified by the shareholder. The proceeds are invested in shares of the
designated AIM Fund at the applicable offering price determined on the date of
the withdrawal. An Automatic Investment Plan may be discontinued upon 10 days'
prior notice to the Transfer Agent or AIM Distributors.
 
   
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
    
 
  DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
 
  PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination
money-purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans;
SARSEP plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement
accounts"). Information concerning these plans, including the custodian's fees
and the forms necessary to adopt such plans, can be obtained by calling or
writing the AIM Funds or AIM Distributors. Shares of the AIM Funds are also
available for investment through existing 401(k) plans (for both individuals and
employers) adopted under the Code. The plan custodian currently imposes an
annual $10 maintenance fee with respect to each retirement account for which it
serves as the custodian. This fee is generally charged in December. Each AIM
Fund and/or the custodian reserve the right to change this maintenance fee and
to initiate an establishment fee (not to exceed its cost).
 

   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance of $5,000 to
establish and maintain an allocation across a range of AIM Funds. The Program
automatically rebalances holdings of AIM Funds to the established allocation on
a periodic basis. Under the Program, a shareholder may predesig-
    
 
                                      A-10
<PAGE>   452
   
nate, on a percentage basis, how the total value of his or her holdings in a
minimum of two, and a maximum of ten, AIM Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more AIM Funds in the shareholder's Personal Portfolio for shares of
the same class(es) of one or more other AIM Funds in the shareholder's Personal
Portfolio. See "Exchange Privilege." If shares of the AIM Fund(s) in a
shareholder's Personal Portfolio have appreciated during a rebalancing period,
the Program will result in shares of AIM Fund(s) that have appreciated most
during the period being exchanged for shares of AIM Fund(s) that have
appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular AIM Fund would be 2% or less.
In predesignating percentages, shareholders must use whole percentages and
totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an AIM Fund's shares. The
AIM Funds and AIM Distributors reserve the right to modify, suspend, or
terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
    
 
                                      A-11
<PAGE>   453
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, including the Class A shares of the Multiple Class Funds, listed below
and referred to herein as the "Load Funds," are sold at a public offering price
that includes a maximum sales charge of 5.50% or 4.75% of the public offering
price of such shares; Class A shares (or shares which normally involve the
payment of initial sales charges) of certain of the AIM Funds, listed below and
referred to herein as the "Lower Load Funds," are sold at a public offering
price that includes a maximum sales charge of 1.00% of the public offering price
of such shares; and Class A shares or shares of certain other funds, listed
below and referred to herein as the "No Load Funds," are sold at net asset
value, without payment of a sales charge.
 
   
<TABLE>
<S>                                    <C>                                   <C>
                                LOAD FUNDS:                                  LOWER LOAD FUNDS:
   AIM ADVISOR FLEX FUND --            AIM GLOBAL INCOME                     AIM LIMITED MATURITY TREASURY FUND
     CLASS A                           FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR INTERNATIONAL           AIM GLOBAL INFRASTRUCTURE               AIM TAX-FREE INTERMEDIATE FUND
     VALUE FUND -- CLASS A             FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR LARGE CAP               AIM GLOBAL RESOURCES                  NO LOAD FUNDS:
     VALUE FUND -- CLASS A             FUND -- CLASS A
   AIM ADVISOR MULTIFLEX               AIM GLOBAL TELECOMMUNICATIONS         AIM MONEY MARKET FUND
     FUND -- CLASS A                   FUND -- CLASS A                           -- AIM CASH RESERVE SHARES
   AIM ADVISOR REAL ESTATE             AIM GLOBAL TRENDS                       AIM TAX-EXEMPT CASH FUND -- CLASS A
     FUND -- CLASS A                   FUND -- CLASS A                         AIM DOLLAR FUND -- CLASS A
   AIM AGGRESSIVE GROWTH               AIM GLOBAL UTILITIES
     FUND -- CLASS A                   FUND -- CLASS A
   AIM ASIAN GROWTH                    AIM HIGH INCOME MUNICIPAL
     FUND -- CLASS A                   FUND -- CLASS A
   AIM BALANCED FUND -- CLASS A        AIM HIGH YIELD FUND -- CLASS A
   AIM BASIC VALUE                     AIM INCOME FUND -- CLASS A
     FUND -- CLASS A                   AIM INTERMEDIATE GOVERNMENT
   AIM BLUE CHIP FUND -- CLASS A       FUND -- CLASS A
   AIM CAPITAL DEVELOPMENT             AIM INTERNATIONAL EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM CHARTER FUND -- CLASS A         AIM INTERNATIONAL GROWTH
   AIM CONSTELLATION                   FUND -- CLASS A
     FUND -- CLASS A                   AIM JAPAN GROWTH FUND -- CLASS A
   AIM DEVELOPING MARKETS              AIM LATIN AMERICAN GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS                AIM MID CAP EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS DEBT           AIM MONEY MARKET
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPE GROWTH                   AIM MUNICIPAL BOND
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPEAN DEVELOPMENT            AIM NEW PACIFIC GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM GLOBAL AGGRESSIVE GROWTH        AIM SELECT GROWTH FUND -- CLASS A
     FUND -- CLASS A                   AIM SMALL CAP GROWTH
   AIM GLOBAL CONSUMER PRODUCTS        FUND -- CLASS A
     AND SERVICES FUND -- CLASS A      AIM SMALL CAP OPPORTUNITIES
   AIM GLOBAL FINANCIAL SERVICES       FUND -- CLASS A
     FUND -- CLASS A                   AIM STRATEGIC INCOME
   AIM GLOBAL GOVERNMENT INCOME        FUND -- CLASS A
     FUND -- CLASS A                   AIM TAX-EXEMPT BOND FUND
   AIM GLOBAL GROWTH                   OF CONNECTICUT -- CLASS A
     FUND -- CLASS A                   AIM VALUE FUND -- CLASS A
   AIM GLOBAL GROWTH &                 AIM WEINGARTEN FUND -- CLASS A
     INCOME FUND -- CLASS A            AIM WORLDWIDE GROWTH
   AIM GLOBAL HEALTH CARE              FUND -- CLASS A
     FUND -- CLASS A
</TABLE>
    
 
                                      A-12
<PAGE>   454
 
   
  Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE; (iii) Class A shares
may be exchanged for Class A shares; (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A, Class B or Class C shares of AIM MONEY MARKET FUND. Class C shares
of AIM Small Cap Opportunities Fund are currently not available.
    
 
  DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
 
<TABLE>
<CAPTION>
                                                                                                      MULTIPLE CLASS FUNDS:
                                                            LOWER LOAD              NO LOAD       ------------------------------
      FROM:                 TO: LOAD FUNDS                     FUNDS                 FUNDS           CLASS B         CLASS C
      -----                 --------------                  ----------              -------          -------         -------
<S>                <C>                                <C>                      <C>                <C>             <C>
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
 
Lower Load Funds.. Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund or any     Fund or any Lower Load
                   Lower Load Fund.                   Fund; otherwise,
                                                      Offering Price.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
 
  FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS REVISED AS FOLLOWS:
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
Lower Load Funds.. Net Asset Value if shares were     Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
                   acquired upon exchange of any
                   Load Fund. Otherwise, difference
                   in sales charge will apply.
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund.           Fund or any Lower Load
                   Difference in sales charge will    Fund; otherwise,
                   apply if No Load shares were       Offering Price.
                   acquired upon exchange of Lower
                   Load Fund shares.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
  Class C........  Not Applicable                     Not Applicable           Not Applicable     Not Applicable  Net Asset Value
</TABLE>
 
   
  An exchange is permitted only in the following circumstances: (a) if the funds
offer more than one class of shares, the exchange must be between the same class
of shares (e.g., Class A, Class B and Class C shares of a Multiple Class Fund
cannot be exchanged for each other) except that AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may be exchanged for Class A shares of another Multiple Class
Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten busi-
    
 
                                      A-13
<PAGE>   455
 
ness days, and all other shares are held in an account for at least one day,
prior to the exchange; and (h) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the AIM
Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
   
  Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged are
redeemed at their net asset value as determined at NYSE Close on the day that an
exchange request in proper form (described below) is received. Exchange requests
received after NYSE Close will result in the redemption of shares at their net
asset value at NYSE Close on the next business day. See "Terms and Conditions of
Purchase of the AIM Funds -- Timing of Purchase, Exchange and Redemption Orders
(AIM MONEY MARKET FUND only)" for information regarding the timing of exchange
orders for AIM MONEY MARKET FUND. Normally, shares of an AIM Fund to be acquired
by exchange are purchased at their net asset value or applicable offering price,
as the case may be, determined on the date that such request is received, but
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that a fund would be materially disadvantaged
by an immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into a fund paying daily dividends (See "Dividends, Distributions and
Tax Matters -- Dividends and Distributions," below), and the release of the
exchange proceeds is delayed for the foregoing five-day period, such shareholder
will not begin to accrue dividends until the sixth business day after the
exchange. Shares purchased by check may not be exchanged until it is determined
that the check has cleared, which may take up to ten business days from the date
that the check is received. See "Terms and Conditions of Purchase of the AIM
Funds -- Timing of Purchase Orders."
    
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the AIM Funds. AIM Distributors reserves the right to impose conditions on
dealers or investment advisors who make telephone exchanges of shares of the
funds, including the condition that any such dealer or investment advisor enter
into an agreement (which contains additional conditions with respect to
exchanges of shares) with AIM Distributors. To exchange shares by telephone, a
shareholder, dealer or investment advisor who has satisfied the foregoing
conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach
AFS by telephone, he may also request exchanges by telegraph or use overnight
courier services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is received
prior to NYSE Close. The Transfer Agent and AIM Distributors will not be liable
for any loss, expense or cost arising out of any telephone exchange request that
they reasonably believe to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions if they do not follow
reasonable procedures for verification of telephone transactions. Such
reasonable procedures may include recordings of telephone transactions
(maintained for six months), requests for confirmation of the shareholder's
Social Security Number and current address, and mailings of confirmations
promptly after the transaction.
 
  EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
 
                                      A-14
<PAGE>   456
 
  MULTIPLE DISTRIBUTION SYSTEM. Class B Shares. Class B shares purchased under
the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
 
<TABLE>
<CAPTION>
  YEARS                                                     CONTINGENT DEFERRED
  SINCE                                                       SALES CHARGE AS
PURCHASE                                                    % OF DOLLAR AMOUNT
  MADE                                                       SUBJECT TO CHARGE
- --------                                                    -------------------
<S>                                                          <C>
First......................................................         5%
Second.....................................................         4%
Third......................................................         3%
Fourth.....................................................         3%
Fifth......................................................         2%
Sixth......................................................         1%
Seventh and Following......................................        None
</TABLE>
 
  In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
 
  Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
 
  Class C Shares. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
 
  Waivers. Contingent deferred sales charges on Class B and Class C shares will
be waived on redemptions (1) following the death or post-purchase disability, as
defined in Section 72(m)(7) of the Code, of a shareholder or a settlor of a
living trust (provided AIM Distributors is notified of such death or
post-purchase disability at the time of the redemption request and is provided
with satisfactory evidence of such death or post-purchase disability), (2) in
connection with certain distributions from IRAs, custodial accounts maintained
pursuant to Code Section 403(b), deferred compensation plans qualified under
Code Section 457 and plans qualified under Code Section 401 (collectively,
"Retirement Plans"), (3) pursuant to a Systematic Withdrawal Plan, provided that
amounts withdrawn under such plan do not exceed on an annual basis 12% of the
value of the shareholder's investment in Class B or Class C shares at the time
the shareholder elects to participate in the Systematic Withdrawal Plan, (4)
effected pursuant to the right of a Multiple Class Fund to liquidate a
shareholder's account if the aggregate net asset value of shares held in the
account is less than the designated minimum account size described in the
prospectus of such Multiple Class Fund, (5) effected by AIM of its investment in
Class B or Class C shares and (6) of Class C shares where such investor's dealer
of record, due to the nature of the investor's account, notifies AIM
Distributors prior to the time of investment that the dealer waives the payment
otherwise payable to the dealer described in the last paragraph under the
caption "Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM
Funds."
 
  Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
 
  Waiver category (2) above applies only to redemptions resulting from:
 
          (i) required minimum distributions to plan participants or
     beneficiaries who are age 70 1/2 or older, and only with respect to that
     portion of such distributions which does not exceed 12% annually of the
     participant's or beneficiary's account value in a particular AIM Fund;
 
                                      A-15
<PAGE>   457
 
          (ii) in-kind transfers of assets where the participant or beneficiary
     notifies AIM Distributors of such transfer no later than the time such
     transfer occurs;
 
          (iii) tax-free rollovers or transfers of assets to another Retirement
     Plan invested in Class B or Class C shares of one or more Multiple Class
     Funds;
 
          (iv) tax-free returns of excess contributions or returns of excess
     deferral amounts; and
 
          (v) distributions upon the death or disability (as defined in the
     Code) of the participant or beneficiary.
 
   
  CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND or Class A shares
of AIM DOLLAR FUND which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code, or Plans created under Section 403(b) of the
Code and sponsored by nonprofit organizations as defined under Section 501(c)(3)
of the Code, where shares are being redeemed in connection with employee
terminations or withdrawals, and (a) the total amount invested in a Plan is at
least $1,000,000, (b) the sponsor of a Plan signs a letter of intent to invest
at least $1,000,000 in one or more of the AIM Funds, or (c) the shares being
redeemed were purchased by an employer-sponsored Plan with at least 100 eligible
employees; provided, however, that Plans created under Section 403(b) of the
Code which are sponsored by public educational institutions shall qualify under
(a), (b) or (c) above on the basis of the value of each Plan participant's
aggregate investment in the AIM Funds, and not on the aggregate investment made
by the Plan or on the number of eligible employees; (2) redemptions of shares
following the death or post-purchase disability, as defined in Section 72(m)(7)
of the Code, of a shareholder or a settlor of a living trust; (3) redemptions of
shares purchased at net asset value by private foundations or endowment funds
where the initial amount invested was at least $1,000,000; (4) redemptions of
shares purchased by an investor in amounts of $1,000,000 or more where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payments otherwise payable to the dealer as described in the third paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds;" and (5) pursuant to a Systematic Withdrawal Plan, provided
that amounts withdrawn under such plan do not exceed on an annual basis 12% of
the value of the shareholder's investment in Class A shares at the time the
shareholder elects to participate in the Systematic Withdrawal Plan.
    
 
  Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  In addition to these requirements, shareholders who have invested in a fund to
establish as IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares; (a) a statement
as to whether or not the shareholder has attained age 59 1/2, and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.
 
                                      A-16
<PAGE>   458
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
this account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
   
  EXPEDITED REDEMPTIONS (AIM Cash Reserve shares of AIM MONEY MARKET FUND
ONLY). If a redemption order is received prior to 11:30 a.m. Eastern Time, the
redemption will be effective on that day and AIM MONEY MARKET FUND will endeavor
to transmit payment on that same business day. If the redemption order is
received after 11:30 a.m. and prior to NYSE Close, the redemption will be made
at the next determined net asset value and payment will generally be transmitted
on the next business day.
    
 
  REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing the
appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone
 
                                      A-17
<PAGE>   459
 
exchange and telephone redemption authorization forms; (7) changes in previously
designated wiring or electronic funds transfer instructions, and (8) written
redemptions or exchanges of shares previously reported as lost, whether or not
the redemption amount is under $50,000 or the proceeds are to be sent to the
address of record. These requirements may be waived or modified upon notice to
shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
    
 
   
  REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within ninety (90) days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment will not alter the taxes due on any
capital gains, except under the circumstances described below. If there has been
a loss on the redemption and shares of the same fund are repurchased, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in shares of the same fund, or exchanged for
shares of another AIM Fund, at a reduced sales charge within 90 days of the
payment of the sales charge, the shareholder's basis in the fund shares redeemed
may not include the amount of the sales charge paid, thereby reducing the loss
or increasing the gain recognized from the redemption; however, the
shareholder's basis in the fund shares purchased will include the sales charge.
Each AIM Fund may amend, suspend or cease offering the privilege at any time as
to shares redeemed after the date of such amendment, suspension or cessation.
This privilege may only be exercised once each year by a shareholder with
respect to each AIM Fund.
    
 
   
  Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of Class A shares and who subsequently reinvest a portion or
all of the value of the redeemed shares in Class A shares of any AIM Fund within
ninety (90) days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
    
 
                                      A-18

<PAGE>   460
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
   
  The net asset value per share (or share price) of each AIM Fund is determined
as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close with
respect to AIM MONEY MARKET FUND) on each "business day" of a fund as previously
defined. In the event the NYSE closes early (i.e. before 4:00 p.m. Eastern Time)
on a particular day, the net asset value of an AIM Fund's share will be
determined as of the close of the NYSE on such day. For purposes of defining net
asset value per share, futures and options contracts generally will be valued 15
minutes after the close of trading of the NYSE. The net asset value per share is
calculated by subtracting a class' liabilities from its assets and dividing the
result by the total number of class shares outstanding. The determination of net
asset value per share is made in accordance with generally accepted accounting
principles. Among other items, liabilities include accrued expenses and
dividends payable, and total assets include portfolio securities valued at their
market value, as well as income accrued but not yet received. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the fund's officers and
in accordance with methods which are specifically authorized by its governing
Board of Directors or Trustees. Short-term obligations with maturities of 60
days or less, and the securities held by the Money Market Funds, are valued at
amortized cost as reflecting fair value. AIM HIGH INCOME MUNICIPAL FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-FREE
INTERMEDIATE FUND value variable rate securities that have an unconditional
demand or put feature exercisable within seven days or less at par, which
reflects the market value of such securities.
    
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as
set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                DISTRIBUTIONS    DISTRIBUTIONS
                                                                                   OF NET           OF NET
                                                    DIVIDENDS FROM                REALIZED         REALIZED
                                                    NET INVESTMENT               SHORT-TERM        LONG-TERM
                   FUND                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
                   ----                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM ADVISOR FLEX FUND.....................  declared and paid quarterly       quarterly          annually
AIM ADVISOR INTERNATIONAL VALUE FUND......  declared and paid annually        annually           annually
AIM ADVISOR LARGE CAP VALUE FUND..........  declared and paid quarterly       quarterly          annually
AIM ADVISOR MULTIFLEX FUND................  declared and paid quarterly       quarterly          annually
AIM ADVISOR REAL ESTATE FUND..............  declared and paid quarterly       quarterly          annually
AIM AGGRESSIVE GROWTH FUND................  declared and paid annually        annually           annually
AIM ASIAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM BALANCED FUND.........................  declared and paid quarterly       annually           annually
AIM BASIC VALUE FUND......................  declared and paid annually        annually           annually
AIM BLUE CHIP FUND........................  declared and paid annually        annually           annually
AIM CAPITAL DEVELOPMENT FUND..............  declared and paid annually        annually           annually
AIM CHARTER FUND..........................  declared and paid quarterly       annually           annually
AIM CONSTELLATION FUND....................  declared and paid annually        annually           annually
AIM DEVELOPING MARKETS FUND...............  declared and paid annually        annually           annually
AIM DOLLAR FUND...........................  declared daily; paid monthly      annually           annually
AIM EMERGING MARKETS FUND.................  declared and paid annually        annually           annually
AIM EMERGING MARKETS DEBT FUND............  declared and paid monthsly        annually           annually
AIM EUROPE GROWTH FUND....................  declared and paid annually        annually           annually
AIM EUROPEAN DEVELOPMENT FUND.............  declared and paid annually        annually           annually
AIM GLOBAL AGGRESSIVE GROWTH FUND.........  declared and paid annually        annually           annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
  FUND....................................  declared and paid annually        annually           annually
AIM GLOBAL FINANCIAL SERVICES FUND........  declared and paid annually        annually           annually
</TABLE>
    
 
                                      A-19
<PAGE>   461
 
   
<TABLE>
<CAPTION>
                                                                             DISTRIBUTIONS    DISTRIBUTIONS
                                                                                OF NET           OF NET
                                                 DIVIDENDS FROM                REALIZED         REALIZED
                                                 NET INVESTMENT               SHORT-TERM        LONG-TERM
FUND                                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
- ----                                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM GLOBAL GOVERNMENT INCOME FUND.........  declared and paid monthly         annually           annually
AIM GLOBAL GROWTH FUND....................  declared and paid annually        annually           annually
AIM GLOBAL GROWTH & INCOME FUND...........  declared and paid quarterly       annually           annually
AIM GLOBAL HEALTH CARE FUND...............  declared and paid annually        annually           annually
AIM GLOBAL INCOME FUND....................  declared daily; paid monthly      annually           annually
AIM GLOBAL INFRASTRUCTURE FUND............  declared and paid annually        annually           annually
AIM GLOBAL RESOURCES FUND.................  declared and paid annually        annually           annually
AIM GLOBAL TELECOMMUNICATIONS FUND........  declared and paid annually        annually           annually
AIM GLOBAL TRENDS FUND....................  declared and paid annually        annually           annually
AIM GLOBAL UTILITIES FUND.................  declared daily; paid monthly      annually           annually
AIM HIGH INCOME MUNICIPAL FUND............  declared daily; paid monthly      annually           annually
AIM HIGH YIELD FUND.......................  declared daily; paid monthly      annually           annually
AIM INCOME FUND...........................  declared daily; paid monthly      annually           annually
AIM INTERMEDIATE GOVERNMENT FUND..........  declared daily; paid monthly      annually           annually
AIM INTERNATIONAL EQUITY FUND.............  declared and paid annually        annually           annually
AIM INTERNATIONAL GROWTH FUND.............  declared and paid annually        annually           annually
AIM JAPAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM LATIN AMERICAN GROWTH FUND............  declared and paid annually        annually           annually
AIM LIMITED MATURITY TREASURY FUND........  declared daily; paid monthly      annually           annually
AIM MID CAP EQUITY FUND...................  declared and paid annually        annually           annually
AIM MONEY MARKET FUND.....................  declared daily; paid monthly      at least annually  annually
AIM MUNICIPAL BOND FUND...................  declared daily; paid monthly      annually           annually
AIM NEW PACIFIC GROWTH FUND...............  declared and paid annually        annually           annually
AIM SELECT GROWTH FUND....................  declared and paid annually        annually           annually
AIM SMALL CAP GROWTH FUND.................  declared and paid annually        annually           annually
AIM SMALL CAP OPPORTUNITIES FUND..........  declared and paid annually        annually           annually
AIM STRATEGIC INCOME FUND.................  declared and paid monthly         annually           annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT...  declared daily; paid monthly      annually           annually
AIM TAX-EXEMPT CASH FUND..................  declared daily; paid monthly      at least annually  annually
AIM TAX-FREE INTERMEDIATE FUND............  declared daily; paid monthly      annually           annually
AIM VALUE FUND............................  declared and paid annually        annually           annually
AIM WEINGARTEN FUND.......................  declared and paid annually        annually           annually
AIM WORLDWIDE GROWTH FUND.................  declared and paid annually        annually           annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in like shares of another
Multiple Class Fund, to the extent permitted. For funds that do not declare a
dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. For funds that declare
a dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or the
dividend portion thereof, in cash, or to invest such dividends and distributions
in shares of another fund in the AIM Funds; provided that (i) dividends and
distributions attributable to Class B shares may only be reinvested in Class B
shares, (ii) dividends and distributions attributable to Class C shares may only
be reinvested in Class C shares, (iii) dividends and distributions attributable
to Class A shares may not be reinvested in Class B or Class C shares, and (iv)
dividends and distributions attributable to the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may not be reinvested in the Class A shares of that Fund or in
any Class B or Class C shares. Investors who have not previously selected such a
reinvestment option on the account application form may contact the Transfer
Agent at any time to obtain a form to authorize such reinvestments in another
AIM Fund. Such reinvestments into the AIM Funds are not subject to sales
charges, and shares so purchased are automatically credited to the account of
the shareholder.
 
  Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
 
                                      A-20
<PAGE>   462
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares, except for "exempt-interest dividends" paid by
AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND
FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND
(the "Tax-Exempt Funds"), which are exempt from federal income tax. With respect
to tax-exempt shareholders, dividends and distributions from the AIM Funds are
not subject to federal income taxation to the extent permitted under the
applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    
 
   
  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
    
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
                                      A-21
<PAGE>   463
   
 TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
  TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other taxable securities. For
additional information concerning the alternative minimum tax and certain
collateral tax consequences of the receipt of exempt-interest dividends, see the
Statements of Additional Information applicable to the Tax-Exempt Funds.
 
  The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
 
  To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
 
  From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP EQUITY FUND,
AIM SMALL CAP GROWTH FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX INFORMATION.
Certain states exempt from income taxes dividends paid by mutual funds
attributable to interest on U.S. Treasury and certain other U.S. government
obligations. Investors should consult with their own tax advisors concerning the
availability of such exemption.
    
 
  AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH
FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do
so, each of these funds may elect to pass through to its shareholders credits
for foreign taxes paid. If a fund makes such an election, a shareholder who
receives a distribution (1) will be required to include in gross income his
proportionate share of foreign taxes allocable to the distribution and (2) may
claim a credit or deduction for such share for his taxable year in which the
distribution is received, subject to the general limitations imposed on the
allowance of foreign tax credits and deductions. Shareholders should also note
that certain gains or losses attributable to fluctuations in exchange rates or
foreign currency forward contracts may increase or decrease the amount of income
of the fund available for distribution to shareholders and should note that if,
for any fund, such losses exceed other income during a taxable year, the fund
would not be able to pay ordinary income dividends for that year.
 
                                      A-22
<PAGE>   464
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each AIM Fund's transfer agent and dividend
payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-23
<PAGE>   465
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
 
 
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                              GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
      ACCOUNT TYPE            NUMBER OF:                       ACCOUNT TYPE                  NUMBER OF:
      ------------            --------------------             ------------                  ------------------
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary
      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application
      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors
      Legal Guardian          Ward, Minor or
                              Incompetent
      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
 
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   466
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   467
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
 
   
GTL-PRO-1
    
<PAGE>   468
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
CLASS A SHARES AND CLASS B SHARES OF
    
 
   
AIM LATIN AMERICAN GROWTH FUND
    
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
PROSPECTUS
SEPTEMBER 8, 1998
 
   
This Prospectus contains information about AIM LATIN AMERICAN GROWTH FUND (the
"Fund"), which is one of several series investment portfolios comprising AIM
Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a non-diversified portfolio which seeks capital
appreciation by investing primarily in equity and debt securities of a broad
range of Latin American issuers.
    
 
The Fund is designed for long term investors and not as a trading vehicle. The
Fund does not represent a complete investment program, nor is it suitable for
all investors. The Fund may invest significantly in lower quality and unrated
foreign government bonds whose credit quality is generally considered the
equivalent of U.S. corporate debt securities commonly known as "junk bonds."
Investments of this type are subject to a greater risk of loss of principal and
interest. An investment in the Fund should be considered speculative and subject
to special risk factors, related primarily to the Fund's investments in Latin
America. Purchasers should carefully assess the risks associated with an
investment in the Fund.
 
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information dated
September 8, 1998 has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   469
- --------------------------------------------------------------------------------
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     7
  Investment Program...................     7
  Risk Factors.........................    10
  Management...........................    12
  Organization of the Trust............    15
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  Introduction to The AIM Family of
     Funds.............................   A-1
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-9
  Exchange Privilege...................  A-12
  How to Redeem Shares.................  A-14
  Determination of Net Asset Value.....  A-19
  Dividends, Distributions and Tax
     Matters...........................  A-19
  General Information..................  A-23
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
  The Fund is a non-diversified series of the Trust.
 
  INVESTMENT OBJECTIVE. The Fund seeks capital appreciation.
 
  PRINCIPAL INVESTMENT. The Fund normally invests at least 65% of its total
assets in equity and debt securities issued by Latin American companies and
governments.
 
   
  INVESTMENT MANAGERS. The Fund is managed by A I M Advisors, Inc. ("AIM") and
is sub-advised and sub-administered by INVESCO (NY), Inc. (the "Sub-advisor").
AIM and the Sub-advisor and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-advisor are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
AIM was organized in 1976 and, together with its subsidiaries, currently advises
approximately 90 investment company portfolios.
    
 
  PURCHASING SHARES. Investors may select Class A or Class B shares of the Fund
which are offered by this Prospectus at an offering price that reflects
differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to
a separate prospectus, the Fund also offers Advisor Class shares, which
represent interests in the Fund. The Advisor Class has different distribution
arrangements.
 
  CLASS A SHARES -- Shares are offered at net asset value plus any applicable
initial sales charge.
 
  CLASS B SHARES -- Shares are offered at net asset value without an initial
sales charge and are subject to a maximum contingent deferred sales charge of 5%
on certain redemptions made within six years from the date such shares were
purchased. Class B shares automatically convert to Class A shares of the Fund
eight years following the end of the calendar month in which a purchase was
made. Class B shares are subject to higher expenses than Class A shares.
 
  Initial investments in any class of shares must be at least $500 and
additional investments must be at least $50. The minimum initial investment is
modified for investments through tax-qualified retirement plans and accounts
initially established with an Automatic Investment Plan. The distributor of the
Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
 
  SUITABILITY FOR INVESTORS. An investor in Class A or Class B shares of the
Fund should consider the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the shares are expected to
be held, and other circumstances. Investors should consider whether, during the
anticipated life of their investment in the Fund, the accumulated distribution
fees and any applicable contingent deferred sales charges on Class B shares
prior to conversion would be less than the initial sales charge and accumulated
distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares.
To assist investors in making this determination, the table under the caption
"Table of Fees and Expenses" sets forth examples of the charges applicable to
each class of shares. Class A shares will normally be more beneficial than Class
B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase
of more than $250,000 for Class B shares.
 
                                        2
<PAGE>   470
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds"). Class
A and Class B shares of the Fund may be exchanged for shares of other funds in
The AIM Family of Funds in the manner and subject to the policies and charges
set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Class A shareholders of the Fund may redeem all or a portion
of their shares at net asset value on any business day, generally without
charge. A contingent deferred sales charge of 1% may apply to certain
redemptions where a purchase of more than $1 million is made at net asset value.
See "How to Redeem Shares -- Contingent Deferred Sales Charge Program for Large
Purchases."
 
   
  Class B shareholders of the Fund may redeem all or a portion of their shares
at net asset value on any business day, less a contingent deferred sales charge
for redemptions made within six years from the date such shares were purchased.
Class B shares redeemed after six years from the date such shares were purchased
will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
    
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters" and "Special Plans."
    
 
   
  RISK FACTORS. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset values will fluctuate, reflecting fluctuations
in the market value of the portfolio holdings. The Fund invests primarily in
foreign securities. Investments in foreign securities involve risks relating to
political and economic developments abroad and the differences between the
regulations to which U.S. and foreign issuers are subject. Individual foreign
economies also may differ favorably or unfavorably from the U.S. economy.
Changes in foreign currency exchange rates will affect the Fund's net asset
value, earnings and gains and losses realized on sales of securities. Securities
of foreign companies may be less liquid and their prices more volatile than
those of securities of comparable U.S. companies.
    
 
   
  The Fund invests a significant portion of its assets in equity and debt
securities of Latin American issuers. As a result, the Fund may be subject to
greater volatility than a fund that is more broadly diversified geographically.
    
 
   
  The Fund may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs. There is no limitation
on the percentage of the Fund's total assets that may be invested in below
investment grade debt securities. Investments of this type are subject to a
greater risk of loss of principal and interest. See "Investment Program" and
"Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   471
 
                                    THE FUND
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction cost associated with investing in the
Class A and Class B shares of the Fund are reflected in the following tables(1):
 
<TABLE>
<CAPTION>
                                                              CLASS A   CLASS B
                                                              -------   -------
<S>                                                           <C>       <C>
Shareholder Transaction Costs(2):
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................   4.75%     None
  Sales charges on reinvested distributions to
     shareholders...........................................   None      None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........   None      5.00%
  Redemption charges........................................   None      None
  Exchange fees.............................................   None      None
Annual Fund Operating Expenses(3): (as a % of average net
  assets)
  Investment management and administration fees.............   0.98%     0.98%
  12b-1 distribution and service fees.......................   0.50%     1.00%
  Other expenses (after reimbursements and waivers).........   0.52%     0.52%
                                                               ----      ----
          Total Fund Operating Expenses.....................   2.00%     2.50%
                                                               ====      ====
</TABLE>
 
(1)  This table is intended to assist investors in understanding the various
     costs and expenses associated with investing in the Fund. Long-term
     shareholders may pay more than the economic equivalent of the maximum
     front-end sales charges permitted by the NASD rules regarding investment
     companies.
 
(2)  Sales charge waivers are available for Class A and Class B shares, and
     reduced sales charge purchase plans are available for Class A shares. The
     maximum 5% contingent deferred sales charge on Class B shares applies to
     redemptions during the first year after purchase. The charge generally
     declines by 1% annually thereafter, reaching zero after six years. See
     "Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
     Sales Charges."
 
   
(3)  Expenses are based on the Fund's fiscal year ended October 31, 1997
     restated to reflect the current expense limits. "Other expenses" include
     custody, transfer agency, legal, audit and other operating expenses. AIM
     has undertaken to limit the Fund's expenses (exclusive of brokerage
     commissions, taxes, interest and extraordinary expenses) to the annual rate
     of 2.00% and 2.50% of the average daily net assets of the Fund's Class A
     and Class B shares, respectively. AIM has voluntarily agreed to continue
     this limitation through May 31, 2000. Without reimbursements and waivers,
     "Other Expenses" and "Total Fund Operating Expenses" would have been 0.58%
     and 2.06%, respectively, for Class A shares and 0.58% and 2.56%,
     respectively, for Class B Shares of the Fund. See "Management" herein and
     the Statement of Additional Information for more information.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                     1 YEAR   3 YEARS   5 YEARS   10 YEARS(3)
                                                     ------   -------   -------   -----------
<S>                                                  <C>      <C>       <C>       <C>
Class A Shares(1)..................................   $67      $108      $151        $270
Class B Shares
  Assuming a complete redemption at end of
     period(2).....................................   $77      $111      $157        $274
  Assuming no redemption...........................   $26      $ 79      $135        $274
</TABLE>
    
 
   
(1)  Assumes payment of maximum sales charge by the investor.
    
 
   
(2)  Assumes deduction of the applicable contingent deferred sales charge.
    
 
   
(3)  For Class B shares, this number reflects the conversion to Class A shares
     eight years following the end of the calendar month in which a purchase was
     made.
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT EXPENSES, MAY
BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE ASSUMPTION IN THE
HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY REGULATION OF THE SEC
APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS NOT A PREDICTION OF AND
DOES NOT REPRESENT THE FUND'S PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   472
 
   
- --------------------------------------------------------------------------------
    
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The table below provides condensed financial information concerning income and
capital changes for one Class A and Class B share of the Fund. This information
is supplemented by the financial statements and accompanying notes appearing in
the Statement of Additional Information. The financial statements and notes for
the fiscal year ended October 31, 1997 and the semi-annual period ended April
30, 1998, have been audited by PricewaterhouseCoopers LLP, independent
accountants, whose report thereon is included in the Statement of Additional
Information.
    
 
   
                         AIM LATIN AMERICAN GROWTH FUND
    
   
                    (FORMERLY GT LATIN AMERICA GROWTH FUND)
    
 
   
<TABLE>
<CAPTION>
                                                                                                                 AUGUST 13, 1991
                                  SIX MONTHS                                                                        (COMMENCE-
                                    ENDED                           YEAR ENDED OCTOBER 31,                           MENT OF
                                  APRIL 30,     --------------------------------------------------------------    OPERATIONS) TO
                                   1998(A)      1997(A)    1996(A)    1995(A)    1994(A)    1993(A)     1992     OCTOBER 31, 1991
                                  ----------    --------   --------   --------   --------   --------   -------   ----------------
<S>                               <C>           <C>        <C>        <C>        <C>        <C>        <C>       <C>
CLASS A+
Per Share Operating Performance:
Net asset value, beginning of
  period........................   $  19.50     $  17.95   $  15.38   $  26.11   $  19.78   $  15.59   $ 16.45       $  14.29
Income from investment
  operations:
  Net investment income
    (loss)......................       0.09**       0.11       0.09       0.15      (0.08)      0.18*     0.25*          0.01*
  Net realized and unrealized
    gain (loss) on
    investments.................       1.15         1.44       2.59      (9.28)      6.75       5.21     (0.98)          2,15
                                   --------     --------   --------   --------   --------   --------   -------       --------
    Net increase (decrease) from
      investment operations.....       1.24         1.55       2.68      (9.13)      6.67       5.39     (0.73)          2.16
                                   --------     --------   --------   --------   --------   --------   -------       --------
Distributions:
  From net investment income....      (0.03)          --      (0.08)        --      (0.19)     (0.12)    (0.13)            --
  From net realized gain on
    investments.................         --           --         --      (1.60)     (0.15)     (1.08)       --             --
  In excess of net investment
    income......................         --           --      (0.03)        --         --         --        --             --
                                   --------     --------   --------   --------   --------   --------   -------       --------
        Total distributions.....      (0.03)          --      (0.11)     (1.60)     (0.34)     (1.20)    (0.13)            --
Net asset value, end of
  period........................   $  20.71     $  19.50   $  17.95   $  15.38   $  26.11   $  19.78   $ 15.59       $  16.45
                                   ========     ========   ========   ========   ========   ========   =======       ========
Total investment return(d)......       6.50%(b)     8.52%     17.52%    (37.16)%    34.10%      37.1%     (4.5)%         15.1%(b)
                                   --------     --------   --------   --------   --------   --------   -------       --------
Ratios and supplemental data:
Net assets, end of period (in
  000's)........................   $131,815     $159,496   $177,373   $182,462   $336,960   $129,280   $94,085       $125,038
Ratio of net investment income
  (loss) to average net
  assets........................
  With expense reductions and
    reimbursements..............       0.90%(c)     0.52%      0.46%      0.86%     (0.29)%     1.29%*     1.3%*          1.2%*(c)
  Without expense reductions and
    reimbursements..............       0.71%(c)     0.42%      0.39%      0.85%       N/A        1.2%      N/A            N/A
Ratio of operating expenses to
  average net assets:
  With expense reductions and
    reimbursements..............       1.99%(c)     1.96%      2.03%      2.11%      2.04%       2.4%*     2.4%*          2.4%*(c)
  Without expense reductions and
    reimbursements..............       2.18%(c)     2.06%      2.10%      2.12%       N/A       2.49%      N/A            N/A
Ratio of interest expense to
  average net assets +++........       0.16%(c)      N/A        N/A        N/A        N/A        N/A       N/A            N/A
Portfolio turnover rate +++.....         27%(c)      130%       101%       125%       155%       112%      159%           N/A
Average commission rate per
  share paid on portfolio
  transactions +++..............   $ 0.0016     $ 0.0007   $ 0.0005        N/A        N/A        N/A       N/A            N/A
</TABLE>
    
 
- ---------------
 
   
+   All capital shares issued and outstanding as of March 31, 1993 were
    reclassified as Class A shares.
    
 
   
+++ Portfolio turnover, average commission rates and ratio of interest expense
    to average net assets are calculated on the basis of the Fund as a whole
    without distinguishing between the classes of shares issued.
    
 
   
*   Includes reimbursement by the Sub-advisor of Fund operating expenses of
    $0.02, $0.04, and $0.01 for the years ended October 31, 1993 and 1992 and
    for the period from August 13, 1991 (commencement of operations) to October
    31, 1991, respectively. Without such reimbursements, the expense ratios
    would have been 2.49%, 2.62% and 3.42% and the ratios of net investment
    income to average net assets would have been 1.25%, 1.07% and 0.15% for the
    years ended October 31, 1993 and 1992 and for the period from August 13,
    1991 to October 31, 1991, respectively.
    
 
   
**  Before reimbursement by the Sub-advisor, the net investment income per share
    would have been reduced by $0.02.
    
 
   
(a) These selected per share data were calculated based upon average shares
    outstanding during the period.
    
 
   
(b) Not annualized.
    
 
   
(c) Annualized.
    
 
   
(d) Total investment return does not include sales charges.
    
 
   
N/A Not Applicable.
    
 
                                        5
<PAGE>   473
 
   
<TABLE>
<CAPTION>
                                                SIX MONTHS
                                                   ENDED                 YEAR ENDED OCTOBER 31,
                                                 APRIL 30,      -----------------------------------------    APRIL 1, 1993 TO
                                                  1998(A)       1997(A)    1996(A)    1995(A)    1994(A)    OCTOBER 31, 1993(A)
                                                -----------     --------   --------   --------   --------   -------------------
<S>                                             <C>             <C>        <C>        <C>        <C>        <C>
CLASS B++
Per Share Operating Performance:
Net asset value, beginning of period..........   $  19.23       $  17.78   $  15.21   $  25.94   $  19.75         $ 16.26
                                                 --------       --------   --------   --------   --------         -------
Income from investment operations:
  Net investment income (loss)................        0.04**        0.01         --       0.06      (0.22)          (0.07)
  Net realized and unrealized gain (loss) on
    investments...............................       1.13           1.44       2.59      (9.19)      6.74            3.56
                                                 --------       --------   --------   --------   --------         -------
    Net increase (decrease) from investment
      operations..............................       1.17           1.45       2.59      (9.13)      6.52            3.49
                                                 --------       --------   --------   --------   --------         -------
Distributions:
  From net investment income..................         --             --      (0.01)        --      (0.18)             --
  From net realized gain on investments.......         --             --         --      (1.60)     (0.15)             --
  In excess of net investment income..........         --             --      (0.01)        --         --              --
                                                 --------       --------   --------   --------   --------         -------
        Total distributions...................         --             --      (0.02)     (1.60)     (0.33)             --
                                                 --------       --------   --------   --------   --------         -------
Net asset value, end of period................   $  20.40       $  19.23   $  17.78   $  15.21   $  25.94         $ 19.75
                                                 ========       ========   ========   ========   ========         =======
Total investment return(d)....................       6.19%(b)       8.04%     17.02%    (37.42)%    33.33%           21.5%(b)
                                                 ========       ========   ========   ========   ========         =======
Ratios and supplemental data:
Net assets, end of period (in 000's)..........   $112,322       $133,448   $137,400   $134,527   $211,673         $13,576
Ratio of net investment income (loss) to
  average net assets:
  With expense reductions and reimbursement by
    the Sub-advisor...........................       0.40%(c)       0.02%     (0.04)%     0.36%     (0.79)%                (0.7)%(c)
  Without expense reductions and reimbursement
    by the Sub-advisor........................       0.21%(c)      (0.08)%    (0.11)%     0.35%       N/A             N/A
Ratio of expenses to average net assets:
  With expense reductions.....................       2.49%(c)       2.46%      2.53%      2.61%      2.54%            2.9%(c)
  Without expense reductions..................       2.68%(c)       2.56%      2.60%      2.62%       N/A             N/A
Ratio of interest expense to average net
  assets +++..................................       0.16%(c)        N/A        N/A        N/A        N/A             N/A
Portfolio turnover rate +++...................         27%(c)        130%       101%       125%       155%            112%
Average commission rate per share paid on
  portfolio transactions +++..................   $ 0.0016       $ 0.0007   $ 0.0005        N/A        N/A             N/A
</TABLE>
    
 
- ---------------
 
   
++  Commencing April 1, 1993, the Fund began offering Class B shares.
    
 
   
+++ Portfolio turnover, average commission rates and ratio of interest expense
    to average net assets are calculated on the basis of the Fund as a whole
    without distinguishing between the classes of shares issued.
    
 
   
**  Before reimbursement the net investment income per share would have been
    reduced by $0.02.
    
 
   
(a) These selected per share data were calculated based upon average shares
    outstanding during the year.
    
 
   
(b) Not annualized.
    
 
   
(c) Annualized.
    
 
   
(d) Total investment return does not include sales charges.
    
 
   
N/A Not Applicable.
    
 
   
<TABLE>
<CAPTION>
                                                                                    AVERAGE MONTHLY
                                                                    AVERAGE            NUMBER OF
                                                 AMOUNT OF         AMOUNT OF         REGISTRANT'S          AVERAGE
                                                    DEBT             DEBT               SHARES              AMOUNT
                                                OUTSTANDING       OUTSTANDING         OUTSTANDING        OF DEBT PER
                                                     AT           DURING THE          DURING THE         SHARE DURING
YEAR ENDED                                     END OF PERIOD        PERIOD              PERIOD            THE PERIOD
- ----------                                     --------------   ---------------   -------------------   --------------
<S>                                            <C>              <C>               <C>                   <C>
Six months ended April 30, 1998..............    $       --       $3,165,121          13,623,707           $ 0.232
October 31, 1997.............................    $3,238,000       $1,519,383          16,973,475           $0.0895
</TABLE>
    
 
   
  Amount of debt outstanding during the period is computed on a daily basis.
    
 
                                        6
<PAGE>   474
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return. Standardized total return
for Class A shares reflects the deduction of the Fund's maximum front-end sales
charge at the time of purchase. Standardized total return for Class B shares
reflects the deduction of the maximum applicable contingent deferred sales
charge on a redemption of shares held for the period.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's yield and total return. The performance
of the Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVE. The Fund's investment objective is capital appreciation.
The Fund normally invests at least 65% of its total assets in the securities of
a broad range of Latin American issuers. The Fund may invest in common stock,
preferred stock, rights, warrants and securities convertible into common stock,
and other substantially similar forms of equity securities with comparable risk
characteristics, as well as bonds, notes, debentures or other forms of
indebtedness that may be developed in the future. Normally, the Fund will invest
a majority of its assets in equity securities. The Fund may also invest up to
35% of its total assets in a combination of equity and debt securities of U.S.
issuers. There can be no assurance that the Fund will meet its investment
objective.
    
 
   
  INVESTMENT POLICIES. For purposes of this Prospectus, unless otherwise
indicated, the Fund defines Latin America to include the following countries:
Argentina, the Bahamas, Barbados, Belize, Bolivia, Brazil, Chile, Colombia,
Costa Rica, Dominican Republic, Ecuador, El Salvador, French Guiana, Guatemala,
Guyana, Haiti, Honduras, Jamaica, Mexico, the Netherlands Antilles, Nicaragua,
Panama, Paraguay, Peru, Suriname, Trinidad and Tobago, Uruguay and Venezuela.
Under current market conditions, the Fund expects to invest primarily in
securities issued by companies and governments in Mexico, Chile, Brazil and
Argentina. The Fund may invest more than 25% of its total assets in any of these
four countries but does not expect to invest more than 60% of its total assets
in any one country.
    
 
   
  The Fund defines securities of Latin American issuers to include: (a)
securities of companies organized under the laws of, or having a principal
office located in, a Latin American country; (b) securities of companies that
derive 50% or more of their total revenues from business in Latin America,
provided that, in the Sub-advisor's view, the value of such issuers' securities
reflect Latin American developments to a greater extent than developments
elsewhere; (c) securities issued or guaranteed by the government of a country in
Latin America, its agencies or instrumentalities, or municipalities, or the
central bank of such country; (d) U.S. dollar-denominated securities or
securities denominated in a Latin American currency issued by companies to
finance operations in Latin America; and (e) securities of Latin American
issuers, as defined herein, in the form of depositary shares. For purposes of
the foregoing definition, the Fund's purchases of securities issued by companies
outside of Latin America to finance their Latin American operations will be
limited to securities the performance of which is materially related to such
company's Latin American activities.
    
 
   
  In allocating investments among the various Latin American countries, the
Sub-advisor looks principally at the stage of industrialization, potential for
productivity gains through economic deregulation, the impact of financial
liberalization and monetary conditions and the political outlook in each
country. In allocating assets between equity and debt securities, the
Sub-advisor will consider, among other factors: the level and anticipated
direction of interest rates; expected rates of economic growth and corporate
profits growth; changes in Latin American government policy including regulation
governing industry, trade, financial markets, and foreign and domestic
investment; substance and likely development of government finances; and the
condition of the balance of payments and changes in the terms of trade. In
evaluating investments in securities of U.S. issuers, the Sub-advisor will
consider, among other fac-
    
 
                                        7
<PAGE>   475
 
tors, the issuer's Latin American business activities and the impact that
development in Latin America may have on the issuer's operations and financial
condition.
 
  Certain sectors of the economies of certain Latin American countries are
closed to equity investments by foreigners. Further, due to the absence of
securities markets and publicly owned corporations and due to restrictions on
direct investment by foreign entities in certain Latin American countries, the
Fund may be able to invest in such countries solely or primarily through
governmentally approved investment vehicles or companies. In addition, the
portion of the Fund's assets invested directly in Chile may be less than the
portion invested in other Latin American countries because, at present, capital
directly invested in Chile normally cannot be repatriated for at least one year.
As a result, the Fund currently intends to limit most of its Chilean investments
to indirect investments through American Depositary Receipts ("ADRs") and
established Chilean investment companies, the shares of which are not subject to
repatriation restrictions.
 
   
  CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objective and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
  INVESTMENTS IN DEBT SECURITIES. Under normal circumstances, the Fund may
invest up to 50% of its total assets in debt securities. There is no limitation
on the percentage of its assets that may be invested in debt securities that are
rated below investment grade. Investment in below investment grade debt
securities involves a high degree of risk and can be speculative. These debt
securities are the equivalent of high yield, high risk bonds, commonly known as
"junk bonds." Most debt securities in which the Fund will invest are not rated;
if rated, it is expected that such ratings would be below investment grade.
However, the Fund will not invest in debt securities that are in default in
payment as to principal or interest. See "Risk Factors -- Risks Associated with
Debt Securities."
 
  The Fund may invest in "Brady Bonds," which are debt restructurings that
provide for the exchange of cash and loans for newly issued bonds. Brady Bonds
have been issued by the countries of Albania, Argentina, Brazil, Bulgaria, Costa
Rica, Dominican Republic, Ecuador, Ivory Coast, Jordan, Mexico, Nigeria, Panama,
Peru, Philippines, Poland, Uruguay, Venezuela and Vietnam, and are expected to
be issued by other emerging market countries. As of the date of this Prospectus,
the Fund is not aware of the occurrence of any payment defaults on Brady Bonds.
Investors should recognize, however, that Brady Bonds do not have a long payment
history. In addition, Brady Bonds are often rated below investment grade.
 
  The Fund may invest in either collateralized or uncollateralized Brady Bonds.
U.S. dollar-denominated, collateralized Brady Bonds, which may be fixed rate par
bonds or floating rate discount bonds, are collateralized in full as to
principal by U.S. Treasury zero coupon bonds having the same maturity as the
bonds. Interest payments on such bonds generally are collateralized by cash or
securities in an amount that, in the case of fixed rate bonds, is equal to at
least one year of rolling interest payments or, in the case of floating rate
bonds, initially is equal to at least one year's rolling interest payments based
on the applicable interest rate at the time of issuance and is adjusted at
regular intervals thereafter.
 
  Capital appreciation in debt securities may arise as a result of a favorable
change in relative foreign exchange rates, in relative interest rate levels
and/or in the creditworthiness of issuers. The receipt of income from debt
securities owned by the Fund is incidental to its objective of capital
appreciation.
 
   
  TEMPORARY DEFENSIVE STRATEGIES. The Fund may invest up to 100% of its assets
in cash (U.S. dollars, foreign currencies, multinational units such as euros)
and/or high quality debt securities or money market instruments to generate
income to defray its expenses, for temporary defensive purposes and pending
investment in accordance with its investment objective and policies.
    
 
   
  In addition, the Fund may be primarily invested in U.S. securities for
temporary defensive purposes or pending investment of the proceeds of sales of
new Fund shares. The Fund may assume a temporary defensive position when, due to
political, market or other factors broadly affecting Latin American markets, the
Sub-advisor determines that opportunities for capital appreciation in those
markets would be significantly limited over an extended period or that investing
in those markets presents undue risk of loss. For a full description of money
market instruments, see "Temporary Defensive Strategies" in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
    
 
   
  INVESTMENT IN OTHER INVESTMENT COMPANIES OR VEHICLES. The Fund may be able to
invest in certain countries solely or primarily through governmentally
authorized investment vehicles or companies, some of which may be investment
vehicles or companies that are advised by the Sub-advisor or its affiliates
("Affiliated Funds"). Pursuant to the Investment Company Act of 1940 (the "1940
Act"), the Fund generally may invest up to 10% of its total assets in the
aggregate in shares of other investment companies and up to 5% of its total
assets in any one investment company, as long as each investment does not
represent more than 3% of the outstanding voting stock of the acquired
investment company at the time of investment.
    
 
   
  Investment in other investment companies may involve the payment of
substantial premiums above the value of such investment companies' portfolio
securities and is subject to limitations under the 1940 Act and market
availability. The Fund does not intend to invest in such investment companies
unless, in the judgment of the Sub-advisor, the potential benefits of such
investment justify the payment of any applicable premium or sales charge. As a
shareholder in an investment company, the Fund would bear its ratable share of
that investment company's expenses, including its advisory and administration
fees. At the same time the Fund would continue to pay its own management fees
and other expenses. AIM and the Sub-advisor will waive their advisory fees to
the extent that the Fund invests in an Affiliated Fund.
    
 
                                        8
<PAGE>   476
 
   
  SECURITIES LENDING. The Fund may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows a
Fund to retain ownership of the securities loaned and, at the same time,
enhances the Fund's total return. At all times a loan is outstanding, the Fund's
borrower must maintain with the Fund's custodian collateral consisting of cash,
U.S. government securities or certain irrevocable letters of credit equal to at
least the value of the borrowed securities plus any accrued interest or such
other collateral as permitted by the Fund's investment program and regulatory
agencies, and as approved by the Board. The Fund limits its loans of portfolio
securities to an aggregate of 30% of the value of its total assets, measured at
the time any such loan is made. The risks in lending portfolio securities, as
with other extensions of secured credit, consist of possible delays in receiving
additional collateral or in recovery of the loaned securities and possible loss
of rights in the collateral should the borrower fail financially.
    
 
   
  PRIVATIZATIONS. The governments in some Latin American countries have been
engaged in programs of selling part or all of their stakes in government owned
or controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Fund in privatizations in appropriate
circumstances. In certain Latin American countries, the ability of foreign
entities such as the Fund to participate in privatizations may be limited by
local law, or the terms on which the Fund may be permitted to participate may be
less advantageous than those afforded local investors. There can be no assurance
that Latin American governments and governments in emerging markets will
continue to sell companies currently owned or controlled by them or that
privatization programs will be successful.
    
 
   
  BORROWING. It is a fundamental policy of the Fund that it may borrow an amount
up to 33 1/3% of its total assets in order to meet redemption requests.
Borrowing may cause greater fluctuation in the value of the Fund's shares than
would be the case if the Fund did not borrow, but also may enable the Fund to
retain favorable securities positions rather than liquidating such positions to
meet redemptions. It is a nonfundamental policy of the Fund, that the Fund will
not purchase securities during times when outstanding borrowings represent 5% or
more of the Fund's total assets.
    
 
  WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities and forward commitments only with the intention
of actually receiving or delivering the securities, as the case may be. No
income accrues on securities that have been purchased pursuant to a forward
commitment or on a when-issued basis prior to delivery to the Fund. If the Fund
disposes of the right to acquire a when-issued security prior to its acquisition
or disposes of its right to deliver or receive against a forward commitment, it
may incur a gain or loss. At the time the Fund enters into a transaction on a
when-issued or forward commitment basis, the Fund will segregate cash or liquid
securities equal to the value of the when-issued or forward commitment
securities with its custodian bank and will mark to market daily such assets.
There is a risk that the securities may not be delivered and that the Fund may
incur a loss.
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment risk normally associated with the
portfolio. These instruments are often referred to as "derivatives," which may
be defined as financial instruments whose performance is derived, at least in
part, from the performance of another asset (such as a security, currency or an
index of securities). The Fund may enter into such instruments up to the full
value of its portfolio assets. See "Risk Factors -- Options, Futures and Foreign
Currency Transactions" herein and "Options, Futures and Currency Strategies" in
the Statement of Additional Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on such futures
contracts to hedge against movements in exchange rates.
 
   
  Only a limited market, if any, currently exists for options and futures
transactions relating to currencies of most Latin American markets, to
securities denominated in such currencies or to securities of issuers domiciled
or principally engaged in business in such emerging markets. To the extent that
such a market does not exist, the Sub-advisor may not be able to effectively
hedge its investment in such markets.
    
 
   
  The Fund may purchase and sell put and call options on securities to hedge
against the risk of fluctuations in the prices of securities held by the Fund or
that the Sub-advisor intends to include in the Fund's portfolio. The Fund also
may purchase and sell put and call options on indices to hedge against overall
fluctuations in the securities markets generally or in a specific market sector.
    
 
  Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market decline or a decline in a specific market sector that could
adversely affect the Fund's portfolio. The Fund also may purchase stock index
futures contracts and purchase call options or write put options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisi-
 
                                        9
<PAGE>   477
 
tions. The Fund may use interest rate futures contracts and options thereon to
hedge the debt portion of its portfolios against changes in the general level of
interest rates.
 
  OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations as
fundamental policies which also may not be changed without shareholder approval.
A complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information may be changed by the Trust's Board of Trustees without shareholder
approval. If a percentage restriction on investment or utilization of assets in
an investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
 
   
  The Fund is authorized to engage in Short Sales, although it currently has no
intention of doing so, and may purchase American Depositary Receipts, American
Depositary Shares, Global Depositary Receipts and European Depositary Receipts.
See "Short Sales" and "Depositary Receipts," respectively, in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
    
- --------------------------------------------------------------------------------
 
   
RISK FACTORS
    
 
  GENERAL. There is no assurance that the Fund will achieve its investment
objective. Investing in the Fund entails a substantial degree of risk and an
investment in the Fund should be considered speculative. Investors are strongly
advised to consider carefully the special risks involved in Latin America, which
are in addition to the usual risks of investing in developed markets around the
world.
 
  The Fund's net asset value will fluctuate, reflecting fluctuations in the
market value of its portfolio positions and its net currency exposure. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. The value of equity securities held by the Fund will fluctuate
in response to general market and economic developments, as well as developments
affecting the particular issuers of such securities.
 
  The Fund is classified under the 1940 Act as a "non-diversified" fund. As a
result, the Fund will be able to invest in a fewer number of issuers than if it
were classified under the 1940 Act as a "diversified" fund. To the extent that
the Fund invests in a smaller number of issuers, the value of its shares may
fluctuate more widely and it may be subject to greater investment and credit
risk with respect to its portfolio.
 
   
  CONCENTRATION. The Fund invests a significant portion of its assets in a
particular region of the world. As a result, the Fund may be subject to greater
risks and may experience greater volatility than a fund that is more broadly
diversified geographically.
    
 
   
  LATIN AMERICAN COUNTRIES. Investing in securities of Latin American issuers
involves risks relating to potential political and economic instability of
certain Latin American countries and the risks of expropriation,
nationalization, confiscation of assets and property or the imposition of
restrictions on foreign investment and on repatriation of capital invested. In
the event of such expropriation, nationalization or other confiscation, the Fund
could lose its entire investment in any such country.
    
 
  The securities markets of Latin American countries are substantially smaller,
less developed, less liquid and more volatile than the major securities markets
in the United States. Disclosure and regulatory standards are in many respects
less stringent than U.S. standards. Furthermore, there is a lower level of
monitoring and regulation of the markets and the activities of investors in such
markets, and enforcement of existing regulations has been extremely limited.
 
  The limited size of many Latin American securities markets and limited trading
volume in issuers compared to volume of trading in U.S. securities could cause
prices to be erratic for reasons apart from factors that affect the quality of
the securities. For example, limited market size may cause prices to be unduly
influenced by traders who control large positions. Adverse publicity and
investors' perceptions, whether or not based on fundamental analysis, may
decrease the value and liquidity of portfolio securities, especially in these
markets.
 
  Further, there is a risk that an emergency situation may arise in one or more
Latin American markets as a result of which prices for portfolio securities in
such markets may not be readily available. Section 22(e) of the 1940 Act permits
a registered investment company, such as the Fund, to suspend redemption of its
shares for any period during which an emergency exists, as determined by the
SEC. Accordingly, when the Fund believes that circumstances dictate, it will
promptly apply to the SEC for a determination that such an emergency exists
within the meaning of Section 22(e) of the 1940 Act. During the period
commencing from the Fund's identification of such conditions until the date of
any SEC action, the Fund's portfolio securities in the affected markets will be
valued at fair value determined in good faith by or under the direction of the
Trust's Board of Trustees.
 
  The economies of individual Latin American countries may differ favorably or
unfavorably from the U.S. economy in such respects as the rate of growth of
gross domestic product, the rate of inflation, capital reinvestment, resource
self-sufficiency and balance of
 
                                       10
<PAGE>   478
 
payments position. Most Latin American countries have experienced substantial,
and in some periods extremely high, rates of inflation for many years. Inflation
and rapid fluctuations in inflation rates have had and may continue to have very
negative effects on the economies and securities markets of certain Latin
American countries. Furthermore, certain Latin American countries may impose
withholding taxes on dividends payable to the Fund at a higher rate than those
imposed by other foreign countries. This may reduce the Fund's investment income
available for distribution to shareholders.
 
  Companies in Latin America are subject to accounting, auditing and financial
standards and requirements that differ, in some cases significantly, from those
applicable to U.S. companies. There is substantially less publicly available
information about Latin American companies and the governments of Latin American
countries than there is about U.S. companies and the U.S. Government.
 
  Certain Latin American countries are among the largest debtors to commercial
banks and foreign governments. At times certain Latin American countries have
declared moratoria on the payment of principal and/or interest on external debt.
The Fund may invest in debt securities, including Brady Bonds, issued as part of
debt restructurings and such debt is to be considered speculative. There is a
history of defaults with respect to commercial bank loans by public and private
entities issuing Brady Bonds.
 
  RISKS ASSOCIATED WITH DEBT SECURITIES. The value of the debt securities held
by the Fund generally will vary inversely with market interest rates. If
interest rates in a market fall, the Fund's debt securities issued by
governments or companies in that market ordinarily will increase in value. If
market interest rates increase, however, the debt securities owned by the Fund
in that market will likely decrease in value.
 
  The Fund may invest up to 50% of its total assets in debt securities of any
rating. Such investments involve a high degree of risk.
 
  Debt rated Baa by Moody's Investors Service, Inc. ("Moody's") is considered by
Moody's to have speculative characteristics. Debt rated BB, B, CCC, CC or C by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), and
debt rated Ba, B, Caa, Ca or C by Moody's is regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. While such
lower quality debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions. Debt rated C by Moody's or S&P is the lowest rated debt that is not
in default as to principal or interest and such issues so rated can be regarded
as having extremely poor prospects of ever attaining any real investment
standing. Lower quality debt securities are also generally considered to be
subject to greater risk than securities with higher ratings with regard to a
deterioration of general economic conditions. These foreign debt securities are
the equivalent of high yield, high risk bonds, commonly known as "junk bonds."
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. Similarly, certain Latin American governments that issue lower
quality debt securities are among the largest debtors to commercial banks,
foreign governments and supranational organizations such as the World Bank, and
may not be able or willing to make principal and/or interest repayments as they
come due. The risk of loss due to default by the issuer is significantly greater
for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities frequently have call or buy-back features which
would permit an issuer to call or repurchase the security from the Fund. In
addition, the Fund may have difficulty disposing of lower quality securities
because they may have a thin trading market. There may be no established retail
secondary market for many of these securities, and the Fund anticipates that
such securities could be sold only to a limited number of dealers or
institutional investors. The lack of a liquid secondary market also may have an
adverse impact on market prices of such instruments and may make it more
difficult for the Fund to obtain accurate market quotations for purposes of
valuing the Fund's portfolio. The Fund may also acquire lower quality debt
securities during an initial underwriting or which are sold without registration
under applicable securities laws. Such securities involve special considerations
and risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Fund may invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic recession.
 
  The Fund may also incur additional expenses to the extent it is required to
seek recovery upon a default in the payment of principal or interest on its
portfolio holdings, and the Fund may have limited legal recourse in the event of
a default. Debt securities issued by
 
                                       11
<PAGE>   479
 
governments in Latin American markets can differ from debt obligations issued by
private entities in that remedies from defaults generally must be pursued in the
courts of the defaulting government, and legal recourse is therefore somewhat
diminished. Political conditions, in terms of a government's willingness to meet
the terms of its debt obligations, also are of considerable significance. There
can be no assurance that the holders of commercial bank debt may not contest
payments to the holders of debt securities issued by governments in Latin
American markets in the event of default by the governments under commercial
bank loan agreements.
 
   
  ILLIQUID SECURITIES. The Fund may invest up to 10% of its net assets in
securities for which no readily available market exists, so-called "Illiquid
Securities." The Fund may invest in joint ventures, cooperatives, partnerships
and state enterprises and other similar vehicles which are illiquid
(collectively, "Special Situations"). The Sub-advisor believes that carefully
selected investments in Special Situations could enable the Fund to achieve
capital appreciation substantially exceeding the appreciation the Fund would
realize if it did not make such investments. However, in order to limit
investment risk, the Fund will invest no more than 5% of its total assets in
Special Situations.
    
 
  Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at a price
lower than similar securities that are liquid.
 
  CURRENCY RISK. Because the Fund may invest substantially in securities
denominated in currencies other than the U.S. dollar, and since the Fund may
hold foreign currencies, the Fund will be affected favorably or unfavorably by
exchange control regulations or changes in the exchange rates between such
currencies and the U.S. dollar. Changes in currency exchange rates will
influence the value of the Fund's shares, and also may affect the value of
dividends and interest earned by the Fund and gains and losses realized by the
Fund. Currencies generally are evaluated on the basis of fundamental economic
criteria (e.g., relative inflation and interest rate levels and trends, growth
rate forecasts, balance of payments status and economic policies) as well as
technical and political data. Exchange rates are determined by the forces of
supply and demand in the foreign exchange markets. These forces are affected by
the international balance of payments and other economic and financial
conditions, government intervention, speculation and other factors. If the
currency in which a security is denominated appreciates against the U.S. dollar,
the dollar value of the security will increase. Conversely, a decline in the
exchange rate of the currency would adversely affect the value of the security
expressed in dollars.
 
  Many of the currencies of Latin American countries have experienced steady
devaluations relative to the U.S. dollar, and major devaluations have
historically occurred in certain countries. Any devaluations in the currencies
in which the Fund's portfolio securities are denominated may have a detrimental
impact on the Fund.
 
  Some countries also may have fixed currencies whose values against the U.S.
dollar are not independently determined. In addition, there is a risk that
certain countries may restrict the free conversion of their currencies into
other currencies. Further, certain currencies may not be internationally traded.
 
   
  OPTIONS, FUTURES AND FOREIGN CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions, the
Fund might not enter into any such transactions. Options, futures and foreign
currency transactions involve certain risks, which include: (1) dependence on
the Sub-advisor's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets and movements in
interest rates and currency markets; (2) imperfect correlation, or even no
correlation, between movements in the price of forward contracts, options,
futures contracts or options thereon and movements in the price of the currency
or security hedged or used for cover; (3) the fact that skills and techniques
needed to trade options, futures contracts and options thereon or to use forward
currency contracts are different from those needed to select the securities in
which the Fund invests; (4) lack of assurance that a liquid secondary market
will exist for any particular option, futures contract or option thereon at any
particular time; (5) the possible loss of principal under certain conditions;
and (6) the possible inability of the Fund to purchase or sell a portfolio
security at a time when it would otherwise be favorable for it to do so, or the
possible need for the Fund to sell a security at a disadvantageous time, due to
the need for the Fund to maintain "cover" or to set aside securities in
connection with hedging transactions.
    
 
- --------------------------------------------------------------------------------
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust on the one side and persons or companies furnishing services
to the Fund on the other, including the investment management and administration
agreement with AIM, the investment sub-advisory and sub-administration agreement
between AIM and the Sub-advisor, the agreements with AIM Distributors regarding
distribution of the Fund's shares, the custody agreement and the transfer agency
agreement. The day to day operations of the Fund are delegated to the officers
of the Trust, subject always to the investment objective and policies of the
Fund and to the general supervision of the Trust's Board of Trustees. See
"Trustees and Executive Officers" in the Statement of Additional Information for
information on the Trust's Board of Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers and administrators include, but
are not limited to, determining the composition of the Fund's portfolio and
placing orders to buy, sell or hold particular securities; furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operation. For these services,
the Fund pays AIM investment management and ad-
    
 
                                       12
<PAGE>   480
 
   
ministration fees, computed daily and paid monthly, based on its average daily
net assets, at the annualized rate of 0.975% on the first $500 million, 0.95% on
the next $500 million, 0.925% on the next $500 million, and 0.90% on amounts
thereafter. Out of the aggregate fees payable by the Fund, AIM pays the
Sub-advisor sub-advisory and sub-administration fees equal to 40% of the
aggregate fees AIM receives from the Fund. The investment management and
administration fees paid by the Fund are higher than those paid by most mutual
funds. The Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM
Distributors or other agents. AIM has undertaken to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary expenses)
to the annual rate of 2.00% and 2.50% of the average daily net assets of the
Fund's Class A and Class B shares, respectively.
    
 
   
  The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-advisor (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement (the "Advisory Agreement"). AIM was organized in 1976
and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Fund pursuant to an investment sub-advisory and
sub-administration agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of the Sub-advisor,
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included the Sub-advisor and
certain other affiliates. As a result of this transaction, the Sub-advisor is
now an indirect wholly-owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Fund, the Sub-advisor employs a team
approach, taking advantage of its investment resources around the world.
    
 
  The investment professionals primarily responsible for the portfolio
management of the Fund are as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
     NAME/OFFICE               THE FUND                           PAST FIVE YEARS
     -----------         --------------------                   -------------------
<S>                     <C>                      <C>
Francesco Bertoni       Portfolio Manager        Portfolio Manager for the Sub-advisor since June
London                  since 1998               1998. Investment Director of INVESCO Asset
                                                 Management Ltd. (London) ("INVESCO London"), an
                                                 affiliate of the Sub-advisor, since 1994.
                                                 Portfolio Manager for INVESCO London from 1990 to
                                                 1994.
David Manuel            Portfolio Manager        Portfolio Manager for the Sub-advisor and INVESCO
London                  since 1997               GT Asset Management PLC (London), an affiliate of
                                                 the Sub-advisor, since November 1997. Investment
                                                 Analyst and Portfolio Manager for Abbey Life
                                                 Investment Services Ltd. (Bournemouth) from 1987
                                                 to 1997, and Head of Latin American Equities from
                                                 1994 to 1997.
</TABLE>
    
 
   
  In placing securities orders for the Fund's portfolio transactions, the
Sub-advisor seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-advisor may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions may be executed
through affiliates of AIM or the Sub-advisor. High portfolio turnover (over
100%) involves correspondingly greater brokerage commissions and other
transaction costs that the Fund will bear directly and could result in the
realization of net capital gains which would be taxable when distributed to
shareholders. See "Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement on
behalf of Class A shares of the Fund and has entered into a Master Distribution
Agreement on behalf of Class B shares of the Fund (individually referred to as a
"Distribution Agreement" or collectively as the "Distribution Agreements.") with
AIM Distributors, a registered broker-dealer and a wholly owned subsidiary of
AIM, to act as the distributor of Class A and Class B shares of the Fund.
Certain Trustees and officers of the Trust are affiliated with AIM Distributors.
    
 
                                       13
<PAGE>   481
 
   
  The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors and its predecessor. In the event the Class B shares Distribution
Agreement is terminated, AIM Distributors would continue to receive payments of
asset based sales charges in respect of the outstanding Class B shares
attributable to the distribution efforts of AIM Distributors and its
predecessor; provided, however, that a complete termination of the Class B
shares master distribution plan (as defined in the plan) would terminate all
payments to AIM Distributors. Termination of the Class B shares master
distribution plan (as defined in the plan) would terminate all payments by the
Fund of asset based sales charges and service fees to AIM Distributors.
Termination of the Class B shares distribution plan or Distribution Agreement
does not affect the obligation of Class B shareholders to pay contingent
deferred sales charges.
    
 
  DISTRIBUTION PLANS. Class A Plan. The Trust has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
 
  Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.50% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
 
  The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
 
   
  Of the aggregate amount payable under the Class A Plan, payments to dealers
and other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee.
    
 
  Class B Plan. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
 
  Both Plans. Activities that may be financed under the Class A Plan and the
Class B Plan (collectively, the "Plans") include, but are not limited to:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders, overhead, preparation and distribution of
advertising material and sales literature, expense of organizing and conducting
sales seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
 
  Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
 
                                       14
<PAGE>   482
 
   
  Under the Plans, certain financial institutions which have entered into
service agreements and which sell shares of the Fund on an agency basis, may
receive payments from the Fund pursuant to the respective Plans. AIM
Distributors does not act as principal, but rather as agent for the Fund in
making such payments. The Fund will obtain a representation from such financial
institutions that they will either be licensed as dealers as required under
applicable state law, or that they will not engage in activities which would
constitute acting as a "dealer" as defined under applicable state law. Financial
intermediaries and any other person entitled to receive compensation for selling
Fund shares may receive different compensation for selling shares of one class
over another.
    
 
  For additional information concerning the operation of the Plans see the
Statement of Additional Information.
 
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST
    
 
   
  The Trust was organized as a Delaware business trust on May 7, 1998. On
September 8, 1998, the Trust acquired the assets of and assumed the liabilities
of AIM Investment Funds, Inc., a Maryland Corporation. The Fund constitutes one
of the thirteen separate and distinct series portfolios of the Trust. From time
to time, the Trust may establish other funds, each corresponding to a distinct
investment portfolio and a distinct series of the Trust's shares of beneficial
interest. Shares of each fund are entitled to one vote per share (with
proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
    
 
                                       15
<PAGE>   483
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
               TO THE AIM FAMILY OF FUNDS--Registered Trademark--
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of the following mutual funds:
   
<TABLE>
            <S>                                           <C>
            AIM ADVISOR FLEX FUND                         AIM GLOBAL INFRASTRUCTURE FUND
            AIM ADVISOR INTERNATIONAL VALUE FUND          AIM GLOBAL RESOURCES FUND
            AIM ADVISOR LARGE CAP VALUE FUND              AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM ADVISOR MULTIFLEX FUND                    AIM GLOBAL TRENDS FUND
            AIM ADVISOR REAL ESTATE FUND                  AIM GLOBAL UTILITIES FUND
            AIM AGGRESSIVE GROWTH FUND                    AIM HIGH INCOME MUNICIPAL FUND
            AIM ASIAN GROWTH FUND                         AIM HIGH YIELD FUND
            AIM BALANCED FUND                             AIM INCOME FUND
            AIM BASIC VALUE FUND                          AIM INTERMEDIATE GOVERNMENT FUND
            AIM BLUE CHIP FUND                            AIM INTERNATIONAL EQUITY FUND
            AIM CAPITAL DEVELOPMENT FUND                  AIM INTERNATIONAL GROWTH FUND
            AIM CHARTER FUND                              AIM JAPAN GROWTH FUND
            AIM CONSTELLATION FUND                        AIM LATIN AMERICAN GROWTH FUND
            AIM DEVELOPING MARKETS FUND                   AIM LIMITED MATURITY TREASURY FUND
            AIM DOLLAR FUND(*)                            AIM MID CAP GROWTH FUND
            AIM EMERGING MARKETS FUND                     AIM MONEY MARKET FUND(*)
            AIM EMERGING MARKET DEBT FUND                 AIM MUNICIPAL BOND FUND
            AIM EUROPEAN DEVELOPMENT FUND                 AIM NEW PACIFIC GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM SELECT GROWTH FUND
            AIM GLOBAL AGGRESSIVE GROWTH FUND             AIM SMALL CAP EQUITY FUND
            AIM GLOBAL CONSUMER PRODUCTS AND              AIM SMALL CAP OPPORTUNITIES FUND
              SERVICES FUND                               AIM STRATEGIC INCOME FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM TAX-EXEMPT CASH FUND(*)
            AIM GLOBAL GROWTH FUND                        AIM TAX-FREE INTERMEDIATE FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM VALUE FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WEINGARTEN FUND
            AIM GLOBAL INCOME FUND                        AIM WORLDWIDE GROWTH FUND
                                                                                                 
</TABLE>
    
 
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
    Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
    asset value, without payment of a sales charge, as described below. Other
    funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
    FUND, are sold with an initial sales charge or subject to a contingent
    deferred sales charge upon redemption, as described below.
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed new Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.
 
   
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment is
$500, except for accounts initially established through an Automatic Investment
Plan, which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an Individual Retirement Arrangement ("IRA") or Roth IRA is $250.
There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such plans is $25 per
fund investment), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM 
    
 
                                       A-1
<PAGE>   484
 
   
Funds account. Notwithstanding the foregoing, the minimum initial investment
applicable to AIM Small Cap Opportunities Fund is $10,000.
    
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Shares of any AIM Funds not named on the cover of this Prospectus, as well as
Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                   OBI:                              Shareholder Name, Shareholder Account Number
                                                     (70 character limit)
</TABLE>
 
   
  HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased directly
through AIM Distributors or through any dealer who has entered into an agreement
with AIM Distributors. The minimum investment for subsequent purchases is $50.
The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. Notwithstanding the foregoing, the minimum subsequent purchases of shares
of AIM Small Cap Opportunities Fund is $1,000. There are no such minimum
investment requirements for investment of dividends and distributions of any of
the AIM Funds into any other existing AIM Funds account.
    
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional shares by electronic funds
transfer, please contact the Client Services Department of AFS for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
   
  Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BASIC
VALUE FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT
FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP EQUITY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND,AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without a
sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over
    
 
                                       A-2
<PAGE>   485
 
another class in the same Multiple Class Fund. Factors an investor should
consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
   
  The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPE
GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL
FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM
GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS
FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN
GROWTH FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
    
 
  The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
 
SALES CHARGES AND DEALER CONCESSIONS
 
   
  GROUP I. Certain AIM Funds are currently sold with a sales charge ranging from
5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM BASIC VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
EQUITY FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
    
 
   
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
      SINGLE TRANSACTION(1)                          PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   25,000                    5.50%          5.82%        4.75%
 $ 25,000 but less than $   50,000                   5.25           5.54         4.50
 $ 50,000 but less than $ 100,000                    4.75           4.99         4.00
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    3.00           3.09         2.50
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
    
 
- ---------------
 
   
(1) AIM Small Cap Opportunities Fund will not accept any single purchase in
    excess of $250,000.
    
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
                                       A-3
<PAGE>   486
   
 GROUP II. Certain AIM Funds are currently sold with a sales charge ranging from
4.75% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND, AIM
BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND
FUND, AIM STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
    
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   50,000                    4.75%          4.99%        4.00%
 $ 50,000 but less than $ 100,000                    4.00           4.17         3.25
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    2.50           2.56         2.00
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
  GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
Less than $ 100,000                                  1.00%          1.01%        0.75%
 $100,000 but less than $ 250,000                    0.75           0.76         0.50
 $250,000 but less than $1,000,000                   0.50           0.50         0.40
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
 
  ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
 
  In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
 
  AIM Distributors may make payments to dealers and institutions who are dealers
of record for purchases of $1 million of more of Class A shares (or shares which
normally involve payment of initial sales charges), which are sold at net asset
value and are subject to
 
                                       A-4
<PAGE>   487
 
a contingent deferred sales charge, for all AIM Funds other than Class A shares
of each of AIM LIMITED MATURITY TREASURY FUND and AIM TAX-FREE INTERMEDIATE FUND
as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next
$1 million of such purchases, plus 0.50% of the next $17 million of such
purchases, plus 0.25% of amounts in excess of $20 million of such purchases. See
"Contingent Deferred Sales Charge Program for Large Purchases." AIM Distributors
may make payments to dealers and institutions who are dealers of record for
purchases of $1 million or more of Class A shares (or shares which normally
involve payment of initial sales charges), and which are sold at net asset value
and are not subject to a contingent deferred sales charge, in an amount up to
0.10% of such purchases of Class A shares of AIM LIMITED MATURITY TREASURY FUND,
and in an amount up to 0.25% of such purchases of Class A shares of AIM TAX-FREE
INTERMEDIATE FUND.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed during the next twelve
months on Saturdays and Sundays and on the days on which New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class Funds
currently offer two or more classes of shares through separate distribution
systems (the "Multiple Distribution System"). Although each class of shares of a
particular Multiple Class Fund represents an interest in the same portfolio of
investments, each class is subject to a different distribution structure and, as
a result, differing expenses. This Multiple Distribution System allows investors
to select the class that is best suited to the investor's needs and objectives.
In considering the options afforded by the Multiple Distribution System,
investors should consider both the applicable initial sales charge or contingent
deferred sales charge, as well as the ongoing expenses borne by each class of
shares and other relevant factors, such as whether his or her investment goals
are long-term or short-term.
 
     CLASS A SHARES generally are sold subject to the initial sales charges
     described above and are subject to the other fees and expenses described
     herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
     needs of an investor who wishes to establish a dollar cost averaging
     program, pursuant to which Class A shares an investor owns may be exchanged
     at net asset value for Class A shares of another Multiple Class Fund or
     shares of another AIM Fund which is not a Multiple Class Fund, subject to
     the terms and conditions described under the caption "Exchange
     Privilege -- Terms and Conditions of Exchanges."
                                       A-5
<PAGE>   488
 
     CLASS B SHARES are sold without an initial sales charge. Thus, the entire
     purchase price of Class B shares is immediately invested in Class B shares.
     Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
     per annum on the average daily net assets of a Multiple Class Fund
     attributable to Class B shares. See the discussion under the caption
     "Management -- Distribution Plans." In addition, Class B shares redeemed
     within six years from the date such shares were purchased are subject to a
     contingent deferred sales charge ranging from 5% for redemptions made
     within the first year to 1% for redemptions made within the sixth year. No
     contingent deferred sales charge will be imposed if Class B shares are
     redeemed after six years from the date such shares were purchased.
     Redemptions of Class B shares and associated charges are further described
     under the caption "How to Redeem Shares -- Multiple Distribution System."
 
     Class B shares will automatically convert into Class A shares of the same
     Multiple Class Fund (together with a pro rata portion of all Class B shares
     acquired through the reinvestment of dividends and other distributions)
     eight years from the end of the calendar month in which the purchase of
     Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
     outstanding on May 29, 1998 and which are continuously held by the
     shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
     FUND seven years from the end of the calendar month in which the purchase
     of such Class B shares was made. If a shareholder exchanges Class B shares
     of AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
     since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
     shares will be subject to the eight year conversion feature applicable to
     Class B shares of all other AIM Funds. Following such conversion of their
     Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
     payments associated with Class B shares. See "Management -- Distribution
     Plans."
 
     AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an
     initial sales charge and are not subject to a contingent deferred sales
     charge; however, they are subject to the other fees and expenses described
     in the prospectus for AIM MONEY MARKET FUND.
 
  TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon Eastern Time or NYSE Close on any
business day of the Fund will be confirmed at the price next determined. Net
asset value is normally determined at 12:00 noon Eastern Time and NYSE Close on
each business day of AIM MONEY MARKET FUND.
 
  SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
REDUCTIONS IN INITIAL SALES CHARGES
 
  Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
 
                                       A-6
<PAGE>   489
 
  The term "purchaser" means:
 
  - an individual and his or her spouse and children, including any trust
    established exclusively for the benefit of any such person; or a pension,
    profit-sharing, or other benefit plan established exclusively for the
    benefit of any such person, such as an IRA, Roth IRA, a single-participant
    money-purchase/profit-sharing plan or an individual participant in a 403(b)
    plan (unless such 403(b) plan qualifies as the purchaser as defined below);
 
  - a 403(b) plan, the employer/sponsor of which is an organization described
    under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
    (the "Code"), provided that:
 
        a. the employer/sponsor must submit contributions for all participating
           employees in a single contribution transmittal (i.e., the funds will
           not accept contributions submitted with respect to individual
           participants);
 
        b. each transmittal must be accompanied by a single check or wire
           transfer; and
 
        c. all new participants must be added to the 403(b) plan by submitting
           an application on behalf of each new participant with the
           contribution transmittal;
 
  - a trustee or fiduciary purchasing for a single trust, estate or single
    fiduciary account (including a pension, profit-sharing or other employee
    benefit trust created pursuant to a plan qualified under Section 401 of the
    Code) and 457 plans, although more than one beneficiary or participant is
    involved;
 
  - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
    Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
    Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
    Distributors in writing that all of its related employee SEP, SARSEP or
    SIMPLE IRA accounts should be linked;
 
  - any other organized group of persons, whether incorporated or not, provided
    the organization has been in existence for at least six months and has some
    purpose other than the purchase at a discount of redeemable securities of a
    registered investment company; or
 
  - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
    Capital Management, Inc. ("AIM Capital").
 
  Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
 
  (1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
 
  Each purchase of fund shares normally subject to an initial sales charge made
during the 13-month period will be made at the public offering price applicable
to a single transaction of the total dollar amount indicated by the LOI, as
described under "Sales Charges and Dealer Concessions." It is the purchaser's
responsibility at the time of purchase to specify the account numbers that
should be considered in determining the appropriate sales charge. The offering
price may be further reduced as described under "Rights of Accumulation" if the
Transfer Agent is advised of all other accounts at the time of the investment.
Shares acquired through reinvestment of dividends and capital gain distributions
will not be applied to the LOI. At any time during the 13-month period after
meeting the original obligation, a purchaser may revise his intended investment
amount upward by submitting a written and signed request. Such a revision will
not change the original expiration date. By signing an LOI, a purchaser is not
making a binding commitment to purchase additional shares, but if purchases made
within the 13-month period do not total the amount specified, the investor will
pay the increased amount of sales charge as described below. Purchases made
within 90 days before signing an LOI will be applied toward completion of the
LOI. The LOI effective date will be the date of the first purchase with the
90-day period. The Transfer Agent will process necessary adjustments upon the
expiration or completion date of the LOI. Purchases made more than 90 days
before signing an LOI will be applied toward completion of the LOI based on the
value of the shares purchased calculated at the public offering price on the
effective date of the LOI.
 
  To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
                                       A-7
<PAGE>   490
 
  If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
 
  Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
 
  (2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
 
  PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at
net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
 
  Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
 
  The following persons may purchase Class A shares of the AIM Funds through AIM
Distributors without payment of an initial sales charge: (a) A I M Management
Group Inc. ("AIM Management") and its affiliated companies; (b) any current or
retired officer, director, trustee or employee, or any member of the immediate
family (including spouse, children, parents and parents of spouse) of any such
person, of AIM Management or its affiliates or of certain mutual funds which are
advised or managed by AIM; or any trust established exclusively for the benefit
of such persons; (c) any employee benefit plan established for employees of AIM
Management or its affiliates; (d) any current or retired officer, director,
trustee or employee, or any member of the immediate family (including spouse,
children, parents and parents of spouse) of any such person, or of CIGNA
Corporation or of any of its affiliated companies, or of First Data Investor
Services Group (formerly The Shareholder Services Group, Inc.); (e) any
investment company sponsored by CIGNA Investments, Inc. or any of its affiliated
companies for the benefit of its directors' deferred compensation plans; (f)
discretionary advised clients of AIM or AIM Capital; (g) registered
representatives and employees of dealers who have entered into agreements with
AIM Distributors (or financial institutions that have arrangements with such
dealers with respect to the sale of shares of the AIM Funds) and any member of
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, provided that purchases at net asset value are permitted by
the policies of such person's employer; (h) certain broker-dealers, investment
advisers or bank trust departments that provide asset allocation, similar
specialized investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services, and that
have entered into an agreement with AIM Distributors with respect to their use
of the AIM Funds in connection with such services; (i) any employee or any
member of the immediate family (including spouse, children, parents and parents
of spouse) of any employee, of Triformis Inc.; (j) shareholders of the AIM/GT
Funds as of April 30, 1987 who since that date continually have owned shares of
one or more of the AIM/GT Funds; and (k) certain former AMA Investment Advisers'
shareholders who became shareholders of the AIM Global Health Care Fund in
October 1989, and who have continuously held shares in the AIM/GT Funds since
that time.
 
   
  In addition, shares of any AIM Fund (except AIM Small Cap Opportunities Fund)
may be purchased at net asset value, without payment of a sales charge, by
pension, profit-sharing or other employee benefit plans created pursuant to a
plan qualified under Section 401 of the Code or plans under Section 457 of the
Code, or employee benefit plans created pursuant to Section 403(b) of the
    
                                       A-8
<PAGE>   491
 
Code and sponsored by nonprofit organizations defined under Section 501(c)(3) of
the Code. Such plans will qualify for purchases at net asset value provided that
(1) the total amount invested in the plan is at least $1,000,000, (2) the
sponsor signs a $1,000,000 LOI, (3) such shares are purchased by an
employer-sponsored plan with at least 100 eligible employees, or (4) all of the
plan's transactions are executed through a single financial institution or
service organization who has entered into an agreement with AIM Distributors
with respect to their use of the AIM Funds in connection with such accounts.
Section 403(b) plans sponsored by public educational institutions will not be
eligible for net asset value purchases based on the aggregate investment made by
the plan or the number of eligible employees. Participants in such plans will be
eligible for reduced sales charges based solely on the aggregate value of their
individual investments in the applicable AIM Fund. PLEASE NOTE THAT TAX-EXEMPT
FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR SUCH PLANS. AIM Distributors may pay
investment dealers or other financial service firms for share purchases of the
Load Funds (as defined under the caption "Exchange Privilege") sold at net asset
value to an employee benefit plan in accordance with this paragraph as follows:
1% of the first $2 million of such purchases, plus 0.80% of the next $1 million
of such purchases, plus 0.50% of the next $17 million of such purchases, plus
0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of
the net asset value of any Class A shares of AIM LIMITED MATURITY TREASURY FUND
sold at net asset value to an employee benefit plan in accordance with this
paragraph.
 
  Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
- --------------------------------------------------------------------------------
 
SPECIAL PLANS
 
  Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
who owns shares which are not subject to a contingent deferred sales charge, can
arrange for monthly, quarterly or annual amounts (but not less than $50) to be
drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that
 
                                       A-9
<PAGE>   492
 
exceed on an annual basis 12% of such account will be subject to a contingent
deferred sales charge on the amounts exceeding 12% of the account value at the
time the shareholder elects to participate in the Systematic Withdrawal Plan.
 
  Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested to shares of the
applicable AIM Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full
and fractional shares at their net asset value in effect at the time of each
such redemption.
 
  Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
 
  The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
 
  AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in the amount specified by
the shareholder (minimum $50 per investment, per account) and on a day or
date(s) specified by the shareholder. The proceeds are invested in shares of the
designated AIM Fund at the applicable offering price determined on the date of
the withdrawal. An Automatic Investment Plan may be discontinued upon 10 days'
prior notice to the Transfer Agent or AIM Distributors.
 
   
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
    
 
  DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
 
  PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination
money-purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans;
SARSEP plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement
accounts"). Information concerning these plans, including the custodian's fees
and the forms necessary to adopt such plans, can be obtained by calling or
writing the AIM Funds or AIM Distributors. Shares of the AIM Funds are also
available for investment through existing 401(k) plans (for both individuals and
employers) adopted under the Code. The plan custodian currently imposes an
annual $10 maintenance fee with respect to each retirement account for which it
serves as the custodian. This fee is generally charged in December. Each AIM
Fund and/or the custodian reserve the right to change this maintenance fee and
to initiate an establishment fee (not to exceed its cost).
 

   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance of $5,000 to
establish and maintain an allocation across a range of AIM Funds. The Program
automatically rebalances holdings of AIM Funds to the established allocation on
a periodic basis. Under the Program, a shareholder may predesig-
    
 
                                      A-10
<PAGE>   493
   
nate, on a percentage basis, how the total value of his or her holdings in a
minimum of two, and a maximum of ten, AIM Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more AIM Funds in the shareholder's Personal Portfolio for shares of
the same class(es) of one or more other AIM Funds in the shareholder's Personal
Portfolio. See "Exchange Privilege." If shares of the AIM Fund(s) in a
shareholder's Personal Portfolio have appreciated during a rebalancing period,
the Program will result in shares of AIM Fund(s) that have appreciated most
during the period being exchanged for shares of AIM Fund(s) that have
appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular AIM Fund would be 2% or less.
In predesignating percentages, shareholders must use whole percentages and
totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an AIM Fund's shares. The
AIM Funds and AIM Distributors reserve the right to modify, suspend, or
terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
    
 
                                      A-11
<PAGE>   494
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, including the Class A shares of the Multiple Class Funds, listed below
and referred to herein as the "Load Funds," are sold at a public offering price
that includes a maximum sales charge of 5.50% or 4.75% of the public offering
price of such shares; Class A shares (or shares which normally involve the
payment of initial sales charges) of certain of the AIM Funds, listed below and
referred to herein as the "Lower Load Funds," are sold at a public offering
price that includes a maximum sales charge of 1.00% of the public offering price
of such shares; and Class A shares or shares of certain other funds, listed
below and referred to herein as the "No Load Funds," are sold at net asset
value, without payment of a sales charge.
 
   
<TABLE>
<S>                                    <C>                                   <C>
                                LOAD FUNDS:                                  LOWER LOAD FUNDS:
   AIM ADVISOR FLEX FUND --            AIM GLOBAL INCOME                     AIM LIMITED MATURITY TREASURY FUND
     CLASS A                           FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR INTERNATIONAL           AIM GLOBAL INFRASTRUCTURE               AIM TAX-FREE INTERMEDIATE FUND
     VALUE FUND -- CLASS A             FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR LARGE CAP               AIM GLOBAL RESOURCES                  NO LOAD FUNDS:
     VALUE FUND -- CLASS A             FUND -- CLASS A
   AIM ADVISOR MULTIFLEX               AIM GLOBAL TELECOMMUNICATIONS         AIM MONEY MARKET FUND
     FUND -- CLASS A                   FUND -- CLASS A                           -- AIM CASH RESERVE SHARES
   AIM ADVISOR REAL ESTATE             AIM GLOBAL TRENDS                       AIM TAX-EXEMPT CASH FUND -- CLASS A
     FUND -- CLASS A                   FUND -- CLASS A                         AIM DOLLAR FUND -- CLASS A
   AIM AGGRESSIVE GROWTH               AIM GLOBAL UTILITIES
     FUND -- CLASS A                   FUND -- CLASS A
   AIM ASIAN GROWTH                    AIM HIGH INCOME MUNICIPAL
     FUND -- CLASS A                   FUND -- CLASS A
   AIM BALANCED FUND -- CLASS A        AIM HIGH YIELD FUND -- CLASS A
   AIM BASIC VALUE                     AIM INCOME FUND -- CLASS A
     FUND -- CLASS A                   AIM INTERMEDIATE GOVERNMENT
   AIM BLUE CHIP FUND -- CLASS A       FUND -- CLASS A
   AIM CAPITAL DEVELOPMENT             AIM INTERNATIONAL EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM CHARTER FUND -- CLASS A         AIM INTERNATIONAL GROWTH
   AIM CONSTELLATION                   FUND -- CLASS A
     FUND -- CLASS A                   AIM JAPAN GROWTH FUND -- CLASS A
   AIM DEVELOPING MARKETS              AIM LATIN AMERICAN GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS                AIM MID CAP EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS DEBT           AIM MONEY MARKET
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPE GROWTH                   AIM MUNICIPAL BOND
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPEAN DEVELOPMENT            AIM NEW PACIFIC GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM GLOBAL AGGRESSIVE GROWTH        AIM SELECT GROWTH FUND -- CLASS A
     FUND -- CLASS A                   AIM SMALL CAP GROWTH
   AIM GLOBAL CONSUMER PRODUCTS        FUND -- CLASS A
     AND SERVICES FUND -- CLASS A      AIM SMALL CAP OPPORTUNITIES
   AIM GLOBAL FINANCIAL SERVICES       FUND -- CLASS A
     FUND -- CLASS A                   AIM STRATEGIC INCOME
   AIM GLOBAL GOVERNMENT INCOME        FUND -- CLASS A
     FUND -- CLASS A                   AIM TAX-EXEMPT BOND FUND
   AIM GLOBAL GROWTH                   OF CONNECTICUT -- CLASS A
     FUND -- CLASS A                   AIM VALUE FUND -- CLASS A
   AIM GLOBAL GROWTH &                 AIM WEINGARTEN FUND -- CLASS A
     INCOME FUND -- CLASS A            AIM WORLDWIDE GROWTH
   AIM GLOBAL HEALTH CARE              FUND -- CLASS A
     FUND -- CLASS A
</TABLE>
    
 
                                      A-12
<PAGE>   495
 
   
  Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE; (iii) Class A shares
may be exchanged for Class A shares; (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A, Class B or Class C shares of AIM MONEY MARKET FUND. Class C shares
of AIM Small Cap Opportunities Fund are currently not available.
    
 
  DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
 
<TABLE>
<CAPTION>
                                                                                                      MULTIPLE CLASS FUNDS:
                                                            LOWER LOAD              NO LOAD       ------------------------------
      FROM:                 TO: LOAD FUNDS                     FUNDS                 FUNDS           CLASS B         CLASS C
      -----                 --------------                  ----------              -------          -------         -------
<S>                <C>                                <C>                      <C>                <C>             <C>
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
 
Lower Load Funds.. Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund or any     Fund or any Lower Load
                   Lower Load Fund.                   Fund; otherwise,
                                                      Offering Price.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
 
  FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS REVISED AS FOLLOWS:
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
Lower Load Funds.. Net Asset Value if shares were     Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
                   acquired upon exchange of any
                   Load Fund. Otherwise, difference
                   in sales charge will apply.
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund.           Fund or any Lower Load
                   Difference in sales charge will    Fund; otherwise,
                   apply if No Load shares were       Offering Price.
                   acquired upon exchange of Lower
                   Load Fund shares.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
  Class C........  Not Applicable                     Not Applicable           Not Applicable     Not Applicable  Net Asset Value
</TABLE>
 
   
  An exchange is permitted only in the following circumstances: (a) if the funds
offer more than one class of shares, the exchange must be between the same class
of shares (e.g., Class A, Class B and Class C shares of a Multiple Class Fund
cannot be exchanged for each other) except that AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may be exchanged for Class A shares of another Multiple Class
Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten busi-
    
 
                                      A-13
<PAGE>   496
 
ness days, and all other shares are held in an account for at least one day,
prior to the exchange; and (h) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the AIM
Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
   
  Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged are
redeemed at their net asset value as determined at NYSE Close on the day that an
exchange request in proper form (described below) is received. Exchange requests
received after NYSE Close will result in the redemption of shares at their net
asset value at NYSE Close on the next business day. See "Terms and Conditions of
Purchase of the AIM Funds -- Timing of Purchase, Exchange and Redemption Orders
(AIM MONEY MARKET FUND only)" for information regarding the timing of exchange
orders for AIM MONEY MARKET FUND. Normally, shares of an AIM Fund to be acquired
by exchange are purchased at their net asset value or applicable offering price,
as the case may be, determined on the date that such request is received, but
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that a fund would be materially disadvantaged
by an immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into a fund paying daily dividends (See "Dividends, Distributions and
Tax Matters -- Dividends and Distributions," below), and the release of the
exchange proceeds is delayed for the foregoing five-day period, such shareholder
will not begin to accrue dividends until the sixth business day after the
exchange. Shares purchased by check may not be exchanged until it is determined
that the check has cleared, which may take up to ten business days from the date
that the check is received. See "Terms and Conditions of Purchase of the AIM
Funds -- Timing of Purchase Orders."
    
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the AIM Funds. AIM Distributors reserves the right to impose conditions on
dealers or investment advisors who make telephone exchanges of shares of the
funds, including the condition that any such dealer or investment advisor enter
into an agreement (which contains additional conditions with respect to
exchanges of shares) with AIM Distributors. To exchange shares by telephone, a
shareholder, dealer or investment advisor who has satisfied the foregoing
conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach
AFS by telephone, he may also request exchanges by telegraph or use overnight
courier services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is received
prior to NYSE Close. The Transfer Agent and AIM Distributors will not be liable
for any loss, expense or cost arising out of any telephone exchange request that
they reasonably believe to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions if they do not follow
reasonable procedures for verification of telephone transactions. Such
reasonable procedures may include recordings of telephone transactions
(maintained for six months), requests for confirmation of the shareholder's
Social Security Number and current address, and mailings of confirmations
promptly after the transaction.
 
  EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
 
                                      A-14
<PAGE>   497
 
  MULTIPLE DISTRIBUTION SYSTEM. Class B Shares. Class B shares purchased under
the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
 
<TABLE>
<CAPTION>
  YEARS                                                     CONTINGENT DEFERRED
  SINCE                                                       SALES CHARGE AS
PURCHASE                                                    % OF DOLLAR AMOUNT
  MADE                                                       SUBJECT TO CHARGE
- --------                                                    -------------------
<S>                                                          <C>
First......................................................         5%
Second.....................................................         4%
Third......................................................         3%
Fourth.....................................................         3%
Fifth......................................................         2%
Sixth......................................................         1%
Seventh and Following......................................        None
</TABLE>
 
  In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
 
  Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
 
  Class C Shares. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
 
  Waivers. Contingent deferred sales charges on Class B and Class C shares will
be waived on redemptions (1) following the death or post-purchase disability, as
defined in Section 72(m)(7) of the Code, of a shareholder or a settlor of a
living trust (provided AIM Distributors is notified of such death or
post-purchase disability at the time of the redemption request and is provided
with satisfactory evidence of such death or post-purchase disability), (2) in
connection with certain distributions from IRAs, custodial accounts maintained
pursuant to Code Section 403(b), deferred compensation plans qualified under
Code Section 457 and plans qualified under Code Section 401 (collectively,
"Retirement Plans"), (3) pursuant to a Systematic Withdrawal Plan, provided that
amounts withdrawn under such plan do not exceed on an annual basis 12% of the
value of the shareholder's investment in Class B or Class C shares at the time
the shareholder elects to participate in the Systematic Withdrawal Plan, (4)
effected pursuant to the right of a Multiple Class Fund to liquidate a
shareholder's account if the aggregate net asset value of shares held in the
account is less than the designated minimum account size described in the
prospectus of such Multiple Class Fund, (5) effected by AIM of its investment in
Class B or Class C shares and (6) of Class C shares where such investor's dealer
of record, due to the nature of the investor's account, notifies AIM
Distributors prior to the time of investment that the dealer waives the payment
otherwise payable to the dealer described in the last paragraph under the
caption "Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM
Funds."
 
  Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
 
  Waiver category (2) above applies only to redemptions resulting from:
 
          (i) required minimum distributions to plan participants or
     beneficiaries who are age 70 1/2 or older, and only with respect to that
     portion of such distributions which does not exceed 12% annually of the
     participant's or beneficiary's account value in a particular AIM Fund;
 
                                      A-15
<PAGE>   498
 
          (ii) in-kind transfers of assets where the participant or beneficiary
     notifies AIM Distributors of such transfer no later than the time such
     transfer occurs;
 
          (iii) tax-free rollovers or transfers of assets to another Retirement
     Plan invested in Class B or Class C shares of one or more Multiple Class
     Funds;
 
          (iv) tax-free returns of excess contributions or returns of excess
     deferral amounts; and
 
          (v) distributions upon the death or disability (as defined in the
     Code) of the participant or beneficiary.
 
   
  CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND or Class A shares
of AIM DOLLAR FUND which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code, or Plans created under Section 403(b) of the
Code and sponsored by nonprofit organizations as defined under Section 501(c)(3)
of the Code, where shares are being redeemed in connection with employee
terminations or withdrawals, and (a) the total amount invested in a Plan is at
least $1,000,000, (b) the sponsor of a Plan signs a letter of intent to invest
at least $1,000,000 in one or more of the AIM Funds, or (c) the shares being
redeemed were purchased by an employer-sponsored Plan with at least 100 eligible
employees; provided, however, that Plans created under Section 403(b) of the
Code which are sponsored by public educational institutions shall qualify under
(a), (b) or (c) above on the basis of the value of each Plan participant's
aggregate investment in the AIM Funds, and not on the aggregate investment made
by the Plan or on the number of eligible employees; (2) redemptions of shares
following the death or post-purchase disability, as defined in Section 72(m)(7)
of the Code, of a shareholder or a settlor of a living trust; (3) redemptions of
shares purchased at net asset value by private foundations or endowment funds
where the initial amount invested was at least $1,000,000; (4) redemptions of
shares purchased by an investor in amounts of $1,000,000 or more where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payments otherwise payable to the dealer as described in the third paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds;" and (5) pursuant to a Systematic Withdrawal Plan, provided
that amounts withdrawn under such plan do not exceed on an annual basis 12% of
the value of the shareholder's investment in Class A shares at the time the
shareholder elects to participate in the Systematic Withdrawal Plan.
    
 
  Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  In addition to these requirements, shareholders who have invested in a fund to
establish as IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares; (a) a statement
as to whether or not the shareholder has attained age 59 1/2, and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.
 
                                      A-16
<PAGE>   499
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
this account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
   
  EXPEDITED REDEMPTIONS (AIM Cash Reserve shares of AIM MONEY MARKET FUND
ONLY). If a redemption order is received prior to 11:30 a.m. Eastern Time, the
redemption will be effective on that day and AIM MONEY MARKET FUND will endeavor
to transmit payment on that same business day. If the redemption order is
received after 11:30 a.m. and prior to NYSE Close, the redemption will be made
at the next determined net asset value and payment will generally be transmitted
on the next business day.
    
 
  REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing the
appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone
 
                                      A-17
<PAGE>   500
 
exchange and telephone redemption authorization forms; (7) changes in previously
designated wiring or electronic funds transfer instructions, and (8) written
redemptions or exchanges of shares previously reported as lost, whether or not
the redemption amount is under $50,000 or the proceeds are to be sent to the
address of record. These requirements may be waived or modified upon notice to
shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
    
 
   
  REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within ninety (90) days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment will not alter the taxes due on any
capital gains, except under the circumstances described below. If there has been
a loss on the redemption and shares of the same fund are repurchased, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in shares of the same fund, or exchanged for
shares of another AIM Fund, at a reduced sales charge within 90 days of the
payment of the sales charge, the shareholder's basis in the fund shares redeemed
may not include the amount of the sales charge paid, thereby reducing the loss
or increasing the gain recognized from the redemption; however, the
shareholder's basis in the fund shares purchased will include the sales charge.
Each AIM Fund may amend, suspend or cease offering the privilege at any time as
to shares redeemed after the date of such amendment, suspension or cessation.
This privilege may only be exercised once each year by a shareholder with
respect to each AIM Fund.
    
 
   
  Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of Class A shares and who subsequently reinvest a portion or
all of the value of the redeemed shares in Class A shares of any AIM Fund within
ninety (90) days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
    
 
                                      A-18

<PAGE>   501
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
   
  The net asset value per share (or share price) of each AIM Fund is determined
as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close with
respect to AIM MONEY MARKET FUND) on each "business day" of a fund as previously
defined. In the event the NYSE closes early (i.e. before 4:00 p.m. Eastern Time)
on a particular day, the net asset value of an AIM Fund's share will be
determined as of the close of the NYSE on such day. For purposes of defining net
asset value per share, futures and options contracts generally will be valued 15
minutes after the close of trading of the NYSE. The net asset value per share is
calculated by subtracting a class' liabilities from its assets and dividing the
result by the total number of class shares outstanding. The determination of net
asset value per share is made in accordance with generally accepted accounting
principles. Among other items, liabilities include accrued expenses and
dividends payable, and total assets include portfolio securities valued at their
market value, as well as income accrued but not yet received. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the fund's officers and
in accordance with methods which are specifically authorized by its governing
Board of Directors or Trustees. Short-term obligations with maturities of 60
days or less, and the securities held by the Money Market Funds, are valued at
amortized cost as reflecting fair value. AIM HIGH INCOME MUNICIPAL FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-FREE
INTERMEDIATE FUND value variable rate securities that have an unconditional
demand or put feature exercisable within seven days or less at par, which
reflects the market value of such securities.
    
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as
set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                DISTRIBUTIONS    DISTRIBUTIONS
                                                                                   OF NET           OF NET
                                                    DIVIDENDS FROM                REALIZED         REALIZED
                                                    NET INVESTMENT               SHORT-TERM        LONG-TERM
                   FUND                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
                   ----                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM ADVISOR FLEX FUND.....................  declared and paid quarterly       quarterly          annually
AIM ADVISOR INTERNATIONAL VALUE FUND......  declared and paid annually        annually           annually
AIM ADVISOR LARGE CAP VALUE FUND..........  declared and paid quarterly       quarterly          annually
AIM ADVISOR MULTIFLEX FUND................  declared and paid quarterly       quarterly          annually
AIM ADVISOR REAL ESTATE FUND..............  declared and paid quarterly       quarterly          annually
AIM AGGRESSIVE GROWTH FUND................  declared and paid annually        annually           annually
AIM ASIAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM BALANCED FUND.........................  declared and paid quarterly       annually           annually
AIM BASIC VALUE FUND......................  declared and paid annually        annually           annually
AIM BLUE CHIP FUND........................  declared and paid annually        annually           annually
AIM CAPITAL DEVELOPMENT FUND..............  declared and paid annually        annually           annually
AIM CHARTER FUND..........................  declared and paid quarterly       annually           annually
AIM CONSTELLATION FUND....................  declared and paid annually        annually           annually
AIM DEVELOPING MARKETS FUND...............  declared and paid annually        annually           annually
AIM DOLLAR FUND...........................  declared daily; paid monthly      annually           annually
AIM EMERGING MARKETS FUND.................  declared and paid annually        annually           annually
AIM EMERGING MARKETS DEBT FUND............  declared and paid monthsly        annually           annually
AIM EUROPE GROWTH FUND....................  declared and paid annually        annually           annually
AIM EUROPEAN DEVELOPMENT FUND.............  declared and paid annually        annually           annually
AIM GLOBAL AGGRESSIVE GROWTH FUND.........  declared and paid annually        annually           annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
  FUND....................................  declared and paid annually        annually           annually
AIM GLOBAL FINANCIAL SERVICES FUND........  declared and paid annually        annually           annually
</TABLE>
    
 
                                      A-19
<PAGE>   502
 
   
<TABLE>
<CAPTION>
                                                                             DISTRIBUTIONS    DISTRIBUTIONS
                                                                                OF NET           OF NET
                                                 DIVIDENDS FROM                REALIZED         REALIZED
                                                 NET INVESTMENT               SHORT-TERM        LONG-TERM
FUND                                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
- ----                                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM GLOBAL GOVERNMENT INCOME FUND.........  declared and paid monthly         annually           annually
AIM GLOBAL GROWTH FUND....................  declared and paid annually        annually           annually
AIM GLOBAL GROWTH & INCOME FUND...........  declared and paid quarterly       annually           annually
AIM GLOBAL HEALTH CARE FUND...............  declared and paid annually        annually           annually
AIM GLOBAL INCOME FUND....................  declared daily; paid monthly      annually           annually
AIM GLOBAL INFRASTRUCTURE FUND............  declared and paid annually        annually           annually
AIM GLOBAL RESOURCES FUND.................  declared and paid annually        annually           annually
AIM GLOBAL TELECOMMUNICATIONS FUND........  declared and paid annually        annually           annually
AIM GLOBAL TRENDS FUND....................  declared and paid annually        annually           annually
AIM GLOBAL UTILITIES FUND.................  declared daily; paid monthly      annually           annually
AIM HIGH INCOME MUNICIPAL FUND............  declared daily; paid monthly      annually           annually
AIM HIGH YIELD FUND.......................  declared daily; paid monthly      annually           annually
AIM INCOME FUND...........................  declared daily; paid monthly      annually           annually
AIM INTERMEDIATE GOVERNMENT FUND..........  declared daily; paid monthly      annually           annually
AIM INTERNATIONAL EQUITY FUND.............  declared and paid annually        annually           annually
AIM INTERNATIONAL GROWTH FUND.............  declared and paid annually        annually           annually
AIM JAPAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM LATIN AMERICAN GROWTH FUND............  declared and paid annually        annually           annually
AIM LIMITED MATURITY TREASURY FUND........  declared daily; paid monthly      annually           annually
AIM MID CAP EQUITY FUND...................  declared and paid annually        annually           annually
AIM MONEY MARKET FUND.....................  declared daily; paid monthly      at least annually  annually
AIM MUNICIPAL BOND FUND...................  declared daily; paid monthly      annually           annually
AIM NEW PACIFIC GROWTH FUND...............  declared and paid annually        annually           annually
AIM SELECT GROWTH FUND....................  declared and paid annually        annually           annually
AIM SMALL CAP GROWTH FUND.................  declared and paid annually        annually           annually
AIM SMALL CAP OPPORTUNITIES FUND..........  declared and paid annually        annually           annually
AIM STRATEGIC INCOME FUND.................  declared and paid monthly         annually           annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT...  declared daily; paid monthly      annually           annually
AIM TAX-EXEMPT CASH FUND..................  declared daily; paid monthly      at least annually  annually
AIM TAX-FREE INTERMEDIATE FUND............  declared daily; paid monthly      annually           annually
AIM VALUE FUND............................  declared and paid annually        annually           annually
AIM WEINGARTEN FUND.......................  declared and paid annually        annually           annually
AIM WORLDWIDE GROWTH FUND.................  declared and paid annually        annually           annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in like shares of another
Multiple Class Fund, to the extent permitted. For funds that do not declare a
dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. For funds that declare
a dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or the
dividend portion thereof, in cash, or to invest such dividends and distributions
in shares of another fund in the AIM Funds; provided that (i) dividends and
distributions attributable to Class B shares may only be reinvested in Class B
shares, (ii) dividends and distributions attributable to Class C shares may only
be reinvested in Class C shares, (iii) dividends and distributions attributable
to Class A shares may not be reinvested in Class B or Class C shares, and (iv)
dividends and distributions attributable to the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may not be reinvested in the Class A shares of that Fund or in
any Class B or Class C shares. Investors who have not previously selected such a
reinvestment option on the account application form may contact the Transfer
Agent at any time to obtain a form to authorize such reinvestments in another
AIM Fund. Such reinvestments into the AIM Funds are not subject to sales
charges, and shares so purchased are automatically credited to the account of
the shareholder.
 
  Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
 
                                      A-20
<PAGE>   503
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares, except for "exempt-interest dividends" paid by
AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND
FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND
(the "Tax-Exempt Funds"), which are exempt from federal income tax. With respect
to tax-exempt shareholders, dividends and distributions from the AIM Funds are
not subject to federal income taxation to the extent permitted under the
applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    
 
   
  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
    
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
                                      A-21
<PAGE>   504
   
 TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
  TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other taxable securities. For
additional information concerning the alternative minimum tax and certain
collateral tax consequences of the receipt of exempt-interest dividends, see the
Statements of Additional Information applicable to the Tax-Exempt Funds.
 
  The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
 
  To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
 
  From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP EQUITY FUND,
AIM SMALL CAP GROWTH FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX INFORMATION.
Certain states exempt from income taxes dividends paid by mutual funds
attributable to interest on U.S. Treasury and certain other U.S. government
obligations. Investors should consult with their own tax advisors concerning the
availability of such exemption.
    
 
  AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH
FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do
so, each of these funds may elect to pass through to its shareholders credits
for foreign taxes paid. If a fund makes such an election, a shareholder who
receives a distribution (1) will be required to include in gross income his
proportionate share of foreign taxes allocable to the distribution and (2) may
claim a credit or deduction for such share for his taxable year in which the
distribution is received, subject to the general limitations imposed on the
allowance of foreign tax credits and deductions. Shareholders should also note
that certain gains or losses attributable to fluctuations in exchange rates or
foreign currency forward contracts may increase or decrease the amount of income
of the fund available for distribution to shareholders and should note that if,
for any fund, such losses exceed other income during a taxable year, the fund
would not be able to pay ordinary income dividends for that year.
 
                                      A-22
<PAGE>   505
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each AIM Fund's transfer agent and dividend
payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-23
<PAGE>   506
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
 
 
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                              GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
      ACCOUNT TYPE            NUMBER OF:                       ACCOUNT TYPE                  NUMBER OF:
      ------------            --------------------             ------------                  ------------------
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary
      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application
      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors
      Legal Guardian          Ward, Minor or
                              Incompetent
      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
 
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   507
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   508
 
LOGO         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
 
   
LAG-PRO-1
    
<PAGE>   509
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
CLASS A AND CLASS B SHARES OF
    
 
AIM STRATEGIC INCOME FUND
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
PROSPECTUS
SEPTEMBER 8, 1998
 
This Prospectus contains information about AIM STRATEGIC INCOME FUND (the
"Fund"), which is one of several series investment portfolios comprising AIM
Investment Funds (the "Trust"), an open-end series, management investment
company. The Fund is a non-diversified portfolio which primarily seeks high
current income and secondarily seeks capital appreciation. The Fund allocates
its assets among debt securities of issuers in: (1) the United States; (2)
developed foreign countries; and (3) emerging markets.
 
   
The Fund is designed for long-term investors and not as a trading vehicle, does
not represent a complete investment program and is not suitable for all
investors. An investment in the Fund involves risk factors that should be
reviewed carefully by potential investors. The Fund is authorized to borrow
money for investment purposes, which would increase the volatility of its
performance and involves additional risks. See "Investment Program" and "Risk
Factors."
    
 
   
THE FUND INVESTS UP TO 50% OF ITS TOTAL ASSETS IN LOWER QUALITY AND UNRATED
FOREIGN GOVERNMENT BONDS WHOSE CREDIT QUALITY IS GENERALLY CONSIDERED THE
EQUIVALENT OF U.S. CORPORATE DEBT SECURITIES COMMONLY KNOWN AS "JUNK BONDS."
INVESTMENTS OF THIS TYPE ARE SUBJECT TO A GREATER RISK OF LOSS OF PRINCIPAL AND
INTEREST. PURCHASERS SHOULD CAREFULLY ASSESS THE RISKS ASSOCIATED WITH AN
INVESTMENT IN THE FUND. SEE "INVESTMENT PROGRAM" AND "RISK FACTORS."
    
 
   
Effective November 9, 1998, no more than 65% of the Fund's total assets may be
invested in non-investment grade debt securities. See "Investment
Program -- Investment Policies."
    
 
   
This Prospectus sets forth concisely information about the Fund that prospective
investors should know before investing. It should be read and retained for
future reference. A Statement of Additional Information, dated September 8,
1998, has been filed with the Securities and Exchange Commission (the "SEC") and
is incorporated herein by reference. The Statement of Additional Information is
available without charge upon written request to the Trust at 11 Greenway Plaza,
Suite 100, Houston, Texas 77046-1173 or by calling 1-800-347-4246. The SEC
maintains a Web site at (http://www.sec.gov) that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding the Fund. Additional information about the Fund may also
be obtained from (http://www.aimfunds.com).
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   510
 
- --------------------------------------------------------------------------------
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     7
  Investment Program...................     7
  Risk Factors.........................    12
  Management...........................    16
  Organization of the Trust............    19
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-9
  Exchange Privilege...................  A-12
  How to Redeem Shares.................  A-14
  Determination of Net Asset Value.....  A-19
  Dividends, Distributions and Tax
     Matters...........................  A-19
  General Information..................  A-23
APPENDIX A.............................  A-24
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
   
  The Fund is a non-diversified series of the Trust.
    
 
  INVESTMENT OBJECTIVES. The Fund primarily seeks high current income and
secondarily seeks capital appreciation.
 
  PRINCIPAL INVESTMENTS. The Fund allocates its assets among debt securities of
issuers in: (1) the United States; (2) developed foreign countries; and (3)
emerging markets, and selects particular securities in each sector based on
their relative investment merit.
 
   
  INVESTMENT MANAGERS. The Fund is managed by A I M Advisors, Inc. ("AIM") and
is sub-advised and sub-administered by INVESCO (NY), Inc. (the "sub-advisor").
AIM and the Sub-advisor and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-advisor are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
AIM was organized in 1976 and, together with its subsidiaries, currently advises
approximately 90 investment company portfolios.
    
 
  PURCHASING SHARES. Investors may select Class A or Class B shares of the Fund
which are offered by this Prospectus at an offering price that reflects
differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to
a separate prospectus, the Fund also offers Advisor Class shares, which
represent interests in the Fund. The Advisor Class has different distribution
arrangements.
 
  CLASS A SHARES -- Shares are offered at net asset value plus any applicable
initial sales charge.
 
  CLASS B SHARES -- Shares are offered at net asset value without an initial
sales charge, and are subject to a maximum contingent deferred sales charge of
5% on certain redemptions made within six years from the date such shares were
purchased. Class B shares automatically convert to Class A shares of the Fund
eight years following the end of the calendar month in which a purchase was
made. Class B shares are subject to higher expenses than Class A shares.
 
  Initial investments in any class of shares must be at least $500 and
additional investments must be at least $50. The minimum initial investment is
modified for investments through tax-qualified retirement plans and accounts
initially established with an Automatic Investment Plan. The distributor of the
Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
 
  SUITABILITY FOR INVESTORS. An investor in Class A or Class B shares of the
Fund should consider the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the shares are expected to
be held, and other circumstances. Investors should consider whether, during the
anticipated life of their investment in the Fund, the accumulated distribution
fees and any applicable contingent deferred sales charges on Class B shares
prior to conversion would be less than the initial sales charge and accumulated
distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares.
To assist investors in making this determination, the table under the caption
"Table of Fees and Expenses" sets forth examples of the charges applicable to
each class of shares. Class A shares will normally be more
 
                                        2
<PAGE>   511
 
beneficial than Class B shares to the investor who qualifies for reduced initial
sales charges, as described below. Therefore, AIM Distributors will reject any
order for purchase of more than $250,000 for Class B shares.
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds"). Class
A and Class B shares of the Fund may be exchanged for shares of other funds in
The AIM Family of Funds in the manner and subject to the policies and charges
set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Class A shareholders of the Fund may redeem all or a portion
of their shares at net asset value on any business day, generally without
charge. A contingent deferred sales charge of 1% may apply to certain
redemptions where a purchase of more than $1 million is made at net asset value.
See "How to Redeem Shares -- Contingent Deferred Sales Charge Program for Large
Purchases."
 
  Class B shareholders of the Fund may redeem all or a portion of their shares
at net asset value on any business day, less a contingent deferred sales charge
for redemptions made within six years from the date such shares were purchased.
Class B shares redeemed after six years from the date such shares were purchased
will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on a monthly basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters" and "Special Plans."
    
 
  RISK FACTORS. There is no assurance that the Fund will achieve its investment
objectives. The Fund's net asset value will fluctuate, reflecting fluctuations
in the market value of its portfolio holdings. The value of debt securities held
by the Fund generally fluctuates inversely with interest rate movements.
 
   
  The Fund will invest in foreign securities. Investments in foreign securities
involve risks relating to political and economic developments abroad and the
differences between the regulations to which U.S. and foreign issuers are
subject. Individual foreign economies also may differ favorably or unfavorably
from the U.S. economy. Changes in foreign currency exchange rates will affect
the Fund's net asset value, earnings and gains and losses realized on sales of
securities. Securities of foreign companies may be less liquid and their prices
more volatile than those of securities of comparable U.S. companies. The Fund
may invest in securities of issuers in emerging markets. Such investments entail
greater risks than investing in securities of issuers in developed markets.
    
 
  The Fund may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs.
 
   
  The Fund may invest up to 50% of its total assets in debt securities rated
below investment grade or, if not rated, determined by the Sub-advisor to be of
comparable quality. Investments of this type are subject to greater risk of loss
of principal and interest. See "Investment Program" and "Risk Factors."
Effective November 9, 1998, under normal market conditions, no more than 65% of
the Fund's total assets may be invested in non-investment grade debt securities.
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   512
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Class A and Class B shares of the Fund are reflected in the following table(1):
 
<TABLE>
<CAPTION>
                                                              CLASS A   CLASS B
                                                              -------   -------
<S>                                                           <C>       <C>
Shareholder Transaction Costs(2):
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................   4.75%     None
  Sales charges on reinvested distributions to
     shareholders...........................................   None      None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........   None      5.00%
  Redemption charges........................................   None      None
  Exchange fees.............................................   None      None
Annual Fund Operating Expenses(3): (as a % of average net
  assets)
  Investment management and administration fees.............   0.73%     0.73%
  12b-1 distribution and service fees.......................   0.35%     1.00%
  Other expenses............................................   0.36%     0.36%
                                                               ----      ----
          Total Fund Operating Expenses.....................   1.44%     2.09%
                                                               ====      ====
</TABLE>
 
   
(1)  This table is intended to assist investors in understanding the various
     costs and expenses associated with investing in the Fund. Long-term
     shareholders may pay more than the economic equivalent of the maximum
     front-end sales charge permitted by the National Association of Securities
     Dealers, Inc. rules regarding investment companies.
    
 
   
(2)  Sales charge waivers are available for Class A and Class B shares, and
     reduced sales charge purchase plans are available for Class A shares. The
     maximum 5% contingent deferred sales charge on Class B shares applies to
     redemptions during the first year after purchase. The charge generally
     declines by 1% annually thereafter, reaching zero after six years. See
     "Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
     Sales Charges."
    
 
   
(3)  Expenses are based on the Fund's fiscal year ended October 31, 1997. "Other
     expenses" include custody, transfer agency, legal, audit and other
     operating expenses. See "Management" herein and the Statement of Additional
     Information for more information. Effective November 1, 1997, AIM has
     voluntarily agreed to limit the Fund's expenses (exclusive of brokerage
     commissions, taxes, interest and extraordinary expenses) to the annual
     rates of 1.75% and 2.40% of the average daily net assets of the Fund's
     Class A and Class B shares, respectively, through May 31, 2000.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                     1 YEAR   3 YEARS   5 YEARS   10 YEARS(3)
                                                     ------   -------   -------   -----------
<S>                                                  <C>      <C>       <C>       <C>
Class A Shares(1)..................................   $62       $91      $123        $213
Class B Shares
  Assuming a complete redemption at end of
     period(2).....................................   $73       $99      $136        $227
  Assuming no redemption...........................   $21       $66      $113        $227
</TABLE>
    
 
   
(1)  Assumes payment of maximum sales charge by the investor.
    
 
   
(2)  Assumes deduction of the applicable contingent deferred sales charge.
    
 
   
(3)  For Class B shares, this number reflects the conversion to Class A shares
     eight years following the end of the calendar month in which a purchase was
     made.
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND
THE ASSUMPTION IN THE HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY
REGULATION OF THE SEC APPLICABLE TO ALL MUTUAL FUNDS; THE 5% ANNUAL RETURN IS
NOT A PREDICTION OF AND DOES NOT REPRESENT THE FUND.
    
 
                                        4
<PAGE>   513
- --------------------------------------------------------------------------------
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The table below provides condensed financial information concerning income and
capital changes for one Class A and Class B share of the Fund. The financial
statements and notes for fiscal year ended October 31, 1997 and the semi-annual
period ending April 30, 1998, have been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report thereon also is included in the Statement
of Additional Information. For the period March 29, 1988 (commencement of
operations) to October 22, 1992, the Strategic Income Fund was named G.T. Global
Bond Fund and operated under different investment objectives, policies and
limitations. This information is supplemented by the financial statements and
accompanying notes appearing in the Statement of Additional Information.
    
 
   
                           AIM STRATEGIC INCOME FUND
    
   
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
    
   
<TABLE>
<CAPTION>
 
                                 SIX
                               MONTHS
                                ENDED                         YEAR ENDED OCTOBER 31,
                              APRIL 30,   --------------------------------------------------------------
                               1998(B)      1997     1996(B)    1995(B)      1994     1993(B)     1992
                              ---------   --------   --------   --------   --------   --------   -------
<S>                           <C>         <C>        <C>        <C>        <C>        <C>        <C>
CLASS A+
Per Share Operating
 Performance:
 Net asset value, beginning
   of period................  $  12.00    $  11.76   $  10.32   $ 10.88    $  13.61   $ 11.25   $ 10.91
                              --------    --------   --------   -------    --------   -------   -------
Income from investment
 operations:
 Net investment income......      0.52**      0.74       0.89      0.97        0.79      0.96      0.86
 Net realized and unrealized
   gain (loss) on
   investments..............      0.19        0.34       1.44     (0.69)      (2.14)     2.85      0.31
                              --------    --------   --------   -------    --------   -------   -------
 Net increase (decrease)
   from investment
   operations...............      0.71        1.08       2.33      0.28       (1.35)     3.81      1.17
                              --------    --------   --------   -------    --------   -------   -------
Distributions:
 From net investment
   income...................     (0.42)      (0.78)     (0.82)    (0.80)      (0.79)    (0.96)    (0.83)
 From net realized gain on
   investments..............        --          --         --        --       (0.38)    (0.37)       --
 In excess of net investment
   income...................        --       (0.06)     (0.07)       --          --        --        --
 Return of capital..........        --          --         --     (0.04)      (0.21)       --        --
 From sources other than net
   investment income........        --          --         --        --          --     (0.12)       --
                              --------    --------   --------   -------    --------   -------   -------
      Total distributions...     (0.42)      (0.84)     (0.89)    (0.84)      (1.38)    (1.45)    (0.83)
                              --------    --------   --------   -------    --------   -------   -------
Net asset value, end of
 period.....................  $  12.29    $  12.00   $  11.76   $ 10.32    $  10.88   $ 13.61   $ 11.25
                              ========    ========   ========   =======    ========   =======   =======
      Total investment
        return(c)...........      5.92%(a)    9.40%     23.00%     3.06%     (10.44)%    37.0%     11.1%
Ratios and supplemental 
 data:
 Net assets, end of period
   (in 000's)...............  $131,367    $138,715   $185,126  $188,165    $275,241  $287,870   $83,849
 Ratio of net investment
   income to average net
   assets...................      7.78%(d)    6.18%      8.09%     9.64%       6.74%      7.2%      7.6%
Ratio of operating expenses
 to average net assets:
 With expense reductions....      1.46%(d)    1.35%      1.38%     1.42%       1.40%      1.7%      1.8%
 Without expense
   reductions...............      1.46%(d)    1.44%      1.40%     1.45%        N/A       N/A       N/A
Ratio of interest expenses
 to average net assets......      0.01%(d)     N/A        N/A       N/A        0.10%      N/A       N/A
Portfolio turnover rate++...       244%(d)     149%       177%      238%        583%      310%      418%
 
<CAPTION>
                                                             MARCH 29,
                                                               1988
                                                            (COMMENCE-
                                                              MENT OF
                                                            OPERATIONS)
                                YEAR ENDED OCTOBER 31,          TO
                              ---------------------------   OCTOBER 31,
                               1991      1990      1989        1988
                              -------   -------   -------   -----------
<S>                           <C>       <C>       <C>       <C>
CLASS A+
Per Share Operating
 Performance:
 Net asset value, beginning
   of period................  $ 11.20   $ 11.17   $ 11.25     $ 11.43
                              -------   -------   -------     -------
Income from investment
 operations:
 Net investment income......     0.84*     1.04*     0.82*       0.45*
 Net realized and unrealized
   gain (loss) on
   investments..............    (0.02)    (0.17)    (0.10)      (0.24)
                              -------   -------   -------     -------
 Net increase (decrease)
   from investment
   operations...............     0.82      0.87      0.72        0.21
                              -------   -------   -------     -------
Distributions:
 From net investment
   income...................    (0.60)    (0.84)    (0.80)      (0.39)
 From net realized gain on
   investments..............    (0.51)       --        --          --
 In excess of net investment
   income...................       --        --        --          --
 Return of capital..........       --        --        --          --
 From sources other than net
   investment income........       --        --        --          --
                              -------   -------   -------     -------
      Total distributions...    (1.11)    (0.84)    (0.80)      (0.39)
                              -------   -------   -------     -------
Net asset value, end of
 period.....................  $ 10.91   $ 11.20   $ 11.17     $ 11.25
                              =======   =======   =======     =======
      Total investment
        return(c)...........      7.7%      8.3%      6.8%        1.2%(a)
Ratios and supplemental
 data:
 Net assets, end of period
   (in 000's)...............  $55,967   $44,545   $37,820     $21,830
 Ratio of net investment
   income to average net
   assets...................      7.2%*     9.6%*     7.7%*       7.2%*(d)
Ratio of operating expenses
 to average net assets:
 With expense reductions....      1.9%*     1.9%*     1.8%*       1.7%*(d)
 Without expense
   reductions...............      N/A       N/A       N/A         N/A
Ratio of interest expenses
 to average net assets......      N/A       N/A       N/A         N/A
Portfolio turnover rate++...      630%      501%      385%        340%(d)
</TABLE>
    
 
- ---------------
   
 +    All capital shares issued and outstanding as of October 21, 1992 were
      reclassified as Class A shares.
    
   
 ++   Portfolio turnover and ratio of interest expense to average net assets are
      calculated on the basis of the Fund as a whole without distinguishing
      between the classes of shares issued.
    
   
 *    Includes reimbursement by the Sub-advisor of Fund operating expenses of
      $0.01, $0.04, $0.02 and 0.05 for the year ended October 31, 1991, 1990,
      1989 and 1988, respectively. Without such reimbursements, the expense
      ratios would have been 1.92%, 2.20%, 2.02% and 2.42% and the ratio of net
      investment income to average net assets would have been 7.16%, 9.26%,
      7.56% and 6.42% for the year ended October 31, 1991, 1990, 1989 and 1988,
      respectively.
    
   
 **   Net investment income per share reflects an interest payment received from
      the conversion of Vnesheconombank loan agreements. Without such a payment,
      net investment income would have been $0.41.
    
   
 (a)  Not annualized.
    
   
 (b)  These selected per share data were calculated based upon average shares
      outstanding during the period.
    
   
 (c)  Total investment return does not include sales charges.
    
   
 (d)  Annualized.
    
   
N/A   Not Applicable.
    
 
                                        5
<PAGE>   514
 
   
<TABLE>
<CAPTION>
                                                SIX MONTHS                                                            OCTOBER 22,
                                                  ENDED                      YEAR ENDED OCTOBER 31,                     1992 TO
                                                APRIL 30,     -----------------------------------------------------   OCTOBER 31,
                                                 1998(C)        1997     1996(C)    1995(C)      1994      1993(C)       1992
                                                ----------    --------   --------   --------   --------    --------   -----------
<S>                                             <C>           <C>        <C>        <C>        <C>         <C>        <C>
CLASS B++
Per Share Operating Performance:
Net asset value, beginning of period..........   $  12.01     $  11.77   $  10.33   $  10.88   $  13.60    $  11.24     $11.36
                                                 --------     --------   --------   --------   --------    --------     ------
Income from investment operations:
  Net investment income.......................       0.48*        0.67       0.82       0.91       0.73        0.89       0.01
  Net realized and unrealized gain (loss) on
    investments...............................       0.19         0.33       1.44      (0.69)     (2.14)       2.85      (0.13)
                                                 --------     --------   --------   --------   --------    --------     ------
    Net increase (decrease) from investment
      operations..............................       0.67         1.00       2.26       0.22      (1.41)       3.74      (0.12)
                                                 --------     --------   --------   --------   --------    --------     ------
Distributions:
  From net investment income..................      (0.38)       (0.71)     (0.75)     (0.73)     (0.72)      (0.89)        --
  From net realized gain on investments.......         --           --         --         --      (0.38)      (0.37)        --
  In excess of net investment income..........         --        (0.05)     (0.07)        --         --          --         --
  Return of capital...........................         --           --         --      (0.04)     (0.21)         --         --
  From sources other than net investment
    income....................................         --           --         --         --         --       (0.12)        --
                                                 --------     --------   --------   --------   --------    --------     ------
    Total distributions.......................      (0.38)       (0.76)     (0.82)     (0.77)     (1.31)      (1.38)        --
                                                 --------     --------   --------   --------   --------    --------     ------
Net asset value, end of period................   $  12.30     $  12.01   $  11.77   $  10.33   $  10.88    $  13.60     $11.24
                                                 ========     ========   ========   ========   ========    ========     ======
Total investment return(d)....................       5.58%(a)     8.70%     22.15%      2.48%    (11.02)%      36.2%      (1.1)%(a)
Ratios and supplemental data:
Net assets, end of period (in 000's)..........   $254,225     $281,376   $338,178   $357,852   $458,550    $310,431     $  533
Ratio of net investment income to average net
  assets......................................       7.13%(e)     5.53%      7.44%      8.99%      6.09%        6.5%       N/A(b)
Ratio of operating expenses to average net
  assets:
  With expense reductions.....................       2.11%(e)     2.00%      2.03%      2.07%      2.05%        2.4%       N/A(b)
  Without expense reductions..................       2.11%(e)     2.09%      2.05%      2.10%       N/A         N/A        N/A
Ratio of interest expenses to average net
  assets......................................       0.01%(e)      N/A        N/A        N/A       0.10%        N/A        N/A
Portfolio turnover rate +++...................        244%(e)      149%       177%       238%       583%        310%       418%
</TABLE>
    
 
- ---------------
 
   
<TABLE>
<C>     <S>
     +  All capital shares issued and outstanding as of October 21,
        1992 were reclassified as Class A shares.
    ++  Commencing October 22, 1992, the Fund began offering Class B
        shares.
   +++  Portfolio turnover and ratio of interest expense to average
        net assets are calculated on the basis of the Fund as a
        whole without distinguishing between the classes of shares
        issued.
     *  Net investment income per share reflects an interest payment
        received from the conversion of Vnescheconombank loan
        agreements. Without such a payment, net investment income
        would have been $0.41 and $0.37 per share for Class A and
        Class B, respectively.
   (a)  Not annualized.
   (b)  Ratios are not meaningful due to short period of operation
        of Class B shares.
   (c)  These selected per share data were calculated based upon
        average shares outstanding during the period.
   (d)  Total investment return does not include sales charges.
   (e)  Annualized.
   N/A  Not Applicable.
</TABLE>
    
 
                            ------------------------
 
   
<TABLE>
<CAPTION>
                                                               AVERAGE           AVERAGE MONTHLY       AVERAGE AMOUNT
                                         AMOUNT OF DEBT    AMOUNT OF DEBT     NUMBER OF REGISTRANT'S    OF DEBT PER
                                         OUTSTANDING AT      OUTSTANDING        SHARES OUTSTANDING      SHARE DURING
              YEAR ENDED                 END OF PERIOD    DURING THE PERIOD     DURING THE PERIOD        THE PERIOD
              ----------                 --------------   -----------------   ----------------------   --------------
<S>                                      <C>              <C>                 <C>                      <C>
Six months ended April 30, 1998........    $1,000,000        $  161,644             33,389,895            $ 0.005
October 31, 1997.......................    $  --             $3,575,910             39,263,038            $0.0911
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed daily.
    
 
                                        6
<PAGE>   515
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return. Standardized total return
for Class A shares reflects the deduction of the Fund's maximum front-end sales
charge at the time of purchase. Standardized total return for Class B shares
reflects the deduction of the maximum applicable contingent deferred sales
charge on a redemption of shares held for the period.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  Yield is computed in accordance with standardized formulas described in the
Statement of Additional Information and can be expected to fluctuate from time
to time and is not necessarily indicative of future results. Accordingly, yield
information may not provide a basis for comparison with investments which pay a
fixed rate of interest for a stated period of time. Yield reflects investment
income net of expenses over the relevant period attributable to a Fund share,
expressed as an annualized percentage of the maximum offering price per share
for Class A shares and net asset value per share for Class B shares.
 
  Yield is a function of the type and quality of the Fund's investments, the
maturity of the securities held in the Fund's portfolio and the operating
expense ratio of the Fund. A shareholder's investment in the Fund is not insured
or guaranteed.
 
  These factors should be carefully considered by the investor before making an
investment in the Fund.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of any fund. Such practices will
have the effect of increasing the Fund's yield and total return. The performance
of the Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVES. The Fund primarily seeks high current income and
secondarily seeks capital appreciation. There can be no assurance that the Fund
will achieve its investment objective.
    
 
   
  INVESTMENT POLICIES. The Fund invests in debt securities of issuers in: (1)
the United States; (2) developed foreign countries; and (3) emerging markets.
The Fund selects debt securities from those issued by governments, their
agencies and instrumentalities; central banks; and commercial banks and other
corporate entities. Debt securities in which the Fund may invest include bonds,
notes, debentures, and other similar instruments including mortgage-backed and
asset-backed securities of foreign issuers as well as domestic issuers. The Fund
normally invests at least 50% of its net assets in U.S. and foreign debt and
other fixed income securities that, at the time of purchase, are rated at least
investment grade by Moody's or S&P or, if not rated, determined by the
Sub-advisor to be of comparable quality. No more than 50% of the Fund's total
assets may be invested in securities rated below investment grade. Such
securities involve a high degree of risk and are predominantly speculative. They
are the equivalent of high yield, high risk bonds, commonly known as "junk
bonds." The Fund may also invest in securities that are in default as to payment
of principal and/or interest.
    
 
   
  Beginning November 9, 1998, the following changes to non-fundamental
investment policies of the Fund will become effective: (1) the non-fundamental
investment policy of the Fund relating to investment grade debt securities will
be removed and replaced in its entirety with the following: "Under normal market
conditions, the Fund will invest at least 35% of its total assets in U.S. and
foreign debt and other fixed income securities that, at the time of purchase,
are either rated at least investment grade by Moody's or S&P or, if not rated,
are determined by the Sub-advisor to be of comparable quality"; (2) the
non-fundamental investment policy of the Fund relating to non-investment grade
debt securities will be removed and replaced in its entirety with the following:
"No more than 65% of the Fund's total assets may be invested in debt securities
that, at the time of purchase are either rated below investment grade by Moody's
or S&P, or, if not rated, are determined by the Sub-advisor to be of comparable
quality"; and (3) a new non-fundamental investment policy of the Fund relating
to investments in equity securities will be added to read in its entirety as
follows: "The Fund may invest up to 35% of its total assets in equity
securities."
    
 
                                        7
<PAGE>   516
 
   
  The Fund's investments in emerging market securities may consist substantially
of Brady Bonds (see "General Policies -- Brady Bonds," below) and other
sovereign debt securities issued by emerging market governments that are traded
in the markets of developed countries or groups of developed countries. The
Sub-advisor may invest in debt securities of emerging market issuers that it
determines to be suitable investments for the Fund without regard to ratings.
Currently, the substantial majority of emerging market debt securities are
considered to have a credit quality below investment grade. The Fund also may
invest in below-investment grade debt securities of corporate issuers in the
United States and in developed foreign countries, subject to the overall 50%
limitation.
    
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
  ASSET ALLOCATION. The Fund invests in debt obligations allocated among diverse
markets and denominated in various currencies, including U.S. dollars, or in
multinational currency units such as Euros. The Fund is designed for investors
who wish to accept the risks entailed in such investments, which are different
from those associated with a portfolio consisting entirely of securities of U.S.
issuers denominated in U.S. dollars. The Fund may purchase securities that are
issued by the government or a company or financial institution of one country
but denominated in the currency of another country (or a multinational currency
unit).
 
   
  The Sub-advisor allocates the assets of the Fund in securities of issuers in
countries and in currency denominations where the combination of fixed income
market returns, the price appreciation potential of fixed income securities and
currency exchange rate movements will present opportunities primarily for high
current income and secondarily for capital appreciation. In so doing, the Sub-
advisor intends to take full advantage of the different yield, risk and return
characteristics that investment in the fixed income markets of different
countries can provide for U.S. investors. Fundamental economic strength, credit
quality and currency and interest rate trends are the principal determinants of
the emphasis given to various country, geographic and industry sectors within
the Fund. Securities held by the Fund may be invested in without limitation as
to maturity.
    
 
   
  The Sub-advisor selects securities of particular issuers on the basis of its
views as to the best values then currently available in the marketplace. Such
values are a function of yield, maturity, issue classification and quality
characteristics, coupled with expectations regarding the local and world
economies, movements in the general level and term of interest rates, currency
values, political developments and variations in the supply of funds available
for investment in the world bond market relative to the demands placed upon it.
    
 
   
  The Sub-advisor generally evaluates currencies on the basis of fundamental
economic criteria (e.g., relative inflation, interest rate levels and trends,
growth rate forecasts, balance of payments status and economic policies) as well
as technical and political data. The Sub-advisor may seek to protect the Fund
against such negative currency movements through the use of sophisticated
investment techniques. See "Options, Futures and Forward Currency Transactions"
and "Swaps, Caps, Floors and Collars."
    
 
   
  According to the Sub-advisor, as of the date of this Prospectus, more than 50%
of the value of all outstanding government debt obligations throughout the world
is represented by obligations denominated in currencies other than the U.S.
dollar. Moreover, from time to time, the debt securities of issuers located
outside the United States have substantially outperformed the debt obligations
of U.S. issuers. Accordingly, the Sub-advisor believes that the Fund's policy of
investing in debt securities throughout the world may enable the achievement of
results superior to those produced by mutual funds with similar objectives to
those of the Fund that invest solely in debt securities of U.S. issuers.
    
 
  The Fund is designed for investors who wish to accept the risks entailed in
such investments, which are different from those associated with a portfolio
consisting entirely of securities of U.S. issuers denominated in U.S. dollars.
 
   
  TEMPORARY DEFENSIVE STRATEGIES. The Sub-advisor may employ a temporary
defensive investment strategy if it determines such a strategy to be warranted
due to market, economic or political conditions. Pursuant to such a defensive
strategy, the Fund temporarily may hold cash (U.S. dollars, foreign currencies
or multinational currency units such as euros) and/or invest up to 100% of its
assets in high quality debt securities or money market instruments of U.S. or
foreign issuers. In addition, for temporary defensive purposes, most or all of
the Fund's investments may be made in the United States and denominated in U.S.
dollars. To the extent the Fund employs a temporary defensive strategy, it will
not be invested so as to achieve directly its investment objectives. In
addition, pending investment of proceeds from new sales of Fund shares or to
meet ordinary daily cash needs, the Fund may hold cash (U.S. dollars, foreign
currencies or multinational currency units) and may invest in high quality
foreign or domestic money market instruments. For a full description of money
market instruments, see "Selection of Debt Investments" in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
    
 
   
  EMERGING MARKET SECURITIES. The Fund considers "emerging markets" to consist
of all countries determined by the Sub-advisor to have developing or emerging
economies and markets. These countries generally include every country in the
world except the United States, Canada, Japan, Australia, New Zealand and most
countries located in Western Europe. The Fund will consider investment in the
following emerging markets:
    
 
Algeria
Argentina
Bolivia
Botswana
Brazil
Bulgaria
 
                                        8
<PAGE>   517
 
Chile
China
Colombia
Costa Rica
Cyprus
Czech Republic
Dominican Republic
Ecuador
Egypt
El Salvador
Finland
Ghana
Greece
Hong Kong
Hungary
India
Indonesia
Israel
Ivory Coast
Jamaica
Jordan
Kazakhstan
Kenya
Lebanon
Malaysia
Mauritius
Mexico
Morocco
Nicaragua
Nigeria
Oman
Pakistan
Panama
Paraguay
Peru
Philippines
Poland
Portugal
Republic of Slovakia
Russia
Singapore
Slovenia
South Africa
South Korea
Sri Lanka
Swaziland
Taiwan
Thailand
Turkey
Ukraine
Uruguay
Venezuela
Zambia
Zimbabwe
 
  The Fund will not be invested in all such markets at all times. Moreover,
investing in some of those markets currently may not be desirable or feasible,
due to the lack of adequate custody arrangements, overly burdensome repatriation
requirements and similar restrictions, the lack of organized and liquid
securities markets, unacceptable political risks or for other reasons.
 
  As used in this Prospectus and the Statement of Additional Information, an
issuer in an emerging market is an entity: (i) for which the principal
securities trading market is an emerging market, as defined above; (ii) that
(alone or on a consolidated basis) derives 50% or more of its total revenue from
either goods produced, sales made or services performed in emerging markets; or
(iii) organized under the laws of, or with a principal office in, an emerging
market.
 
  BRADY BONDS. The Fund may invest in "Brady Bonds," which are debt
restructurings that provide for the exchange of cash and loans for newly issued
bonds. Brady Bonds have been issued by the countries of Albania, Argentina,
Brazil, Bulgaria, Costa Rica, Dominican Republic, Ecuador, Ivory Coast, Jordan,
Mexico, Nigeria, Panama, Peru, Philippines, Poland, Uruguay, Venezuela and
Vietnam and are expected to be issued by other emerging market countries. As of
the date of this Prospectus, the Fund is not aware of the occurrence of any
payment defaults on Brady Bonds. Investors should recognize, however, that Brady
Bonds do not have a long payment history. In addition, Brady Bonds are often
rated below investment grade.
 
  The Fund may invest in either collateralized or uncollateralized Brady Bonds.
U.S. dollar-denominated, collateralized Brady Bonds, which may be fixed rate par
bonds or floating rate discount bonds, are collateralized in full as to
principal by U.S. Treasury zero coupon bonds having the same maturity as the
bonds. Interest payments on such bonds generally are collateralized by cash or
securities in an amount that, in the case of fixed rate bonds, is equal to at
least one year of rolling interest payments or, in the case of floating rate
bonds, initially is equal to at least one year's rolling interest payments based
on the applicable interest rate at the time of issuance and is adjusted at
regular intervals thereafter.
 
  MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The Fund may invest in
mortgage-backed and asset-backed securities of U.S. and foreign issuers,
including privately issued mortgage-backed and asset-backed securities.
Mortgage-backed securities represent direct or indirect interests in pools of
underlying mortgage loans that are secured by real property. Investors typically
receive payments out of the interest on and principal of the underlying
mortgages. Asset-backed securities are similar to mortgage-backed securities,
except that the underlying assets are other financial assets or financial
receivables, such as motor vehicle installment sales contracts, home equity
loans, leases of various types of real and personal property, and receivables
from credit cards. Any mortgage-backed and asset-backed securities purchased by
the Fund will be subject to the same rating requirements that apply to its other
investments.
 
  LOAN PARTICIPATIONS AND ASSIGNMENTS. The Fund may invest in fixed and floating
rate loans ("Loans") arranged through private negotiations between a foreign
entity and one or more financial institutions ("Lenders"). The majority of the
Fund's investments in Loans in emerging markets is expected to be in the form of
participations in Loans ("Participations") and assignments of portions of Loans
from third parties ("Assignments"). Participations typically will result in the
Fund having a contractual relationship only with the Lender, not with the
borrower government. The Fund will have the right to receive payments of
principal, interest and any fees to which it is entitled only from the Lender
selling the Participation and only upon receipt by the Lender of the payments
from the borrower. In connection with purchasing Participations, the Fund
generally will have no right to enforce compliance by the borrower with the
terms of the loan agreement relating to the loan ("Loan Agreement"), nor any
rights of set-off against the borrower, and the Fund may not directly benefit
from any collateral supporting the Loan in which it has purchased the
Participation. As a result, the Fund will assume the credit risk of both the
borrower and the Lender that is selling the Participation.
 
  In the event of the insolvency of the Lender selling a Participation, the Fund
may be treated as a general creditor of the Lender and may not benefit from any
set-off between the Lender and the borrower. The Fund will acquire
Participations only if the Lender in-
 
                                        9
<PAGE>   518
 
   
terpositioned between the Fund and the borrower is determined by the Sub-advisor
to be creditworthy. When the Fund purchases Assignments from Lenders, the Fund
will acquire direct rights against the borrower on the Loan. However, since
Assignments are arranged through private negotiations between potential
assignees and assignors, the rights and obligations acquired by the Fund as the
purchaser of an Assignment may differ from, and be more limited than, those held
by the assigning Lender.
    
 
  WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities and forward commitments only with the intention
of actually receiving or delivering the securities, as the case may be. No
income accrues on securities that have been purchased pursuant to a forward
commitment or on a when-issued basis prior to delivery of the securities. If the
Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, the Fund will
segregate cash or liquid securities equal to the value of the when-issued or
forward commitment securities with its custodian and will mark to market daily
such assets. There is a risk that the securities may not be delivered and that
the Fund may incur a loss.
 
  The Fund may also sell securities on a "when, as and if issued" basis for
hedging purposes. Under such a transaction, the Fund is required to deliver at a
future date a security it does not presently hold, but which it has a right to
receive if the security is issued. Issuance of the security may not occur, in
which case the Fund would have no obligation to the other party, and would not
receive payment for the sale. Selling securities on a "when, as and if issued"
basis may reduce risk of loss to the extent that such a sale wholly or partially
offsets unfavorable price movements on the investments being hedged. However,
such sales also limit the amount the Fund can receive if the "when, as and if
issued" security is in fact issued.
 
   
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund is
authorized to borrow money from banks in an amount up to 33 1/3% of its total
assets (including the amount borrowed), less all liabilities and indebtedness
other than the borrowings and may use the proceeds of such borrowings for
investment purposes. The Fund will borrow for investment purposes only when the
Sub-advisor believes that such borrowings will benefit the Fund after taking
into account considerations such as the costs of the borrowing and the likely
investment returns on the securities purchased with the borrowed monies.
    
 
  Borrowing for investment purposes is known as leveraging, which is a
speculative practice. Such borrowing by the Fund creates the opportunity for
increased net income and appreciation but, at the same time, involves special
risk considerations. For example, leveraging might exaggerate changes in the net
asset value of Fund shares and in the yield realized by the Fund. Although the
principal amount of such borrowings will be fixed, the Fund's assets may change
in value during the time the borrowing is outstanding. By leveraging the Fund,
changes in net asset values, higher or lower, may be greater in degree than if
leverage was not employed. To the extent the income derived from the assets
obtained with borrowed funds exceeds the interest and other expenses that the
Fund will have to pay, the Fund's net income will be greater than if borrowing
was not used. Conversely, if the income from the assets obtained with borrowed
funds is not sufficient to cover the cost of borrowing, the net income of the
Fund will be less than if borrowing were not used, and therefore the amount
available for distribution to shareholders as dividends will be reduced. The
Fund expects that some of its borrowings may be made on a secured basis.
 
  In addition to the foregoing borrowings, the Fund may borrow money for
temporary or emergency purposes or payments in an amount not exceeding 5% of the
value of its total assets (not including the amount borrowed) provided that the
total amount borrowed by the Fund for any purpose does not exceed 33 1/3% of its
total assets.
 
  The Fund may also enter into reverse repurchase agreements with a bank or
recognized securities dealer, although the Fund currently has no intention of
doing so with respect to more than 5% of its total assets. Under a reverse
repurchase agreement, the Fund would sell securities and agree to repurchase
them at a particular price at a future date. At the time the Fund enters into a
reverse repurchase agreement, it will establish and maintain a segregated
account with an approved custodian containing cash or liquid securities having a
value not less than the repurchase price, including accrued interest. Reverse
repurchase agreements involve the risk that the market value of the securities
retained in lieu of sale by the Fund may decline below the price of the
securities the Fund has sold but is obligated to repurchase. In the event the
buyer of securities under a reverse repurchase agreement files for bankruptcy or
becomes insolvent, such buyer or its trustee or receiver may receive an
extension of time to determine whether to enforce the Fund's obligation to
repurchase the securities, and the Fund's use of the proceeds of the reverse
repurchase agreement may effectively be restricted pending such decision.
 
  The Fund also may enter into "dollar rolls," in which the Fund sells fixed
income securities for delivery in the current month and simultaneously contracts
to repurchase substantially similar (same type, coupon and maturity) securities
on a specified future date. During the roll period, the Fund would forego
principal and interest paid on such securities. The Fund would be compensated by
the difference between the current sales price and the forward price for the
future purchase, as well as by the interest earned on the cash proceeds of the
initial sale. See "Investment Objectives and Policies" in the Statement of
Additional Information.
 
                                       10
<PAGE>   519
 
  Reverse repurchase agreements and dollar rolls will be treated as borrowings
and will be deducted from the Fund's assets for purposes of calculating
compliance with the Fund's borrowing limitation. See "Investment Limitations" in
the Statement of Additional Information.
 
   
  SECURITIES LENDING. The Fund may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Fund to retain ownership of the securities loaned and, at the same time,
enhances the Fund's total return. At all times a loan is outstanding, the Fund
requires the borrower to maintain with the Fund's custodian, collateral
consisting of cash, U.S. government securities or certain irrevocable letters of
credit equal to at least the value of the borrowed securities, plus any accrued
interest or such other collateral as permitted by the Fund's investment program
and regulatory agencies, and as approved by the Board. The Fund limits its loans
of portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. The risks in lending portfolio
securities, as with other extensions of secured credit, consist of possible
delays in receiving additional collateral or in recovery of the loaned
securities and possible loss of rights in the collateral should the borrower
fail financially.
    
 
  ZERO COUPON SECURITIES. The Fund may invest in certain zero coupon securities
that are "stripped" U.S. Treasury notes and bonds. It also may invest in zero
coupon and other deep discount securities issued by foreign governments and
domestic and foreign corporations, including certain Brady Bonds and other
foreign debt and in payment-in-kind securities. Zero coupon securities pay no
interest to holders prior to maturity, and payment-in-kind securities pay
interest in the form of additional securities. However, a portion of the
original issue discount on zero coupon securities and the "interest" on
payment-in-kind securities will be included in the Fund's income. Accordingly,
for the Fund to continue to qualify for tax treatment as a regulated investment
company and to avoid a certain excise tax (see "Taxes" in the Statement of
Additional Information), it may be required to distribute an amount that is
greater than the total amount of cash it actually receives. These distributions
must be made from the Fund's cash assets or, if necessary, from the proceeds of
sales of portfolio securities. The Fund will not be able to purchase additional
income-producing securities with cash used to make such distributions, and its
current income ultimately may be reduced as a result. Zero coupon and
payment-in-kind securities usually trade at a deep discount from their face or
par value and will be subject to greater fluctuations of market value in
response to changing interest rates than debt obligations of comparable
maturities that make current distributions of interest in cash.
 
  SYNTHETIC SECURITY POSITIONS. The Fund may utilize combinations of futures on
bonds and forward currency contracts to create investment positions that have
substantially the same characteristics as bonds of the same type as those on
which the futures contracts are written. Investment positions of this type are
generally referred to as "synthetic securities."
 
   
  For example, in order to establish a synthetic security position for the Fund
that is comparable to owning a Japanese government bond, the Sub-advisor might
purchase futures contracts on Japanese government bonds in the desired principal
amount and purchase forward currency contracts for Japanese Yen in an amount
equal to the then current purchase price for such bonds in the Japanese cash
market, with each contract having approximately the same delivery date.
    
 
   
  The Sub-advisor might roll over the futures and forward currency contract
positions before taking delivery in order to continue the Fund's investment
position, or the Sub-adviser might close out those positions, thus effectively
selling the synthetic security. Further, the amount of each contract might be
adjusted in response to market conditions and the forward currency contract
might be changed in amount or eliminated in order to hedge against currency
fluctuations.
    
 
   
  The Sub-advisor would create synthetic security positions for the Fund when it
believes that it can obtain a better yield or achieve cost savings in comparison
to purchasing actual bonds or when comparable bonds are not readily available in
the market. Synthetic security positions are subject to the risk that changes in
the value of purchased futures contracts may differ from changes in the value of
the bonds that might otherwise have been purchased in the cash market. Also,
while the Sub-advisor believes that the cost of creating synthetic security
positions generally will be materially lower than the cost of acquiring
comparable bonds in the cash market, the Fund will incur transaction costs in
connection with each purchase of a futures or forward currency contract. The use
of futures contracts and forward currency contracts to create synthetic security
positions also is subject to substantially the same risks as those that exist
when these instruments are used in connection with hedging strategies. See
"Options, Futures and Forward Currency Transactions" below and "Options, Futures
and Currency Strategies" in the Statement of Additional Information.
    
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies, and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the Fund's investment. The Fund also may enter into interest
rate, currency and index swaps and purchase or sell related caps, floors and
collars and other similar instruments. See "Swaps, Caps, Floors and Collars"
below. These instruments are often referred to as "derivatives," which may be
defined as financial instruments whose performance is derived, at least in part,
from the performance of another asset (such as a security, currency or an index
of securities). The Fund may enter into such instruments up to the full value of
its portfolio assets. See "Risk Factors -- Options, Futures and Currency
Transactions" herein and "Options, Futures and Currency Strategies" in the
Statement of Additional Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to the
Fund's portfolio positions. The Fund also may purchase and sell put
 
                                       11
<PAGE>   520
 
and call options on currencies, futures contracts on currencies and options on
such futures contracts to hedge against movements in exchange rates.
 
  In addition, the Fund may purchase and sell put and call options on securities
to hedge against the risk of fluctuations in the prices of securities held by
the Fund or that the Sub-adviser intends to include in the Fund's portfolio. The
Fund also may purchase and sell put and call options on indices to hedge against
overall fluctuations in the securities markets generally or in a specific market
sector.
 
  Further, the Fund may sell index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general market or market sector decline that could adversely affect the Fund's
portfolio. The Fund also may purchase index futures contracts and purchase call
options or write put options on such contracts to hedge against a general market
or market sector advance and thereby attempt to lessen the cost of future
securities acquisitions. The Fund may use interest rate futures contracts and
options thereon to hedge its portfolio against changes in the general level of
interest rates.
 
  SWAPS, CAPS, FLOORS AND COLLARS. The Fund may enter into interest rate,
currency and index swaps, and purchase or sell related caps, floors and collars
and other derivative instruments. The Fund expects to enter into these
transactions primarily to preserve a return or spread on a particular investment
or portion of its portfolio, to protect against currency fluctuations, as a
technique for managing the portfolio's duration (i.e., the price sensitivity to
changes in interest rates) or to protect against any increase in the price of
securities the Fund anticipates purchasing at a later date. The Fund intends to
use these transactions as hedges, and will not sell interest rate caps or floors
if it does not own securities or other instruments providing an income stream
roughly equivalent to what the Fund may be obligated to pay.
 
  Interest rate swaps involve the exchange by the Fund with another party of
their respective commitments to pay or receive interest (for example, an
exchange of floating rate payments for fixed rate payments) with respect to a
notional amount of principal. A currency swap is an agreement to exchange cash
flows on a notional amount based on changes in the values of the reference
indices.
 
  The purchase of a cap entitles the purchaser to receive payments on a notional
principal amount from the party selling the cap to the extent that a specified
index exceeds a predetermined interest rate. The purchase of an interest rate
floor entitles the purchaser to receive payments on a notional principal amount
from the party selling the floor to the extent that a specified index falls
below a predetermined interest rate or amount. A collar is a combination of a
cap and a floor that preserves a certain return within a predetermined range of
interest rates or values.
 
  INDEXED COMMERCIAL PAPER. The Fund may invest without limitation in commercial
paper which is indexed to certain specific foreign currency exchange rates. The
terms of such commercial paper provide that its principal amount is adjusted
upwards or downwards (but not below zero) at maturity to reflect changes in the
exchange rate between two currencies while the obligation is outstanding. The
Fund will purchase such commercial paper with the currency in which it is
denominated and, at maturity, will receive interest and principal payments
thereon in that currency, but the amount of principal payable by the issuer at
maturity will change in proportion to the change (if any) in the exchange rate
between the two specified currencies between the date the instrument is issued
and the date the instrument matures. While such commercial paper entails the
risk of loss of principal, the potential for realizing gains as a result of
changes in foreign currency exchange rates enables the Fund to hedge against a
decline in the U.S. dollar value of investments denominated in foreign
currencies while seeking to provide an attractive money market rate of return.
The Fund will not purchase such commercial paper for speculation.
 
  OTHER INDEXED SECURITIES. The Fund may invest in certain other indexed
securities, which are securities whose prices are indexed to the prices of other
securities, securities indices, currencies, precious metals or other
commodities, or other financial indicators. Indexed securities typically, but
not always, are debt securities or deposits whose value at maturity or coupon
rate is determined by reference to a specific instrument or statistic. The
performance of indexed securities depends to a great extent on the performance
of the security, currency, or other instrument to which they are indexed, and
may also be influenced by interest rate changes in the United States and abroad.
At the same time, indexed securities are subject to the credit risks associated
with the issuer of the security, and their values may decline substantially if
the issuer's creditworthiness deteriorates. Indexed securities may be more
volatile than the underlying instruments. New forms of indexed securities
continue to be developed. The Fund may invest in such securities to the extent
consistent with its investment objectives.
 
  OTHER INFORMATION. The Fund's investment objectives may not be changed without
the approval of a majority of the Fund's outstanding voting securities. A
"majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. The
Fund's other investment policies described herein and in the Statement of
Additional Information may be changed by the Trust's Board of Trustees without
shareholder approval.
 
  The Fund is authorized to make short sales of securities, although it has no
current intention of doing so. See "Investment Objectives and Policies -- Short
Sales" in the Statement of Additional Information.
 
                                       12
<PAGE>   521
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
 
- --------------------------------------------------------------------------------
 
   
RISK FACTORS
    
 
   
  GENERAL. There is no assurance that the Fund will achieve its investment
objectives. The Fund's net asset value will fluctuate, reflecting fluctuations
in the market value of its portfolio positions and its net currency exposure.
The value of fixed income securities held by the Fund generally fluctuates
inversely with interest rate movements. Longer term bonds held by the Fund are
subject to greater interest rate risk. The value of equity securities held by
the Fund will fluctuate in response to general market and economic developments,
as well as developments affecting the particular issuers of such securities.
Equity securities, particularly common stocks, generally represent the most
junior position in an issuer's capital structure, and entitle holders to an
interest in the assets of an issuer, if any, remaining after all more senior
claims have been satisfied.
    
 
  NON-DIVERSIFIED CLASSIFICATION. The Fund is classified under the Investment
Company Act of 1940 (the "1940 Act") as a "non-diversified" fund. As a result,
the Fund will be able to invest in a fewer number of issuers than if it were
classified under the 1940 Act as a "diversified" fund. To the extent that the
Fund invests in a smaller number of issuers, the value of the Fund's shares may
fluctuate more widely and the Fund may be subject to greater investment and
credit risk with respect to its portfolios.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally are not registered with the SEC, nor
are the issuers thereof usually subject to the SEC's reporting requirements.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available with respect to U.S. securities and
issuers. Foreign companies generally are not subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to U.S. companies. In addition, certain costs
attributable to foreign investing, such as custody charges, are higher than
those attributable to domestic investing. Securities of some foreign companies
are less liquid and their prices may be more volatile than securities of
comparable domestic companies. The Fund's interest and dividends from foreign
issuers may be subject to non-U.S. withholding taxes, thereby reducing their net
investment income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Fund, political or social instability, or diplomatic
developments which could affect the investments of the Fund in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
 
   
  CURRENCY RISK. Since the Fund normally invests substantially in securities
denominated in currencies other than the U.S. dollar, and because they may hold
foreign currencies, they may be affected favorably or unfavorably by exchange
control regulations or changes in the exchange rates between such currencies and
the U.S. dollar. Changes in currency exchange rates may influence the value of
the Fund's shares, and also may affect the value of dividends and interest
earned by the Fund and gains and losses realized by the Fund. Currencies
generally are evaluated on the basis of fundamental economic criteria (e.g.,
relative inflation and interest rate levels and trends, growth rate forecasts,
balance of payments status and economic policies) as well as technical and
political data. The exchange rates between the U.S. dollar and other currencies
are determined by supply and demand in the currency exchange markets, the
international balance of payments, governmental intervention, speculation and
other economic and political conditions. If the currency in which a security is
denominated appreciates against the U.S. dollar, the dollar value of the
security will increase. Conversely, a decline in the exchange rate of the
currency would adversely affect the value of the security expressed in U.S.
dollars.
    
 
  In addition, many of the currencies in emerging market countries have
experienced steady devaluations relative to the U.S. dollar and major
devaluations have historically occurred in certain countries.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
  INVESTING IN EMERGING MARKETS. Because of the special risks associated with
investing in emerging markets, an investment in the Fund should be considered
speculative. Investors are strongly advised to consider carefully the special
risks involved in emerging markets, which are in addition to the usual risks of
investing in developed foreign markets around the world.
 
                                       13
<PAGE>   522
 
  Investing in emerging markets involves risks relating to potential political
and economic instability within such markets and the risks of expropriation,
nationalization, confiscation of assets and property or the imposition of
restrictions on foreign investment and on repatriation of capital invested. In
the event of such expropriation, nationalization or other confiscation in any
emerging market, the Fund could lose its entire investment in that market.
 
  Many emerging market countries have experienced substantial, and in some
periods extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries.
 
  Economies in emerging markets generally are dependent heavily upon
international trade and, accordingly, have been and may continue to be affected
adversely by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been and may continue
to be affected adversely by economic conditions in the countries in which they
trade.
 
  The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the United States and
other major markets. There also may be a lower level of monitoring and
regulation of emerging securities markets and the activities of investors in
such markets, and enforcement of existing regulations has been extremely
limited.
 
  In addition, brokerage commissions, custodial services and other costs
relating to investment in foreign markets generally are more expensive than in
the United States, particularly with respect to emerging markets. Such markets
have different settlement and clearance procedures. In certain markets there
have been times when settlements have been unable to keep pace with the volume
of securities transactions, making it difficult to conduct such transactions.
The inability of the Fund to make intended securities purchases due to
settlement problems could cause the Fund to forego attractive investment
opportunities. Inability to dispose of a portfolio security caused by settlement
problems could result in losses to the Fund due to subsequent declines in value
of the portfolio security or, if the Fund has entered into a contract to sell
the security, could result in possible liability to the purchaser.
 
  The risk also exists that an emergency situation may arise in one or more
emerging markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for the Fund's portfolio securities in such
markets may not be readily available. Section 22(e) of the 1940 Act permits a
registered investment company to suspend redemption of its shares for any period
during which an emergency exists, as determined by the SEC. Accordingly, when
the Fund believes that appropriate circumstances warrant, it will promptly apply
to the SEC for a determination that an emergency exists within the meaning of
Section 22(e) of the 1940 Act. During the period commencing from the Fund's
identification of such conditions until the date of SEC action, the portfolio
securities of the Fund in the affected markets will be valued at fair value as
determined in good faith by or under the direction of the Trust's Board of
Trustees.
 
  MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The yield characteristics of
mortgage-backed and asset-backed securities differ from those of traditional
bonds. Among the major differences are that interest and principal payments are
made more frequently (usually monthly) and that principal may be prepaid at any
time because the underlying mortgage loans or other assets generally may be
prepaid at any time. Generally, prepayments on fixed-rate mortgage loans will
increase during a period of falling interest rates and decrease during a period
of rising interest rates. Mortgage-backed and asset-backed securities may also
decrease in value as a result of increasing market interest rates and, because
of prepayments, may benefit less than other bonds from declining interest rates.
Reinvestments of prepayments may occur at lower interest rates than the original
investment, thus adversely affecting the yield of the Fund. Actual prepayment
experience may cause the yield of a mortgage-backed security to differ from what
was assumed when the Fund purchased the security. The market for privately
issued mortgage-backed and asset-backed securities is smaller and less liquid
than the market for U.S. government mortgage-backed securities.
 
  Foreign mortgage-backed securities markets are substantially smaller than U.S.
markets, but have been established in several countries, including Germany,
Denmark, Sweden, Canada and Australia, and may be developed elsewhere. Foreign
mortgage-backed securities generally are structured similar to domestic
mortgage-backed securities, and they normally present substantially similar
investment risks as well as the other risks normally associated with foreign
securities.
 
  LOAN PARTICIPATIONS AND ASSIGNMENTS. The Fund may have difficulty disposing of
Assignments and Participations. The liquidity of such securities is limited and,
the Fund anticipates that such securities could be sold only to a limited number
of institutional investors. The lack of a liquid secondary market could have an
adverse impact on the value of such securities and on the Fund's ability to
dispose of particular Assignments or Participations when necessary to meet the
Fund's liquidity needs or in response to a specific economic event, such as a
deterioration in the creditworthiness of the borrower. The lack of a liquid
secondary market for Assignments and Participations also may make it more
difficult for the Fund to assign a value to those securities for purposes of
valuing the Fund's portfolio and calculating its net asset value.
 
  SOVEREIGN DEBT. The Fund may invest in sovereign debt securities of emerging
market governments, including Brady Bonds. Investments in such securities
involve special risks. The issuer of the debt or the governmental authorities
that control the repayment of the debt may be unable or unwilling to repay
principal or interest when due in accordance with the terms of such debt.
Periods of economic uncertainty may result in the volatility of market prices of
sovereign debt obligations and in turn the Fund's net asset value, to a greater
extent than the volatility inherent in domestic fixed income securities.
 
                                       14
<PAGE>   523
 
  A sovereign debtor's willingness or ability to repay principal and pay
interest in a timely manner may be affected by, among other factors, its cash
flow situation, the extent of its foreign reserves, the availability of
sufficient foreign exchange on the date a payment is due, the relative size of
the debt service burden to the economy as a whole, the sovereign debtor's policy
toward principal international lenders and the political constraints to which a
sovereign debtor may be subject. Emerging market governments could default on
their sovereign debt. Such sovereign debtors also may be dependent on expected
disbursements from foreign governments, multilateral agencies and other entities
abroad to reduce principal and interest arrearages on their debt. The commitment
on the part of these governments, agencies and others to make such disbursements
may be conditioned on a sovereign debtor's implementation of economic reforms
and/or economic performance and the timely service of such debtor's obligations.
Failure to implement such reforms, achieve such levels of economic performance
or repay principal or interest when due, may result in the cancellation of such
third parties' commitments to lend funds to the sovereign debtor, which may
further impair such debtor's ability or willingness to timely service its debts.
 
   
  The occurrence of political, social or diplomatic changes in one or more of
the countries issuing sovereign debt could adversely affect the Fund's
investments. Emerging markets are faced with social and political issues and
some of them have experienced high rates of inflation in recent years and have
extensive internal debt. Among other effects, high inflation and internal debt
service requirements may adversely affect the cost and availability of future
domestic sovereign borrowing to finance governmental programs, and may have
other adverse social, political and economic consequences. Political changes or
a deterioration of a country's domestic economy or balance of trade may affect
the willingness of countries to service their sovereign debt. Although the
Sub-advisor intends to manage the Fund in a manner that will minimize the
exposure to such risks, there can be no assurance that adverse political changes
will not cause the Fund to suffer a loss of interest or principal on any of its
holdings.
    
 
  In recent years, some of the emerging market countries in which the Fund
expects to invest have encountered difficulties in servicing their sovereign
debt obligations. Some of these countries have withheld payments of interest
and/or principal of sovereign debt. These difficulties have also led to
agreements to restructure external debt obligations -- in particular, commercial
bank loans, typically by rescheduling principal payments, reducing interest
rates and extending new credits to finance interest payments on existing debt.
In the future, holders of emerging market sovereign debt securities may be
requested to participate in similar rescheduling of such debt. Certain emerging
market countries are among the largest debtors to commercial banks and foreign
governments. Currently, Brazil, Mexico and Argentina are the largest debtors
among developing countries. At times certain emerging market countries have
declared moratoria on the payment of principal and interest on external debt;
such a moratorium is currently in effect in certain emerging market countries.
There is no bankruptcy proceeding by which a creditor may collect in whole or in
part sovereign debt on which an emerging market government has defaulted.
 
  The ability of emerging market governments to make timely payments on their
sovereign debt securities is likely to be influenced strongly by a country's
balance of trade and its access to trade and other international credits. A
country whose exports are concentrated in a few commodities could be vulnerable
to a decline in the international prices of one or more of such commodities.
Increased protectionism on the part of a country's trading partners could also
adversely affect its exports. Such events could diminish a country's trade
account surplus, if any. To the extent that a country receives payment for its
exports in currencies other than hard currencies, its ability to make hard
currency payments could be affected.
 
  Investors should also be aware that certain sovereign debt instruments in
which the Fund may invest involve great risk. As noted above, sovereign debt
obligations issued by emerging market governments generally are deemed to be the
equivalent in terms of quality to securities rated below investment grade by
Moody's and S&P. Such securities are regarded as predominantly speculative with
respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligations and involve major risk exposure to
adverse conditions. Some of such securities, with respect to which the issuer
currently may not be paying interest or may be in payment default, may be
comparable to securities rated D by S&P or C by Moody's. The Fund may have
difficulty disposing of and valuing certain sovereign debt obligations because
there may be a limited trading market for such securities. Because there is no
liquid secondary market for many of these securities, the Fund anticipates that
such securities could be sold only to a limited number of dealers or
institutional investors.
 
   
  LOWER QUALITY DEBT SECURITIES. Under normal market conditions the Fund may
invest up to 65% of its total assets in debt securities rated below investment
grade. Such investments involve a high degree of risk.
    
 
  Debt rated Baa by Moody's is considered by Moody's to have speculative
characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B,
Caa, Ca or C by Moody's is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such lower quality debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Debt rated C
by Moody's or S&P is the lowest quality debt that is not in default as to
principal or interest and such issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Lower
quality debt securities are also generally considered to be subject to greater
risk than higher quality securities with regard to a deterioration of general
economic conditions. These securities are the equivalent of high yield, high
risk bonds, commonly known as "junk bonds." As noted above, the Fund may invest
in debt securities rated below C, which are in default as to principal and/or
interest.
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market
 
                                       15
<PAGE>   524
 
value. Also, rating agencies may fail to make timely changes in credit quality
in response to subsequent events, so that an issuer's current financial
condition may be better or worse than a rating indicates. See "Appendix A" for a
discussion of Moody's and S&P's ratings.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities of corporate issuers frequently have call or
buy-back features which would permit an issuer to call or repurchase the
security from the Fund. If an issuer exercises these provisions in a declining
interest rate market, the Fund may have to replace the security with a lower
yielding security, resulting in a decreased return for investors. In addition,
the Fund may have difficulty disposing of lower quality securities because there
may be a thin trading market for such securities. There may be no established
retail secondary market for many of these securities, and the Fund anticipates
that such securities could be sold only to a limited number of dealers or
institutional investors. The lack of a liquid secondary market also may have an
adverse impact on market prices of such instruments and may make it more
difficult for the Fund to obtain accurate market quotations for purposes of
valuing the securities in the portfolios of the Fund. Adverse publicity and
investor perceptions, whether or not based on fundamental analysis, may also
decrease the values and liquidity of lower quality securities, especially in a
thinly traded market. The Fund also may acquire lower quality debt securities
during an initial underwriting or may acquire lower quality debt securities
which are sold without registration under applicable securities laws. Such
securities involve special considerations and risks.
 
  Factors having an adverse effect on the market value of lower rated securities
or their equivalents purchased by the Fund will adversely impact net asset value
of the Fund. See "Risk Factors" in the Statement of Additional Information. In
addition to the foregoing, such factors may include: (i) potential adverse
publicity; (ii) heightened sensitivity to general economic or political
conditions; and (iii) the likely adverse impact of a major economic recession.
The Fund also may incur additional expenses to the extent it is required to seek
recovery upon a default in the payment of principal or interest on its portfolio
holdings, and the Fund may have limited legal recourse in the event of a
default. Debt securities issued by governments in emerging markets can differ
from debt obligations issued by private entities in that remedies from defaults
generally must be pursued in the courts of the defaulting government, and legal
recourse is therefore somewhat diminished. Political conditions, in terms of a
government's willingness to meet the terms of its debt obligations, also are of
considerable significance. There can be no assurance that the holders of
commercial bank debt may not contest payments to the holders of debt securities
issued by governments in emerging markets in the event of default by the
governments under commercial bank loan agreements.
 
  As of October 31, 1997, the Fund had 89.27% of its total net assets in debt
securities that received a rating from Moody's and 4.00% of its total net assets
in debt securities that were not so rated. In addition, the Fund had 6.73% of
its total net assets in cash and net receivables. The Fund had the following
percentages of its total net assets invested in rated securities: Aaa -- 41.23%,
Aa -- 12.68%, A -- 1.31%, Baa -- 3.75%, Ba -- 24.30%, B -- 6.00%, Caa -- 0.00%,
Ca -- 0.00%, C -- 0.00%. Included under the unrated category are securities held
by the Fund which, while unrated, have been determined by the Sub-adviser to be
of comparable quality to securities in the following rating categories:
Ba -- 1.03%; and B -- 2.97%. It should be noted that the allocation of the
investments of the Fund by rating on any given date will vary and should not be
considered representative of the future portfolio composition of the Fund.
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions, the
Fund might not enter into any such transactions. In addition, issuers in
emerging markets typically are subject to a greater degree of change in earnings
and business prospects than issuers in developed countries. Options, futures and
foreign currency transactions involve certain risks, which include: (1)
dependence on the Sub-advisor's ability to predict movements in the prices of
individual securities, fluctuations in the general securities markets or in the
appropriate market sector and movements in interest rates and currency markets;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, forward contracts, futures contracts or options thereon and
movements in the price of the currency or security hedged or used for cover; (3)
the fact that skills and techniques needed to trade options, futures contracts
and options thereon or to use forward currency contracts are different from
those needed to select the securities in which the Fund invests; (4) lack of
assurance that a liquid secondary market will exist for any particular option,
futures contract or option thereon at any particular time; (5) the possible loss
of principal under certain conditions; and (6) the possible inability of the
Fund to purchase or sell a portfolio security at a time when it would otherwise
be favorable for it to do so, or the possible need for the Fund to sell a
security at a disadvantageous time, due to the need for the Fund to maintain
"cover" or to set aside securities in connection with hedging transactions.
    
 
  ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets, in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities and the sale of illiquid securities
                                       16
<PAGE>   525
 
generally will require more time and result in higher brokerage charges or
dealer discounts and other selling expenses than the sale of liquid securities.
Moreover, illiquid securities often sell at a price lower than similar
securities that are liquid.
 
   
- --------------------------------------------------------------------------------
    
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust and persons or companies furnishing services to the Fund
including the investment management and administration agreement with AIM, the
investment sub-advisory and sub-administration agreement between AIM and the
Sub-advisor, the agreements with AIM Distributors regarding distribution of the
Fund's shares, the custody agreement and the transfer agency agreement. The
day-to-day operations of the Fund are delegated to the officers of the Trust,
subject always to the investment objectives and policies of the Fund and to the
general supervision of the Trust's Board of Trustees. See "Trustees and
Executive Officers" in the Statement of Additional Information for information
on the Trustees of the Trust.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers and administrators include, but
are not limited to, determining the composition of the investment portfolio of
the Fund and placing orders to buy, sell or hold particular securities. In
addition, AIM and the Sub-advisor provide the following administration services
to the Fund: furnishing corporate officers and clerical staff; providing office
space, services and equipment; and supervising all matters relating to the
Fund's operation.
    
 
   
  The Fund pays AIM investment management and administration fees computed daily
and payable monthly, based on the average daily net assets, for such services at
the annualized rate of 0.725% on the first $500 million, 0.70% on the next $1
billion, 0.675% on the next $1 billion, and 0.65% on amounts thereafter. Out of
the aggregate fees payable by the Fund, AIM pays the Sub-advisor sub-advisory
and sub-administration fees equal to 40% of the aggregate fees AIM receives from
the Fund. The investment management and administration fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-advisor, AIM Distributors or any other agents. Effective
November 1, 1997, AIM has undertaken to limit the expenses of the Class A and
Class B shares of the Fund (exclusive of brokerage commissions, taxes, interest
and extraordinary expenses) to the maximum annual rate of 1.75% and 2.40% of the
average daily net assets of the Fund's Class A and Class B shares.
    
 
   
  The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-adviser (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement (the "Advisory Agreement"). AIM was organized in 1976
and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-adviser to the Fund pursuant to an investment sub-advisory and
sub-administration agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of the Sub-advisor,
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included the Sub-adviser and
certain other affiliates. As a result of this transaction, the Sub-advisor is
now an indirect wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices, including investment offices in Atlanta,
Boston, Dallas, Denver, Louisville, Miami, Portland (Oregon), Frankfurt, Hong
Kong, London, Singapore, Sydney, Tokyo and Toronto. In managing the Fund, the
Sub-advisor employs a team approach, taking advantage of its investment
resources around the world.
    
 
                                       17
<PAGE>   526
 
  The investment professional primarily responsible for the portfolio management
of the Fund is as follows:
 
   
<TABLE>
<CAPTION>
                          RESPONSIBILITIES FOR                 BUSINESS EXPERIENCE
      NAME/OFFICE               THE FUND                         PAST FIVE YEARS
      -----------         --------------------                 -------------------
<S>                       <C>                    <C>
Cheng-Hock Lau              Portfolio Manager    Chief Investment Officer for Global Fixed Income
New York                    since 1996           and Portfolio Manager for the Sub-advisor since
                                                 October 1996. Senior Portfolio Manager for
                                                 Global/International Fixed Income for the
                                                 Sub-advisor from July 1995 to October 1996.
                                                 Employed by Chancellor Capital Management, Inc.
                                                 ("Chancellor Capital"), a predecessor of the
                                                 Sub-advisor, from 1995 to October 1996. Senior
                                                 Vice President and Senior Portfolio Manager for
                                                 Fiduciary Trust Company International from 1993
                                                 to 1995. Vice President at Bankers Trust Company
                                                 from 1991 to 1993.
David B. Hughes             Portfolio Manager    Head of Global Fixed Income, North America, and
New York                    since 1998           Portfolio Manager for the Sub-advisor since
                                                 January 1998. Senior Portfolio Manager for
                                                 Global/International Fixed Income for the
                                                 Sub-advisor from July 1995 to December 1997.
                                                 Employed by Chancellor Capital from July 1995 to
                                                 October 1996. Assistant Vice President of
                                                 Fiduciary Trust Company International from 1994
                                                 to 1995. Assistant Treasurer at the Bankers
                                                 Trust Company from 1991 to 1994.
Craig Munro                 Portfolio Manager    Portfolio Manager for the Sub-advisor since
New York                    since 1998           August 1997. Vice President and Senior Analyst
                                                 in the Emerging Markets Group of the Global
                                                 Fixed Income Division of Merrill Lynch Asset
                                                 Management from 1993 to August 1997.
Kevin J. Rogers             Portfolio Manager    Portfolio Manager for the Sub-advisor since July
New York                    since 1998           1997. High Yield Bond Analyst at Fidelity
                                                 Management & Research Company (Boston) from 1988
                                                 to 1997.
</TABLE>
    
 
   
  In placing orders for the Fund's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-adviser may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions for the Fund may be
executed through affiliates of AIM or the Sub-advisor. High portfolio turnover
(over 100%) involves correspondingly greater brokerage commissions and other
transaction costs that the Fund will bear directly and could result in the
realization of net capital gains which would be taxable when distributed to
shareholders. See "Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement on
behalf of Class A shares of the Fund, and has entered into a Master Distribution
Agreement on behalf of Class B shares of the Fund (individually referred to as a
"Distribution Agreement" or collectively as the "Distribution Agreements") with
AIM Distributors, a registered broker-dealer and a wholly owned subsidiary of
AIM, to act as the distributor of Class A and Class B shares of the Fund.
Certain Trustees and officers of the Trust are affiliated with AIM Distributors.
    
 
   
  The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors and its predecessor. In the event the Class B shares Distribution
Agreement is terminated, AIM Distributors would continue to receive payments of
asset based sales charges in respect of the outstanding Class B shares
attributable to the distribution efforts of AIM Distributors and its
predecessor; provided, however, that a complete termination of the Class B
shares master distribution plan (as defined in the plan) would terminate all
payments by the Fund of asset based sales charges and service fees to AIM
Distributors. Termination of the Class B shares distribution plan or
Distribution Agreement does not affect the obligation of Class B shareholders to
pay contingent deferred sales charges.
    
 
  DISTRIBUTION PLANS. Class A Plan. The Trust has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
 
                                       18
<PAGE>   527
 
  Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.35% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
 
  The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
 
   
  Of the aggregate amount payable under the Class A Plan, payments to dealers
and other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee.
    
 
  Class B Plan. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
 
  Both Plans. Activities that may be financed under the Class A Plan and the
Class B Plan (collectively, the "Plans") include, but are not limited to:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders, overhead, preparation and distribution of
advertising material and sales literature, expense of organizing and conducting
sales seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
 
  Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
 
   
  Under the Plans, certain financial institutions which have entered into
service agreements and which sell shares of the Fund on an agency basis, may
receive payments from the Fund pursuant to the respective Plans. AIM
Distributors does not act as principal, but rather as agent for the Fund in
making such payments. The Fund will obtain a representation from such financial
institutions that they will either be licensed as dealers as required under
applicable state law, or that they will not engage in activities which would
constitute acting as a "dealer" as defined under applicable state law. Financial
intermediaries and any other person entitled to receive compensation for selling
Fund shares may receive different compensation for selling shares of one class
over another.
    
 
  For additional information concerning the operation of the Plans see the
Statement of Additional Information.
 
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST
    
 
   
  The Trust was organized as a Delaware business trust on May 7, 1998. On
September 8, 1998, the Trust acquired the assets of and assumed the liabilities
of AIM Investment Funds, Inc., a Maryland corporation. The Fund constitutes one
of the thirteen separate and distinct series portfolios of the Trust.
    
 
  From time to time, the Trust may establish other funds, each corresponding to
a distinct investment portfolio and a distinct series of the Trust's shares.
Shares of each fund are entitled to one vote per share (with proportional voting
for fractional shares) and are freely transferable. Shareholders have no
preemptive rights. Other than the automatic conversion of Class B shares to
Class A shares, there are no conversion rights.
 
                                       19
<PAGE>   528
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that Class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may also
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
    
   
    
 
                                       20
<PAGE>   529
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
               TO THE AIM FAMILY OF FUNDS--Registered Trademark--
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of the following mutual funds:
   
<TABLE>
            <S>                                           <C>
            AIM ADVISOR FLEX FUND                         AIM GLOBAL INFRASTRUCTURE FUND
            AIM ADVISOR INTERNATIONAL VALUE FUND          AIM GLOBAL RESOURCES FUND
            AIM ADVISOR LARGE CAP VALUE FUND              AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM ADVISOR MULTIFLEX FUND                    AIM GLOBAL TRENDS FUND
            AIM ADVISOR REAL ESTATE FUND                  AIM GLOBAL UTILITIES FUND
            AIM AGGRESSIVE GROWTH FUND                    AIM HIGH INCOME MUNICIPAL FUND
            AIM ASIAN GROWTH FUND                         AIM HIGH YIELD FUND
            AIM BALANCED FUND                             AIM INCOME FUND
            AIM BASIC VALUE FUND                          AIM INTERMEDIATE GOVERNMENT FUND
            AIM BLUE CHIP FUND                            AIM INTERNATIONAL EQUITY FUND
            AIM CAPITAL DEVELOPMENT FUND                  AIM INTERNATIONAL GROWTH FUND
            AIM CHARTER FUND                              AIM JAPAN GROWTH FUND
            AIM CONSTELLATION FUND                        AIM LATIN AMERICAN GROWTH FUND
            AIM DEVELOPING MARKETS FUND                   AIM LIMITED MATURITY TREASURY FUND
            AIM DOLLAR FUND(*)                            AIM MID CAP GROWTH FUND
            AIM EMERGING MARKETS FUND                     AIM MONEY MARKET FUND(*)
            AIM EMERGING MARKET DEBT FUND                 AIM MUNICIPAL BOND FUND
            AIM EUROPEAN DEVELOPMENT FUND                 AIM NEW PACIFIC GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM SELECT GROWTH FUND
            AIM GLOBAL AGGRESSIVE GROWTH FUND             AIM SMALL CAP EQUITY FUND
            AIM GLOBAL CONSUMER PRODUCTS AND              AIM SMALL CAP OPPORTUNITIES FUND
              SERVICES FUND                               AIM STRATEGIC INCOME FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM TAX-EXEMPT CASH FUND(*)
            AIM GLOBAL GROWTH FUND                        AIM TAX-FREE INTERMEDIATE FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM VALUE FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WEINGARTEN FUND
            AIM GLOBAL INCOME FUND                        AIM WORLDWIDE GROWTH FUND
                                                                                                 
</TABLE>
    
 
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
    Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
    asset value, without payment of a sales charge, as described below. Other
    funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
    FUND, are sold with an initial sales charge or subject to a contingent
    deferred sales charge upon redemption, as described below.
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed new Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.
 
   
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment is
$500, except for accounts initially established through an Automatic Investment
Plan, which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an Individual Retirement Arrangement ("IRA") or Roth IRA is $250.
There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such plans is $25 per
fund investment), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM 
    
 
                                       A-1
<PAGE>   530
 
   
Funds account. Notwithstanding the foregoing, the minimum initial investment
applicable to AIM Small Cap Opportunities Fund is $10,000.
    
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Shares of any AIM Funds not named on the cover of this Prospectus, as well as
Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                   OBI:                              Shareholder Name, Shareholder Account Number
                                                     (70 character limit)
</TABLE>
 
   
  HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased directly
through AIM Distributors or through any dealer who has entered into an agreement
with AIM Distributors. The minimum investment for subsequent purchases is $50.
The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. Notwithstanding the foregoing, the minimum subsequent purchases of shares
of AIM Small Cap Opportunities Fund is $1,000. There are no such minimum
investment requirements for investment of dividends and distributions of any of
the AIM Funds into any other existing AIM Funds account.
    
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional shares by electronic funds
transfer, please contact the Client Services Department of AFS for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
   
  Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BASIC
VALUE FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT
FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP EQUITY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND,AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without a
sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over
    
 
                                       A-2
<PAGE>   531
 
another class in the same Multiple Class Fund. Factors an investor should
consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
   
  The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EMERGING MARKETS DEBT FUND, AIM EUROPE
GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL
FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH &
INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM
GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS
FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN
GROWTH FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
    
 
  The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
 
SALES CHARGES AND DEALER CONCESSIONS
 
   
  GROUP I. Certain AIM Funds are currently sold with a sales charge ranging from
5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM BASIC VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
EQUITY FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
    
 
   
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
      SINGLE TRANSACTION(1)                          PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   25,000                    5.50%          5.82%        4.75%
 $ 25,000 but less than $   50,000                   5.25           5.54         4.50
 $ 50,000 but less than $ 100,000                    4.75           4.99         4.00
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    3.00           3.09         2.50
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
    
 
- ---------------
 
   
(1) AIM Small Cap Opportunities Fund will not accept any single purchase in
    excess of $250,000.
    
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
                                       A-3
<PAGE>   532
   
 GROUP II. Certain AIM Funds are currently sold with a sales charge ranging from
4.75% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND, AIM
BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND
FUND, AIM STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
    
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
             Less than $   50,000                    4.75%          4.99%        4.00%
 $ 50,000 but less than $ 100,000                    4.00           4.17         3.25
 $100,000 but less than $ 250,000                    3.75           3.90         3.00
 $250,000 but less than $ 500,000                    2.50           2.56         2.00
 $500,000 but less than $1,000,000                   2.00           2.04         1.60
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
 
  GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
 
<TABLE>
<CAPTION>
                                                                                DEALER
                                                                              CONCESSION
                                                  INVESTOR'S SALES CHARGE     ----------
                                                 --------------------------      AS A
                                                     AS A           AS A      PERCENTAGE
                                                  PERCENTAGE     PERCENTAGE     OF THE
                                                 OF THE PUBLIC   OF THE NET     PUBLIC
     AMOUNT OF INVESTMENT IN                       OFFERING        AMOUNT      OFFERING
        SINGLE TRANSACTION                           PRICE        INVESTED      PRICE
     -----------------------                     -------------   ----------   ----------
<S>                                 <C>          <C>             <C>          <C>
Less than $ 100,000                                  1.00%          1.01%        0.75%
 $100,000 but less than $ 250,000                    0.75           0.76         0.50
 $250,000 but less than $1,000,000                   0.50           0.50         0.40
</TABLE>
 
  There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
 
  ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
 
  In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
 
  AIM Distributors may make payments to dealers and institutions who are dealers
of record for purchases of $1 million of more of Class A shares (or shares which
normally involve payment of initial sales charges), which are sold at net asset
value and are subject to
 
                                       A-4
<PAGE>   533
 
a contingent deferred sales charge, for all AIM Funds other than Class A shares
of each of AIM LIMITED MATURITY TREASURY FUND and AIM TAX-FREE INTERMEDIATE FUND
as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next
$1 million of such purchases, plus 0.50% of the next $17 million of such
purchases, plus 0.25% of amounts in excess of $20 million of such purchases. See
"Contingent Deferred Sales Charge Program for Large Purchases." AIM Distributors
may make payments to dealers and institutions who are dealers of record for
purchases of $1 million or more of Class A shares (or shares which normally
involve payment of initial sales charges), and which are sold at net asset value
and are not subject to a contingent deferred sales charge, in an amount up to
0.10% of such purchases of Class A shares of AIM LIMITED MATURITY TREASURY FUND,
and in an amount up to 0.25% of such purchases of Class A shares of AIM TAX-FREE
INTERMEDIATE FUND.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
 
  AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed during the next twelve
months on Saturdays and Sundays and on the days on which New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class Funds
currently offer two or more classes of shares through separate distribution
systems (the "Multiple Distribution System"). Although each class of shares of a
particular Multiple Class Fund represents an interest in the same portfolio of
investments, each class is subject to a different distribution structure and, as
a result, differing expenses. This Multiple Distribution System allows investors
to select the class that is best suited to the investor's needs and objectives.
In considering the options afforded by the Multiple Distribution System,
investors should consider both the applicable initial sales charge or contingent
deferred sales charge, as well as the ongoing expenses borne by each class of
shares and other relevant factors, such as whether his or her investment goals
are long-term or short-term.
 
     CLASS A SHARES generally are sold subject to the initial sales charges
     described above and are subject to the other fees and expenses described
     herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
     needs of an investor who wishes to establish a dollar cost averaging
     program, pursuant to which Class A shares an investor owns may be exchanged
     at net asset value for Class A shares of another Multiple Class Fund or
     shares of another AIM Fund which is not a Multiple Class Fund, subject to
     the terms and conditions described under the caption "Exchange
     Privilege -- Terms and Conditions of Exchanges."
                                       A-5
<PAGE>   534
 
     CLASS B SHARES are sold without an initial sales charge. Thus, the entire
     purchase price of Class B shares is immediately invested in Class B shares.
     Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
     per annum on the average daily net assets of a Multiple Class Fund
     attributable to Class B shares. See the discussion under the caption
     "Management -- Distribution Plans." In addition, Class B shares redeemed
     within six years from the date such shares were purchased are subject to a
     contingent deferred sales charge ranging from 5% for redemptions made
     within the first year to 1% for redemptions made within the sixth year. No
     contingent deferred sales charge will be imposed if Class B shares are
     redeemed after six years from the date such shares were purchased.
     Redemptions of Class B shares and associated charges are further described
     under the caption "How to Redeem Shares -- Multiple Distribution System."
 
     Class B shares will automatically convert into Class A shares of the same
     Multiple Class Fund (together with a pro rata portion of all Class B shares
     acquired through the reinvestment of dividends and other distributions)
     eight years from the end of the calendar month in which the purchase of
     Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
     outstanding on May 29, 1998 and which are continuously held by the
     shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
     FUND seven years from the end of the calendar month in which the purchase
     of such Class B shares was made. If a shareholder exchanges Class B shares
     of AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
     since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
     shares will be subject to the eight year conversion feature applicable to
     Class B shares of all other AIM Funds. Following such conversion of their
     Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
     payments associated with Class B shares. See "Management -- Distribution
     Plans."
 
     AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an
     initial sales charge and are not subject to a contingent deferred sales
     charge; however, they are subject to the other fees and expenses described
     in the prospectus for AIM MONEY MARKET FUND.
 
  TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon Eastern Time or NYSE Close on any
business day of the Fund will be confirmed at the price next determined. Net
asset value is normally determined at 12:00 noon Eastern Time and NYSE Close on
each business day of AIM MONEY MARKET FUND.
 
  SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
REDUCTIONS IN INITIAL SALES CHARGES
 
  Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
 
                                       A-6
<PAGE>   535
 
  The term "purchaser" means:
 
  - an individual and his or her spouse and children, including any trust
    established exclusively for the benefit of any such person; or a pension,
    profit-sharing, or other benefit plan established exclusively for the
    benefit of any such person, such as an IRA, Roth IRA, a single-participant
    money-purchase/profit-sharing plan or an individual participant in a 403(b)
    plan (unless such 403(b) plan qualifies as the purchaser as defined below);
 
  - a 403(b) plan, the employer/sponsor of which is an organization described
    under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
    (the "Code"), provided that:
 
        a. the employer/sponsor must submit contributions for all participating
           employees in a single contribution transmittal (i.e., the funds will
           not accept contributions submitted with respect to individual
           participants);
 
        b. each transmittal must be accompanied by a single check or wire
           transfer; and
 
        c. all new participants must be added to the 403(b) plan by submitting
           an application on behalf of each new participant with the
           contribution transmittal;
 
  - a trustee or fiduciary purchasing for a single trust, estate or single
    fiduciary account (including a pension, profit-sharing or other employee
    benefit trust created pursuant to a plan qualified under Section 401 of the
    Code) and 457 plans, although more than one beneficiary or participant is
    involved;
 
  - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
    Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
    Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
    Distributors in writing that all of its related employee SEP, SARSEP or
    SIMPLE IRA accounts should be linked;
 
  - any other organized group of persons, whether incorporated or not, provided
    the organization has been in existence for at least six months and has some
    purpose other than the purchase at a discount of redeemable securities of a
    registered investment company; or
 
  - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
    Capital Management, Inc. ("AIM Capital").
 
  Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
 
  (1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
 
  Each purchase of fund shares normally subject to an initial sales charge made
during the 13-month period will be made at the public offering price applicable
to a single transaction of the total dollar amount indicated by the LOI, as
described under "Sales Charges and Dealer Concessions." It is the purchaser's
responsibility at the time of purchase to specify the account numbers that
should be considered in determining the appropriate sales charge. The offering
price may be further reduced as described under "Rights of Accumulation" if the
Transfer Agent is advised of all other accounts at the time of the investment.
Shares acquired through reinvestment of dividends and capital gain distributions
will not be applied to the LOI. At any time during the 13-month period after
meeting the original obligation, a purchaser may revise his intended investment
amount upward by submitting a written and signed request. Such a revision will
not change the original expiration date. By signing an LOI, a purchaser is not
making a binding commitment to purchase additional shares, but if purchases made
within the 13-month period do not total the amount specified, the investor will
pay the increased amount of sales charge as described below. Purchases made
within 90 days before signing an LOI will be applied toward completion of the
LOI. The LOI effective date will be the date of the first purchase with the
90-day period. The Transfer Agent will process necessary adjustments upon the
expiration or completion date of the LOI. Purchases made more than 90 days
before signing an LOI will be applied toward completion of the LOI based on the
value of the shares purchased calculated at the public offering price on the
effective date of the LOI.
 
  To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
                                       A-7
<PAGE>   536
 
  If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
 
  Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
 
  (2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
 
  PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at
net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
 
  Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
 
  The following persons may purchase Class A shares of the AIM Funds through AIM
Distributors without payment of an initial sales charge: (a) A I M Management
Group Inc. ("AIM Management") and its affiliated companies; (b) any current or
retired officer, director, trustee or employee, or any member of the immediate
family (including spouse, children, parents and parents of spouse) of any such
person, of AIM Management or its affiliates or of certain mutual funds which are
advised or managed by AIM; or any trust established exclusively for the benefit
of such persons; (c) any employee benefit plan established for employees of AIM
Management or its affiliates; (d) any current or retired officer, director,
trustee or employee, or any member of the immediate family (including spouse,
children, parents and parents of spouse) of any such person, or of CIGNA
Corporation or of any of its affiliated companies, or of First Data Investor
Services Group (formerly The Shareholder Services Group, Inc.); (e) any
investment company sponsored by CIGNA Investments, Inc. or any of its affiliated
companies for the benefit of its directors' deferred compensation plans; (f)
discretionary advised clients of AIM or AIM Capital; (g) registered
representatives and employees of dealers who have entered into agreements with
AIM Distributors (or financial institutions that have arrangements with such
dealers with respect to the sale of shares of the AIM Funds) and any member of
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, provided that purchases at net asset value are permitted by
the policies of such person's employer; (h) certain broker-dealers, investment
advisers or bank trust departments that provide asset allocation, similar
specialized investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services, and that
have entered into an agreement with AIM Distributors with respect to their use
of the AIM Funds in connection with such services; (i) any employee or any
member of the immediate family (including spouse, children, parents and parents
of spouse) of any employee, of Triformis Inc.; (j) shareholders of the AIM/GT
Funds as of April 30, 1987 who since that date continually have owned shares of
one or more of the AIM/GT Funds; and (k) certain former AMA Investment Advisers'
shareholders who became shareholders of the AIM Global Health Care Fund in
October 1989, and who have continuously held shares in the AIM/GT Funds since
that time.
 
   
  In addition, shares of any AIM Fund (except AIM Small Cap Opportunities Fund)
may be purchased at net asset value, without payment of a sales charge, by
pension, profit-sharing or other employee benefit plans created pursuant to a
plan qualified under Section 401 of the Code or plans under Section 457 of the
Code, or employee benefit plans created pursuant to Section 403(b) of the
    
                                       A-8
<PAGE>   537
 
Code and sponsored by nonprofit organizations defined under Section 501(c)(3) of
the Code. Such plans will qualify for purchases at net asset value provided that
(1) the total amount invested in the plan is at least $1,000,000, (2) the
sponsor signs a $1,000,000 LOI, (3) such shares are purchased by an
employer-sponsored plan with at least 100 eligible employees, or (4) all of the
plan's transactions are executed through a single financial institution or
service organization who has entered into an agreement with AIM Distributors
with respect to their use of the AIM Funds in connection with such accounts.
Section 403(b) plans sponsored by public educational institutions will not be
eligible for net asset value purchases based on the aggregate investment made by
the plan or the number of eligible employees. Participants in such plans will be
eligible for reduced sales charges based solely on the aggregate value of their
individual investments in the applicable AIM Fund. PLEASE NOTE THAT TAX-EXEMPT
FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR SUCH PLANS. AIM Distributors may pay
investment dealers or other financial service firms for share purchases of the
Load Funds (as defined under the caption "Exchange Privilege") sold at net asset
value to an employee benefit plan in accordance with this paragraph as follows:
1% of the first $2 million of such purchases, plus 0.80% of the next $1 million
of such purchases, plus 0.50% of the next $17 million of such purchases, plus
0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of
the net asset value of any Class A shares of AIM LIMITED MATURITY TREASURY FUND
sold at net asset value to an employee benefit plan in accordance with this
paragraph.
 
  Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
- --------------------------------------------------------------------------------
 
SPECIAL PLANS
 
  Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
who owns shares which are not subject to a contingent deferred sales charge, can
arrange for monthly, quarterly or annual amounts (but not less than $50) to be
drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that
 
                                       A-9
<PAGE>   538
 
exceed on an annual basis 12% of such account will be subject to a contingent
deferred sales charge on the amounts exceeding 12% of the account value at the
time the shareholder elects to participate in the Systematic Withdrawal Plan.
 
  Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested to shares of the
applicable AIM Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full
and fractional shares at their net asset value in effect at the time of each
such redemption.
 
  Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
 
  The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
 
  AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in the amount specified by
the shareholder (minimum $50 per investment, per account) and on a day or
date(s) specified by the shareholder. The proceeds are invested in shares of the
designated AIM Fund at the applicable offering price determined on the date of
the withdrawal. An Automatic Investment Plan may be discontinued upon 10 days'
prior notice to the Transfer Agent or AIM Distributors.
 
   
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
    
 
  DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
 
  PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination
money-purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans;
SARSEP plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement
accounts"). Information concerning these plans, including the custodian's fees
and the forms necessary to adopt such plans, can be obtained by calling or
writing the AIM Funds or AIM Distributors. Shares of the AIM Funds are also
available for investment through existing 401(k) plans (for both individuals and
employers) adopted under the Code. The plan custodian currently imposes an
annual $10 maintenance fee with respect to each retirement account for which it
serves as the custodian. This fee is generally charged in December. Each AIM
Fund and/or the custodian reserve the right to change this maintenance fee and
to initiate an establishment fee (not to exceed its cost).
 

   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance of $5,000 to
establish and maintain an allocation across a range of AIM Funds. The Program
automatically rebalances holdings of AIM Funds to the established allocation on
a periodic basis. Under the Program, a shareholder may predesig-
    
 
                                      A-10
<PAGE>   539
   
nate, on a percentage basis, how the total value of his or her holdings in a
minimum of two, and a maximum of ten, AIM Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more AIM Funds in the shareholder's Personal Portfolio for shares of
the same class(es) of one or more other AIM Funds in the shareholder's Personal
Portfolio. See "Exchange Privilege." If shares of the AIM Fund(s) in a
shareholder's Personal Portfolio have appreciated during a rebalancing period,
the Program will result in shares of AIM Fund(s) that have appreciated most
during the period being exchanged for shares of AIM Fund(s) that have
appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular AIM Fund would be 2% or less.
In predesignating percentages, shareholders must use whole percentages and
totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an AIM Fund's shares. The
AIM Funds and AIM Distributors reserve the right to modify, suspend, or
terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
    
 
                                      A-11
<PAGE>   540
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, including the Class A shares of the Multiple Class Funds, listed below
and referred to herein as the "Load Funds," are sold at a public offering price
that includes a maximum sales charge of 5.50% or 4.75% of the public offering
price of such shares; Class A shares (or shares which normally involve the
payment of initial sales charges) of certain of the AIM Funds, listed below and
referred to herein as the "Lower Load Funds," are sold at a public offering
price that includes a maximum sales charge of 1.00% of the public offering price
of such shares; and Class A shares or shares of certain other funds, listed
below and referred to herein as the "No Load Funds," are sold at net asset
value, without payment of a sales charge.
 
   
<TABLE>
<S>                                    <C>                                   <C>
                                LOAD FUNDS:                                  LOWER LOAD FUNDS:
   AIM ADVISOR FLEX FUND --            AIM GLOBAL INCOME                     AIM LIMITED MATURITY TREASURY FUND
     CLASS A                           FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR INTERNATIONAL           AIM GLOBAL INFRASTRUCTURE               AIM TAX-FREE INTERMEDIATE FUND
     VALUE FUND -- CLASS A             FUND -- CLASS A                           -- CLASS A
   AIM ADVISOR LARGE CAP               AIM GLOBAL RESOURCES                  NO LOAD FUNDS:
     VALUE FUND -- CLASS A             FUND -- CLASS A
   AIM ADVISOR MULTIFLEX               AIM GLOBAL TELECOMMUNICATIONS         AIM MONEY MARKET FUND
     FUND -- CLASS A                   FUND -- CLASS A                           -- AIM CASH RESERVE SHARES
   AIM ADVISOR REAL ESTATE             AIM GLOBAL TRENDS                       AIM TAX-EXEMPT CASH FUND -- CLASS A
     FUND -- CLASS A                   FUND -- CLASS A                         AIM DOLLAR FUND -- CLASS A
   AIM AGGRESSIVE GROWTH               AIM GLOBAL UTILITIES
     FUND -- CLASS A                   FUND -- CLASS A
   AIM ASIAN GROWTH                    AIM HIGH INCOME MUNICIPAL
     FUND -- CLASS A                   FUND -- CLASS A
   AIM BALANCED FUND -- CLASS A        AIM HIGH YIELD FUND -- CLASS A
   AIM BASIC VALUE                     AIM INCOME FUND -- CLASS A
     FUND -- CLASS A                   AIM INTERMEDIATE GOVERNMENT
   AIM BLUE CHIP FUND -- CLASS A       FUND -- CLASS A
   AIM CAPITAL DEVELOPMENT             AIM INTERNATIONAL EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM CHARTER FUND -- CLASS A         AIM INTERNATIONAL GROWTH
   AIM CONSTELLATION                   FUND -- CLASS A
     FUND -- CLASS A                   AIM JAPAN GROWTH FUND -- CLASS A
   AIM DEVELOPING MARKETS              AIM LATIN AMERICAN GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS                AIM MID CAP EQUITY
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EMERGING MARKETS DEBT           AIM MONEY MARKET
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPE GROWTH                   AIM MUNICIPAL BOND
     FUND -- CLASS A                   FUND -- CLASS A
   AIM EUROPEAN DEVELOPMENT            AIM NEW PACIFIC GROWTH
     FUND -- CLASS A                   FUND -- CLASS A
   AIM GLOBAL AGGRESSIVE GROWTH        AIM SELECT GROWTH FUND -- CLASS A
     FUND -- CLASS A                   AIM SMALL CAP GROWTH
   AIM GLOBAL CONSUMER PRODUCTS        FUND -- CLASS A
     AND SERVICES FUND -- CLASS A      AIM SMALL CAP OPPORTUNITIES
   AIM GLOBAL FINANCIAL SERVICES       FUND -- CLASS A
     FUND -- CLASS A                   AIM STRATEGIC INCOME
   AIM GLOBAL GOVERNMENT INCOME        FUND -- CLASS A
     FUND -- CLASS A                   AIM TAX-EXEMPT BOND FUND
   AIM GLOBAL GROWTH                   OF CONNECTICUT -- CLASS A
     FUND -- CLASS A                   AIM VALUE FUND -- CLASS A
   AIM GLOBAL GROWTH &                 AIM WEINGARTEN FUND -- CLASS A
     INCOME FUND -- CLASS A            AIM WORLDWIDE GROWTH
   AIM GLOBAL HEALTH CARE              FUND -- CLASS A
     FUND -- CLASS A
</TABLE>
    
 
                                      A-12
<PAGE>   541
 
   
  Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE; (iii) Class A shares
may be exchanged for Class A shares; (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A, Class B or Class C shares of AIM MONEY MARKET FUND. Class C shares
of AIM Small Cap Opportunities Fund are currently not available.
    
 
  DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
 
<TABLE>
<CAPTION>
                                                                                                      MULTIPLE CLASS FUNDS:
                                                            LOWER LOAD              NO LOAD       ------------------------------
      FROM:                 TO: LOAD FUNDS                     FUNDS                 FUNDS           CLASS B         CLASS C
      -----                 --------------                  ----------              -------          -------         -------
<S>                <C>                                <C>                      <C>                <C>             <C>
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
 
Lower Load Funds.. Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund or any     Fund or any Lower Load
                   Lower Load Fund.                   Fund; otherwise,
                                                      Offering Price.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
 
  FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS REVISED AS FOLLOWS:
Load Funds.......  Net Asset Value                    Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
Lower Load Funds.. Net Asset Value if shares were     Net Asset Value          Net Asset Value    Not Applicable  Not Applicable
                   acquired upon exchange of any
                   Load Fund. Otherwise, difference
                   in sales charge will apply.
No Load Funds....  Offering Price if No Load shares   Net Asset Value if No    Net Asset Value    Not Applicable  Not Applicable
                   were directly purchased. Net       Load shares were
                   Asset Value if No Load shares      acquired upon exchange
                   were acquired upon exchange of     of shares of any Load
                   shares of any Load Fund.           Fund or any Lower Load
                   Difference in sales charge will    Fund; otherwise,
                   apply if No Load shares were       Offering Price.
                   acquired upon exchange of Lower
                   Load Fund shares.
Multiple Class
  Funds:
  Class B........  Not Applicable                     Not Applicable           Not Applicable     Net Asset Value Not Applicable
  Class C........  Not Applicable                     Not Applicable           Not Applicable     Not Applicable  Net Asset Value
</TABLE>
 
   
  An exchange is permitted only in the following circumstances: (a) if the funds
offer more than one class of shares, the exchange must be between the same class
of shares (e.g., Class A, Class B and Class C shares of a Multiple Class Fund
cannot be exchanged for each other) except that AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may be exchanged for Class A shares of another Multiple Class
Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten busi-
    
 
                                      A-13
<PAGE>   542
 
ness days, and all other shares are held in an account for at least one day,
prior to the exchange; and (h) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the AIM
Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
   
  Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged are
redeemed at their net asset value as determined at NYSE Close on the day that an
exchange request in proper form (described below) is received. Exchange requests
received after NYSE Close will result in the redemption of shares at their net
asset value at NYSE Close on the next business day. See "Terms and Conditions of
Purchase of the AIM Funds -- Timing of Purchase, Exchange and Redemption Orders
(AIM MONEY MARKET FUND only)" for information regarding the timing of exchange
orders for AIM MONEY MARKET FUND. Normally, shares of an AIM Fund to be acquired
by exchange are purchased at their net asset value or applicable offering price,
as the case may be, determined on the date that such request is received, but
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that a fund would be materially disadvantaged
by an immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into a fund paying daily dividends (See "Dividends, Distributions and
Tax Matters -- Dividends and Distributions," below), and the release of the
exchange proceeds is delayed for the foregoing five-day period, such shareholder
will not begin to accrue dividends until the sixth business day after the
exchange. Shares purchased by check may not be exchanged until it is determined
that the check has cleared, which may take up to ten business days from the date
that the check is received. See "Terms and Conditions of Purchase of the AIM
Funds -- Timing of Purchase Orders."
    
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the AIM Funds. AIM Distributors reserves the right to impose conditions on
dealers or investment advisors who make telephone exchanges of shares of the
funds, including the condition that any such dealer or investment advisor enter
into an agreement (which contains additional conditions with respect to
exchanges of shares) with AIM Distributors. To exchange shares by telephone, a
shareholder, dealer or investment advisor who has satisfied the foregoing
conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach
AFS by telephone, he may also request exchanges by telegraph or use overnight
courier services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is received
prior to NYSE Close. The Transfer Agent and AIM Distributors will not be liable
for any loss, expense or cost arising out of any telephone exchange request that
they reasonably believe to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions if they do not follow
reasonable procedures for verification of telephone transactions. Such
reasonable procedures may include recordings of telephone transactions
(maintained for six months), requests for confirmation of the shareholder's
Social Security Number and current address, and mailings of confirmations
promptly after the transaction.
 
  EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
 
                                      A-14
<PAGE>   543
 
  MULTIPLE DISTRIBUTION SYSTEM. Class B Shares. Class B shares purchased under
the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
 
<TABLE>
<CAPTION>
  YEARS                                                     CONTINGENT DEFERRED
  SINCE                                                       SALES CHARGE AS
PURCHASE                                                    % OF DOLLAR AMOUNT
  MADE                                                       SUBJECT TO CHARGE
- --------                                                    -------------------
<S>                                                          <C>
First......................................................         5%
Second.....................................................         4%
Third......................................................         3%
Fourth.....................................................         3%
Fifth......................................................         2%
Sixth......................................................         1%
Seventh and Following......................................        None
</TABLE>
 
  In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
 
  Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
 
  Class C Shares. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
 
  Waivers. Contingent deferred sales charges on Class B and Class C shares will
be waived on redemptions (1) following the death or post-purchase disability, as
defined in Section 72(m)(7) of the Code, of a shareholder or a settlor of a
living trust (provided AIM Distributors is notified of such death or
post-purchase disability at the time of the redemption request and is provided
with satisfactory evidence of such death or post-purchase disability), (2) in
connection with certain distributions from IRAs, custodial accounts maintained
pursuant to Code Section 403(b), deferred compensation plans qualified under
Code Section 457 and plans qualified under Code Section 401 (collectively,
"Retirement Plans"), (3) pursuant to a Systematic Withdrawal Plan, provided that
amounts withdrawn under such plan do not exceed on an annual basis 12% of the
value of the shareholder's investment in Class B or Class C shares at the time
the shareholder elects to participate in the Systematic Withdrawal Plan, (4)
effected pursuant to the right of a Multiple Class Fund to liquidate a
shareholder's account if the aggregate net asset value of shares held in the
account is less than the designated minimum account size described in the
prospectus of such Multiple Class Fund, (5) effected by AIM of its investment in
Class B or Class C shares and (6) of Class C shares where such investor's dealer
of record, due to the nature of the investor's account, notifies AIM
Distributors prior to the time of investment that the dealer waives the payment
otherwise payable to the dealer described in the last paragraph under the
caption "Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM
Funds."
 
  Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
 
  Waiver category (2) above applies only to redemptions resulting from:
 
          (i) required minimum distributions to plan participants or
     beneficiaries who are age 70 1/2 or older, and only with respect to that
     portion of such distributions which does not exceed 12% annually of the
     participant's or beneficiary's account value in a particular AIM Fund;
 
                                      A-15
<PAGE>   544
 
          (ii) in-kind transfers of assets where the participant or beneficiary
     notifies AIM Distributors of such transfer no later than the time such
     transfer occurs;
 
          (iii) tax-free rollovers or transfers of assets to another Retirement
     Plan invested in Class B or Class C shares of one or more Multiple Class
     Funds;
 
          (iv) tax-free returns of excess contributions or returns of excess
     deferral amounts; and
 
          (v) distributions upon the death or disability (as defined in the
     Code) of the participant or beneficiary.
 
   
  CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND or Class A shares
of AIM DOLLAR FUND which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code, or Plans created under Section 403(b) of the
Code and sponsored by nonprofit organizations as defined under Section 501(c)(3)
of the Code, where shares are being redeemed in connection with employee
terminations or withdrawals, and (a) the total amount invested in a Plan is at
least $1,000,000, (b) the sponsor of a Plan signs a letter of intent to invest
at least $1,000,000 in one or more of the AIM Funds, or (c) the shares being
redeemed were purchased by an employer-sponsored Plan with at least 100 eligible
employees; provided, however, that Plans created under Section 403(b) of the
Code which are sponsored by public educational institutions shall qualify under
(a), (b) or (c) above on the basis of the value of each Plan participant's
aggregate investment in the AIM Funds, and not on the aggregate investment made
by the Plan or on the number of eligible employees; (2) redemptions of shares
following the death or post-purchase disability, as defined in Section 72(m)(7)
of the Code, of a shareholder or a settlor of a living trust; (3) redemptions of
shares purchased at net asset value by private foundations or endowment funds
where the initial amount invested was at least $1,000,000; (4) redemptions of
shares purchased by an investor in amounts of $1,000,000 or more where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payments otherwise payable to the dealer as described in the third paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds;" and (5) pursuant to a Systematic Withdrawal Plan, provided
that amounts withdrawn under such plan do not exceed on an annual basis 12% of
the value of the shareholder's investment in Class A shares at the time the
shareholder elects to participate in the Systematic Withdrawal Plan.
    
 
  Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  In addition to these requirements, shareholders who have invested in a fund to
establish as IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares; (a) a statement
as to whether or not the shareholder has attained age 59 1/2, and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.
 
                                      A-16
<PAGE>   545
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
this account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
   
  EXPEDITED REDEMPTIONS (AIM Cash Reserve shares of AIM MONEY MARKET FUND
ONLY). If a redemption order is received prior to 11:30 a.m. Eastern Time, the
redemption will be effective on that day and AIM MONEY MARKET FUND will endeavor
to transmit payment on that same business day. If the redemption order is
received after 11:30 a.m. and prior to NYSE Close, the redemption will be made
at the next determined net asset value and payment will generally be transmitted
on the next business day.
    
 
  REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing the
appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone
 
                                      A-17
<PAGE>   546
 
exchange and telephone redemption authorization forms; (7) changes in previously
designated wiring or electronic funds transfer instructions, and (8) written
redemptions or exchanges of shares previously reported as lost, whether or not
the redemption amount is under $50,000 or the proceeds are to be sent to the
address of record. These requirements may be waived or modified upon notice to
shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
    
 
   
  REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within ninety (90) days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment will not alter the taxes due on any
capital gains, except under the circumstances described below. If there has been
a loss on the redemption and shares of the same fund are repurchased, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in shares of the same fund, or exchanged for
shares of another AIM Fund, at a reduced sales charge within 90 days of the
payment of the sales charge, the shareholder's basis in the fund shares redeemed
may not include the amount of the sales charge paid, thereby reducing the loss
or increasing the gain recognized from the redemption; however, the
shareholder's basis in the fund shares purchased will include the sales charge.
Each AIM Fund may amend, suspend or cease offering the privilege at any time as
to shares redeemed after the date of such amendment, suspension or cessation.
This privilege may only be exercised once each year by a shareholder with
respect to each AIM Fund.
    
 
   
  Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of Class A shares and who subsequently reinvest a portion or
all of the value of the redeemed shares in Class A shares of any AIM Fund within
ninety (90) days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
    
 
                                      A-18

<PAGE>   547
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
   
  The net asset value per share (or share price) of each AIM Fund is determined
as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close with
respect to AIM MONEY MARKET FUND) on each "business day" of a fund as previously
defined. In the event the NYSE closes early (i.e. before 4:00 p.m. Eastern Time)
on a particular day, the net asset value of an AIM Fund's share will be
determined as of the close of the NYSE on such day. For purposes of defining net
asset value per share, futures and options contracts generally will be valued 15
minutes after the close of trading of the NYSE. The net asset value per share is
calculated by subtracting a class' liabilities from its assets and dividing the
result by the total number of class shares outstanding. The determination of net
asset value per share is made in accordance with generally accepted accounting
principles. Among other items, liabilities include accrued expenses and
dividends payable, and total assets include portfolio securities valued at their
market value, as well as income accrued but not yet received. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the fund's officers and
in accordance with methods which are specifically authorized by its governing
Board of Directors or Trustees. Short-term obligations with maturities of 60
days or less, and the securities held by the Money Market Funds, are valued at
amortized cost as reflecting fair value. AIM HIGH INCOME MUNICIPAL FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-FREE
INTERMEDIATE FUND value variable rate securities that have an unconditional
demand or put feature exercisable within seven days or less at par, which
reflects the market value of such securities.
    
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as
set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                DISTRIBUTIONS    DISTRIBUTIONS
                                                                                   OF NET           OF NET
                                                    DIVIDENDS FROM                REALIZED         REALIZED
                                                    NET INVESTMENT               SHORT-TERM        LONG-TERM
                   FUND                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
                   ----                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM ADVISOR FLEX FUND.....................  declared and paid quarterly       quarterly          annually
AIM ADVISOR INTERNATIONAL VALUE FUND......  declared and paid annually        annually           annually
AIM ADVISOR LARGE CAP VALUE FUND..........  declared and paid quarterly       quarterly          annually
AIM ADVISOR MULTIFLEX FUND................  declared and paid quarterly       quarterly          annually
AIM ADVISOR REAL ESTATE FUND..............  declared and paid quarterly       quarterly          annually
AIM AGGRESSIVE GROWTH FUND................  declared and paid annually        annually           annually
AIM ASIAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM BALANCED FUND.........................  declared and paid quarterly       annually           annually
AIM BASIC VALUE FUND......................  declared and paid annually        annually           annually
AIM BLUE CHIP FUND........................  declared and paid annually        annually           annually
AIM CAPITAL DEVELOPMENT FUND..............  declared and paid annually        annually           annually
AIM CHARTER FUND..........................  declared and paid quarterly       annually           annually
AIM CONSTELLATION FUND....................  declared and paid annually        annually           annually
AIM DEVELOPING MARKETS FUND...............  declared and paid annually        annually           annually
AIM DOLLAR FUND...........................  declared daily; paid monthly      annually           annually
AIM EMERGING MARKETS FUND.................  declared and paid annually        annually           annually
AIM EMERGING MARKETS DEBT FUND............  declared and paid monthsly        annually           annually
AIM EUROPE GROWTH FUND....................  declared and paid annually        annually           annually
AIM EUROPEAN DEVELOPMENT FUND.............  declared and paid annually        annually           annually
AIM GLOBAL AGGRESSIVE GROWTH FUND.........  declared and paid annually        annually           annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
  FUND....................................  declared and paid annually        annually           annually
AIM GLOBAL FINANCIAL SERVICES FUND........  declared and paid annually        annually           annually
</TABLE>
    
 
                                      A-19
<PAGE>   548
 
   
<TABLE>
<CAPTION>
                                                                             DISTRIBUTIONS    DISTRIBUTIONS
                                                                                OF NET           OF NET
                                                 DIVIDENDS FROM                REALIZED         REALIZED
                                                 NET INVESTMENT               SHORT-TERM        LONG-TERM
FUND                                                 INCOME                  CAPITAL GAINS    CAPITAL GAINS
- ----                                             --------------              -------------    -------------
<S>                                         <C>                               <C>                <C>
AIM GLOBAL GOVERNMENT INCOME FUND.........  declared and paid monthly         annually           annually
AIM GLOBAL GROWTH FUND....................  declared and paid annually        annually           annually
AIM GLOBAL GROWTH & INCOME FUND...........  declared and paid quarterly       annually           annually
AIM GLOBAL HEALTH CARE FUND...............  declared and paid annually        annually           annually
AIM GLOBAL INCOME FUND....................  declared daily; paid monthly      annually           annually
AIM GLOBAL INFRASTRUCTURE FUND............  declared and paid annually        annually           annually
AIM GLOBAL RESOURCES FUND.................  declared and paid annually        annually           annually
AIM GLOBAL TELECOMMUNICATIONS FUND........  declared and paid annually        annually           annually
AIM GLOBAL TRENDS FUND....................  declared and paid annually        annually           annually
AIM GLOBAL UTILITIES FUND.................  declared daily; paid monthly      annually           annually
AIM HIGH INCOME MUNICIPAL FUND............  declared daily; paid monthly      annually           annually
AIM HIGH YIELD FUND.......................  declared daily; paid monthly      annually           annually
AIM INCOME FUND...........................  declared daily; paid monthly      annually           annually
AIM INTERMEDIATE GOVERNMENT FUND..........  declared daily; paid monthly      annually           annually
AIM INTERNATIONAL EQUITY FUND.............  declared and paid annually        annually           annually
AIM INTERNATIONAL GROWTH FUND.............  declared and paid annually        annually           annually
AIM JAPAN GROWTH FUND.....................  declared and paid annually        annually           annually
AIM LATIN AMERICAN GROWTH FUND............  declared and paid annually        annually           annually
AIM LIMITED MATURITY TREASURY FUND........  declared daily; paid monthly      annually           annually
AIM MID CAP EQUITY FUND...................  declared and paid annually        annually           annually
AIM MONEY MARKET FUND.....................  declared daily; paid monthly      at least annually  annually
AIM MUNICIPAL BOND FUND...................  declared daily; paid monthly      annually           annually
AIM NEW PACIFIC GROWTH FUND...............  declared and paid annually        annually           annually
AIM SELECT GROWTH FUND....................  declared and paid annually        annually           annually
AIM SMALL CAP GROWTH FUND.................  declared and paid annually        annually           annually
AIM SMALL CAP OPPORTUNITIES FUND..........  declared and paid annually        annually           annually
AIM STRATEGIC INCOME FUND.................  declared and paid monthly         annually           annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT...  declared daily; paid monthly      annually           annually
AIM TAX-EXEMPT CASH FUND..................  declared daily; paid monthly      at least annually  annually
AIM TAX-FREE INTERMEDIATE FUND............  declared daily; paid monthly      annually           annually
AIM VALUE FUND............................  declared and paid annually        annually           annually
AIM WEINGARTEN FUND.......................  declared and paid annually        annually           annually
AIM WORLDWIDE GROWTH FUND.................  declared and paid annually        annually           annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in like shares of another
Multiple Class Fund, to the extent permitted. For funds that do not declare a
dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. For funds that declare
a dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or the
dividend portion thereof, in cash, or to invest such dividends and distributions
in shares of another fund in the AIM Funds; provided that (i) dividends and
distributions attributable to Class B shares may only be reinvested in Class B
shares, (ii) dividends and distributions attributable to Class C shares may only
be reinvested in Class C shares, (iii) dividends and distributions attributable
to Class A shares may not be reinvested in Class B or Class C shares, and (iv)
dividends and distributions attributable to the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may not be reinvested in the Class A shares of that Fund or in
any Class B or Class C shares. Investors who have not previously selected such a
reinvestment option on the account application form may contact the Transfer
Agent at any time to obtain a form to authorize such reinvestments in another
AIM Fund. Such reinvestments into the AIM Funds are not subject to sales
charges, and shares so purchased are automatically credited to the account of
the shareholder.
 
  Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
 
                                      A-20
<PAGE>   549
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares, except for "exempt-interest dividends" paid by
AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND
FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND
(the "Tax-Exempt Funds"), which are exempt from federal income tax. With respect
to tax-exempt shareholders, dividends and distributions from the AIM Funds are
not subject to federal income taxation to the extent permitted under the
applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    
 
   
  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EMERGING MARKETS DEBT FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
    
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
                                      A-21
<PAGE>   550
   
 TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
  TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other taxable securities. For
additional information concerning the alternative minimum tax and certain
collateral tax consequences of the receipt of exempt-interest dividends, see the
Statements of Additional Information applicable to the Tax-Exempt Funds.
 
  The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
 
  To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
 
  From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP EQUITY FUND,
AIM SMALL CAP GROWTH FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX INFORMATION.
Certain states exempt from income taxes dividends paid by mutual funds
attributable to interest on U.S. Treasury and certain other U.S. government
obligations. Investors should consult with their own tax advisors concerning the
availability of such exemption.
    
 
  AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH
FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do
so, each of these funds may elect to pass through to its shareholders credits
for foreign taxes paid. If a fund makes such an election, a shareholder who
receives a distribution (1) will be required to include in gross income his
proportionate share of foreign taxes allocable to the distribution and (2) may
claim a credit or deduction for such share for his taxable year in which the
distribution is received, subject to the general limitations imposed on the
allowance of foreign tax credits and deductions. Shareholders should also note
that certain gains or losses attributable to fluctuations in exchange rates or
foreign currency forward contracts may increase or decrease the amount of income
of the fund available for distribution to shareholders and should note that if,
for any fund, such losses exceed other income during a taxable year, the fund
would not be able to pay ordinary income dividends for that year.
 
                                      A-22
<PAGE>   551
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each AIM Fund's transfer agent and dividend
payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-23
<PAGE>   552
 
                                                                      APPENDIX A
- --------------------------------------------------------------------------------
 
DESCRIPTION OF DEBT RATINGS
 
DESCRIPTION OF BOND RATINGS
 
  Moody's Investors Service, Inc. ("Moody's") rates the debt securities issued
by various entities from "Aaa" to "C." Investment grade ratings are the first
four categories: Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. Ba -- Bonds which are rated Ba
are judged to have speculative elements; their future cannot be considered as
well-assured. Often the protection of interest and principal payments may be
very moderate, and thereby not well safeguarded during both good and bad times
over the future. Uncertainty of position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest. Ca -- Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings. C -- Bonds which are rated C are the lowest rated class of
bonds, and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
 
  ABSENCE OF RATING. Where no rating has been assigned or where a rating has
been suspended or withdrawn, it may be for reasons unrelated to the quality of
the issue.
 
  Should no rating be assigned, the reason may be one of the following:
 
          1. An application for rating was not received or accepted.
 
          2. The issue or issuer belongs to a group of securities or companies
     that are not rated as a matter of policy.
 
          3. There is a lack of essential data pertaining to the issue or
     issuer.
 
          4. The issue was privately placed, in which case the rating is not
     published in Moody's publications.
 
  Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.
 
  Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the Company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the Company ranks in the
lower end of its generic rating category.
 
  Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"),
rates the securities debt of various entities in categories ranging from "AAA"
to "D" according to quality. Investment grade ratings are the first four
categories:
 
  AAA -- An obligation rated "AAA" has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong. AA -- An obligation rated "AA" differs from the highest rated
obligations only in a small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong. A -- An obligation rated "A" is
somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions than obligations in higher rated categories. BBB -- An
obligation rated "BBB" exhibits adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the
obligation. BB, B, CCC, CC, C -- Obligations rated "BB," "B," "CCC," "CC," and
"C" are regarded as having significant speculative characteristics. "BB"
indicates the least degree of speculation and "C" the highest. While such
obligations will likely have some quality and protective characteristics, these
may be outweighed by large uncertainties or major exposures to adverse
conditions. BB -- An obligation rated "BB" is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could lead
to the obligor's inadequate capacity to meet its financial commitment on the
obligation. B -- An obligation rated "B" is more vulnerable to nonpayment than
obligations rated "BB," but the obligor currently has the capacity to meet its
financial commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation. CCC -- An obli-
 
                                      A-24
<PAGE>   553
 
gation rated "CCC" is currently vulnerable to nonpayment, and is dependent upon
favorable business, financial, and economic conditions for the obligor to meet
its financial commitment on the obligation. In the event of adverse business,
financial, or economic conditions, the obligor is not likely to have the
capacity to meet its financial commitment on the obligation. CC -- An obligation
rated "CC" is currently highly vulnerable to nonpayment. C -- The "C" rating may
be used to cover a situation where a bankruptcy petition has been filed or
similar action has been taken, but payments on this obligation are being
continued. D -- An obligation rated "D" is in payment default. The "D" rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless S&P believes that
such payments will be made during such grace period. The "D" rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.
 
   
  PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
    
 
   
  NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
    
 
DESCRIPTION OF COMMERCIAL PAPER RATINGS
 
  Moody's employs the designation "Prime-1" to indicate commercial paper having
a superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. Issues rated Prime-2 have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many of
the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
 
  S&P ratings of commercial paper are graded into several categories ranging
from "A1" for the highest quality obligations to "D" for the lowest. Issues in
the "A" category are delineated with numbers 1, 2, and 3 to indicate the
relative degree of safety. A-1 -- This highest category indicates that the
degree of safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics will be denoted with a plus sign
(+) designation. A-2 -- Capacity for timely payments on issues with this
designation is satisfactory; however, the relative degree of safety is not as
high as for issues designated "A-1."
 
                                      A-25
<PAGE>   554
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
 
 
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                              GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
      ACCOUNT TYPE            NUMBER OF:                       ACCOUNT TYPE                  NUMBER OF:
      ------------            --------------------             ------------                  ------------------
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary
      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application
      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors
      Legal Guardian          Ward, Minor or
                              Incompetent
      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
 
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   555
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   556
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
<PAGE>   557
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
   
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
    
 
   
ADVISOR CLASS OF
    
 
   
AIM DEVELOPING MARKETS FUND
    
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
   
PROSPECTUS
    
   
SEPTEMBER 8, 1998
    
 
This Prospectus contains information about AIM DEVELOPING MARKETS FUND (the
"Fund"), which is one of several series investment portfolios comprising AIM
Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a non-diversified portfolio which primarily seeks long-
term capital appreciation. Its secondary investment objective is income, to the
extent consistent with seeking capital appreciation. The Fund normally invests
substantially all of its assets in issuers in the developing (or "emerging")
markets of Asia, Europe, Latin America and elsewhere. A majority of the Fund's
assets ordinarily is invested in emerging market equity securities. The Fund
also invests in emerging market debt securities, which are selected based on
their potential to provide a combination of capital appreciation and current
income.
 
The Fund is designed for long-term investors and not as a trading vehicle. The
Fund does not represent a complete investment program, nor is it suitable for
all investors. The Fund may invest significantly in equity and high yield, high
risk ("lower quality") debt securities that are predominantly speculative.
Investments of this type are subject to a greater risk of loss of principal and
interest. The Fund's investments in securities of issuers in developing markets
involves special considerations and risks that are not typically associated with
investments in securities of issuers in the United States or in other more
established markets. Investors should carefully assess the risks associated with
an investment in the Fund.
 
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information dated
September 8, 1998 has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   558
- --------------------------------------------------------------------------------
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     6
  Investment Program...................     6
  Risk Factors.........................    10
  Management...........................    14
  Organization of the Trust............    15
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-4
  Exchange Privilege...................   A-4
  How to Redeem Shares.................   A-5
  Determination of Net Asset Value.....   A-7
  Dividends, Distributions and Tax
     Matters...........................   A-8
  General Information..................  A-10
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
   
                                    SUMMARY
    
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
  The Fund is a non-diversified series of the Trust.
 
   
  INVESTMENT OBJECTIVES. The Fund's primary investment objective is long-term
capital appreciation; its secondary objective is income, to the extent
consistent with seeking capital appreciation.
    
 
   
  PRINCIPAL INVESTMENTS. The Fund normally invests a majority of its assets in
emerging market equity securities and also may invest in emerging market debt
securities.
    
 
   
  INVESTMENT MANAGERS. The Fund is managed by A I M Advisors, Inc. ("AIM") and
is sub-advised and sub-administered by INVESCO (NY), Inc. (the "Sub-advisor").
AIM and the Sub-advisor and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-advisor are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
AIM was organized in 1976 and, together with its subsidiaries, currently advises
approximately 90 investment company portfolios.
    
 
   
  PURCHASING SHARES. Advisor Class shares are offered through this Prospectus to
(a) trustees or other fiduciaries purchasing shares for employee benefit plans
which are sponsored by organizations which have at least 1,000 employees; (b)
any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment advisor has investment
discretion over such account, and (ii) the account holder pays such person as
compensation for its advice and other services an annual fee of at least 0.50%
on the assets in the account; (c) any account with assets of a least $10,000 if
(i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the
assets in the account; (d) accounts advised by the Sub-advisor or one of the
companies formerly affiliated with the Asset Management Division of
Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the funds in The AIM Family of Funds on May 29, 1998; and
(e) any of the companies affiliated with AMVESCAP PLC. Pursuant to a separate
prospectus, the Fund also offers Class A and Class B shares, which represent
interests in the Fund. The Class A and Class B shares have different
distribution arrangements.
    
 
   
  Initial investments in Advisor Class shares must be at least $500 and
additional investments must be at least $50. The distributor of the Advisor
Class shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares."
    
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds").
Advisor Class shares of the Fund may be exchanged for Advisor Class shares of
certain funds in the AIM Family of Funds in the manner and subject to the
policies and charges set forth herein. See "Exchange Privilege."
    
 
   
  REDEEMING SHARES. Advisor Class shareholders of the Fund may redeem all or a
portion of their shares at net asset value on any business day. See "How to
Redeem Shares."
    
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be rein-
    
 
                                        2
<PAGE>   559
 
vested at net asset value without payment of a sales charge in the Fund's shares
or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters."
 
   
  RISK FACTORS. There is no assurance that the Fund will achieve its investment
objectives. The Fund's net asset value per share will fluctuate, reflecting
fluctuations in the market value of its portfolio holdings.
    
 
   
  The Fund invests in foreign securities. Investments in foreign securities
involve risks relating to political and economic developments abroad and the
differences between the regulations to which U.S. and foreign issuers are
subject. Individual foreign economies also may differ favorably or unfavorably
from the U.S. economy. Changes in foreign currency exchange rates will affect
the Fund's net asset value, earnings, and gains and losses realized on sales of
securities. Securities of foreign companies may be less liquid and their prices
more volatile than those of securities of comparable U.S. companies. The Fund
normally invests substantially all of its assets in issuers in emerging markets.
Such investments entail greater risks than investing in issuers in developed
markets. The Fund may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs. The value of debt
securities held by the Fund generally fluctuates inversely with interest rate
movements. Certain investment grade debt securities may possess speculative
qualities. The Fund may invest in below investment grade debt securities.
Investments of this type are subject to a greater risk of loss of principal and
interest. See "Investment Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   560
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
   
TABLE OF FEES AND EXPENSES
    
 
  The expenses and maximum transaction costs associated with investing in the
Advisor Class shares of the Fund are reflected in the following table (1):
 
<TABLE>
<S>                                                           <C>
Shareholder Transaction Costs:
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................  None
  Sales charges on reinvested distributions to
     shareholders...........................................  None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........  None
  Redemption charges........................................  None
  Exchange Fees.............................................  None
Annual Fund Operating Expenses(2):
  (as a % of average net assets)
  Investment management and administration fees.............  0.98%
  12b-1 distribution and service fees.......................  None
  Other expenses (after estimated waivers)..................  0.52%
                                                              ----
          Total Fund Operating Expenses.....................  1.50%
                                                              ====
</TABLE>
 
- ---------------
 
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Fund.
 
   
(2)Expenses are estimated based on the fees and expenses the Fund is expected to
   incur during its initial year as an open-end fund and AIM's undertaking to
   limit the Fund's expenses (exclusive of brokerage commissions, taxes,
   interest and extraordinary expenses) to the annual rate of 1.50% of the
   average daily net assets of the Fund's Advisor Class shares. AIM has
   voluntarily agreed to continue this limitation through May 31, 2000. Without
   waivers, "Other expenses" and "Total Fund Operating Expenses" are estimated
   to be 0.65% and 1.63%, respectively, for Advisor Class shares. "Other
   expenses" include custody, transfer agent, legal and audit fees and other
   operating expenses. See "Management" herein and in the Statement of
   Additional Information for more information. Investors purchasing Advisor
   Class shares through financial planners, trust companies, bank trust
   departments or registered investment advisors, or under a "wrap fee" program,
   will be subject to additional fees charged by such entities or by the
   sponsors of such programs. Where any account advised by one of the companies
   affiliated with AMVESCAP PLC invests in Advisor Class shares of the Fund,
   such account shall not be subject to duplicative advisory fees.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                              1 YEAR   3 YEARS   5 YEARS   10 YEARS
                                                              ------   -------   -------   --------
<S>                                                           <C>      <C>       <C>       <C>
Advisor Class Shares........................................   $15       $48       $82       $180
</TABLE>
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT EXPENSES, MAY
BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE ASSUMPTION IN THE EXAMPLE OF
A 5% ANNUAL RETURN ARE REQUIRED BY REGULATIONS OF THE SEC APPLICABLE TO ALL
MUTUAL FUNDS. THE 5% ANNUAL RETURN IS NOT A PREDICTION OF AND DOES NOT REPRESENT
THE FUND'S PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   561
 
- --------------------------------------------------------------------------------
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The table below provides condensed financial information concerning income and
capital changes for Advisor Class shares of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statement and notes for the
fiscal year ended October 31, 1997 and the semi-annual period ended April 30,
1998 have been audited by PricewaterhouseCoopers LLP, independent accountants,
whose report thereon also is included in the Statement of Additional
Information. The Predecessor Fund was a closed-end investment company whose
single class of shares traded on the New York Stock Exchange ("NYSE"). On
October 31, 1997, the Fund, which had no previous operating history, acquired
the assets and assumed the liabilities of G.T. Global Developing Markets Fund,
Inc. (the "Predecessor Fund"). On that date, all shareholders of the Predecessor
Fund received Class A shares of the Fund. The fees and expenses of the Fund will
differ from those of the Predecessor Fund. The Fund's fiscal year end will be
October 31, rather than December 31, which was the Predecessor Fund's fiscal
year end.
    
 
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
            (SUCCESSOR TO G.T. GLOBAL DEVELOPING MARKETS FUND, INC.)
   
    
 
   
<TABLE>
<CAPTION>
                                                               ADVISOR CLASS++
                                                              SIX MONTHS ENDED
                                                              APRIL 30, 1998(D)
                                                              -----------------
<S>                                                           <C>
Per Share Operating Performance:
Net asset value, beginning of period........................       $ 12.56
                                                                   -------
Income from investment operations:
  Net investment income.....................................          0.27*O
  Net realized and unrealized gain (loss) on investments....         (0.02)
                                                                   -------
    Net increase (decrease) from investment operations......          0.25
                                                                   -------
  Redemption fees retained..................................          0.23
                                                                   -------
  Distributions to shareholders:
    From net investment income..............................         (0.60)
    From net realized gain on investments...................            --
                                                                   -------
      Total distributions...................................         (0.60)
                                                                   -------
Net asset value, end of period..............................       $ 12.44
                                                                   =======
    Total investment return (based on net asset value)......          3.88%(b)(c)
Ratios and supplemental data:
Net assets, end of period (in 000's)........................       $    37
Ratio of net investment income to average net assets:
  With expense reductions and reimbursement.................          3.32%(a)
  Without expense reductions and reimbursement..............          2.82%(a)
Ratio of operating expenses to average net assets:
  With expense reductions and reimbursement.................          1.46%(a)
  Without expense reductions and reimbursement..............          1.96%(a)
Ratio of interest expense to average net assets+++..........          0.22%(a)
Portfolio turnover rate.....................................            99%(a)
Average commission rate per share paid on portfolio
  transactions..............................................       $0.0017
</TABLE>
    
 
- ---------------
 
   
(a)  Annualized.
    
 
   
(b)  Not annualized.
    
 
   
(c)  Total investment return does not include sales charges.
    
 
   
(d)  These selected per share data were calculated based upon the average shares
     outstanding during the period.
    
 
   
 O   Net investment income per share reflects an interest payment received from
     the conversion of Vnesheconombank loan agreements. Without such a payment
     net investment would have been $0.13 per share for Advisor Class shares.
    
 
   
 *   Before reimbursement the net investment income per share would have been
     reduced by $0.03.
    
 
   
  +  Commencing November 1, 1997, the Fund began offering Class B and Advisor
     Class shares.
    
 
   
+++  Portfolio turnover rate, average commission rate, and ratio of interest
     expense to average net assets are calculated on the basis of the Fund as
     whole without distinguishing between the classes of shares issued.
    
 
   
N/A  Not applicable.
    
 
   
<TABLE>
<CAPTION>
                                          AMOUNT OF                               AVERAGE MONTHLY NUMBER   AVERAGE AMOUNT
                                             DEBT            AVERAGE AMOUNT       OF REGISTRANT'S SHARES    OF DEBT PER
                                        OUTSTANDING AT    OF DEBT OUTSTANDING          OUTSTANDING          SHARE DURING
YEAR ENDED                              END OF PERIOD      DURING THE PERIOD        DURING THE PERIOD        THE PERIOD
- ----------                              --------------   ----------------------   ----------------------   --------------
<S>                                     <C>              <C>                      <C>                      <C>
Six months ended April 30, 1998.......        $--              $3,299,756               21,283,681            $ 0.155
October 31, 1997......................        --               $  379,964               36,416,667            $0.0104
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed on a daily
basis.
    
 
                                        5
<PAGE>   562
 
- --------------------------------------------------------------------------------
 
   
PERFORMANCE
    
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
   
- --------------------------------------------------------------------------------
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVES. The Fund's primary investment objective is long-term
capital appreciation; its secondary objective is income, to the extent
consistent with seeking capital appreciation. The Fund normally invests
substantially all of its assets in issuers in the developing (or "emerging")
markets of Asia, Europe, Latin America and elsewhere. A majority of the Fund's
assets normally are invested in emerging market equity securities. The Fund may
invest in the following types of equity securities: common stock, preferred
stock, securities convertible into common stock, American Depositary Receipts,
Global Depositary Receipts, rights and warrants to acquire such securities and
substantially similar forms of equity with comparable risk characteristics. The
Fund may also invest in emerging market debt securities that will be selected
based on their potential to provide a combination of capital appreciation and
current income. There can be no assurance the Fund will achieve its investment
objectives.
    
 
   
  INVESTMENT POLICIES. For purposes of the Fund's operations, emerging markets
consist of all countries determined by the Sub-advisor to have developing or
emerging economies and markets. These countries generally include every country
in the world except the United States, Canada, Japan, Australia, New Zealand and
most countries located in Western Europe. See "Investment Objectives and
Policies' in the Statement of Additional Information for a complete list of all
the countries that the Fund does not currently consider to be emerging markets.
    
 
  For purposes of the Fund's policy of normally investing substantially all of
its assets in issuers in emerging markets, the Fund will consider investment in
the following emerging markets:
 
<TABLE>
<S>                               <C>                               <C>
     Algeria                      Hungary                           Philippines
     Argentina                    India                             Poland
     Bolivia                      Indonesia                         Portugal
     Botswana                     Israel                            Republic of Slovakia
     Brazil                       Ivory Coast                       Russia
     Bulgaria                     Jamaica                           Singapore
     Chile                        Jordan                            Slovenia
     China                        Kazakhstan                        South Africa
     Colombia                     Kenya                             South Korea
     Costa Rica                   Lebanon                           Sri Lanka
     Cyprus                       Malaysia                          Swaziland
     Czech Republic               Mauritius                         Taiwan
     Dominican Republic           Morocco                           Thailand
     Ecuador                      Nicaragua                         Turkey
     Egypt                        Nigeria                           Ukraine
     El Salvador                  Oman                              Uruguay
     Finland                      Pakistan                          Venezuela
     Ghana                        Panama                            Zambia
     Greece                       Paraguay                          Zimbabwe
     Hong Kong                    Peru
</TABLE>
 
                                        6
<PAGE>   563
 
  Although the Fund considers each of the above-listed countries eligible for
investment, it will not be invested in all such markets at all times. Moreover,
investing in some of those markets currently may not be desirable or feasible,
due to the lack of adequate custody arrangements for the Fund's assets, overly
burdensome repatriation and similar restrictions, the lack of organized and
liquid securities markets, unacceptable political risks or for other reasons.
 
   
  As used in this Prospectus, an issuer in an emerging market is an entity (1)
for which the principal securities trading market is an emerging market, as
defined above, (2) that (alone or on a consolidated basis) derives 50% or more
of its total revenues from business in emerging markets, provided that, in the
Sub-advisor's view, the value of such issuer's securities will tend to reflect
emerging market developments to a greater extent than developments elsewhere, or
(3) organized under the laws of, or with a principal office in, an emerging
market.
    
 
   
  In selecting investments, the Sub-advisor seeks to identify those countries
and industries where economic and political factors, including currency
movements, are likely to produce above-average growth rates over the long term.
The Sub-advisor seeks those emerging markets that have strongly developing
economies and in which the markets are becoming more sophisticated. The
Sub-advisor then invests in those companies in such countries and industries
that it believes are best positioned and managed to take advantage of these
economic and political factors. The Sub-advisor believes that the issuers of
securities in emerging markets often have sales and earnings growth rates that
exceed those in developed countries and that such growth rates may in turn be
reflected in more rapid share price appreciation.
    
 
   
  As opportunities to invest in securities in other emerging markets develop,
the Fund expects to expand and further broaden the group of emerging markets in
which it invests. In some cases, investments in debt securities could provide
the Fund with access to emerging markets in the early stages of their economic
development, when equity securities are not yet generally available or, in the
Sub-advisor's view, do not yet present an acceptable investment alternative.
While the Fund generally is not restricted in the portion of its assets that may
be invested in a single region, under normal conditions its assets will be
invested in issuers in at least four countries, and it will not invest more than
25% of its assets in issuers in one country. The Fund's holdings of any one
foreign currency together with securities denominated in or indexed to such
currency will not exceed 40% of its assets.
    
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
  INVESTMENTS IN DEBT SECURITIES. The Fund may invest up to 50% of its total
assets in the following types of emerging market debt securities: (1) debt
securities issued or guaranteed by governments, their agencies,
instrumentalities or political subdivisions, or by government owned, controlled
or sponsored entities, including central banks (collectively, "Sovereign Debt"),
including Brady Bonds; (2) interests in issuers organized and operated for the
purpose of restructuring the investment characteristics of Sovereign Debt; (3)
debt securities issued by banks and other business entities; and (4) debt
securities denominated in or indexed to the currencies of emerging markets. Debt
securities held by the Fund may take the form of bonds, notes, bills,
debentures, bank debt obligations, short-term paper, loan participations,
assignments and interests issued by entities organized and operated for the
purpose of restructuring the investment characteristics of any of the foregoing.
There is no requirement with respect to the maturity or duration of debt
securities in which the Fund may invest.
 
  There is no limitation on the percentage of the Fund's assets that may be
invested in debt securities that are rated below investment grade. Investment in
below investment grade debt securities involves a high degree of risk and can be
speculative. These debt securities are the equivalent of high yield, high risk
bonds, commonly known as "junk bonds." Debt securities in which the Fund will
invest may not be rated; if rated, it is expected that such ratings will be
below investment grade. See "Risk Factors -- Risks Associated with Debt
Securities" and "-- Risks Associated with Below Investment Grade Debt
Securities."
 
  The Fund may invest in "Brady Bonds," which are debt restructurings that
provide for the exchange of cash and loans for newly issued bonds. Brady Bonds
have been issued by the countries of Albania, Argentina, Brazil, Bulgaria, Costa
Rica, Dominican Republic, Ecuador, Ivory Coast, Jordan, Mexico, Nigeria, Panama,
Peru, Philippines, Poland, Uruguay, Venezuela and Vietnam, and are expected to
be issued by other emerging market countries. As of the date of this Prospectus,
the Fund is not aware of the occurrence of any payment defaults on Brady Bonds.
Investors should recognize, however, that Brady Bonds do not have a long payment
history. In addition, Brady Bonds are often rated below investment grade.
 
  The Fund may invest in either collateralized or uncollateralized Brady Bonds.
U.S. dollar-denominated collateralized Brady Bonds, which may be fixed rate par
bonds or floating rate discount bonds, are collateralized in full as to
principal by U.S. Treasury zero coupon bonds having the same maturity as the
bonds. Interest payments on such bonds generally are collateralized by cash or
securities in an amount that, in the case of fixed rate bonds, is equal to at
least one year of rolling interest payments or, in the case of floating rate
bonds, initially is equal to at least one year's rolling interest payments based
on the applicable interest rate at the time of issuance and is adjusted at
regular intervals thereafter.
 
  Capital appreciation in debt securities may arise as a result of a favorable
change in relative foreign exchange rates, relative interest rate levels and/or
the creditworthiness of issuers.
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy
for the Fund if it determines such a strategy to be warranted due to market,
economic or political
    
 
                                        7
<PAGE>   564
 
conditions. Under a defensive strategy, the Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units such as Euros) and/or invest
any portion or all of its assets in high quality money market instruments of
U.S. or foreign issuers. In addition, for temporary defensive purposes, most or
all of the Fund's investments may be made in the United States and denominated
in U.S. dollars. To the extent the Fund adopts a temporary defensive posture, it
will not be invested so as to directly achieve its investment objectives. In
addition, pending investment of proceeds from new sales of Fund shares or in
order to meet ordinary daily cash needs, the Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units) and may invest in foreign or
domestic high quality money market instruments. For a description of money
market instruments, see "Temporary Defensive Strategies" in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
 
  BORROWING AND REVERSE REPURCHASE AGREEMENTS. In connection with meeting
requests for the redemption of Fund shares, the Fund may borrow from banks or
may borrow through reverse repurchase agreements. The Fund also may borrow up to
5% of its total assets for temporary or emergency purposes other than to meet
redemptions, but total borrowings may not exceed 33 1/3% of its total assets.
However, the Fund will not purchase securities while borrowings in excess of 5%
of its total assets are outstanding. Any borrowing by the Fund may cause greater
fluctuation in the value of its shares than would be the case if it did not
borrow.
 
  A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed-upon price that includes an interest component.
 
   
  SECURITIES LENDING. The Fund may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Fund to retain ownership of the securities loaned and, at the same time,
enhances the Fund's total return. The Fund limits its loans of portfolio
securities to an aggregate of 30% of the value of its total assets, measured at
the time any such loan is made. While a loan is outstanding, the borrower must
maintain with the Fund's custodian collateral consisting of cash, U.S.
government securities or certain irrevocable letters of credit equal to at least
100% of the value of the borrowed securities plus any accrued interest or such
other collateral as permitted by the Fund's investment program and regulatory
agencies, and as approved by the Board. The risks in lending portfolio
securities, as with other extensions of secured credit, consist of possible
delays in receiving additional collateral or in recovery of the securities and
possible loss of rights in the collateral if the borrower fails financially.
    
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. To attempt to increase
return, the Fund may write call options on securities. This strategy will be
employed only when, in the opinion of the Sub-advisor, the size of the premium
the Fund receives for writing the option is adequate to compensate it against
the risk that appreciation in the underlying security may not be fully realized
if the option is exercised. The Fund also is authorized to write put options to
attempt to enhance return, although it does not currently intend to do so.
    
 
  The Fund may also use forward currency contracts, futures contracts, options
on securities, options on currencies, options on indices and options on futures
contracts to attempt to hedge against the overall level of investment and
currency risk normally associated with its investments. These instruments are
often referred to as "derivatives," which may be defined as financial
instruments whose performance is derived, at least in part, from the performance
of another asset (such as a security, currency or an index of securities). The
Fund may enter into such instruments up to the full value of its portfolio
assets. See "Options, Futures and Currency Strategies" in the Statement of
Additional Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on such futures
contracts to hedge its portfolio against movements in exchange rates.
 
   
  Only a limited market, if any, currently exists for options and futures
transactions relating to currencies of most emerging markets, to securities
denominated in such currencies or to securities of issuers domiciled or
principally engaged in business in such emerging markets. To the extent that
such a market does not exist, the Sub-advisor may not be able to effectively
hedge its investment in such markets.
    
 
   
  In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-advisor intends to include in the
Fund's portfolio. The Fund also may purchase and sell put and call options on
stock indices to hedge against overall fluctuations in the securities markets or
in a specific market sector.
    
 
  Further, the Fund may sell index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general market or a specific market sector decline that could adversely affect
the Fund's portfolio. The Fund also may purchase index futures contracts and
purchase call options or write put options on such contracts to hedge against a
general market or market sector advance and thereby attempt to lessen the cost
of future securities acquisitions. Similarly, the Fund may use interest rate
futures contracts and options thereon to hedge the debt portion of its portfolio
against changes in the general level of interest rates.
 
                                        8
<PAGE>   565
 
   
  INVESTMENT IN OTHER INVESTMENT COMPANIES OR VEHICLES. The Fund may be able to
invest in certain countries solely or primarily through governmentally
authorized investment vehicles or companies, some of which may be investment
vehicles or companies that are advised by the Sub-advisor or its affiliates
("Affiliated Funds"). Pursuant to the Investment Company Act of 1940, as amended
(the "1940 Act"), the Fund generally may invest up to 10% of its total assets in
the aggregate in shares of other investment companies and up to 5% of its total
assets in any one investment company, as long as each investment does not
represent more than 3% of the outstanding voting stock of the acquired
investment company at the time of investment.
    
 
   
  Investment in other investment companies may involve the payment of
substantial premiums above the value of their portfolio securities and multiple
layering of fees and expenses and is subject to limitations under the 1940 Act
and market availability. The Fund does not intend to invest in other investment
companies unless, in the judgment of the Sub-advisor, the potential benefits of
such investment justify the payment of any applicable premium or sales charge.
As a shareholder in another investment company, the Fund would bear its ratable
share of that company's expenses, including its advisory and administration
fees. At the same time the Fund would continue to pay its own management fees
and other expenses. AIM and the Sub-advisor will waive their advisory fees to
the extent that the Fund invests in an Affiliated Fund.
    
 
   
  PRIVATIZATIONS. The governments in some emerging markets have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Fund in privatizations in appropriate
circumstances. In certain emerging markets, the ability of foreign entities such
as the Fund to participate in privatizations may be limited by local law or the
terms on which the Fund may be permitted to participate may be less advantageous
than those afforded local investors. There can be no assurance that governments
in emerging markets will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
    
 
  WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities and forward commitments only with the intention
of actually receiving or delivering the securities, as the case may be. No
income accrues on securities that have been purchased pursuant to a forward
commitment or on a when-issued basis prior to delivery to the Fund. If the Fund
disposes of the right to acquire a when-issued security prior to its acquisition
or disposes of its right to deliver or receive against a forward commitment, it
may incur a gain or loss. At the time the Fund enters into a transaction on a
when-issued or forward commitment basis, the Fund will segregate cash or liquid
securities equal to the value of the when-issued or forward commitment
securities with its custodian bank and will mark to market daily such assets.
There is a risk that the securities may not be delivered and that the Fund may
incur a loss.
 
  LOAN PARTICIPATIONS AND ASSIGNMENTS. The Fund may invest in fixed and floating
rate loans ("Loans") arranged through private negotiations between a foreign
entity and one or more financial institutions ("Lenders"). The majority of the
Fund's investments in Loans in emerging markets is expected to be in the form of
participations in Loans ("Participations") and assignments of portions of Loans
from third parties ("Assignments"). Participations typically will result in the
Fund having a contractual relationship only with the Lender, not with the
borrower. The Fund will have the right to receive payments of principal,
interest and any fees to which it is entitled only from the Lender selling the
Participation and only upon receipt by the Lender of the payments from the
borrower. In connection with purchasing Participations, the Fund generally will
have no right to enforce compliance by the borrower with the terms of the loan
agreement relating to the loan, nor any rights of set-off against the borrower,
and the Fund may not directly benefit from any collateral supporting the Loan in
which it has purchased the Participation. As a result, the Fund will assume the
credit risk of both the borrower and the Lender that is selling the
Participation.
 
   
  In the event of the insolvency of the Lender selling a Participation, the Fund
may be treated as a general creditor of the Lender and may not benefit from any
set-off between the Lender and the borrower. The Fund will acquire
Participations only if the Lender interpositioned between the Fund and the
borrower is determined by the Sub-advisor to be creditworthy. When the Fund
purchases Assignments from Lenders, the Fund will acquire direct rights against
the borrower on the Loan. However, because Assignments are arranged through
private negotiations between potential assignees and assignors, the rights and
obligations acquired by the Fund as the purchaser of an Assignment may differ
from, and be more limited than, those held by the assigning Lender.
    
 
  ZERO COUPON SECURITIES. The Fund may invest in certain zero coupon securities
that are "stripped" U.S. Treasury notes and bonds. The Fund also may invest in
zero coupon and other deep discount securities issued by foreign governments and
domestic and foreign corporations, including certain Brady Bonds and other
foreign debt, and in payment-in-kind securities. Zero coupon securities pay no
interest to holders prior to maturity, and payment-in-kind securities pay
"interest" in the form of additional securities. However, a portion of the
original issue discount on zero coupon securities and the interest on
payment-in-kind securities will be included in the Fund's income. Accordingly,
for the Fund to continue to qualify for tax treatment as a regulated investment
company and to avoid a certain excise tax (see "Taxes" in the Statement of
Additional Information), it may be required to distribute an amount that is
greater than the total amount of cash it actually receives. These distributions
may be made from the Fund's cash assets or, if necessary, from the proceeds of
sales of portfolio securities. The Fund will not be able to purchase additional
income-producing securities with cash used to make such distributions, and its
current income ultimately may be reduced as a result. Zero coupon and
payment-in-kind
 
                                        9
<PAGE>   566
 
securities usually trade at a deep discount from their face or par value and
will be subject to greater fluctuations of market value in response to changing
interest rates than debt obligations of comparable maturities that make current
distributions of interest in cash.
 
  INDEXED COMMERCIAL PAPER. The Fund may invest without limitation in commercial
paper that is indexed to certain specific foreign currency exchange rates. The
terms of such commercial paper provide that its principal amount is adjusted
upwards or downwards (but not below zero) at maturity to reflect changes in the
exchange rate between two currencies while the obligation is outstanding. The
Fund will purchase such commercial paper with the currency in which it is
denominated and, at maturity, will receive interest and principal payments
thereon in that currency, but the amount of principal payable by the issuer at
maturity will change in proportion to the change (if any) in the exchange rate
between the two specified currencies between the date the instrument is issued
and the date the instrument matures. While such commercial paper entails the
risk of loss of principal, the potential for realizing gains as a result of
changes in foreign currency exchange rates enables the Fund to hedge against a
decline in the U.S. dollar value of investments denominated in foreign
currencies while seeking to provide an attractive money market rate of return.
The Fund will not purchase such commercial paper for speculation.
 
  OTHER INDEXED SECURITIES. The Fund may invest in certain other indexed
securities, which are securities whose prices are indexed to the prices of other
securities, securities indices, currencies, precious metals or other commodities
or other financial indicators. Indexed securities typically, but not always, are
debt securities or deposits whose value at maturity or coupon rate is determined
by reference to a specific instrument or statistic. The performance of indexed
securities depends to a great extent on the performance of the security,
currency or other instrument to which they are indexed and also may be
influenced by interest rate changes in the United States and abroad. At the same
time, indexed securities are subject to the credit risks associated with the
issuer of the security, and their values may decline substantially if the
issuer's creditworthiness deteriorates. Indexed securities may be more volatile
than the underlying instruments. New forms of indexed securities continue to be
developed. The Fund may invest in such securities to the extent consistent with
its investment objectives.
 
  OTHER INFORMATION. The Fund's investment objectives may not be changed without
the approval of a majority of its outstanding voting securities. A "majority of
its outstanding voting securities" means the lesser of (i) 67% of the shares
represented at a meeting at which more than 50% of the outstanding shares are
represented, or (ii) more than 50% of the outstanding shares. In addition, the
Fund has adopted certain investment limitations that also may not be changed
without shareholder approval. A complete description of these limitations is
included in the Statement of Additional Information. Unless specifically noted,
the Fund's investment policies described in this Prospectus and in the Statement
of Additional Information may be changed by the Trust's Board of Trustees
without shareholder approval. The Fund's policies regarding lending, and the
percentage of Fund assets that may be committed to borrowing, are fundamental
policies and may not be changed without shareholder approval.
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
 
   
  The Fund is authorized to engage in Short Sales, although it currently has no
intention of doing so, and may purchase American Depositary Receipts, American
Depositary Shares, Global Depositary Receipts and European Depositary Receipts.
See "Short Sales" and "Depositary Receipts," respectively, in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
    
 
   
- --------------------------------------------------------------------------------
    
 
   
RISK FACTORS
    
 
  GENERAL. There is no assurance that the Fund will achieve its investment
objectives. Investing in the Fund entails a substantial degree of risk, and an
investment in the Fund should be considered speculative. Investors are strongly
advised to consider carefully the special risks involved in investing in
emerging markets, which are in addition to the usual risks of investing in
developed markets around the world.
 
  The Fund's net asset value will fluctuate, reflecting fluctuations in the
market value of its portfolio positions and its net currency exposure. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. The value of equity securities held by the Fund will fluctuate
in response to general market and economic developments, as well as developments
affecting the particular issuers of such securities.
 
  In addition, the value of debt securities held by the Fund generally will
fluctuate with the perceived creditworthiness of the issuers of such securities
and interest rates.
 
  NON-DIVERSIFIED CLASSIFICATION. The Fund is classified under the 1940 Act as a
"non-diversified" fund. As a result, the Fund will be able to invest in a
smaller number of issuers than if it was classified under the 1940 Act as a
"diversified" fund. To the extent that the Fund invests in a smaller number of
issuers, the net asset value of its shares may fluctuate more widely and it may
be subject to greater investment and credit risk with respect to its portfolio.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to, the reporting requirements of, the SEC.
Accordingly, there may be less publicly
 
                                       10
<PAGE>   567
 
available information about foreign securities and issuers than is available
about domestic securities and issuers. Foreign companies generally are not
subject to uniform accounting, auditing and financial reporting standards,
practices and requirements comparable to those applicable to domestic companies.
In addition, certain costs attributable to foreign investing, such as custody
charges, are higher than those attributable to domestic investing. Securities of
some foreign companies are less liquid and their prices may be more volatile
than securities of comparable domestic companies. The Fund's net investment
income from foreign issuers may be subject to non-U.S. withholding taxes,
thereby reducing that income.
 
  Investing in some foreign countries involves risks relating to potential
political and economic instability within such countries and the risks of
expropriation, nationalization, confiscation of assets and property or the
imposition of restrictions on foreign investment and on repatriation of capital
invested. In the event of such expropriation, nationalization or other
confiscation, the Fund could lose its entire investment in that market.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, currency depreciation,
resource self-sufficiency and balance of payments positions. Investments in
foreign government securities involve special risks, including the risk that the
government issuers may be unable or unwilling to repay principal or interest
when due.
 
  The Fund will also be affected favorably or unfavorably by exchange control
regulations or changes in the exchange rates between such currencies and the
U.S. dollar. Changes in currency exchange rates will affect the net asset value
of the Fund's shares and also may affect the value of dividends and interest
earned by the Fund and gains and losses realized by it.
 
  INVESTING IN EMERGING MARKETS. Emerging markets generally are dependent
heavily upon international trade and, accordingly, have been and may continue to
be affected adversely by trade barriers, exchange controls, managed adjustments
in relative currency values and other protectionist measures imposed or
negotiated by the countries with which they trade. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain countries with
emerging markets.
 
  Disclosure and regulatory standards in many respects are less stringent than
in the United States and other major markets. There also may be a lower level of
monitoring and regulation of emerging markets and the activities of investors in
such markets, and enforcement of existing regulations has been extremely
limited.
 
  In addition, brokerage commissions, custodial services and other costs
relating to investment in foreign markets generally are more expensive than in
the United States, particularly with respect to emerging markets. Such markets
have different settlement and clearance procedures. In certain markets there
have been times when settlements have been unable to keep pace with the volume
of securities transactions, making it difficult to conduct such transactions.
The inability of the Fund to make intended securities purchases due to
settlement problems could cause it to miss attractive investment opportunities.
Inability to dispose of a portfolio security caused by settlement problems could
result either in losses to the Fund due to subsequent declines in value of the
portfolio security or, if the Fund has entered into a contract to sell the
security, could result in possible liability to the purchaser.
 
  The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
developed countries. The risk also exists that an emergency situation may arise
in one or more emerging markets as a result of which trading of securities may
cease or may be substantially curtailed and prices for the Fund's portfolio
securities in such markets may not be readily available. Section 22(e) of the
1940 Act permits a registered investment company, such as the Fund, to suspend
redemption of its shares for any period during which an emergency exists, as
determined by the SEC. Accordingly, when the Fund believes that circumstances
dictate, it will promptly apply to the SEC for a determination that such an
emergency exists. During the period commencing with the Fund's identification of
such conditions until the date of any SEC action, the Fund's portfolio
securities in the affected markets will be valued at fair value determined in
good faith by or under the direction of the Trust's Board of Trustees.
 
  RISKS ASSOCIATED WITH DEBT SECURITIES. The value of the debt securities held
by the Fund generally will vary inversely with market interest rates. If
interest rates in a market fall, the Fund's debt securities issued by
governments or companies in that market ordinarily will increase in value. If
market interest rates increase, however, the debt securities owned by the Fund
in that market will likely decrease in value.
 
  RISKS ASSOCIATED WITH BELOW INVESTMENT GRADE DEBT SECURITIES. The Fund may
invest up to 50% of its total assets in debt securities rated below investment
grade. Such investments involve a high degree of risk.
 
  Debt rated Baa by Moody's Investors Service, Inc. ("Moody's") is considered by
Moody's to have speculative characteristics. Debt rated BB, B, CCC, CC or C by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), and
debt rated Ba, B, Caa, Ca or C by Moody's is regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. While such
lower quality debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions. Debt rated C by Moody's or S&P is the lowest rated debt that is not
in default as to principal or interest, and issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment standing.
Lower quality debt securities are also generally considered to be subject to
greater risk than securities with higher ratings with regard to a deterioration
of general economic conditions. These foreign debt securities are the equivalent
of high yield, high risk bonds, commonly known as "junk bonds."
 
                                       11
<PAGE>   568
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting it, such as its inability to meet specific
projected business forecasts or the unavailability of additional financing.
Similarly, certain emerging market governments that issue lower quality debt
securities are among the largest debtors to commercial banks, foreign
governments and supranational organizations such as the World Bank and may not
be able or willing to make principal and/or interest repayments as they come
due. The risk of loss due to default by the issuer is significantly greater for
the holders of lower quality securities because such securities are generally
unsecured and may be subordinated to the claims of other creditors of the
issuer.
 
  Lower quality debt securities frequently have call or buy-back features that
would permit an issuer to call or repurchase the security from the Fund. In
addition, the Fund may have difficulty disposing of lower quality securities
because they may have a thin trading market. There may be no established retail
secondary market for many of these securities, and the Fund anticipates that
such securities could be sold only to a limited number of dealers or
institutional investors. The lack of a liquid secondary market also may have an
adverse impact on market prices of such instruments and may make it more
difficult for the Fund to obtain accurate market quotations for purposes of
valuing its portfolio. The Fund may also acquire lower quality debt securities
during an initial underwriting or that are sold without registration under
applicable securities laws. Such securities involve special considerations and
risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Fund may invest
include (1) potential adverse publicity, (2) heightened sensitivity to general
economic or political conditions and (3) the likely adverse impact of a major
economic recession.
 
  The Fund may also incur additional expenses to the extent it is required to
seek recovery upon a default in the payment of principal or interest on its
portfolio holdings, and the Fund may have limited legal recourse in the event of
a default. Debt securities issued by governments in emerging markets can differ
from debt obligations issued by private entities in that remedies from defaults
generally must be pursued in the courts of the defaulting government, and legal
recourse is therefore somewhat diminished. Political conditions, in terms of a
government's willingness to meet the terms of its debt obligations, also are of
considerable significance. There can be no assurance that the holders of
commercial bank debt may not contest payments to the holders of debt securities
issued by governments in emerging markets in the event of default by the
governments under commercial bank loan agreements.
 
  ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
 
  CURRENCY RISK. Because the Fund may invest substantially in securities
denominated in currencies other than the U.S. dollar, and since the Fund may
hold foreign currencies, it will be affected favorably or unfavorably by
exchange control regulations or changes in the exchange rates between such
currencies and the U.S. dollar. Changes in currency exchange rates will affect
the net asset value of the Fund's shares and also may affect the value of
dividends and interest earned by the Fund and gains and losses realized by it.
Currencies generally are evaluated on the basis of fundamental economic criteria
(e.g., relative inflation and interest rate levels and trends, growth rate
forecasts, balance of payments status and economic policies) as well as
technical and political data. Exchange rates are determined by the forces of
supply and demand in the foreign exchange markets. These forces are affected by
the international balance of payments and other economic and financial
conditions, government intervention, speculation and other factors. If the
currency in which a security is denominated appreciates against the U.S. dollar,
the dollar value of the security will increase. Conversely, a decline in the
exchange rate of the currency would adversely affect the value of the security
expressed in dollars.
 
  Many of the currencies of emerging market countries have experienced steady
devaluations relative to the U.S. dollar, and major devaluations have
historically occurred in certain countries. Any devaluations in the currencies
in which the Fund's portfolio securities are denominated may have a detrimental
impact on the Fund.
 
  Some countries also may have fixed currencies whose values against the U.S.
dollar are not independently determined. In addition, there is a risk that
certain countries may restrict the free conversion of their currencies into
other currencies. Further, certain currencies may not be internationally traded.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency
    
 
                                       12
<PAGE>   569
 
   
with the euro on January 1, 1999, and will replace its existing currency with
the euro on July 1, 2002. Any other European country which is a member of the
EEMU may elect to participate in the EEMU and may supplement its existing
currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
   
  OPTIONS, FUTURES AND FOREIGN CURRENCY TRANSACTIONS. The Fund is authorized to
enter into options, futures and forward currency transactions. These
transactions involve certain risks, which include: (1) dependence on the
Sub-advisor's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets and movements in
interest rates and currency markets; (2) imperfect correlation, or even no
correlation, between movements in the price of forward contracts, options,
futures contracts or options thereon and movements in the price of the currency
or security hedged or used for cover; (3) the fact that skills and techniques
needed to trade options, futures contracts and options thereon or to use forward
currency contracts are different from those needed to select the securities in
which the Fund invests; (4) lack of assurance that a liquid secondary market
will exist for any particular option, futures contract or option thereon at any
particular time; (5) the possible loss of principal under certain conditions;
and (6) the possible inability of the Fund to purchase or sell a portfolio
security at a time when it would otherwise be favorable for it to do so, or the
possible need for the Fund to sell a security at a disadvantageous time, due to
the need for the Fund to maintain "cover" or to set aside securities in
connection with hedging transactions.
    
 
  LOAN PARTICIPATIONS AND ASSIGNMENTS. The Fund may have difficulty disposing of
Assignments and Participations. The liquidity of such securities is limited, and
the Fund anticipates that such securities could be sold only to a limited number
of institutional investors. The lack of a liquid secondary market could have an
adverse impact on the value of such securities and on the Fund's ability to
dispose of particular Assignments or Participations when necessary to meet its
liquidity needs or in response to a specific economic event, such as a
deterioration in the creditworthiness of the borrower. The lack of a liquid
secondary market for Assignments and Participations also may make it more
difficult for the Fund to assign a value to those securities for purposes of
valuing its portfolio and calculating its net asset value.
 
  SOVEREIGN DEBT. The Fund may invest in sovereign debt securities of emerging
market governments, including Brady Bonds. Investments in such securities
involve special risks. The issuer of the debt or the governmental authorities
that control the repayment of the debt may be unable or unwilling to repay
principal or interest when due in accordance with the terms of such debt.
Periods of economic uncertainty may result in the volatility of market prices of
sovereign debt obligations and in turn the Fund's net asset value, to a greater
extent than the volatility inherent in domestic fixed income securities.
 
  A sovereign debtor's willingness or ability to repay principal and pay
interest in a timely manner may be affected by, among other factors, its cash
flow situation, the extent of its foreign reserves, the availability of
sufficient foreign exchange on the date a payment is due, the relative size of
the debt service burden to the economy as a whole, the sovereign debtor's policy
toward principal international lenders and the political constraints to which a
sovereign debtor may be subject. Emerging market governments could default on
their sovereign debt. Such sovereign debtors also may be dependent on expected
disbursements from foreign governments, multilateral agencies and other entities
abroad to reduce principal and interest arrearages on their debt. The commitment
on the part of these governments, agencies and others to make such disbursements
may be conditioned on a sovereign debtor's implementation of economic reforms
and/or economic performance and the timely service of such debtor's obligations.
Failure to implement such reforms, achieve such levels of economic performance
or repay principal or interest when due may result in the cancellation of such
third parties' commitments to lend funds to the sovereign debtor, which may
further impair such debtor's ability or willingness to timely service its debts.
 
   
  The occurrence of political, social or diplomatic changes in one or more of
the countries issuing sovereign debt could adversely affect the Fund's
investments. Emerging markets are faced with social and political issues, and
some of them have experienced high rates of inflation in recent years and have
extensive internal debt. Among other effects, high inflation and internal debt
service requirements may adversely affect the cost and availability of future
domestic sovereign borrowing to finance governmental programs and may have other
adverse social, political and economic consequences. Political changes or a
deterioration of a country's domestic economy or balance of trade may affect its
willingness to service its sovereign debt. Although the Sub-advisor intends to
manage the Fund in a manner that will minimize the exposure to such risks, there
can be no assurance that adverse political changes will not cause the Fund to
suffer a loss of interest or principal on any of its holdings.
    
 
   
  In recent years, some of the emerging market countries in which the Fund
expects to invest have encountered difficulties in servicing their sovereign
debt obligations. Some of these countries have withheld payments of interest
and/or principal of sovereign debt. These difficulties have also led to
agreements to restructure external debt obligations -- in particular, commercial
bank loans -- typically by rescheduling principal payments, reducing interest
rates and extending new credits to finance interest payments on existing debt.
In the future, holders of emerging market sovereign debt securities may be
requested to participate in similar rescheduling of such debt. Certain emerging
market countries are among the largest debtors to commercial banks and foreign
governments. Currently, Brazil, Mexico and Argentina are the largest debtors
among developing countries. At times certain emerging market countries
    
 
                                       13
<PAGE>   570
 
have declared moratoria on the payment of principal and interest on external
debt; such a moratorium is currently in effect in certain emerging market
countries. There is no bankruptcy proceeding by which a creditor may collect in
whole or in part sovereign debt on which an emerging market government has
defaulted.
 
  The ability of emerging market governments to make timely payments on their
sovereign debt securities is likely to be influenced strongly by a country's
balance of trade and its access to trade and other international credits. A
country whose exports are concentrated in a few commodities could be vulnerable
to a decline in the international prices of one or more of such commodities.
Increased protectionism on the part of a country's trading partners could also
adversely affect its exports. Such events could diminish a country's trade
account surplus, if any. To the extent that a country receives payment for its
exports in currencies other than hard currencies, its ability to make hard
currency payments could be affected.
 
  As noted above, sovereign debt obligations issued by emerging market
governments generally are deemed to be the equivalent in terms of quality to
securities rated below investment grade by Moody's and S&P. Such securities are
regarded as predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the obligations
and involve major risk exposure to adverse conditions. Some of such securities,
with respect to which the issuer currently may not be paying interest or may be
in payment default, may be comparable to securities rated D by S&P or C by
Moody's. The Fund may have difficulty disposing of and valuing certain sovereign
debt obligations because there may be a limited trading market for such
securities. Because there is no liquid secondary market for many of these
securities, the Fund anticipates that such securities could be sold only to a
limited number of dealers or institutional investors.
   
- --------------------------------------------------------------------------------
    
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust on the one side and persons or companies furnishing services
to the Fund on the other, including the investment management and administration
agreement with AIM, the investment sub-advisory and sub-administration agreement
between AIM and the Sub-advisor, the agreements with AIM Distributors regarding
distribution of the Fund's shares, the custody agreement and the transfer agency
agreement. The day-to-day operations of the Fund are delegated to the officers
of the Trust, subject always to the investment objectives and policies of the
Fund and to the general supervision of the Trust's Board of Trustees. See "Board
of Trustees and Executive Officers" in the Statement of Additional Information
for information on the Trust's Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers and administrators include
determining the composition of the Fund's portfolio and placing orders to buy,
sell or hold particular securities; furnishing corporate officers and clerical
staff; providing office space, services and equipment; and supervising all
matters relating to the Fund's operation. For these services, the Fund pays AIM
investment management and administration fees, computed daily and paid monthly,
based on its average daily net assets, at the annualized rate of 0.975% on the
first $500 million, 0.95% on the next $500 million, 0.925% on the next $500
million and 0.90% on amounts thereafter. Out of the aggregate fees payable by
the Fund, AIM pays the Sub-advisor sub-advisory and sub-administration fees
equal to 40% of the aggregate fees AIM receives from the Fund. The investment
management and administration fees paid by the Fund are higher than those paid
by most mutual funds. The Fund pays all expenses not assumed by AIM, the
Sub-advisor, AIM Distributors or other agents. AIM has undertaken to limit the
Fund's expenses (exclusive of brokerage commissions, taxes, interest and
extraordinary expenses) to the annual rate of 1.50% of the average daily net
assets of the Fund's Advisor Class shares.
    
 
   
  The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-advisor (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement (the "Advisory Agreement"). AIM was organized in 1976
and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Fund pursuant to an investment sub-advisory and
sub-administration agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of the Sub-advisor,
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included the Sub-advisor and
certain other affiliates. As a result of this transaction, the Sub-advisor is
now an indirect wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a sig-
    
 
                                       14
<PAGE>   571
 
nificant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Fund, the Sub-advisor employs a team
approach, taking advantage of its investment resources around the world.
    
 
  The investment professionals primarily responsible for the portfolio
management of the Fund are as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
     NAME/OFFICE            THE PORTFOLIO                         PAST FIVE YEARS
     -----------         --------------------                   -------------------
<S>                     <C>                      <C>
Francesco Bertoni       Portfolio Manager        Portfolio Manager for the Sub-advisor since June
London                  since 1998               1998. Investment Director of INVESCO Asset
                                                 Management Ltd. (London) ("INVESCO London"), an
                                                 affiliate of the Sub-advisor, since 1994.
                                                 Portfolio Manager for INVESCO London from 1990 to
                                                 1994.
Cheng-Hock Lau          Portfolio Manager        Chief Investment Officer for Global Fixed Income
New York                since 1997               and Portfolio Manager for the Sub-advisor since
                                                 October 1996. Senior Portfolio Manager for
                                                 Global/International Fixed Income for the
                                                 Sub-advisor from July 1995 to October 1996.
                                                 Employed by Chancellor Capital Management, Inc., a
                                                 predecessor of the Sub-advisor, from 1995 to
                                                 October 1996. Senior Vice President and Senior
                                                 Portfolio Manager for Fiduciary Trust Company
                                                 International from 1993 to 1995. Vice President at
                                                 Bankers Trust Company from 1991 to 1993.
</TABLE>
    
 
   
  In placing securities orders for the Fund's portfolio transactions, the
Sub-advisor seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-advisor may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions may be executed
through affiliates of AIM or the Sub-advisor. High portfolio turnover (over
100%) involves correspondingly greater brokerage commissions and other
transaction costs that the Fund will bear directly and could result in the
realization of net capital gains which would be taxable when distributed to
shareholders. See "Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement (the
"Distribution Agreement"), with AIM Distributors, a registered broker-dealer and
a wholly owned subsidiary of AIM, to act as the distributor of Advisor Class
shares of the Fund. Certain Trustees and officers of the Trust are affiliated
with AIM Distributors.
    
 
  The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST
    
 
   
  The Trust was organized as a Delaware business trust on May 7, 1998. On
September 8, 1998, the Trust acquired the assets of and assumed the liabilities
of AIM Investment Funds, Inc., a Maryland corporation. The Fund constitutes one
of thirteen separate and distinct series portfolios of the Trust. From time to
time, the Trust may establish other funds, each corresponding to a distinct
investment portfolio and a distinct series of the Trust's shares of beneficial
interest. Shares of each fund are entitled to one vote per share (with
proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
                                       15
<PAGE>   572
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
    
   
    
 
                                       16
<PAGE>   573
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
                  TO THE AIM FAMILY OF FUNDS--Register Mark--
                            FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several of
which offer Advisor Class shares. Only Advisor Class shares are offered through
this Prospectus. Advisor Class shares are available from the following funds
(collectively, the "Advisor Class Funds"):
 
   
<TABLE>
            <S>                                           <C>
            AIM BASIC VALUE FUND                          AIM GLOBAL INFRASTRUCTURE FUND
            AIM DEVELOPING MARKETS FUND                   AIM GLOBAL RESOURCES FUND
            AIM DOLLAR FUND                               AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM EMERGING MARKETS FUND                     AIM GLOBAL TRENDS FUND
            AIM EMERGING MARKETS DEBT FUND                AIM INTERNATIONAL GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM JAPAN GROWTH FUND
            AIM GLOBAL CONSUMER PRODUCTS                  AIM LATIN AMERICAN GROWTH FUND
              AND SERVICES FUND                           AIM MID CAP EQUITY FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM NEW PACIFIC GROWTH FUND
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM SMALL CAP GROWTH FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM STRATEGIC INCOME FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WORLDWIDE GROWTH FUND
</TABLE>
    
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
 
  HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through Financial
Advisers (as defined herein) who have entered into agreements with A I M
Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor Class
shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
 
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment for
Advisor Class shares is $500.
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
                                       A-1
<PAGE>   574
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Advisor Class shares of any Advisor Class Funds not named on the cover of this
Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                                                     Shareholder Name, Shareholder Account Number 
                   OBI:                              (70 character limit)
</TABLE>
 
  It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
 
  HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
  In addition to the Advisor Class Funds, the AIM Funds consist of the following
funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR
LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND,
AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BLUE
CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION
FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED MATURITY TREASURY
FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM SELECT GROWTH FUND,
AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM VALUE FUND and AIM
WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM
LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with the Advisor Class
Funds, the "Multiple Class Funds." For information on purchasing any of the AIM
Funds and to receive a prospectus, please call (800) 347-4246. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
  Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
 
  Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee'
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares. Investors in wrap fee programs and
advisory accounts may only purchase Advisor Class shares through Financial
Advisers who have entered into agreements with AIM Distributors. Investors may
be charged a fee by their agents or brokers for effecting transactions in
Advisor Class shares.
 
  AIM Distributors may, from time to time, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives
 
                                       A-2
<PAGE>   575
 
and their families to places within or outside the United States. The total
amount of such additional bonus payments or other consideration shall not exceed
0.25% of the public offering price of the shares sold. Any such bonus or
incentive programs will not change the price paid by investors for the purchase
of the applicable AIM Fund's shares or the amount that any particular AIM Fund
will receive as proceeds from such sales. Dealers may not use sales of the AIM
Funds' shares to qualify for any incentives to the extent that such incentives
may be prohibited by the laws of any state.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND uses
the amortized cost method of valuing the securities it holds and rounds its per
share net asset value to the nearest whole cent, it is anticipated that the net
asset value of the shares of that fund will remain constant at $1.00 per share.
However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00 net
asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
                                       A-3
<PAGE>   576
 
- --------------------------------------------------------------------------------
 
   
SPECIAL PLANS
    
 
  Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
 
   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance to $5,000 to
establish and maintain an allocation across a range of Advisor Class Funds. The
Program automatically rebalances holdings of Advisor Class Funds to the
established allocation on a periodic basis. Under the Program, a shareholder may
predesignate, on a percentage basis, how the total value of his or her holdings
in a minimum of two, and a maximum of ten, Advisor Class Funds ("Personal
Portfolio") is to be rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more Advisor Class Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other Advisor Class Funds in the
shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the
Advisor Class Fund(s) in a shareholder's Personal Portfolio have appreciated
during a rebalancing period, the Program will result in shares of Advisor Class
Fund(s) that have appreciated most during the period being exchanged for shares
of Advisor Class Fund(s) that have appreciated least. SUCH EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends, Distributions and Tax
Matters -- Dividends and Distributions." Participation in the Program does not
assure that a shareholder will profit from purchases under the Program nor does
it prevent or lessen losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Advisor Class Fund would be 2%
or less. In predesignating percentages, shareholders must use whole percentages
and totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an Advisor Class Fund's
shares. The AIM Funds and AIM Distributors reserve the right to modify, suspend,
or terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which Advisor
Class Funds or what allocation percentages are assigned to the Program, unless
canceled or changed in writing and received by the Transfer Agent in good order
at least five business days prior to the rebalancing date. Certain
dealers/financial institutions may charge a fee for establishing accounts
relating to the Program. Investors should contact their dealers/financial
institutions or AIM Distributors for more information.
    
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the Advisor
Class Funds may participate in an exchange privilege as described below. AIM
Distributors acts as distributor for the Advisor Class Funds which represent a
range of different investment objectives and policies.
 
  Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
 
  Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
 
  An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor
 
                                       A-4
<PAGE>   577
 
Class Fund acquired through exchange must be qualified for sale in the state in
which the shareholder resides; (c) the exchange must be made between accounts
having identical registrations and addresses; (d) the full amount of the
purchase price for the shares being exchanged must have already been received by
the fund; (e) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or Form
W-9 (certifying exempt status) must have been received by the fund; (f) newly
acquired shares (through either an initial or subsequent investment) are held in
an account for at least ten business days, and all other shares are held in an
account for at least one day, prior to the exchange; and (g) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the Advisor Class Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
  Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but under unusual market
conditions such purchases may be delayed for up to five business days if it is
determined that an Advisor Class Fund would be materially disadvantaged by an
immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into an Advisor Class Fund that declares daily dividends ("Dividends,
Distributions and Tax Matters -- Dividends and Distributions," below), and the
release of the exchange proceeds is delayed for the foregoing five-day period,
such shareholder will not begin to accrue dividends until the sixth business day
after the exchange. Advisor Class shares purchased by check may not be exchanged
until it is determined that the check has cleared, which may take up to ten
business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. A shareholder may give exchange information to his Financial
Adviser. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the Advisor Class Funds. AIM Distributors reserves the right to impose
conditions on dealers or investment advisors who make telephone exchanges of
shares of the Advisor Class Funds, including the condition that any such dealer
or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/financial institutions may charge service fees for handling
repurchase transactions.
 
                                       A-5
<PAGE>   578
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the Advisor
Class Funds are redeemed at their net asset value next computed after a request
for redemption in proper form (including signature guarantees and other required
documentation for written redemptions) is received by the Transfer Agent or
certain financial institutions (or their designees) who are authorized to accept
redemption orders on behalf of the AIM Funds, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. Orders for the redemption of Advisor Class shares received on any
business day of an AIM Fund will be confirmed at the price determined as of the
close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the proceeds are to be sent to
the address of record. These requirements may be waived or modified upon notice
to shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such 
    

                                       A-6
<PAGE>   579
   

as certain domestic banks, credit unions, securities dealers, or securities
exchanges. The Transfer Agent will also accept signatures with either: (1) a
signature guaranteed with a medallion stamp of the STAMP Program, or (2) a
signature guaranteed with a medallion stamp of the NYSE Medallion Signature
Program, provided that in either event, the amount of the transaction involved
does not exceed the surety coverage amount indicated on the medallion. For
information regarding whether a particular institution or organization qualifies
as an "eligible guarantor institution," an investor should contact the Client
Services Department of AFS.
    
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
  The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
                                       A-7
<PAGE>   580
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                    DISTRIBUTIONS          DISTRIBUTIONS
                                                                        OF NET                 OF NET
                                     DIVIDENDS FROM                    REALIZED               REALIZED
                                     NET INVESTMENT                   SHORT-TERM              LONG-TERM
FUND                                     INCOME                      CAPITAL GAINS          CAPITAL GAINS
- ----                                 --------------                  -------------          -------------
<S>                                  <C>                             <C>                     <C>
AIM BASIC VALUE FUND...............  declared and paid annually         annually                annually
AIM DEVELOPING MARKETS FUND........  declared and paid annually         annually                annually
AIM DOLLAR FUND....................  declared daily; paid monthly       annually                annually
AIM EMERGING MARKETS FUND..........  declared and paid annually         annually                annually
AIM EMERGING MARKETS DEBT FUND.....  declared and paid monthly          annually                annually
AIM EUROPE GROWTH FUND.............  declared and paid annually         annually                annually
AIM GLOBAL CONSUMER PRODUCTS AND
  SERVICES FUND....................  declared and paid annually         annually                annually
AIM GLOBAL FINANCIAL SERVICES
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL GOVERNMENT INCOME
  FUND.............................  declared and paid monthly          annually                annually
AIM GLOBAL GROWTH & INCOME FUND....  declared and paid quarterly        annually                annually
AIM GLOBAL HEALTH CARE FUND........  declared and paid annually         annually                annually
AIM GLOBAL INFRASTRUCTURE FUND.....  declared and paid annually         annually                annually
AIM GLOBAL RESOURCES FUND..........  declared and paid annually         annually                annually
AIM GLOBAL TELECOMMUNICATIONS
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL TRENDS FUND.............  declared and paid annually         annually                annually
AIM INTERNATIONAL GROWTH FUND......  declared and paid annually         annually                annually
AIM JAPAN GROWTH FUND..............  declared and paid annually         annually                annually
AIM LATIN AMERICAN GROWTH FUND.....  declared and paid annually         annually                annually
AIM MID CAP EQUITY FUND............  declared and paid annually         annually                annually
AIM NEW PACIFIC GROWTH FUND........  declared and paid annually         annually                annually
AIM SMALL CAP GROWTH FUND..........  declared and paid annually         annually                annually
AIM STRATEGIC INCOME FUND..........  declared and paid monthly          annually                annually
AIM WORLDWIDE GROWTH FUND..........  declared and paid annually         annually                annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
 
  Dividends on Advisor Class shares of an Advisor Class Fund are expected to be
higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
                                       A-8
<PAGE>   581
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares. With respect to tax-exempt shareholders,
dividends and distributions from the AIM Funds are not subject to federal income
taxation to the extent permitted under the applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the 
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    

  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
   
  TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS DEBT FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM MID CAP
EQUITY FUND, AIM SMALL CAP GROWTH FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL
TAX INFORMATION. Certain states exempt from income taxes dividends paid by
mutual funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
    
 
                                       A-9
<PAGE>   582
   
  AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
    
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each Advisor Class Fund's transfer agent and
dividend payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-10
<PAGE>   583
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                   GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
        ACCOUNT TYPE                    NUMBER OF:                     ACCOUNT TYPE                   NUMBER OF:
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary

      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application

      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors

      Legal Guardian          Ward, Minor or
                              Incompetent

      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
</TABLE>
- --------------------------------------------------------------------------------
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   584
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   585
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
<PAGE>   586
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
ADVISOR CLASS OF
    
 
   
AIM EMERGING MARKETS FUND
    
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
PROSPECTUS
SEPTEMBER 8, 1998
 
This Prospectus contains information about AIM EMERGING MARKETS FUND (the
"Fund"), which is one of several series investment portfolios comprising AIM
Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a diversified portfolio which seeks long-term growth of
capital by investing primarily in equity securities of companies in emerging
markets.
 
The Fund is designed for long term investors and not as a trading vehicle. The
Fund does not represent a complete investment program, nor is it suitable for
all investors. The Fund may invest significantly in lower quality and unrated
foreign government bonds whose credit quality is generally considered the
equivalent of U.S. corporate debt securities commonly known as "junk bonds."
Investments of this type are subject to a greater risk of loss of principal and
interest. An investment in the Fund should be considered speculative and subject
to special risk factors, related primarily to the Fund's investments in emerging
markets. Purchasers should carefully assess the risks associated with an
investment in the Fund.
 
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information dated
September 8, 1998 has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
   
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
    
<PAGE>   587
 
   
    
 
- --------------------------------------------------------------------------------
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     6
  Investment Program...................     6
  Risk Factors.........................     9
  Management...........................    12
  Organization of the Trust............    13
    
   
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-4
  Exchange Privilege...................   A-4
  How to Redeem Shares.................   A-5
  Determination of Net Asset Value.....   A-7
  Dividends, Distributions and Tax
     Matters...........................   A-8
  General Information..................  A-10
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
  The Fund is a diversified series of the Trust.
 
  INVESTMENT OBJECTIVE. The Fund seeks long-term growth of capital.
 
  PRINCIPAL INVESTMENT. The Fund normally invests at least 65% of its total
assets in equity securities of companies in emerging markets.
 
   
  INVESTMENT MANAGERS. The Fund is managed by A I M Advisors, Inc. ("AIM") and
is sub-advised and sub-administered by INVESCO (NY), Inc. (the "Sub-advisor").
AIM and the Sub-advisor and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-advisor are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
AIM was organized in 1976 and, together with its subsidiaries, currently advises
approximately 90 investment company portfolios.
    
 
   
  PURCHASING SHARES. Advisor Class shares are offered through this Prospectus to
(a) trustees or other fiduciaries purchasing shares for employee benefit plans
which are sponsored by organizations which have at least 1,000 employees; (b)
any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment advisor has investment
discretion over such account, and (ii) the account holder pays such person as
compensation for its advice and other services an annual fee of at least 0.50%
on the assets in the account; (c) any account with assets of a least $10,000 if
(i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the
assets in the account; (d) accounts advised by the Sub-advisor or one of the
companies formerly affiliated with the Asset Management Division of
Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the funds in The AIM Family of Funds on May 29, 1998; and
(e) any of the companies affiliated with AMVESCAP PLC. Pursuant to a separate
prospectus, the Fund also offers Class A and Class B shares, which represent
interests in the Fund. The Class A and Class B shares have different
distribution arrangements. Initial investments in Advisor Class shares must be
at least $500 and additional investments must be at least $50. The distributor
of the Advisor Class shares is A I M Distributors, Inc. ("AIM Distributors"),
P.O. Box 4739, Houston, TX 77210-4739. See "How to Purchase Shares."
    
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds").
Advisor Class shares of the Fund may be exchanged for Advisor Class shares of
certain funds in The AIM Family of Funds in the manner and subject to the
policies and charges set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Advisor Class shareholders of the Fund may redeem all or a
portion of their shares at net asset value on any business day. See "How to
Redeem Shares."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters."
    
 
                                        2
<PAGE>   588
 
  RISK FACTORS. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset values will fluctuate, reflecting fluctuations
in the market value of its portfolio holdings.
 
   
  The Fund will invest primarily in foreign securities. Investments in foreign
securities involve risks relating to political and economic developments abroad
and the differences between the regulations to which U.S. and foreign issuers
are subject. Individual foreign economies also may differ favorably or
unfavorably from the U.S. economy. Changes in foreign currency exchange rates
will affect the Fund's net asset value, earnings and gains and losses realized
on sales of securities. Securities of foreign companies may be less liquid and
their prices more volatile than those of securities of comparable U.S.
companies. The Fund may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs. The Fund may invest up
to 20% of its total assets in below investment grade debt securities.
Investments of this type are subject to a greater risk of loss of principal and
interest. See "Investment Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   589
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Advisor Class shares of the Fund are reflected in the following table(1):
 
<TABLE>
<S>                                                            <C>
Shareholder Transaction Costs:
  Maximum sales charge on purchases (as a % of offering        None
     price).................................................
  Sales charges on reinvested distributions to                 None
     shareholders...........................................
  Maximum deferred sales charge (as a % of net asset value     None
     at time of purchase or sale, whichever is less)........
  Redemption charges........................................   None
  Exchange fees.............................................   None
Annual Fund Operating Expenses(2): (as a % of average net
  assets)
  Investment management and administration fees.............   0.98%
  12b-1 distribution and service fees.......................   None
  Other expenses (after reimbursements).....................   0.52%
                                                               ----
          Total Fund Operating Expenses.....................   1.50%
                                                               ====
</TABLE>
 
   
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Fund.
    
   
(2)Expenses are based on the Fund's fiscal year ended October 31, 1997 restated
   to reflect the current expense limits. "Other expenses" include custody,
   transfer agent, legal, audit and other operating expenses. AIM has undertaken
   to limit the Fund's expenses (exclusive of brokerage commissions, taxes,
   interest and extraordinary expenses) to the annual rate of 1.50% of the
   average daily net assets of the Fund's Advisor Class shares. AIM has
   voluntarily agreed to continue this limitation through May 31, 2000. Without
   reimbursements, "Other Expenses" and "Total Fund Operating Expenses" would
   have been 0.70% and 1.68%, respectively, for Advisor Class shares of the
   Fund. See "Management" herein and the Statement of Additional Information for
   more information. Investors purchasing Advisor Class shares through financial
   planners, trust companies, bank trust departments or registered investment
   advisors, or under a "wrap fee" program, will be subject to additional fees
   charged by such entities or by the sponsors of such programs. Where any
   account advised by one of the companies affiliated with AMVESCAP PLC invests
   in Advisor Class shares of the Fund, such account shall not be subject to
   duplicative advisory fees.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                   1 YEAR    3 YEARS    5 YEARS    10 YEARS
                                                   -------   --------   --------   ---------
<S>                                                <C>       <C>        <C>        <C>
Advisor Class Shares.............................    $15       $48        $82        $180
</TABLE>
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND
THE ASSUMPTION IN THE HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY
REGULATION OF THE SEC APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS
NOT A PREDICTION OF AND DOES NOT REPRESENT THE FUND'S PROJECTED OR ACTUAL
PERFORMANCE.
    
 
                                        4
<PAGE>   590
 
- --------------------------------------------------------------------------------
 
FINANCIAL HIGHLIGHTS
 
   
  The tables below provide condensed financial information concerning income and
capital changes for one Advisor Class share of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statements and notes, for the
fiscal year ended October 31, 1997 and for the semi-annual period ended April
30, 1998, have been audited by PricewaterhouseCoopers LLP, independent
accountants, whose report thereon is also included in the Statement of
Additional Information.
    
 
   
                           AIM EMERGING MARKETS FUND
    
   
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
    
 
   
<TABLE>
<CAPTION>
                                                                                ADVISOR CLASS**
                                                              ---------------------------------------------------
                                                              SIX MONTHS                                 JUNE 1,
                                                                ENDED         YEAR ENDED OCTOBER 31,     1995 TO
                                                              APRIL 30,       ----------------------    OCT. 31,
                                                               1998(D)        1997(D)       1996(D)       1995
                                                              ----------      --------      --------    ---------
<S>                                                           <C>             <C>           <C>         <C>
Per Share Operating Performance:
  Net asset value, beginning of period......................   $ 12.27        $ 14.38       $ 13.88      $14.71
                                                               -------        -------       -------      ------
Income from investment operations:
  Net investment income (loss)..............................      0.05*          0.05          0.18        0.08
  Net realized and unrealized gain (loss) on investments....      0.32          (2.05)         0.32       (0.91)
                                                               -------        -------       -------      ------
  Net increase (decrease) from investment operations........      0.37          (2.00)         0.50       (0.83)
                                                               -------        -------       -------      ------
Distributions:
  From net investment income................................        --          (0.03)           --          --
  From net realized gain on investments.....................        --             --            --          --
  In excess of net investment income........................        --          (0.08)           --          --
                                                               -------        -------       -------      ------
         Total distributions................................        --          (0.11)           --          --
                                                               -------        -------       -------      ------
Net asset value, end of period..............................   $ 12.64        $ 12.27       $ 14.38      $13.88
                                                               =======        =======       =======      ======
         Total investment return(c).........................      3.10%(a)     (14.05)%        3.60%      (5.71)%(a)
Ratios and supplemental data:
  Net assets, end of period (in 000's)......................   $ 1,802        $ 1,924       $ 3,139      $1,675
Ratio of net investment income (loss) to average net
  assets....................................................      0.81%(b)       0.49%         1.26%       1.39%(b)
Ratio of operating expenses to average net assets:
  With expense reductions...................................      1.46%(b)       1.60%         1.46%       1.62%(b)
  Without expense reductions................................      2.07%(b)       1.68%         1.58%       1.64%(b)
Ratio of interest expense to average net assets.............      0.33%(b)         --            --          --
Portfolio turnover rate+....................................       117%(b)        150%          104%        114%
Average commission rate per share on paid portfolio
  transactions+.............................................   $0.0016        $0.0015       $0.0040         N/A
</TABLE>
    
 
- ---------------
   
   +  Portfolio turnover, average commission rates and ratio of interest expense
      to average net assets are calculated on the basis of the Fund as a whole
      without distinguishing between the classes of shares issued.
    
   
   *  Includes reimbursement by the Sub-advisor of Fund operating expenses of
      $0.03.
    
   
  **  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
    
   
  (a) Not annualized.
    
   
  (b) Annualized.
    
   
  (c) Total investment return does not include sales charges.
    
   
  (d) These selected per share data were calculated based upon average shares
      outstanding during the period.
    
   
 N/A  Not Applicable.
    
 
                                ---------------
 
   
<TABLE>
<CAPTION>
                                                                                     AVERAGE MONTHLY
                                                                    AVERAGE             NUMBER OF        AVERAGE AMOUNT
                                              AMOUNT OF DEBT    AMOUNT OF DEBT     REGISTRANT'S SHARES    OF DEBT PER
                                              OUTSTANDING AT      OUTSTANDING          OUTSTANDING        SHARE DURING
YEAR ENDED                                    END OF PERIOD    DURING THE PERIOD    DURING THE PERIOD      THE PERIOD
- ----------                                    --------------   -----------------   -------------------   --------------
<S>                                           <C>              <C>                 <C>                   <C>
Six months ended April 30, 1998.............    $3,353,000        $5,242,625           18,290,005           $ 0.287
October 31, 1997............................    $6,184,000        $2,568,627           26,177,077           $0.0981
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed on a daily
basis.
    
 
                                        5
<PAGE>   591
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
 
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVE. The Fund's investment objective is long-term growth of
capital. Under normal circumstances, the Fund seeks its objective by investing
at least 65% of its total assets in equity securities of companies in emerging
markets. The Fund may invest in the following types of equity securities: common
stock, preferred stock, securities convertible into common stock, rights and
warrants to acquire such securities and substantially similar forms of equity
with comparable risk characteristics. There can be no assurance that the Fund
will meet its investment objective.
    
 
   
  INVESTMENT POLICIES. For purposes of the Fund's operations, "emerging markets"
consist of all countries determined by the Sub-advisor to have developing or
emerging economies and markets. These countries generally include every country
in the world except the United States, Canada, Japan, Australia, New Zealand and
most countries located in Western Europe. See "Investment Objective and
Policies" in the Statement of Additional Information for a complete list of all
the countries that the Fund does not consider to be emerging markets.
    
 
  For purposes of the Fund's policy of normally investing at least 65% of its
total assets in equity securities of issuers in emerging markets, the Fund will
consider investment in the following emerging markets:
 
<TABLE>
<S>                 <C>          <C>
Algeria             Hungary      Peru
Argentina           India        Philippines
Bolivia             Indonesia    Poland
Botswana            Israel       Portugal
Brazil              Ivory Coast  Republic of Slovakia
Bulgaria            Jamaica      Russia
Chile               Jordan       Singapore
China               Kazakhstan   Slovenia
Colombia            Kenya        South Africa
Costa Rica          Lebanon      South Korea
Cyprus              Malaysia     Sri Lanka
Czech Republic      Mauritius    Swaziland
Dominican Republic  Mexico       Taiwan
Ecuador             Morocco      Thailand
Egypt               Nicaragua    Turkey
El Salvador         Nigeria      Ukraine
Finland             Oman         Uruguay
Ghana               Pakistan     Venezuela
Greece              Panama       Zambia
Hong Kong           Paraguay     Zimbabwe
</TABLE>
 
                                        6
<PAGE>   592
 
  Although the Fund considers each of the above-listed countries eligible for
investment, it will not be invested in all such markets at all times. Moreover,
investing in some of those markets currently may not be desirable or feasible,
due to the lack of adequate custody arrangements for the Fund's assets, overly
burdensome repatriation and similar restrictions, the lack of organized and
liquid securities markets, unacceptable political risks or for other reasons.
 
   
  As used in this Prospectus, an issuer in an emerging market is an entity: (i)
for which the principal securities trading market is an emerging market, as
defined above; (ii) that (alone or on a consolidated basis) derives 50% or more
of its total revenues from business in emerging markets, provided that, in the
Sub-advisor's view, the value of such issuer's securities will tend to reflect
emerging market developments to a greater extent than developments elsewhere; or
(iii) organized under the laws of, or with a principal office in, an emerging
market.
    
 
  The Fund may also invest up to 35% of its total assets in (i) debt securities
of government or corporate issuers in emerging markets; (ii) equity and debt
securities of issuers in developed countries, including the United States; (iii)
securities of issuers in emerging markets not included in the list of emerging
markets above, if investing therein becomes feasible and desirable subsequent to
the date of this Prospectus; and (iv) cash and money market instruments.
 
   
  The Fund invests in those emerging markets that the Sub-advisor believes have
strongly developing economies and in which the markets are becoming more
sophisticated. In selecting investments, the Sub-advisor seeks to identify those
countries and industries where economic and political factors, including
currency movements, are likely to produce above-average growth rates. The Sub-
advisor then invests in those companies in such countries and industries that
are best positioned and managed to take advantage of these economic and
political factors. The Fund ordinarily will be invested in the securities of
issuers in at least three different emerging markets. In evaluating investments
in securities of issuers in developed markets, the Sub-advisor will consider,
among other things, the business activities of the issuer in emerging markets
and the impact that developments in emerging markets are likely to have on the
issuer.
    
 
   
  The Sub-advisor believes that the issuers of securities in emerging markets
often have sales and earnings growth rates that exceed those in developed
countries and that such growth rates may in turn be reflected in more rapid
share price appreciation. Accordingly, the Sub-advisor believes that the Fund's
policy of investing in equity securities of companies in emerging markets may
enable the Fund to achieve results superior to those produced by mutual funds
with similar objectives that invest solely in equity securities of issuers
domiciled in the United States and/or in other developed markets.
    
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
  INVESTMENTS IN DEBT SECURITIES. The Fund may invest in debt securities of
governmental and corporate issuers in emerging markets. Emerging market debt
securities often are rated below investment grade or not rated by U.S. rating
agencies. The Fund may invest up to 20% of its total assets in debt securities
rated below investment grade. Investment in below investment grade debt
securities involves a high degree of risk and can be speculative. These debt
securities are the equivalent of high yield, high risk bonds, commonly known as
"junk bonds." See "Risk Factors -- Risks Associated with Debt Securities."
 
   
  If the rating of a debt security held by the Fund drops below a minimum rating
considered acceptable by the Sub-advisor, the Fund will dispose of any such
security as soon as practicable and consistent with the best interests of the
Fund and its shareholders.
    
 
  Growth of capital in debt securities may arise as a result of favorable
changes in relative foreign exchange rates, in relative interest rate levels
and/or in the creditworthiness of issuers. The receipt of income from debt
securities owned by the Fund is incidental to its objective of long-term growth
of capital.
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic, or
political conditions. Under a defensive strategy, the Fund temporarily may
invest up to 100% of its assets in cash (U.S. dollars, foreign currencies,
multinational currency units such as Euros) and/or high quality debt securities
or money market instruments of U.S. or foreign issuers. In addition, for
temporary defensive purposes, most or all of its investments may be made in the
United States and denominated in U.S. dollars. To the extent the Fund employs a
temporary defensive strategy, it will not be invested so as to achieve directly
its investment objective. In addition, pending investment of proceeds from new
sales of Fund shares or to meet ordinary daily cash needs, the Fund temporarily
may hold cash (U.S. dollars, foreign currencies or multinational currency units)
and may invest any portion of its assets in money market instruments. For a
description of money market instruments in which the Fund may invest, see
"Temporary Defensive Strategies" in the "Investment Objectives and Policies"
section of the Statement of Additional Information.
    
 
   
  INVESTMENT IN OTHER INVESTMENT COMPANIES OR VEHICLES. The Fund may be able to
invest in certain countries solely or primarily through governmentally
authorized investment vehicles or companies, some of which may be investment
vehicles or companies that are advised by the Sub-advisor or its affiliates
("Affiliated Funds"). Pursuant to the Investment Company Act of 1940 (the "1940
Act"), the Fund generally may invest up to 10% of its total assets in the
aggregate in shares of other investment companies and up to 5% of its total
assets in any one investment company, as long as each investment does not
represent more than 3% of the outstanding voting stock of the acquired
investment company at the time of investment.
    
 
                                        7
<PAGE>   593
 
   
  Investment in other investment companies may involve the payment of
substantial premiums above the value of such investment companies' portfolio
securities and is subject to limitations under the 1940 Act and market
availability. The Fund does not intend to invest in such investment companies
unless, in the judgment of the Sub-advisor, the potential benefits of such
investment justify the payment of any applicable premium or sales charge. As a
shareholder in an investment company, the Fund would bear its ratable share of
that investment company's expenses, including its advisory and administration
fees. At the same time the Fund would continue to pay its own management fees
and other expenses. AIM and the Sub-advisor will waive their advisory fees to
the extent that the Fund invests in an Affiliated Fund.
    
 
   
  SECURITIES LENDING. The Fund may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows a
Fund to retain ownership of the securities loaned and, at the same time,
enhances the Fund's total return. At all times a loan is outstanding, the Fund's
borrower must maintain with the Fund's custodian collateral consisting of cash,
U.S. government securities or certain irrevocable letters of credit equal to at
least the value of the borrowed securities plus any accrued interest or such
other collateral as permitted by the Fund's investment program and regulatory
agencies, and as approved by the Board. The Fund limits its loans of portfolio
securities to an aggregate of 30% of the value of its total assets, measured at
the time any such loan is made. The risks in lending portfolio securities, as
with other extensions of secured credit, consist of possible delays in receiving
additional collateral or in recovery of the loaned securities and possible loss
of rights in the collateral should the borrower fail financially.
    
 
   
  PRIVATIZATIONS. The governments in some emerging markets have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Fund in privatizations in appropriate
circumstances. In certain emerging markets, the ability of foreign entities such
as the Fund to participate in privatizations may be limited by local law, or the
terms on which the Fund may be permitted to participate may be less advantageous
than those afforded local investors. There can be no assurance that governments
in emerging markets will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
    
 
  BORROWING. It is a fundamental policy of the Fund that it may borrow an amount
up to 33 1/3% of its total assets in order to meet redemption requests.
Borrowing may cause greater fluctuation in the value of the Fund's shares than
would be the case if the Fund did not borrow, but also may enable the Fund to
retain favorable securities positions rather than liquidating such positions to
meet redemptions. It is a nonfundamental policy of the Fund that the Fund will
not purchase securities during times when outstanding borrowings represent 5% or
more of the Fund's total assets.
 
  WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities and forward commitments only with the intention
of actually receiving or delivering the securities, as the case may be. No
income accrues on securities that have been purchased pursuant to a forward
commitment or on a when-issued basis prior to delivery to the Fund. If the Fund
disposes of the right to acquire a when-issued security prior to its acquisition
or disposes of its right to deliver or receive against a forward commitment, it
may incur a gain or loss. At the time the Fund enters into a transaction on a
when-issued or forward commitment basis, the Fund will segregate cash or liquid
securities equal to the value of the when-issued or forward commitment
securities with its custodian bank and will mark to market daily such assets.
There is a risk that the securities may not be delivered and that the Fund may
incur a loss.
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment risk normally associated with the
portfolio. These instruments are often referred to as "derivatives," which may
be defined as financial instruments whose performance is derived, at least in
part, from the performance of another asset (such as a security, currency or an
index of securities). The Fund may enter into such instruments up to the full
value of its portfolio assets. See "Risk Factors -- Options, Futures and Foreign
Currency Transactions" herein and "Options, Futures and Currency Strategies" in
the Statement of Additional Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on such futures
contracts to hedge against movements in exchange rates.
 
   
  Only a limited market, if any, currently exists for options and futures
transactions relating to currencies of most emerging markets, to securities
denominated in such currencies or to securities of issuers domiciled or
principally engaged in business in such emerging markets. To the extent that
such a market does not exist, the Sub-advisor may not be able to effectively
hedge its investment in such markets.
    
 
                                        8
<PAGE>   594
 
   
  The Fund may purchase and sell put and call options on securities to hedge
against the risk of fluctuations in the prices of securities held by the Fund or
that the Sub-advisor intends to include in the Fund's portfolio. The Fund also
may purchase and sell put and call options on indices to hedge against overall
fluctuations in the securities markets generally or in a specific market sector.
    
 
  Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market decline or a decline in a specific market sector that could
adversely affect the Fund's portfolio. The Fund also may purchase stock index
futures contracts and purchase call options or write put options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisitions. The Fund
may use interest rate futures contracts and options thereon to hedge the debt
portion of its portfolios against changes in the general level of interest
rates.
 
  OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations as
fundamental policies which also may not be changed without shareholder approval.
A complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information may be changed by the Trust's Board of Trustees without shareholder
approval. If a percentage restriction on investment or utilization of assets in
an investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
 
   
  The Fund is authorized to engage in Short Sales, although it currently has no
intention of doing so, and may purchase American Depositary Receipts, American
Depositary Shares, Global Depositary Receipts and European Depositary Receipts.
See "Short Sales" and "Depositary Receipts," respectively, in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
    
 
- --------------------------------------------------------------------------------
 
RISK FACTORS
 
   
  GENERAL. There is no assurance that the Fund will achieve its investment
objective. Investing in the Fund entails a substantial degree of risk and an
investment in the Fund should be considered speculative. Investors are strongly
advised to consider carefully the special risks involved in emerging markets,
which are in addition to the usual risks of investing in developed markets
around the world.
    
 
  The Fund's net asset value will fluctuate, reflecting fluctuations in the
market value of its portfolio positions and its net currency exposure. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. The value of equity securities held by the Fund will fluctuate
in response to general market and economic developments, as well as developments
affecting the particular issuers of such securities.
 
  Investing in emerging markets involves risks relating to potential political
and economic instability within such markets and the risks of expropriation,
nationalization, confiscation of assets and property or the imposition of
restrictions on foreign investment and on repatriation of capital invested. In
the event of such expropriation, nationalization or other confiscation, the Fund
could lose its entire investment in that market.
 
  Economies in individual emerging markets may differ favorably or unfavorably
from the U.S. economy in such respects as growth of gross domestic product,
rates of inflation, currency depreciation, capital reinvestment, resource
self-sufficiency and balance of payments positions. Many emerging market
countries have experienced high rates of inflation for many years. Inflation and
rapid fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain countries with
emerging markets.
 
  Emerging markets generally are dependent heavily upon international trade and,
accordingly, have been and may continue to be affected adversely by trade
barriers, exchange controls, managed adjustments in relative currency values and
other protectionist measures imposed or negotiated by the countries with which
they trade.
 
  Disclosure and regulatory standards in many respects are less stringent than
in the U.S. and other major markets. There also may be a lower level of
monitoring and regulation of emerging markets and the activities of investors in
such markets, and enforcement of existing regulations has been extremely
limited. In addition, the securities of non-U.S. issuers generally are not
registered with the SEC, nor are the issuers thereof usually subject to the
SEC's reporting requirements. Accordingly, there may be less publicly available
information about foreign securities and issuers than is available with respect
to U.S. securities and issuers. Foreign companies generally are not subject to
uniform accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to U.S. companies. The Fund's net
investment income and/or capital gains from its foreign investment activities
may be subject to non-U.S. withholding taxes.
 
                                        9
<PAGE>   595
 
  In addition, brokerage commissions, custodial services and other costs
relating to investment in foreign markets generally are more expensive than in
the United States, particularly with respect to emerging markets. Such markets
have different settlement and clearance procedures. In certain markets there
have been times when settlements have been unable to keep pace with the volume
of securities transactions, making it difficult to conduct such transactions.
The inability of the Fund to make intended securities purchases due to
settlement problems could cause the Fund to miss attractive investment
opportunities. Inability to dispose of a portfolio security caused by settlement
problems could result either in losses to the Fund due to subsequent declines in
value of the portfolio security or, if the Fund has entered into a contract to
sell the security, could result in possible liability to the purchaser.
 
  The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
developed countries. The risk also exists that an emergency situation may arise
in one or more emerging markets as a result of which trading of securities may
cease or may be substantially curtailed and prices for the Fund's portfolio
securities in such markets may not be readily available. Section 22(e) of the
1940 Act permits a registered investment company, such as the Fund, to suspend
redemption of its shares for any period during which an emergency exists, as
determined by the SEC. Accordingly, when the Fund believes that circumstances
dictate, it will promptly apply to the SEC for a determination that such an
emergency exists within the meaning of Section 22(e) of the 1940 Act. During the
period commencing from the Fund's identification of such conditions until the
date of any SEC action, the Fund's portfolio securities in the affected markets
will be valued at fair value determined in good faith by or under the direction
of the Trust's Board of Trustees.
 
  RISKS ASSOCIATED WITH DEBT SECURITIES. The value of the debt securities held
by the Fund generally will vary inversely with market interest rates. If
interest rates in a market fall, the Fund's debt securities issued by
governments or companies in that market ordinarily will increase in value. If
market interest rates increase, however, the debt securities owned by the Fund
in that market will likely decrease in value.
 
  The Fund may invest up to 20% of its total assets in debt securities rated
below investment grade. Such investments involve a high degree of risk.
 
  Debt rated Baa by Moody's Investors Service, Inc. ("Moody's") is considered by
Moody's to have speculative characteristics. Debt rated BB, B, CCC, CC or C by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), and
debt rated Ba, B, Caa, Ca or C by Moody's is regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. While such
lower quality debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions. Debt rated C by Moody's or S&P is the lowest rated debt that is not
in default as to principal or interest and such issues so rated can be regarded
as having extremely poor prospects of ever attaining any real investment
standing. Lower quality debt securities are also generally considered to be
subject to greater risk than securities with higher ratings with regard to a
deterioration of general economic conditions. These foreign debt securities are
the equivalent of high yield, high risk bonds, commonly known as "junk bonds."
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. Similarly, certain emerging market governments that issue lower
quality debt securities are among the largest debtors to commercial banks,
foreign governments and supranational organizations such as the World Bank, and
may not be able or willing to make principal and/or interest repayments as they
come due. The risk of loss due to default by the issuer is significantly greater
for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities frequently have call or buy-back features which
would permit an issuer to call or repurchase the security from the Fund. In
addition, the Fund may have difficulty disposing of lower quality securities
because they may have a thin trading market. There may be no established retail
secondary market for many of these securities, and the Fund anticipates that
such securities could be sold only to a limited number of dealers or
institutional investors. The lack of a liquid secondary market also may have an
adverse impact on market prices of such instruments and may make it more
difficult for the Fund to obtain accurate market quotations for purposes of
valuing the Fund's portfolio. The Fund may also acquire lower quality debt
securities during an initial underwriting or which are sold without registration
under applicable securities laws. Such securities involve special considerations
and risks.
 
                                       10
<PAGE>   596
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Fund may invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic recession.
 
  The Fund may also incur additional expenses to the extent it is required to
seek recovery upon a default in the payment of principal or interest on its
portfolio holdings, and the Fund may have limited legal recourse in the event of
a default. Debt securities issued by governments in emerging markets can differ
from debt obligations issued by private entities in that remedies from defaults
generally must be pursued in the courts of the defaulting government, and legal
recourse is therefore somewhat diminished. Political conditions, in terms of a
government's willingness to meet the terms of its debt obligations, also are of
considerable significance. There can be no assurance that the holders of
commercial bank debt may not contest payments to the holders of debt securities
issued by governments in emerging markets in the event of default by the
governments under commercial bank loan agreements.
 
  ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "Illiquid
Securities."
 
  Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at a price
lower than similar securities that are liquid.
 
  CURRENCY RISK. Because the Fund may invest substantially in securities
denominated in currencies other than the U.S. dollar, and since the Fund may
hold foreign currencies, the Fund will be affected favorably or unfavorably by
exchange control regulations or changes in the exchange rates between such
currencies and the U.S. dollar. Changes in currency exchange rates will
influence the value of the Fund's shares, and also may affect the value of
dividends and interest earned by the Fund and gains and losses realized by the
Fund. Currencies generally are evaluated on the basis of fundamental economic
criteria (e.g., relative inflation and interest rate levels and trends, growth
rate forecasts, balance of payments status and economic policies) as well as
technical and political data. Exchange rates are determined by the forces of
supply and demand in the foreign exchange markets. These forces are affected by
the international balance of payments and other economic and financial
conditions, government intervention, speculation and other factors. If the
currency in which a security is denominated appreciates against the U.S. dollar,
the dollar value of the security will increase. Conversely, a decline in the
exchange rate of the currency would adversely affect the value of the security
expressed in dollars.
 
  Many of the currencies of emerging market countries have experienced steady
devaluations relative to the U.S. dollar, and major devaluations have
historically occurred in certain countries. Any devaluations in the currencies
in which the Fund's portfolio securities are denominated may have a detrimental
impact on the Fund.
 
  Some countries also may have fixed currencies whose values against the U.S.
dollar are not independently determined. In addition, there is a risk that
certain countries may restrict the free conversion of their currencies into
other currencies. Further, certain currencies may not be internationally traded.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
   
  OPTIONS, FUTURES AND FOREIGN CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions, the
Fund might not enter into any such transactions. Options, futures and foreign
currency transactions involve certain risks, which include: (1) dependence on
the Sub-advisor's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets and movements in
interest rates and currency markets; (2) imperfect correlation, or even no
correlation, between movements in the price of forward contracts, options,
futures contracts or options thereon and movements in the price of the currency
or security hedged or used for cover; (3) the fact that skills and techniques
needed to trade options, futures contracts and options thereon or to use forward
currency contracts are different from those needed to select the securities in
which the Fund invests; (4) lack of assurance that a liquid secondary market
will exist for any particular option, futures contract or option thereon at any
particular time; (5) the possible loss of principal under certain conditions;
and (6) the possible inability of the Fund to purchase or sell a portfolio
security at a time when it would otherwise be favorable for it to do so, or the
possible need for the Fund to sell a security at a disadvantageous time, due to
the need for the Fund to maintain "cover" or to set aside securities in
connection with hedging transactions.
    
 
                                       11
<PAGE>   597
 
- --------------------------------------------------------------------------------
 
MANAGEMENT
 
   
  The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust on the one side and persons or companies furnishing services
to the Fund on the other, including the investment management and administration
agreement with AIM, the investment sub-advisory and sub-administration agreement
between AIM and the Sub-advisor, the agreements with AIM Distributors regarding
distribution of the Fund's shares, the custody agreement and the transfer agency
agreement. The day to day operations of the Fund are delegated to the officers
of the Trust, subject always to the investment objective and policies of the
Fund and to the general supervision of the Trust's Board of Trustees. See
"Trustees and Executive Officers" in the Statement of Additional Information for
information on the Trust's Board of Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment manager and administrator include, but are
not limited to, determining the composition of the Fund's portfolio and placing
orders to buy, sell or hold particular securities; furnishing corporate officers
and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operation. For these services,
the Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on its average daily net assets, at the annualized rate
of 0.975% on the first $500 million, 0.95% on the next $500 million, 0.925% on
the next $500 million, and 0.90% on amounts thereafter. Out of the aggregate
fees payable by the Fund, AIM pays the Sub-advisor sub-advisory and
sub-administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administration fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-advisor, AIM Distributors or other agents. AIM has
undertaken to limit each Fund's expenses (exclusive of brokerage commissions,
taxes, interest and extraordinary expenses) to the annual rate of 1.50% the
average daily net assets of the Fund's Advisor Class shares.
    
 
   
  The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-advisor (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement (the "Advisory Agreement"). AIM was organized in 1976
and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Fund pursuant to an investment sub-advisory and
sub-administration agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of the Sub-advisor,
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included the Sub-advisor and
certain other affiliates. As a result of this transaction, the Sub-advisor is
now an indirect wholly-owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Fund, the Sub-advisor employs a team
approach, taking advantage of its investment resources around the world.
    
 
  The investment professionals primarily responsible for the portfolio
management of the Fund are as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                       BUSINESS EXPERIENCE
NAME/OFFICE                    THE FUND                               PAST FIVE YEARS
- -----------              --------------------                       -------------------
<S>                     <C>                      <C>
Francesco Bertoni       Portfolio Manager        Portfolio Manager for the Sub-advisor since June 1998.
London                  since 1998               Investment Director of INVESCO Asset Management Ltd.
                                                 (London) ("INVESCO London"), an affiliate of the
                                                 Sub-advisor, since 1994. Portfolio Manager for INVESCO
                                                 London from 1990 to 1994.
Christine Rowley        Portfolio Manager        Portfolio Manager for the Sub-advisor, GT Asset Management
London                  since 1997               PLC (London) and INVESCO GT Asset Management Asia Ltd.
                                                 (Hong Kong), affiliates of the Sub-advisor, since 1992.
</TABLE>
    
 
                                       12
<PAGE>   598
 
   
  In placing securities orders for the Fund's portfolio transactions, the
Sub-advisor seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-advisor may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions may be executed
through affiliates of AIM or the Sub-advisor. High portfolio turnover (over
100%) involves correspondingly greater brokerage commissions and other
transaction costs that the Fund will bear directly and could result in the
realization of net capital gains which would be taxable when distributed to
shareholders. See "Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement (the
"Distribution Agreement"), with AIM Distributors, a registered broker-dealer and
a wholly owned subsidiary of AIM, to act as the distributor of the Advisor Class
shares of the Fund. Certain Trustees and officers of the Trust are affiliated
with AIM Distributors.
    
 
  The Distribution Agreement provide AIM Distributors with the exclusive right
to distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
 
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST
    
 
   
  The Trust was organized as a Delaware business trust on May 7, 1998. On
September 8, 1998, the Trust acquired the assets of and assumed the liabilities
of AIM Investment Funds, Inc., a Maryland corporation. The Fund constitutes one
of the thirteen separate and distinct series portfolios of the Trust. From time
to time, the Trust may establish other funds, each corresponding to a distinct
investment portfolio and a distinct series of the Trust's shares of beneficial
interest. Shares of each fund are entitled to one vote per share (with
proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the fund with other shares of the
Fund and is entitled to such other shares of the Fund and is entitled to such
dividends and distributions out of the income earned and gain realized on the
assets belonging to the Fund as may be declared by the Board of Trustees. Each
share of the Fund is equal in earnings, assets and voting privileges except that
each class normally has exclusive voting rights with respect to its distribution
plan and bears the expenses, if any, related to the distribution of its shares.
Shares of the Fund, when issued, are fully paid and nonassessable.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
    
   
    
 
                                       13
<PAGE>   599
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
                  TO THE AIM FAMILY OF FUNDS--Register Mark--
                            FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several of
which offer Advisor Class shares. Only Advisor Class shares are offered through
this Prospectus. Advisor Class shares are available from the following funds
(collectively, the "Advisor Class Funds"):
 
   
<TABLE>
            <S>                                           <C>
            AIM BASIC VALUE FUND                          AIM GLOBAL INFRASTRUCTURE FUND
            AIM DEVELOPING MARKETS FUND                   AIM GLOBAL RESOURCES FUND
            AIM DOLLAR FUND                               AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM EMERGING MARKETS FUND                     AIM GLOBAL TRENDS FUND
            AIM EMERGING MARKETS DEBT FUND                AIM INTERNATIONAL GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM JAPAN GROWTH FUND
            AIM GLOBAL CONSUMER PRODUCTS                  AIM LATIN AMERICAN GROWTH FUND
              AND SERVICES FUND                           AIM MID CAP EQUITY FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM NEW PACIFIC GROWTH FUND
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM SMALL CAP GROWTH FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM STRATEGIC INCOME FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WORLDWIDE GROWTH FUND
</TABLE>
    
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
 
  HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through Financial
Advisers (as defined herein) who have entered into agreements with A I M
Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor Class
shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
 
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment for
Advisor Class shares is $500.
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
                                       A-1
<PAGE>   600
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Advisor Class shares of any Advisor Class Funds not named on the cover of this
Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                                                     Shareholder Name, Shareholder Account Number 
                   OBI:                              (70 character limit)
</TABLE>
 
  It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
 
  HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
  In addition to the Advisor Class Funds, the AIM Funds consist of the following
funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR
LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND,
AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BLUE
CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION
FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED MATURITY TREASURY
FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM SELECT GROWTH FUND,
AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM VALUE FUND and AIM
WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM
LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with the Advisor Class
Funds, the "Multiple Class Funds." For information on purchasing any of the AIM
Funds and to receive a prospectus, please call (800) 347-4246. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
  Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
 
  Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee'
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares. Investors in wrap fee programs and
advisory accounts may only purchase Advisor Class shares through Financial
Advisers who have entered into agreements with AIM Distributors. Investors may
be charged a fee by their agents or brokers for effecting transactions in
Advisor Class shares.
 
  AIM Distributors may, from time to time, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives
 
                                       A-2
<PAGE>   601
 
and their families to places within or outside the United States. The total
amount of such additional bonus payments or other consideration shall not exceed
0.25% of the public offering price of the shares sold. Any such bonus or
incentive programs will not change the price paid by investors for the purchase
of the applicable AIM Fund's shares or the amount that any particular AIM Fund
will receive as proceeds from such sales. Dealers may not use sales of the AIM
Funds' shares to qualify for any incentives to the extent that such incentives
may be prohibited by the laws of any state.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND uses
the amortized cost method of valuing the securities it holds and rounds its per
share net asset value to the nearest whole cent, it is anticipated that the net
asset value of the shares of that fund will remain constant at $1.00 per share.
However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00 net
asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
                                       A-3
<PAGE>   602
 
- --------------------------------------------------------------------------------
 
   
SPECIAL PLANS
    
 
  Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
 
   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance to $5,000 to
establish and maintain an allocation across a range of Advisor Class Funds. The
Program automatically rebalances holdings of Advisor Class Funds to the
established allocation on a periodic basis. Under the Program, a shareholder may
predesignate, on a percentage basis, how the total value of his or her holdings
in a minimum of two, and a maximum of ten, Advisor Class Funds ("Personal
Portfolio") is to be rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more Advisor Class Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other Advisor Class Funds in the
shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the
Advisor Class Fund(s) in a shareholder's Personal Portfolio have appreciated
during a rebalancing period, the Program will result in shares of Advisor Class
Fund(s) that have appreciated most during the period being exchanged for shares
of Advisor Class Fund(s) that have appreciated least. SUCH EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends, Distributions and Tax
Matters -- Dividends and Distributions." Participation in the Program does not
assure that a shareholder will profit from purchases under the Program nor does
it prevent or lessen losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Advisor Class Fund would be 2%
or less. In predesignating percentages, shareholders must use whole percentages
and totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an Advisor Class Fund's
shares. The AIM Funds and AIM Distributors reserve the right to modify, suspend,
or terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which Advisor
Class Funds or what allocation percentages are assigned to the Program, unless
canceled or changed in writing and received by the Transfer Agent in good order
at least five business days prior to the rebalancing date. Certain
dealers/financial institutions may charge a fee for establishing accounts
relating to the Program. Investors should contact their dealers/financial
institutions or AIM Distributors for more information.
    
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the Advisor
Class Funds may participate in an exchange privilege as described below. AIM
Distributors acts as distributor for the Advisor Class Funds which represent a
range of different investment objectives and policies.
 
  Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
 
  Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
 
  An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor
 
                                       A-4
<PAGE>   603
 
Class Fund acquired through exchange must be qualified for sale in the state in
which the shareholder resides; (c) the exchange must be made between accounts
having identical registrations and addresses; (d) the full amount of the
purchase price for the shares being exchanged must have already been received by
the fund; (e) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or Form
W-9 (certifying exempt status) must have been received by the fund; (f) newly
acquired shares (through either an initial or subsequent investment) are held in
an account for at least ten business days, and all other shares are held in an
account for at least one day, prior to the exchange; and (g) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the Advisor Class Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
  Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but under unusual market
conditions such purchases may be delayed for up to five business days if it is
determined that an Advisor Class Fund would be materially disadvantaged by an
immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into an Advisor Class Fund that declares daily dividends ("Dividends,
Distributions and Tax Matters -- Dividends and Distributions," below), and the
release of the exchange proceeds is delayed for the foregoing five-day period,
such shareholder will not begin to accrue dividends until the sixth business day
after the exchange. Advisor Class shares purchased by check may not be exchanged
until it is determined that the check has cleared, which may take up to ten
business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. A shareholder may give exchange information to his Financial
Adviser. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the Advisor Class Funds. AIM Distributors reserves the right to impose
conditions on dealers or investment advisors who make telephone exchanges of
shares of the Advisor Class Funds, including the condition that any such dealer
or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/financial institutions may charge service fees for handling
repurchase transactions.
 
                                       A-5
<PAGE>   604
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the Advisor
Class Funds are redeemed at their net asset value next computed after a request
for redemption in proper form (including signature guarantees and other required
documentation for written redemptions) is received by the Transfer Agent or
certain financial institutions (or their designees) who are authorized to accept
redemption orders on behalf of the AIM Funds, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. Orders for the redemption of Advisor Class shares received on any
business day of an AIM Fund will be confirmed at the price determined as of the
close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the proceeds are to be sent to
the address of record. These requirements may be waived or modified upon notice
to shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such 
    

                                       A-6
<PAGE>   605
   

as certain domestic banks, credit unions, securities dealers, or securities
exchanges. The Transfer Agent will also accept signatures with either: (1) a
signature guaranteed with a medallion stamp of the STAMP Program, or (2) a
signature guaranteed with a medallion stamp of the NYSE Medallion Signature
Program, provided that in either event, the amount of the transaction involved
does not exceed the surety coverage amount indicated on the medallion. For
information regarding whether a particular institution or organization qualifies
as an "eligible guarantor institution," an investor should contact the Client
Services Department of AFS.
    
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
  The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
                                       A-7
<PAGE>   606
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                    DISTRIBUTIONS          DISTRIBUTIONS
                                                                        OF NET                 OF NET
                                     DIVIDENDS FROM                    REALIZED               REALIZED
                                     NET INVESTMENT                   SHORT-TERM              LONG-TERM
FUND                                     INCOME                      CAPITAL GAINS          CAPITAL GAINS
- ----                                 --------------                  -------------          -------------
<S>                                  <C>                             <C>                     <C>
AIM BASIC VALUE FUND...............  declared and paid annually         annually                annually
AIM DEVELOPING MARKETS FUND........  declared and paid annually         annually                annually
AIM DOLLAR FUND....................  declared daily; paid monthly       annually                annually
AIM EMERGING MARKETS FUND..........  declared and paid annually         annually                annually
AIM EMERGING MARKETS DEBT FUND.....  declared and paid monthly          annually                annually
AIM EUROPE GROWTH FUND.............  declared and paid annually         annually                annually
AIM GLOBAL CONSUMER PRODUCTS AND
  SERVICES FUND....................  declared and paid annually         annually                annually
AIM GLOBAL FINANCIAL SERVICES
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL GOVERNMENT INCOME
  FUND.............................  declared and paid monthly          annually                annually
AIM GLOBAL GROWTH & INCOME FUND....  declared and paid quarterly        annually                annually
AIM GLOBAL HEALTH CARE FUND........  declared and paid annually         annually                annually
AIM GLOBAL INFRASTRUCTURE FUND.....  declared and paid annually         annually                annually
AIM GLOBAL RESOURCES FUND..........  declared and paid annually         annually                annually
AIM GLOBAL TELECOMMUNICATIONS
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL TRENDS FUND.............  declared and paid annually         annually                annually
AIM INTERNATIONAL GROWTH FUND......  declared and paid annually         annually                annually
AIM JAPAN GROWTH FUND..............  declared and paid annually         annually                annually
AIM LATIN AMERICAN GROWTH FUND.....  declared and paid annually         annually                annually
AIM MID CAP EQUITY FUND............  declared and paid annually         annually                annually
AIM NEW PACIFIC GROWTH FUND........  declared and paid annually         annually                annually
AIM SMALL CAP GROWTH FUND..........  declared and paid annually         annually                annually
AIM STRATEGIC INCOME FUND..........  declared and paid monthly          annually                annually
AIM WORLDWIDE GROWTH FUND..........  declared and paid annually         annually                annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
 
  Dividends on Advisor Class shares of an Advisor Class Fund are expected to be
higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
                                       A-8
<PAGE>   607
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares. With respect to tax-exempt shareholders,
dividends and distributions from the AIM Funds are not subject to federal income
taxation to the extent permitted under the applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the 
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    

  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
   
  TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS DEBT FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM MID CAP
EQUITY FUND, AIM SMALL CAP GROWTH FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL
TAX INFORMATION. Certain states exempt from income taxes dividends paid by
mutual funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
    
 
                                       A-9
<PAGE>   608
   
  AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
    
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each Advisor Class Fund's transfer agent and
dividend payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-10
<PAGE>   609
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                   GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
        ACCOUNT TYPE                    NUMBER OF:                     ACCOUNT TYPE                   NUMBER OF:
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary

      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application

      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors

      Legal Guardian          Ward, Minor or
                              Incompetent

      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
</TABLE>
- --------------------------------------------------------------------------------
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   610
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   611
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
<PAGE>   612
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
   
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
    
 
   
ADVISOR CLASS OF
    
 
AIM GLOBAL CONSUMER PRODUCTS
AND SERVICES FUND
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
   
PROSPECTUS
    
   
SEPTEMBER 8, 1998
    
 
   
This Prospectus contains information about AIM GLOBAL CONSUMER PRODUCTS AND
SERVICES FUND (the "Fund"), which is one of several series investment portfolios
comprising AIM Investment Funds (the "Trust"), an open-end, series, management
investment company. The Fund is a diversified portfolio which seeks long-term
capital growth by investing all of its investable assets in the Global Consumer
Products and Services Portfolio (the "Portfolio"), which, in turn, invests
primarily in equity securities of companies throughout the world that
manufacture, market, retail or distribute consumer products and services.
    
 
The Portfolio's investment objective is identical to that of the Fund. The
investment experience of the Fund will correspond directly with the investment
experience of the Portfolio.
 
   
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or by calling (800)
347-4246. The SEC maintains a Web site at http://www.sec.gov that contains the
Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   613
 
- --------------------------------------------------------------------------------
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     6
  Investment Program...................     6
  Risk Factors.........................     9
  Management...........................    11
  Organization of the Trust and
     Portfolio.........................    13
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
    
   
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-4
  Exchange Privilege...................   A-4
  How to Redeem Shares.................   A-5
  Determination of Net Asset Value.....   A-7
  Dividends, Distributions and Tax
     Matters...........................   A-8
  General Information..................  A-10
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND AND THE PORTFOLIO
    
 
  The Fund is a diversified series of the Trust. The Portfolio is a diversified
series of Global Investment Portfolio.
 
  INVESTMENT OBJECTIVES. The Fund seeks long-term capital growth.
 
   
  PRINCIPAL INVESTMENTS. The Fund invests all of its investable assets in the
Portfolio, which, in turn, invests primarily in equity securities of companies
throughout the world that manufacture, market, retail or distribute consumer
products and services.
    
 
   
  INVESTMENT MANAGERS. The Portfolio is managed by A I M Advisors, Inc. ("AIM")
and is sub-advised and sub-administered by INVESCO (NY), Inc. (the
"Sub-advisor"). AIM and the Sub-advisor and their worldwide asset management
affiliates provide investment management and/or administrative services to
institutional, corporate and individual clients around the world. AIM and the
Sub-advisor are both indirect wholly owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC and its subsidiaries are an independent investment management group
that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing
presence in Asia. AIM was organized in 1976 and, together with its subsidiaries,
currently advises approximately 90 investment company portfolios.
    
 
   
  PURCHASING SHARES. Advisor Class shares are offered through this Prospectus to
(a) trustees or other fiduciaries purchasing shares for employee benefit plans
which are sponsored by organizations which have at least 1,000 employees; (b)
any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment advisor has investment
discretion over such account, and (ii) the account holder pays such person as
compensation for its advice and other services an annual fee of at least 0.50%
on the assets in the account; (c) any account with assets of a least $10,000 if
(i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the
assets in the account; (d) accounts advised by the Sub-advisor or one of the
companies formerly affiliated with the Asset Management Division of
Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the funds in The AIM Family of Funds that are sub-advised
by the Sub-advisor ("AIM Funds") on May 29, 1998; (e) any of the companies
composing or affiliated with AMVESCAP PLC; and (f) AIM Global Trends Fund.
Pursuant to a separate prospectus, the Fund also offers Class A and Class B
shares, which represent interests in the Fund. The Class A and Class B shares
have different distribution arrangements. Initial investments in Advisor Class
shares must be at least $500 and additional investments must be at least $50.
The distributor of the Advisor Class shares is A I M Distributors, Inc. ("AIM
Distributors"), P.O. Box 4739, Houston, TX 77210-4739. See "How to Purchase
Shares."
    
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds or the "AIM Funds"),
Advisor Class shares of the Fund may be exchanged for Advisor Class shares of
certain funds in The AIM Family of Funds in the manner and subject to the
policies and charges set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Advisor Class shareholders of the Fund may redeem all or a
portion of their shares at net asset value on any business day. See "How to
Redeem Shares."
 
                                        2
<PAGE>   614
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters."
    
 
   
  RISK FACTORS. There is no assurance that the Fund or the Portfolio will
achieve its investment objective. The Fund's net asset value will fluctuate,
reflecting fluctuations in the market value of the Portfolio's portfolio
holdings. The Portfolio's policy of concentrating its investments in companies
in the consumer products and services industries may cause the Fund's net asset
value to fluctuate more than if it invested in a greater number of industries.
The Portfolio may invest in foreign securities. Investments in foreign
securities involve risks relating to political and economic developments abroad
and the differences between the regulations to which U.S. and foreign issuers
are subject. Individual foreign economies also may differ favorably or
unfavorably from the U.S. economy. Changes in foreign currency exchange rates
will affect the Fund's net asset value, earnings and gains and losses realized
on sales of securities. Securities of foreign companies may be less liquid and
their prices more volatile than those of securities of comparable U.S.
companies. The Portfolio may engage in certain foreign currency, options and
futures transactions to attempt to hedge against the overall level of investment
and currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs. The Portfolio may
invest up to 20% of its total assets in below investment grade debt securities.
Investments of this type are subject to a greater risk of loss of principal and
interest. See "Investment Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   615
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Advisor Class shares of the Fund are reflected in the following table(1):
 
<TABLE>
<S>                                                           <C>
Shareholder Transaction Costs:
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................  None
  Sales charges on reinvested distributions to
     shareholders...........................................  None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........  None
  Redemption charges........................................  None
  Exchange fees.............................................  None
Annual Fund Operating Expenses(2): (as a % of average net
  assets)
  Investment management and administration fees.............  0.98%
  12b-1 distribution and service fees.......................  None
  Other expenses (after reimbursements).....................  0.51%
                                                              ----
          Total Fund Operating Expenses.....................  1.49%
                                                              ====
</TABLE>
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                            1 YEAR   3 YEARS   5 YEARS   10 YEARS
                                                            ------   -------   -------   --------
<S>                                                         <C>      <C>       <C>       <C>
Advisor Class Shares......................................   $15       $47       $82       $179
</TABLE>
    
 
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Fund.
 
   
(2)Expenses are based on the Fund's fiscal year ended October 31, 1997 restated
   to reflect AIM's undertaking to limit the Fund's expenses (exclusive of
   brokerage commissions, taxes, interest and extraordinary expenses) to the
   annual rate of 1.50% of the average daily net assets of the Fund's Advisor
   Class shares. AIM has voluntarily agreed to continue this limitation through
   May 31, 2000. "Other expenses" include custody, transfer agency, legal, audit
   and other operating expenses. See "Management" herein and the Statement of
   Additional Information for more information. Investors purchasing Advisor
   Class shares through financial planners, trust companies, bank trust
   departments or registered investment advisors, or under a "wrap fee" program,
   will be subject to additional fees charged by such entities or by the
   sponsors of such programs. Where any account advised by one of the companies
   composing or affiliated with AMVESCAP PLC invests in Advisor Class shares of
   the Fund, such account shall not be subject to duplicative advisory fees.
    
 
   The Board of Trustees of the Trust believes that the aggregate per share
   expenses of the Fund and its Portfolio will be approximately equal to the
   expenses the Fund would incur if its assets were invested directly in the
   type of securities being held by its Portfolio.
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S AND THE PORTFOLIO'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND
INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE
ASSUMPTION IN THE HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY
REGULATION OF THE SEC APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS
NOT A PREDICTION OF AND DOES NOT REPRESENT THE FUND'S OR THE PORTFOLIO'S
PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   616
 
- --------------------------------------------------------------------------------
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The tables below provide condensed financial information concerning income and
capital changes for one Advisor Class share of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statements and notes, for the
fiscal year ended October 31, 1997, have been audited by PricewaterhouseCoopers
LLP, independent accountants, whose report thereon also is included in the
Statement of Additional Information. The unaudited financial statements and
notes, for the semi-annual period ended April 30, 1998, are also included in the
Statement of Additional Information.
    
 
                 AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
            (FORMERLY GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND)
   
    
 
   
<TABLE>
<CAPTION>
                                                                                  ADVISOR CLASS+
                                                              ------------------------------------------------------
                                                                SIX MONTHS
                                                                  ENDED         YEAR ENDED OCT. 31,    JUNE 1, 1995
                                                              APRIL 30, 1998    -------------------         TO
                                                               (UNAUDITED)*      1997*       1996*    OCT. 31, 1995*
                                                              --------------    -------     -------   --------------
<S>                                                           <C>               <C>         <C>       <C>
Per Share Operating Performance:
Net asset value, beginning of period........................     $ 22.50        $ 21.15     $ 14.64      $ 11.84
                                                                 -------        -------     -------      -------
Income from investment operations:
  Net investment income (loss)..............................       (0.06)         (0.04)      (0.13)        0.04**
  Net realized and unrealized gain on investments...........        4.86           2.30        7.16         2.76
                                                                 -------        -------     -------      -------
  Net increase from investment operations...................        4.80           2.26        7.03         2.80
                                                                 -------        -------     -------      -------
Distributions:
  From net realized gain on investments.....................       (1.89)         (0.91)      (0.52)          --
                                                                 -------        -------     -------      -------
        Total distributions.................................       (1.89)         (0.91)      (0.52)          --
                                                                 -------        -------     -------      -------
Net asset value, end of period..............................     $ 25.41        $ 22.50     $ 21.15      $ 14.64
                                                                 =======        =======     =======      =======
Total investment return(c)..................................       22.77%(b)      11.15%      49.50%       23.65%(b)
                                                                 =======        =======     =======      =======
Ratios and supplemental data:
Net assets, end of period (in 000's)........................     $18,141        $ 6,047     $ 7,446      $   164
Ratio of net investment income (loss) to average net assets:
  With expense reductions and reimbursement by the
    Sub-advisor.............................................       (0.50)%(a)     (0.22)%     (0.64)%       0.70%(a)
  Without expense reductions and reimbursement by the
    Sub-advisor.............................................       (0.52)%(a)     (0.37)%     (0.74)%     (10.61)%(a)
Ratio of expenses to average net assets:
  With expense reductions and reimbursement by the
    Sub-advisor.............................................        1.42%(a)       1.34%       1.74%        1.82%(a)
  Without expense reductions and reimbursement by the
    Sub-advisor.............................................        1.44%(a)       1.49%       1.84%       13.13%(a)
Portfolio turnover rate++...................................         169%(a)        392%        169%         240%(a)
Average commission rate per share paid on portfolio
  transactions++............................................     $0.0423        $0.0319     $0.0545          N/A
</TABLE>
    
 
- ---------------
   
+    Commencing June 1, 1995, the Fund began offering Advisor Class shares.
    
   
++   Portfolio turnover and average commission rates are calculated on the basis
     of the Fund as a whole without distinguishing among the classes of shares
     issued. The Fund invests only in the AIM Global Consumer Products and
     Services Portfolio and does not engage in securities transactions.
     Accordingly, the portfolio turnover and average commission rates presented
     are for the AIM Global Consumer Products and Services Portfolio.
    
   
*    These selected per share data were calculated based upon average shares
     outstanding during the period.
    
   
**   Before reimbursement by the Sub-advisor, net investment income per share
     would have been reduced by $0.61.
    
   
(a)  Annualized.
    
   
(b)  Not annualized.
    
   
(c)  Total investment return does not include sales charges.
    
   
N/A  Not Applicable.
    
                         ------------------------------
 
   
<TABLE>
<CAPTION>
                                                                                 AVERAGE MONTHLY
                                                                AVERAGE             NUMBER OF             AVERAGE
                                          AMOUNT OF DEBT    AMOUNT OF DEBT     REGISTRANT'S SHARES    AMOUNT OF DEBT
                                          OUTSTANDING AT      OUTSTANDING          OUTSTANDING           PER SHARE
YEAR ENDED                                END OF PERIOD    DURING THE PERIOD    DURING THE PERIOD    DURING THE PERIOD
- ----------                                --------------   -----------------   -------------------   -----------------
<S>                                       <C>              <C>                 <C>                   <C>
Six months ended April 30, 1998.........      $  --            $115,397             7,894,281             $ 0.015
October 31, 1997........................      $  --            $103,293             8,302,173             $0.0124
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed daily.
    
 
                                        5
<PAGE>   617
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
 
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVE. The Fund's investment objective is long-term capital
growth. It seeks its objective by investing all of its investable assets in the
Portfolio, which, in turn, invests primarily in equity securities of companies
throughout the world that manufacture, market, retail or distribute consumer
products and services. The Portfolio's investment objective is identical to that
of the Fund. There can be no assurance that the Fund or Portfolio will achieve
its investment objective.
    
 
   
  INVESTMENT POLICIES. At least 65% of the Portfolio's total assets normally
will be invested in common and preferred stocks and warrants to acquire such
securities issued by consumer products and services companies. A "consumer
products or services" company is an entity in which (i) at least 50% of either
the revenues or earnings was derived from activities relating to consumer
products or services, or (ii) at least 50% of the assets was devoted to such
activities, based on the company's most recent fiscal year. The remainder of the
Portfolio's assets may be invested in debt securities issued by consumer
products or services companies and/or equity and debt securities of companies
outside the consumer products or services industries, which, in the opinion of
the Sub-advisor, stand to benefit from developments in such industries.
    
 
   
  Examples of consumer products and services companies include those that
manufacture, market, retail, or distribute: durable goods (such as homes,
household goods, automobiles, boats, furniture and appliances, and computers);
non-durable goods (such as food and beverages and apparel); media,
entertainment, broadcasting, publishing and sports-related goods and services
(such as television and radio broadcast, motion pictures, wireless
communications, gaming casinos, theme parks, restaurants and lodging); and goods
and services to companies in the foregoing industries (such as advertisers,
textile companies and distribution and shipping companies).
    
 
   
  The Portfolio expects that a significant portion of its assets may be invested
in the securities of U.S. issuers from time to time, particularly those that
market their products globally. However, consumer products and services
companies of a particular nation or region of the world are often operated and
owned in their local markets, close to their customers. These companies, the
Sub-advisor believes, may offer superior opportunities for capital growth as
compared to their larger, multinational counterparts. Certain global markets may
be more attractive than others from time to time; companies dependent on U.S.
markets, for example, may be outperformed by companies not dependent on U.S.
markets.
    
 
   
  The Sub-advisor also believes that the demand for consumer products and
services worldwide will increase along with rising disposable incomes in both
developed and developing nations. Emerging economies, such as those in China,
Southeast Asia, Eastern Europe and Latin America, offer opportunities for the
growth and expansion of consumer markets. These regions currently comprise a
growing source of inexpensive consumer products for export and a growing source
of demand for consumer products and services as the disposable incomes of their
populations increase. In the Sub-advisor's view, these changes are likely to
create investment opportunities in companies, both local and multinational, that
are able to employ innovative manufacturing, marketing, retailing and
distribution methods to open new markets and/or expand existing markets.
    
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
                                        6
<PAGE>   618
 
  SELECTION OF INVESTMENTS AND ASSET ALLOCATION. The Portfolio expects that,
from time to time, a significant portion of its assets may be invested in the
securities of domestic issuers. The industry represented in the Portfolio,
however, is a global industry with significant, growing markets outside of the
United States. A sizeable proportion of the companies which comprise the
consumer products and services industries are headquartered outside of the
United States.
 
   
  For these reasons, the Sub-advisor believes that a portfolio composed only of
securities of U.S. issuers does not provide the greatest potential for return
from an investment by the Portfolio. The Sub-advisor uses its financial
expertise in markets located throughout the world and the substantial global
resources of AMVESCAP PLC in attempting to identify those countries and
companies then providing the greatest potential for long-term capital
appreciation. In this fashion, the Sub-advisor seeks to enable shareholders to
capitalize on the substantial investment opportunities and the potential for
long-term growth of capital presented by the global consumer products and
services industries represented in the Portfolio.
    
 
   
  The Sub-advisor allocates the Portfolio's assets among securities of countries
and in currency denominations where opportunities for meeting the Portfolio's
investment objective are expected to be the most attractive. The Portfolio may
invest substantially in securities denominated in one or more currencies. Under
normal conditions, the Portfolio invests in the securities of issuers located in
at least three countries, including the United States; investments in securities
of issuers in any one country, other than the United States, will represent no
more than 50% of the Portfolio's total assets.
    
 
   
  In analyzing specific companies for possible investment, the Sub-advisor
ordinarily looks for several of the following characteristics: above-average per
share earnings growth; high return on invested capital; a healthy balance sheet;
sound financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; development of new technologies; efficient service; pricing
flexibility; strong management; and general operating characteristics that will
enable the companies to compete successfully in their respective markets.
    
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. Under a defensive strategy, the Portfolio may invest up to
100% of its total assets in cash (U.S. dollars, foreign currencies or
multinational currency units such as euros) and/or high quality debt securities
or money market instruments of U.S. or foreign issuers. In addition, for
temporary defensive purposes, most or all of the Portfolio's investments may be
made in the United States and denominated in U.S. dollars. To the extent the
Portfolio adopts a temporary defensive posture, it will not be invested so as to
achieve directly its investment objective. In addition, pending investment of
proceeds from new sales of Fund shares or to meet its ordinary daily cash needs,
the Portfolio may hold cash (U.S. dollars, foreign currencies or multinational
currency units) and may invest in foreign or domestic high quality money market
instruments. For a full description of money market instruments, see "Money
Market Instruments" in the "Investment Objectives and Policies" section of the
Statement of Additional Information.
    
 
   
  PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Portfolio in privatizations in appropriate
circumstances. In certain foreign countries, the ability of foreign entities
such as the Portfolio to participate in privatizations may be limited by local
law, or the terms on which the Portfolio may be permitted to participate may be
less advantageous than those for local investors. There can be no assurance that
foreign governments will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
    
 
   
  INVESTMENTS IN OTHER INVESTMENT COMPANIES. The Portfolio may invest up to 10%
of its total assets in other investment companies, some of which may be
investment vehicles or companies that are advised by the Sub-advisor or its
affiliates ("Affiliated Funds"). As a shareholder in an investment company, the
Portfolio would bear its ratable share of that investment company's expenses,
including its advisory and administration fees. At the same time, the Portfolio
would continue to pay its own management fees and other expenses. AIM and the
Sub-advisor will waive their advisory fees to the extent that the Portfolio
invests in an Affiliated Fund.
    
 
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Portfolio
may borrow from banks or may borrow through reverse repurchase agreements and
"roll" transactions in connection with meeting requests for the redemptions of
the Fund's shares. The Portfolio also may borrow up to 5% of its total assets
for temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Portfolio may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Portfolio's borrowings exceed 5% of
its total assets. Any borrowing by the Portfolio may cause greater fluctuation
in the value of its shares than would be the case if the Portfolio did not
borrow.
 
  A reverse repurchase agreement is a borrowing transaction in which the
Portfolio transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash, and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Portfolio's sale of securities together with
its commitment (for which the Portfolio may receive a fee) to purchase similar,
but not identical, securities at a future date.
 
   
  SECURITIES LENDING. The Portfolio may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Portfolios to retain ownership of the securities loaned and, at the same
time, enhances the Fund's total return. The Portfolio limits its loans of
portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. While a loan is outstanding, the
borrower must maintain with the Portfolio's custodian collateral consisting of
cash,
    
 
                                        7
<PAGE>   619
 
   
U.S. government securities or certain irrevocable letters of credit equal to at
least the value of the borrowed securities, plus any accrued interest or such
other collateral as permitted by the Portfolio's investment program and
regulatory agencies, and as approved by the Board. The risks in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delays in receiving additional collateral or in recovery of the
securities and possible loss of rights in the collateral should the borrower
fail financially.
    
 
  WHEN-ISSUED OR FORWARD COMMITMENT SECURITIES. The Portfolio may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Portfolio will
purchase or sell when-issued securities or enter into forward commitments only
with the intention of actually receiving or delivering the securities, as the
case may be. No income accrues on securities that have been purchased pursuant
to a forward commitment or on a when-issued basis prior to delivery to the
Portfolio. If the Portfolio disposes of the right to acquire a when-issued
security prior to its acquisition or disposes of its right to deliver or receive
against a forward commitment, it may incur a gain or loss. At the time the
Portfolio enters into a transaction on a when-issued or forward commitment
basis, the Portfolio will segregate cash or liquid securities equal to the value
of the when-issued or forward commitment securities with its custodian and will
mark to market daily such assets. There is a risk that the securities may not be
delivered and that the Portfolio may incur a loss.
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Portfolio may use
forward currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the portfolio. These instruments are often referred to as
"derivatives," which may be defined as financial instruments whose performance
is derived, at least in part, from the performance of another asset (such as a
security, currency or an index of securities). The Portfolio may enter into such
instruments up to the full value of its portfolio assets. See "Risk
Factors -- Options, Futures and Forward Currency Transactions" herein and
"Options, Futures and Currency Strategies" in the Statement of Additional
Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Portfolio may enter into forward currency contracts for the
purchase or sale of a specified currency at a specified future date. Such
contracts may involve the purchase or sale of a foreign currency against the
U.S. dollar or may involve two foreign currencies. The Portfolio may enter into
forward currency contracts either with respect to specific transactions or with
respect to its portfolio positions. The Portfolio also may purchase and sell put
and call options on currencies, futures contracts on currencies and options on
such futures contracts to hedge against movements in exchange rates.
 
   
  In addition, the Portfolio may purchase and sell put and call options on
equity and debt securities to hedge against the risk of fluctuations in the
prices of securities held by the Portfolio or that the Sub-advisor intends to
include in the Portfolio's holdings. The Portfolio also may purchase and sell
put and call options on stock indexes to hedge against overall fluctuations in
the securities markets generally or in a specific market sector.
    
 
  Further, the Portfolio may sell stock index futures contracts and may purchase
put options or write call options on such futures contracts to protect against a
general stock market decline or a decline in a specific market sector that could
affect adversely the Portfolio's holdings. The Portfolio also may purchase stock
index futures contracts and purchase call options or write put options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisitions. The
Portfolio may use interest rate futures contracts and options thereon to hedge
the debt portion of its portfolio against changes in the general level of
interest rates.
 
  OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of that Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this Prospectus
and in the Statement of Additional Information may be changed by the Trust's
Board of Trustees without shareholder approval. The Fund's policies regarding
concentration and lending, and the percentage of the Fund's assets that may be
committed to borrowing, are fundamental policies and may not be changed without
shareholder approval. The investment policies of the Fund are identical to the
investment policies of the Portfolio.
 
  The approval of the Fund and of other investors in the Portfolio, if any, is
not required to change the investment objective, policies or limitations of the
Portfolio, unless otherwise specified. Written notice shall be provided to
shareholders of the Fund thirty days prior to any changes in its corresponding
Portfolio's investment objective.
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's or Portfolio's investment policies or
restrictions.
 
   
  The Portfolio is authorized to engage in Short Sales, although it currently
has no intention of doing so, and may purchase American Depositary Receipts,
American Depositary Shares, Global Depositary Receipts and European Depositary
Receipts. See "Short Sales"
    
 
                                        8
<PAGE>   620
 
   
and "Depositary Receipts," respectively, in the Investment Objectives and
Policies section of the Statement of Additional Information.
    
 
  OTHER INFORMATION REGARDING THE PORTFOLIO. As previously described, the Fund,
unlike mutual funds that directly acquire and manage their own portfolios of
securities, seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio, which is a separate investment company.
Because a Fund will invest only in its corresponding Portfolio, the Fund's
shareholders will acquire only an indirect interest in the investments of that
Portfolio.
 
   
  The Fund may redeem its investment in the Portfolio at any time, if the Board
of Trustees of the Trust determines that it is in the best interests of the Fund
and its shareholders to do so. A change in the Portfolio's investment objective,
policies or limitations that is not approved by the Board or the shareholders of
the Fund could require the Fund to redeem its interest in the Portfolio. Any
such redemption could result in a distribution in kind of portfolio securities
(as opposed to a cash distribution) by the Portfolio. Should such a distribution
occur, the Fund could incur brokerage fees or other transaction costs in
converting such securities to cash. In addition, a distribution in kind could
result in a less diversified portfolio of investments for the Fund and could
adversely affect its liquidity. Upon redemption, the Board would consider what
action might be taken, including the investment of all the investable assets of
the Fund in another pooled investment entity having substantially the same
investment objective as the Fund or the retention by the Fund of its own
investment advisor to manage its assets in accordance with its investment
objective, policies and limitations discussed herein.
    
 
  In addition to selling an interest therein to the Fund, the Portfolio may sell
interests therein to other non-affiliated investment companies and/or other
institutional investors. All institutional investors in the Portfolio will pay a
proportionate share of the Portfolio's expenses and will invest in the Portfolio
on the same terms and conditions. However, if another investment company invests
any or all of its assets in a Portfolio, it would not be required to sell its
shares at the same public offering price as the Fund and may charge different
sales commissions. Therefore, investors in the Fund may experience different
returns than investors in another investment company that invests exclusively in
the Portfolio. As of the date of this Prospectus, the Fund is the only
institutional investor in the Portfolio.
 
  The Fund may be materially affected by the actions of other large investors,
if any, in the Portfolio. For example, as with all open-end investment
companies, if a large investor were to redeem its interest in the Portfolio, (1)
the Portfolio's remaining investors could experience higher pro rata operating
expenses, thereby producing lower returns and (2) the Portfolio's security
holdings may become less diverse, resulting in increased risk. Institutional
investors in the Portfolio that have a greater pro rata ownership interest in
the Portfolio than the Fund could have effective voting control over the
operation of the Portfolio.
 
- --------------------------------------------------------------------------------
 
   
RISK FACTORS
    
 
  GENERAL. There is no assurance that the Fund or the Portfolio will achieve its
investment objective. The Fund's net asset values will fluctuate reflecting
fluctuations in the market value of the Portfolio's securities. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure, and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. The value of equity securities held by the Portfolio will
fluctuate in response to general market and economic developments, as well as
developments affecting the particular issuers of such securities. In addition,
the value of debt securities held by the Portfolio generally will fluctuate with
changes in the perceived creditworthiness of the issuers of such securities and
interest rates.
 
  Because the Portfolio focuses its investments on the consumer products and
services industries, an investment in it may be more volatile than that of other
investment companies that do not concentrate their investments in such a manner.
Moreover, the value of the shares of the Fund will be especially susceptible to
factors affecting the consumer products and services industries. Accordingly,
the Fund should not be considered a complete investment program.
 
  CONSUMER PRODUCTS AND SERVICES INDUSTRIES. The performance of consumer
products and services companies, relates closely to the actual or perceived
performance of the overall economy, interest rates and consumer confidence. In
addition, changes in demographics and consumer tastes may also affect the demand
for, and success of, particular consumer products and services. Many consumer
products and services companies have unpredictable earnings, due in part to
changes in consumer tastes and intense competition. As a result, such companies
may be subject to increased share price volatility. The consumer products and
services industries may also be subject to greater government regulation,
including trade regulation, than many other industries. Changes in governmental
policy and the need for regulatory approvals may have a material effect on the
products and services offered by companies in the consumer products and services
industries. Such governmental regulations may also hamper the development of new
business opportunities.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to, the reporting requirements of the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. In addition, certain costs attributable to
foreign investing, such as custody charges, are higher than those attributable
to domestic investing. Securities of some foreign companies are less liquid and
their prices may be more
 
                                        9
<PAGE>   621
 
volatile than securities of comparable domestic companies. The Portfolio's
interest and dividends from foreign issuers may be subject to non-U.S.
withholding taxes, thereby reducing the Portfolio's net investment income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Portfolio, political or social instability, or diplomatic
developments which could affect the Portfolio's investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
 
  The Portfolio may invest in issuers domiciled in "emerging markets." Investing
in emerging market countries involves risks in addition to those risks involved
in foreign investing. Many emerging market countries have experienced high rates
of inflation for many years. In addition, emerging markets generally are
dependent heavily upon international trade and, accordingly, have been and
continue to be affected adversely by trade barriers, exchange controls, managed
adjustments in relative currency values and other protectionist measures imposed
or negotiated by the countries with which they trade. The securities markets of
emerging market countries are substantially smaller, less developed, less liquid
and more volatile than the securities markets of the developed countries. In
addition, issuers in emerging markets typically are subject to a greater degree
of change in earnings and business prospects than issuers in developed
countries.
 
  The Portfolio will also be affected favorably or unfavorably by exchange
control regulations or changes in the exchange rates between foreign currencies
and the U.S. dollar. Changes in currency exchange rates will influence the value
of the Fund's shares, and also may affect the value of dividends and interest
earned by the Portfolio and gains and losses realized by the Portfolio.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
   
  LOWER QUALITY DEBT SECURITIES. The Portfolio may invest up to 20%, of its
total assets in below investment grade debt securities, that is, rated below BBB
by Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or
Baa by Moody's Investors Service, Inc. ("Moody's") or, if unrated, deemed to be
of equivalent quality in the judgment of the Sub-advisor. Such investments
involve a high degree of risk. However, the Portfolio will not invest in debt
securities that are in default as to payment of principal and interest.
    
 
  Debt rated Baa by Moody's is considered by Moody's to have speculative
characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B,
Caa, Ca or C by Moody's is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such lower quality debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Debt rated C
by Moody's or S&P is the lowest rated debt that is not in default as to
principal or interest, and such issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Lower
quality debt securities are also generally considered to be subject to greater
risk than securities with higher ratings with regard to a deterioration of
general economic conditions. These lower quality debt securities are the
equivalent of high yield, high risk bonds, commonly known as "junk bonds."
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates. See "Description of Debt Ratings" in the Statement of Additional
Information for a full discussion of Moody's and S&P's ratings.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing.
 
                                       10
<PAGE>   622
 
The risk of loss due to default by the issuer is significantly greater for the
holders of lower quality securities because such securities are generally
unsecured and may be subordinated to the claims of other creditors of the
issuer.
 
  Lower quality debt securities of corporate issuers frequently have call or
buy-back features which would permit an issuer to call or repurchase the
security from the Portfolio. If an issuer exercises these provisions in a
declining interest rate market, the Portfolio may have to replace the security
with a lower yielding security, resulting in a decreased return for investors.
In addition, the Portfolio may have difficulty disposing of lower quality
securities because they may have a thin trading market. There may be no
established retail secondary market for many of these securities, and the
Portfolio anticipates that such securities could be sold only to a limited
number of dealers or institutional investors. The lack of a liquid secondary
market also may have an adverse impact on market prices of such instruments and
may make it more difficult for the Portfolio to obtain accurate market
quotations for purposes of valuing its investments. The Portfolio may also
acquire lower quality debt securities during an initial underwriting or which
are sold without registration under applicable securities laws. Such securities
involve special considerations and risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Portfolio may invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic recession. The Portfolio may also incur additional expenses to the
extent it is required to seek recovery upon a default in the payment of
principal or interest on portfolio holdings, and the Portfolio may have limited
legal recourse in the event of a default.
 
   
  ILLIQUID SECURITIES. The Portfolio may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." The Sub-advisor believes that carefully selected investments in
joint ventures, cooperatives, partnerships and state enterprises which are
illiquid (collectively, "Special Situations") could enable the Portfolio to
achieve capital appreciation substantially exceeding the appreciation the
Portfolio would realize if it did not make such investments. However, in order
to attempt to limit investment risk, the Portfolio will invest no more than 5%
of its total assets in Special Situations.
    
 
  Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at a price
lower than similar securities that are liquid.
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Portfolio is
authorized to enter into options, futures and forward currency transactions, the
Portfolio might not enter into any such transactions. Options, futures and
foreign currency transactions involve certain risks, which include: (1)
dependence on the Sub-advisor's ability to predict movements in the prices of
individual securities, fluctuations in the general securities markets or in the
appropriate market sector and movements in interest rates and currency markets;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, forward contracts, futures contracts or options thereon and
movements in the price of the currency or security hedged or used for cover; (3)
the fact that skills and techniques needed to trade options, futures contracts
and options thereon or to use forward currency contracts are different from
those needed to select the securities in which the Portfolio invests; (4) lack
of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time; (5) the
possible loss of principal under certain conditions; and (6) the possible
inability of the Portfolio to purchase or sell a portfolio security at a time
when it would otherwise be favorable for it to do so, or the possible need for
the Portfolio to sell a security at a disadvantageous time, due to the need for
the Portfolio to maintain "cover" or to set aside securities in connection with
hedging transactions.
    
 
  INVESTING IN SMALLER COMPANIES. While the Portfolio's holdings normally will
include securities of established suppliers of traditional products and
services, the Portfolio may invest in smaller companies which can benefit from
the development of new products and services. These smaller companies may
present greater opportunities for capital appreciation, but may also involve
greater risks than large, established issuers. Such smaller companies may have
limited product lines, markets or financial resources, and their securities may
trade less frequently and in more limited volume than the securities of larger,
more established companies. As a result, the prices of the securities of such
smaller companies may fluctuate to a greater degree than the prices of the
securities of other issuers.
 
- --------------------------------------------------------------------------------
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees and the Board of Trustees of the Portfolio have
overall responsibility for the operation of the Fund and the Portfolio,
respectively. The Boards have approved all significant agreements between the
Trust and the Portfolio on the one side and persons or companies furnishing
services to the Fund and the Portfolio on the other, including the investment
management and administration agreement with AIM, the investment sub-advisory
and sub-administration agreement between AIM and the Sub-advisor, the agreements
with AIM Distributors regarding distribution of the Fund's shares, the custody
agreement and the transfer agency agreement. The day-to-day operations of the
Fund and the Portfolio are delegated to the officers of the Trust and the
Portfolio, subject always to the investment objective and policies of the Fund
and the Portfolio and to the general supervision of the Boards. See "Trustees
and Executive Officers" in the Statement of Additional Information for
information on the Trust's and the Portfolio's Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the investment managers and administrators to the Fund and the
Portfolio include, but are not limited to, determining the composition of the
investment hold-
    
 
                                       11
<PAGE>   623
 
   
ings of the Portfolio and placing orders to buy, sell or hold particular
securities. In addition, AIM and the Sub-advisor provide the following
administration services to the Portfolio and the Fund: furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Portfolio's and the Fund's operation.
    
 
   
  For administration services, the Fund pays AIM administration fees computed
daily and payable monthly at the annualized rate of 0.25% of the Fund's average
daily net assets. AIM has appointed the Sub-advisor as the Fund's
sub-administrator. In addition, the Fund bears its pro rata portion of the
investment management and administration fees paid by its corresponding
Portfolio to AIM and the Sub-advisor. The Portfolio pays AIM a fee, based on the
Portfolio's average daily net assets at the annualized rate of 0.725% on the
first $500 million, 0.70% on the next $500 million, 0.675% on the next $500
million and 0.65% on all amounts thereafter. Out of its aggregate fees payable
by the Fund and the Portfolio, AIM pays the Sub-advisor sub-advisory and
sub-administration fees equal to 40% of the aggregate fees AIM receives from the
Fund and the Portfolio. The investment management and administration fees paid
by the Fund and the Portfolio are higher than those paid by most mutual funds.
The Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM Distributors
or other agents. AIM has undertaken to limit the Fund's expenses (exclusive of
brokerage commissions, taxes, interest and extraordinary expenses) to the annual
rate of 1.50% of the average daily net assets of the Fund's Advisor Class
shares.
    
 
   
  The Sub-advisor also serves as the Fund's and the Portfolio's pricing and
accounting agent. For these services the Sub-advisor receives a fee consisting
of 0.03% of the first $5 billion of assets, and 0.02% of the assets in excess of
$5 billion, of the AIM Funds that are sub-advised by the Sub-advisor (other than
AIM Eastern Europe Fund). Each of these funds, including the Fund and the
Portfolio, pays an amount based upon its relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Portfolio pursuant to a master investment management
and administration agreement (the "Advisory Agreement"). AIM was organized in
1976 and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Portfolio pursuant to an investment
sub-advisory and sub-administration agreement. Prior to May 29, 1998, the
Sub-advisor was known as Chancellor LGT Asset Management, Inc. On May 29, 1998,
Liechtenstein Global Trust AG ("LGT"), the former indirect parent organization
of the Sub-advisor, consummated a purchase agreement with AMVESCAP PLC pursuant
to which AMVESCAP PLC acquired LGT's Asset Management Division, which included
the Sub-advisor and certain other affiliates. As a result of this transaction,
the Sub-advisor is now an indirect wholly owned subsidiary of AMVESCAP PLC.
Prior to the sale, the Sub-advisor and its worldwide asset management affiliates
provided investment management and/or administrative services to institutional,
corporate and individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Portfolio, the Sub-advisor employs a
team approach, taking advantage of its investment resources around the world.
    
 
  The investment professional primarily responsible for the portfolio management
of the Portfolio is as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
NAME/OFFICE                 THE PORTFOLIO                         PAST FIVE YEARS
- -----------              --------------------                   -------------------
<S>                     <C>                      <C>
Derek H. Webb           Portfolio Manager        Head of [the Theme Funds] for the Sub-advisor
  San Francisco         since Portfolio          since 1997. Portfolio Manager for the Sub-advisor
                        inception in 1994        since 1994. Analyst for the Sub-advisor from 1992
                                                 to 1994.
</TABLE>
    
 
   
In placing orders for the Portfolio's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions may be executed through
affiliates of AIM or the Sub-advisor. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Fund will bear directly and could result in the realization of
net capital gains which would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement (the
"Distribution Agreement"), with AIM Distributors, a registered broker-dealer and
a wholly owned subsidiary of AIM, to act as the distributor of Advisor Class
shares of the Fund. Certain Trustees and officers of the Trust are affiliated
with AIM Distributors.
    
 
  The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
                                       12
<PAGE>   624
 
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST AND PORTFOLIO
    
 
   
  ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business
trust on May 7, 1998. On September 8, 1998, the Trust acquired the assets of and
assumed the liabilities of AIM Investment Funds, Inc., a Maryland corporation.
The Fund constitutes one of the thirteen separate and distinct series portfolios
of the Trust. From time to time, the Trust may continue to establish other
funds, each corresponding to a distinct investment portfolio and a distinct
series of the Trust's shares of beneficial interest. Shares of each fund are
entitled to one vote per share (with proportional voting for fractional shares)
and are freely transferable. Shareholders have no preemptive rights. Other than
the automatic conversion of Class B shares to Class A shares, there are no
conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other shares
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
 
  ORGANIZATION OF THE PORTFOLIO. The Portfolio is organized as a subtrust of
Global Investment Portfolio, a Delaware business trust. Under Delaware law, the
Fund and other entities investing in the Portfolio enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances an investor in
the Portfolio may be held liable for the Portfolio's obligations. However, the
Agreement and Declaration of Trust of Global Investment Portfolio disclaims
shareholder liability for acts or obligations of the Portfolio and requires that
notice of such disclaimer be given in each agreement, obligation or instrument
entered into or executed by the Portfolio or a trustee. The Agreement and
Declaration of Trust also provides for indemnification from the Portfolio
property for all losses and expenses of any shareholder held personally liable
for the Portfolio's obligations. Thus the risk of an investor incurring
financial loss on account of such liability is limited to circumstances in which
the Portfolio itself would be unable to meet its obligations and where the other
party was held not to be bound by the disclaimer.
 
  Whenever the Fund is requested to vote on any proposal of the Portfolio, the
Fund will hold a meeting of the Fund's shareholders and will cast its vote as
instructed by its shareholders. Shares for which no voting instructions are
received will be voted in the same proportion as the shares for which voting
instructions are received.
 
   
  The Fund's annual report contains additional information with respect to its
performance. The annual report is available to investors upon request and free
of charge.
    
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust, to the
Fund and to the Portfolio.
    
 
                                       13
<PAGE>   625
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
                  TO THE AIM FAMILY OF FUNDS--Register Mark--
                            FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several of
which offer Advisor Class shares. Only Advisor Class shares are offered through
this Prospectus. Advisor Class shares are available from the following funds
(collectively, the "Advisor Class Funds"):
 
   
<TABLE>
            <S>                                           <C>
            AIM BASIC VALUE FUND                          AIM GLOBAL INFRASTRUCTURE FUND
            AIM DEVELOPING MARKETS FUND                   AIM GLOBAL RESOURCES FUND
            AIM DOLLAR FUND                               AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM EMERGING MARKETS FUND                     AIM GLOBAL TRENDS FUND
            AIM EMERGING MARKETS DEBT FUND                AIM INTERNATIONAL GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM JAPAN GROWTH FUND
            AIM GLOBAL CONSUMER PRODUCTS                  AIM LATIN AMERICAN GROWTH FUND
              AND SERVICES FUND                           AIM MID CAP EQUITY FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM NEW PACIFIC GROWTH FUND
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM SMALL CAP GROWTH FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM STRATEGIC INCOME FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WORLDWIDE GROWTH FUND
</TABLE>
    
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
 
  HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through Financial
Advisers (as defined herein) who have entered into agreements with A I M
Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor Class
shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
 
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment for
Advisor Class shares is $500.
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
                                       A-1
<PAGE>   626
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Advisor Class shares of any Advisor Class Funds not named on the cover of this
Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                                                     Shareholder Name, Shareholder Account Number 
                   OBI:                              (70 character limit)
</TABLE>
 
  It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
 
  HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
  In addition to the Advisor Class Funds, the AIM Funds consist of the following
funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR
LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND,
AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BLUE
CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION
FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED MATURITY TREASURY
FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM SELECT GROWTH FUND,
AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM VALUE FUND and AIM
WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM
LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with the Advisor Class
Funds, the "Multiple Class Funds." For information on purchasing any of the AIM
Funds and to receive a prospectus, please call (800) 347-4246. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
  Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
 
  Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee'
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares. Investors in wrap fee programs and
advisory accounts may only purchase Advisor Class shares through Financial
Advisers who have entered into agreements with AIM Distributors. Investors may
be charged a fee by their agents or brokers for effecting transactions in
Advisor Class shares.
 
  AIM Distributors may, from time to time, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives
 
                                       A-2
<PAGE>   627
 
and their families to places within or outside the United States. The total
amount of such additional bonus payments or other consideration shall not exceed
0.25% of the public offering price of the shares sold. Any such bonus or
incentive programs will not change the price paid by investors for the purchase
of the applicable AIM Fund's shares or the amount that any particular AIM Fund
will receive as proceeds from such sales. Dealers may not use sales of the AIM
Funds' shares to qualify for any incentives to the extent that such incentives
may be prohibited by the laws of any state.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND uses
the amortized cost method of valuing the securities it holds and rounds its per
share net asset value to the nearest whole cent, it is anticipated that the net
asset value of the shares of that fund will remain constant at $1.00 per share.
However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00 net
asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
                                       A-3
<PAGE>   628
 
- --------------------------------------------------------------------------------
 
   
SPECIAL PLANS
    
 
  Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
 
   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance to $5,000 to
establish and maintain an allocation across a range of Advisor Class Funds. The
Program automatically rebalances holdings of Advisor Class Funds to the
established allocation on a periodic basis. Under the Program, a shareholder may
predesignate, on a percentage basis, how the total value of his or her holdings
in a minimum of two, and a maximum of ten, Advisor Class Funds ("Personal
Portfolio") is to be rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more Advisor Class Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other Advisor Class Funds in the
shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the
Advisor Class Fund(s) in a shareholder's Personal Portfolio have appreciated
during a rebalancing period, the Program will result in shares of Advisor Class
Fund(s) that have appreciated most during the period being exchanged for shares
of Advisor Class Fund(s) that have appreciated least. SUCH EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends, Distributions and Tax
Matters -- Dividends and Distributions." Participation in the Program does not
assure that a shareholder will profit from purchases under the Program nor does
it prevent or lessen losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Advisor Class Fund would be 2%
or less. In predesignating percentages, shareholders must use whole percentages
and totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an Advisor Class Fund's
shares. The AIM Funds and AIM Distributors reserve the right to modify, suspend,
or terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which Advisor
Class Funds or what allocation percentages are assigned to the Program, unless
canceled or changed in writing and received by the Transfer Agent in good order
at least five business days prior to the rebalancing date. Certain
dealers/financial institutions may charge a fee for establishing accounts
relating to the Program. Investors should contact their dealers/financial
institutions or AIM Distributors for more information.
    
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the Advisor
Class Funds may participate in an exchange privilege as described below. AIM
Distributors acts as distributor for the Advisor Class Funds which represent a
range of different investment objectives and policies.
 
  Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
 
  Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
 
  An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor
 
                                       A-4
<PAGE>   629
 
Class Fund acquired through exchange must be qualified for sale in the state in
which the shareholder resides; (c) the exchange must be made between accounts
having identical registrations and addresses; (d) the full amount of the
purchase price for the shares being exchanged must have already been received by
the fund; (e) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or Form
W-9 (certifying exempt status) must have been received by the fund; (f) newly
acquired shares (through either an initial or subsequent investment) are held in
an account for at least ten business days, and all other shares are held in an
account for at least one day, prior to the exchange; and (g) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the Advisor Class Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
  Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but under unusual market
conditions such purchases may be delayed for up to five business days if it is
determined that an Advisor Class Fund would be materially disadvantaged by an
immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into an Advisor Class Fund that declares daily dividends ("Dividends,
Distributions and Tax Matters -- Dividends and Distributions," below), and the
release of the exchange proceeds is delayed for the foregoing five-day period,
such shareholder will not begin to accrue dividends until the sixth business day
after the exchange. Advisor Class shares purchased by check may not be exchanged
until it is determined that the check has cleared, which may take up to ten
business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. A shareholder may give exchange information to his Financial
Adviser. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the Advisor Class Funds. AIM Distributors reserves the right to impose
conditions on dealers or investment advisors who make telephone exchanges of
shares of the Advisor Class Funds, including the condition that any such dealer
or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/financial institutions may charge service fees for handling
repurchase transactions.
 
                                       A-5
<PAGE>   630
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the Advisor
Class Funds are redeemed at their net asset value next computed after a request
for redemption in proper form (including signature guarantees and other required
documentation for written redemptions) is received by the Transfer Agent or
certain financial institutions (or their designees) who are authorized to accept
redemption orders on behalf of the AIM Funds, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. Orders for the redemption of Advisor Class shares received on any
business day of an AIM Fund will be confirmed at the price determined as of the
close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the proceeds are to be sent to
the address of record. These requirements may be waived or modified upon notice
to shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such 
    

                                       A-6
<PAGE>   631
   

as certain domestic banks, credit unions, securities dealers, or securities
exchanges. The Transfer Agent will also accept signatures with either: (1) a
signature guaranteed with a medallion stamp of the STAMP Program, or (2) a
signature guaranteed with a medallion stamp of the NYSE Medallion Signature
Program, provided that in either event, the amount of the transaction involved
does not exceed the surety coverage amount indicated on the medallion. For
information regarding whether a particular institution or organization qualifies
as an "eligible guarantor institution," an investor should contact the Client
Services Department of AFS.
    
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
  The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
                                       A-7
<PAGE>   632
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                    DISTRIBUTIONS          DISTRIBUTIONS
                                                                        OF NET                 OF NET
                                     DIVIDENDS FROM                    REALIZED               REALIZED
                                     NET INVESTMENT                   SHORT-TERM              LONG-TERM
FUND                                     INCOME                      CAPITAL GAINS          CAPITAL GAINS
- ----                                 --------------                  -------------          -------------
<S>                                  <C>                             <C>                     <C>
AIM BASIC VALUE FUND...............  declared and paid annually         annually                annually
AIM DEVELOPING MARKETS FUND........  declared and paid annually         annually                annually
AIM DOLLAR FUND....................  declared daily; paid monthly       annually                annually
AIM EMERGING MARKETS FUND..........  declared and paid annually         annually                annually
AIM EMERGING MARKETS DEBT FUND.....  declared and paid monthly          annually                annually
AIM EUROPE GROWTH FUND.............  declared and paid annually         annually                annually
AIM GLOBAL CONSUMER PRODUCTS AND
  SERVICES FUND....................  declared and paid annually         annually                annually
AIM GLOBAL FINANCIAL SERVICES
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL GOVERNMENT INCOME
  FUND.............................  declared and paid monthly          annually                annually
AIM GLOBAL GROWTH & INCOME FUND....  declared and paid quarterly        annually                annually
AIM GLOBAL HEALTH CARE FUND........  declared and paid annually         annually                annually
AIM GLOBAL INFRASTRUCTURE FUND.....  declared and paid annually         annually                annually
AIM GLOBAL RESOURCES FUND..........  declared and paid annually         annually                annually
AIM GLOBAL TELECOMMUNICATIONS
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL TRENDS FUND.............  declared and paid annually         annually                annually
AIM INTERNATIONAL GROWTH FUND......  declared and paid annually         annually                annually
AIM JAPAN GROWTH FUND..............  declared and paid annually         annually                annually
AIM LATIN AMERICAN GROWTH FUND.....  declared and paid annually         annually                annually
AIM MID CAP EQUITY FUND............  declared and paid annually         annually                annually
AIM NEW PACIFIC GROWTH FUND........  declared and paid annually         annually                annually
AIM SMALL CAP GROWTH FUND..........  declared and paid annually         annually                annually
AIM STRATEGIC INCOME FUND..........  declared and paid monthly          annually                annually
AIM WORLDWIDE GROWTH FUND..........  declared and paid annually         annually                annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
 
  Dividends on Advisor Class shares of an Advisor Class Fund are expected to be
higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
                                       A-8
<PAGE>   633
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares. With respect to tax-exempt shareholders,
dividends and distributions from the AIM Funds are not subject to federal income
taxation to the extent permitted under the applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the 
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    

  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
   
  TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS DEBT FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM MID CAP
EQUITY FUND, AIM SMALL CAP GROWTH FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL
TAX INFORMATION. Certain states exempt from income taxes dividends paid by
mutual funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
    
 
                                       A-9
<PAGE>   634
   
  AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
    
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each Advisor Class Fund's transfer agent and
dividend payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-10
<PAGE>   635
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                   GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
        ACCOUNT TYPE                    NUMBER OF:                     ACCOUNT TYPE                   NUMBER OF:
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary

      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application

      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors

      Legal Guardian          Ward, Minor or
                              Incompetent

      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
</TABLE>
- --------------------------------------------------------------------------------
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   636
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   637
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
 
   
GCPS-PRO-2
    
<PAGE>   638
 
                                                   [APPLICATION INSIDE]
 
            [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS(R)
 
   
ADVISOR CLASS OF
    
 
   
AIM GLOBAL FINANCIAL SERVICES FUND
    
   
(SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
 
P
PROSPECTUS
SEPTEMBER 8, 1998
 
   
This Prospectus contains information about AIM GLOBAL FINANCIAL SERVICES FUND
(the "Fund"), which is one of several series investment portfolios comprising
AIM Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a diversified portfolio which seeks long-term capital
growth by investing all of its investable assets in the AIM Global Financial
Services Portfolio (the "Portfolio"), which, in turn, invests primarily in
equity securities of companies throughout the world that operate in the
financial services industries. The Portfolio's investment objective is identical
to that of the Fund. The investment experience of the Fund will correspond
directly with the investment experience of the Portfolio.
    
 
   
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
(the "SEC") and, is incorporated herein by reference. The Statement of
Additional Information is available without charge upon written request to the
Trust at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or by calling
(800) 347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the fund may
also be obtained from http://www.aimfunds.com.
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   639
 
- --------------------------------------------------------------------------------
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
  The Fund and the Portfolio...........     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     6
  Investment Program...................     6
  Risk Factors.........................    10
  Management...........................    12
  Organization of the Trust and the
     Portfolio.........................    14
    
   
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
  How to Purchase Shares...............   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-4
  Exchange Privilege...................   A-4
  How to Redeem Shares.................   A-5
  Determination of Net Asset Value.....   A-7
  Dividends, Distributions and Tax
     Matters...........................   A-8
  General Information..................  A-10
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND AND THE PORTFOLIO
    
 
   
  The Fund is a diversified series of the Trust. The Portfolio is a diversified
series of Global Investment Portfolio.
    
 
  INVESTMENT OBJECTIVE. The Fund seeks long-term capital growth.
 
  PRINCIPAL INVESTMENTS. The Fund invests all of its investable assets in the
Portfolio, which, in turn, invests primarily in equity securities of companies
throughout the world that operate in the financial services industries.
 
   
  INVESTMENT MANAGERS. The Portfolio is managed by A I M Advisors, Inc. ("AIM")
and is sub-advised and sub-administered by INVESCO (NY), Inc. (the
"Sub-advisor"). AIM and the Sub-advisor and their worldwide asset management
affiliates provide investment management and/or administrative services to
institutional, corporate and individual clients around the world. AIM and the
Sub-advisor are both indirect wholly owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC and its subsidiaries are an independent investment management group
that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing
presence in Asia. AIM was organized in 1976 and, together with its subsidiaries,
currently advises approximately 90 investment company portfolios.
    
 
   
  PURCHASING SHARES. Advisor Class shares are offered through this Prospectus to
(a) trustees or other fiduciaries purchasing shares for employee benefit plans
which are sponsored by organizations which have at least 1,000 employees; (b)
any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment advisor has investment
discretion over such account, and (ii) the account holder pays such person as
compensation for its advice and other services an annual fee of at least 0.50%
on the assets in the account; (c) any account with assets of at least $10,000 if
(i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the
assets in the account; (d) accounts advised by the Sub-advisor or one of the
companies formerly affiliated with the Asset Management Division of
Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the funds in The AIM Family of Funds that are sub-advised
by the Sub-advisor ("AIM Funds") on May 29, 1998; (e) any of the companies
composing or affiliated with AMVESCAP PLC; and (f) AIM Global Trends Fund.
Pursuant to a separate prospectus, the Fund also offers Class A and Class B
shares, which represent interests in the Fund. The Class A and Class B shares
have different distribution arrangements.
    
 
  Initial investments in Advisor Class shares must be at least $500 and
additional investments must be at least $50. The distributor of the Advisor
Class shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares."
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds").
Advisor Class shares of the Fund may be exchanged for Advisor Class shares of
certain funds in The AIM Family of Funds in the manner and subject to the
policies and charges set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Advisor Class shareholders of the Fund may redeem all or a
portion of their shares at net asset value on any business day. See "How to
Redeem Shares."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be rein-
    
 
                                        2
<PAGE>   640
 
   
vested at net asset value without payment of a sales charge in the Fund's shares
or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters."
    
 
  RISK FACTORS. There is no assurance that the Fund or the Portfolio will
achieve its investment objective. The Fund's net asset value will fluctuate,
reflecting fluctuations in the market value of the Portfolio's portfolio
holdings. The Portfolio's policy of concentrating its investments in companies
in the financial services industries may cause the Fund's net asset value to
fluctuate more than if it invested in a greater number of industries.
 
  The Portfolio may invest in foreign securities. Investments in foreign
securities involve risks relating to political and economic developments abroad
and the differences between the regulations to which U.S. and foreign issuers
are subject. Individual foreign economies also may differ favorably or
unfavorably from the U.S. economy. Changes in foreign currency exchange rates
will affect the Fund's net asset value, earnings and gains and losses realized
on sales of securities. Securities of foreign companies may be less liquid and
their prices more volatile than those of securities of comparable U.S.
companies.
 
  The Portfolio may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs.
 
   
  The Portfolio may invest up to 5% of its total assets in below investment
grade debt securities. Investments of this type are subject to a greater risk of
loss of principal and interest. See "Investment Program" and "Risk Factors."
    
 
   
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
    
 
                                        3
<PAGE>   641
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Advisor Class shares of the Fund are reflected in the following table(1):
 
<TABLE>
<S>                                                            <C>
Shareholder Transaction Costs:
  Maximum sales charge on purchases of shares (as a % of       None
     offering price)........................................
  Sales charges on reinvested distributions to                 None
     shareholders...........................................
  Maximum deferred sales charge (as a % of net asset value     None
     at time of purchase or sale, whichever is less)........
  Redemption charges........................................   None
  Exchange fees.............................................   None
Annual Fund Operating Expenses(2): (as a % of average net
  assets)
  Investment management and administration fees.............   0.98%
  12b-1 distribution and service fees.......................   None
  Other expenses (after reimbursements).....................   0.52%
                                                               ----
          Total Fund Operating Expenses.....................   1.50%
                                                               ====
</TABLE>
 
   
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Fund.
    
 
   
(2)Expenses are based on the Fund's fiscal year ended October 31, 1997 restated
   to reflect AIM's undertaking to limit each Fund's expenses (exclusive of
   brokerage commissions, taxes, interest and extraordinary expenses) to the
   annual rate of 1.50% of the average daily net assets of the Fund's Advisor
   Class shares. AIM has voluntarily agreed to continue this limitation through
   May 31, 2000. Without reimbursements, "Other Expenses" and "Total Fund
   Operating Expenses" would have been 0.88% and 1.86%, respectively, for
   Advisor Class shares of the Fund. "Other expenses" include custody, transfer
   agency, legal, audit and other operating expenses. See "Management" herein
   and the Statement of Additional Information for more information. Investors
   purchasing Advisor Class shares through financial planners, trust companies,
   bank trust departments or registered investment advisors, or under a "wrap
   fee" program, will be subject to additional fees charged by such entities or
   by the sponsors of such programs. Where any account advised by one of the
   companies composing or affiliated with AMVESCAP PLC invests in Advisor Class
   shares of the Fund, such account shall not be subject to duplicative advisory
   fees.
    
 
   The Board of Trustees of the Trust believes that the aggregate per share
   expenses of the Fund and its Portfolio will be approximately equal to the
   expenses the Fund would incur if its assets were invested directly in the
   type of securities being held by the Portfolio.
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                       1 YEAR   3 YEARS   5 YEARS   10 YEARS
                                                       ------   -------   -------   --------
<S>                                                    <C>      <C>       <C>       <C>
Advisor Class Shares.................................   $15       $48       $82       $180
</TABLE>
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S AND THE PORTFOLIO'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND
INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE
ASSUMPTION IN THE HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY
REGULATION OF THE SEC APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS
NOT A PREDICTION OF AND DOES NOT REPRESENT THE FUND'S OR THE PORTFOLIO'S
PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   642
 
   
- --------------------------------------------------------------------------------
    
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The tables below provide condensed financial information concerning income and
capital changes for one Advisor Class share of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statements and notes, for the
fiscal year ended October 31, 1997, have been audited by PricewaterhouseCoopers
LLP, independent accountants, whose report thereon also is included in the
Statement of Additional Information. The unaudited financial statements and
notes for the semi-annual period ended April 30, 1998 are also included in the
Statement of Additional Information.
    
 
   
                       AIM GLOBAL FINANCIAL SERVICES FUND
    
   
                  (FORMERLY GT GLOBAL FINANCIAL SERVICES FUND)
    
 
   
<TABLE>
<CAPTION>
                                                                        ADVISOR CLASS+
                                                --------------------------------------------------------------
                                                  SIX MONTHS
                                                     ENDED        YEAR ENDED OCTOBER 31,      JUNE 1, 1995
                                                APRIL 30, 1998    ----------------------           TO
                                                (UNAUDITED)(d)     1997(d)      1996(d)    OCTOBER 31, 1995(d)
                                                ---------------   ---------    ---------   -------------------
<S>                                             <C>               <C>          <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period..........      $ 17.40        $ 14.26      $ 11.95          $ 11.09
                                                    -------        -------      -------          -------
Income from investment operations:
  Net investment income (loss)................         0.07           0.12         0.12*            0.09*
  Net realized and unrealized gain (loss) on
     investments..............................         3.57           4.01         2.36             0.77
                                                    -------        -------      -------          -------
  Net increase (decrease) from investment
     operations...............................         3.64           4.13         2.48             0.86
                                                    -------        -------      -------          -------
Distributions:
  From net investment income..................           --             --        (0.16)              --
  From net realized gain on investments.......        (0.61)         (0.99)       (0.01)              --
                                                    -------        -------      -------          -------
          Total distributions.................        (0.61)         (0.99)       (0.17)              --
                                                    -------        -------      -------          -------
Net asset value, end of period................      $ 20.43        $ 17.40      $ 14.26          $ 11.95
                                                    =======        =======      =======          =======
Total investment return(b)....................        21.55%(c)      30.52%       20.87%            7.75%(c)
                                                    =======        =======      =======          =======
Ratios and supplemental data:
Net assets, end of period (in 000's)..........      $12,161        $ 3,738      $    72          $    31
Ratio of net investment income (loss) to
  average net assets:
  With expense reductions and reimbursement
     from the Sub-advisor.....................         0.75%(a)       0.73%        0.91%            1.96%(a)
  Without expense reductions and reimbursement
     from the Sub-advisor.....................         0.70%(a)       0.66%(a)    (0.16)%          (4.84)%(a)
Ratio of operating expenses to average net
  assets:
  With expense reductions and reimbursement
     from the Sub-advisor.....................         1.48%(a)       1.79%        1.82%            1.84%(a)
  Without expense reductions and reimbursement
     from the Sub-advisor.....................         1.53%(a)       1.86%        2.89%            8.64%(a)
Portfolio turnover rate++.....................          106%(a)         91%         103%             170%
Average commission rate per share paid on
  portfolio transactions++....................      $0.0015        $0.0014      $0.0080              N/A
</TABLE>
    
 
- ---------------
 
   
(a)  Annualized.
    
 
   
(b)  Total investment return does not include sales charges.
    
 
   
(c)  Not annualized.
    
 
   
(d)  These selected per share data were calculated based upon average shares
     outstanding during the period.
    
 
   
*    Before reimbursement by the Sub-advisor, the net investment income per
     share would have been reduced by $0.13 for the year ended October 31, 1996
     and $0.30 for the period ended October 31, 1995.
    
 
   
+    Commencing June 1, 1995, the Fund began offering Advisor Class shares.
    
 
   
++   Portfolio turnover and average commission rates are calculated on the basis
     of the Fund as a whole without distinguishing among the class of shares
     issued. The Fund invests only in the AIM Financial Services Portfolio and
     does not engage in securities transactions. Accordingly, the portfolio
     turnover and average commission rates presented are for the AIM Financial
     Services Portfolio.
    
 
   
N/A  Not Applicable.
    
                                ---------------
 
                                        5
<PAGE>   643
 
   
<TABLE>
<CAPTION>
                                                                       AVERAGE MONTHLY NUMBER   AVERAGE AMOUNT
                             AMOUNT OF DEBT     AVERAGE AMOUNT OF      OF REGISTRANT'S SHARES    OF DEBT PER
                             OUTSTANDING AT      DEBT OUTSTANDING           OUTSTANDING          SHARE DURING
YEAR                         END OF PERIOD      DURING THE PERIOD        DURING THE PERIOD        THE PERIOD
- ----                         --------------   ----------------------   ----------------------   --------------
<S>                          <C>              <C>                      <C>                      <C>
Six Months ended April 30,
  1998.....................      $  --               $35,342                 5,369,134              $0.007
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed on a daily
basis.
    
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quotes. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
 
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVES. The Fund's investment objective is long-term capital
growth. It seeks its objective by investing all of its investable assets in the
Portfolio, which, in turn, invests primarily in equity securities of companies
throughout the world that operate in the financial services industries. The
Portfolio's investment objective is identical to that of the Fund. There can be
no assurance that the Fund or Portfolio will achieve its investment objectives.
    
 
   
  INVESTMENT POLICIES. At least 65% of the Portfolio's total assets normally
will be invested in common and preferred stocks and warrants to acquire such
securities issued by financial services companies. A "financial services"
company is an entity in which (i) at least 50% of either the revenues or
earnings was derived from financial services activities, or (ii) at least 50% of
the assets was devoted to such activities, based on the company's most recent
fiscal year. The remainder of the Portfolio's assets may be invested in debt
securities issued by financial services companies and/or equity and debt
securities of companies outside of the financial services industries, which, in
the opinion of the Sub-advisor, stand to benefit from developments in the
financial services industries.
    
 
   
  Examples of financial services companies include commercial banks and savings
institutions and loan associations and their holding companies; consumer and
industrial finance companies; diversified financial services companies;
investment banks; insurance brokerages; securities brokerage and investment
advisory companies; real estate-related companies; leasing companies; and a
variety of firms in all segments of the insurance field such as multi-line,
property and casualty and life insurance and insurance holding companies.
    
 
   
  The Sub-advisor believes an accelerating rate of global economic
interdependence will lead to significant growth in the demand for financial
services. In addition, in the Sub-advisor's view, as the industries evolve,
opportunities will emerge for those companies positioned for the future. Thus,
the Sub-advisor expects that banking and related financial institution
consolidation in the developed countries, increased demand for retail borrowing
in developing countries, a growing need for international trade-based financing,
a rising demand for sophisticated risk management, the proliferating number of
liquid securities markets around the world, and larger concentrations of
investable assets should lead to growth in financial service companies that are
positioned for the future.
    
 
   
  CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
   
  SELECTION OF INVESTMENTS AND ASSET ALLOCATION. The Portfolio expects that,
from time to time, a significant portion of its assets may be invested in the
securities of domestic issuers. The industry represented in the Portfolio,
however, is a global industry with
    
 
                                        6
<PAGE>   644
 
significant, growing markets outside of the United States. A sizeable proportion
of the companies which comprise the financial services industries are
headquartered outside of the United States.
 
   
  For these reasons, the Sub-advisor believes that a portfolio composed only of
securities of U.S. issuers does not provide the greatest potential for return
from an investment by the Portfolio. The Sub-advisor uses its financial
expertise in markets located throughout the world and the substantial global
resources of AMVESCAP PLC in attempting to identify those countries and
companies then providing the greatest potential for long-term capital
appreciation. In this fashion, the Sub-advisor seeks to enable shareholders to
capitalize on the substantial investment opportunities and the potential for
long-term growth of capital presented by the global financial services
industries represented in the Portfolio.
    
 
   
  The Sub-advisor allocates the Portfolio's assets among securities of countries
and in currency denominations where opportunities for meeting the Portfolio's
investment objective are expected to be the most attractive. The Portfolio may
invest substantially in securities denominated in one or more currencies. Under
normal conditions, the Portfolio invests in the securities of issuers located in
at least three countries, including the United States; investments in securities
of issuers in any one country, other than the United States, will represent no
more than 40% of the Portfolio's total assets.
    
 
   
  In analyzing specific companies for possible investment, the Sub-advisor
ordinarily looks for several of the following characteristics: above-average per
share earnings growth; high return on invested capital; a healthy balance sheet;
sound financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; development of new technologies; efficient service; pricing
flexibility; strong management; and general operating characteristics that will
enable the companies to compete successfully in their respective markets.
    
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. Under a defensive strategy, the Portfolio may invest up to
100% of its total assets in cash (U.S. dollars, foreign currencies or
multinational currency units such as euros) and/or high quality debt securities
or money market instruments of U.S. or foreign issuers. In addition, for
temporary defensive purposes, most or all of the Portfolio's investments may be
made in the United States and denominated in U.S. dollars. To the extent the
Portfolio adopts a temporary defensive posture, it will not be invested so as to
achieve directly its investment objective. In addition, pending investment of
proceeds from new sales of Fund shares or to meet its ordinary daily cash needs,
the Portfolio may hold cash (U.S. dollars, foreign currencies or multinational
currency units) and may invest in foreign or domestic high quality money market
instruments. For a full description of money market instruments, see "Money
Market Instruments" in the "Investment Objectives and Policies" section of the
Statement of Additional Information.
    
 
   
  PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Portfolio in privatizations in appropriate
circumstances. In certain foreign countries, the ability of foreign entities
such as the Portfolio to participate in privatizations may be limited by local
law, or the terms on which the Portfolio may be permitted to participate may be
less advantageous than those for local investors. There can be no assurance that
foreign governments will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
    
 
   
  INVESTMENTS IN OTHER INVESTMENT COMPANIES. The Portfolio may invest up to 10%
of its total assets in other investment companies, some of which may be
investment vehicles or companies that are advised by the Sub-advisor or its
affiliates ("Affiliated Funds"). As a shareholder in an investment company, the
Portfolio would bear its ratable share of that investment company's expenses,
including its advisory and administration fees. At the same time, the Portfolio
would continue to pay its own management fees and other expenses. AIM and the
Sub-advisor will waive their advisory fees to the extent that the Portfolio
invests in an Affiliated Fund.
    
 
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Portfolio
may borrow from banks or may borrow through reverse repurchase agreements and
"roll" transactions in connection with meeting requests for the redemptions of
the Fund's shares. The Portfolio also may borrow up to 5% of its total assets
for temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Portfolio may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Portfolio's borrowings exceed 5% of
its total assets. Any borrowing by the Portfolio may cause greater fluctuation
in the value of its shares than would be the case if the Portfolio did not
borrow.
 
  A reverse repurchase agreement is a borrowing transaction in which the
Portfolio transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash, and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Portfolio's sale of securities together with
its commitment (for which the Portfolio may receive a fee) to purchase similar,
but not identical, securities at a future date.
 
   
  SECURITIES LENDING. The Portfolio may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Portfolio to retain ownership of the securities loaned and, at the same
time, enhances the Fund's total return. The Portfolio limits its loans of
portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. While a loan is outstanding, the
borrower must maintain with the Portfolio's custodian collateral consisting of
cash, U.S. government securities or certain irrevocable letters of credit equal
to at least the value of the borrowed securities, plus any accrued interest or
such other collateral as permitted by the Portfolio's investment program and
regulatory agencies, and as approved
    
 
                                        7
<PAGE>   645
 
by the Board. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delays in receiving additional
collateral or in recovery of the securities and possible loss of rights in the
collateral should the borrower fail financially.
 
  WHEN-ISSUED OR FORWARD COMMITMENT SECURITIES. The Portfolio may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Portfolio will
purchase or sell when-issued securities or enter into forward commitments only
with the intention of actually receiving or delivering the securities, as the
case may be. No income accrues on securities that have been purchased pursuant
to a forward commitment or on a when-issued basis prior to delivery to the
Portfolio. If the Portfolio disposes of the right to acquire a when-issued
security prior to its acquisition or disposes of its right to deliver or receive
against a forward commitment, it may incur a gain or loss. At the time the
Portfolio enters into a transaction on a when-issued or forward commitment
basis, the Portfolio will segregate cash or liquid securities equal to the value
of the when-issued or forward commitment securities with its custodian and will
mark to market daily such assets. There is a risk that the securities may not be
delivered and that the Portfolio may incur a loss.
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Portfolio may use
forward currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the portfolio. These instruments are often referred to as
"derivatives," which may be defined as financial instruments whose performance
is derived, at least in part, from the performance of another asset (such as a
security, currency or an index of securities). The Portfolio may enter into such
instruments up to the full value of its portfolio assets. See "Risk
Factors -- Options, Futures and Forward Currency Transactions" herein and
"Options, Futures and Currency Strategies" in the Statement of Additional
Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Portfolio may enter into forward currency contracts for the
purchase or sale of a specified currency at a specified future date. Such
contracts may involve the purchase or sale of a foreign currency against the
U.S. dollar or may involve two foreign currencies. The Portfolio may enter into
forward currency contracts either with respect to specific transactions or with
respect to its portfolio positions. The Portfolio also may purchase and sell put
and call options on currencies, futures contracts on currencies and options on
such futures contracts to hedge against movements in exchange rates.
 
   
  In addition, the Portfolio may purchase and sell put and call options on
equity and debt securities to hedge against the risk of fluctuations in the
prices of securities held by the Portfolio or that the Sub-advisor intends to
include in the Portfolio's holdings. The Portfolio also may purchase and sell
put and call options on stock indexes to hedge against overall fluctuations in
the securities markets generally or in a specific market sector.
    
 
  Further, the Portfolio may sell stock index futures contracts and may purchase
put options or write call options on such futures contracts to protect against a
general stock market decline or a decline in a specific market sector that could
affect adversely the Portfolio's holdings. The Portfolio also may purchase stock
index futures contracts and purchase call options or write put options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisitions. The
Portfolio may use interest rate futures contracts and options thereon to hedge
the debt portion of its portfolio against changes in the general level of
interest rates.
 
  OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this Prospectus
and in the Statement of Additional Information may be changed by the Trust's
Board of Trustees without shareholder approval. The Fund's policies regarding
concentration and lending, and the percentage of the Fund's assets that may be
committed to borrowing, are fundamental policies and may not be changed without
shareholder approval. The investment policies of the Fund are identical to the
investment policies of the Portfolio.
 
  The approval of the Fund and of other investors in the Portfolio, if any, is
not required to change the investment objective, policies or limitations of the
Portfolio, unless otherwise specified. Written notice shall be provided to
shareholders of the Fund thirty days prior to any changes in the Portfolio's
investment objective.
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's or Portfolio's investment policies or
restrictions.
 
   
  The Portfolio is authorized to engage in Short Sales, although it currently
has no intention of doing so, and may purchase American Depositary Receipts,
American Depositary Shares, Global Depositary Receipts and European Depositary
Receipts. See "Short Sales" and "Depositary Receipts," respectively in the
"Investment Objective and Policies" section of the Statement of Additional
Information.
    
 
                                        8
<PAGE>   646
 
  OTHER INFORMATION REGARDING THE PORTFOLIO. As previously described, the Fund,
unlike mutual funds that directly acquire and manage their own portfolios of
securities, seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio, which is a separate investment company.
Because the Fund will invest only in the Portfolio, the Fund's shareholders will
acquire only an indirect interest in the investments of the Portfolio.
 
   
  The Fund may redeem its investment in the Portfolio at any time, if the Board
of Trustees of the Trust determines that it is in the best interests of the Fund
and its shareholders to do so. A change in the Portfolio's investment objective,
policies or limitations that is not approved by the Board or the shareholders of
the Fund could require the Fund to redeem its interest in the Portfolio. Any
such redemption could result in a distribution in kind of portfolio securities
(as opposed to a cash distribution) by the Portfolio. Should such a distribution
occur, the Fund could incur brokerage fees or other transaction costs in
converting such securities to cash. In addition, a distribution in kind could
result in a less diversified portfolio of investments for the Fund and could
adversely affect its liquidity. Upon redemption, the Board would consider what
action might be taken, including the investment of all the investable assets of
the Fund in another pooled investment entity having substantially the same
investment objective as the Fund or the retention by the Fund of its own
investment advisor to manage its assets in accordance with its investment
objective, policies and limitations discussed herein.
    
 
  In addition to selling an interest therein to the Fund, the Portfolio may sell
interests therein to other non-affiliated investment companies and/or other
institutional investors. All institutional investors in the Portfolio will pay a
proportionate share of the Portfolio's expenses and will invest in the Portfolio
on the same terms and conditions. However, if another investment company invests
any or all of its assets in the Portfolio, it would not be required to sell its
shares at the same public offering price as the Fund and may charge different
sales commissions. Therefore, investors in the Fund may experience different
returns than investors in another investment company that invests exclusively in
the Portfolio. As of the date of this Prospectus, the Fund is the only
institutional investor in the Portfolio.
 
  The Fund may be materially affected by the actions of other large investors,
if any, in the Portfolio. For example, as with all open-end investment
companies, if a large investor were to redeem its interest in the Portfolio, (1)
the Portfolio's remaining investors could experience higher pro rata operating
expenses, thereby producing lower returns and (2) the Portfolio's security
holdings may become less diverse, resulting in increased risk. Institutional
investors in the Portfolio that have a greater pro rata ownership interest in
the Portfolio than the Fund could have effective voting control over the
operation of the Portfolio.
 
- --------------------------------------------------------------------------------
 
   
RISK FACTORS
    
 
  GENERAL. There is no assurance that the Fund or the Portfolio will achieve its
investment objective. The Fund's net asset values will fluctuate reflecting
fluctuations in the market value of the Portfolio's securities positions. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure, and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. The value of equity securities held by the Portfolio will
fluctuate in response to general market and economic developments, as well as
developments affecting the particular issuers of such securities. In addition,
the value of debt securities held by the Portfolio generally will fluctuate with
changes in the perceived creditworthiness of the issuers of such securities and
interest rates.
 
  Because the Portfolio focuses its investments on the financial services
industries, an investment in it may be more volatile than that of other
investment companies that do not concentrate their investments in such a manner.
Moreover, the value of the shares of the Fund will be especially susceptible to
factors affecting the financial services industries. Accordingly, the Fund
should not be considered a complete investment program.
 
  FINANCIAL SERVICES INDUSTRIES. Financial services industries may be subject to
greater governmental regulation than many other industries and changes in
governmental policies and the need for regulatory approvals may have a material
effect on the services offered by companies in the financial services
industries. Governmental regulation may limit both the financial commitments
banks can make, including the amounts and types of loans, and the interest rates
and fees they can charge. In addition, governmental regulation in certain
foreign countries may impose interest rate controls, credit controls and price
controls.
 
  Companies in the financial services sector are subject to rapid business
changes, significant competition, value fluctuations due to the concentration of
loans in particular industries significantly affected by economic conditions
(such as real estate or energy) and volatile performance dependent upon the
availability and cost of capital and prevailing interest rates. In addition,
general economic conditions significantly affect these companies. Credit and
other losses resulting from the financial difficulty of borrowers or other third
parties potentially may have an adverse effect on companies in these industries.
Foreign banks, particularly those of Japan, have reported financial difficulties
attributed to increased competition, regulatory changes, and general economic
difficulties.
 
  The financial services area in the United States currently is changing
relatively rapidly as existing distinctions between various financial service
segments become less clear. For instance, recent business combinations have
included insurance, finance, and securities brokerage under single ownership.
Some primarily retail corporations have expanded into securities and insurance
fields. Investment banking, securities brokerage and investment advisory
companies are subject to government regulation and risk due to securities
trading and underwriting activities.
 
                                        9
<PAGE>   647
 
  Many of the investment considerations discussed in connection with banks,
savings institutions and loan associations, and finance companies also apply to
insurance companies. The performance of insurance company investments will be
subject to risk from several factors. The earnings of insurance companies will
be affected by interest rates, pricing (including severe pricing competition
from time to time), claims activity, marketing competition and general economic
conditions. Particular insurance lines also will be influenced by specific
matters. Property and casualty insurer profits may be affected by certain
weather catastrophes and other disasters. Life and health insurer profits may be
affected by mortality and morbidity rates. Individual companies may be exposed
to material risks, including reserve inadequacy, problems in investment
portfolios (due to real estate or "junk" bond holdings, for example), and the
inability to collect from reinsurance carriers. Insurance companies are subject
to extensive governmental regulation, including the imposition of maximum rate
levels, which may not be adequate for some lines of business. Proposed or
potential anti-trust or tax law changes also may affect adversely insurance
companies' policy sales, tax obligations and profitability.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to, the reporting requirements of the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. In addition, certain costs attributable to
foreign investing, such as custody charges, are higher than those attributable
to domestic investing. Securities of some foreign companies are less liquid and
their prices may be more volatile than securities of comparable domestic
companies. The Portfolio's interest and dividends from foreign issuers may be
subject to non-U.S. withholding taxes, thereby reducing the Portfolio's net
investment income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Portfolio, political or social instability, or diplomatic
developments which could affect the Portfolio's investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
 
  The Portfolio may invest in issuers domiciled in "emerging markets." Investing
in emerging market countries involves risks in addition to those risks involved
in foreign investing. Many emerging market countries have experienced high rates
of inflation for many years. In addition, emerging markets generally are
dependent heavily upon international trade and, accordingly, have been and
continue to be affected adversely by trade barriers, exchange controls, managed
adjustments in relative currency values and other protectionist measures imposed
or negotiated by the countries with which they trade. The securities markets of
emerging market countries are substantially smaller, less developed, less liquid
and more volatile than the securities markets of the developed countries. In
addition, issuers in emerging markets typically are subject to a greater degree
of change in earnings and business prospects than issuers in developed
countries.
 
  The Portfolio will also be affected favorably or unfavorably by exchange
control regulations or changes in the exchange rates between foreign currencies
and the U.S. dollar. Changes in currency exchange rates will influence the value
of the Fund's shares, and also may affect the value of dividends and interest
earned by the Portfolio and gains and losses realized by the Portfolio.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
   
  LOWER QUALITY DEBT SECURITIES. The Portfolio may invest up to 5% of its total
assets in below investment grade debt securities, that is, rated below BBB by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or Baa
by Moody's Investors Service, Inc. ("Moody's") or, if unrated, deemed to be of
equivalent quality in the judgment of the Sub-advisor. Such investments involve
a high degree of risk. However, the Portfolio will not invest in debt securities
that are in default as to payment of principal and interest.
    
 
  Debt rated Baa by Moody's is considered by Moody's to have speculative
characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B,
Caa, Ca or C by Moody's is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such lower quality debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Debt rated C
by Moody's or S&P is the lowest rated debt that is not in default as to
principal or interest, and such issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Lower
quality debt securities are also
 
                                       10
<PAGE>   648
 
generally considered to be subject to greater risk than securities with higher
ratings with regard to a deterioration of general economic conditions. These
lower quality debt securities are the equivalent of high yield, high risk bonds,
commonly known as "junk bonds."
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates. See "Description of Debt Ratings" in the Statement of Additional
Information for a full discussion of Moody's and S&P's ratings.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities of corporate issuers frequently have call or
buy-back features which would permit an issuer to call or repurchase the
security from the Portfolio. If an issuer exercises these provisions in a
declining interest rate market, the Portfolio may have to replace the security
with a lower yielding security, resulting in a decreased return for investors.
In addition, the Portfolio may have difficulty disposing of lower quality
securities because they may have a thin trading market. There may be no
established retail secondary market for many of these securities, and the
Portfolio anticipates that such securities could be sold only to a limited
number of dealers or institutional investors. The lack of a liquid secondary
market also may have an adverse impact on market prices of such instruments and
may make it more difficult for the Portfolio to obtain accurate market
quotations for purposes of valuing its investments. The Portfolio may also
acquire lower quality debt securities during an initial underwriting or which
are sold without registration under applicable securities laws. Such securities
involve special considerations and risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Portfolio may invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic recession. The Portfolio may also incur additional expenses to the
extent it is required to seek recovery upon a default in the payment of
principal or interest on portfolio holdings, and the Portfolio may have limited
legal recourse in the event of a default.
 
   
  ILLIQUID SECURITIES. The Portfolio may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." The Sub-advisor believes that carefully selected investments in
joint ventures, cooperatives, partnerships and state enterprises which are
illiquid (collectively, "Special Situations") could enable the Portfolio to
achieve capital appreciation substantially exceeding the appreciation the
Portfolio would realize if it did not make such investments. However, in order
to attempt to limit investment risk, the Portfolio will invest no more than 5%
of its total assets in Special Situations.
    
 
  Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at a price
lower than similar securities that are liquid.
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Portfolio is
authorized to enter into options, futures and forward currency transactions, the
Portfolio might not enter into any such transactions. Options, futures and
foreign currency transactions involve certain risks, which include: (1)
dependence on the Sub-advisor's ability to predict movements in the prices of
individual securities, fluctuations in the general securities markets or in the
appropriate market sector and movements in interest rates and currency markets;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, forward contracts, futures contracts or options thereon and
movements in the price of the currency or security hedged or used for cover; (3)
the fact that skills and techniques needed to trade options, futures contracts
and options thereon or to use forward currency contracts are different from
those needed to select the securities in which the Portfolio invests; (4) lack
of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time; (5) the
possible loss of principal under certain conditions; and (6) the possible
inability of the Portfolio to purchase or sell a portfolio security at a time
when it would otherwise be favorable for it to do so, or the possible need for
the Portfolio to sell a security at a disadvantageous time, due to the need for
the Portfolio to maintain "cover" or to set aside securities in connection with
hedging transactions.
    
 
  INVESTING IN SMALLER COMPANIES. While the Portfolio's holdings normally will
include securities of established suppliers of traditional products and
services, the Portfolio may invest in smaller companies which can benefit from
the development of new products and services. These smaller companies may
present greater opportunities for capital appreciation, but may also involve
greater risks than large, established issuers. Such smaller companies may have
limited product lines, markets or financial resources, and their
 
                                       11
<PAGE>   649
 
securities may trade less frequently and in more limited volume than the
securities of larger, more established companies. As a result, the prices of the
securities of such smaller companies may fluctuate to a greater degree than the
prices of the securities of other issuers.
 
- --------------------------------------------------------------------------------
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees and the Board of Trustees of the Portfolio have
overall responsibility for the operation of the Fund and the Portfolio,
respectively. The Boards have approved all significant agreements between the
Trust and the Portfolio on the one side and persons or companies furnishing
services to the Fund and the Portfolio on the other, including the investment
management and administration agreement with AIM, the investment sub-advisory
and sub-administration agreement between AIM and the Sub-advisor, the agreements
with AIM Distributors regarding distribution of the Fund's shares, the custody
agreement and the transfer agency agreement. The day-to-day operations of the
Fund and the Portfolio are delegated to the officers of the Trust and the
Portfolio, subject always to the investment objective and policies of the Fund
and the Portfolio and to the general supervision of the Boards. See "Trustees
and Executive Officers" in the Statement of Additional Information for
information on the Trust's and the Portfolio's Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the investment managers and administrators to the Fund and the
Portfolio include, but are not limited to, determining the composition of the
investment portfolio of the Portfolio and placing orders to buy, sell or hold
particular securities. In addition, AIM and the Sub-advisor provide the
following administration services to the Portfolio and the Fund: furnishing
corporate officers and clerical staff; providing office space, services and
equipment; and supervising all matters relating to the Portfolio's and the
Fund's operation.
    
 
   
  For administration services, the Fund pays AIM administration fees computed
daily and payable monthly at the annualized rate of 0.25% of the Fund's average
daily net assets. AIM has appointed the Sub-advisor as the Fund's
sub-administrator. In addition, the Fund bears its pro rata portion of the
investment management and administration fees paid by the Portfolio to AIM and
the Sub-advisor. The Portfolio pays AIM a fee, based on the Portfolio's average
daily net assets at the annualized rate of 0.725% on the first $500 million,
0.70% on the next $500 million, 0.675% on the next $500 million and 0.65% on all
amounts thereafter. Out of its aggregate fees payable by the Fund and the
Portfolio, AIM pays the Sub-advisor sub-advisory and sub-administration fees
equal to 40% of the aggregate fees AIM receives from the Fund and the Portfolio.
The investment management and administration fees paid by the Fund and the
Portfolio are higher than those paid by most mutual funds. The Fund pays all
expenses not assumed by AIM, the Sub-advisor, AIM Distributors or other agents.
AIM has undertaken to limit the Fund's expenses (exclusive of brokerage
commissions, taxes, interest and extraordinary expenses) to the annual rate of
1.50% of the average daily net assets of the Fund's Advisor Class shares.
    
 
   
  The Sub-advisor also serves as the Fund's and the Portfolio's pricing and
accounting agent. For these services the Sub-advisor receives a fee consisting
of 0.03% of the first $5 billion of assets, and 0.02% of the assets in excess of
$5 billion, of the AIM Funds that are sub-advised by the Sub-advisor (other than
AIM Eastern Europe Fund). Each of these funds, including the Fund and the
Portfolio, pays an amount based upon its relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Portfolio pursuant to a master investment management
and administration agreement (the "Advisory Agreement"). AIM was organized in
1976 and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Portfolio pursuant to an investment
sub-advisory and sub-administration agreement. Prior to May 29, 1998, the
Sub-advisor was known as Chancellor LGT Asset Management, Inc. On May 29, 1998,
Liechtenstein Global Trust AG ("LGT"), the former indirect parent organization
of the Sub-advisor, consummated a purchase agreement with AMVESCAP PLC pursuant
to which AMVESCAP PLC acquired LGT's Asset Management Division, which included
the Sub-advisor and certain other affiliates. As a result of this transaction,
the Sub-advisor is now an indirect wholly owned subsidiary of AMVESCAP PLC.
Prior to the sale, the Sub-advisor and its worldwide asset management affiliates
provided investment management and/or administrative services to institutional,
corporate and individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Portfolio, the Sub-advisor employs a
team approach, taking advantage of its investment resources around the world.
    
 
                                       12
<PAGE>   650
 
  The investment professional primarily responsible for the portfolio management
of the Portfolio is as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
     NAME/OFFICE            THE PORTFOLIO                         PAST FIVE YEARS
     -----------         --------------------                   -------------------
<S>                     <C>                      <C>
A. James Ellman         Portfolio Manager        Portfolio Manager for the Sub-advisor since 1995.
San Francisco           since 1995               Analyst for the Sub-advisor from 1994 to 1995.
</TABLE>
    
 
   
  In placing orders for the Portfolio's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions may be executed through
affiliates of AIM or the Sub-advisor. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Fund will bear directly and could result in the realization of
net capital gains which would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
    
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust, to the
Fund and to the Portfolio.
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement (the
"Distribution Agreement"), with AIM Distributors, a registered broker-dealer and
a wholly owned subsidiary of AIM, to act as the distributor of Advisor Class
shares of the Fund. Certain Trustees and officers of the Trust are affiliated
with AIM Distributors.
    
 
  The Distribution Agreement provides AIM Distributors with the exclusive right
to distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
   
- --------------------------------------------------------------------------------
    
 
   
ORGANIZATION OF THE TRUST AND THE PORTFOLIO
    
 
   
  ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business
trust on May 7, 1998. On September 8, 1998, the Trust acquired the assets of and
assumed the liabilities of AIM Investment Funds, Inc., a Maryland corporation.
The Fund constitutes one of the thirteen separate and distinct series portfolios
of the Trust. From time to time, the Trust may establish other funds, each
corresponding to a distinct investment portfolio and a distinct series of the
Trust's shares of beneficial interest. Shares of each fund are entitled to one
vote per share (with proportional voting for fractional shares) and are freely
transferable. Shareholders have no preemptive rights. Other than the automatic
conversion of Class B shares to Class A shares, there are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  ORGANIZATION OF THE PORTFOLIO. The Portfolio is organized as a subtrust of
Global Investment Portfolio, a Delaware business trust. Under Delaware law, the
Fund and other entities investing in the Portfolio enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances an investor in
the Portfolio may be held liable for the Portfolio's obligations. However, the
Agreement and Declaration of Trust of Global Investment Portfolio disclaims
shareholder liability for acts or obligations of the Portfolio and requires that
notice of such disclaimer be given in each agreement, obligation or instrument
entered into or executed by the Portfolio or a trustee. The Agreement and
Declaration of Trust also provides for indemnification from the Portfolio
property for all losses and expenses of any shareholder held personally liable
for the Portfolio's obligations. Thus the risk of an investor incurring
financial loss on account of such liability is limited to circumstances in which
the Portfolio itself would be unable to meet its obligations and where the other
party was held not to be bound by the disclaimer.
 
  Whenever the Fund is requested to vote on any proposal of the Portfolio, the
Fund will hold a meeting of the Fund's shareholders and will cast its vote as
instructed by its shareholders. Shares for which no voting instructions are
received will be voted in the same proportion as the shares for which voting
instructions are received.
 
                                       13
<PAGE>   651
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund when issued are
fully paid and nonassessable.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust, to the
Fund and to the Portfolio.
    
 
                                       14
<PAGE>   652
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
                  TO THE AIM FAMILY OF FUNDS--Register Mark--
                            FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several of
which offer Advisor Class shares. Only Advisor Class shares are offered through
this Prospectus. Advisor Class shares are available from the following funds
(collectively, the "Advisor Class Funds"):
 
   
<TABLE>
            <S>                                           <C>
            AIM BASIC VALUE FUND                          AIM GLOBAL INFRASTRUCTURE FUND
            AIM DEVELOPING MARKETS FUND                   AIM GLOBAL RESOURCES FUND
            AIM DOLLAR FUND                               AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM EMERGING MARKETS FUND                     AIM GLOBAL TRENDS FUND
            AIM EMERGING MARKETS DEBT FUND                AIM INTERNATIONAL GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM JAPAN GROWTH FUND
            AIM GLOBAL CONSUMER PRODUCTS                  AIM LATIN AMERICAN GROWTH FUND
              AND SERVICES FUND                           AIM MID CAP EQUITY FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM NEW PACIFIC GROWTH FUND
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM SMALL CAP GROWTH FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM STRATEGIC INCOME FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WORLDWIDE GROWTH FUND
</TABLE>
    
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
 
  HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through Financial
Advisers (as defined herein) who have entered into agreements with A I M
Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor Class
shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
 
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment for
Advisor Class shares is $500.
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
                                       A-1
<PAGE>   653
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Advisor Class shares of any Advisor Class Funds not named on the cover of this
Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                                                     Shareholder Name, Shareholder Account Number 
                   OBI:                              (70 character limit)
</TABLE>
 
  It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
 
  HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
  In addition to the Advisor Class Funds, the AIM Funds consist of the following
funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR
LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND,
AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BLUE
CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION
FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED MATURITY TREASURY
FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM SELECT GROWTH FUND,
AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM VALUE FUND and AIM
WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM
LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with the Advisor Class
Funds, the "Multiple Class Funds." For information on purchasing any of the AIM
Funds and to receive a prospectus, please call (800) 347-4246. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
  Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
 
  Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee'
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares. Investors in wrap fee programs and
advisory accounts may only purchase Advisor Class shares through Financial
Advisers who have entered into agreements with AIM Distributors. Investors may
be charged a fee by their agents or brokers for effecting transactions in
Advisor Class shares.
 
  AIM Distributors may, from time to time, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives
 
                                       A-2
<PAGE>   654
 
and their families to places within or outside the United States. The total
amount of such additional bonus payments or other consideration shall not exceed
0.25% of the public offering price of the shares sold. Any such bonus or
incentive programs will not change the price paid by investors for the purchase
of the applicable AIM Fund's shares or the amount that any particular AIM Fund
will receive as proceeds from such sales. Dealers may not use sales of the AIM
Funds' shares to qualify for any incentives to the extent that such incentives
may be prohibited by the laws of any state.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND uses
the amortized cost method of valuing the securities it holds and rounds its per
share net asset value to the nearest whole cent, it is anticipated that the net
asset value of the shares of that fund will remain constant at $1.00 per share.
However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00 net
asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
                                       A-3
<PAGE>   655
 
- --------------------------------------------------------------------------------
 
   
SPECIAL PLANS
    
 
  Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
 
   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance to $5,000 to
establish and maintain an allocation across a range of Advisor Class Funds. The
Program automatically rebalances holdings of Advisor Class Funds to the
established allocation on a periodic basis. Under the Program, a shareholder may
predesignate, on a percentage basis, how the total value of his or her holdings
in a minimum of two, and a maximum of ten, Advisor Class Funds ("Personal
Portfolio") is to be rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more Advisor Class Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other Advisor Class Funds in the
shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the
Advisor Class Fund(s) in a shareholder's Personal Portfolio have appreciated
during a rebalancing period, the Program will result in shares of Advisor Class
Fund(s) that have appreciated most during the period being exchanged for shares
of Advisor Class Fund(s) that have appreciated least. SUCH EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends, Distributions and Tax
Matters -- Dividends and Distributions." Participation in the Program does not
assure that a shareholder will profit from purchases under the Program nor does
it prevent or lessen losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Advisor Class Fund would be 2%
or less. In predesignating percentages, shareholders must use whole percentages
and totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an Advisor Class Fund's
shares. The AIM Funds and AIM Distributors reserve the right to modify, suspend,
or terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which Advisor
Class Funds or what allocation percentages are assigned to the Program, unless
canceled or changed in writing and received by the Transfer Agent in good order
at least five business days prior to the rebalancing date. Certain
dealers/financial institutions may charge a fee for establishing accounts
relating to the Program. Investors should contact their dealers/financial
institutions or AIM Distributors for more information.
    
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the Advisor
Class Funds may participate in an exchange privilege as described below. AIM
Distributors acts as distributor for the Advisor Class Funds which represent a
range of different investment objectives and policies.
 
  Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
 
  Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
 
  An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor
 
                                       A-4
<PAGE>   656
 
Class Fund acquired through exchange must be qualified for sale in the state in
which the shareholder resides; (c) the exchange must be made between accounts
having identical registrations and addresses; (d) the full amount of the
purchase price for the shares being exchanged must have already been received by
the fund; (e) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or Form
W-9 (certifying exempt status) must have been received by the fund; (f) newly
acquired shares (through either an initial or subsequent investment) are held in
an account for at least ten business days, and all other shares are held in an
account for at least one day, prior to the exchange; and (g) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the Advisor Class Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
  Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but under unusual market
conditions such purchases may be delayed for up to five business days if it is
determined that an Advisor Class Fund would be materially disadvantaged by an
immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into an Advisor Class Fund that declares daily dividends ("Dividends,
Distributions and Tax Matters -- Dividends and Distributions," below), and the
release of the exchange proceeds is delayed for the foregoing five-day period,
such shareholder will not begin to accrue dividends until the sixth business day
after the exchange. Advisor Class shares purchased by check may not be exchanged
until it is determined that the check has cleared, which may take up to ten
business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. A shareholder may give exchange information to his Financial
Adviser. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the Advisor Class Funds. AIM Distributors reserves the right to impose
conditions on dealers or investment advisors who make telephone exchanges of
shares of the Advisor Class Funds, including the condition that any such dealer
or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/financial institutions may charge service fees for handling
repurchase transactions.
 
                                       A-5
<PAGE>   657
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the Advisor
Class Funds are redeemed at their net asset value next computed after a request
for redemption in proper form (including signature guarantees and other required
documentation for written redemptions) is received by the Transfer Agent or
certain financial institutions (or their designees) who are authorized to accept
redemption orders on behalf of the AIM Funds, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. Orders for the redemption of Advisor Class shares received on any
business day of an AIM Fund will be confirmed at the price determined as of the
close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the proceeds are to be sent to
the address of record. These requirements may be waived or modified upon notice
to shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such 
    

                                       A-6
<PAGE>   658
   

as certain domestic banks, credit unions, securities dealers, or securities
exchanges. The Transfer Agent will also accept signatures with either: (1) a
signature guaranteed with a medallion stamp of the STAMP Program, or (2) a
signature guaranteed with a medallion stamp of the NYSE Medallion Signature
Program, provided that in either event, the amount of the transaction involved
does not exceed the surety coverage amount indicated on the medallion. For
information regarding whether a particular institution or organization qualifies
as an "eligible guarantor institution," an investor should contact the Client
Services Department of AFS.
    
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
  The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
                                       A-7
<PAGE>   659
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                    DISTRIBUTIONS          DISTRIBUTIONS
                                                                        OF NET                 OF NET
                                     DIVIDENDS FROM                    REALIZED               REALIZED
                                     NET INVESTMENT                   SHORT-TERM              LONG-TERM
FUND                                     INCOME                      CAPITAL GAINS          CAPITAL GAINS
- ----                                 --------------                  -------------          -------------
<S>                                  <C>                             <C>                     <C>
AIM BASIC VALUE FUND...............  declared and paid annually         annually                annually
AIM DEVELOPING MARKETS FUND........  declared and paid annually         annually                annually
AIM DOLLAR FUND....................  declared daily; paid monthly       annually                annually
AIM EMERGING MARKETS FUND..........  declared and paid annually         annually                annually
AIM EMERGING MARKETS DEBT FUND.....  declared and paid monthly          annually                annually
AIM EUROPE GROWTH FUND.............  declared and paid annually         annually                annually
AIM GLOBAL CONSUMER PRODUCTS AND
  SERVICES FUND....................  declared and paid annually         annually                annually
AIM GLOBAL FINANCIAL SERVICES
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL GOVERNMENT INCOME
  FUND.............................  declared and paid monthly          annually                annually
AIM GLOBAL GROWTH & INCOME FUND....  declared and paid quarterly        annually                annually
AIM GLOBAL HEALTH CARE FUND........  declared and paid annually         annually                annually
AIM GLOBAL INFRASTRUCTURE FUND.....  declared and paid annually         annually                annually
AIM GLOBAL RESOURCES FUND..........  declared and paid annually         annually                annually
AIM GLOBAL TELECOMMUNICATIONS
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL TRENDS FUND.............  declared and paid annually         annually                annually
AIM INTERNATIONAL GROWTH FUND......  declared and paid annually         annually                annually
AIM JAPAN GROWTH FUND..............  declared and paid annually         annually                annually
AIM LATIN AMERICAN GROWTH FUND.....  declared and paid annually         annually                annually
AIM MID CAP EQUITY FUND............  declared and paid annually         annually                annually
AIM NEW PACIFIC GROWTH FUND........  declared and paid annually         annually                annually
AIM SMALL CAP GROWTH FUND..........  declared and paid annually         annually                annually
AIM STRATEGIC INCOME FUND..........  declared and paid monthly          annually                annually
AIM WORLDWIDE GROWTH FUND..........  declared and paid annually         annually                annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
 
  Dividends on Advisor Class shares of an Advisor Class Fund are expected to be
higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
                                       A-8
<PAGE>   660
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares. With respect to tax-exempt shareholders,
dividends and distributions from the AIM Funds are not subject to federal income
taxation to the extent permitted under the applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the 
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    

  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
   
  TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS DEBT FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM MID CAP
EQUITY FUND, AIM SMALL CAP GROWTH FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL
TAX INFORMATION. Certain states exempt from income taxes dividends paid by
mutual funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
    
 
                                       A-9
<PAGE>   661
   
  AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
    
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each Advisor Class Fund's transfer agent and
dividend payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-10
<PAGE>   662
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                   GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
        ACCOUNT TYPE                    NUMBER OF:                     ACCOUNT TYPE                   NUMBER OF:
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary

      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application

      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors

      Legal Guardian          Ward, Minor or
                              Incompetent

      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
</TABLE>
- --------------------------------------------------------------------------------
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   663
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   664
 
LOGO         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
 
   
GFS-PRO-2
    
<PAGE>   665
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
ADVISOR CLASS OF
    
 
   
AIM GLOBAL GOVERNMENT INCOME FUND
    
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
PROSPECTUS
SEPTEMBER 8, 1998
 
This Prospectus contains information about AIM GLOBAL GOVERNMENT INCOME FUND
(the "Fund"), which is one of several series investment portfolios comprising
AIM Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a non-diversified portfolio which seeks a high level of
current income by investing primarily in high quality U.S. and foreign
government debt securities. The Fund's secondary objectives are capital
appreciation and protection of principal through active management of its
maturity structure and currency exposure.
 
   
This Prospectus sets forth concisely information about the Fund that prospective
investors should know before investing. It should be read carefully and retained
for future reference. A Statement of Additional Information, dated September 8,
1998, has been filed with the Securities and Exchange Commission (the "SEC") and
is incorporated herein by reference. The Statement of Additional Information is
available without charge upon request to the Trust at 11 Greenway Plaza, Suite
100, Houston, Texas 77046-1173, or by calling (800) 347-4246. The SEC maintains
a Web site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. Additional information about the Fund may also be obtained from
http://www.aimfunds.com.
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   666
   
- --------------------------------------------------------------------------------
    
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     6
  Investment Program...................     6
  Risk Factors.........................    10
  Management...........................    12
  Organization of the Trust............    14
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-4
  Exchange Privilege...................   A-4
  How to Redeem Shares.................   A-5
  Determination of Net Asset Value.....   A-7
  Dividends, Distributions and Tax
     Matters...........................   A-8
  General Information..................  A-10
APPLICATION INSTRUCTIONS...............   B-1
APPENDIX A.............................  A-14
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
   
  The Fund is a non-diversified series of the Trust.
    
 
  INVESTMENT OBJECTIVES. The Fund primarily seeks high current income and
secondarily seeks capital appreciation and protection of principal.
 
  PRINCIPAL INVESTMENTS. The Fund invests primarily in high quality U.S. and
foreign government debt obligations.
 
   
  INVESTMENT MANAGERS. The Fund is managed by AIM Advisors, Inc. ("AIM") and is
sub-advised and sub-administered by INVESCO (NY), Inc. (the "Sub-advisor"). AIM
and the Sub-advisor and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-advisor are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
AIM was organized in 1976 and, together with its subsidiaries, currently advises
approximately 90 investment company portfolios.
    
 
   
  PURCHASING SHARES. Advisor Class shares are offered through this Prospectus to
(a) trustees or other fiduciaries purchasing shares for employee benefit plans
which are sponsored by organizations which have at least 1,000 employees; (b)
any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment advisor has investment
discretion over such account, and (ii) the account holder pays such person as
compensation for its advice and other services an annual fee of at least 0.50%
on the assets in the account; (c) any account with assets of a least $10,000 if
(i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the
assets in the account; (d) accounts advised by the Sub-advisor or one of the
companies formerly affiliated with the Asset Management Division of
Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the funds in The AIM Family of Funds on May 29, 1998; and
(e) any of the companies composing or affiliated with AMVESCAP PLC.
    
 
  Pursuant to a separate prospectus, the Fund also offers Class A and Class B
shares, which represent interests in the Fund. The Class A and Class B shares
have different distribution arrangements.
 
  Initial investments in Advisor Class shares must be at least $500 and
additional investments must be at least $50. The distributor of the Advisor
Class shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares."
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds").
Advisor Class shares of the Fund may be exchanged for Advisor Class shares of
certain Funds in the AIM Family of Funds in the manner and subject to the
policies and charges set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Advisor Class shareholders of the Fund may redeem all or a
portion of their shares at net asset value on any business day. See "How to
Redeem Shares."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on a monthly basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be
    
 
                                        2
<PAGE>   667
 
reinvested at net asset value without payment of a sales charge in the Fund's
shares or may be invested in shares of the other funds in The AIM Family of
Funds. See "Dividends, Distributions and Tax Matters."
 
  RISK FACTORS. There is no assurance that the Fund will achieve its investment
objectives. The Fund's net asset value will fluctuate, reflecting fluctuations
in the market value of its portfolio holdings. The value of debt securities held
by the Fund generally fluctuates inversely with interest rate movements.
 
  The Fund will invest in foreign securities. Investments in foreign securities
involve risks relating to political and economic developments abroad and the
differences between the regulations to which U.S. and foreign issuers are
subject. Individual foreign economies also may differ favorably or unfavorably
from the U.S. economy. Changes in foreign currency exchange rates will affect
the Fund's net asset value, earnings and gains and losses realized on sales of
securities. Securities of foreign companies may be less liquid and their prices
more volatile than those of securities of comparable U.S. companies.
 
   
  The Fund may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs. See "Investment
Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   668
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
   
TABLE OF FEES AND EXPENSES
    
 
   
  The expenses and maximum transaction costs associated with investing in the
Advisor Class shares of the Fund are reflected in the following table(1):
    
 
   
<TABLE>
<S>                                                           <C>
Shareholder Transaction Costs:
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................  None
  Sales charges on reinvested distributions to
     shareholders...........................................  None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........  None
  Redemption charges........................................  None
  Exchange Fees.............................................  None
Annual Fund Operating Expenses(2): (as a % of average net
  assets)
  Investment management and administration fees.............  0.73%
  12b-1 distribution and service fees.......................  None
  Other expenses............................................  0.43%
                                                              ----
          Total Fund Operating Expenses.....................  1.16%
                                                              ====
</TABLE>
    
 
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Fund.
 
   
(2)Expenses are based on the Fund's fiscal year ended October 31, 1997. "Other
   expenses" include custody, transfer agent, legal, audit and other operating
   expenses. Effective November 1, 1997, AIM has voluntarily agreed to limit the
   Fund's expenses (exclusive of brokerage commissions, taxes, interest and
   extraordinary expenses) to the annual rate of 1.40% of the average daily net
   assets of the Fund's Advisor Class shares through May 31, 2000. See
   "Management" herein and the Statement of Additional Information for more
   information. Investors purchasing Advisor Class shares through financial
   planners, trust companies, bank trust departments or registered investment
   advisors, or under a "wrap fee" program, will be subject to additional fees
   charged by such entities or by the sponsors of such programs. Where any
   account advised by one of the companies composing or affiliated with AMVESCAP
   PLC invests in Advisor Class shares of the Fund, such account shall not be
   subject to duplicative advisory fees.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                      1 YEAR      3 YEARS     5 YEARS    10 YEARS
                                                     ---------   ---------   ---------   ---------
<S>                                                  <C>         <C>         <C>         <C>
Advisor Class Shares...............................     $12         $37         $64        $142
</TABLE>
    
 
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT EXPENSES, MAY
BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE ASSUMPTION IN THE
HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY REGULATION OF THE SEC
APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS NOT A PREDICTION OF AND
DOES NOT REPRESENT THE FUND'S PROJECTED OR ACTUAL PERFORMANCE.
 
                                        4
<PAGE>   669
 
- --------------------------------------------------------------------------------
 
FINANCIAL HIGHLIGHTS
 
   
  The table below provides condensed financial information concerning income and
capital changes for Advisor Class shares of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statements and notes for
fiscal year ended October 31, 1997 have been audited by PricewaterhouseCoopers
LLP, independent accountants, whose report thereon also is included in the
Statement of Additional Information. The unaudited financial statements and
notes, for the semi-annual period April 30, 1998, are also included in the
Statement of Additional Information.
    
 
   
                       AIM GLOBAL GOVERNMENT INCOME FUND
    
   
                  (FORMERLY GT GLOBAL GOVERNMENT INCOME FUND)
    
 
   
<TABLE>
<CAPTION>
                                                                                    ADVISOR CLASS+
                                                              ----------------------------------------------------------
                                                                SIX MONTHS                                 JUNE 1, 1995
                                                                  ENDED         YEAR ENDED OCTOBER 31,          TO
                                                              APRIL 30, 1998    -----------------------     OCTOBER 31,
                                                              (UNAUDITED)(C)    1997(C)        1996(C)        1995(C)
                                                              --------------    --------      ---------    -------------
<S>                                                           <C>               <C>           <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period........................      $ 8.61         $ 8.73        $  8.80        $ 8.98
                                                                  ------         ------        -------        ------
Income from investment operations:
  Net investment income.....................................        0.30           0.55           0.60          0.26
  Net realized and unrealized gain (loss) on investments....        0.11          (0.13)          0.03         (0.19)
                                                                  ------         ------        -------        ------
  Net increase (decrease) from investment operations........        0.41           0.42           0.63          0.07
                                                                  ------         ------        -------        ------
Distributions:
  From net investment income................................       (0.27)         (0.33)         (0.60)        (0.25)
  From net realized gain on investments.....................          --             --          (0.10)           --
  In excess of net investment income........................          --          (0.21)            --            --
  In excess of net realized gain on investments.............          --             --             --            --
  Return of capital.........................................          --             --             --            --
  From sources other than net investment income.............          --             --             --            --
                                                                  ------         ------        -------        ------
         Total distributions................................       (0.27)         (0.54)         (0.70)        (0.25)
                                                                  ------         ------        -------        ------
Net asset value, end of period..............................      $ 8.75         $ 8.61        $  8.73        $ 8.80
                                                                  ======         ======        =======        ======
Total investment return(d)..................................        4.71%(a)       5.15%          7.49%         0.83%(a)
                                                                  ======         ======        =======        ======
Ratios and supplemental data:
Net assets, end of period (in 000's)........................      $  196         $  116        $    86        $  131
Ratio of net investment income to average net assets........        7.04%(b)       6.39%          6.87%         7.33%(b)
Ratio of operating expenses to average net assets:
  With expense reductions...................................        1.15%(b)       0.99%          0.99%         1.00%(b)
  Without expense reductions................................        1.15%(b)       1.16%          1.04%         1.03%(b)
Ratio of interest expense to average net assets.............        0.32%(b)        N/A            N/A           N/A
Portfolio turnover rate++...................................         211%(b)        N/A            N/A           N/A
</TABLE>
    
 
- ---------------
 
   
+
    
   
    
   
     Commencing June 1, 1995, the Fund began offering Advisor Class shares.
    
 
   
++
    
   
    
   
     Portfolio turnover and ratio of interest expense to average net assets is
     calculated on the basis of the Fund as a whole without distinguishing
     between the classes of shares issued.
    
 
   
(a)  Not annualized.
    
 
   
(b)  Annualized.
    
 
   
(c)  These selected per share data were calculated based upon average shares
     outstanding during the period.
    
 
   
(d)  Total investment return does not include sales charges.
    
 
   
N/A  Not Applicable.
    
                                ---------------
 
   
<TABLE>
<CAPTION>
                                                                          AVERAGE         AVERAGE NUMBER OF    AVERAGE AMOUNT
                                                    AMOUNT OF DEBT    AMOUNT OF DEBT     REGISTRANT'S SHARES    OF DEBT PER
                                                    OUTSTANDING AT      OUTSTANDING          OUTSTANDING        SHARE DURING
                    YEAR ENDED                      END OF PERIOD    DURING THE PERIOD    DURING THE PERIOD      THE PERIOD
                    ----------                      --------------   -----------------   -------------------   --------------
<S>                                                 <C>              <C>                 <C>                   <C>
Six months ended April 30, 1998...................   $21,178,000        $12,376,724           30,907,029          $ 0.400
October 31, 1997..................................   $ 4,451,000        $ 1,616,315           38,476,908          $0.0420
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed on a daily
basis.
    
 
                                        5
<PAGE>   670
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  Yield is computed in accordance with standardized formulas described in the
Statement of Additional Information and can be expected to fluctuate from time
to time and is not necessarily indicative of future results. Accordingly, yield
information may not provide a basis for comparison with investments which pay a
fixed rate of interest for a stated period of time. Yield reflects investment
income net of expenses over the relevant period attributable to a Fund share,
expressed as an annualized percentage of the net asset value per share for
Advisor Class shares.
 
  Yield is a function of the type and quality of the Fund's investments, the
maturity of the securities held in the Fund's portfolio and the operating
expense ratio of the Fund. A shareholder's investment in the Fund is not insured
or guaranteed. These factors should be carefully considered by the investor
before making an investment in the Fund.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's yield and total return. The performance
of the Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
 
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVE. The Fund seeks a high level of current income by
investing primarily in high quality debt securities of the U.S. and foreign
governments, their agencies and instrumentalities. Its secondary objectives are
capital appreciation and protection of principal through active management of
its maturity structure and currency exposure. There can be no assurance that the
Fund will achieve its investment objective.
    
 
   
  INVESTMENT POLICIES. At least 65% of the Fund's total assets normally are
invested in debt obligations issued or guaranteed by the U.S. or foreign
governments (including foreign states, provinces or municipalities) or their
agencies, authorities or instrumentalities including mortgage-backed securities
issued by agencies or instrumentalities of the U.S. Government or by foreign
governments. For purposes of this policy, the Fund considers debt obligations of
supranational entities organized or supported by several national governments,
such as the World Bank and the Asian Development Bank, to be "government
securities."
    
 
   
  The Fund invests primarily in high quality government debt securities. "High
quality" debt securities are those rated in the top two ratings categories of
Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's, a division of
The McGraw-Hill Companies, Inc. ("S&P"), or, if not rated, determined to be of
comparable quality by the Sub-advisor. A description of Moody's and S&P ratings
is included in the Appendix to this Prospectus.
    
 
   
  The Fund currently contemplates that it will invest principally in obligations
of the United States, Canada, Japan, the Western European nations, New Zealand
and Australia, as well as in multinational currency units. Under normal market
conditions, the Fund invests in issues of not less than three different
countries; investments in the securities of any one country, other than the
United States, normally represent no more than 40% of the Fund's total assets.
The Fund will not invest in a foreign currency or in securities denominated in a
foreign currency if such currency is not at the time of investment considered by
the Sub-advisor to be fully exchangeable into U.S. dollars (or a multinational
currency unit) without legal restriction.
    
 
   
  The Fund may also invest up to 35% of its total assets in: (1) foreign
government securities that are not high quality but are rated at least
"investment grade," (i.e., rated within the four highest ratings categories of
Moody's or S&P or, if not rated, determined by the Sub-advisor to be of
comparable quality); (2) corporate debt obligations of U.S. or foreign issuers
rated at least investment grade by Moody's or S&P, including debt obligations
convertible into equity securities or having attached warrants or rights to
purchase equity
    
                                        6
<PAGE>   671
 
   
securities; (3) privately issued mortgage-backed and asset-backed securities
that are rated at least investment grade by Moody's or S&P, or if unrated,
determined by the Sub-advisor to be of comparable quality; and (4) common
stocks, preferred stocks and warrants to acquire such securities, provided that
the Fund will not invest more than 20% of its total assets in such securities.
    
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
  ASSET ALLOCATION. The Fund invests in debt obligations allocated among diverse
markets and denominated in various currencies, including U.S. dollars, or in
multinational currency units such as Euros. The Fund is designed for investors
who wish to accept the risks entailed in such investments, which are different
from those associated with a portfolio consisting entirely of securities of U.S.
issuers denominated in U.S. dollars. The Fund may purchase securities that are
issued by the government or a company or financial institution of one country
but denominated in the currency of another country (or a multinational currency
unit).
 
   
  The Sub-advisor allocates the assets of the Fund in securities of issuers in
countries and in currency denominations where the combination of fixed income
market returns, the price appreciation potential of fixed income securities and
currency exchange rate movements will present opportunities primarily for high
current income and secondarily for capital appreciation (and in the case of the
Fund, secondarily for Capital Appreciation and protection of principal). In so
doing, the Sub-advisor intends to take full advantage of the different yield,
risk and return characteristics that investment in the fixed income markets of
different countries can provide for U.S. investors. Fundamental economic
strength, credit quality and currency and interest rate trends are the principal
determinants of the emphasis given to various country, geographic and industry
sectors within the Fund. Securities held by the Fund may be invested without
limitation as to maturity.
    
 
   
  The Sub-advisor selects securities of particular issuers on the basis of its
views as to the best values then currently available in the marketplace. Such
values are a function of yield, maturity, issue classification and quality
characteristics, coupled with expectations regarding the local and world
economies, movements in the general level and term of interest rates, currency
values, political developments and variations in the supply of funds available
for investment in the world bond market relative to the demands placed upon it.
    
 
   
  The Sub-advisor generally evaluates currencies on the basis of fundamental
economic criteria (e.g., relative inflation, interest rate levels and trends,
growth rate forecasts, balance of payments status and economic policies) as well
as technical and political data. The Sub-advisor may seek to protect the Fund
against such negative currency movements through the use of sophisticated
investment techniques. See "Options, Futures and Forward Currency Transactions."
    
 
   
  According to the Sub-advisor, as of the date of this Prospectus, more than 50%
of the value of all outstanding government debt obligations throughout the world
is represented by obligations denominated in currencies other than the U.S.
dollar. Moreover, from time to time, the debt securities of issuers located
outside the United States have substantially outperformed the debt obligations
of U.S. issuers. Accordingly, the Sub-advisor believes that the Fund's policy of
investing in debt securities throughout the world may enable the achievement of
results superior to those produced by mutual funds with similar objectives to
those of the Fund that invest solely in debt securities of U.S. issuers.
    
 
  The Fund is designed for investors who wish to accept the risks entailed in
such investments, which are different from those associated with a portfolio
consisting entirely of securities of U.S. issuers denominated in U.S. dollars.
 
   
  TEMPORARY DEFENSIVE STRATEGIES. The Sub-advisor may employ a temporary
defensive investment strategy if it determines such a strategy to be warranted
due to market, economic or political conditions. Pursuant to such a defensive
strategy, the Fund temporarily may hold cash (U.S. dollars, foreign currencies
or multinational currency units) and/or invest up to 100% of its assets in high
quality debt securities or money market instruments of U.S. or foreign issuers.
In addition, for temporary defensive purposes, most or all of the Fund's
investments may be made in the United States and denominated in U.S. dollars. To
the extent the Fund employ a temporary defensive strategy, it will not be
invested so as to achieve directly its investment objectives. In addition,
pending investment of proceeds from new sales of Fund shares or to meet ordinary
daily cash needs, the Fund may hold cash (U.S. dollars, foreign currencies or
multinational currency units such as euros) and may invest in high quality
foreign or domestic money market instruments. For a full description of money
market instruments, see "Selection of Debt Investments" in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
    
 
  BRADY BONDS. The Fund may invest in "Brady Bonds," which are debt
restructurings that provide for the exchange of cash and loans for newly issued
bonds. Brady Bonds have been issued by the countries of Albania, Argentina,
Brazil, Bulgaria, Costa Rica, Dominican Republic, Ecuador, Ivory Coast, Jordan,
Mexico, Nigeria, Panama, Peru, Philippines, Poland, Uruguay, Venezuela and
Vietnam and are expected to be issued by other emerging market countries. As of
the date of this Prospectus, the Fund is not aware of the occurrence of any
payment defaults on Brady Bonds. Investors should recognize, however, that Brady
Bonds do not have a long payment history. In addition, Brady Bonds are often
rated below investment grade.
 
  The Fund may invest in either collateralized or uncollateralized Brady Bonds.
U.S. dollar-denominated, collateralized Brady Bonds, which may be fixed rate par
bonds or floating rate discount bonds, are collateralized in full as to
principal by U.S. Treasury zero coupon bonds having the same maturity as the
bonds. Interest payments on such bonds generally are collateralized by cash or
securities in an amount that, in the case of fixed rate bonds, is equal to at
least one year of rolling interest payments or, in the case of floating rate
 
                                        7
<PAGE>   672
 
bonds, initially is equal to at least one year's rolling interest payments based
on the applicable interest rate at the time of issuance and is adjusted at
regular intervals thereafter.
 
  MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The Fund may invest in
mortgage-backed and asset-backed securities of U.S. and foreign issuers,
including privately issued mortgage-backed and asset-backed securities.
Mortgage-backed securities represent direct or indirect interests in pools of
underlying mortgage loans that are secured by real property. Investors typically
receive payments out of the interest on and principal of the underlying
mortgages. Asset-backed securities are similar to mortgage-backed securities,
except that the underlying assets are other financial assets or financial
receivables, such as motor vehicle installment sales contracts, home equity
loans, leases of various types of real and personal property, and receivables
from credit cards. Any mortgage-backed and asset-backed securities purchased by
the Fund will be subject to the same rating requirements that apply to its other
investments. In addition, privately issued mortgage-backed and asset-backed
securities purchased by the Fund will be subject to the limitation of the Fund
which allows no more than 35% of its total assets to be invested in securities
of non-governmental issuers.
 
  WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities and forward commitments only with the intention
of actually receiving or delivering the securities, as the case may be. No
income accrues on securities that have been purchased pursuant to a forward
commitment or on a when-issued basis prior to delivery of the securities. If the
Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, the Fund will
segregate cash or liquid securities equal to the value of the when-issued or
forward commitment securities with its custodian and will mark to market daily
such assets. There is a risk that the securities may not be delivered and that
the Fund may incur a loss. The Fund may invest up to 5% of its total assets in a
combination of securities purchased on a when-issued basis or with respect to
which it has entered into forward commitment agreements.
 
   
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemption of Fund
shares. The Fund also may borrow up to 5% of its total assets for temporary or
emergency purposes other than to meet redemptions. However, the Fund will not
borrow for investment purposes, nor will the Fund purchase securities while
borrowings in excess of 5% of its total assets are outstanding.
    
 
  The Fund may also enter into reverse repurchase agreements with a bank or
recognized securities dealer. Under a reverse repurchase agreement, the Fund
would sell securities and agree to repurchase them at a particular price at a
future date. At the time the Fund enters into a reverse repurchase agreement, it
will establish and maintain a segregated account with an approved custodian
containing cash or liquid securities having a value not less than the repurchase
price, including accrued interest. Reverse repurchase agreements involve the
risk that the market value of the securities retained in lieu of sale by the
Fund may decline below the price of the securities the Fund has sold but is
obligated to repurchase. In the event the buyer of securities under a reverse
repurchase agreement files for bankruptcy or becomes insolvent, such buyer or
its trustee or receiver may receive an extension of time to determine whether to
enforce the Fund's obligation to repurchase the securities, and the Fund's use
of the proceeds of the reverse repurchase agreement may effectively be
restricted pending such decision.
 
  The Fund also may enter into "dollar rolls," in which the Fund sells fixed
income securities for delivery in the current month and simultaneously contracts
to repurchase substantially similar (same type, coupon and maturity) securities
on a specified future date. During the roll period, the Fund would forego
principal and interest paid on such securities. The Fund would be compensated by
the difference between the current sales price and the forward price for the
future purchase, as well as by the interest earned on the cash proceeds of the
initial sale. See "Investment Objectives and Policies" in the Statement of
Additional Information.
 
  Reverse repurchase agreements and dollar rolls will be treated as borrowings
and will be deducted from the Fund's assets for purposes of calculating
compliance with the Fund's borrowing limitation. See "Investment Limitations" in
the Statement of Additional Information.
 
   
  SECURITIES LENDING. The Fund may lend its respective portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Fund to retain ownership of the securities loaned and, at the same time,
enhances the Fund's total return. At all times a loan is outstanding, the Fund
requires the borrower to maintain with the Fund's custodian, collateral
consisting of cash, U.S. government securities or certain irrevocable letters of
credit equal to at least the value of the borrowed securities, plus any accrued
interest or such other collateral as permitted by the Fund's investment program
and regulatory agencies, and as approved by the Board. The Fund limits its loans
of portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. The risks in lending portfolio
securities, as with other extensions of secured credit, consist of possible
delays in receiving additional collateral or in recovery of the loaned
securities and possible loss of rights in the collateral should the borrower
fail financially.
    
 
                                        8
<PAGE>   673
 
  ZERO COUPON SECURITIES. The Fund may invest in certain zero coupon securities
that are "stripped" U.S. Treasury notes and bonds. It may also invest in zero
coupon and other deep discount securities issued by foreign governments and
domestic and foreign corporations, including certain Brady Bonds and other
foreign debt and in payment-in-kind securities. Zero coupon securities pay no
interest to holders prior to maturity, and payment-in-kind securities pay
interest in the form of additional securities. However, a portion of the
original issue discount on zero coupon securities and the "interest" on
payment-in-kind securities will be included in the Fund's income. Accordingly,
for the Fund to continue to qualify for tax treatment as a regulated investment
company and to avoid a certain excise tax (see "Taxes" in the Statement of
Additional Information), it may be required to distribute an amount that is
greater than the total amount of cash it actually receives. These distributions
must be made from the Fund's cash assets or, if necessary, from the proceeds of
sales of portfolio securities. The Fund will not be able to purchase additional
income-producing securities with cash used to make such distributions, and its
current income ultimately may be reduced as a result. Zero coupon and
payment-in-kind securities usually trade at a deep discount from their face or
par value and will be subject to greater fluctuations of market value in
response to changing interest rates than debt obligations of comparable
maturities that make current distributions of interest in cash.
 
  SYNTHETIC SECURITY POSITIONS. The Fund may utilize combinations of futures on
bonds and forward currency contracts to create investment positions that have
substantially the same characteristics as bonds of the same type as those on
which the futures contracts are written. Investment positions of this type are
generally referred to as "synthetic securities."
 
   
  For example, in order to establish a synthetic security position for the Fund
that is comparable to owning a Japanese government bond, the Sub-advisor might
purchase futures contracts on Japanese government bonds in the desired principal
amount and purchase forward currency contracts for Japanese Yen in an amount
equal to the then current purchase price for such bonds in the Japanese cash
market, with each contract having approximately the same delivery date.
    
 
   
  The Sub-advisor might roll over the futures and forward currency contract
positions before taking delivery in order to continue the Fund's investment
position, or the Sub-advisor might close out those positions, thus effectively
selling the synthetic security. Further, the amount of each contract might be
adjusted in response to market conditions and the forward currency contract
might be changed in amount or eliminated in order to hedge against currency
fluctuations.
    
 
   
  The Sub-advisor would create synthetic security positions for the Fund when it
believes that it can obtain a better yield or achieve cost savings in comparison
to purchasing actual bonds or when comparable bonds are not readily available in
the market. Synthetic security positions are subject to the risk that changes in
the value of purchased futures contracts may differ from changes in the value of
the bonds that might otherwise have been purchased in the cash market. Also,
while the Sub-advisor believes that the cost of creating synthetic security
positions generally will be materially lower than the cost of acquiring
comparable bonds in the cash market, the Fund will incur transaction costs in
connection with each purchase of a futures or forward currency contract. The use
of futures contracts and forward currency contracts to create synthetic security
positions also is subject to substantially the same risks as those that exist
when these instruments are used in connection with hedging strategies. See
"Options, Futures and Forward Currency Transactions" below and "Options, Futures
and Currency Strategies" in the Statement of Additional Information.
    
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies, and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the Fund's investment. The Fund may enter into such instruments
up to the full value of its portfolio assets. See "Risk Factors -- Options,
Futures and Currency Transactions" herein and "Options, Futures and Currency
Strategies" in the Statement of Additional Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to the
Fund's portfolio positions. The Fund may also purchase and sell put and call
options on currencies, futures contracts on currencies and options on such
futures contracts to hedge against movements in exchange rates.
 
   
  In addition, the Fund may purchase and sell put and call options on securities
to hedge against the risk of fluctuations in the prices of securities held by
the Fund or that the Sub-advisor intends to include in the Fund's portfolio. The
Fund also may purchase and sell put and call options on indices to hedge against
overall fluctuations in the securities markets generally or in a specific market
sector.
    
 
  Further, the Fund may sell index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general market or market sector decline that could adversely affect the Fund's
portfolio. The Fund also may purchase index futures contracts and purchase call
options or write put options on such contracts to hedge against a general market
or market sector advance and thereby attempt to lessen the cost of future
securities acquisitions. The Fund may use interest rate futures contracts and
options thereon to hedge its portfolio against changes in the general level of
interest rates.
 
   
  INDEXED SECURITIES. The Fund may invest in certain indexed securities, which
are securities whose prices are indexed to the prices of other securities,
securities indices, currencies, precious metals or other commodities, or other
financial indicators. Indexed securities typically, but not always, are debt
securities or deposits whose value at maturity or coupon rate is determined by
reference to a specific instrument or statistic. The performance of indexed
securities depends to a great extent on the performance of the security,
currency, or other instrument to which they are indexed, and may also be
influenced by interest rate changes in the United
    
 
                                        9
<PAGE>   674
 
States and abroad. At the same time, indexed securities are subject to the
credit risks associated with the issuer of the security, and their values may
decline substantially if the issuer's creditworthiness deteriorates. Indexed
securities may be more volatile than the underlying instruments. New forms of
indexed securities continue to be developed. The Fund may invest in such
securities to the extent consistent with its investment objectives.
 
  OTHER INFORMATION. The Fund's investment objectives may not be changed without
the approval of a majority of the Fund's outstanding voting securities. A
"majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. The
Fund's other investment policies described herein and in the Statement of
Additional Information may be changed by the Trust's Board of Trustees without
shareholder approval.
 
  The Fund is authorized to make short sales of securities, although it has no
current intention of doing so. See "Investment Objectives and Policies -- Short
Sales" in the Statement of Additional Information.
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
 
- --------------------------------------------------------------------------------
 
RISK FACTORS
 
   
  GENERAL. There is no assurance that the Fund will achieve its investment
objectives. The Fund's net asset value will fluctuate, reflecting fluctuations
in the market value of its portfolio positions and its net currency exposure.
The value of fixed income securities held by the Fund generally fluctuates
inversely with interest rate movements. Longer term bonds held by the Fund are
subject to greater interest rate risk.
    
 
  NON-DIVERSIFIED CLASSIFICATION. The Fund is classified under the Investment
Company Act of 1940 (the "1940 Act") as a "non-diversified" fund. As a result,
the Fund will be able to invest in a fewer number of issuers than if it were
classified under the 1940 Act as a "diversified" fund. To the extent that the
Fund invests in a smaller number of issuers, the value of the Fund's shares may
fluctuate more widely and the Fund may be subject to greater investment and
credit risk with respect to its portfolio.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally are not registered with the SEC, nor
are the issuers thereof usually subject to the SEC's reporting requirements.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available with respect to U.S. securities and
issuers. Foreign companies generally are not subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to U.S. companies. In addition, certain costs
attributable to foreign investing, such as custody charges, are higher than
those attributable to domestic investing. Securities of some foreign companies
are less liquid and their prices may be more volatile than securities of
comparable domestic companies. The Fund's interest and dividends from foreign
issuers may be subject to non-U.S. withholding taxes, thereby reducing its net
investment income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Fund, political or social instability, or diplomatic
developments which could affect the investments of the Fund in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
 
  CURRENCY RISK. Since the Fund normally invests substantially in securities
denominated in currencies other than the U.S. dollar, and because it may hold
foreign currencies, it will be affected favorably or unfavorably by exchange
control regulations or changes in the exchange rates between such currencies and
the U.S. dollar. Changes in currency exchange rates will influence the value of
the Fund's shares, and also may affect the value of dividends and interest
earned by the Fund and gains and losses realized by the Fund. Currencies
generally are evaluated on the basis of fundamental economic criteria (e.g.,
relative inflation and interest rate levels and trends, growth rate forecasts,
balance of payments status and economic policies) as well as technical and
political data. The exchange rates between the U.S. dollar and other currencies
are determined by supply and demand in the currency exchange markets, the
international balance of payments, governmental intervention, speculation and
other economic and political conditions. If the currency in which a security is
denominated appreciates against the U.S. dollar, the dollar value of the
security will increase. Conversely, a decline in the exchange rate of the
currency would adversely affect the value of the security expressed in U.S.
dollars.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country
    
 
                                       10
<PAGE>   675
 
   
which is a member of the EEMU may elect to participate in the EEMU and may
supplement its existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
  MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The yield characteristics of
mortgage-backed and asset-backed securities differ from those of traditional
bonds. Among the major differences are that interest and principal payments are
made more frequently (usually monthly) and that principal may be prepaid at any
time because the underlying mortgage loans or other assets generally may be
prepaid at any time. Generally, prepayments on fixed-rate mortgage loans will
increase during a period of falling interest rates and decrease during a period
of rising interest rates. Mortgage-backed and asset-backed securities may also
decrease in value as a result of increasing market interest rates and, because
of prepayments, may benefit less than other bonds from declining interest rates.
Reinvestments of prepayments may occur at lower interest rates than the original
investment, thus adversely affecting the yield of the Fund. Actual prepayment
experience may cause the yield of a mortgage-backed security to differ from what
was assumed when the Fund purchased the security. The market for privately
issued mortgage-backed and asset-backed securities is smaller and less liquid
than the market for U.S. government mortgage-backed securities.
 
  Foreign mortgage-backed securities markets are substantially smaller than U.S.
markets, but have been established in several countries, including Germany,
Denmark, Sweden, Canada and Australia, and may be developed elsewhere. Foreign
mortgage-backed securities generally are structured similar to domestic
mortgage-backed securities, and they normally present substantially similar
investment risks as well as the other risks normally associated with foreign
securities.
 
  SOVEREIGN DEBT. The Fund may invest in sovereign debt securities of emerging
market governments, including Brady Bonds. Investments in such securities
involve special risks. The issuer of the debt or the governmental authorities
that control the repayment of the debt may be unable or unwilling to repay
principal or interest when due in accordance with the terms of such debt.
Periods of economic uncertainty may result in the volatility of market prices of
sovereign debt obligations and in turn the Fund's net asset value, to a greater
extent than the volatility inherent in domestic fixed income securities.
 
  A sovereign debtor's willingness or ability to repay principal and pay
interest in a timely manner may be affected by, among other factors, its cash
flow situation, the extent of its foreign reserves, the availability of
sufficient foreign exchange on the date a payment is due, the relative size of
the debt service burden to the economy as a whole, the sovereign debtor's policy
toward principal international lenders and the political constraints to which a
sovereign debtor may be subject. Emerging market governments could default on
their sovereign debt. Such sovereign debtors also may be dependent on expected
disbursements from foreign governments, multilateral agencies and other entities
abroad to reduce principal and interest arrearages on their debt. The commitment
on the part of these governments, agencies and others to make such disbursements
may be conditioned on a sovereign debtor's implementation of economic reforms
and/or economic performance and the timely service of such debtor's obligations.
Failure to implement such reforms, achieve such levels of economic performance
or repay principal or interest when due, may result in the cancellation of such
third parties' commitments to lend funds to the sovereign debtor, which may
further impair such debtor's ability or willingness to timely service its debts.
 
   
  The occurrence of political, social or diplomatic changes in one or more of
the countries issuing sovereign debt could adversely affect the Fund's
investments. Emerging markets are faced with social and political issues and
some of them have experienced high rates of inflation in recent years and have
extensive internal debt. Among other effects, high inflation and internal debt
service requirements may adversely affect the cost and availability of future
domestic sovereign borrowing to finance governmental programs, and may have
other adverse social, political and economic consequences. Political changes or
a deterioration of a country's domestic economy or balance of trade may affect
the willingness of countries to service their sovereign debt. Although the
Sub-advisor intends to manage the Fund in a manner that will minimize the
exposure to such risks, there can be no assurance that adverse political changes
will not cause the Fund to suffer a loss of interest or principal on any of its
holdings.
    
 
  In recent years, some of the emerging market countries in which the Fund
expects to invest have encountered difficulties in servicing their sovereign
debt obligations. Some of these countries have withheld payments of interest
and/or principal of sovereign debt. These difficulties have also led to
agreements to restructure external debt obligations -- in particular, commercial
bank loans, typically by rescheduling principal payments, reducing interest
rates and extending new credits to finance interest payments on existing debt.
In the future, holders of emerging market sovereign debt securities may be
requested to participate in similar rescheduling of such debt. Certain emerging
market countries are among the largest debtors to commercial banks and foreign
governments. Currently, Brazil, Mexico and Argentina are the largest debtors
among developing countries. At times certain emerging market countries have
declared moratoria on the payment of principal and interest on external debt;
such a moratorium is currently in effect in certain emerging market countries.
There is no bankruptcy proceeding by which a creditor may collect in whole or in
part sovereign debt on which an emerging market government has defaulted.
 
                                       11
<PAGE>   676
 
  The ability of emerging market governments to make timely payments on their
sovereign debt securities is likely to be influenced strongly by a country's
balance of trade and its access to trade and other international credits. A
country whose exports are concentrated in a few commodities could be vulnerable
to a decline in the international prices of one or more of such commodities.
Increased protectionism on the part of a country's trading partners could also
adversely affect its exports. Such events could diminish a country's trade
account surplus, if any. To the extent that a country receives payment for its
exports in currencies other than hard currencies, its ability to make hard
currency payments could be affected.
 
  Investors should also be aware that certain sovereign debt instruments in
which the Fund may invest involve great risk. As noted above, sovereign debt
obligations issued by emerging market governments generally are deemed to be the
equivalent in terms of quality to securities rated below investment grade by
Moody's and S&P. Such securities are regarded as predominantly speculative with
respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligations and involve major risk exposure to
adverse conditions. Some of such securities, with respect to which the issuer
currently may not be paying interest or may be in payment default, may be
comparable to securities rated D by S&P or C by Moody's. The Fund may have
difficulty disposing of and valuing certain sovereign debt obligations because
there may be a limited trading market for such securities. Because there is no
liquid secondary market for many of these securities, the Fund anticipates that
such securities could be sold only to a limited number of dealers or
institutional investors.
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions, the
Fund might not enter into any such transactions. Options, futures and foreign
currency transactions involve certain risks, which include: (1) dependence on
the Sub-advisor's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets or in the appropriate
market sector and movements in interest rates and currency markets; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, forward contracts, futures contracts or options thereon and movements
in the price of the currency or security hedged or used for cover; (3) the fact
that skills and techniques needed to trade options, futures contracts and
options thereon or to use forward currency contracts are different from those
needed to select the securities in which the Fund invests; (4) lack of assurance
that a liquid secondary market will exist for any particular option, futures
contract or option thereon at any particular time; (5) the possible loss of
principal under certain conditions; and (6) the possible inability of the Fund
to purchase or sell a portfolio security at a time when it would otherwise be
favorable for it to do so, or the possible need for the Fund to sell a security
at a disadvantageous time, due to the need for the Fund to maintain "cover" or
to set aside securities in connection with hedging transactions.
    
 
  ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets, in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
 
- --------------------------------------------------------------------------------
 
MANAGEMENT
 
   
  The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust and persons or companies furnishing services to the Fund,
including the investment management and administrative services agreement with
AIM, the investment sub-advisory and sub-administration agreement between AIM
and the Sub-advisor, the agreements with AIM Distributors regarding distribution
of the Fund's shares, the custody agreement and the transfer agency agreement.
The day-to-day operation of the Fund is delegated to the officers of the Trust,
subject always to the investment objectives and policies of the Fund and to the
general supervision of the Trust's Board. See "Trustees and Executive Officers"
in the Statement of Additional Information for information on the Trustees of
the Trust.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers and administrators include, but
are not limited to, determining the composition of the investment portfolio of
the Fund and placing orders to buy, sell or hold particular securities. In
addition, AIM and the Sub-advisor provide the following administration services
to the Fund: furnishing corporate officers and clerical staff; providing office
space, services and equipment; and supervising all matters relating to the
Fund's operation.
    
 
   
  The Fund pays AIM investment management and administration fees computed daily
and payable monthly, based on the average daily net assets, for such services at
the annualized rate of .725% on the first $500 million, .70% on the next $1
billion, .675% on the next $1 billion, and .65% on amounts thereafter. Out of
the aggregate fees payable by the Fund, AIM pays the Sub-advisor sub-advisory
and sub-administration fees equal to 40% of the aggregate fees AIM receives from
the Fund. The investment management and administration fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-advisor, AIM Distributors or any other agents. Effective
November 1, 1997, AIM has undertaken to limit the expenses of the Advisor Class
shares of the Fund (exclusive of brokerage commissions, taxes, interest and
extraordinary expenses) to the maximum annual rate of 1.40% of the average daily
net assets of the Fund's Advisor Class shares.
    
 
   
  The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the
    
 
                                       12
<PAGE>   677
 
   
Sub-advisor (other than AIM Eastern Europe Fund). Each of these funds, including
the Fund, pays an amount based upon its relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment advisory
agreement (the "Advisory Agreement"). AIM was organized in 1976 and, together
with its subsidiaries, manages or advises approximately 90 investment company
portfolios encompassing a broad range of investment objectives. The Sub-advisor,
50 California Street, 27th Floor, San Francisco, California 94111, and 1166
Avenue of the Americas, New York, New York 10036, serves as the sub-advisor to
the Fund pursuant to an investment sub-advisory and sub-administrative
agreement. Prior to May 29, 1998, the Sub-advisor was known as Chancellor LGT
Asset Management, Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"),
the former indirect parent organization of the Sub-advisor, consummated a
purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP PLC acquired
LGT's Asset Management Division, which included the Sub-advisor and certain
other affiliates. As a result of this transaction, the Sub-advisor is now an
indirect wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-
advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices, including investment offices in Atlanta,
Boston, Dallas, Denver, Louisville, Miami, Portland (Oregon), Frankfurt, Hong
Kong, London, Singapore, Sydney, Tokyo and Toronto. In managing the Fund, the
Sub-advisor employs a team approach, taking advantage of its investment
resources around the world.
    
 
  The investment professionals primarily responsible for the portfolio
management of the Fund are as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
     NAME/OFFICE               THE FUND                           PAST FIVE YEARS
     -----------         --------------------                   -------------------
<S>                     <C>                      <C>
Cheng-Hock Lau          Portfolio Manager        Chief Investment Officer for Global Fixed Income
New York                since 1996               and Portfolio Manager for the Sub-advisor since
                                                 October 1996. Senior Portfolio Manager for
                                                 Global/International Fixed Income for the
                                                 Sub-advisor from July 1995 to October 1996.
                                                 Employed by Chancellor Capital Management, Inc.
                                                 ("Chancellor Capital"), a predecessor of the
                                                 Sub-Advisor, from 1995 to October 1996. Senior
                                                 Vice President and Senior Portfolio Manager for
                                                 Fiduciary Trust Company International from 1993 to
                                                 1995.
David B. Hughes         Portfolio Manager        Head of Global Fixed Income, North America, and
New York                since 1998               Portfolio Manager for the Sub-advisor since
                                                 January 1998. Senior Portfolio Manager for
                                                 Global/International Fixed Income for the
                                                 Sub-advisor from July 1995 to December 1997.
                                                 Employed by Chancellor Capital from July 1995 to
                                                 October 1996. Assistant Vice President of
                                                 Fiduciary Trust Company International from 1994 to
                                                 1995. Assistant Treasurer at the Bankers Trust
                                                 Company from 1991 to 1994.
</TABLE>
    
 
   
  In placing orders for the Fund's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions for the Fund may be
executed through affiliates of AIM or the Sub-advisor. High portfolio turnover
(over 100%) involves correspondingly greater brokerage commissions and other
transaction costs that the Fund will bear directly and could result in the
realization of net capital gains which would be taxable when distributed to
shareholders. See "Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement (the
"Distribution Agreement"), with AIM Distributors, a registered broker-dealer and
a wholly owned subsidiary of AIM, to act as the distributor of the Advisor Class
shares of the Fund. Certain Trustees and officers of the Trust are affiliated
with AIM Distributors.
    
 
  The Distribution Agreement provides AIM Distributors with the exclusive right
to distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
 
                                       13
<PAGE>   678
 
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST
    
 
   
  The Trust was organized as a Delaware business trust on May 7, 1998. On
September 8, 1998, the Trust acquired the assets of and assumed the liabilities
of AIM Investment Funds, Inc., a Maryland corporation. The Fund constitutes one
of the thirteen separate and distinct series portfolios of the Trust.
    
 
  From time to time, the Trust may establish other funds, each corresponding to
a distinct investment portfolio and a distinct series of the Trust's shares.
Shares of each fund are entitled to one vote per share (with proportional voting
for fractional shares) and are freely transferable. Shareholders have no
preemptive rights. Other than the automatic conversion of Class B shares to
Class A shares, there are no conversion rights.
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that Class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
   
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
    
   
    
 
                                       14
<PAGE>   679
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
                  TO THE AIM FAMILY OF FUNDS--Register Mark--
                            FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several of
which offer Advisor Class shares. Only Advisor Class shares are offered through
this Prospectus. Advisor Class shares are available from the following funds
(collectively, the "Advisor Class Funds"):
 
   
<TABLE>
            <S>                                           <C>
            AIM BASIC VALUE FUND                          AIM GLOBAL INFRASTRUCTURE FUND
            AIM DEVELOPING MARKETS FUND                   AIM GLOBAL RESOURCES FUND
            AIM DOLLAR FUND                               AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM EMERGING MARKETS FUND                     AIM GLOBAL TRENDS FUND
            AIM EMERGING MARKETS DEBT FUND                AIM INTERNATIONAL GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM JAPAN GROWTH FUND
            AIM GLOBAL CONSUMER PRODUCTS                  AIM LATIN AMERICAN GROWTH FUND
              AND SERVICES FUND                           AIM MID CAP EQUITY FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM NEW PACIFIC GROWTH FUND
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM SMALL CAP GROWTH FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM STRATEGIC INCOME FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WORLDWIDE GROWTH FUND
</TABLE>
    
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
 
  HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through Financial
Advisers (as defined herein) who have entered into agreements with A I M
Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor Class
shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
 
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment for
Advisor Class shares is $500.
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
                                       A-1
<PAGE>   680
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Advisor Class shares of any Advisor Class Funds not named on the cover of this
Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                                                     Shareholder Name, Shareholder Account Number 
                   OBI:                              (70 character limit)
</TABLE>
 
  It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
 
  HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
  In addition to the Advisor Class Funds, the AIM Funds consist of the following
funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR
LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND,
AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BLUE
CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION
FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED MATURITY TREASURY
FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM SELECT GROWTH FUND,
AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM VALUE FUND and AIM
WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM
LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with the Advisor Class
Funds, the "Multiple Class Funds." For information on purchasing any of the AIM
Funds and to receive a prospectus, please call (800) 347-4246. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
  Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
 
  Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee'
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares. Investors in wrap fee programs and
advisory accounts may only purchase Advisor Class shares through Financial
Advisers who have entered into agreements with AIM Distributors. Investors may
be charged a fee by their agents or brokers for effecting transactions in
Advisor Class shares.
 
  AIM Distributors may, from time to time, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives
 
                                       A-2
<PAGE>   681
 
and their families to places within or outside the United States. The total
amount of such additional bonus payments or other consideration shall not exceed
0.25% of the public offering price of the shares sold. Any such bonus or
incentive programs will not change the price paid by investors for the purchase
of the applicable AIM Fund's shares or the amount that any particular AIM Fund
will receive as proceeds from such sales. Dealers may not use sales of the AIM
Funds' shares to qualify for any incentives to the extent that such incentives
may be prohibited by the laws of any state.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND uses
the amortized cost method of valuing the securities it holds and rounds its per
share net asset value to the nearest whole cent, it is anticipated that the net
asset value of the shares of that fund will remain constant at $1.00 per share.
However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00 net
asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
                                       A-3
<PAGE>   682
 
- --------------------------------------------------------------------------------
 
   
SPECIAL PLANS
    
 
  Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
 
   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance to $5,000 to
establish and maintain an allocation across a range of Advisor Class Funds. The
Program automatically rebalances holdings of Advisor Class Funds to the
established allocation on a periodic basis. Under the Program, a shareholder may
predesignate, on a percentage basis, how the total value of his or her holdings
in a minimum of two, and a maximum of ten, Advisor Class Funds ("Personal
Portfolio") is to be rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more Advisor Class Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other Advisor Class Funds in the
shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the
Advisor Class Fund(s) in a shareholder's Personal Portfolio have appreciated
during a rebalancing period, the Program will result in shares of Advisor Class
Fund(s) that have appreciated most during the period being exchanged for shares
of Advisor Class Fund(s) that have appreciated least. SUCH EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends, Distributions and Tax
Matters -- Dividends and Distributions." Participation in the Program does not
assure that a shareholder will profit from purchases under the Program nor does
it prevent or lessen losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Advisor Class Fund would be 2%
or less. In predesignating percentages, shareholders must use whole percentages
and totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an Advisor Class Fund's
shares. The AIM Funds and AIM Distributors reserve the right to modify, suspend,
or terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which Advisor
Class Funds or what allocation percentages are assigned to the Program, unless
canceled or changed in writing and received by the Transfer Agent in good order
at least five business days prior to the rebalancing date. Certain
dealers/financial institutions may charge a fee for establishing accounts
relating to the Program. Investors should contact their dealers/financial
institutions or AIM Distributors for more information.
    
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the Advisor
Class Funds may participate in an exchange privilege as described below. AIM
Distributors acts as distributor for the Advisor Class Funds which represent a
range of different investment objectives and policies.
 
  Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
 
  Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
 
  An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor
 
                                       A-4
<PAGE>   683
 
Class Fund acquired through exchange must be qualified for sale in the state in
which the shareholder resides; (c) the exchange must be made between accounts
having identical registrations and addresses; (d) the full amount of the
purchase price for the shares being exchanged must have already been received by
the fund; (e) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or Form
W-9 (certifying exempt status) must have been received by the fund; (f) newly
acquired shares (through either an initial or subsequent investment) are held in
an account for at least ten business days, and all other shares are held in an
account for at least one day, prior to the exchange; and (g) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the Advisor Class Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
  Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but under unusual market
conditions such purchases may be delayed for up to five business days if it is
determined that an Advisor Class Fund would be materially disadvantaged by an
immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into an Advisor Class Fund that declares daily dividends ("Dividends,
Distributions and Tax Matters -- Dividends and Distributions," below), and the
release of the exchange proceeds is delayed for the foregoing five-day period,
such shareholder will not begin to accrue dividends until the sixth business day
after the exchange. Advisor Class shares purchased by check may not be exchanged
until it is determined that the check has cleared, which may take up to ten
business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. A shareholder may give exchange information to his Financial
Adviser. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the Advisor Class Funds. AIM Distributors reserves the right to impose
conditions on dealers or investment advisors who make telephone exchanges of
shares of the Advisor Class Funds, including the condition that any such dealer
or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/financial institutions may charge service fees for handling
repurchase transactions.
 
                                       A-5
<PAGE>   684
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the Advisor
Class Funds are redeemed at their net asset value next computed after a request
for redemption in proper form (including signature guarantees and other required
documentation for written redemptions) is received by the Transfer Agent or
certain financial institutions (or their designees) who are authorized to accept
redemption orders on behalf of the AIM Funds, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. Orders for the redemption of Advisor Class shares received on any
business day of an AIM Fund will be confirmed at the price determined as of the
close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the proceeds are to be sent to
the address of record. These requirements may be waived or modified upon notice
to shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such 
    

                                       A-6
<PAGE>   685
   

as certain domestic banks, credit unions, securities dealers, or securities
exchanges. The Transfer Agent will also accept signatures with either: (1) a
signature guaranteed with a medallion stamp of the STAMP Program, or (2) a
signature guaranteed with a medallion stamp of the NYSE Medallion Signature
Program, provided that in either event, the amount of the transaction involved
does not exceed the surety coverage amount indicated on the medallion. For
information regarding whether a particular institution or organization qualifies
as an "eligible guarantor institution," an investor should contact the Client
Services Department of AFS.
    
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
  The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
                                       A-7
<PAGE>   686
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                    DISTRIBUTIONS          DISTRIBUTIONS
                                                                        OF NET                 OF NET
                                     DIVIDENDS FROM                    REALIZED               REALIZED
                                     NET INVESTMENT                   SHORT-TERM              LONG-TERM
FUND                                     INCOME                      CAPITAL GAINS          CAPITAL GAINS
- ----                                 --------------                  -------------          -------------
<S>                                  <C>                             <C>                     <C>
AIM BASIC VALUE FUND...............  declared and paid annually         annually                annually
AIM DEVELOPING MARKETS FUND........  declared and paid annually         annually                annually
AIM DOLLAR FUND....................  declared daily; paid monthly       annually                annually
AIM EMERGING MARKETS FUND..........  declared and paid annually         annually                annually
AIM EMERGING MARKETS DEBT FUND.....  declared and paid monthly          annually                annually
AIM EUROPE GROWTH FUND.............  declared and paid annually         annually                annually
AIM GLOBAL CONSUMER PRODUCTS AND
  SERVICES FUND....................  declared and paid annually         annually                annually
AIM GLOBAL FINANCIAL SERVICES
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL GOVERNMENT INCOME
  FUND.............................  declared and paid monthly          annually                annually
AIM GLOBAL GROWTH & INCOME FUND....  declared and paid quarterly        annually                annually
AIM GLOBAL HEALTH CARE FUND........  declared and paid annually         annually                annually
AIM GLOBAL INFRASTRUCTURE FUND.....  declared and paid annually         annually                annually
AIM GLOBAL RESOURCES FUND..........  declared and paid annually         annually                annually
AIM GLOBAL TELECOMMUNICATIONS
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL TRENDS FUND.............  declared and paid annually         annually                annually
AIM INTERNATIONAL GROWTH FUND......  declared and paid annually         annually                annually
AIM JAPAN GROWTH FUND..............  declared and paid annually         annually                annually
AIM LATIN AMERICAN GROWTH FUND.....  declared and paid annually         annually                annually
AIM MID CAP EQUITY FUND............  declared and paid annually         annually                annually
AIM NEW PACIFIC GROWTH FUND........  declared and paid annually         annually                annually
AIM SMALL CAP GROWTH FUND..........  declared and paid annually         annually                annually
AIM STRATEGIC INCOME FUND..........  declared and paid monthly          annually                annually
AIM WORLDWIDE GROWTH FUND..........  declared and paid annually         annually                annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
 
  Dividends on Advisor Class shares of an Advisor Class Fund are expected to be
higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
                                       A-8
<PAGE>   687
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares. With respect to tax-exempt shareholders,
dividends and distributions from the AIM Funds are not subject to federal income
taxation to the extent permitted under the applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the 
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    

  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
   
  TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS DEBT FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM MID CAP
EQUITY FUND, AIM SMALL CAP GROWTH FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL
TAX INFORMATION. Certain states exempt from income taxes dividends paid by
mutual funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
    
 
                                       A-9
<PAGE>   688
   
  AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
    
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each Advisor Class Fund's transfer agent and
dividend payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-10
<PAGE>   689
 
                                                                      APPENDIX A
- --------------------------------------------------------------------------------
 
                          DESCRIPTION OF DEBT RATINGS
 
DESCRIPTION OF BOND RATINGS
 
  Moody's Investors Service, Inc. ("Moody's") rates the debt securities issued
by various entities from "Aaa" to "C." Investment grade ratings are the four
categories shown: Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
 
  ABSENCE OF RATING. Where no rating has been assigned or where a rating has
been suspended or withdrawn, it may be for reasons unrelated to the quality of
the issue.
 
  Should no rating be assigned, the reason may be one of the following:
 
          1. An application for rating was not received or accepted.
 
          2. The issue or issuer belongs to a group of securities or companies
     that are not rated as a matter of policy.
 
          3. There is a lack of essential data pertaining to the issue or
     issuer.
 
          4. The issue was privately placed, in which case the rating is not
     published in Moody's publications.
 
  Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.
 
  Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the Company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the Company ranks in the
lower end of its generic rating category.
 
  Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"),
rates the securities debt of various entities in categories ranging from "AAA"
to "D" according to quality. Investment grade ratings are the four categories
shown:
 
  AAA -- An obligation rated "AAA" has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong. AA -- An obligation rated "AA" differs from the highest rated
obligations only in a small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong. A -- An obligation rated "A" is
somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions than obligations in higher rated categories. BBB -- An
obligation rated "BBB" exhibits adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the
obligation.
 
   
  PLUS (+) OR MINUS (-). The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
    
 
  NR. Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
 
DESCRIPTION OF COMMERCIAL PAPER RATINGS
 
  Moody's employs the designation "Prime-1" to indicate commercial paper having
a superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. Issues rated Prime-2
 
                                      A-11
<PAGE>   690
 
have a strong ability for repayment of senior short-term debt obligations. This
normally will be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.
 
  S&P ratings of commercial paper are graded into several categories ranging
from "A1" for the highest quality obligations to "D" for the lowest. Issues in
the "A" category are delineated with numbers 1, 2, and 3 to indicate the
relative degree of safety. A-1 -- This highest category indicates that the
degree of safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics will be denoted with a plus sign
(+) designation. A-2 -- Capacity for timely payments on issues with this
designation is satisfactory; however, the relative degree of safety is not as
high as for issues designated "A-1."
 
   
  LEGAL COUNSEL.  The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
    
 
                                      A-12
<PAGE>   691
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                   GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
        ACCOUNT TYPE                    NUMBER OF:                     ACCOUNT TYPE                   NUMBER OF:
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary

      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application

      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors

      Legal Guardian          Ward, Minor or
                              Incompetent

      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
</TABLE>
- --------------------------------------------------------------------------------
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   692
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   693
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
 
   
GGVI-PRO-2
    
<PAGE>   694
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
ADVISOR CLASS OF
    
 
   
AIM GLOBAL GROWTH & INCOME FUND
    
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
   
    
PROSPECTUS
SEPTEMBER 8, 1998
 
   
This Prospectus contains information about AIM GLOBAL GROWTH & INCOME FUND (the
"Fund"), which is one of several series investment portfolios comprising AIM
Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a non-diversified portfolio which seeks long-term capital
appreciation together with current income. The Fund invests in a global
portfolio of both equity and debt securities, in such relative proportions as
deemed most appropriate by the Fund's investment sub-advisor, INVESCO (NY), Inc.
(the "Sub-advisor"), in view of then-current economic and market conditions.
    
 
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information dated
September 8, 1998 has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   695
 
- --------------------------------------------------------------------------------
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     6
  Investment Program...................     6
  Management...........................    10
  Organization of the Trust............    11
    
   
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-4
  Exchange Privilege...................   A-4
  How to Redeem Shares.................   A-5
  Determination of Net Asset Value.....   A-7
  Dividends, Distributions and Tax
     Matters...........................   A-8
  General Information..................  A-10
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
   
                                    SUMMARY
    
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
  The Fund is a non-diversified series of the Trust.
 
  INVESTMENT OBJECTIVE. The Fund seeks long-term capital appreciation together
with current income.
 
  PRINCIPAL INVESTMENTS. The Fund invests primarily in blue-chip equity
securities and high quality government bonds of issuers located in the United
States and throughout the world.
 
   
  INVESTMENT MANAGERS. The Fund is managed by A I M Advisors, Inc. ("AIM") and
is sub-advised and sub-administered by the Sub-advisor. AIM and the Sub-advisor
and their worldwide asset management affiliates provide investment management
and/or administrative services to institutional, corporate and individual
clients around the world. AIM and the Sub-advisor are both indirect wholly owned
subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an
independent investment management group that has a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia. AIM was organized in 1976
and, together with its subsidiaries, currently advises approximately 90
investment company portfolios.
    
 
   
  PURCHASING SHARES. Advisor Class shares are offered through this Prospectus to
(a) trustees or other fiduciaries purchasing shares for employee benefit plans
which are sponsored by organizations which have at least 1,000 employees; (b)
any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment advisor has investment
discretion over such account, and (ii) the account holder pays such person as
compensation for its advice and other services an annual fee of at least 0.50%
on the assets in the account; (c) any account with assets of a least $10,000 if
(i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the
assets in the account; (d) accounts advised by the Sub-advisor or one of the
companies formerly affiliated with the Asset Management Division of
Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the funds in The AIM Family of Funds on May 29, 1998; and
(e) any of the companies affiliated with AMVESCAP PLC. Pursuant to a separate
prospectus, the Fund also offers Class A and Class B shares, which represent
interests in the Fund. The Class A and Class B shares have different
distribution arrangements.
    
 
  Initial investments in Advisor Class shares must be at least $500 and
additional investments must be at least $50. The distributor of the Advisor
Class shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston TX 77210-4739. See "How to Purchase Shares."
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds"),
Advisor Class shares of the Fund may be exchanged for Advisor Class shares of
certain funds in The AIM Family of Funds in the manner and subject to the
policies and charges set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Advisor Class shareholders of the Fund may redeem all or a
portion of their shares at net asset value on any business day. See "How to
Redeem Shares."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on a quarterly basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters."
    
 
  RISK FACTORS. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its portfolio holdings. The value of debt securities held by
the Fund generally fluctuates
 
                                        2
<PAGE>   696
 
   
inversely with interest rate movements. Certain investment grade debt securities
may possess speculative qualities. The Fund may invest in foreign securities.
Investments in foreign securities involve risks relating to political and
economic developments abroad and the differences between the regulations to
which U.S. and foreign issuers are subject. Individual foreign economies also
may differ favorably or unfavorably from the U.S. economy. Changes in foreign
currency exchange rates will affect the Fund's net asset value, earnings and
gains and losses realized on sales of securities. Securities of foreign
companies may be less liquid and their prices more volatile than those of
securities of comparable U.S. companies. The Fund may engage in certain foreign
currency, options and futures transactions to attempt to hedge against the
overall level of investment and currency risk associated with its present or
planned investments. Such transactions involve certain risks and transaction
costs. See "Investment Program."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   697
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Advisor Class shares of the Fund are reflected in the following table(1):
 
<TABLE>
<S>                                                           <C>
Shareholder Transaction Costs:
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................  None
  Sales charges on reinvested distributions to
     shareholders...........................................  None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........  None
  Redemption charges........................................  None
  Exchange Fees.............................................  None
Annual Fund Operating Expenses(2): (as a % of average net
  assets)
  Investment management and administration fees.............  0.97%
  12b-1 distribution and service fees.......................  None
  Other expenses............................................  0.32%
                                                              ----
          Total Fund Operating Expenses.....................  1.29%
                                                              ====
</TABLE>
 
   
(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
    COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND.
    
 
   
(2) Expenses are based on the Fund's fiscal year ended October 31, 1997. "Other
    expenses" include custody, transfer agent, legal, audit and other operating
    expenses. See "Management" herein and the Statement of Additional
    Information for more information. Effective November 1, 1997, AIM has
    voluntarily agreed to limit the Fund's expenses (exclusive of brokerage
    commissions, taxes, interest and extraordinary expenses) to the annual rate
    of 1.40% of the average daily net assets of the Fund's Advisor Class through
    May 31, 2000. Investors purchasing Advisor Class shares through financial
    planners, trust companies, bank trust departments or registered investment
    advisors, or under a "wrap fee" program, will be subject to additional fees
    charged by such entities or by the sponsors of such programs. Where any
    account advised by one of the companies affiliated with AMVESCAP PLC invests
    in Advisor Class shares of the Fund, such account shall not be subject to
    duplicative advisory fees.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                              ONE    THREE   FIVE     TEN
                                                              YEAR   YEARS   YEARS   YEARS
                                                              ----   -----   -----   -----
<S>                                                           <C>    <C>     <C>     <C>
Advisor Class Shares........................................  $13     $41     $71    $156
</TABLE>
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT EXPENSES, MAY
BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE ASSUMPTION IN THE
HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY REGULATION OF THE SEC
APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS NOT A PREDICTION OF AND
DOES NOT REPRESENT THE FUND'S PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   698
 
   
    
 
- --------------------------------------------------------------------------------
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The tables below provide condensed financial information concerning income and
capital changes for Advisor Class shares of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statements and notes for the
fiscal year ended October 31, 1997 have been audited by PricewaterhouseCoopers
LLP, independent accountants, whose report thereon also is included in the
Statement of Additional Information. The unaudited financials and notes for the
semi-annual period ended April 30, 1998 are also included in the Statement of
Additional Information.
    
 
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
   
<TABLE>
<CAPTION>
                                                                                    ADVISOR CLASS*
                                                              -----------------------------------------------------------
                                                                SIX MONTHS
                                                                  ENDED         YEAR ENDED OCTOBER 31,     JUNE 1, 1995
                                                              APRIL 30, 1998    ----------------------          TO
                                                              (UNAUDITED)(A)     1997(A)       1996      OCTOBER 31, 1995
                                                              --------------    ---------    ---------   ----------------
<S>                                                           <C>               <C>          <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period........................     $  8.20         $  7.10      $  6.35        $  6.24
                                                                 -------         -------      -------        -------
Income from investment operations:
  Net investment income.....................................        0.08            0.23         0.23           0.11
  Net realized and unrealized gain (loss) on investments....        1.33            1.13         0.82           0.13
                                                                 -------         -------      -------        -------
     Net increase (decrease) from investment operations.....        1.41            1.36         1.05           0.24
                                                                 -------         -------      -------        -------
Distributions:
  From net investment income................................       (0.08)          (0.24)       (0.26)         (0.13)
  From net realized gain on investments.....................       (0.15)          (0.02)       (0.04)            --
  In excess of net investment income........................       (0.05)             --           --             --
                                                                 -------         -------      -------        -------
     Total distributions....................................       (0.28)          (0.26)       (0.30)         (0.13)
                                                                 -------         -------      -------        -------
Net asset value, end of period..............................     $  9.33         $  8.20      $  7.10        $  6.35
                                                                 =======         =======      =======        =======
          Total investment return...........................       17.59%(b)       19.23%       17.19%          3.83%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)........................     $ 7,509         $ 3,057      $ 3,085        $   944
Ratio of net investment income to average net assets........        1.87%(c)        3.09%        3.52%          4.20%(c)
Ratio of operating expenses to average net assets:
  With expense reductions...................................        1.31%(c)        1.15%        1.24%          1.35%(c)
  Without expense reductions................................        1.31%(c)        1.29%        1.31%          1.39%(c)
Portfolio turnover rate +...................................          63%(c)          50%          39%            83%(c)
Average commission rate per share paid on portfolio
  transactions+.............................................     $0.0131         $0.0151      $0.0139            N/A
</TABLE>
    
 
- ---------------
 
   
<TABLE>
<S>   <C>
+     Portfolio turnover and average commission rates are
      calculated on the basis of the Fund as a whole without
      distinguishing between the classes of shares issued.
*     Commencing June 1, 1995, the Fund began offering Advisor
      Class shares.
(a)   These selected per share data were calculated based upon
      average shares outstanding during the year.
(b)   Not annualized.
(c)   Annualized.
N/A   Not Applicable.
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                                                                         AVERAGE MONTHLY
                                                                        AVERAGE             NUMBER OF
                                                  AMOUNT OF DEBT    AMOUNT OF DEBT     REGISTRANT'S SHARES   AVERAGE AMOUNT OF
                                                  OUTSTANDING AT      OUTSTANDING          OUTSTANDING        DEBT PER SHARE
                   YEAR ENDED                     END OF PERIOD    DURING THE PERIOD    DURING THE PERIOD    DURING THE PERIOD
                   ----------                     --------------   -----------------   -------------------   -----------------
<S>                                               <C>              <C>                 <C>                   <C>
Six months ended April 30, 1998.................   $31,902,000        $1,715,293           91,959,757             $0.0187
October 31, 1997................................   $   --             $   77,178           92,456,411             $0.0008
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed on a daily
basis.
    
 
                                        5
<PAGE>   699
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  Yield is computed in accordance with standardized formulas described in the
Statement of Additional Information and can be expected to fluctuate from time
to time and is not necessarily indicative of future results. Accordingly, yield
information may not provide a basis for comparison with investments which pay a
fixed rate of interest for a stated period of time. Yield reflects investment
income net of expenses over the relevant period attributable to a Fund share,
expressed as an annualized percentage of net asset value per share for Advisor
Class shares.
 
  Yield is a function of the type and quality of the Fund's investments, the
maturity of the securities held in the Fund's portfolio and the operating
expense ratio of the Fund. A shareholder's investment in the Fund is not insured
or guaranteed. These factors should be carefully considered by the investor
before making an investment in the Fund.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
   
- --------------------------------------------------------------------------------
    
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVE. The Fund's investment objective is long-term capital
appreciation together with current income. The Fund seeks its objective by
investing in a global portfolio of both equity and debt securities, allocated
among diverse international markets. There is no assurance that the Fund will
achieve its investment objective.
    
 
   
  INVESTMENT POLICIES. At least 65% of the Fund's total assets normally will be
invested in a combination of blue-chip equity securities and high quality
government bonds. The Fund considers an equity security to be "blue chip" if:
(i) during the issuer's most recent fiscal year the security offered an above
average dividend yield relative to the latest reported dividend yield on the
Morgan Stanley Capital International World Index; and (ii) the total equity
market capitalization of the issuer is at least $1 billion. Government bonds are
deemed to be high quality if at the time of the Fund's investment they are rated
within one of the two highest ratings categories of Moody's Investors Service,
Inc. ("Moody's") or by Standard & Poor's, a division of The McGraw-Hill
Companies, Inc. ("S&P"), or, if not rated, are deemed to be of equivalent
quality in the judgment of the Sub-advisor.
    
 
   
  Up to 35% of the Fund's total assets may be invested in other equity
securities and investment grade government and corporate debt obligations which
the Sub-advisor believes will assist the Fund in achieving its objective.
"Investment grade" debt securities are those rated within one of the four
highest ratings categories of Moody's or S&P, or, if not rated, deemed to be of
equivalent quality in the judgment of the Sub-advisor.
    
 
  Equity securities that the Fund may purchase include common stocks, preferred
stocks and warrants to acquire such stocks and other equity securities.
Government bonds that the Fund may purchase include debt obligations issued or
guaranteed by the United States or foreign governments (including foreign
states, provinces or municipalities) or their agencies, authorities or
instrumentalities and debt obligations of supranational entities organized or
supported by several national governments, such as the World Bank and the Asian
Development Bank. The debt obligations held by the Fund may include debt
obligations convertible into equity securities or having attached warrants or
rights to purchase equity securities. The Fund may purchase securities that are
issued by the government or a corporation or financial institution of one nation
but denominated in the currency of another nation (or a multinational currency
unit).
 
   
  According to the Sub-advisor, as of the date of this Prospectus, more than 50%
of the total equity market capitalization worldwide is represented by non-U.S.
equity securities, and more than 50% of the value of all outstanding government
debt obligations throughout
    
 
                                        6
<PAGE>   700
 
   
the world is represented by obligations denominated in currencies other than the
U.S. dollar. Moreover, from time to time the equity and debt securities of
issuers located outside the United States have substantially outperformed the
equity and debt securities of U.S. issuers. Accordingly, the Sub-advisor
believes that the Fund's policy of investing in a global portfolio of equity and
debt securities may enable the achievement of long-term results superior to
those produced by mutual funds with similar objectives to that of the Fund that
invest solely in U.S. equity and debt securities.
    
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
   
  SELECTION OF INVESTMENTS AND ASSET ALLOCATION. Consistent with the Fund's
investment objective, the Sub-advisor employs a conservative investment style in
managing the Fund's assets. In so doing the Sub-advisor attempts to limit
volatility and risk to capital. The Sub-advisor allocates the Fund's assets
among securities of countries and in currency denominations where opportunities
for meeting the Fund's investment objective are expected to be the most
attractive. The Sub-advisor attempts to identify those countries and industries
where economic and political factors are likely to produce above-average growth
rates and to further identify companies in such countries and industries that
are best positioned and managed to benefit from these factors.
    
 
  The Fund currently contemplates that it will invest principally in securities
of issuers in the United States, Canada, Japan, Western Europe, New Zealand and
Australia. The Fund may invest substantially in securities denominated in one or
more currencies. Under normal conditions, the Fund invests in issuers of not
less than three different countries and issuers of any one country, other than
the United States, will represent no more than 40% of the Fund's total assets.
 
   
  The relative proportions of equity and debt securities held by the Fund at any
one time will vary, depending upon the Sub-advisor's assessment of global
political and economic conditions and the relative strengths and weaknesses of
the world equity and debt markets. To enable the Fund to respond to general
economic changes and market conditions around the world, the Fund is authorized
to invest up to 100% of its total assets in either equity securities or debt
securities.
    
 
   
  In selecting equity securities for investment, the Sub-advisor attempts to
identify and acquire only securities it deems to represent high or improving
investment quality. Securities representing high investment quality generally
will include those of well-known, established and successful issuers that the
Sub-advisor believes will continue to be successful in the future. Securities
representing improving investment quality may include those of an issuer that
has improved its sales or earnings or of an issuer the balance sheet and
financial condition of which is improving. The Sub-advisor seeks to avoid
investing in equity securities that appear overly speculative or risky, even if
they have attractive features or investment potential.
    
 
   
  In evaluating debt securities considered for the Fund, the Sub-advisor
analyzes their yield, maturity, issue classification and quality
characteristics, coupled with expectations regarding local and world economies,
movements in the general level and term of interest rates, currency values,
political developments, and variations in the supply of funds available for
investment in the world bond market relative to the demands placed upon it.
There are no limitations on the maximum or minimum maturities of the debt
securities considered by the Fund or on the average weighted maturity of the
debt portion of the Fund's portfolio. Should the rating of a debt security be
revised while such security is owned by the Fund, the Sub-advisor will evaluate
what action, if any, is appropriate with respect to such security.
    
 
   
  The Sub-advisor generally evaluates currencies on the basis of fundamental
economic criteria (e.g., relative inflation and interest rate levels and trends,
growth rate forecasts, balance of payments status and economic policies) as well
as technical and political data. The Fund may seek to protect itself against
negative currency movements by engaging in hedging techniques through the use of
options, futures and forward currency contracts.
    
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. Under a defensive strategy, the Fund may hold cash (U.S.
dollars, foreign currencies or multinational currency units such as Euros)
and/or invest any portion or all of its assets in high quality money market
instruments of U.S. or foreign issuers. In addition, for temporary defensive
purposes, most or all of the Fund's investments may be made in the United States
and denominated in U.S. dollars. To the extent the Fund adopts a temporary
defensive posture, it will not be invested so as to directly achieve its
investment objective. In addition, pending investment of proceeds from new sales
of Fund shares or in order to meet ordinary daily cash needs, the Fund may hold
cash (U.S. dollars, foreign currencies or multinational currency units such as
euros) and may invest in foreign or domestic high quality money market
instruments. For a full description of money market instruments, see "Money
Market Instruments" in the "Investment Objectives and Policies" section of the
Statement of Additional Information.
    
 
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemption of Fund
shares. The Fund also may borrow up to 5% of its total assets for temporary or
emergency purposes other than to meet redemptions. The Fund may borrow up to
33 1/3% of its total assets. However, the Fund will not purchase securities
while borrowings in excess of 5% of the Fund's total assets are outstanding. Any
borrowing by the Fund may cause greater fluctuation in the value of its shares
than would be the case if the Fund did not borrow.
 
                                        7
<PAGE>   701
 
  A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash, and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's sale of securities together with its
commitment (for which the Fund may receive a fee) to purchase similar, but not
identical, securities at a future date.
 
   
  SECURITIES LENDING. The Fund may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Fund to retain ownership of the securities loaned and, at the same time,
enhances the Fund's total return. The Fund limits its loans of portfolio
securities to an aggregate of 30% of the value of its total assets, measured at
the time any such loan is made. While a loan is outstanding, the borrower must
maintain with the Fund's custodian collateral consisting of cash, U.S.
government securities or certain irrevocable letters of credit equal to at least
100% of the value of the borrowed securities, plus any accrued interest or such
other collateral as permitted by the Fund's investment program and regulatory
agencies, and as approved by the Board. The risks in lending portfolio
securities, as with other extensions of secured credit, consist of possible
delays in receiving additional collateral or in recovery of the securities and
possible loss of rights in the collateral should the borrower fail financially.
    
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to the reporting requirements of the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. In addition, certain costs attributable to
foreign investing, such as custody charges, are higher than those attributable
to domestic investing. Securities of some foreign companies are less liquid and
their prices may be more volatile than securities of comparable domestic
companies. The Fund's net investment income from foreign issuers may be subject
to non-U.S. withholding taxes, thereby reducing the Fund's net investment
income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Fund, political or social instability, or diplomatic or
economic developments which could affect the Fund's investments in those
countries. Moreover, individual foreign economies may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross national
product, rate of inflation, rate of savings and capital reinvestment, resource
self-sufficiency and balance of payments positions. Investments in foreign
government securities involve special risks, including the risk that the
government issuers may be unable or unwilling to repay principal and interest
when due.
 
  The Fund will also be affected favorably or unfavorably by exchange control
regulations or changes in the exchange rates between such currencies and the
U.S. dollar. Changes in currency exchange rates will influence the value of the
Fund's shares, and also may affect the value of dividends and interest earned by
the Fund and gains and losses realized by the Fund.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. To attempt to increase
return, the Fund may write call options on securities. This strategy will be
employed only when, in the opinion of the Sub-advisor, the size of the premium
the Fund receives for writing the option is adequate to compensate the Fund
against the risk that appreciation in the underlying security may not be fully
realized if the option is exercised. The Fund also is authorized to write put
options to attempt to enhance return, although it does not have the current
intention of so doing.
    
 
  The Fund may also use forward currency contracts, futures contracts, options
on securities, options on currencies, options on indices and options on futures
contracts to attempt to hedge against the overall level of investment and
currency risk normally associated with the Fund's investments. These instruments
are often referred to as "derivatives," which may be defined as financial
instruments whose performance is derived, at least in part, from the performance
of another asset (such as a security, currency, or an index of securities). The
Fund may enter into such instruments up to the full value of its portfolio
assets. See "Options, Futures and Currency Strategies" in the Statement of
Additional Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar, or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to the
Fund's portfolio positions. The Fund also may purchase and sell put
 
                                        8
<PAGE>   702
 
and call options on currencies, futures contracts on currencies and options on
such futures contracts to hedge the Fund's portfolio against movements in
exchange rates.
 
   
  In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-advisor intends to include in the
Fund's portfolio. The Fund also may purchase and sell put and call options on
stock indices to hedge against overall fluctuations in the securities markets or
in a specific market sector.
    
 
  Further, the Fund may sell index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general market or a specific market sector decline that could adversely affect
the Fund's portfolio. The Fund also may purchase index futures contracts and
purchase call options or write put options on such contracts to hedge against a
general market or market sector advance and thereby attempt to lessen the cost
of future securities acquisitions. Similarly, the Fund may use interest rate
futures contracts and options thereon to hedge the debt portion of its portfolio
against changes in the general level of interest rates.
 
   
  Although the Fund is authorized to enter into options, futures and forward
currency transactions, the Fund might not enter into any such transactions.
Options, futures and foreign currency transactions involve certain risks, which
include: (1) dependence on the Sub-advisor's ability to predict movements in the
prices of individual securities, fluctuations in the general securities markets
and movements in interest rates and currency markets; (2) imperfect correlation,
or even no correlation, between movements in the price of forward contracts,
options, futures contracts or options thereon and movements in the price of the
currency or security hedged or used for cover; (3) the fact that the skills and
techniques needed to trade options, futures contracts and options thereon or to
use forward currency contracts are different from those needed to select the
securities in which the Fund invests; (4) the lack of assurance that a liquid
secondary market will exist for any particular option, futures contract or
option thereon at any particular time; (5) the possible loss of principal under
certain conditions; and (6) the possible inability of the Fund to purchase or
sell a portfolio security at a time when it would otherwise be favorable for it
to do so, or the possible need for the Fund to sell a security at a
disadvantageous time, due to the need for the Fund to maintain "cover" or to set
aside securities in connection with hedging transactions.
    
 
  OTHER POLICIES AND RISKS. The Fund's net asset value will fluctuate,
reflecting fluctuations in the market value of its portfolio positions. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure, and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. The value of equity securities held by the Fund will fluctuate
in response to general market and economic developments, as well as developments
affecting the particular issuers of such securities. In addition, the value of
debt securities held by the Fund generally will fluctuate with changes in the
perceived creditworthiness of the issuers of such securities and movements in
interest rates. Investment grade debt securities rated Baa by Moody's are
described by Moody's as having speculative characteristics, and therefore may be
affected by economic conditions and changes in the circumstances of their
issuers to a greater extent than higher rated bonds.
 
  The Fund may invest up to 15% of its net assets in illiquid securities and
other securities for which no readily available market exists. The Fund may also
invest up to 5% of its total assets in a combination of securities purchased on
a when-issued basis or with respect to which it has entered into forward
commitment agreements.
 
  The Fund is classified under the Investment Company Act of 1940, as amended
("1940 Act") as a "non-diversified" fund. As a result, the Fund will be able to
invest in a fewer number of issuers than if it were classified under the 1940
Act as a "diversified" fund. To the extent that the Fund invests in a smaller
number of issuers, the value of the Fund's shares may fluctuate more widely and
the Fund may be subject to greater investment and credit risk with respect to
its portfolio.
 
  OTHER INFORMATION. The Fund's investment objective may not be changed without
the approval of a majority of the Fund's outstanding voting securities. A
"majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this Prospectus
and in the Statement of Additional Information may be changed by the Trust's
Board of Trustees without shareholder approval. The Fund's policies regarding
lending, and the percentage of Fund assets that may be committed to borrowing,
are fundamental policies and may not be changed without shareholder approval. If
a percentage restriction on investment or utilization of assets in an investment
policy or restriction is adhered to at the time an investment is made, a later
change in percentage ownership of a security or kind of securities resulting
from changing market values or a similar type of event will not be considered a
violation of the Fund's investment policies or restrictions.
 
   
  The Fund is authorized to engage in Short Sales, although it currently has no
intention of doing so, and may purchase American Depositary Receipts, American
Depositary Shares, Global Depositary Receipts and European Depositary Receipts.
See "Short Sales" and "Depositary Receipts," respectively, in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
    
 
                                        9
<PAGE>   703
 
- --------------------------------------------------------------------------------
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust on the one side and persons or companies furnishing services
to the Fund on the other, including the investment management and administration
agreement with AIM, the investment sub-advisory and sub-administration agreement
between AIM and the Sub-advisor, the agreements with AIM Distributors regarding
distribution of the Fund's shares, the custody agreement and the transfer agency
agreement. The day-to-day operations of the Fund are delegated to the officers
of the Trust, subject always to the objective and policies of the Fund and to
the general supervision of the Trust's Board of Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers and administrators include, but
are not limited to, determining the composition of the Fund's portfolio and
placing orders to buy, sell or hold particular securities; furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operation. For these services,
the Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on the average daily net assets, at the annualized rate
of 0.975% on the first $500 million, 0.95% on the next $500 million, 0.925% on
the next $500 million and 0.90% on amounts thereafter. Out of the aggregate fees
payable by the Fund, AIM pays the Sub-advisor sub-advisory and
sub-administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administration fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-advisor, AIM Distributors or other agents. Effective
November 1, 1997, AIM has undertaken to limit the Fund's expenses (exclusive of
brokerage commissions, taxes, interest and extraordinary expenses) to the annual
rate of 1.40% of the average daily net assets of the Fund's Advisor Class
shares.
    
 
   
  The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-advisor (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement (the "Advisory Agreement"). AIM was organized in 1976
and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Fund pursuant to an investment sub-advisory and
sub-administration agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of the Sub-advisor,
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included the Sub-advisor and
certain other affiliates. As a result of this transaction, the Sub-advisor is
now an indirect wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Fund, the Sub-advisor employs a team
approach, taking advantage of its investment resources around the world.
    
 
                                       10
<PAGE>   704
 
  The investment professionals primarily responsible for the portfolio
management of the Fund are as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
     NAME/OFFICE               THE FUND                           LAST FIVE YEARS
     -----------         --------------------                   -------------------
<S>                     <C>                      <C>
Paul Griffiths          Portfolio Manager        Head of Global Fixed Income and Portfolio Manager
  London                since 1995               for the Sub- advisor and INVESCO GT Asset
                                                 Management PLC (London) ("GT London") since June
                                                 1997. Portfolio Manager from 1994 to 1997. Global
                                                 Bond Fund Manager for Lazard Investors from 1993
                                                 to 1994. Global Bond Fund Manager for Sanwa
                                                 International PLC from 1991 to 1993.
Michael Lindsell        Portfolio Manager        Head of Investment Strategy for Global Equities
  London                since 1998               and Portfolio Manager for the Sub-advisor and GT
                                                 London since 1996. Chief Investment Officer for
                                                 Japan and Portfolio Manager for INVESCO GT Asset
                                                 Management Asia Ltd. (Hong Kong) ("GT Asia") and
                                                 for the Sub-advisor from 1992 to 1996. Director of
                                                 Warburg Asset Management (Tokyo) prior to thereto.
                                                 GT London and GT Asia are affiliates of the
                                                 Sub-advisor.
John Nadell             Portfolio Manager        Portfolio Manager for the sub-advisor since July
  London                since 1998               1998 and for INVESCO GT Asset Management Japan
                                                 Ltd. (Tokyo) ("GT Tokyo") since 1996. Joined GT
                                                 Tokyo in 1994 as an Investment Analyst. Investment
                                                 Analyst at Pacific Equity Management (Oakland,
                                                 California) from 1990 to 1994. GT Tokyo is also an
                                                 affiliate of the Sub-Advisor.
</TABLE>
    
 
   
  In placing securities orders for the Fund's portfolio transactions, the
Sub-advisor seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-advisor may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions may be executed
through affiliates of AIM or the Sub-advisor.
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement (the
"Distribution Agreement"), with AIM Distributors, a registered broker-dealer and
a wholly owned subsidiary of AIM, to act as the distributor of the Advisor Class
shares of the Fund. Certain Trustees and officers of the Trust are affiliated
with AIM Distributors.
    
 
  The Distribution Agreement provides AIM Distributors with the exclusive right
to distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
 
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST
    
 
   
  The Trust was organized as a Delaware business trust on May 7, 1998. On
September 8, 1998 the Trust acquired the assets of and assumed the liabilities
of AIM Investment Funds, Inc., a Maryland corporation. The Fund constitutes one
of the thirteen separate and distinct series portfolios of the Trust. From time
to time, the Trust may establish other funds, each corresponding to a distinct
investment portfolio and a distinct series of the Company's shares of beneficial
interest. Shares of each fund are entitled to one vote per share (with
proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that Class. The shares of the Fund and the
Company's other funds will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
   
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings,
    
 
                                       11
<PAGE>   705
 
assets and voting privileges except that each class normally has exclusive
voting rights with respect to its distribution plan and bears the expenses, if
any, related to the distribution of its shares. Shares of the Fund, when issued,
are fully paid and nonassessable.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
    
 
                                       12
<PAGE>   706
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
                  TO THE AIM FAMILY OF FUNDS--Register Mark--
                            FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several of
which offer Advisor Class shares. Only Advisor Class shares are offered through
this Prospectus. Advisor Class shares are available from the following funds
(collectively, the "Advisor Class Funds"):
 
   
<TABLE>
            <S>                                           <C>
            AIM BASIC VALUE FUND                          AIM GLOBAL INFRASTRUCTURE FUND
            AIM DEVELOPING MARKETS FUND                   AIM GLOBAL RESOURCES FUND
            AIM DOLLAR FUND                               AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM EMERGING MARKETS FUND                     AIM GLOBAL TRENDS FUND
            AIM EMERGING MARKETS DEBT FUND                AIM INTERNATIONAL GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM JAPAN GROWTH FUND
            AIM GLOBAL CONSUMER PRODUCTS                  AIM LATIN AMERICAN GROWTH FUND
              AND SERVICES FUND                           AIM MID CAP EQUITY FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM NEW PACIFIC GROWTH FUND
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM SMALL CAP GROWTH FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM STRATEGIC INCOME FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WORLDWIDE GROWTH FUND
</TABLE>
    
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
 
  HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through Financial
Advisers (as defined herein) who have entered into agreements with A I M
Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor Class
shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
 
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment for
Advisor Class shares is $500.
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
                                       A-1
<PAGE>   707
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Advisor Class shares of any Advisor Class Funds not named on the cover of this
Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                                                     Shareholder Name, Shareholder Account Number 
                   OBI:                              (70 character limit)
</TABLE>
 
  It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
 
  HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
  In addition to the Advisor Class Funds, the AIM Funds consist of the following
funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR
LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND,
AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BLUE
CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION
FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED MATURITY TREASURY
FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM SELECT GROWTH FUND,
AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM VALUE FUND and AIM
WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM
LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with the Advisor Class
Funds, the "Multiple Class Funds." For information on purchasing any of the AIM
Funds and to receive a prospectus, please call (800) 347-4246. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
  Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
 
  Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee'
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares. Investors in wrap fee programs and
advisory accounts may only purchase Advisor Class shares through Financial
Advisers who have entered into agreements with AIM Distributors. Investors may
be charged a fee by their agents or brokers for effecting transactions in
Advisor Class shares.
 
  AIM Distributors may, from time to time, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives
 
                                       A-2
<PAGE>   708
 
and their families to places within or outside the United States. The total
amount of such additional bonus payments or other consideration shall not exceed
0.25% of the public offering price of the shares sold. Any such bonus or
incentive programs will not change the price paid by investors for the purchase
of the applicable AIM Fund's shares or the amount that any particular AIM Fund
will receive as proceeds from such sales. Dealers may not use sales of the AIM
Funds' shares to qualify for any incentives to the extent that such incentives
may be prohibited by the laws of any state.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND uses
the amortized cost method of valuing the securities it holds and rounds its per
share net asset value to the nearest whole cent, it is anticipated that the net
asset value of the shares of that fund will remain constant at $1.00 per share.
However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00 net
asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
                                       A-3
<PAGE>   709
 
- --------------------------------------------------------------------------------
 
   
SPECIAL PLANS
    
 
  Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
 
   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance to $5,000 to
establish and maintain an allocation across a range of Advisor Class Funds. The
Program automatically rebalances holdings of Advisor Class Funds to the
established allocation on a periodic basis. Under the Program, a shareholder may
predesignate, on a percentage basis, how the total value of his or her holdings
in a minimum of two, and a maximum of ten, Advisor Class Funds ("Personal
Portfolio") is to be rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more Advisor Class Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other Advisor Class Funds in the
shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the
Advisor Class Fund(s) in a shareholder's Personal Portfolio have appreciated
during a rebalancing period, the Program will result in shares of Advisor Class
Fund(s) that have appreciated most during the period being exchanged for shares
of Advisor Class Fund(s) that have appreciated least. SUCH EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends, Distributions and Tax
Matters -- Dividends and Distributions." Participation in the Program does not
assure that a shareholder will profit from purchases under the Program nor does
it prevent or lessen losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Advisor Class Fund would be 2%
or less. In predesignating percentages, shareholders must use whole percentages
and totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an Advisor Class Fund's
shares. The AIM Funds and AIM Distributors reserve the right to modify, suspend,
or terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which Advisor
Class Funds or what allocation percentages are assigned to the Program, unless
canceled or changed in writing and received by the Transfer Agent in good order
at least five business days prior to the rebalancing date. Certain
dealers/financial institutions may charge a fee for establishing accounts
relating to the Program. Investors should contact their dealers/financial
institutions or AIM Distributors for more information.
    
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the Advisor
Class Funds may participate in an exchange privilege as described below. AIM
Distributors acts as distributor for the Advisor Class Funds which represent a
range of different investment objectives and policies.
 
  Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
 
  Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
 
  An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor
 
                                       A-4
<PAGE>   710
 
Class Fund acquired through exchange must be qualified for sale in the state in
which the shareholder resides; (c) the exchange must be made between accounts
having identical registrations and addresses; (d) the full amount of the
purchase price for the shares being exchanged must have already been received by
the fund; (e) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or Form
W-9 (certifying exempt status) must have been received by the fund; (f) newly
acquired shares (through either an initial or subsequent investment) are held in
an account for at least ten business days, and all other shares are held in an
account for at least one day, prior to the exchange; and (g) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the Advisor Class Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
  Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but under unusual market
conditions such purchases may be delayed for up to five business days if it is
determined that an Advisor Class Fund would be materially disadvantaged by an
immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into an Advisor Class Fund that declares daily dividends ("Dividends,
Distributions and Tax Matters -- Dividends and Distributions," below), and the
release of the exchange proceeds is delayed for the foregoing five-day period,
such shareholder will not begin to accrue dividends until the sixth business day
after the exchange. Advisor Class shares purchased by check may not be exchanged
until it is determined that the check has cleared, which may take up to ten
business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. A shareholder may give exchange information to his Financial
Adviser. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the Advisor Class Funds. AIM Distributors reserves the right to impose
conditions on dealers or investment advisors who make telephone exchanges of
shares of the Advisor Class Funds, including the condition that any such dealer
or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/financial institutions may charge service fees for handling
repurchase transactions.
 
                                       A-5
<PAGE>   711
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the Advisor
Class Funds are redeemed at their net asset value next computed after a request
for redemption in proper form (including signature guarantees and other required
documentation for written redemptions) is received by the Transfer Agent or
certain financial institutions (or their designees) who are authorized to accept
redemption orders on behalf of the AIM Funds, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. Orders for the redemption of Advisor Class shares received on any
business day of an AIM Fund will be confirmed at the price determined as of the
close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the proceeds are to be sent to
the address of record. These requirements may be waived or modified upon notice
to shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such 
    

                                       A-6
<PAGE>   712
   

as certain domestic banks, credit unions, securities dealers, or securities
exchanges. The Transfer Agent will also accept signatures with either: (1) a
signature guaranteed with a medallion stamp of the STAMP Program, or (2) a
signature guaranteed with a medallion stamp of the NYSE Medallion Signature
Program, provided that in either event, the amount of the transaction involved
does not exceed the surety coverage amount indicated on the medallion. For
information regarding whether a particular institution or organization qualifies
as an "eligible guarantor institution," an investor should contact the Client
Services Department of AFS.
    
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
  The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
                                       A-7
<PAGE>   713
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                    DISTRIBUTIONS          DISTRIBUTIONS
                                                                        OF NET                 OF NET
                                     DIVIDENDS FROM                    REALIZED               REALIZED
                                     NET INVESTMENT                   SHORT-TERM              LONG-TERM
FUND                                     INCOME                      CAPITAL GAINS          CAPITAL GAINS
- ----                                 --------------                  -------------          -------------
<S>                                  <C>                             <C>                     <C>
AIM BASIC VALUE FUND...............  declared and paid annually         annually                annually
AIM DEVELOPING MARKETS FUND........  declared and paid annually         annually                annually
AIM DOLLAR FUND....................  declared daily; paid monthly       annually                annually
AIM EMERGING MARKETS FUND..........  declared and paid annually         annually                annually
AIM EMERGING MARKETS DEBT FUND.....  declared and paid monthly          annually                annually
AIM EUROPE GROWTH FUND.............  declared and paid annually         annually                annually
AIM GLOBAL CONSUMER PRODUCTS AND
  SERVICES FUND....................  declared and paid annually         annually                annually
AIM GLOBAL FINANCIAL SERVICES
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL GOVERNMENT INCOME
  FUND.............................  declared and paid monthly          annually                annually
AIM GLOBAL GROWTH & INCOME FUND....  declared and paid quarterly        annually                annually
AIM GLOBAL HEALTH CARE FUND........  declared and paid annually         annually                annually
AIM GLOBAL INFRASTRUCTURE FUND.....  declared and paid annually         annually                annually
AIM GLOBAL RESOURCES FUND..........  declared and paid annually         annually                annually
AIM GLOBAL TELECOMMUNICATIONS
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL TRENDS FUND.............  declared and paid annually         annually                annually
AIM INTERNATIONAL GROWTH FUND......  declared and paid annually         annually                annually
AIM JAPAN GROWTH FUND..............  declared and paid annually         annually                annually
AIM LATIN AMERICAN GROWTH FUND.....  declared and paid annually         annually                annually
AIM MID CAP EQUITY FUND............  declared and paid annually         annually                annually
AIM NEW PACIFIC GROWTH FUND........  declared and paid annually         annually                annually
AIM SMALL CAP GROWTH FUND..........  declared and paid annually         annually                annually
AIM STRATEGIC INCOME FUND..........  declared and paid monthly          annually                annually
AIM WORLDWIDE GROWTH FUND..........  declared and paid annually         annually                annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
 
  Dividends on Advisor Class shares of an Advisor Class Fund are expected to be
higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
                                       A-8
<PAGE>   714
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares. With respect to tax-exempt shareholders,
dividends and distributions from the AIM Funds are not subject to federal income
taxation to the extent permitted under the applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the 
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    

  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
   
  TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS DEBT FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM MID CAP
EQUITY FUND, AIM SMALL CAP GROWTH FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL
TAX INFORMATION. Certain states exempt from income taxes dividends paid by
mutual funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
    
 
                                       A-9
<PAGE>   715
   
  AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
    
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each Advisor Class Fund's transfer agent and
dividend payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-10
<PAGE>   716
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                   GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
        ACCOUNT TYPE                    NUMBER OF:                     ACCOUNT TYPE                   NUMBER OF:
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary

      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application

      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors

      Legal Guardian          Ward, Minor or
                              Incompetent

      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
</TABLE>
- --------------------------------------------------------------------------------
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   717
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   718
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
<PAGE>   719
 
   
                                                                    [APPLICATION
                                                                         INSIDE]
    
   
    
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
ADVISOR CLASS OF
    
 
AIM GLOBAL HEALTH CARE FUND
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
PROSPECTUS
SEPTEMBER 8, 1998
 
This Prospectus contains information about AIM GLOBAL HEALTH CARE FUND (the
"Fund"), which is one of several series investment portfolios comprising AIM
Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a diversified portfolio which seeks long-term capital
appreciation by investing primarily in equity securities of health care
companies throughout the world.
 
   
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or by calling (800)
347-4246. The SEC maintains a Web site at http://www.sec.gov that contains the
Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the fund may
also be obtained from http://www.aimfunds.com.
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   720
- --------------------------------------------------------------------------------
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     6
  Investment Program...................     6
  Risk Factors.........................     9
  Management...........................    11
  Organization of the Trust............    12
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  Introduction to The AIM Family of
     Funds.............................   A-1
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-4
  Exchange Privilege...................   A-4
  How to Redeem Shares.................   A-5
  Determination of Net Asset Value.....   A-7
  Dividends, Distributions and Tax
     Matters...........................   A-8
  General Information..................  A-10
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
  The Fund is a diversified series of the Trust.
 
  INVESTMENT OBJECTIVE. The Fund seeks long-term growth of capital appreciation.
 
  PRINCIPAL INVESTMENTS. The Fund invests primarily in equity securities of
health care companies throughout the world.
 
   
  INVESTMENT MANAGERS. The Fund is managed by A I M Advisors, Inc. ("AIM") and
is sub-advised and sub-administered by INVESCO (NY), Inc. (the "Sub-advisor").
AIM and the Sub-advisor and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-advisor are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
AIM was organized in 1976 and, together with its subsidiaries, currently advises
approximately 90 investment company portfolios.
    
 
   
  PURCHASING SHARES. Advisor Class shares are offered through this Prospectus to
(a) trustees or other fiduciaries purchasing shares for employee benefit plans
which are sponsored by organizations which have at least 1,000 employees; (b)
any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment advisor has investment
discretion over such account, and (ii) the account holder pays such person as
compensation for its advice and other services an annual fee of at least 0.50%
on the assets in the account; (c) any account with assets of a least $10,000 if
(i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the
assets in the account; (d) accounts advised by the Sub-advisor or one of the
companies formerly affiliated with the Asset Management Division of
Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the other funds in The AIM Family of Funds that are
sub-advised by the Sub-advisor ("AIM Funds") on May 29, 1998; (e) any of the
companies composing or affiliated with AMVESCAP PLC; and (f) AIM Global Trends
Fund. Pursuant to a separate prospectus, the Fund also offers Class A and Class
B shares, which represent interests in the Fund. The Class A and Class B shares
have different distribution arrangements. Initial investments in Advisor Class
shares must be at least $500 and additional investments must be at least $50.
The distributor of the Advisor Class shares is A I M Distributors, Inc. ("AIM
Distributors"), P.O. Box 4739, Houston, TX 77210-4739. See "How to Purchase
Shares."
    
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds")
Advisor Class shares of the Fund may be exchanged for Advisor Class shares of
certain funds in The AIM Family of Funds in the manner and subject to the
policies and charges set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Advisor Class shareholders of the Fund may redeem all or a
portion of their shares at the Fund's net asset value on any business day. See
"How to Redeem Shares."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters."
    
 
                                        2
<PAGE>   721
 
   
  RISK FACTORS. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its Portfolio's portfolio holdings. The Fund's policy of
concentrating its investments in companies in its particular industries may
cause the Fund's net asset value to fluctuate more than if it invested in a
greater number of industries. The Fund may invest in foreign securities.
Investments in foreign securities involve risks relating to political and
economic developments abroad and the differences between the regulations to
which U.S. and foreign issuers are subject. Individual foreign economies also
may differ favorably or unfavorably from the U.S. economy. Changes in foreign
currency exchange rates will affect the Fund's net asset value, earnings and
gains and losses realized on sales of securities. Securities of foreign
companies may be less liquid and their prices more volatile than those of
securities of comparable U.S. companies. The Fund may engage in certain foreign
currency, options and futures transactions to attempt to hedge against the
overall level of investment and currency risk associated with its present or
planned investments. Such transactions involve certain risks and transaction
costs. The Fund may invest up to 5% of its total assets in below investment
grade debt securities. Investments of this type are subject to a greater risk of
loss of principal and interest. See "Investment Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   722
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Advisor Class shares of the Fund are reflected in the following tables(1):
 
<TABLE>
<S>                                                            <C>
Shareholder Transaction Costs:
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................   None
  Sales charges on reinvested distributions to
     shareholders...........................................   None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........   None
  Redemption charges........................................   None
  Exchange fees.............................................   None
Annual Fund Operating Expenses(2): (as a % of average net
  assets)
  Investment management and administration fees.............   0.97%
  12b-1 distribution and service fees.......................   None
  Other expenses (after reimbursements).....................   0.33%
                                                               ----
          Total Fund Operating Expenses.....................   1.30%
                                                               ====
</TABLE>
 
   
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Fund.
    
 
   
(2)Expenses are based on the Fund's fiscal year ended October 31, 1997 restated
   to reflect AIM's undertaking to limit the Fund's expenses (exclusive of
   brokerage commissions, taxes, interest and extraordinary expenses) to the
   annual rate of 1.50% of the average daily net assets of the Fund's Advisor
   Class shares. AIM has voluntarily agreed to continue this limitation through
   May 31, 2000. "Other expenses" include custody, transfer agency, legal, audit
   and other operating expenses. See "Management" herein and the Statement of
   Additional Information for more information. Investors purchasing Advisor
   Class shares through financial planners, trust companies, bank trust
   departments or registered investment advisers, or under a "wrap fee" program,
   will be subject to additional fees charged by such entities or by the
   sponsors of such programs. Where any account advised by one of the companies
   composing or affiliated with AMVESCAP PLC invests in Advisor Class shares of
   the Fund, such account shall not be subject to duplicative advisory fees.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                       1 YEAR   3 YEARS   5 YEARS   10 YEARS
                                                       ------   -------   -------   --------
<S>                                                    <C>      <C>       <C>       <C>
Advisor Class Shares.................................   $13      $ 41      $ 72       $158
</TABLE>
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT EXPENSES, MAY
BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE ASSUMPTION IN THE
HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY REGULATION OF THE SEC
APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS NOT A PREDICTION OF AND
DOES NOT REPRESENT THE FUND'S PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   723
 
- --------------------------------------------------------------------------------
 
FINANCIAL HIGHLIGHTS
 
   
  The tables below provide condensed financial information concerning income and
capital changes for Advisor Class shares of the Fund for the periods shown. This
information is supplemented by the financial statements and accompanying notes
appearing in the Statement of Additional Information. The financial statements
and notes for the fiscal year ended October 31, 1997, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon is
also included in the Statement of Additional Information. The unaudited
financial statements and notes, for the semi-annual period ended April 30, 1998,
are also included in the Statement of Additional Information.
    
 
   
                          AIM GLOBAL HEALTH CARE FUND
    
   
                     (FORMERLY GT GLOBAL HEALTH CARE FUND)
    
 
   
<TABLE>
<CAPTION>
                                                                            ADVISOR CLASS**
                                                        --------------------------------------------------------
                                                         SIX MONTHS
                                                           ENDED                                    JUNE 1, 1995
                                                         APRIL 30,       YEAR ENDED OCTOBER 31,          TO
                                                            1998         -----------------------    OCTOBER 31,
                                                        (UNAUDITED)*       1997*         1996*          1995
                                                        ------------     ---------     ---------    ------------
<S>                                                     <C>              <C>           <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period..................    $ 28.34         $ 23.77       $ 21.88        $18.66
                                                          -------         -------       -------        ------
Income from investment operations:
  Net investment income (loss)........................      (0.05)          (0.12)        (0.05)        (0.02)
  Net realized and unrealized gain (loss) on
     investments......................................       0.44            6.54          4.80          3.24
                                                          -------         -------       -------        ------
  Net increase (decrease) from investment
     operations.......................................       0.39            6.42          4.75          3.22
                                                          -------         -------       -------        ------
Distributions:
  From net investment income..........................                         --            --            --
  From net realized gain on investments...............      (6.71)          (1.85)        (2.86)           --
  In excess of net realized gain on investments.......         --              --            --            --
                                                          -------         -------       -------        ------
          Total distributions.........................      (6.71)          (1.85)        (2.86)           --
                                                          -------         -------       -------        ------
Net asset value, end of period........................    $ 22.02         $ 28.34       $ 23.77        $21.88
                                                          =======         =======       =======        ======
Total investment return(c)............................       2.37% (a)      29.00%        23.82%        17.10%(a)
                                                          =======         =======       =======        ======
Ratios and supplemental data:
Net assets, end of period (in 000's)..................    $ 9,699         $ 6,819       $ 1,152        $  539
Ratio of net investment income (loss) to average net
  assets:
  With expense reductions.............................      (0.56)%(b)      (0.50)%       (0.21)%       (0.22)%(b)
  Without expense reductions..........................      (0.57)%(b)      (0.53)%       (0.25)%       (0.28)%(b)
Ratio of expenses to average net assets:
  With expense reduction..............................       1.30%(b)        1.27%         1.30%         1.35%(b)
  Without expense reduction...........................       1.31%(b)        1.30%         1.34%         1.41%(b)
Portfolio turnover rate+..............................        156%(b)         149%          157%           99%(b)
Average commission rate per share paid on portfolio
  transactions+.......................................    $0.0561         $0.0490       $0.0548           N/A
</TABLE>
    
 
- ---------------
 
   
+
    
   
    
   
     Portfolio turnover and average commission rates are calculated on the basis
     of the Fund as a whole without distinguishing among the classes of shares
     issued.
    
 
   
*    These selected per share data were calculated based upon average shares
     outstanding during the period.
    
 
   
**   Commencing June 1, 1995, the Fund began offering Advisor Class shares.
    
 
   
(a)  Not annualized.
    
 
   
(b)  Annualized.
    
 
   
(c)  Total investment return does not include sales charges.
    
 
   
N/A  Not Applicable.
    
                                ---------------
 
   
<TABLE>
<CAPTION>
                                                                                    AVERAGE MONTHLY
                                                                  AVERAGE              NUMBER OF         AVERAGE AMOUNT
                                           AMOUNT OF DEBT     AMOUNT OF DEBT      REGISTRANT'S SHARES     OF DEBT PER
                                           OUTSTANDING AT       OUTSTANDING           OUTSTANDING         SHARE DURING
YEAR ENDED                                 END OF PERIOD     DURING THE PERIOD     DURING THE PERIOD       THE PERIOD
- ----------                                 --------------    -----------------    -------------------    --------------
<S>                                        <C>               <C>                  <C>                    <C>
Six months ended April 30, 1998.........        $--              $  8,184             25,589,566            $ 0.000
October 31, 1997........................        $--              $323,288             24,106,677            $0.0134
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is completed on a daily
basis.
    
 
                                        5
<PAGE>   724
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVE. The Fund's investment objective is long-term capital
appreciation. It seeks its objective by investing primarily in equity securities
of health care companies throughout the world. There can be no assurance that
the Fund will achieve its investment objective.
    
 
   
  INVESTMENT POLICIES. At least 65% of the Fund's total assets normally will be
invested in common and preferred stocks, and warrants to acquire such
securities, issued by health care companies. A "health care" company is an
entity in which (i) at least 50% of either the revenues or earnings was derived
from health care activities, or (ii) at least 50% of the assets was devoted to
such activities, based on the company's most recent fiscal year. The remainder
of the Fund's assets may be invested in debt securities issued by health care
companies and/or equity and debt securities of companies outside of the health
care industry, which, in the opinion of the Sub-advisor, stand to benefit from
developments in the health care industries.
    
 
  Global Health Care Industries Investment. Examples of health care companies
include those that are substantially engaged in the design, manufacture or sale
of products or services used for or in connection with health care or medicine.
Such firms may include pharmaceutical companies; firms that design, manufacture,
sell or supply medical, dental and optical products, hardware or services;
companies involved in biotechnology, medical diagnostic, and biochemical
research and development; and companies involved in the ownership and/or
operation of health care facilities.
 
  The Fund expects that, from time to time, a significant portion of its assets
may be invested in the securities of U.S. issuers. Health care industries,
however, are global industries with significant, growing markets outside of the
United States. A sizeable portion of the companies which comprise the health
care industries are headquartered outside of the United States, and many
important pharmaceutical and biotechnology discoveries and technological
breakthroughs have occurred outside of the United States, primarily in Japan,
the United Kingdom and Western Europe.
 
   
  The Sub-advisor believes that the global health care industries offer
attractive long-term supply/demand dynamics. While the United States, Western
Europe, and Japan presently account for a substantial portion of health care
expenditures, this should change dramatically in the coming decade if the
populations of developing countries devote an increasing percentage of income to
health care. Additionally, the Sub-advisor believes demographics on aging point
to a significant increase in demand from the industrialized nations, as the
elderly account for a growing proportion of worldwide health care spending.
Finally, in the Sub-advisor's view, technology will continue to expand the range
of products and services offered, with new drugs, medical devices and surgical
procedures addressing medical conditions previously considered untreatable.
    
 
   
  In addition to these underlying trends, the United States is presently
experiencing a period of rapid and profound change in its own health care
system, marked by the rise of managed care, the formation of health care
delivery networks, and widespread consolidation across all segments of the
industry. The Sub-advisor believes that this transition offers investment
opportunities in those companies acting as consolidators or otherwise gaining
market share at the expense of less efficient competitors.
    
 
                                        6
<PAGE>   725
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
   
  SELECTION OF INVESTMENTS AND ASSET ALLOCATION. The Fund expects that, from
time to time, a significant portion of its assets may be invested in the
securities of domestic issuers. The industry represented in the Fund, however,
is a global industry with significant, growing markets outside of the United
States. A sizeable proportion of the companies which comprise the health care
industries are headquartered outside of the United States.
    
 
   
  For these reasons, the Sub-advisor believes that a portfolio composed only of
securities of U.S. issuers does not provide the greatest potential for return
from an investment by the Fund. The Sub-advisor uses its financial expertise in
markets located throughout the world and the substantial global resources of
AMVESCAP PLC in attempting to identify those countries and companies then
providing the greatest potential for long-term capital appreciation. In this
fashion, the Sub-advisor seeks to enable shareholders to capitalize on the
substantial investment opportunities and the potential for long-term growth of
capital presented by the global industries represented in the Fund.
    
 
   
  The Sub-advisor allocates the Fund's assets among securities of countries and
in currency denominations where opportunities for meeting the Fund's investment
objective are expected to be the most attractive. The Fund may invest
substantially in securities denominated in one or more currencies. Under normal
conditions, the Fund invests in the securities of issuers located in at least
three countries, including the United States; investments in securities of
issuers in any one country, other than the United States, will represent no more
than 50% of the Fund's total assets.
    
 
   
  In analyzing specific companies for possible investment, the Sub-advisor
ordinarily looks for several of the following characteristics: above-average per
share earnings growth; high return on invested capital; a healthy balance sheet;
sound financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; development of new technologies; efficient service; pricing
flexibility; strong management; and general operating characteristics that will
enable the companies to compete successfully in their respective markets.
    
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. Under a defensive strategy, the Fund may invest up to 100%
of its total assets in cash (U.S. dollars, foreign currencies or multinational
currency units such as Euros) and/or high quality debt securities or money
market instruments of U.S. or foreign issuers. In addition, for temporary
defensive purposes, most or all of the Fund's investments may be made in the
United States and denominated in U.S. dollars. To the extent the Fund adopts a
temporary defensive posture, it will not be invested so as to achieve directly
its investment objective. In addition, pending investment of proceeds from new
sales of Fund shares or to meet its ordinary daily cash needs, the Fund may hold
cash (U.S. dollars, foreign currencies or multinational currency units) and may
invest in foreign or domestic high quality money market instruments. For a full
description of money market instruments, see "Money Market Instruments" in the
"Investment Objectives and Policies" section of the Statement of Additional
Information.
    
 
   
  PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Fund in privatizations in appropriate
circumstances. In certain foreign countries, the ability of foreign entities
such as the Fund to participate in privatizations may be limited by local law,
or the terms on which the Fund may be permitted to participate may be less
advantageous than those for local investors. There can be no assurance that
foreign governments will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
    
 
   
  INVESTMENTS IN OTHER INVESTMENT COMPANIES. The Fund may invest up to 10% of
its total assets in other investment companies, some of which may be investment
vehicles or companies that are advised by the Sub-advisor or its affiliates
("Affiliated Funds"). As a shareholder in an investment company, the Fund would
bear its ratable share of that investment company's expenses, including its
advisory and administration fees. At the same time, the Fund would continue to
pay its own management fees and other expenses. AIM and the Sub-advisor will
waive their advisory fees to the extent that the Fund invests in an Affiliated
Fund.
    
 
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemptions of the
Fund's shares. The Fund also may borrow up to 5% of its total assets for
temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Fund may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Fund's borrowings exceed 5% of its
total assets. Any borrowing by the Fund may cause greater fluctuation in the
value of its shares than would be the case if the Fund did not borrow.
 
  A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash, and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's sale of securities together with its
commitment (for which the Fund may receive a fee) to purchase similar, but not
identical, securities at a future date.
 
                                        7
<PAGE>   726
 
   
  SECURITIES LENDING. The Fund may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Fund to retain ownership of the securities loaned and, at the same time,
enhances the Fund's total return. The Fund limits its loans of portfolio
securities to an aggregate of 30% of the value of its total assets, measured at
the time any such loan is made. While a loan is outstanding, the borrower must
maintain with the Fund's custodian collateral consisting of liquid assets equal
to at least the value of the borrowed securities, plus any accrued interest or
such other collateral as permitted by the Fund's investment program and
regulatory agencies, and as approved by the Board. The risks in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delays in receiving additional collateral or in recovery of the
securities and possible loss of rights in the collateral should the borrower
fail financially.
    
 
  WHEN-ISSUED OR FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities or enter into forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If
the Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, the Fund will
segregate cash or liquid securities equal to the value of the when-issued or
forward commitment securities with its custodian and will mark to market daily
such assets. There is a risk that the securities may not be delivered and that
the Fund may incur a loss.
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the portfolio. These instruments are often referred to as
"derivatives," which may be defined as financial instruments whose performance
is derived, at least in part, from the performance of another asset (such as a
security, currency or an index of securities). The Fund may enter into such
instruments up to the full value of its portfolio assets. See "Risk
Factors -- Options, Futures and Forward Currency Transactions" herein and
"Options, Futures and Currency Strategies" in the Statement of Additional
Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on such futures
contracts to hedge against movements in exchange rates.
 
   
  In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-advisor intends to include in the
Fund's portfolio. The Fund also may purchase and sell put and call options on
stock indexes to hedge against overall fluctuations in the securities markets
generally or in a specific market sector.
    
 
  Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market decline or a decline in a specific market sector that could
affect adversely the Fund's holdings. The Fund also may purchase stock index
futures contracts and purchase call options or write put options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisitions. The Fund
may use interest rate futures contracts and options thereon to hedge the debt
portion of its portfolio against changes in the general level of interest rates.
 
  OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this Prospectus
and in the Statement of Additional Information may be changed by the Trust's
Board of Trustees without shareholder approval. The Fund's policies regarding
concentration and lending, and the percentage of the Fund's assets that may be
committed to borrowing, are fundamental policies and may not be changed without
shareholder approval.
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
 
   
  The Fund is authorized to engage in Short Sales, although it currently has no
intention of doing so, and may purchase American Depositary Receipts, American
Depositary Shares, Global Depositary Receipts and European Depositary Receipts.
See "Short Sales"
    
 
                                        8
<PAGE>   727
 
   
and "Depositary Receipts," respectively, in the Investment Objectives and
Policies section of the Statement of Additional Information.
    
- --------------------------------------------------------------------------------
 
RISK FACTORS
 
   
  GENERAL. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset values will fluctuate reflecting fluctuations in
the market value of the Fund's portfolio positions. Equity securities,
particularly common stocks, generally represent the most junior position in an
issuer's capital structure, and entitle holders to an interest in the assets of
an issuer, if any, remaining after all more senior claims have been satisfied.
The value of equity securities held by the Fund will fluctuate in response to
general market and economic developments, as well as developments affecting the
particular issuers of such securities. In addition, the value of debt securities
held by the Fund generally will fluctuate with changes in the perceived
creditworthiness of the issuers of such securities and interest rates.
    
 
  Because the Fund focuses its investments on particular industries, an
investment in each may be more volatile than that of other investment companies
that do not concentrate their investments in such a manner. Moreover, the value
of the shares of the Fund will be especially susceptible to factors affecting
the industries in which it focuses. Accordingly, the Fund should not be
considered a complete investment program.
 
  HEALTH CARE INDUSTRIES. Health care industries generally are subject to
substantial governmental regulation. Changes in governmental policy or
regulation could have a material effect on the demand for products and services
offered by companies in the health care industries and therefore could affect
the performance of the Fund. Regulatory approvals are generally required before
new drugs and medical devices or procedures may be introduced and before the
acquisition of additional facilities by health care providers. In addition, the
products and services offered by such companies may be subject to rapid
obsolescence caused by technological and scientific advances.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to, the reporting requirements of the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. In addition, certain costs attributable to
foreign investing, such as custody charges, are higher than those attributable
to domestic investing. Securities of some foreign companies are less liquid and
their prices may be more volatile than securities of comparable domestic
companies. The Fund's interest and dividends from foreign issuers may be subject
to non-U.S. withholding taxes, thereby reducing the Fund's net investment
income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Fund, political or social instability, or diplomatic
developments which could affect the Fund's investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
 
  The Fund may invest in issuers domiciled in "emerging markets." Investing in
emerging market countries involves risks in addition to those risks involved in
foreign investing. Many emerging market countries have experienced high rates of
inflation for many years. In addition, emerging markets generally are dependent
heavily upon international trade and, accordingly, have been and continue to be
affected adversely by trade barriers, exchange controls, managed adjustments in
relative currency values and other protectionist measures imposed or negotiated
by the countries with which they trade. The securities markets of emerging
market countries are substantially smaller, less developed, less liquid and more
volatile than the securities markets of the developed countries. In addition,
issuers in emerging markets typically are subject to a greater degree of change
in earnings and business prospects than issuers in developed countries.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
  The Fund will also be affected favorably or unfavorably by exchange control
regulations or changes in the exchange rates between foreign currencies and the
U.S. dollar. Changes in currency exchange rates will influence the value of the
Funds' shares, and also may affect the value of dividends and interest earned by
the Fund and gains and losses realized by the Fund.
                                        9
<PAGE>   728
 
   
  LOWER QUALITY DEBT SECURITIES. The Fund may invest up to 5% of its total
assets in below investment grade debt securities, that is, rated below BBB by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or Baa
by Moody's Investors Service, Inc. ("Moody's") or, if unrated, deemed to be of
equivalent quality in the judgment of the Sub-advisor. Such investments involve
a high degree of risk. However, the Fund will not invest in debt securities that
are in default as to payment of principal and interest.
    
 
  Debt rated Baa by Moody's is considered by Moody's to have speculative
characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B,
Caa, Ca or C by Moody's is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such lower quality debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Debt rated C
by Moody's or S&P is the lowest rated debt that is not in default as to
principal or interest, and such issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Lower
quality debt securities are also generally considered to be subject to greater
risk than securities with higher ratings with regard to a deterioration of
general economic conditions. These lower quality debt securities are the
equivalent of high yield, high risk bonds, commonly known as "junk bonds."
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates. See "Description of Debt Ratings" in the Statement of Additional
Information for a full discussion of Moody's and S&P's ratings.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities of corporate issuers frequently have call or
buy-back features which would permit an issuer to call or repurchase the
security from the Fund. If an issuer exercises these provisions in a declining
interest rate market, the Fund may have to replace the security with a lower
yielding security, resulting in a decreased return for investors. In addition,
the Fund may have difficulty disposing of lower quality securities because they
may have a thin trading market. There may be no established retail secondary
market for many of these securities, and the Fund anticipates that such
securities could be sold only to a limited number of dealers or institutional
investors. The lack of a liquid secondary market also may have an adverse impact
on market prices of such instruments and may make it more difficult for the Fund
to obtain accurate market quotations for purposes of valuing the Fund's
portfolio investments. The Fund may also acquire lower quality debt securities
during an initial underwriting or which are sold without registration under
applicable securities laws. Such securities involve special considerations and
risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Fund may invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic recession. The Fund may also incur additional expenses to the extent it
is required to seek recovery upon a default in the payment of principal or
interest on portfolio holdings, and the Fund may have limited legal recourse in
the event of a default.
 
   
  ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." The Sub-advisor believes that carefully selected investments in
joint ventures, cooperatives, partnerships and state enterprises which are
illiquid (collectively, "Special Situations") could enable the Fund to achieve
capital appreciation substantially exceeding the appreciation the Fund would
realize if it did not make such investments. However, in order to attempt to
limit investment risk, the Fund will invest no more than 5% of its total assets
in Special Situations.
    
 
  Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at a price
lower than similar securities that are liquid.
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions, the
Fund might not enter into any such transactions. Options, futures and foreign
currency transactions involve certain risks, which include: (1) dependence on
the Sub-advisor's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets or in the appropriate
market sector and movements in interest rates and currency markets; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, forward contracts, futures contracts or options thereon and movements
in the price of the currency or security hedged or used for cover; (3) the fact
that
    
 
                                       10
<PAGE>   729
 
skills and techniques needed to trade options, futures contracts and options
thereon or to use forward currency contracts are different from those needed to
select the securities in which the Fund invests; (4) lack of assurance that a
liquid secondary market will exist for any particular option, futures contract
or option thereon at any particular time; (5) the possible loss of principal
under certain conditions; and (6) the possible inability of the Fund to purchase
or sell a portfolio security at a time when it would otherwise be favorable for
it to do so, or the possible need for the Fund to sell a security at a
disadvantageous time, due to the need for the Fund to maintain "cover" or to set
aside securities in connection with hedging transactions.
 
  INVESTING IN SMALLER COMPANIES. While the Fund's portfolio normally will
include securities of established suppliers of traditional products and
services, the Fund may invest in smaller companies which can benefit from the
development of new products and services. These smaller companies may present
greater opportunities for capital appreciation, but may also involve greater
risks than large, established issuers. Such smaller companies may have limited
product lines, markets or financial resources, and their securities may trade
less frequently and in more limited volume than the securities of larger, more
established companies. As a result, the prices of the securities of such smaller
companies may fluctuate to a greater degree than the prices of the securities of
other issuers.
- --------------------------------------------------------------------------------
 
MANAGEMENT
 
   
  The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust on the one side and persons or companies furnishing services
to the Fund on the other, including the investment management and administration
agreement with AIM, the investment sub-advisory and sub-administration agreement
between AIM and the Sub-advisor, the agreements with AIM Distributors regarding
distribution of the Fund's shares, the custody agreement and the transfer agency
agreement. The day-to-day operations of the Fund is delegated to the officers of
the Trust, subject always to the investment objective and policies of the Fund
and to the general supervision of the Trust's Board of Trustees. See "Trustees
and Executive Officers" in the Statement of Additional Information for
information on the Company's Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers and administrators include, but
are not limited to, determining the composition of the investment portfolio of
the Fund and placing orders to buy, sell or hold particular securities. In
addition, AIM and the Sub-advisor provide the following administration services
to the Fund: furnishing corporate officers and clerical staff; providing office
space, services and equipment; and supervising all matters relating to the
Funds' operation.
    
 
   
  For investment management and administration services provided to the Fund,
the Fund pays AIM a fee computed daily and paid monthly based on the Fund's
average daily net assets at the annualized rate of 0.975% on the first $500
million, 0.95% on the next $500 million, 0.925% on the next $500 million and
0.90% on amounts thereafter. Out of the aggregate fees payable by the Fund, AIM
pays the Sub-advisor sub-advisory and sub-administration fees equal to 40% of
the aggregate fees AIM receives from the Fund.
    
 
   
  The Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM
Distributors or other agents. AIM has undertaken to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary expenses)
to the annual rate of 1.50% of the average daily net assets of the Fund's
Advisor Class shares.
    
 
   
  The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-advisor (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement (the "Advisory Agreement"). AIM was organized in 1976
and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Fund pursuant to an investment sub-advisory and
sub-administration agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of the Sub-advisor,
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included the Sub-advisor and
certain other affiliates. As a result of this transaction, the Sub-advisor is
now an indirect wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon),
    
 
                                       11
<PAGE>   730
 
   
Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo and Toronto. In managing
the Fund, the Sub-advisor employs a team approach, taking advantage of its
investment resources around the world.
    
 
  The investment professional primarily responsible for the portfolio management
of the Fund is as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
NAME/OFFICE                    THE FUND                           PAST FIVE YEARS
- -----------             ----------------------                  -------------------
<S>                     <C>                      <C>
Michael Yellen          Portfolio Manager        Portfolio Manager for the Sub-advisor since 1996.
San Francisco           since 1996               Research analyst for the Sub-advisor from 1994 to
                                                 1996. Securities analyst and Co-Portfolio Manager
                                                 for Franklin Resources, Inc. (San Mateo, CA) from
                                                 1991 to 1994.
</TABLE>
    
 
   
  In placing orders for the Fund's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of The AIM Family of Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions may be executed
through affiliates of AIM or the Sub-advisor. High portfolio turnover (over
100%) involves correspondingly greater brokerage commissions and other
transaction costs that the Funds will bear directly and could result in the
realization of net capital gains which would be taxable when distributed to
shareholders. See "Dividends, Other Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement (the
"Distribution Agreement"), with AIM Distributors, a registered broker-dealer and
a wholly owned subsidiary of AIM, to act as the distributor of the Advisor Class
shares of the Fund. Certain Trustees and officers of the Trust are affiliated
with AIM Distributors.
    
 
  The Distribution Agreement provides AIM Distributors with the exclusive right
to distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST
    
 
   
  The Trust was organized as a Delaware Business trust on May 7, 1998. On
September 8, 1998, the Company acquired the assets of and assumed the
liabilities of AIM Investment Funds, Inc., a Maryland corporation. The Fund
constitutes one of the thirteen separate and distinct series portfolios of the
Trust. From time to time, the Trust may establish other funds, each
corresponding to a distinct investment portfolio and a distinct series of the
Trust's shares of beneficial interest. Shares of each fund are entitled to one
vote per share (with proportional voting for fractional shares) and are freely
transferable. Shareholders have no preemptive rights. Other than the automatic
conversion of Class B shares to Class A shares, there are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges, except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust and the
Fund.
    
 
                                       12
<PAGE>   731
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
                  TO THE AIM FAMILY OF FUNDS--Register Mark--
                            FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several of
which offer Advisor Class shares. Only Advisor Class shares are offered through
this Prospectus. Advisor Class shares are available from the following funds
(collectively, the "Advisor Class Funds"):
 
   
<TABLE>
            <S>                                           <C>
            AIM BASIC VALUE FUND                          AIM GLOBAL INFRASTRUCTURE FUND
            AIM DEVELOPING MARKETS FUND                   AIM GLOBAL RESOURCES FUND
            AIM DOLLAR FUND                               AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM EMERGING MARKETS FUND                     AIM GLOBAL TRENDS FUND
            AIM EMERGING MARKETS DEBT FUND                AIM INTERNATIONAL GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM JAPAN GROWTH FUND
            AIM GLOBAL CONSUMER PRODUCTS                  AIM LATIN AMERICAN GROWTH FUND
              AND SERVICES FUND                           AIM MID CAP EQUITY FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM NEW PACIFIC GROWTH FUND
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM SMALL CAP GROWTH FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM STRATEGIC INCOME FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WORLDWIDE GROWTH FUND
</TABLE>
    
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
 
  HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through Financial
Advisers (as defined herein) who have entered into agreements with A I M
Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor Class
shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
 
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment for
Advisor Class shares is $500.
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
                                       A-1
<PAGE>   732
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Advisor Class shares of any Advisor Class Funds not named on the cover of this
Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                                                     Shareholder Name, Shareholder Account Number 
                   OBI:                              (70 character limit)
</TABLE>
 
  It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
 
  HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
  In addition to the Advisor Class Funds, the AIM Funds consist of the following
funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR
LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND,
AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BLUE
CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION
FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED MATURITY TREASURY
FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM SELECT GROWTH FUND,
AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM VALUE FUND and AIM
WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM
LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with the Advisor Class
Funds, the "Multiple Class Funds." For information on purchasing any of the AIM
Funds and to receive a prospectus, please call (800) 347-4246. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
  Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
 
  Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee'
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares. Investors in wrap fee programs and
advisory accounts may only purchase Advisor Class shares through Financial
Advisers who have entered into agreements with AIM Distributors. Investors may
be charged a fee by their agents or brokers for effecting transactions in
Advisor Class shares.
 
  AIM Distributors may, from time to time, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives
 
                                       A-2
<PAGE>   733
 
and their families to places within or outside the United States. The total
amount of such additional bonus payments or other consideration shall not exceed
0.25% of the public offering price of the shares sold. Any such bonus or
incentive programs will not change the price paid by investors for the purchase
of the applicable AIM Fund's shares or the amount that any particular AIM Fund
will receive as proceeds from such sales. Dealers may not use sales of the AIM
Funds' shares to qualify for any incentives to the extent that such incentives
may be prohibited by the laws of any state.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND uses
the amortized cost method of valuing the securities it holds and rounds its per
share net asset value to the nearest whole cent, it is anticipated that the net
asset value of the shares of that fund will remain constant at $1.00 per share.
However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00 net
asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
                                       A-3
<PAGE>   734
 
- --------------------------------------------------------------------------------
 
   
SPECIAL PLANS
    
 
  Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
 
   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance to $5,000 to
establish and maintain an allocation across a range of Advisor Class Funds. The
Program automatically rebalances holdings of Advisor Class Funds to the
established allocation on a periodic basis. Under the Program, a shareholder may
predesignate, on a percentage basis, how the total value of his or her holdings
in a minimum of two, and a maximum of ten, Advisor Class Funds ("Personal
Portfolio") is to be rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more Advisor Class Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other Advisor Class Funds in the
shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the
Advisor Class Fund(s) in a shareholder's Personal Portfolio have appreciated
during a rebalancing period, the Program will result in shares of Advisor Class
Fund(s) that have appreciated most during the period being exchanged for shares
of Advisor Class Fund(s) that have appreciated least. SUCH EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends, Distributions and Tax
Matters -- Dividends and Distributions." Participation in the Program does not
assure that a shareholder will profit from purchases under the Program nor does
it prevent or lessen losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Advisor Class Fund would be 2%
or less. In predesignating percentages, shareholders must use whole percentages
and totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an Advisor Class Fund's
shares. The AIM Funds and AIM Distributors reserve the right to modify, suspend,
or terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which Advisor
Class Funds or what allocation percentages are assigned to the Program, unless
canceled or changed in writing and received by the Transfer Agent in good order
at least five business days prior to the rebalancing date. Certain
dealers/financial institutions may charge a fee for establishing accounts
relating to the Program. Investors should contact their dealers/financial
institutions or AIM Distributors for more information.
    
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the Advisor
Class Funds may participate in an exchange privilege as described below. AIM
Distributors acts as distributor for the Advisor Class Funds which represent a
range of different investment objectives and policies.
 
  Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
 
  Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
 
  An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor
 
                                       A-4
<PAGE>   735
 
Class Fund acquired through exchange must be qualified for sale in the state in
which the shareholder resides; (c) the exchange must be made between accounts
having identical registrations and addresses; (d) the full amount of the
purchase price for the shares being exchanged must have already been received by
the fund; (e) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or Form
W-9 (certifying exempt status) must have been received by the fund; (f) newly
acquired shares (through either an initial or subsequent investment) are held in
an account for at least ten business days, and all other shares are held in an
account for at least one day, prior to the exchange; and (g) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the Advisor Class Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
  Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but under unusual market
conditions such purchases may be delayed for up to five business days if it is
determined that an Advisor Class Fund would be materially disadvantaged by an
immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into an Advisor Class Fund that declares daily dividends ("Dividends,
Distributions and Tax Matters -- Dividends and Distributions," below), and the
release of the exchange proceeds is delayed for the foregoing five-day period,
such shareholder will not begin to accrue dividends until the sixth business day
after the exchange. Advisor Class shares purchased by check may not be exchanged
until it is determined that the check has cleared, which may take up to ten
business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. A shareholder may give exchange information to his Financial
Adviser. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the Advisor Class Funds. AIM Distributors reserves the right to impose
conditions on dealers or investment advisors who make telephone exchanges of
shares of the Advisor Class Funds, including the condition that any such dealer
or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/financial institutions may charge service fees for handling
repurchase transactions.
 
                                       A-5
<PAGE>   736
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the Advisor
Class Funds are redeemed at their net asset value next computed after a request
for redemption in proper form (including signature guarantees and other required
documentation for written redemptions) is received by the Transfer Agent or
certain financial institutions (or their designees) who are authorized to accept
redemption orders on behalf of the AIM Funds, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. Orders for the redemption of Advisor Class shares received on any
business day of an AIM Fund will be confirmed at the price determined as of the
close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the proceeds are to be sent to
the address of record. These requirements may be waived or modified upon notice
to shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such 
    

                                       A-6
<PAGE>   737
   

as certain domestic banks, credit unions, securities dealers, or securities
exchanges. The Transfer Agent will also accept signatures with either: (1) a
signature guaranteed with a medallion stamp of the STAMP Program, or (2) a
signature guaranteed with a medallion stamp of the NYSE Medallion Signature
Program, provided that in either event, the amount of the transaction involved
does not exceed the surety coverage amount indicated on the medallion. For
information regarding whether a particular institution or organization qualifies
as an "eligible guarantor institution," an investor should contact the Client
Services Department of AFS.
    
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
  The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
                                       A-7
<PAGE>   738
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                    DISTRIBUTIONS          DISTRIBUTIONS
                                                                        OF NET                 OF NET
                                     DIVIDENDS FROM                    REALIZED               REALIZED
                                     NET INVESTMENT                   SHORT-TERM              LONG-TERM
FUND                                     INCOME                      CAPITAL GAINS          CAPITAL GAINS
- ----                                 --------------                  -------------          -------------
<S>                                  <C>                             <C>                     <C>
AIM BASIC VALUE FUND...............  declared and paid annually         annually                annually
AIM DEVELOPING MARKETS FUND........  declared and paid annually         annually                annually
AIM DOLLAR FUND....................  declared daily; paid monthly       annually                annually
AIM EMERGING MARKETS FUND..........  declared and paid annually         annually                annually
AIM EMERGING MARKETS DEBT FUND.....  declared and paid monthly          annually                annually
AIM EUROPE GROWTH FUND.............  declared and paid annually         annually                annually
AIM GLOBAL CONSUMER PRODUCTS AND
  SERVICES FUND....................  declared and paid annually         annually                annually
AIM GLOBAL FINANCIAL SERVICES
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL GOVERNMENT INCOME
  FUND.............................  declared and paid monthly          annually                annually
AIM GLOBAL GROWTH & INCOME FUND....  declared and paid quarterly        annually                annually
AIM GLOBAL HEALTH CARE FUND........  declared and paid annually         annually                annually
AIM GLOBAL INFRASTRUCTURE FUND.....  declared and paid annually         annually                annually
AIM GLOBAL RESOURCES FUND..........  declared and paid annually         annually                annually
AIM GLOBAL TELECOMMUNICATIONS
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL TRENDS FUND.............  declared and paid annually         annually                annually
AIM INTERNATIONAL GROWTH FUND......  declared and paid annually         annually                annually
AIM JAPAN GROWTH FUND..............  declared and paid annually         annually                annually
AIM LATIN AMERICAN GROWTH FUND.....  declared and paid annually         annually                annually
AIM MID CAP EQUITY FUND............  declared and paid annually         annually                annually
AIM NEW PACIFIC GROWTH FUND........  declared and paid annually         annually                annually
AIM SMALL CAP GROWTH FUND..........  declared and paid annually         annually                annually
AIM STRATEGIC INCOME FUND..........  declared and paid monthly          annually                annually
AIM WORLDWIDE GROWTH FUND..........  declared and paid annually         annually                annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
 
  Dividends on Advisor Class shares of an Advisor Class Fund are expected to be
higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
                                       A-8
<PAGE>   739
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares. With respect to tax-exempt shareholders,
dividends and distributions from the AIM Funds are not subject to federal income
taxation to the extent permitted under the applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the 
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    

  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
   
  TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS DEBT FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM MID CAP
EQUITY FUND, AIM SMALL CAP GROWTH FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL
TAX INFORMATION. Certain states exempt from income taxes dividends paid by
mutual funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
    
 
                                       A-9
<PAGE>   740
   
  AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
    
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each Advisor Class Fund's transfer agent and
dividend payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-10
<PAGE>   741
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                   GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
        ACCOUNT TYPE                    NUMBER OF:                     ACCOUNT TYPE                   NUMBER OF:
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary

      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application

      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors

      Legal Guardian          Ward, Minor or
                              Incompetent

      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
</TABLE>
- --------------------------------------------------------------------------------
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   742
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   743
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
 
   
GHC-PRO-2
    
<PAGE>   744
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
ADVISOR CLASS OF
    
 
   
AIM EMERGING MARKETS DEBT FUND
    
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
   
PROSPECTUS
    
   
SEPTEMBER 8, 1998
    
 
   
This Prospectus contains information about AIM EMERGING MARKETS DEBT FUND
(formerly known as AIM Global High Income Fund) (the "Fund"), which is one of
several series investment portfolios comprising AIM Investment Funds (the
"Trust"), an open-end, series, management investment company. The Fund is a
diversified portfolio which primarily seeks high current income and secondarily
seeks capital appreciation by investing all of its investable assets in the
Emerging Markets Debt Portfolio (the "Portfolio"), which, in turn, invests
primarily in the debt securities of issuers located in emerging markets. The
Portfolio's investment objectives are identical to those of the Fund.
    
 
The investment experience of the Fund will correspond directly with the
investment experience of the Portfolio.
 
   
THE PORTFOLIO INVESTS UP TO 100% OF ITS TOTAL ASSETS IN LOWER QUALITY AND
UNRATED FOREIGN GOVERNMENT BONDS WHOSE CREDIT QUALITY IS GENERALLY CONSIDERED
THE EQUIVALENT OF U.S. CORPORATE DEBT SECURITIES COMMONLY KNOWN AS "JUNK BONDS."
INVESTMENTS OF THIS TYPE ARE SUBJECT TO A GREATER RISK OF LOSS OF PRINCIPAL AND
INTEREST. PURCHASERS SHOULD CAREFULLY ASSESS THE RISKS ASSOCIATED WITH AN
INVESTMENT IN THE FUND. SEE "INVESTMENT PROGRAM" AND "RISK FACTORS."
    
 
   
This Prospectus sets forth concisely information about the Fund that prospective
investors should know before investing. It should be read and retained for
future reference. A Statement of Additional Information, dated September 8,
1998, has been filed with the Securities and Exchange Commission (the "SEC") and
is incorporated herein by reference. The Statement of Additional Information is
available without charge upon written request to the Trust at 11 Greenway Plaza,
Suite 100, Houston, Texas 77046-1173, or by calling 1-800 347-4246. The SEC
maintains a Web site at http://www.sec.gov that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding the Fund. Additional information about the fund may also
be obtained from http://www.aimfunds.com.
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   745
- --------------------------------------------------------------------------------
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     6
  Investment Program...................     6
  Risk Factors.........................    12
  Management...........................    16
  Organization of the Trust and the
     Portfolio.........................    17
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-4
  Exchange Privilege...................   A-4
  How to Redeem Shares.................   A-5
  Determination of Net Asset Value.....   A-7
  Dividends, Distributions and Tax
     Matters...........................   A-8
  General Information..................  A-10
  Appendix A...........................  A-11
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
   
  The Fund is a non-diversified series of the Trust. The Portfolio is a
non-diversified, open-end management investment company.
    
 
  INVESTMENT OBJECTIVES. The Fund primarily seeks high current income and
secondarily seeks capital appreciation.
 
  PRINCIPAL INVESTMENTS. The Fund invests all of its investable assets in the
Portfolio, which, in turn, invests primarily in debt securities of issuers
located in emerging markets.
 
   
  INVESTMENT MANAGERS. The Portfolio is managed by A I M Advisors, Inc. ("AIM")
and is sub-advised and sub-administered by INVESCO (NY), Inc. (the
"Sub-advisor"). AIM and the Sub-advisor and their worldwide asset management
affiliates provide investment management and/or administrative services to
institutional, corporate and individual clients around the world. AIM and the
Sub-advisor are both indirect wholly owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC and its subsidiaries are an independent investment management group
that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing
presence in Asia. AIM was organized in 1976 and, together with its subsidiaries,
currently advises approximately 90 investment company portfolios.
    
 
   
  PURCHASING SHARES. Advisor Class shares are offered through this Prospectus to
(a) trustees or other fiduciaries purchasing shares for employee benefit plans
which are sponsored by organizations which have at least 1,000 employees; (b)
any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment advisor has investment
discretion over such account, and (ii) the account holder pays such person as
compensation for its advice and other services an annual fee of at least 0.50%
on the assets in the account; (c) any account with assets of a least $10,000 if
(i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the
assets in the account; (d) accounts advised by the Sub-advisor or one of the
companies formerly affiliated with the Asset Management Division of
Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the funds in The AIM Family of Funds on May 29, 1998 and;
(e) any of the companies composing or affiliated with AMVESCAP PLC. Pursuant to
a separate prospectus, the Fund also offers Class A and Class B shares, which
represent interests in the Fund. The Class A and Class B shares have different
distribution arrangements.
    
 
  Initial investments in Advisor Class shares must be at least $500 and
additional investments must be at least $50. The distributor of the Advisor
Class shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares."
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds").
Advisor Class shares of the Fund may be exchanged for Advisor Class shares of
certain funds in The AIM Family of Funds in the manner and subject to the
policies and charges set forth herein. See "Exchange Privilege."
    
 
   
  REDEEMING SHARES. Advisor Class shareholders of the Fund may redeem all or a
portion of their shares at net asset value on any business day. See "How to
Redeem Shares."
    
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on a monthly basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters."
    
 
                                        2
<PAGE>   746
 
  RISK FACTORS. There is no assurance that the Fund or the Portfolio will
achieve its investment objectives. The Fund's net asset value will fluctuate,
reflecting fluctuations in the market value of its or its corresponding
Portfolio's securities holdings. The value of debt securities held by the
Portfolio generally fluctuates inversely with interest rate movements.
 
  The Portfolio will invest in foreign securities. Investments in foreign
securities involve risks relating to political and economic developments abroad
and the differences between the regulations to which U.S. and foreign issuers
are subject. Individual foreign economies also may differ favorably or
unfavorably from the U.S. economy. Changes in foreign currency exchange rates
will affect the Fund's or the Portfolio's net asset value, earnings and gains
and losses realized on sales of securities. Securities of foreign companies may
be less liquid and their prices more volatile than those of securities of
comparable U.S. companies. The Portfolio will normally invest at least 65% of
its total assets in debt securities of issuers in emerging markets. Such
investments entail greater risks than investing in securities of issuers in
developed markets.
 
  The Portfolio may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs.
 
   
  The Portfolio may invest up to 100% of its total assets in debt securities
rated below investment grade or, if not rated, determined by the Sub-advisor to
be of comparable quality. Investments of this type are subject to greater risk
of loss of principal and interest. See "Investment Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   747
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Advisor Class shares of the Fund are reflected in the following table(1):
 
<TABLE>
<S>                                                           <C>
Shareholder Transaction Costs:
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................  None
  Sales charges on reinvested distributions to
     shareholders...........................................  None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........  None
  Redemption charges........................................  None
  Exchange fees.............................................  None
Annual Fund Operating Expenses(2): (as a % of average net
  assets)
  Investment management and administration fees.............  0.90%
  12b-1 distribution and service fees.......................  None
  Other expenses............................................  0.33%
                                                              ----
          Total Fund Operating Expenses.....................  1.23%
                                                              ====
</TABLE>
 
   
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Fund.
    
 
   
(2)Expenses are based on the Fund's fiscal year ended October 31, 1997. "Other
   expenses" include custody, transfer agent, legal, audit and other operating
   expenses. See "Management" herein and the Statement of Additional Information
   for more information. Investors purchasing Advisor Class shares through
   financial planners, trust companies, bank trust departments or registered
   investment advisors, or under a "wrap fee" program, will be subject to
   additional fees charged by such entities or by the sponsors of such programs.
   Where any account advised by one of the companies composing or affiliated
   with AMVESCAP PLC invests in Advisor Class shares of the Fund, such account
   shall not be subject to duplicative advisory fees. The Board of Trustees of
   the Trust believes that the aggregate per share expenses of the Fund and the
   Portfolio will be less than or approximately equal to the expenses which the
   Fund would incur if the assets of that Fund were invested directly in the
   type of securities being held by the Portfolio. Effective November 1, 1997,
   AIM has voluntarily agreed to limit the Fund's expenses (exclusive of
   brokerage commissions, taxes, interest and extraordinary expenses) to the
   annual rate of 1.40% of the average daily net assets of the Fund's Advisor
   Class shares through May 31, 2000.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                       1 YEAR   3 YEARS   5 YEARS   10 YEARS
                                                       ------   -------   -------   --------
<S>                                                    <C>      <C>       <C>       <C>
Advisor Class Shares.................................   $13       $39       $68       $150
</TABLE>
    
 
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S AND THE PORTFOLIO'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND
INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE
ASSUMPTION IN THE HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY
REGULATION OF THE SEC APPLICABLE TO ALL MUTUAL FUNDS; THE 5% ANNUAL RETURN IS
NOT A PREDICTION OF AND DOES NOT REPRESENT THE FUND'S OR THE PORTFOLIO'S
PROJECTED OR ACTUAL PERFORMANCE.
 
                                        4
<PAGE>   748
 
   
- --------------------------------------------------------------------------------
    
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The table below provides condensed financial information concerning income and
capital changes for one Advisor Class share of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statements and notes for the
fiscal year ended October 31, 1997 and the semi-annual period ended April 30,
1998, have been audited by PricewaterhouseCoopers LLP, independent accountants,
whose reports thereon appear in the Statement of Additional Information.
    
 
   
                         AIM EMERGING MARKETS DEBT FUND
    
   
 (FORMERLY AIM GLOBAL HIGH INCOME FUND AND PRIOR TO THAT GT GLOBAL HIGH INCOME
                                     FUND)
    
 
   
    
 
   
<TABLE>
<CAPTION>
                                                              SIX MONTHS        YEAR ENDED       JUNE 1, 1995
                                                                ENDED           OCTOBER 31,           TO
                                                              APRIL 30,      -----------------   OCTOBER 31,
                                                               1998(D)       1997(D)   1996(D)       1995
                                                              ----------     -------   -------   ------------
<S>                                                           <C>            <C>       <C>       <C>
ADVISOR CLASS+:
Per Share Operating Performance:
  Net asset value, beginning of period......................    $15.52       $14.83    $11.71       $11.44
                                                                ------       ------    -------      ------
Income from investment operations:
  Net investment income.....................................      0.87*        1.22      1.34         0.57
  Net realized and unrealized gain (loss) on investments....      0.36         0.93      3.05         0.17
                                                                ------       ------    -------      ------
Net increase (decrease) from investment operations..........      1.23         2.15      4.39         0.74
                                                                ------       ------    -------      ------
Distributions to shareholders:
  From net investment income................................     (0.86)       (1.23)    (1.16)       (0.44)
  From net realized gain on investments.....................     (2.83)       (0.23)    (0.11)          --
  In excess of net realized gain on investments.............        --           --        --           --
  Return of capital.........................................        --           --        --        (0.03)
  From sources other than net investment income.............        --           --        --           --
                                                                ------       ------    -------      ------
        Total distributions.................................     (3.69)       (1.46)    (1.27)       (0.47)
                                                                ------       ------    -------      ------
Net asset value, end of period..............................    $13.06       $15.52    $14.83       $11.71
                                                                ======       ======    =======      ======
        Total investment return(c)..........................      9.81%(b)    14.72%    39.38%        6.54%(b)
                                                                ======       ======    =======      ======
Ratios and supplemental data:
  Net assets, end of period (in 000's)......................    $3,005       $3,719    $15,298      $1,463
Ratio of net investment income to average net assets........     11.22%(a)     7.74%     9.87%       12.20%(a)
Ratio of operating expenses to average net assets:
  With expense reductions (Note 1)..........................      1.33%(a)     1.18%     1.34%        1.40%(a)
  Without expense reductions................................      1.33%(a)     1.23%     1.34%        1.40%
Ratio of interest expense to average net assets++...........      0.01%(a)      N/A      0.04%         N/A
Portfolio turnover rate++...................................       222%(a)      214%      290%         213%(a)
</TABLE>
    
 
   
- ---------------
 
<TABLE>
<C>  <S>
(a)  Annualized
(b)  Not annualized
(c)  Total investment return does not include sales charges.
(d)  These selected per share operating data were calculated
     based upon average shares outstanding during the period.
  *  Net investment income per share reflects an interest payment
     received from the conversion of Vnesheconombank loan
     agreements. Without such a payment net investment income
     would have been $0.66 per share.
  +  Commencing June 1, 1995, the Fund began offering Advisor
     Class Shares.
 ++  Portfolio turnover and ratio of interest expense to average
     net assets is calculated on the basis of the fund as a whole
     without distinguishing among the classes of shares issued.
N/A  Not Applicable
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                                                                 AVERAGE MONTHLY
                                                                AVERAGE             NUMBER OF             AVERAGE
                                          AMOUNT OF DEBT    AMOUNT OF DEBT     REGISTRANT'S SHARES    AMOUNT OF DEBT
                                          OUTSTANDING AT      OUTSTANDING          OUTSTANDING           PER SHARE
YEAR ENDED                                END OF PERIOD    DURING THE PERIOD    DURING THE PERIOD    DURING THE PERIOD
- ----------                                --------------   -----------------   -------------------   -----------------
<S>                                       <C>              <C>                 <C>                   <C>
Six months ended April 30, 1998.........      $   --          $   246,575          26,410,544             $ 0.009
October 31, 1997........................      $   --          $ 2,526,057          28,093,475             $0.0899
October 31, 1996........................      $   --          $ 2,431,693          30,732,727             $0.0791
October 31, 1995........................      $   --          $        --                  --             $    --
October 31, 1994........................      $   --          $14,109,589          26,707,829             $0.5283
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed on a daily
basis.
    
 
                                        5
<PAGE>   749
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return. The Fund's total return
shows its overall change in value, including changes in share price and assuming
all the Fund's dividends and capital gain distributions are reinvested. A
cumulative total return reflects the Fund's performance over a stated period of
time. An average annual total return reflects the hypothetical compounded annual
rate of return that would have produced the same cumulative total return if the
Fund's performance had been constant over the entire period. BECAUSE AVERAGE
ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN, INVESTORS
SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR
RESULTS. To illustrate the components of overall performance, the Fund may
separate its cumulative and average annual returns into income results and
capital gains or losses.
 
  Yield is computed in accordance with standardized formulas described in the
Statement of Additional Information and can be expected to fluctuate from time
to time and is not necessarily indicative of future results. Accordingly, yield
information may not provide a basis for comparison with investments which pay a
fixed rate of interest for a stated period of time. Yield reflects investment
income net of expenses over the relevant period attributable to the Fund share,
expressed as an annualized percentage of the net asset value per share for
Advisor Class shares.
 
  Yield is a function of the type and quality of the Fund's investments, the
maturity of the securities held in the Fund's portfolio and the operating
expense ratio of the Fund. A shareholder's investment in the Fund is not insured
or guaranteed. These factors should be carefully considered by the investor
before making an investment in the Fund.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's yield and total return. The performance
of the Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVES. The Fund primarily seeks high current income, and
secondarily seeks capital appreciation. It seeks its objectives by investing all
of its investable assets in the Portfolio, which in turn seeks the same
objectives as the Fund by normally investing at least 65% of its total assets in
debt securities of issuers in emerging markets. There can be no assurance that
the Fund or the Portfolio will achieve its investment objectives.
    
 
   
  INVESTMENT POLICIES. The Portfolio intends to invest in the following types of
debt securities: bonds, notes and debentures of emerging market governments;
securities issued or guaranteed by such governments' agencies or
instrumentalities; securities issued or guaranteed by the central banks of
emerging market countries; and securities issued by other banks and companies in
such countries and securities denominated in or indexed to the currencies of
emerging markets. Under current market conditions, the Portfolio expects its
investments in emerging market securities to consist substantially of Brady
Bonds (see "General Policies -- Brady Bonds," below) and other sovereign debt
securities.
    
 
   
  The Portfolio may also invest up to 35% of its total assets in (1) equity
securities of issuers in emerging markets included in the list below under the
caption "Emerging Markets"; (2) equity and debt securities of issuers in
developed countries, including the United States; (3) securities of issuers in
emerging markets not included in the emerging markets list, if investing therein
becomes feasible and desirable subsequent to the date of this Prospectus; and
(4) cash and money market instruments. In evaluating investments in securities
of issuers in developed markets, the Sub-advisor will consider, among other
things, the business activities of the issuer in emerging markets and the impact
that developments in emerging markets are likely to have on the issuer's
financial condition.
    
 
   
  Under normal circumstances, substantially all of the Portfolio's assets will
be invested in debt securities of both governmental and corporate issuers in
emerging markets. Emerging markets debt securities generally are considered to
have a credit quality below investment grade, as defined above. Lower quality
securities involve a high degree of risk and are predominantly speculative.
These debt securities are the equivalent of high yield, high risk bonds,
commonly known as "junk bonds." See "Risk Factors." Many emerging market debt
securities are not rated by U.S. ratings agencies such as Moody's and S&P. The
Portfolio's ability to achieve its investment objectives is thus more dependent
on the Sub-advisor's credit analysis. The Portfolio may invest in securities
that are in default as to payment of principal and/or interest.
    
 
                                        6
<PAGE>   750
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
  OTHER INFORMATION REGARDING THE PORTFOLIO. As previously described, investors
should be aware that the Fund, unlike mutual funds that directly acquire and
manage their own portfolios of securities, seeks to achieve its investment
objectives by investing all of its investable assets in the Portfolio, which is
a separate investment company. Because the Fund will invest only in the
Portfolio, the Fund's shareholders will acquire only an indirect interest in the
investments of the Portfolio.
 
   
  The Fund may redeem its investment from the Portfolio at any time, if the
Board of Trustees of the Trust determines that it is in the best interests of
the Fund and its shareholders to do so. A change in the Portfolio's investment
objectives, policies or limitations that is not approved by the Board or the
shareholders of the Fund could require the Fund to redeem its interest in the
Portfolio. Any such redemption could result in a distribution in kind of
portfolio securities (as opposed to a cash distribution) by the Portfolio. In
addition, a distribution in kind could result in a less diversified portfolio of
investments for the Fund and could adversely affect its liquidity. Upon
redemption, the Board would consider what action might be taken, including the
investment of all the investable assets of the Fund in another pooled investment
entity having substantially the same investment objectives as the Fund or the
retention by the Fund of its own investment advisor to manage its assets in
accordance with its investment objectives, policies and limitations discussed
herein.
    
 
  In addition to selling an interest therein to the Fund, the Portfolio may sell
interests therein to other non-affiliated investment companies and/or other
institutional investors. All institutional investors in the Portfolio will pay a
proportionate share of the Portfolio's expenses and will invest in the Portfolio
on the same terms and conditions. However, if another investment company invests
any or all of its assets in the Portfolio, it would not be required to sell its
shares at the same public offering price as the Fund and may charge different
sales commissions. Therefore, investors in the Fund may experience different
returns than investors in another investment company that invests exclusively in
the Portfolio. As of the date of this Prospectus, the Fund is the only
institutional investor in the Portfolio.
 
  Investors in the Fund should be aware that the Fund's investment in the
Portfolio may be materially affected by the actions of other large investors, if
any, in the Portfolio. For example, as with all open-end investment companies,
if a large investor were to redeem its interest in the Portfolio, (1) the
Portfolio's remaining investors could experience higher pro rata operating
expenses, thereby producing lower returns and (2) the Portfolio's security
holdings may become less diverse, resulting in increased risk. Institutional
investors in the Portfolio that have a greater pro rata ownership interest in
the Portfolio than the Fund could have effective voting control over the
operation of the Portfolio.
 
   
  ASSET ALLOCATION. The Portfolio invests in debt obligations allocated among
diverse markets and denominated in various currencies, including U.S. dollars,
or in multinational currency units such as Euros. The Fund is designed for
investors who wish to accept the risks entailed in such investments, which are
different from those associated with a portfolio consisting entirely of
securities of U.S. issuers denominated in U.S. dollars. The Portfolio may
purchase securities that are issued by the government or a company or financial
institution of one country but denominated in the currency of another country
(or a multinational currency unit).
    
 
   
  The Sub-advisor allocates the assets of the Portfolio in securities of issuers
in countries and in currency denominations where the combination of fixed income
market returns, the price appreciation potential of fixed income securities and
currency exchange rate movements will present opportunities primarily for high
current income and secondarily for capital appreciation. In so doing, the
Sub-advisor intends to take full advantage of the different yield, risk and
return characteristics that investment in the fixed income markets of different
countries can provide for U.S. investors. Fundamental economic strength, credit
quality and currency and interest rate trends are the principal determinants of
the emphasis given to various country, geographic and industry sectors within
the Portfolio. Securities held by the Portfolio may be invested in without
limitation as to maturity.
    
 
   
  The Sub-advisor selects securities of particular issuers on the basis of its
views as to the best values then currently available in the marketplace. Such
values are a function of yield, maturity, issue classification and quality
characteristics, coupled with expectations regarding the local and world
economies, movements in the general level and term of interest rates, currency
values, political developments and variations in the supply of funds available
for investment in the world bond market relative to the demands placed upon it.
    
 
   
  The Sub-advisor generally evaluates currencies on the basis of fundamental
economic criteria (e.g., relative inflation, interest rate levels and trends,
growth rate forecasts, balance of payments status and economic policies) as well
as technical and political data. The Sub-advisor may seek to protect the
Portfolio against such negative currency movements through the use of
sophisticated investment techniques. See "Options, Futures and Forward Currency
Transactions" and "Swaps, Caps, Floors and Collars."
    
 
   
  According to the Sub-advisor, as of the date of this Prospectus, more than 50%
of the value of all outstanding government debt obligations throughout the world
is represented by obligations denominated in currencies other than the U.S.
dollar. Moreover, from time to time, the debt securities of issuers located
outside the United States have substantially outperformed the debt obligations
of U.S. issuers. Accordingly, the Sub-advisor believes that the Portfolio's
policy of investing in debt securities of issuers in emerging markets may enable
the achievement of results superior to those produced by mutual funds with
similar objectives to those of the Fund and the Portfolio that invest solely in
debt securities of U.S. issuers.
    
 
                                        7
<PAGE>   751
 
  The Fund is designed for investors who wish to accept the risks entailed in
such investments, which are different from those associated with a portfolio
consisting entirely of securities of U.S. issuers denominated in U.S. dollars.
 
   
  TEMPORARY DEFENSIVE STRATEGIES. The Sub-advisor may employ a temporary
defensive investment strategy if it determines such a strategy to be warranted
due to market, economic or political conditions. Pursuant to such a defensive
strategy, the Portfolio temporarily may hold cash (U.S. dollars, foreign
currencies or multinational currency units such as euros) and/or invest up to
100% of its respective assets in high quality debt securities or money market
instruments of U.S. or foreign issuers. In addition, for temporary defensive
purposes, most or all of the Portfolio's investments may be made in the United
States and denominated in U.S. dollars. To the extent the Portfolio employs a
temporary defensive strategy, it will not invest so as to achieve directly its
investment objectives. In addition, pending investment of proceeds from new
sales of Fund shares or to meet ordinary daily cash needs, the Portfolio may
hold cash (U.S. dollars, foreign currencies or multinational currency units) and
may invest in high quality foreign or domestic money market instruments. For a
full description of money market instruments, see "Selection of Debt
Investments" in the "Investment Objectives and Policies" section of the
Statement of Additional Information.
    
 
   
  EMERGING MARKET SECURITIES. The Portfolio considers "emerging markets" to
consist of all countries determined by the Sub-advisor to have developing or
emerging economies and markets. These countries generally include every country
in the world except the United States, Canada, Japan, Australia, New Zealand and
most countries located in Western Europe. The Portfolio will consider investment
in the following emerging markets:
    
 
     Algeria
     Argentina
     Bolivia
     Botswana
     Brazil
     Bulgaria
     Chile
     China
     Colombia
     Costa Rica
     Cyprus
     Czech Republic
     Dominican Republic
     Ecuador
     Egypt
     El Salvador
     Finland
     Ghana
     Greece
     Hong Kong
     Hungary
     India
     Indonesia
     Israel
     Ivory Coast
     Jamaica
     Jordan
     Kazakhstan
     Kenya
     Lebanon
     Malaysia
     Mauritius
     Mexico
     Morocco
     Nicaragua
     Nigeria
     Oman
     Pakistan
     Panama
     Paraguay
     Peru
     Philippines
     Poland
     Portugal
     Republic of Slovakia
     Russia
     Singapore
     Slovenia
     South Africa
     South Korea
     Sri Lanka
     Swaziland
     Taiwan
     Thailand
     Turkey
     Ukraine
     Uruguay
     Venezuela
     Zambia
     Zimbabwe
 
  The Portfolio will not be invested in all such markets at all times. Moreover,
investing in some of those markets currently may not be desirable or feasible,
due to the lack of adequate custody arrangements, overly burdensome repatriation
requirements and similar restrictions, the lack of organized and liquid
securities markets, unacceptable political risks or for other reasons.
 
  As used in this Prospectus and the Statement of Additional Information, an
issuer in an emerging market is an entity: (i) for which the principal
securities trading market is an emerging market, as defined above; (ii) that
(alone or on a consolidated basis) derives 50% or more of its total revenue from
either goods produced, sales made or services performed in emerging markets; or
(iii) organized under the laws of, or with a principal office in, an emerging
market.
 
  BRADY BONDS. The Portfolio may invest in "Brady Bonds," which are debt
restructurings that provide for the exchange of cash and loans for newly issued
bonds. Brady Bonds have been issued by the countries of Albania, Argentina,
Brazil, Bulgaria, Costa Rica, Dominican Republic, Ecuador, Ivory Coast, Jordan,
Mexico, Nigeria, Panama, Peru, Philippines, Poland, Uruguay, Venezuela and
Vietnam and are expected to be issued by other emerging market countries. As of
the date of this Prospectus, the Portfolio is not aware of the occurrence of any
payment defaults on Brady Bonds. Investors should recognize, however, that Brady
Bonds do not have a long payment history. In addition, Brady Bonds are often
rated below investment grade.
 
  The Portfolio may invest in either collateralized or uncollateralized Brady
Bonds. U.S. dollar-denominated, collateralized Brady Bonds, which may be fixed
rate par bonds or floating rate discount bonds, are collateralized in full as to
principal by U.S. Treasury zero coupon bonds having the same maturity as the
bonds. Interest payments on such bonds generally are collateralized by cash or
securities in an amount that, in the case of fixed rate bonds, is equal to at
least one year of rolling interest payments or, in the case of floating rate
bonds, initially is equal to at least one year's rolling interest payments based
on the applicable interest rate at the time of issuance and is adjusted at
regular intervals thereafter.
 
  LOAN PARTICIPATIONS AND ASSIGNMENTS. The Portfolio may invest in fixed and
floating rate loans ("Loans") arranged through private negotiations between a
foreign entity and one or more financial institutions ("Lenders"). The majority
of the Portfolio's in-
 
                                        8
<PAGE>   752
 
vestments in Loans in emerging markets is expected to be in the form of
participations in Loans ("Participations") and assignments of portions of Loans
from third parties ("Assignments"). Participations typically will result in the
Portfolio having a contractual relationship only with the Lender, not with the
borrower government. The Portfolio will have the right to receive payments of
principal, interest and any fees to which it is entitled only from the Lender
selling the Participation and only upon receipt by the Lender of the payments
from the borrower. In connection with purchasing Participations, the Portfolio
generally will have no right to enforce compliance by the borrower with the
terms of the loan agreement relating to the loan ("Loan Agreement"), nor any
rights of set-off against the borrower, and the Portfolio may not directly
benefit from any collateral supporting the Loan in which it has purchased the
Participation. As a result, the Portfolio will assume the credit risk of both
the borrower and the Lender that is selling the Participation.
 
   
  In the event of the insolvency of the Lender selling a Participation, the
Portfolio may be treated as a general creditor of the Lender and may not benefit
from any set-off between the Lender and the borrower. The Portfolio will acquire
Participations only if the Lender interpositioned between the Portfolio and the
borrower is determined by the Sub-advisor to be creditworthy. When the Portfolio
purchases Assignments from Lenders, the Portfolio will acquire direct rights
against the borrower on the Loan. However, since Assignments are arranged
through private negotiations between potential assignees and assignors, the
rights and obligations acquired by the Portfolio as the purchaser of an
Assignment may differ from, and be more limited than, those held by the
assigning Lender.
    
 
  WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. The Portfolio may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Portfolio will
purchase or sell when-issued securities and forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery of the
securities. If the Portfolio disposes of the right to acquire a when-issued
security prior to its acquisition or disposes of its right to deliver or receive
against a forward commitment, it may incur a gain or loss. At the time the
Portfolio enters into a transaction on a when-issued or forward commitment
basis, the Portfolio will segregate cash or liquid securities equal to the value
of the when-issued or forward commitment securities with its custodian and will
mark to market daily such assets. There is a risk that the securities may not be
delivered and that the Portfolio may incur a loss.
 
  The Portfolio may also sell securities on a "when, as and if issued" basis for
hedging purposes. Under such a transaction, the Portfolio is required to deliver
at a future date a security it does not presently hold, but which it has a right
to receive if the security is issued. Issuance of the security may not occur, in
which case the Portfolio would have no obligation to the other party, and would
not receive payment for the sale. Selling securities on a "when, as and if
issued" basis may reduce risk of loss to the extent that such a sale wholly or
partially offsets unfavorable price movements on the investments being hedged.
However, such sales also limit the amount the Portfolio can receive if the
"when, as and if issued" security is in fact issued.
 
   
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Portfolio
is authorized to borrow money from banks in an amount up to 33 1/3% of its total
assets (including the amount borrowed), less all liabilities and indebtedness
other than the borrowings and may use the proceeds of such borrowings for
investment purposes. The Portfolio will borrow for investment purposes only when
the Sub-advisor believes that such borrowings will benefit the Portfolio after
taking into account considerations such as the costs of the borrowing and the
likely investment returns on the securities purchased with the borrowed monies.
    
 
  Borrowing for investment purposes is known as leveraging, which is a
speculative practice. Such borrowing by the Portfolio creates the opportunity
for increased net income and appreciation but, at the same time, involves
special risk considerations. For example, leveraging might exaggerate changes in
the net asset value of Fund shares and in the yield realized by the Portfolio.
Although the principal amount of such borrowings will be fixed, the Portfolio's
assets may change in value during the time the borrowing is outstanding. By
leveraging the Portfolio, changes in net asset values, higher or lower, may be
greater in degree than if leverage was not employed. To the extent the income
derived from the assets obtained with borrowed funds exceeds the interest and
other expenses that the Portfolio will have to pay, the Portfolio's net income
will be greater than if borrowing was not used. Conversely, if the income from
the assets obtained with borrowed funds is not sufficient to cover the cost of
borrowing, the net income of the Portfolio will be less than if borrowing were
not used, and therefore the amount available for distribution to shareholders as
dividends will be reduced. The Portfolio each expects that some of its
borrowings may be made on a secured basis.
 
  In addition to the foregoing borrowings, the Portfolio may borrow money for
temporary or emergency purposes or payments in an amount not exceeding 5% of the
value of its total assets (not including the amount borrowed) provided that the
total amount borrowed by the Portfolio for any purpose does not exceed 33 1/3%
of its total assets.
 
  The Portfolio may also enter into reverse repurchase agreements with a bank or
recognized securities dealer. Under a reverse repurchase agreement, the
Portfolio would sell securities and agree to repurchase them at a particular
price at a future date. At the time the Portfolio enters into a reverse
repurchase agreement, it will establish and maintain a segregated account with
an approved custodian containing cash or liquid securities having a value not
less than the repurchase price, including accrued interest. Reverse repurchase
agreements involve the risk that the market value of the securities retained in
lieu of sale by the Portfolio may decline below the price of the securities the
Portfolio has sold but is obligated to repurchase. In the event the buyer of
securities under a reverse repurchase agreement files for bankruptcy or becomes
insolvent, such buyer or its trustee or receiver may receive an extension of
time to
 
                                        9
<PAGE>   753
 
determine whether to enforce the Portfolio's obligation to repurchase the
securities, and the Portfolio's use of the proceeds of the reverse repurchase
agreement may effectively be restricted pending such decision.
 
  The Portfolio also may enter into "dollar rolls," in which the Portfolio sells
fixed income securities for delivery in the current month and simultaneously
contracts to repurchase substantially similar (same type, coupon and maturity)
securities on a specified future date. During the roll period, the Portfolio
would forego principal and interest paid on such securities. The Portfolio would
be compensated by the difference between the current sales price and the forward
price for the future purchase, as well as by the interest earned on the cash
proceeds of the initial sale. See "Investment Objectives and Policies" in the
Statement of Additional Information.
 
  Reverse repurchase agreements and dollar rolls will be treated as borrowings
and will be deducted from the Portfolio's assets for purposes of calculating
compliance with the Portfolio's borrowing limitation. See "Investment
Limitations" in the Statement of Additional Information.
 
   
  SECURITIES LENDING. The Portfolio may lend its respective portfolio securities
to broker/dealers or to other institutional investors. Securities lending allows
a Fund to retain ownership of the securities loaned and, at the same time,
enhances a Fund's total return. At all times a loan is outstanding, the
Portfolio requires the borrower to maintain with the Portfolio's custodian,
collateral consisting of cash, U.S. government securities or certain irrevocable
letters of credit equal to at least the value of the borrowed securities, plus
any accrued interest or such other collateral as permitted by a Fund's
investment program and regulatory agencies, and as approved by the Board. The
Portfolio limits its loans of portfolio securities to an aggregate of 30% of the
value of its total assets, measured at the time any such loan is made. The risks
in lending portfolio securities, as with other extensions of secured credit,
consist of possible delays in receiving additional collateral or in recovery of
the loaned securities and possible loss of rights in the collateral should the
borrower fail financially.
    
 
  ZERO COUPON SECURITIES. The Portfolio may invest in certain zero coupon
securities that are "stripped" U.S. Treasury notes and bonds. They also may
invest in zero coupon and other deep discount securities issued by foreign
governments and domestic and foreign corporations, including certain Brady Bonds
and other foreign debt and in payment-in-kind securities. Zero coupon securities
pay no interest to holders prior to maturity, and payment-in-kind securities pay
interest in the form of additional securities. However, a portion of the
original issue discount on zero coupon securities and the "interest" on
payment-in-kind securities will be included in the Portfolio's income.
Accordingly, for a Fund to continue to qualify for tax treatment as a regulated
investment company and to avoid a certain excise tax (see "Taxes" in the
Statement of Additional Information), it may be required to distribute an amount
that is greater than its share of the total amount of cash the Portfolio
actually receives. These distributions must be made from the Fund's, or its
share of the Portfolio's cash assets or, if necessary, from the proceeds of
sales of portfolio securities. The Portfolio will not be able to purchase
additional income-producing securities with cash used to make such
distributions, and its current income ultimately may be reduced as a result.
Zero coupon and payment-in-kind securities usually trade at a deep discount from
their face or par value and will be subject to greater fluctuations of market
value in response to changing interest rates than debt obligations of comparable
maturities that make current distributions of interest in cash.
 
  SYNTHETIC SECURITY POSITIONS. The Portfolio may utilize combinations of
futures on bonds and forward currency contracts to create investment positions
that have substantially the same characteristics as bonds of the same type as
those on which the futures contracts are written. Investment positions of this
type are generally referred to as "synthetic securities."
 
   
  For example, in order to establish a synthetic security position the Portfolio
that is comparable to owning a Japanese government bond, the Sub-advisor might
purchase futures contracts on Japanese government bonds in the desired principal
amount and purchase forward currency contracts for Japanese Yen in an amount
equal to the then current purchase price for such bonds in the Japanese cash
market, with each contract having approximately the same delivery date.
    
 
   
  The Sub-advisor might roll over the futures and forward currency contract
positions before taking delivery in order to continue the Portfolio's investment
position, or the Sub-advisor might close out those positions, thus effectively
selling the synthetic security. Further, the amount of each contract might be
adjusted in response to market conditions and the forward currency contract
might be changed in amount or eliminated in order to hedge against currency
fluctuations.
    
 
   
  The Sub-advisor would create synthetic security positions for the Portfolio
when it believes that it can obtain a better yield or achieve cost savings in
comparison to purchasing actual bonds or when comparable bonds are not readily
available in the market. Synthetic security positions are subject to the risk
that changes in the value of purchased futures contracts may differ from changes
in the value of the bonds that might otherwise have been purchased in the cash
market. Also, while the Sub-advisor believes that the cost of creating synthetic
security positions generally will be materially lower than the cost of acquiring
comparable bonds in the cash market, the Portfolio will incur transaction costs
in connection with each purchase of a futures or forward currency contract. The
use of futures contracts and forward currency contracts to create synthetic
security positions also is subject to substantially the same risks as those that
exist when these instruments are used in connection with hedging strategies. See
"Options, Futures and Forward Currency Transactions" below and "Options, Futures
and Currency Strategies" in the Statement of Additional Information.
    
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Portfolio may use
forward currency contracts, futures contracts, options on securities, options on
indices, options on currencies, and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the Portfolio's investment. The Portfolio also may enter into
interest rate, currency and index swaps and purchase or sell related caps,
floors and collars and other similar instruments. See
 
                                       10
<PAGE>   754
 
"Swaps, Caps, Floors and Collars" below. These instruments are often referred to
as "derivatives," which may be defined as financial instruments whose
performance is derived, at least in part, from the performance of another asset
(such as a security, currency or an index of securities). The Portfolio may
enter into such instruments up to the full value of its portfolio assets. See
"Risk Factors -- Options, Futures and Forward Currency Transactions" herein and
"Options, Futures and Currency Strategies" in the Statement of Additional
Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Portfolio may enter into forward currency contracts for the
purchase or sale of a specified currency at a specified future date. Such
contracts may involve the purchase or sale of a foreign currency against the
U.S. dollar or may involve two foreign currencies. The Portfolio may enter into
forward currency contracts either with respect to specific transactions or with
respect to the Portfolio's portfolio positions. The Portfolio also may purchase
and sell put and call options on currencies, futures contracts on currencies and
options on such futures contracts to hedge against movements in exchange rates.
 
   
  In addition, the Portfolio may purchase and sell put and call options on
securities to hedge against the risk of fluctuations in the prices of securities
held by the Portfolio or that the Sub-advisor intends to include in the
Portfolio's holdings. The Portfolio also may purchase and sell put and call
options on indices to hedge against overall fluctuations in the securities
markets generally or in a specific market sector.
    
 
  Further, the Portfolio may sell index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general market or market sector decline that could adversely affect the
Portfolio's holdings. The Portfolio also may purchase index futures contracts
and purchase call options or write put options on such contracts to hedge
against a general market or market sector advance and thereby attempt to lessen
the cost of future securities acquisitions. The Portfolio may use interest rate
futures contracts and options thereon to hedge its portfolio against changes in
the general level of interest rates.
 
  SWAPS, CAPS, FLOORS AND COLLARS. The Portfolio may enter into interest rate,
currency and index swaps, and purchase or sell related caps, floors and collars
and other derivative instruments. The Portfolio expects to enter into these
transactions primarily to preserve a return or spread on a particular investment
or portion of its portfolio, to protect against currency fluctuations, as a
technique for managing the portfolio's duration (i.e., the price sensitivity to
changes in interest rates) or to protect against any increase in the price of
securities the Portfolio anticipates purchasing at a later date. The Portfolio
intends to use these transactions as hedges, and neither will sell interest rate
caps or floors if it does not own securities or other instruments providing an
income stream roughly equivalent to what the Portfolio may be obligated to pay.
 
  Interest rate swaps involve the exchange by the Portfolio with another party
of their respective commitments to pay or receive interest (for example, an
exchange of floating rate payments for fixed rate payments) with respect to a
notional amount of principal. A currency swap is an agreement to exchange cash
flows on a notional amount based on changes in the values of the reference
indices.
 
  The purchase of a cap entitles the purchaser to receive payments on a notional
principal amount from the party selling the cap to the extent that a specified
index exceeds a predetermined interest rate. The purchase of an interest rate
floor entitles the purchaser to receive payments on a notional principal amount
from the party selling the floor to the extent that a specified index falls
below a predetermined interest rate or amount. A collar is a combination of a
cap and a floor that preserves a certain return within a predetermined range of
interest rates or values.
 
  INDEXED COMMERCIAL PAPER. The Portfolio may invest without limitation in
commercial paper which is indexed to certain specific foreign currency exchange
rates. The terms of such commercial paper provide that its principal amount is
adjusted upwards or downwards (but not below zero) at maturity to reflect
changes in the exchange rate between two currencies while the obligation is
outstanding. The Portfolio will purchase such commercial paper with the currency
in which it is denominated and, at maturity, will receive interest and principal
payments thereon in that currency, but the amount of principal payable by the
issuer at maturity will change in proportion to the change (if any) in the
exchange rate between the two specified currencies between the date the
instrument is issued and the date the instrument matures. While such commercial
paper entails the risk of loss of principal, the potential for realizing gains
as a result of changes in foreign currency exchange rates enables the Portfolio
to hedge against a decline in the U.S. dollar value of investments denominated
in foreign currencies while seeking to provide an attractive money market rate
of return. The Portfolio will not purchase such commercial paper for
speculation.
 
  OTHER INDEXED SECURITIES. The Portfolio may invest in certain other indexed
securities, which are securities whose prices are indexed to the prices of other
securities, securities indices, currencies, precious metals or other
commodities, or other financial indicators. Indexed securities typically, but
not always, are debt securities or deposits whose value at maturity or coupon
rate is determined by reference to a specific instrument or statistic. The
performance of indexed securities depends to a great extent on the performance
of the security, currency, or other instrument to which they are indexed, and
may also be influenced by interest rate changes in the United States and abroad.
At the same time, indexed securities are subject to the credit risks associated
with the issuer of the security, and their values may decline substantially if
the issuer's creditworthiness deteriorates. Indexed securities may be more
volatile than the underlying instruments. New forms of indexed securities
continue to be developed. The Portfolio may invest in such securities to the
extent consistent with its investment objectives.
 
  OTHER INFORMATION. The Fund's investment objectives may not be changed without
the approval of a majority of the Fund's outstanding voting securities. A
"majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the shares repre-
 
                                       11
<PAGE>   755
 
sented at a meeting at which more than 50% of the outstanding shares are
represented, or (ii) more than 50% of the outstanding shares. In addition, the
Fund has adopted certain investment limitations which also may not be changed
without shareholder approval. A complete description of these limitations is
included in the Statement of Additional Information. Unless specifically noted,
the Fund's investment policies described in this Prospectus and in the Statement
of Additional Information are not fundamental policies and may be changed by the
Trust's Board of Trustees without shareholder approval. The investment policies
of the Fund are identical to the investment policies of the Portfolio.
 
  The approval of the Fund and of other investors in the Portfolio, if any, is
not required to change the investment objectives, policies or limitations of the
Portfolio, unless otherwise specified. Written notice shall be provided to
shareholders of the Fund thirty days prior to any changes in the Portfolio's
investment objectives.
 
  The Fund is authorized to make short sales of securities, although it has no
current intention of doing so. See "Investment Objectives and Policies -- Short
Sales" in the Statement of Additional Information.
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Portfolio's investment policies or restrictions.
   
- --------------------------------------------------------------------------------
    
 
   
RISK FACTORS
    
 
  GENERAL. There is no assurance that the Fund or the Portfolio will achieve its
investment objectives. The Portfolio's net asset value will fluctuate,
reflecting fluctuations in the market value of its portfolio positions and its
net currency exposure. The value of fixed income securities held by the
Portfolio generally fluctuates inversely with interest rate movements. Longer
term bonds held by the Portfolio are subject to greater interest rate risk.
 
  NON-DIVERSIFIED CLASSIFICATION. The Fund and the Portfolio are classified
under the Investment Company Act of 1940 (the "1940 Act") as a "non-diversified"
fund. As a result, the Portfolio will be able to invest in a fewer number of
issuers than if it were classified under the 1940 Act as a "diversified" fund.
To the extent that the Portfolio invests in a smaller number of issuers, the
value of the Fund's shares may fluctuate more widely and the Portfolio may be
subject to greater investment and credit risk with respect to the portfolios.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally are not registered with the SEC, nor
are the issuers thereof usually subject to the SEC's reporting requirements.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available with respect to U.S. securities and
issuers. Foreign companies generally are not subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to U.S. companies. In addition, certain costs
attributable to foreign investing, such as custody charges, are higher than
those attributable to domestic investing. Securities of some foreign companies
are less liquid and their prices may be more volatile than securities of
comparable domestic companies. The Portfolio's interest and dividends from
foreign issuers may be subject to non-U.S. withholding taxes, thereby reducing
their net investment income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Portfolio, political or social instability, or diplomatic
developments which could affect the investments of the Portfolio in those
countries. Moreover, individual foreign economies may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross national
product, rate of inflation, rate of savings and capital reinvestment, resource
self-sufficiency and balance of payments positions.
 
  CURRENCY RISK. Since the Portfolio normally invests substantially in
securities denominated in currencies other than the U.S. dollar, and because
they may hold foreign currencies, they will be affected favorably or unfavorably
by exchange control regulations or changes in the exchange rates between such
currencies and the U.S. dollar. Changes in currency exchange rates will
influence the value of the Fund's shares, and also may affect the value of
dividends and interest earned by the Fund and gains and losses realized by the
Fund. Currencies generally are evaluated on the basis of fundamental economic
criteria (e.g., relative inflation and interest rate levels and trends, growth
rate forecasts, balance of payments status and economic policies) as well as
technical and political data. The exchange rates between the U.S. dollar and
other currencies are determined by supply and demand in the currency exchange
markets, the international balance of payments, governmental intervention,
speculation and other economic and political conditions. If the currency in
which a security is denominated appreciates against the U.S. dollar, the dollar
value of the security will increase. Conversely, a decline in the exchange rate
of the currency would adversely affect the value of the security expressed in
U.S. dollars.
 
  In addition, many of the currencies in emerging market countries have
experienced steady devaluations relative to the U.S. dollar and major
devaluations have historically occurred in certain countries.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country
    
 
                                       12
<PAGE>   756
 
   
which is a member of the EEMU may elect to participate in the EEMU and may
supplement its existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
  INVESTING IN EMERGING MARKETS. Because of the special risks associated with
investing in emerging markets, an investment in the Portfolio should be
considered speculative. Investors are strongly advised to consider carefully the
special risks involved in emerging markets, which are in addition to the usual
risks of investing in developed foreign markets around the world.
 
  Investing in emerging markets involves risks relating to potential political
and economic instability within such markets and the risks of expropriation,
nationalization, confiscation of assets and property or the imposition of
restrictions on foreign investment and on repatriation of capital invested. In
the event of such expropriation, nationalization or other confiscation in any
emerging market, the Portfolio could lose its entire investment in that market.
 
  Many emerging market countries have experienced substantial, and in some
periods extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries.
 
  Economies in emerging markets generally are dependent heavily upon
international trade and, accordingly, have been and may continue to be affected
adversely by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been and may continue
to be affected adversely by economic conditions in the countries in which they
trade.
 
  The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the United States and
other major markets. There also may be a lower level of monitoring and
regulation of emerging securities markets and the activities of investors in
such markets, and enforcement of existing regulations has been extremely
limited.
 
  In addition, brokerage commissions, custodial services and other costs
relating to investment in foreign markets generally are more expensive than in
the United States, particularly with respect to emerging markets. Such markets
have different settlement and clearance procedures. In certain markets there
have been times when settlements have been unable to keep pace with the volume
of securities transactions, making it difficult to conduct such transactions.
The inability of the Portfolio to make intended securities purchases due to
settlement problems could cause the Portfolio to forego attractive investment
opportunities. Inability to dispose of a portfolio security caused by settlement
problems could result either in losses to the Portfolio due to subsequent
declines in value of the portfolio security or, if the Portfolio has entered
into a contract to sell the security, could result in possible liability to the
purchaser.
 
  The risk also exists that an emergency situation may arise in one or more
emerging markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for the Portfolio's portfolio securities in
such markets may not be readily available. Section 22(e) of the 1940 Act permits
a registered investment company to suspend redemption of its shares for any
period during which an emergency exists, as determined by the SEC. Accordingly,
when the Portfolio believes that appropriate circumstances warrant, it will
promptly apply to the SEC for a determination that an emergency exists within
the meaning of Section 22(e) of the 1940 Act. During the period commencing from
the Portfolio's identification of such conditions until the date of SEC action,
the portfolio securities of the Portfolio in the affected markets will be valued
at fair value as determined in good faith by or under the direction of the
Trust's or the Portfolio's Boards of Trustees.
 
  LOAN PARTICIPATIONS AND ASSIGNMENTS. The Portfolio may have difficulty
disposing of Assignments and Participations. The liquidity of such securities is
limited and the Portfolio anticipates that such securities could be sold only to
a limited number of institutional investors. The lack of a liquid secondary
market could have an adverse impact on the value of such securities and on the
Portfolio's ability to dispose of particular Assignments or Participations when
necessary to meet the Portfolio's liquidity needs or in response to a specific
economic event, such as a deterioration in the creditworthiness of the borrower.
The lack of a liquid secondary market for Assignments and Participations also
may make it more difficult for the Portfolio to assign a value to those
securities for purposes of valuing the Portfolio's portfolio and calculating its
net asset value.
 
  SOVEREIGN DEBT. The Portfolio may invest in sovereign debt securities of
emerging market governments, including Brady Bonds. Investments in such
securities involve special risks. The issuer of the debt or the governmental
authorities that control the repayment of the debt may be unable or unwilling to
repay principal or interest when due in accordance with the terms of such debt.
Periods of economic uncertainty may result in the volatility of market prices of
sovereign debt obligations and in turn a Fund's net asset value, to a greater
extent than the volatility inherent in domestic fixed income securities.
 
  A sovereign debtor's willingness or ability to repay principal and pay
interest in a timely manner may be affected by, among other factors, its cash
flow situation, the extent of its foreign reserves, the availability of
sufficient foreign exchange on the date a payment is
 
                                       13
<PAGE>   757
 
due, the relative size of the debt service burden to the economy as a whole, the
sovereign debtor's policy toward principal international lenders and the
political constraints to which a sovereign debtor may be subject. Emerging
market governments could default on their sovereign debt. Such sovereign debtors
also may be dependent on expected disbursements from foreign governments,
multilateral agencies and other entities abroad to reduce principal and interest
arrearages on their debt. The commitment on the part of these governments,
agencies and others to make such disbursements may be conditioned on a sovereign
debtor's implementation of economic reforms and/or economic performance and the
timely service of such debtor's obligations. Failure to implement such reforms,
achieve such levels of economic performance or repay principal or interest when
due, may result in the cancellation of such third parties' commitments to lend
funds to the sovereign debtor, which may further impair such debtor's ability or
willingness to timely service its debts.
 
   
  The occurrence of political, social or diplomatic changes in one or more of
the countries issuing sovereign debt could adversely affect the Portfolio's
investments. Emerging markets are faced with social and political issues and
some of them have experienced high rates of inflation in recent years and have
extensive internal debt. Among other effects, high inflation and internal debt
service requirements may adversely affect the cost and availability of future
domestic sovereign borrowing to finance governmental programs, and may have
other adverse social, political and economic consequences. Political changes or
a deterioration of a country's domestic economy or balance of trade may affect
the willingness of countries to service their sovereign debt. Although the
Sub-advisor intends to manage the Portfolio in a manner that will minimize the
exposure to such risks, there can be no assurance that adverse political changes
will not cause the Portfolio to suffer a loss of interest or principal on any of
its holdings.
    
 
  In recent years, some of the emerging market countries in which the Portfolio
expects to invest have encountered difficulties in servicing their sovereign
debt obligations. Some of these countries have withheld payments of interest
and/or principal of sovereign debt. These difficulties have also led to
agreements to restructure external debt obligations -- in particular, commercial
bank loans, typically by rescheduling principal payments, reducing interest
rates and extending new credits to finance interest payments on existing debt.
In the future, holders of emerging market sovereign debt securities may be
requested to participate in similar rescheduling of such debt. Certain emerging
market countries are among the largest debtors to commercial banks and foreign
governments. Currently, Brazil, Mexico and Argentina are the largest debtors
among developing countries. At times certain emerging market countries have
declared moratoria on the payment of principal and interest on external debt;
such a moratorium is currently in effect in certain emerging market countries.
There is no bankruptcy proceeding by which a creditor may collect in whole or in
part sovereign debt on which an emerging market government has defaulted.
 
  The ability of emerging market governments to make timely payments on their
sovereign debt securities is likely to be influenced strongly by a country's
balance of trade and its access to trade and other international credits. A
country whose exports are concentrated in a few commodities could be vulnerable
to a decline in the international prices of one or more of such commodities.
Increased protectionism on the part of a country's trading partners could also
adversely affect its exports. Such events could diminish a country's trade
account surplus, if any. To the extent that a country receives payment for its
exports in currencies other than hard currencies, its ability to make hard
currency payments could be affected.
 
  Investors should also be aware that certain sovereign debt instruments in
which the Portfolio may invest involve great risk. As noted above, sovereign
debt obligations issued by emerging market governments generally are deemed to
be the equivalent in terms of quality to securities rated below investment grade
by Moody's and S&P. Such securities are regarded as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligations and involve major risk exposure to
adverse conditions. Some of such securities, with respect to which the issuer
currently may not be paying interest or may be in payment default, may be
comparable to securities rated D by S&P or C by Moody's. The Portfolio may have
difficulty disposing of and valuing certain sovereign debt obligations because
there may be a limited trading market for such securities. Because there is no
liquid secondary market for many of these securities, the Portfolio anticipates
that such securities could be sold only to a limited number of dealers or
institutional investors.
 
  LOWER QUALITY DEBT SECURITIES. Under normal market conditions the Portfolio
may invest up to 100% of the Portfolio's total assets in debt securities rated
below investment grade. Such investments involve a high degree of risk.
 
  Debt rated Baa by Moody's is considered by Moody's to have speculative
characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B,
Caa, Ca or C by Moody's is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such lower quality debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Debt rated C
by Moody's or S&P is the lowest quality debt that is not in default as to
principal or interest and such issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Lower
quality debt securities are also generally considered to be subject to greater
risk than higher quality securities with regard to a deterioration of general
economic conditions. These securities are the equivalent of high yield, high
risk bonds, commonly known as "junk bonds." As noted above, the Portfolio may
invest in debt securities rated below C, which are in default as to principal
and/or interest.
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit quality in response to subsequent events, so that an
issuer's
 
                                       14
<PAGE>   758
 
current financial condition may be better or worse than a rating indicates. See
"Appendix A" for a discussion of Moody's and S&P's ratings.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities of corporate issuers frequently have call or
buy-back features which would permit an issuer to call or repurchase the
security from the Portfolio. If an issuer exercises these provisions in a
declining interest rate market, the Portfolio may have to replace the security
with a lower yielding security, resulting in a decreased return for investors.
In addition, the Portfolio may have difficulty disposing of lower quality
securities because there may be a thin trading market for such securities. There
may be no established retail secondary market for many of these securities, and
the Portfolio anticipates that such securities could be sold only to a limited
number of dealers or institutional investors. The lack of a liquid secondary
market also may have an adverse impact on market prices of such instruments and
may make it more difficult for the Portfolio to obtain accurate market
quotations for purposes of valuing the securities in the Portfolio. Adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may also decrease the values and liquidity of lower quality
securities, especially in a thinly traded market. The Portfolio also may acquire
lower quality debt securities during an initial underwriting or may acquire
lower quality debt securities which are sold without registration under
applicable securities laws. Such securities involve special considerations and
risks.
 
  Factors having an adverse effect on the market value of lower rated securities
or their equivalents purchased by the Portfolio will adversely impact net asset
value of the Fund. See "Risk Factors" in the Statement of Additional
Information. In addition to the foregoing, such factors may include: (i)
potential adverse publicity; (ii) heightened sensitivity to general economic or
political conditions; and (iii) the likely adverse impact of a major economic
recession. The Portfolio also may incur additional expenses to the extent it is
required to seek recovery upon a default in the payment of principal or interest
on its portfolio holdings, and the Portfolio may have limited legal recourse in
the event of a default. Debt securities issued by governments in emerging
markets can differ from debt obligations issued by private entities in that
remedies from defaults generally must be pursued in the courts of the defaulting
government, and legal recourse is therefore somewhat diminished. Political
conditions, in terms of a government's willingness to meet the terms of its debt
obligations, also are of considerable significance. There can be no assurance
that the holders of commercial bank debt may not contest payments to the holders
of debt securities issued by governments in emerging markets in the event of
default by the governments under commercial bank loan agreements.
 
   
  As of October 31, 1997, the Portfolio had 86.59% of its total net assets in
debt securities that received a rating from Moody's and 10.29% of its total net
assets in debt securities that were not so rated. In addition, the Portfolio had
3.12%, of its total net assets in cash and net receivables. The Portfolio had
the following percentages of its total net assets invested in rated securities:
Aaa -- 7.99%, Aa -- 0.00%, A -- 0.00%, Baa -- 13.11%, Ba -- 48.56%, B -- 16.93%,
Caa -- 0.00%, Ca -- 0.00%, C -- 0.00%. Included under the unrated category are
securities held by the Portfolio's total net assets which have been determined
by the Sub-advisor to be of comparable quality to securities in the following
rating categories: Ba -- 3.22%; and B -- 7.07%. It should be noted that the
allocation of the investments of the Portfolio by rating on any given date will
vary and should not be considered representative of the future portfolio
composition of the Portfolio.
    
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Portfolio is
authorized to enter into options, futures and forward currency transactions, the
Portfolio might not enter into any such transactions. In addition, issuers in
emerging markets typically are subject to a greater degree of change in earnings
and business prospects than issuers in developed countries. Options, futures and
foreign currency transactions involve certain risks, which include: (1)
dependence on the Sub-advisor's ability to predict movements in the prices of
individual securities, fluctuations in the general securities markets or in the
appropriate market sector and movements in interest rates and currency markets;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, forward contracts, futures contracts or options thereon and
movements in the price of the currency or security hedged or used for cover; (3)
the fact that skills and techniques needed to trade options, futures contracts
and options thereon or to use forward currency contracts are different from
those needed to select the securities in which the Portfolio invests; (4) lack
of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time; (5) the
possible loss of principal under certain conditions; and (6) the possible
inability of the Portfolio to purchase or sell a portfolio security at a time
when it would otherwise be favorable for it to do so, or the possible need for
the Portfolio to sell a security at a disadvantageous time, due to the need for
the Portfolio to maintain "cover" or to set aside securities in connection with
hedging transactions.
    
 
  ILLIQUID SECURITIES. The Portfolio may invest up to 15% of its net assets, in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities and the sale of illiquid securi-
                                       15
<PAGE>   759
 
ties generally will require more time and result in higher brokerage charges or
dealer discounts and other selling expenses than the sale of liquid securities.
Moreover, illiquid securities often sell at a price lower than similar
securities that are liquid.
   
- --------------------------------------------------------------------------------
    
 
   
MANAGEMENT
    
 
   
  The Trust's and the Portfolio's Boards of Trustees have overall responsibility
for the operation of the Fund and the Portfolio, respectively. The Trust's and
Portfolio's Boards of Trustees have approved all significant agreements between
the Trust and the Portfolio on the one side and persons or companies furnishing
services to the Fund and the Portfolio on the other, including the investment
management and administration agreement with AIM, the investment sub-advisory
and sub-administration agreement between AIM and the Sub-advisor, the agreements
with AIM Distributors regarding distribution of the Fund's shares, the custody
agreement and the transfer agency agreement. The day-to-day operations of the
Fund and the Portfolio are delegated to the officers of the Trust and the
Portfolio, subject always to the investment objective and policies of the Fund
and the Portfolio and to the general supervision of the Boards. See "Trustees
and Executive Officers" in the Statement of Additional Information for
information on the Trust's and the Portfolio's Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Portfolio's investment managers and administrators include,
but are not limited to, determining the composition of the investment holdings
of the Portfolio and placing orders to buy, sell or hold particular securities.
In addition, AIM and the Sub-advisor provide the following administration
services to the Fund and the Portfolio: furnishing corporate officers and
clerical staff; providing office space, services and equipment; and supervising
all matters relating to the Portfolio's operation.
    
 
   
  The Fund pays AIM administration fees at the annualized rate of 0.25% of the
Fund's average daily net assets. AIM has appointed the Sub-advisor as the Fund's
sub-administrator. In addition, the Fund bears its pro rata portion of the
investment management and administration fees paid by the Portfolio to AIM and
the Sub-advisor. The Portfolio pays AIM such fees, based on the average daily
net assets of the Portfolio at the annualized rate of 0.475% on the first $500
million, 0.45% on the next $1 billion, 0.425% on the next $1 billion and 0.40%
on amounts thereafter, plus 2% of the Portfolio's total investment income as
stated in the Portfolio's Statement of Operations, calculated in accordance with
generally accepted accounting principles, adjusted daily for currency
revaluations, on a marked to market basis, of the Portfolio's assets; provided,
however, that during any fiscal year this amount shall not exceed 2% of the
Portfolio's total investment income calculated in accordance with generally
accepted accounting principles. Out of its aggregate fees payable by the Fund
and the Portfolio, AIM pays the Sub-advisor sub-advisory and sub-administration
fees equal to 40% of the aggregate fees AIM receives from the Fund and the
Portfolio. The investment management and administration fees paid by the Fund
and the Portfolio are higher than those paid by most mutual funds. The Fund and
Portfolio pay all expenses not assumed by AIM, the Sub-advisor, AIM Distributors
or other agents. Effective November 1, 1997, AIM has undertaken to limit the
expenses of the Advisor Class shares of the Fund (and the Fund's pro-rata
portion of the Portfolio's expenses) to the maximum annual rate of 1.40% of the
average daily net assets of the Fund's Advisor Class shares.
    
 
   
  The Sub-advisor also serves as the Fund's and the Portfolio's pricing and
accounting agent. For these services the Sub-advisor receives a fee consisting
of 0.03% of the first $5 billion of assets, and 0.02% of the assets in excess of
$5 billion, of the AIM Funds that are sub-advised by the Sub-advisor (other than
AIM Eastern Europe Fund). Each of these funds, including the Fund and the
Portfolio, pays an amount based upon its relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Portfolio pursuant to a master investment management
and administration agreement (the "Advisory Agreement"). AIM was organized in
1976 and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Portfolio pursuant to an investment
sub-advisory and sub-administration agreement. Prior to May 29, 1998, the
Sub-advisor was known as Chancellor LGT Asset Management, Inc. On May 29, 1998,
Liechtenstein Global Trust AG ("LGT"), the former indirect parent organization
of the Sub-advisor, consummated a purchase agreement with AMVESCAP PLC pursuant
to which AMVESCAP PLC acquired LGT's Asset Management Division, which included
the Sub-advisor and certain other affiliates. As a result of this transaction,
the Sub-advisor is now an indirect wholly owned subsidiary of AMVESCAP PLC.
Prior to the sale, the Sub-advisor and its worldwide asset management affiliates
provided investment management and/or administrative services to institutional,
corporate and individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Fund and the Portfolio, the
Sub-advisor employs a team approach, taking advantage of its investment
resources around the world.
    
 
                                       16
<PAGE>   760
 
  The investment professionals primarily responsible for the portfolio
management of the Portfolio are as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
NAME/OFFICE                    THE FUND                           PAST FIVE YEARS
- -----------              --------------------                   -------------------
<S>                     <C>                      <C>
Cheng-Hock Lau          Portfolio Manager        Chief Investment Officer and Portfolio Manager for
New York                since 1997               Global Fixed Income for the Sub-advisor since
                                                 October 1996. Senior Portfolio Manager for
                                                 Global/International Fixed Income for the
                                                 Sub-advisor from July 1995 to October 1996.
                                                 Employed by Chancellor Capital Management, Inc., a
                                                 predecessor of the Sub-advisor, from 1995 to
                                                 October 1996. Senior Vice President and Senior
                                                 Portfolio Manager for Fiduciary Trust Company
                                                 International from 1993 to 1995. Vice President at
                                                 Bankers Trust Company from 1991 to 1993.
Craig Munro             Portfolio Manager        Portfolio Manager for the Sub-advisor since August
New York                since 1998               1997. Vice President and Senior Analyst in the
                                                 Emerging Markets Group of the Global Fixed Income
                                                 Division of Merrill Lynch Asset Management from
                                                 1993 to August 1997.
</TABLE>
    
 
   
  In placing orders for the Portfolio's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions for the Portfolio may be
executed through affiliates of AIM or the Sub-advisor. High portfolio turnover
(over 100%) involves correspondingly greater brokerage commissions and other
transaction costs that the Fund or the Portfolio will bear directly and could
result in the realization of net capital gains which would be taxable when
distributed to shareholders. See "Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement (the
"Distribution Agreement"), with AIM Distributors, a registered broker-dealer and
a wholly owned subsidiary of AIM, to act as the distributor of the Advisor Class
shares of the Fund. Certain Trustees and officers of the Trust are affiliated
with AIM Distributors.
    
 
  The Distribution Agreement provides AIM Distributors with the exclusive right
to distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
   
- --------------------------------------------------------------------------------
    
 
   
ORGANIZATION OF THE TRUST AND THE PORTFOLIO
    
 
   
  ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business
trust on May 7, 1998. On September 8, 1998, the Trust acquired the assets of and
assumed the liabilities of AIM Investment Funds, Inc., a Maryland corporation.
The Fund constitutes one of the thirteen separate and distinct series portfolios
of the Trust.
    
 
  From time to time, the Trust may establish other funds, each corresponding to
a distinct investment portfolio and a distinct series of the Trust's shares of
beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that Class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
 
                                       17
<PAGE>   761
 
  ORGANIZATION OF THE PORTFOLIO. The Portfolio is organized as a Delaware
business trust. Under Delaware law, the Fund and other entities that invest in
the Portfolio enjoy the same limitations of liability extended to shareholders
of private, for-profit corporations. There is a remote possibility, however,
that under certain circumstances an investor in the Portfolio may be held liable
for the Portfolio's obligations. However, the Agreement and Declaration of Trust
of the Portfolio disclaims shareholder liability for acts or obligations of the
Portfolio and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Portfolio or
a trustee. The Agreement and Declaration of Trust also provides for
indemnification from the Portfolio property for all losses and expenses of any
shareholder held personally liable for the Portfolio's obligations. Thus the
risk of an investor incurring financial loss on account of such liability is
limited to circumstances in which the Portfolio itself would be unable to meet
its obligations and where the other party was held not to be bound by the
disclaimer.
 
  Whenever the Fund is requested to vote on any proposal of the Portfolio, the
Fund will hold a meeting of Fund shareholders and will cast its vote as
instructed by Fund shareholders. Shares for which no voting instructions are
received will be voted in the same proportion as the shares for which voting
instructions are received.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust, to the
Fund and to the Portfolio.
    
   
    
 
                                       18
<PAGE>   762
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
                  TO THE AIM FAMILY OF FUNDS--Register Mark--
                            FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several of
which offer Advisor Class shares. Only Advisor Class shares are offered through
this Prospectus. Advisor Class shares are available from the following funds
(collectively, the "Advisor Class Funds"):
 
   
<TABLE>
            <S>                                           <C>
            AIM BASIC VALUE FUND                          AIM GLOBAL INFRASTRUCTURE FUND
            AIM DEVELOPING MARKETS FUND                   AIM GLOBAL RESOURCES FUND
            AIM DOLLAR FUND                               AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM EMERGING MARKETS FUND                     AIM GLOBAL TRENDS FUND
            AIM EMERGING MARKETS DEBT FUND                AIM INTERNATIONAL GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM JAPAN GROWTH FUND
            AIM GLOBAL CONSUMER PRODUCTS                  AIM LATIN AMERICAN GROWTH FUND
              AND SERVICES FUND                           AIM MID CAP EQUITY FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM NEW PACIFIC GROWTH FUND
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM SMALL CAP GROWTH FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM STRATEGIC INCOME FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WORLDWIDE GROWTH FUND
</TABLE>
    
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
 
  HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through Financial
Advisers (as defined herein) who have entered into agreements with A I M
Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor Class
shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
 
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment for
Advisor Class shares is $500.
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
                                       A-1
<PAGE>   763
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Advisor Class shares of any Advisor Class Funds not named on the cover of this
Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                                                     Shareholder Name, Shareholder Account Number 
                   OBI:                              (70 character limit)
</TABLE>
 
  It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
 
  HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
  In addition to the Advisor Class Funds, the AIM Funds consist of the following
funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR
LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND,
AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BLUE
CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION
FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED MATURITY TREASURY
FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM SELECT GROWTH FUND,
AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM VALUE FUND and AIM
WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM
LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with the Advisor Class
Funds, the "Multiple Class Funds." For information on purchasing any of the AIM
Funds and to receive a prospectus, please call (800) 347-4246. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
  Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
 
  Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee'
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares. Investors in wrap fee programs and
advisory accounts may only purchase Advisor Class shares through Financial
Advisers who have entered into agreements with AIM Distributors. Investors may
be charged a fee by their agents or brokers for effecting transactions in
Advisor Class shares.
 
  AIM Distributors may, from time to time, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives
 
                                       A-2
<PAGE>   764
 
and their families to places within or outside the United States. The total
amount of such additional bonus payments or other consideration shall not exceed
0.25% of the public offering price of the shares sold. Any such bonus or
incentive programs will not change the price paid by investors for the purchase
of the applicable AIM Fund's shares or the amount that any particular AIM Fund
will receive as proceeds from such sales. Dealers may not use sales of the AIM
Funds' shares to qualify for any incentives to the extent that such incentives
may be prohibited by the laws of any state.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND uses
the amortized cost method of valuing the securities it holds and rounds its per
share net asset value to the nearest whole cent, it is anticipated that the net
asset value of the shares of that fund will remain constant at $1.00 per share.
However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00 net
asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
                                       A-3
<PAGE>   765
 
- --------------------------------------------------------------------------------
 
   
SPECIAL PLANS
    
 
  Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
 
   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance to $5,000 to
establish and maintain an allocation across a range of Advisor Class Funds. The
Program automatically rebalances holdings of Advisor Class Funds to the
established allocation on a periodic basis. Under the Program, a shareholder may
predesignate, on a percentage basis, how the total value of his or her holdings
in a minimum of two, and a maximum of ten, Advisor Class Funds ("Personal
Portfolio") is to be rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more Advisor Class Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other Advisor Class Funds in the
shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the
Advisor Class Fund(s) in a shareholder's Personal Portfolio have appreciated
during a rebalancing period, the Program will result in shares of Advisor Class
Fund(s) that have appreciated most during the period being exchanged for shares
of Advisor Class Fund(s) that have appreciated least. SUCH EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends, Distributions and Tax
Matters -- Dividends and Distributions." Participation in the Program does not
assure that a shareholder will profit from purchases under the Program nor does
it prevent or lessen losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Advisor Class Fund would be 2%
or less. In predesignating percentages, shareholders must use whole percentages
and totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an Advisor Class Fund's
shares. The AIM Funds and AIM Distributors reserve the right to modify, suspend,
or terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which Advisor
Class Funds or what allocation percentages are assigned to the Program, unless
canceled or changed in writing and received by the Transfer Agent in good order
at least five business days prior to the rebalancing date. Certain
dealers/financial institutions may charge a fee for establishing accounts
relating to the Program. Investors should contact their dealers/financial
institutions or AIM Distributors for more information.
    
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the Advisor
Class Funds may participate in an exchange privilege as described below. AIM
Distributors acts as distributor for the Advisor Class Funds which represent a
range of different investment objectives and policies.
 
  Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
 
  Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
 
  An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor
 
                                       A-4
<PAGE>   766
 
Class Fund acquired through exchange must be qualified for sale in the state in
which the shareholder resides; (c) the exchange must be made between accounts
having identical registrations and addresses; (d) the full amount of the
purchase price for the shares being exchanged must have already been received by
the fund; (e) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or Form
W-9 (certifying exempt status) must have been received by the fund; (f) newly
acquired shares (through either an initial or subsequent investment) are held in
an account for at least ten business days, and all other shares are held in an
account for at least one day, prior to the exchange; and (g) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the Advisor Class Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
  Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but under unusual market
conditions such purchases may be delayed for up to five business days if it is
determined that an Advisor Class Fund would be materially disadvantaged by an
immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into an Advisor Class Fund that declares daily dividends ("Dividends,
Distributions and Tax Matters -- Dividends and Distributions," below), and the
release of the exchange proceeds is delayed for the foregoing five-day period,
such shareholder will not begin to accrue dividends until the sixth business day
after the exchange. Advisor Class shares purchased by check may not be exchanged
until it is determined that the check has cleared, which may take up to ten
business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. A shareholder may give exchange information to his Financial
Adviser. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the Advisor Class Funds. AIM Distributors reserves the right to impose
conditions on dealers or investment advisors who make telephone exchanges of
shares of the Advisor Class Funds, including the condition that any such dealer
or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/financial institutions may charge service fees for handling
repurchase transactions.
 
                                       A-5
<PAGE>   767
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the Advisor
Class Funds are redeemed at their net asset value next computed after a request
for redemption in proper form (including signature guarantees and other required
documentation for written redemptions) is received by the Transfer Agent or
certain financial institutions (or their designees) who are authorized to accept
redemption orders on behalf of the AIM Funds, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. Orders for the redemption of Advisor Class shares received on any
business day of an AIM Fund will be confirmed at the price determined as of the
close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the proceeds are to be sent to
the address of record. These requirements may be waived or modified upon notice
to shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such 
    

                                       A-6
<PAGE>   768
   

as certain domestic banks, credit unions, securities dealers, or securities
exchanges. The Transfer Agent will also accept signatures with either: (1) a
signature guaranteed with a medallion stamp of the STAMP Program, or (2) a
signature guaranteed with a medallion stamp of the NYSE Medallion Signature
Program, provided that in either event, the amount of the transaction involved
does not exceed the surety coverage amount indicated on the medallion. For
information regarding whether a particular institution or organization qualifies
as an "eligible guarantor institution," an investor should contact the Client
Services Department of AFS.
    
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
  The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
                                       A-7
<PAGE>   769
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                    DISTRIBUTIONS          DISTRIBUTIONS
                                                                        OF NET                 OF NET
                                     DIVIDENDS FROM                    REALIZED               REALIZED
                                     NET INVESTMENT                   SHORT-TERM              LONG-TERM
FUND                                     INCOME                      CAPITAL GAINS          CAPITAL GAINS
- ----                                 --------------                  -------------          -------------
<S>                                  <C>                             <C>                     <C>
AIM BASIC VALUE FUND...............  declared and paid annually         annually                annually
AIM DEVELOPING MARKETS FUND........  declared and paid annually         annually                annually
AIM DOLLAR FUND....................  declared daily; paid monthly       annually                annually
AIM EMERGING MARKETS FUND..........  declared and paid annually         annually                annually
AIM EMERGING MARKETS DEBT FUND.....  declared and paid monthly          annually                annually
AIM EUROPE GROWTH FUND.............  declared and paid annually         annually                annually
AIM GLOBAL CONSUMER PRODUCTS AND
  SERVICES FUND....................  declared and paid annually         annually                annually
AIM GLOBAL FINANCIAL SERVICES
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL GOVERNMENT INCOME
  FUND.............................  declared and paid monthly          annually                annually
AIM GLOBAL GROWTH & INCOME FUND....  declared and paid quarterly        annually                annually
AIM GLOBAL HEALTH CARE FUND........  declared and paid annually         annually                annually
AIM GLOBAL INFRASTRUCTURE FUND.....  declared and paid annually         annually                annually
AIM GLOBAL RESOURCES FUND..........  declared and paid annually         annually                annually
AIM GLOBAL TELECOMMUNICATIONS
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL TRENDS FUND.............  declared and paid annually         annually                annually
AIM INTERNATIONAL GROWTH FUND......  declared and paid annually         annually                annually
AIM JAPAN GROWTH FUND..............  declared and paid annually         annually                annually
AIM LATIN AMERICAN GROWTH FUND.....  declared and paid annually         annually                annually
AIM MID CAP EQUITY FUND............  declared and paid annually         annually                annually
AIM NEW PACIFIC GROWTH FUND........  declared and paid annually         annually                annually
AIM SMALL CAP GROWTH FUND..........  declared and paid annually         annually                annually
AIM STRATEGIC INCOME FUND..........  declared and paid monthly          annually                annually
AIM WORLDWIDE GROWTH FUND..........  declared and paid annually         annually                annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
 
  Dividends on Advisor Class shares of an Advisor Class Fund are expected to be
higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
                                       A-8
<PAGE>   770
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares. With respect to tax-exempt shareholders,
dividends and distributions from the AIM Funds are not subject to federal income
taxation to the extent permitted under the applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the 
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    

  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
   
  TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS DEBT FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM MID CAP
EQUITY FUND, AIM SMALL CAP GROWTH FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL
TAX INFORMATION. Certain states exempt from income taxes dividends paid by
mutual funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
    
 
                                       A-9
<PAGE>   771
   
  AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
    
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each Advisor Class Fund's transfer agent and
dividend payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-10
<PAGE>   772
                                                                     APPENDIX A
- --------------------------------------------------------------------------------
 
                          DESCRIPTION OF DEBT RATINGS
 
DESCRIPTION OF BOND RATINGS
 
  Moody's Investors Service, Inc. ("Moody's") rates the debt securities issued
by various entities from "Aaa" to "C." Investment grade ratings are the first
four categories: Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. Ba -- Bonds which are rated Ba
are judged to have speculative elements; their future cannot be considered as
well-assured. Often the protection of interest and principal payments may be
very moderate, and thereby not well safeguarded during both good and bad times
over the future. Uncertainty of position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest. Ca -- Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings. C -- Bonds which are rated C are the lowest rated class of
bonds, and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
 
  ABSENCE OF RATING. Where no rating has been assigned or where a rating has
been suspended or withdrawn, it may be for reasons unrelated to the quality of
the issue.
 
  Should no rating be assigned, the reason may be one of the following:
 
          1. An application for rating was not received or accepted.
 
          2. The issue or issuer belongs to a group of securities or companies
     that are not rated as a matter of policy.
 
          3. There is a lack of essential data pertaining to the issue or
     issuer.
 
          4. The issue was privately placed, in which case the rating is not
     published in Moody's publications.
 
  Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.
 
  Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the Company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the Company ranks in the
lower end of its generic rating category.
 
  Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"),
rates the securities debt of various entities in categories ranging from "AAA"
to "D" according to quality. Investment grade ratings are the first four
categories:
 
   
  AAA -- An obligation rated "AAA" has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong. AA -- An obligation rated "AA" differs from the highest rated
obligations only in a small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong. A -- An obligation rated "A" is
somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions than obligations in higher rated categories. BBB -- An
obligation rated "BBB" exhibits adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the
obligation. BB, B, CCC, CC, C -- Obligations rated "BB," "B," "CCC," "CC," and
"C" are regarded as having significant speculative characteristics. "BB"
indicates the least degree of speculation and "C" the highest. While such
obligations will likely have some quality and protective characteristics, these
may be outweighed by large uncertainties or major exposures to adverse
conditions. BB -- An obligation rated "BB" is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could lead
to the obligor's inadequate capacity to meet its fi-
    

                                      A-11
<PAGE>   773
 
nancial commitment on the obligation. B -- An obligation rated "B" is more
vulnerable to nonpayment than obligations rated "BB," but the obligor currently
has the capacity to meet its financial commitment on the obligation. Adverse
business, financial, or economic conditions will likely impair the obligor's
capacity or willingness to meet its financial commitment on the obligation.
CCC -- An obligation rated "CCC" is currently vulnerable to nonpayment, and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.
CC -- An obligation rated "CC" is currently highly vulnerable to nonpayment.
C -- The "C" rating may be used to cover a situation where a bankruptcy petition
has been filed or similar action has been taken, but payments on this obligation
are being continued. D -- An obligation rated "D" is in payment default. The "D"
rating category is used when payments on an obligation are not made on the date
due even if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The "D" rating also
will be used upon the filing of a bankruptcy petition or the taking of a similar
action if payments on an obligation are jeopardized.
 
  PLUS (+) OR MINUS (-). The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
 
  NR. Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
 
DESCRIPTION OF COMMERCIAL PAPER RATINGS
 
  Moody's employs the designation "Prime-1" to indicate commercial paper having
a superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. Issues rated Prime-2 have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many of
the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
 
  S&P ratings of commercial paper are graded into several categories ranging
from "A1" for the highest quality obligations to "D" for the lowest. Issues in
the "A" category are delineated with numbers 1, 2, and 3 to indicate the
relative degree of safety. A-1 -- This highest category indicates that the
degree of safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics will be denoted with a plus sign
(+) designation. A-2 -- Capacity for timely payments on issues with this
designation is satisfactory; however, the relative degree of safety is not as
high as for issues designated "A-1."
 
                                      A-12
<PAGE>   774
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                   GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
        ACCOUNT TYPE                    NUMBER OF:                     ACCOUNT TYPE                   NUMBER OF:
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary

      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application

      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors

      Legal Guardian          Ward, Minor or
                              Incompetent

      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
</TABLE>
- --------------------------------------------------------------------------------
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   775
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   776
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
<PAGE>   777
 
                                                                     APPLICATION
                                                                          INSIDE
 
[AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
ADVISOR CLASS OF
    
 
   
AIM GLOBAL INFRASTRUCTURE FUND
    
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
PROSPECTUS
SEPTEMBER 8, 1998
 
   
This Prospectus contains information about AIM GLOBAL INFRASTRUCTURE FUND (the
"Fund"), which is one of several series investment portfolios comprising AIM
Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a diversified portfolio which seeks long-term capital
growth by investing all of its investable assets in the Global Infrastructure
Portfolio (the "Portfolio"), which, in turn, invests primarily in equity
securities of companies throughout the world that design, develop or provide
products and services significant to a country's infrastructure. The Portfolio's
investment objective is identical to that of the Fund. The investment experience
of the Fund will correspond directly with the investment experience of the
Portfolio.
    
 
   
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or by calling (800)
347-4246. The SEC maintains a Web site at http://www.sec.gov that contains the
Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the fund may
also be obtained from http://www.aimfunds.com.
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   778
   
    
 
- --------------------------------------------------------------------------------
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     6
  Investment Program...................     6
  Risk Factors.........................     9
  Management...........................    12
  Organization of the Trust and the
     Portfolio.........................    13
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-4
  Exchange Privilege...................   A-4
  How to Redeem Shares.................   A-5
  Determination of Net Asset Value.....   A-7
  Dividends, Distributions and Tax
     Matters...........................   A-8
  General Information..................  A-10
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND AND THE PORTFOLIO
    
 
  The Fund is a diversified series of the Trust. The Portfolio is a diversified
series of Global Investment Portfolio.
 
  INVESTMENT OBJECTIVE. The Fund seeks long-term capital growth.
 
  PRINCIPAL INVESTMENTS. The Fund invests all of its investable assets in the
Portfolio, which, in turn, invests primarily in equity securities of companies
throughout the world that design, develop or provide products and services
significant to a country's infrastructure.
 
   
  INVESTMENT MANAGERS. The Portfolio is managed by A I M Advisors, Inc. ("AIM")
and is sub-advised and sub-administered by INVESCO (NY), Inc. (the
"Sub-advisor"). AIM and the Sub-advisor and their worldwide asset management
affiliates provide investment management and/or administrative services to
institutional, corporate and individual clients around the world. AIM and the
Sub-advisor are both indirect wholly owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC and its subsidiaries are an independent investment management group
that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing
presence in Asia. AIM was organized in 1976 and, together with its subsidiaries,
currently advises approximately 90 investment company portfolios.
    
 
   
  PURCHASING SHARES. Advisor Class shares are offered through this Prospectus to
(a) trustees or other fiduciaries purchasing shares for employee benefit plans
which are sponsored by organizations which have at least 1,000 employees; (b)
any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment advisor has investment
discretion over such account, and (ii) the account holder pays such person as
compensation for its advice and other services an annual fee of at least 0.50%
on the assets in the account; (c) any account with assets of a least $10,000 if
(i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the
assets in the account; (d) accounts advised by the Sub-advisor or one of the
companies formerly affiliated with the Asset Management Division of
Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the other funds in The AIM Family of Funds that are
sub-advised by the Sub-advisor ("AIM Funds") on May 29, 1998; (e) any of the
companies composing or affiliated with AMVESCAP PLC; and (f) AIM Global Trends
Fund. Pursuant to a separate prospectus, the Fund also offers Class A and Class
B shares, which represent interests in the Fund. The Class A and Class B shares
have different distribution arrangements.
    
 
  Initial investments in Advisor Class shares must be at least $500 and
additional investments must be at least $50. The distributor of the Advisor
Class shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares."
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds"),
Advisor Class shares of the Fund may be exchanged for Advisor Class shares of
certain Funds in the AIM Family of Funds in the manner and subject to the
policies and charges set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Advisor Class shareholders of the Fund may redeem all or a
portion of their shares at the Fund's net asset value on any business day. See
"How to Redeem Shares."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be rein-
    
 
                                        2
<PAGE>   779
 
vested at net asset value without payment of a sales charge in the Fund's shares
or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters."
 
  RISK FACTORS. There is no assurance that the Fund or the Portfolio will
achieve its investment objective. The Fund's net asset value will fluctuate,
reflecting fluctuations in the market value of the Portfolio's portfolio
holdings. The Portfolio's policy of concentrating its investments in companies
that design, develop or provide products and services significant to a country's
infrastructure may cause the Fund's net asset value to fluctuate more than if it
invested in a greater number of industries. The Portfolio may invest in foreign
securities. Investments in foreign securities involve risks relating to
political and economic developments abroad and the differences between the
regulations to which U.S. and foreign issuers are subject. Individual foreign
economies also may differ favorably or unfavorably from the U.S. economy.
Changes in foreign currency exchange rates will affect the Fund's net asset
value, earnings and gains and losses realized on sales of securities. Securities
of foreign companies may be less liquid and their prices more volatile than
those of securities of comparable U.S. companies.
 
   
  The Portfolio may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs. The Portfolio may
invest up to 20%, of its total assets in below investment grade debt securities.
Investments of this type are subject to a greater risk of loss of principal and
interest. See "Investment Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   780
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
   
  The expenses and maximum transaction costs associated with investing in the
Advisor Class shares of the Fund are reflected in the following table(1):
    
 
<TABLE>
<CAPTION>
<S>                                                           <C>
Shareholder Transaction Costs:
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................   None
  Sales charges on reinvested distributions to
     shareholders...........................................   None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........   None
  Redemption charges........................................   None
  Exchange fees.............................................   None
Annual Fund Operating Expenses(2): (as a % of average net
  assets)
  Investment management and administration fees.............   0.98%
  12b-1 distribution and service fees.......................   None
  Other expenses (after reimbursements).....................   0.52%
                                                               ----
          Total Fund Operating Expenses.....................   1.50%
                                                               ====
</TABLE>
 
   
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Fund.
    
 
   
(2)Expenses are based on the Fund's fiscal year ended October 31, 1997 restated
   to reflect AIM's undertaking to limit the Fund's expenses (exclusive of
   brokerage commissions, taxes, interest and extraordinary expenses) to the
   annual rate of 1.50% of the average daily net assets of the Fund's Advisor
   Class shares. AIM has voluntarily agreed to continue this limitation through
   May 31, 2000. Without reimbursements, "Other Expenses' and "Total Fund
   Operating Expenses" would have been 0.60% and 1.58%, respectively, for
   Advisor Class shares of the Infrastructure Fund. "Other expenses" include
   custody, transfer agency, legal, audit and other operating expenses. See
   "Management" herein and the Statement of Additional Information for more
   information. Investors purchasing Advisor Class shares through financial
   planners, trust companies, bank trust departments or registered investment
   advisors, or under a "wrap fee' program, will be subject to additional fees
   charged by such entities or by the sponsors of such programs. Where any
   account advised by one of the companies composing or affiliated with AMVESCAP
   PLC invests in Advisor Class shares of the Fund, such account shall not be
   subject to duplicative advisory fees.
    
 
   The Board of Trustees of the Trust believes that the aggregate per share
   expenses of the Infrastructure Fund and its corresponding Portfolio will be
   approximately equal to the expenses the Fund would incur if its assets were
   invested directly in the type of securities being held by its Portfolio.
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                       1 YEAR   3 YEARS   5 YEARS   10 YEARS
                                                       ------   -------   -------   --------
<S>                                                    <C>      <C>       <C>       <C>
Advisor Class Shares.................................   $15       $48       $82       $180
</TABLE>
    
 
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S AND THE PORTFOLIO'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND
INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE
ASSUMPTION IN THE HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY
REGULATION OF THE SEC APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS
NOT A PREDICTION OF AND DOES NOT REPRESENT THE FUND'S OR THE PORTFOLIO'S
PROJECTED OR ACTUAL PERFORMANCE.
 
                                        4
<PAGE>   781
 
- --------------------------------------------------------------------------------
 
FINANCIAL HIGHLIGHTS
 
   
  The tables below provide condensed financial information concerning income and
capital changes for Advisor Class shares of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statements and notes, for the
fiscal year ended October 31, 1997, have been audited by PricewaterhouseCoopers
LLP, independent accountants, whose report thereon also is included in the
Statement of Additional Information. The unaudited financial statements and
notes for the semi-annual period ended April 30, 1998, are also included in the
Statement of Additional Information.
    
 
                         AIM GLOBAL INFRASTRUCTURE FUND
   
                    (FORMERLY GT GLOBAL INFRASTRUCTURE FUND)
    
 
   
<TABLE>
<CAPTION>
                                                                            ADVISOR CLASS+
                                                        -------------------------------------------------------
                                                          SIX MONTHS
                                                            ENDED                                     JUNE 1,
                                                          APRIL 30,       YEAR ENDED OCTOBER 31,      1995 TO
                                                             1998         ----------------------    OCTOBER 31,
                                                        (UNAUDITED)(D)     1997(D)      1996(D)        1995
                                                        --------------    ---------    ---------    -----------
<S>                                                     <C>               <C>          <C>          <C>
Per Share Operating Performance:
  Net asset value, beginning of period................      $ 15.23        $ 14.52      $ 12.14       $ 12.00
                                                            -------        -------      -------       -------
Income from investment operations:
  Net investment income (loss)........................         0.08*          0.05         0.04          0.02*
  Net realized and unrealized gain (loss) on
    investments.......................................         1.51           1.38         2.34          0.12
                                                            -------        -------      -------       -------
  Net increase (decrease) from investment
    operations........................................         1.59           1.43         2.38          0.14
                                                            -------        -------      -------       -------
Distributions:
  From net realized gain on investments...............        (0.11)         (0.72)          --            --
         Total distributions..........................        (0.11)         (0.72)          --            --
Net assets value, end of period.......................      $ 16.71        $ 15.23      $ 14.52       $ 12.14
                                                            =======        =======      =======       =======
         Total investment return(c)...................        10.53%(b)      10.10%       19.60%         1.17%(b)
                                                            =======        =======      =======       =======
Ratios and supplemental data:
  Net assets, end of period (in 000's)................      $ 9,347        $ 2,539      $   344       $   216
Ratio of net investment income (loss) to average net
  assets:
  With expense reductions and reimbursement by the
    Sub-advisor.......................................         1.01%(b)       0.41%        0.31%         0.18%(a)
  Without expense reductions and reimbursement by the
    Sub-advisor.......................................         0.82%(a)       0.33%        0.20%        (0.08)%(a)
Ratio of operating expenses to average net assets:
  With expense reductions and reimbursement by the
    Sub-advisor.......................................         1.49%(a)       1.50%        1.64%         1.86%(a)
  Without expense reductions and reimbursement by the
    Sub-advisor.......................................         1.68%(a)       1.58%        1.75%         2.12%(a)
Portfolio turnover rate++.............................           95%(a)         41%          41%           45%
Average commission rate per share paid on portfolio
  transactions++......................................      $0.0148        $0.0046      $0.0109           N/A
</TABLE>
    
 
- ---------------
   
(a)   Annualized.
    
   
(b)   Not annualized.
    
   
(c)   Total investment return does not include sales charges.
    
   
(d)   These selected per share data were calculated based upon average shares
      outstanding during the period.
    
   
*     Before reimbursement by the Sub-advisor, the net investment income per
      share would have been reduced by $0.01 and $0.02 for the six months ended
      April 30, 1997 and for the year ended October 31, 1995, respectively.
    
   
**    Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.01.
    
   
+     Commencing June 1, 1995, the Fund began offering Advisor Class shares.
    
   
++    Portfolio turnover and average commission rates are calculated on the
      basis of the Fund as a whole without distinguishing among the class of
      shares issued. The Fund invests only in the Infrastructure Portfolio and
      does not engage in securities transactions. Accordingly, the portfolio
      turnover and average commission rates presented are for the Infrastructure
      Portfolio.
    
   
 N/A  Not Applicable.
    
 
                                        5
<PAGE>   782
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVE. The Fund's investment objective is long-term capital
growth. It seeks its objective by investing all of its investable assets in the
Portfolio, which, in turn, invests primarily in equity securities of companies
throughout the world that design, develop or provide products and services
significant to a country's infrastructure. The Portfolio's investment objective
is identical to that of the Fund. There can be no assurance that the Fund or
Portfolio will achieve its investment objective.
    
 
   
  INVESTMENT POLICIES. At least 65% of the Portfolio's total assets normally
will be invested in common and preferred stocks and warrants to acquire such
securities issued by infrastructure companies. An "infrastructure" company is an
entity in which (i) at least 50% of either the revenues or earnings was derived
from infrastructure activities, or (ii) at least 50% of the assets was devoted
to such activities, based on the company's most recent fiscal year. The
remainder of the Portfolio's assets may be invested in debt securities issued by
infrastructure companies and/or equity and debt securities of companies outside
of the infrastructure industries, which, in the opinion of the Sub-advisor,
stand to benefit from developments in the infrastructure industries.
    
 
   
  Examples of infrastructure companies include those engaged in designing,
developing or providing the following products and services: electricity
production; oil, gas, and coal exploration, development, production and
distribution; water supply, including water treatment facilities; nuclear power
and other alternative energy sources; transportation, including the construction
or operation of transportation systems; steel, concrete, or similar types of
products; communications equipment and services (including equipment and
services for both data and voice transmission); mobile communications and
cellular radio/paging; emerging technologies combining telephone, television
and/or computer systems; and other products and services, which, in the
Sub-advisor's judgment, constitute services significant to the development of a
country's infrastructure.
    
 
   
  The Sub-advisor believes that a country's infrastructure is one key to the
long-term success of that country's economy. The Sub-advisor believes that
adequate energy, transportation, water, and communications systems are essential
elements for long-term economic growth. The Sub-advisor believes that many
developing nations, especially in Asia and Latin America, plan to make
significant expenditures to the development of their infrastructure in the
coming years, which is expected to facilitate increased levels of services and
manufactured goods.
    
 
   
  In the developed countries of North America, Europe, Japan and the Pacific
Rim, the Sub-advisor expects that the replacement and upgrade of transportation
and communications systems should stimulate growth in the infrastructure
industries of those countries. In addition, in the Sub-advisor's view,
deregulation of telecommunications and electric and gas utilities in many
countries is promoting significant changes in these industries.
    
 
   
  The Sub-advisor believes that strong economic growth in developing countries
and infrastructure replacement, upgrade, and deregulation in more developed
countries provide an environment for favorable investment opportunities in
infrastructure companies worldwide. In addition, the long-term growth rates of
certain foreign countries' economies may be substantially higher than the long-
term growth rate of the U.S. economy. An integral aspect of certain foreign
countries' economies may be the development or improvement of their
infrastructure.
    
 
                                        6
<PAGE>   783
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
   
  SELECTION OF INVESTMENTS AND ASSET ALLOCATION. The Portfolio expects that,
from time to time, a significant portion of its assets may be invested in the
securities of domestic issuers. The industry represented in the Portfolio,
however, is a global industry with significant, growing markets outside of the
United States. A sizeable proportion of the companies which comprise the
infrastructure industries are headquartered outside of the United States.
    
 
   
  For these reasons, the Sub-advisor believes that a portfolio composed only of
securities of U.S. issuers does not provide the greatest potential for return
from an investment by the Portfolio. The Sub-advisor uses its financial
expertise in markets located throughout the world and the substantial global
resources of AMVESCAP PLC in attempting to identify those countries and
companies then providing the greatest potential for long-term capital
appreciation. In this fashion, the Sub-advisor seeks to enable shareholders to
capitalize on the substantial investment opportunities and the potential for
long-term growth of capital presented by the global infrastructure industry
represented in the Portfolio.
    
 
   
  The Sub-advisor allocates the Portfolio's assets among securities of countries
and in currency denominations where opportunities for meeting the Portfolio's
investment objective are expected to be the most attractive. The Portfolio may
invest substantially in securities denominated in one or more currencies. Under
normal conditions, the Portfolio invests in the securities of issuers located in
at least three countries, including the United States; investments in securities
of issuers in any one country, other than the United States, will represent no
more than 50% of the Portfolio's total assets.
    
 
   
  In analyzing specific companies for possible investment, the Sub-advisor
ordinarily looks for several of the following characteristics: above-average per
share earnings growth; high return on invested capital; a healthy balance sheet;
sound financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; development of new technologies; efficient service; pricing
flexibility; strong management; and general operating characteristics that will
enable the companies to compete successfully in their respective markets.
    
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. Under a defensive strategy, the Portfolio may invest up to
100% of its total assets in cash (U.S. dollars, foreign currencies or
multinational currency units such as euros) and/or high quality debt securities
or money market instruments of U.S. or foreign issuers. In addition, for
temporary defensive purposes, most or all of the Portfolio's investments may be
made in the United States and denominated in U.S. dollars. To the extent the
Portfolio adopts a temporary defensive posture, it will not be invested so as to
achieve directly its investment objective. In addition, pending investment of
proceeds from new sales of Fund shares or to meet its ordinary daily cash needs,
the Portfolio may hold cash (U.S. dollars, foreign currencies or multinational
currency units) and may invest in foreign or domestic high quality money market
instruments. For a full description of money market instruments, see "Money
Market Instruments" in the "Investment Objectives and Policies" section of the
Statement of Additional Information.
    
 
   
  PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Portfolio in privatizations in appropriate
circumstances. In certain foreign countries, the ability of foreign entities
such as the Portfolio to participate in privatizations may be limited by local
law, or the terms on which the Portfolio may be permitted to participate may be
less advantageous than those for local investors. There can be no assurance that
foreign governments will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
    
 
   
  INVESTMENTS IN OTHER INVESTMENT COMPANIES. The Portfolio may invest up to 10%
of its total assets in other investment companies, some of which may be
investment vehicles or companies that are advised by the Sub-advisor or its
affiliates ("Affiliated Funds"). As a shareholder in an investment company, the
Portfolio would bear its ratable share of that investment company's expenses,
including its advisory and administration fees. At the same time, the Portfolio
would continue to pay its own management fees and other expenses. AIM and the
Sub-advisor will waive their advisory fees to the extent that the Portfolio
invests in an Affiliated Fund.
    
 
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Portfolio
may borrow from banks or may borrow through reverse repurchase agreements and
"roll" transactions in connection with meeting requests for the redemptions of
the Fund's shares. The Portfolio also may borrow up to 5% of its total assets
for temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Portfolio may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Portfolio's borrowings exceed 5% of
its total assets. Any borrowing by the Portfolio may cause greater fluctuation
in the value of its shares than would be the case if the Portfolio did not
borrow.
 
  A reverse repurchase agreement is a borrowing transaction in which the
Portfolio transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash, and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Portfolio's sale of securities together with
its commitment (for which the Portfolio may receive a fee) to purchase similar,
but not identical, securities at a future date.
 
                                        7
<PAGE>   784
 
   
  SECURITIES LENDING. The Portfolio may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Portfolio to retain ownership of the securities loaned and, at the same
time, enhances the Fund's total return. The Portfolio limits its loans of
portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. While a loan is outstanding, the
borrower must maintain with the Portfolio's custodian collateral consisting of
cash, U.S. government securities or certain irrevocable letters of credit equal
to at least the value of the borrowed securities, plus any accrued interest or
such other collateral as permitted by the Portfolio's investment program and
regulatory agencies, and as approved by the Board. The risks in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delays in receiving additional collateral or in recovery of the
securities and possible loss of rights in the collateral should the borrower
fail financially.
    
 
  WHEN-ISSUED OR FORWARD COMMITMENT SECURITIES. The Portfolio may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Portfolio will
purchase or sell when-issued securities or enter into forward commitments only
with the intention of actually receiving or delivering the securities, as the
case may be. No income accrues on securities that have been purchased pursuant
to a forward commitment or on a when-issued basis prior to delivery to the
Portfolio. If the Portfolio disposes of the right to acquire a when-issued
security prior to its acquisition or disposes of its right to deliver or receive
against a forward commitment, it may incur a gain or loss. At the time the
Portfolio enters into a transaction on a when-issued or forward commitment
basis, the Portfolio will segregate cash or liquid securities equal to the value
of the when-issued or forward commitment securities with its custodian and will
mark to market daily such assets. There is a risk that the securities may not be
delivered and that the Portfolio may incur a loss.
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Portfolio may use
forward currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the portfolio. These instruments are often referred to as
"derivatives," which may be defined as financial instruments whose performance
is derived, at least in part, from the performance of another asset (such as a
security, currency or an index of securities). The Portfolio may enter into such
instruments up to the full value of its portfolio assets. See "Risk
Factors -- Options, Futures and Forward Currency Transactions" herein and
"Options, Futures and Currency Strategies" in the Statement of Additional
Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Portfolio may enter into forward currency contracts for the
purchase or sale of a specified currency at a specified future date. Such
contracts may involve the purchase or sale of a foreign currency against the
U.S. dollar or may involve two foreign currencies. The Portfolio may enter into
forward currency contracts either with respect to specific transactions or with
respect to its portfolio positions. The Portfolio also may purchase and sell put
and call options on currencies, futures contracts on currencies and options on
such futures contracts to hedge against movements in exchange rates.
 
   
  In addition, the Portfolio may purchase and sell put and call options on
equity and debt securities to hedge against the risk of fluctuations in the
prices of securities held by the Portfolio or that the Sub-advisor intends to
include in the Portfolio's holdings. The Portfolio also may purchase and sell
put and call options on stock indexes to hedge against overall fluctuations in
the securities markets generally or in a specific market sector.
    
 
  Further, the Portfolio may sell stock index futures contracts and may purchase
put options or write call options on such futures contracts to protect against a
general stock market decline or a decline in a specific market sector that could
affect adversely the Portfolio's holdings. The Portfolio also may purchase stock
index futures contracts and purchase call options or write put options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisitions. The
Portfolio may use interest rate futures contracts and options thereon to hedge
the debt portion of its portfolio against changes in the general level of
interest rates.
 
  OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this Prospectus
and in the Statement of Additional Information may be changed by the Trust's
Board of Trustees without shareholder approval. The Fund's policies regarding
concentration and lending, and the percentage of the Fund's assets that may be
committed to borrowing, are fundamental policies and may not be changed without
shareholder approval. The investment policies of the Fund are identical to the
investment policies of the Portfolio.
 
  The approval of the Fund and of other investors in the Portfolio, if any, is
not required to change the investment objective, policies or limitations of the
Portfolio, unless otherwise specified. Written notice shall be provided to
shareholders of the Fund thirty days prior to any changes in the Portfolio's
investment objective.
 
                                        8
<PAGE>   785
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's or Portfolio's investment policies or
restrictions.
 
   
  The Portfolio is authorized to engage in Short Sales, although it currently
has no intention of doing so, and may purchase American Depositary Receipts,
American Depositary Shares, Global Depositary Receipts and European Depositary
Receipts. See "Short Sales" and "Depositary Receipts," respectively in the
"Investment Program" section of the Statement of Additional Information.
    
 
  OTHER INFORMATION REGARDING THE PORTFOLIO. As previously described, the Fund,
unlike mutual funds that directly acquire and manage their own portfolios of
securities, seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio, which is a separate investment company.
Because the Fund will invest only in the Portfolio, the Fund's shareholders will
acquire only an indirect interest in the investments of the Portfolio.
 
   
  The Fund may redeem its investment in the Portfolio at any time, if the Board
of Trustees of the Trust determines that it is in the best interests of the Fund
and its shareholders to do so. A change in the Portfolio's investment objective,
policies or limitations that is not approved by the Board or the shareholders of
the Fund could require the Fund to redeem its interest in the Portfolio. Any
such redemption could result in a distribution in kind of portfolio securities
(as opposed to a cash distribution) by the Portfolio. Should such a distribution
occur, the Fund could incur brokerage fees or other transaction costs in
converting such securities to cash. In addition, a distribution in kind could
result in a less diversified portfolio of investments for the Fund and could
adversely affect its liquidity. Upon redemption, the Board would consider what
action might be taken, including the investment of all the investable assets of
the Fund in another pooled investment entity having substantially the same
investment objective as the Fund or the retention by the Fund of its own
investment advisor to manage its assets in accordance with its investment
objective, policies and limitations discussed herein.
    
 
  In addition to selling an interest therein to the Fund, the Portfolio may sell
interests therein to other non-affiliated investment companies and/or other
institutional investors. All institutional investors in the Portfolio will pay a
proportionate share of the Portfolio's expenses and will invest in the Portfolio
on the same terms and conditions. However, if another investment company invests
any or all of its assets in the Portfolio, it would not be required to sell its
shares at the same public offering price as the Fund and may charge different
sales commissions. Therefore, investors in the Fund may experience different
returns than investors in another investment company that invests exclusively in
the Portfolio. As of the date of this Prospectus, the Fund is the only
institutional investor in the Portfolio.
 
  The Fund may be materially affected by the actions of other large investors,
if any, in the Portfolio. For example, as with all open-end investment
companies, if a large investor were to redeem its interest in the Portfolio, (1)
the Portfolio's remaining investors could experience higher pro rata operating
expenses, thereby producing lower returns and (2) the Portfolio's security
holdings may become less diverse, resulting in increased risk. Institutional
investors in the Portfolio that have a greater pro rata ownership interest in
the Portfolio than the Fund could have effective voting control over the
operation of the Portfolio.
- --------------------------------------------------------------------------------
 
RISK FACTORS
 
   
  GENERAL. There is no assurance that the Fund or the Portfolio will achieve its
investment objective. The Fund's net asset values will fluctuate reflecting
fluctuations in the market value of the Portfolio's securities positions. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure, and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. The value of equity securities held by the Portfolio will
fluctuate in response to general market and economic developments, as well as
developments affecting the particular issuers of such securities. In addition,
the value of debt securities held by the Portfolio generally will fluctuate with
changes in the perceived creditworthiness of the issuers of such securities and
interest rates.
    
 
  Because the Portfolio focuses its investments on the infrastructure
industries, an investment in it may be more volatile than that of other
investment companies that do not concentrate their investments in such a manner.
Moreover, the value of the shares of the Fund will be especially susceptible to
factors affecting the infrastructure industries. Accordingly, the Fund should be
considered a complete investment program.
 
  INFRASTRUCTURE INDUSTRIES. Infrastructure industries may be subject to greater
political, environmental and other governmental regulation than many other
industries. The nature of such regulation continues to evolve in both the United
States and foreign countries, and changes in governmental policy and the need
for regulatory approvals may have a material effect on the products and services
offered by companies in the infrastructure industries. Electric, gas, water and
most telecommunications companies in the United States, for example, are subject
to both federal and state regulation affecting permitted rates of return and the
kinds of services that may be offered. Governmental regulation may also hamper
the development of new technologies.
 
  In addition, many infrastructure companies have historically been subject to
the risks attendant to increases in fuel and other operating costs, high
interest costs on borrowed funds, costs associated with compliance with
environmental and other safety regulations and changes in the regulatory
climate. Further, competition is intense for many infrastructure companies. As a
result, many of these companies may be adversely affected in the future and such
companies may be subject to increased share price volatility. In addition, many
companies have diversified into oil and gas exploration and development, and
therefore returns may be more sensitive to en-
                                        9
<PAGE>   786
 
ergy prices. Other infrastructure companies, such as water supply companies, are
in a highly fragmented industry due to local ownership. Generally these
companies are mature and are experiencing little or no growth. Changes in
prevailing interest rates may also affect the Infrastructure Fund's share values
because prices of equity and debt securities of infrastructure companies often
tend to increase when interest rates decline and decrease when interest rates
rise.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to, the reporting requirements of the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. In addition, certain costs attributable to
foreign investing, such as custody charges, are higher than those attributable
to domestic investing. Securities of some foreign companies are less liquid and
their prices may be more volatile than securities of comparable domestic
companies. The Portfolio's interest and dividends from foreign issuers may be
subject to non-U.S. withholding taxes, thereby reducing the Portfolio's net
investment income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Portfolio, political or social instability, or diplomatic
developments which could affect the Portfolio's investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
 
  The Portfolio may invest in issuers domiciled in "emerging markets." Investing
in emerging market countries involves risks in addition to those risks involved
in foreign investing. Many emerging market countries have experienced high rates
of inflation for many years. In addition, emerging markets generally are
dependent heavily upon international trade and, accordingly, have been and
continue to be affected adversely by trade barriers, exchange controls, managed
adjustments in relative currency values and other protectionist measures imposed
or negotiated by the countries with which they trade. The securities markets of
emerging market countries are substantially smaller, less developed, less liquid
and more volatile than the securities markets of the developed countries. In
addition, issuers in emerging markets typically are subject to a greater degree
of change in earnings and business prospects than issuers in developed
countries.
 
  The Portfolio will also be affected favorably or unfavorably by exchange
control regulations or changes in the exchange rates between foreign currencies
and the U.S. dollar. Changes in currency exchange rates will influence the value
of the Fund's shares, and also may affect the value of dividends and interest
earned by the Portfolio and gains and losses realized by the Portfolio.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
   
  LOWER QUALITY DEBT SECURITIES. The Portfolio may invest up to 20%, of its
total assets in below investment grade debt securities, that is, rated below BBB
by Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or
Baa by Moody's Investors Service, Inc. ("Moody's") or, if unrated, deemed to be
of equivalent quality in the judgment of the Sub-advisor. Such investments
involve a high degree of risk. However, the Portfolio will not invest in debt
securities that are in default as to payment of principal and interest.
    
 
  Debt rated Baa by Moody's is considered by Moody's to have speculative
characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B,
Caa, Ca or C by Moody's is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such lower quality debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Debt rated C
by Moody's or S&P is the lowest rated debt that is not in default as to
principal or interest, and such issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Lower
quality debt securities are also generally considered to be subject to greater
risk than securities with higher ratings with regard to a deterioration of
general economic conditions. These lower quality debt securities are the
equivalent of high yield, high risk bonds, commonly known as "junk bonds."
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's
 
                                       10
<PAGE>   787
 
current financial condition may be better or worse than a rating indicates. See
"Description of Debt Ratings" in the Statement of Additional Information for a
full discussion of Moody's and S&P's ratings.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities of corporate issuers frequently have call or
buy-back features which would permit an issuer to call or repurchase the
security from the Portfolio. If an issuer exercises these provisions in a
declining interest rate market, the Portfolio may have to replace the security
with a lower yielding security, resulting in a decreased return for investors.
In addition, the Portfolio may have difficulty disposing of lower quality
securities because they may have a thin trading market. There may be no
established retail secondary market for many of these securities, and the
Portfolio anticipates that such securities could be sold only to a limited
number of dealers or institutional investors. The lack of a liquid secondary
market also may have an adverse impact on market prices of such instruments and
may make it more difficult for the Portfolio to obtain accurate market
quotations for purposes of valuing its investments. The Portfolio may also
acquire lower quality debt securities during an initial underwriting or which
are sold without registration under applicable securities laws. Such securities
involve special considerations and risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Portfolio may invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic recession. The Portfolio may also incur additional expenses to the
extent it is required to seek recovery upon a default in the payment of
principal or interest on portfolio holdings, and the Portfolio may have limited
legal recourse in the event of a default.
 
   
  ILLIQUID SECURITIES. The Portfolio may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." The Sub-advisor believes that carefully selected investments in
joint ventures, cooperatives, partnerships and state enterprises which are
illiquid (collectively, "Special Situations") could enable the Portfolio to
achieve capital appreciation substantially exceeding the appreciation the
Portfolio would realize if it did not make such investments. However, in order
to attempt to limit investment risk, the Portfolio will invest no more than 5%
of its total assets in Special Situations.
    
 
   
  Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at a price
lower than similar securities that are liquid.
    
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Portfolio is
authorized to enter into options, futures and forward currency transactions, the
Portfolio might not enter into any such transactions. Options, futures and
foreign currency transactions involve certain risks, which include: (1)
dependence on the Sub-advisor's ability to predict movements in the prices of
individual securities, fluctuations in the general securities markets or in the
appropriate market sector and movements in interest rates and currency markets;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, forward contracts, futures contracts or options thereon and
movements in the price of the currency or security hedged or used for cover; (3)
the fact that skills and techniques needed to trade options, futures contracts
and options thereon or to use forward currency contracts are different from
those needed to select the securities in which the Portfolio invests; (4) lack
of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time; (5) the
possible loss of principal under certain conditions; and (6) the possible
inability of the Portfolio to purchase or sell a portfolio security at a time
when it would otherwise be favorable for it to do so, or the possible need for
the Portfolio to sell a security at a disadvantageous time, due to the need for
the Portfolio to maintain "cover" or to set aside securities in connection with
hedging transactions.
    
 
  INVESTING IN SMALLER COMPANIES. While the Portfolio's holdings normally will
include securities of established suppliers of traditional products and
services, the Portfolio may invest in smaller companies which can benefit from
the development of new products and services. These smaller companies may
present greater opportunities for capital appreciation, but may also involve
greater risks than large, established issuers. Such smaller companies may have
limited product lines, markets or financial resources, and their securities may
trade less frequently and in more limited volume than the securities of larger,
more established companies. As a result, the prices of the securities of such
smaller companies may fluctuate to a greater degree than the prices of the
securities of other issuers.
 
                                       11
<PAGE>   788
 
- --------------------------------------------------------------------------------
 
MANAGEMENT
 
   
  The Trust's Board of Trustees and the Board of Trustees of the Portfolio have
overall responsibility for the operation of the Fund and the Portfolio,
respectively. The Boards have approved all significant agreements between the
Trust and the Portfolio on the one side and persons or companies furnishing
services to the Fund and the Portfolio on the other, including the investment
management and administration agreement with AIM, the investment sub-advisory
and sub-administration agreement between AIM and the Sub-advisor, the agreements
with AIM Distributors regarding distribution of the Fund's shares, the custody
agreement and the transfer agency agreement. The day-to-day operations of the
Fund and the Portfolio are delegated to the officers of the Trust and the
Portfolio, subject always to the investment objective and policies of the Fund
and the Portfolio and to the general supervision of the Boards. See "Trustees
and Executive Officers" in the Statement of Additional Information for
information on the Trust's and the Portfolio's Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the investment managers to the Fund and the Portfolio include,
but are not limited to, determining the composition of the investment portfolio
of the Portfolio and placing orders to buy, sell or hold particular securities.
In addition, AIM and the Sub-advisor provide the following administration
services to the Portfolio and the Fund: furnishing corporate officers and
clerical staff; providing office space, services and equipment; and supervising
all matters relating to the Portfolio's and the Fund's operation.
    
 
   
  For administration services, the Fund pays AIM administration fees computed
daily and payable monthly at the annualized rate of 0.25% of the Fund's average
daily net assets. AIM has appointed the Sub-advisor as the Fund's
sub-administrator. In addition, the Fund bears its pro rata portion of the
investment management and administration fees paid by its corresponding
Portfolio to AIM and the Sub-advisor. The Portfolio pays AIM a fee, based on the
Portfolio's average daily net assets at the annualized rate of 0.725% on the
first $500 million, 0.70% on the next $500 million, 0.675% on the next $500
million and 0.65% on all amounts thereafter. Out of its aggregate fees payable
by the Fund and Portfolio, AIM pays the Sub-advisor sub-advisory and
sub-administration fees equal to 40% of the aggregate fees AIM receives from the
Fund and Portfolio. The investment management and administration fees paid by
the Fund and the Portfolio are higher than those paid by most mutual funds. The
Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM Distributors or
other agents. AIM has undertaken to limit the Fund's expenses (exclusive of
brokerage commissions, taxes, interest and extraordinary expenses) to the annual
rate of 1.50% of the average daily net assets of the Fund's Advisor Class
shares.
    
 
   
  The Sub-advisor also serves as the Fund's and the Portfolio's pricing and
accounting agent. For these services the Sub-advisor receives a fee consisting
of 0.03% to the first $5 billion of assets, and 0.02% to the assets in excess of
$5 billion, of the AIM Funds that are sub-advised by the Sub-advisor (other than
AIM Eastern Europe Fund). Each of these funds, including the Fund and the
Portfolio, pays an amount based upon its relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Portfolio pursuant to a master investment management
and administration services agreement (the "Advisory Agreement"). AIM was
organized in 1976 and, together with its subsidiaries, manages or advises
approximately 90 investment company portfolios encompassing a broad range of
investment objectives. The Sub-advisor, 50 California Street, 27th Floor, San
Francisco, California 94111, and 1166 Avenue of the Americas, New York, New York
10036, serves as the sub-advisor to the Portfolio pursuant to an investment
sub-advisory and sub-administration agreement. Prior to May 29, 1998, the
Sub-advisor was known as Chancellor LGT Asset Management, Inc. On May 29, 1998,
Liechtenstein Global Trust AG ("LGT"), the former indirect parent organization
of the Sub-advisor, consummated a purchase agreement with AMVESCAP PLC pursuant
to which AMVESCAP PLC acquired LGT's Asset Management Division, which included
the Sub-advisor and certain other affiliates. As a result of this transaction,
the Sub-advisor is now an indirect wholly owned subsidiary of AMVESCAP PLC.
Prior to the sale, the Sub-advisor and its worldwide asset management affiliates
provided investment management and/or administrative services to institutional,
corporate and individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Portfolio, the Sub-advisor employs a
team approach, taking advantage of its investment resources around the world.
    
 
                                       12
<PAGE>   789
 
  The investment professional primarily responsible for the portfolio management
of the Portfolio is as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
     NAME/OFFICE            THE PORTFOLIO                         PAST FIVE YEARS
     -----------         --------------------                   -------------------
<S>                     <C>                      <C>
Brian T. Nelson         Portfolio Manager        Portfolio Manager for the Sub-advisor since
San Francisco           since 1997               September 1997. Senior Equity Research Analyst for
                                                 the Sub-advisor from October 1994 to September
                                                 1997. Employed by Chancellor Capital Management,
                                                 Inc., a predecessor of the Sub-advisor, from 1994
                                                 to October 1996. Equity Research Analyst and
                                                 Co-Portfolio Manager for Franklin Resources, Inc.
                                                 (San Mateo, CA) from 1988 to 1994.
</TABLE>
    
 
                             ---------------------
 
   
  In placing orders for the Portfolio's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions may be executed through
affiliates of AIM or the Sub-advisor. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Funds will bear directly and could result in the realization of
net capital gains which would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement (the
"Distribution Agreement"), with AIM Distributors, a registered broker-dealer and
a wholly owned subsidiary of AIM, to act as the distributor of the Advisor Class
shares of the Fund. Certain Trustees and officers of the Trust are affiliated
with AIM Distributors.
    
 
  The Distribution Agreement provides AIM Distributors with the exclusive right
to distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
 
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST AND THE PORTFOLIO
    
 
   
  ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business
trust on May 7, 1998. On September 8, 1998, the Company acquired the assets of
and assumed the liabilities of AIM Investment Funds, Inc., a Maryland
corporation. The Fund constitutes one of the thirteen separate and distinct
series or portfolios of the Trust. From time to time, the Company may establish
other funds, each corresponding to a distinct investment portfolio and a
distinct series of the Trust's shares of beneficial interest. Shares of each
fund are entitled to one vote per share (with proportional voting for fractional
shares) and are freely transferable. Shareholders have no preemptive rights.
Other than the automatic conversion of Class B shares to Class A shares, there
are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Company may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
 
  ORGANIZATION OF THE PORTFOLIO. The Portfolio is organized as a subtrust of
Global Investment Portfolio, a Delaware business trust. Under Delaware law, the
Fund and other entities investing in the Portfolio enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances an investor in
the Portfolio may be held liable for the Portfolio's obligations. However, the
Agreement and Declaration of Trust of the Global Investment Portfolio disclaims
shareholder liability for acts or obligations of the Portfolio and requires that
notice of such disclaimer be given in each agreement, obligation or instrument
entered into or executed by the Portfolio or a trustee. The Agreement and
Declara-
 
                                       13
<PAGE>   790
 
tion of Trust also provides for indemnification from the Portfolio property for
all losses and expenses of any shareholder held personally liable for the
Portfolio's obligations. Thus the risk of an investor incurring financial loss
on account of such liability is limited to circumstances in which the Portfolio
itself would be unable to meet its obligations and where the other party was
held not to be bound by the disclaimer.
 
  Whenever the Fund is requested to vote on any proposal of the Portfolio, the
Fund will hold a meeting of the Fund's shareholders and will cast its vote as
instructed by its shareholders. Shares for which no voting instructions are
received will be voted in the same proportion as the shares for which voting
instructions are received.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust, to the
Fund and to the Portfolio.
    
   
    
 
                                       14
<PAGE>   791
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
                  TO THE AIM FAMILY OF FUNDS--Register Mark--
                            FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several of
which offer Advisor Class shares. Only Advisor Class shares are offered through
this Prospectus. Advisor Class shares are available from the following funds
(collectively, the "Advisor Class Funds"):
 
   
<TABLE>
            <S>                                           <C>
            AIM BASIC VALUE FUND                          AIM GLOBAL INFRASTRUCTURE FUND
            AIM DEVELOPING MARKETS FUND                   AIM GLOBAL RESOURCES FUND
            AIM DOLLAR FUND                               AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM EMERGING MARKETS FUND                     AIM GLOBAL TRENDS FUND
            AIM EMERGING MARKETS DEBT FUND                AIM INTERNATIONAL GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM JAPAN GROWTH FUND
            AIM GLOBAL CONSUMER PRODUCTS                  AIM LATIN AMERICAN GROWTH FUND
              AND SERVICES FUND                           AIM MID CAP EQUITY FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM NEW PACIFIC GROWTH FUND
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM SMALL CAP GROWTH FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM STRATEGIC INCOME FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WORLDWIDE GROWTH FUND
</TABLE>
    
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
 
  HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through Financial
Advisers (as defined herein) who have entered into agreements with A I M
Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor Class
shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
 
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment for
Advisor Class shares is $500.
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
                                       A-1
<PAGE>   792
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Advisor Class shares of any Advisor Class Funds not named on the cover of this
Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                                                     Shareholder Name, Shareholder Account Number 
                   OBI:                              (70 character limit)
</TABLE>
 
  It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
 
  HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
  In addition to the Advisor Class Funds, the AIM Funds consist of the following
funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR
LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND,
AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BLUE
CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION
FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED MATURITY TREASURY
FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM SELECT GROWTH FUND,
AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM VALUE FUND and AIM
WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM
LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with the Advisor Class
Funds, the "Multiple Class Funds." For information on purchasing any of the AIM
Funds and to receive a prospectus, please call (800) 347-4246. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
  Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
 
  Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee'
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares. Investors in wrap fee programs and
advisory accounts may only purchase Advisor Class shares through Financial
Advisers who have entered into agreements with AIM Distributors. Investors may
be charged a fee by their agents or brokers for effecting transactions in
Advisor Class shares.
 
  AIM Distributors may, from time to time, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives
 
                                       A-2
<PAGE>   793
 
and their families to places within or outside the United States. The total
amount of such additional bonus payments or other consideration shall not exceed
0.25% of the public offering price of the shares sold. Any such bonus or
incentive programs will not change the price paid by investors for the purchase
of the applicable AIM Fund's shares or the amount that any particular AIM Fund
will receive as proceeds from such sales. Dealers may not use sales of the AIM
Funds' shares to qualify for any incentives to the extent that such incentives
may be prohibited by the laws of any state.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND uses
the amortized cost method of valuing the securities it holds and rounds its per
share net asset value to the nearest whole cent, it is anticipated that the net
asset value of the shares of that fund will remain constant at $1.00 per share.
However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00 net
asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
                                       A-3
<PAGE>   794
 
- --------------------------------------------------------------------------------
 
   
SPECIAL PLANS
    
 
  Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
 
   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance to $5,000 to
establish and maintain an allocation across a range of Advisor Class Funds. The
Program automatically rebalances holdings of Advisor Class Funds to the
established allocation on a periodic basis. Under the Program, a shareholder may
predesignate, on a percentage basis, how the total value of his or her holdings
in a minimum of two, and a maximum of ten, Advisor Class Funds ("Personal
Portfolio") is to be rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more Advisor Class Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other Advisor Class Funds in the
shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the
Advisor Class Fund(s) in a shareholder's Personal Portfolio have appreciated
during a rebalancing period, the Program will result in shares of Advisor Class
Fund(s) that have appreciated most during the period being exchanged for shares
of Advisor Class Fund(s) that have appreciated least. SUCH EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends, Distributions and Tax
Matters -- Dividends and Distributions." Participation in the Program does not
assure that a shareholder will profit from purchases under the Program nor does
it prevent or lessen losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Advisor Class Fund would be 2%
or less. In predesignating percentages, shareholders must use whole percentages
and totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an Advisor Class Fund's
shares. The AIM Funds and AIM Distributors reserve the right to modify, suspend,
or terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which Advisor
Class Funds or what allocation percentages are assigned to the Program, unless
canceled or changed in writing and received by the Transfer Agent in good order
at least five business days prior to the rebalancing date. Certain
dealers/financial institutions may charge a fee for establishing accounts
relating to the Program. Investors should contact their dealers/financial
institutions or AIM Distributors for more information.
    
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the Advisor
Class Funds may participate in an exchange privilege as described below. AIM
Distributors acts as distributor for the Advisor Class Funds which represent a
range of different investment objectives and policies.
 
  Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
 
  Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
 
  An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor
 
                                       A-4
<PAGE>   795
 
Class Fund acquired through exchange must be qualified for sale in the state in
which the shareholder resides; (c) the exchange must be made between accounts
having identical registrations and addresses; (d) the full amount of the
purchase price for the shares being exchanged must have already been received by
the fund; (e) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or Form
W-9 (certifying exempt status) must have been received by the fund; (f) newly
acquired shares (through either an initial or subsequent investment) are held in
an account for at least ten business days, and all other shares are held in an
account for at least one day, prior to the exchange; and (g) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the Advisor Class Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
  Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but under unusual market
conditions such purchases may be delayed for up to five business days if it is
determined that an Advisor Class Fund would be materially disadvantaged by an
immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into an Advisor Class Fund that declares daily dividends ("Dividends,
Distributions and Tax Matters -- Dividends and Distributions," below), and the
release of the exchange proceeds is delayed for the foregoing five-day period,
such shareholder will not begin to accrue dividends until the sixth business day
after the exchange. Advisor Class shares purchased by check may not be exchanged
until it is determined that the check has cleared, which may take up to ten
business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. A shareholder may give exchange information to his Financial
Adviser. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the Advisor Class Funds. AIM Distributors reserves the right to impose
conditions on dealers or investment advisors who make telephone exchanges of
shares of the Advisor Class Funds, including the condition that any such dealer
or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/financial institutions may charge service fees for handling
repurchase transactions.
 
                                       A-5
<PAGE>   796
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the Advisor
Class Funds are redeemed at their net asset value next computed after a request
for redemption in proper form (including signature guarantees and other required
documentation for written redemptions) is received by the Transfer Agent or
certain financial institutions (or their designees) who are authorized to accept
redemption orders on behalf of the AIM Funds, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. Orders for the redemption of Advisor Class shares received on any
business day of an AIM Fund will be confirmed at the price determined as of the
close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the proceeds are to be sent to
the address of record. These requirements may be waived or modified upon notice
to shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such 
    

                                       A-6
<PAGE>   797
   

as certain domestic banks, credit unions, securities dealers, or securities
exchanges. The Transfer Agent will also accept signatures with either: (1) a
signature guaranteed with a medallion stamp of the STAMP Program, or (2) a
signature guaranteed with a medallion stamp of the NYSE Medallion Signature
Program, provided that in either event, the amount of the transaction involved
does not exceed the surety coverage amount indicated on the medallion. For
information regarding whether a particular institution or organization qualifies
as an "eligible guarantor institution," an investor should contact the Client
Services Department of AFS.
    
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
  The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
                                       A-7
<PAGE>   798
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                    DISTRIBUTIONS          DISTRIBUTIONS
                                                                        OF NET                 OF NET
                                     DIVIDENDS FROM                    REALIZED               REALIZED
                                     NET INVESTMENT                   SHORT-TERM              LONG-TERM
FUND                                     INCOME                      CAPITAL GAINS          CAPITAL GAINS
- ----                                 --------------                  -------------          -------------
<S>                                  <C>                             <C>                     <C>
AIM BASIC VALUE FUND...............  declared and paid annually         annually                annually
AIM DEVELOPING MARKETS FUND........  declared and paid annually         annually                annually
AIM DOLLAR FUND....................  declared daily; paid monthly       annually                annually
AIM EMERGING MARKETS FUND..........  declared and paid annually         annually                annually
AIM EMERGING MARKETS DEBT FUND.....  declared and paid monthly          annually                annually
AIM EUROPE GROWTH FUND.............  declared and paid annually         annually                annually
AIM GLOBAL CONSUMER PRODUCTS AND
  SERVICES FUND....................  declared and paid annually         annually                annually
AIM GLOBAL FINANCIAL SERVICES
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL GOVERNMENT INCOME
  FUND.............................  declared and paid monthly          annually                annually
AIM GLOBAL GROWTH & INCOME FUND....  declared and paid quarterly        annually                annually
AIM GLOBAL HEALTH CARE FUND........  declared and paid annually         annually                annually
AIM GLOBAL INFRASTRUCTURE FUND.....  declared and paid annually         annually                annually
AIM GLOBAL RESOURCES FUND..........  declared and paid annually         annually                annually
AIM GLOBAL TELECOMMUNICATIONS
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL TRENDS FUND.............  declared and paid annually         annually                annually
AIM INTERNATIONAL GROWTH FUND......  declared and paid annually         annually                annually
AIM JAPAN GROWTH FUND..............  declared and paid annually         annually                annually
AIM LATIN AMERICAN GROWTH FUND.....  declared and paid annually         annually                annually
AIM MID CAP EQUITY FUND............  declared and paid annually         annually                annually
AIM NEW PACIFIC GROWTH FUND........  declared and paid annually         annually                annually
AIM SMALL CAP GROWTH FUND..........  declared and paid annually         annually                annually
AIM STRATEGIC INCOME FUND..........  declared and paid monthly          annually                annually
AIM WORLDWIDE GROWTH FUND..........  declared and paid annually         annually                annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
 
  Dividends on Advisor Class shares of an Advisor Class Fund are expected to be
higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
                                       A-8
<PAGE>   799
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares. With respect to tax-exempt shareholders,
dividends and distributions from the AIM Funds are not subject to federal income
taxation to the extent permitted under the applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the 
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    

  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
   
  TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS DEBT FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM MID CAP
EQUITY FUND, AIM SMALL CAP GROWTH FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL
TAX INFORMATION. Certain states exempt from income taxes dividends paid by
mutual funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
    
 
                                       A-9
<PAGE>   800
   
  AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
    
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each Advisor Class Fund's transfer agent and
dividend payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-10
<PAGE>   801
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                   GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
        ACCOUNT TYPE                    NUMBER OF:                     ACCOUNT TYPE                   NUMBER OF:
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary

      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application

      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors

      Legal Guardian          Ward, Minor or
                              Incompetent

      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
</TABLE>
- --------------------------------------------------------------------------------
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   802
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   803
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
 
   
GIF-PRO-2
    
<PAGE>   804
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
ADVISOR CLASS OF
    
 
   
AIM GLOBAL RESOURCES FUND
    
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
PROSPECTUS
SEPTEMBER 8, 1998
 
   
This Prospectus contains information about AIM GLOBAL RESOURCE FUND (the
"Fund"), which is one of several series investment portfolios comprising AIM
Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a diversified portfolio which seeks long-term capital
growth by investing all of its investable assets in the AIM Global Resources
Portfolio (the "Portfolio"), which, in turn, invests primarily in equity
securities of companies throughout the world that own, explore or develop
natural resources and other basic commodities or supply goods and services to
such companies. The Portfolio's investment objective is identical to that of the
Fund. The investment experience of the Fund will correspond directly with the
investment experience of the Portfolios.
    
 
   
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or by calling (800)
347-4246. The SEC maintains a Web site at http://www.sec.gov that contains the
Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   805
 
- --------------------------------------------------------------------------------
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     6
  Investment Program...................     6
  Risk Factors.........................     9
  Management...........................    12
  Organization of the Trust and the
     Portfolio.........................    13
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
    
   
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-4
  Exchange Privilege...................   A-4
  How to Redeem Shares.................   A-5
  Determination of Net Asset Value.....   A-7
  Dividends, Distributions and Tax
     Matters...........................   A-8
  General Information..................  A-10
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND AND THE PORTFOLIO
    
 
  The Fund is a diversified series of the Trust. The Portfolio is a diversified
series of the Portfolio.
 
  INVESTMENT OBJECTIVE. The Fund seeks long-term capital growth.
 
  PRINCIPAL INVESTMENTS. The Fund invests all of its investable assets in the
Portfolio, which, in turn, invests primarily in equity securities of companies
throughout the world that own, explore or develop natural resources and other
basic commodities or supply goods and services to such companies.
 
   
  INVESTMENT MANAGERS. The Portfolio is managed by A I M Advisors, Inc. ("AIM")
and is sub-advised and sub-administered by INVESCO (NY), Inc. (the
"Sub-advisor"). AIM and the Sub-advisor and their worldwide asset management
affiliates provide investment management and/or administrative services to
institutional, corporate and individual clients around the world. AIM and the
Sub-advisor are both indirect wholly owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC and its subsidiaries are an independent investment management group
that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing
presence in Asia. AIM was organized in 1976 and, together with its subsidiaries,
currently advises approximately 90 investment company portfolios.
    
 
   
  PURCHASING SHARES. Advisor Class shares are offered through this Prospectus to
(a) trustees or other fiduciaries purchasing shares for employee benefit plans
which are sponsored by organizations which have at least 1,000 employees; (b)
any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment adviser has investment
discretion over such account, and (ii) the account holder pays such person as
compensation for its advice and other services an annual fee of at least 0.50%
on the assets in the account; (c) any account with assets of a least $10,000 if
(i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the
assets in the account; (d) accounts advised by the Sub-advisor or one of the
companies formerly affiliated with the Asset Management Division of
Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the funds in The AIM Family of Funds that are sub-advised
by the Sub-advisor ("AIM Funds") on May 29, 1998; (e) any of the companies
composing or affiliated with AMVESCAP PLC; and (f) AIM Global Trends Fund.
Pursuant to a separate prospectus, the Fund also offers Class A and Class B
shares, which represent interests in the Fund. The Class A and Class B shares
have different distribution arrangements.
    
 
  Initial investments in Advisor Class shares must be at least $500 and
additional investments must be at least $50. The distributor of the Advisor
Class shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares."
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds").
Advisor Class shares of the Fund may be exchanged for Advisor Class shares of
certain funds in The AIM Family of Funds in the manner and subject to the
policies and charges set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Advisor Class shareholders of the Fund may redeem all or a
portion of their shares at the Fund's net asset value on any business day. See
"How to Redeem Shares."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be rein-
    
 
                                        2
<PAGE>   806
 
vested at net asset value without payment of a sales charge in the Fund's shares
or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters."
 
  RISK FACTORS. There is no assurance that the Fund or the Portfolio will
achieve its investment objective. The Fund's net asset value will fluctuate,
reflecting fluctuations in the market value of the Portfolio's portfolio
holdings. The Portfolio's policy of concentrating its investments in companies
in the natural resources industries may cause the Fund's net asset value to
fluctuate more than if it invested in a greater number of industries.
 
  The Portfolio may invest in foreign securities. Investments in foreign
securities involve risks relating to political and economic developments abroad
and the differences between the regulations to which U.S. and foreign issuers
are subject. Individual foreign economies also may differ favorably or
unfavorably from the U.S. economy. Changes in foreign currency exchange rates
will affect the Fund's net asset value, earnings and gains and losses realized
on sales of securities. Securities of foreign companies may be less liquid and
their prices more volatile than those of securities of comparable U.S.
companies.
 
  The Portfolio may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs.
 
   
  The Portfolio may invest up to 20% of its total assets in below investment
grade debt securities. Investments of this type are subject to a greater risk of
loss of principal and interest. See "Investment Program" and "Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   807
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Advisor Class shares of the Fund are reflected in the following table(1):
 
<TABLE>
<S>                                                            <C>
Shareholder Transaction Costs:
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................   None
  Sales charges on reinvested distributions to
     shareholders...........................................   None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........   None
  Redemption charges........................................   None
  Exchange fees.............................................   None
Annual Fund Operating Expenses(2): (as a % of average net
  assets)
  Investment management and administration fees.............   0.98%
  12b-1 distribution and service fees.......................   None
  Other expenses (after reimbursements).....................   0.52%
                                                               ----
          Total Fund Operating Expenses.....................   1.50%
                                                               ====
</TABLE>
 
   
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Fund.
    
 
   
(2)Expenses are based on the Fund's fiscal year ended October 31, 1997 restated
   to reflect AIM's undertaking to limit the Fund's expenses (exclusive of
   brokerage commissions, taxes, interest and extraordinary expenses) to the
   annual rate of 1.50% of the average daily net assets of the Fund's Advisor
   Class shares. AIM has voluntarily agreed to continue this limitation through
   May 31, 2000. Without reimbursements, "Other Expenses" and "Total Fund
   Operating Expenses" would have been 0.65% and 1.63%, respectively, for
   Advisor Class Shares of the Fund. "Other expenses" include custody, transfer
   agency, legal, audit and other operating expenses. See "Management" herein
   and the Statement of Additional Information for more information. Investors
   purchasing Advisor Class shares through financial planners, trust companies,
   bank trust departments or registered investment advisers, or under a "wrap
   fee" program, will be subject to additional fees charged by such entities or
   by the sponsors of such programs. Where any account advised by one of the
   companies composing or affiliated with AMVESCAP PLC invests in Advisor Class
   shares of the Fund, such account shall not be subject to duplicative advisory
   fees.
    
 
   The Board of Trustees of the Trust believes that the aggregate per share
   expenses of the Fund and its Portfolio will be approximately equal to the
   expenses the Fund would incur if its assets were invested directly in the
   type of securities being held by its Portfolio.
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                    1 YEAR    3 YEARS    5 YEARS    10 YEARS
                                                    ------    -------    -------    --------
<S>                                                 <C>       <C>        <C>        <C>
Advisor Class Shares..............................   $15        $48        $82        $180
</TABLE>
    
 
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S AND THE PORTFOLIO'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND
INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE
ASSUMPTION IN THE HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY
REGULATION OF THE SEC APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS
NOT A PREDICTION OF AND DOES NOT REPRESENT THE FUND'S OR THE PORTFOLIO'S
PROJECTED OR ACTUAL PERFORMANCE.
 
                                        4
<PAGE>   808
 
- --------------------------------------------------------------------------------
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The tables below provide condensed financial information concerning income and
capital changes for one Advisor Class share of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statements and notes, for the
fiscal year ended October 31, 1997, have been audited by PricewaterhouseCoopers
LLP, independent accountants, whose report thereon also is included in the
Statement of Additional Information. The unaudited financial statements and
notes, for the semi-annual period ended April 30, 1998, are also included in the
Statement of Additional Information.
    
 
   
                           AIM GLOBAL RESOURCES FUND
    
   
                  (FORMERLY GT GLOBAL NATURAL RESOURCES FUND)
    
 
   
<TABLE>
<CAPTION>
                                                                                  ADVISOR CLASS+
                                                              -------------------------------------------------------
                                                                SIX MONTHS          YEAR ENDED
                                                                  ENDED            OCTOBER 31,         JUNE 1, 1995
                                                              APRIL 30, 1998    ------------------          TO
                                                              (UNAUDITED)(d)    1997(d)    1996(d)   OCTOBER 31, 1995
                                                              --------------    -------    -------   ----------------
<S>                                                           <C>               <C>        <C>       <C>
Per Share Operating Performance:
Net asset value, beginning of period........................     $ 20.80        $ 17.47    $ 11.47       $ 11.45
                                                                 -------        -------    -------       -------
Income from investment operations:
  Net investment income (loss)..............................       (0.06)*        (0.14)     (0.17)         0.11*
  Net realized and unrealized gain (loss) on investments....       (4.36)          4.08       6.28         (0.09)
                                                                 -------        -------    -------       -------
Net increase (decrease) from investment operations..........       (4.42)          3.94       6.11          0.02
                                                                 -------        -------    -------       -------
Distributions:
  From net investment income................................          --             --      (0.10)           --
  From net realized gain on investments.....................       (0.68)         (0.61)     (0.01)           --
                                                                 -------        -------    -------       -------
        Total distributions.................................       (0.68)         (0.61)     (0.11)           --
                                                                 =======        =======    =======       =======
Net asset value, end of period..............................     $ 15.70        $ 20.80    $ 17.47       $ 11.47
                                                                 =======        =======    =======       =======
Total investment return (c).................................      (21.76)%(b)     23.23%     53.76%         0.17%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)........................     $ 7,337        $14,886    $ 5,502       $    95
Ratio of net investment income (loss) to average net assets:
  With expense reductions and reimbursement from the
    Sub-advisor.............................................       (0.64)%(a)     (0.91)%    (1.05)%        0.91%(a)
  Without expense reductions and reimbursement from the
    Sub-advisor.............................................       (0.82)%(a)     (1.01)%    (1.15)%       (0.19)%(a)
Ratio of operating expenses to average net assets:
  With expense reductions and reimbursement from the
    Sub-advisor.............................................        1.49%(a)       1.53%      1.70%         1.87%(a)
  Without expense reductions and reimbursement from the
    Sub-advisor.............................................        1.67%(a)       1.63%      1.80%         2.97%(a)
Portfolio turnover rate++...................................         197%(a)        321%        94%           87%
Average commission rate per share paid on portfolio
  transactions ++...........................................     $0.0245        $0.0112    $0.0243           N/A
</TABLE>
    
 
- ---------------
 
   
(a)  Annualized.
    
 
   
(b)  Not annualized.
    
 
   
(c)  Total investment return does not include sales charges.
    
 
   
(d)  These selected per share data were calculated based upon average shares
     outstanding during the period.
    
 
   
*    Before reimbursement by the Sub-advisor, the net investment income per
     share would have been reduced by $0.01 for the six months ended April 30,
     1998 and $0.12 for the period ended Oct. 31, 1995.
    
 
   
+    Commencing June 1, 1995, the Fund began offering Advisor Class shares.
    
 
   
++   Portfolio turnover and average commission rates are calculated on the basis
     of the Fund as a whole without distinguishing among the classes of shares
     issued. The Fund invests only in the AIM Global Resources Portfolio and
     does not engage in securities transactions. Accordingly, the portfolio
     turnover and average commission rates presented are for the AIM Global
     Resources Portfolio.
    
 
   
N/A  Not Applicable.
    
                             ---------------------
 
   
<TABLE>
<CAPTION>
                                                                                                AVERAGE
                                                                                                MONTHLY
                                                                          AVERAGE              NUMBER OF         AVERAGE AMOUNT
                                                   AMOUNT OF DEBT     AMOUNT OF DEBT      REGISTRANT'S SHARES     OF DEBT PER
                                                   OUTSTANDING AT       OUTSTANDING           OUTSTANDING         SHARE DURING
YEAR ENDED                                         END OF PERIOD     DURING THE PERIOD     DURING THE PERIOD       THE PERIOD
- ----------                                         --------------    -----------------    -------------------    --------------
<S>                                                <C>               <C>                  <C>                    <C>
Six months ended April 30, 1998.................     $       --          $331,332              7,240,441            $ 0.046
October 31, 1997................................     $4,670,000          $999,474              7,868,612            $0.1270
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed on a daily
basis.
    
 
                                        5
<PAGE>   809
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
 
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVES. The Fund's investment objective is long-term capital
growth. It seeks its objective by investing all of its investable assets in the
Portfolio, which, in turn, invests primarily in equity securities of companies
throughout the world that own, explore or develop natural resources and other
basic commodities or supply goods and services to such companies. The
Portfolio's investment objective is identical to that of the Fund. There can be
no assurance that the Fund or Portfolio will achieve its investment objectives.
    
 
   
  INVESTMENT POLICIES. At least 65% of the Portfolio's total assets will
normally be invested in common stock and preferred stock, and warrants to
acquire such securities, issued by natural resource companies. A "natural
resource" company is an entity in which (i) at least 50% of either the revenues
or earnings was derived from natural resource activities, or (ii) at least 50%
of the assets was devoted to such activities, based upon the company's most
recent fiscal year. The remainder of the Portfolio's assets may be invested in
debt securities issued by natural resource companies and/or equity and debt
securities of companies outside of the natural resource industries, which, in
the opinion of the Sub-advisor, stand to benefit from developments in the
natural resource industries.
    
 
   
  Examples of natural resource companies include those which own, explore or
develop: energy sources (such as oil, gas and coal); ferrous and non-ferrous
metals (such as iron, aluminum, copper, nickel, zinc and lead), strategic metals
(such as uranium and titanium) and precious metals (such as gold, silver and
platinum); chemicals; forest products (such as timber, coated and uncoated tree
sheet, pulp and newsprint); other basic commodities (such as foodstuffs);
refined products (such as chemicals and steel) and service companies that sell
to these producers and refiners; and other products and services, which, in the
Sub-advisor's opinion are significant to the ownership and development of
natural resources and other basic commodities.
    
 
   
  The Sub-advisor believes that the liberalization of formerly socialist
economies will bring about dramatic changes in both the supply and demand for
natural resources. In addition, rapid industrialization in developing countries
of Asia and Latin America is generating new demands for industrial materials
that are affecting world commodities markets. The Sub-advisor believes these
changes are likely to create investment opportunities that benefit from new
sources of supply and/or from changes in commodities prices.
    
 
   
  The Sub-advisor also believes that investments in natural resource industries
offer an opportunity to protect wealth against the capital-eroding effects of
inflation. During periods of accelerating inflation or currency uncertainty,
worldwide investment demand for natural resources, particularly precious metals,
tends to increase, and during periods of disinflation or currency stability, it
tends to decrease. The Sub-advisor believes that rising commodity prices and
increasing worldwide industrial production may favorably affect share prices of
natural resource companies, and investments in such companies can offer
excellent opportunities to offset the effects of inflation.
    
 
                                        6
<PAGE>   810
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
   
  SELECTION OF INVESTMENTS AND ASSET ALLOCATION. The Portfolio expects that,
from time to time, a significant portion of its assets may be invested in the
securities of domestic issuers. The industry represented in the Portfolio,
however, is a global industry with significant, growing markets outside of the
United States. A sizeable proportion of the companies which comprise the natural
resources industries are headquartered outside of the United States.
    
 
   
  For these reasons, the Sub-advisor believes that a portfolio composed only of
securities of U.S. issuers does not provide the greatest potential for return
from an investment by the Portfolio. The Sub-advisor uses its financial
expertise in markets located throughout the world and the substantial global
resources of AMVESCAP PLC in attempting to identify those countries and
companies then providing the greatest potential for long-term capital
appreciation. In this fashion, the Sub-advisor seeks to enable shareholders to
capitalize on the substantial investment opportunities and the potential for
long-term growth of capital presented by the global natural resources industries
represented in the Portfolio.
    
 
   
  The Sub-advisor allocates the Portfolio's assets among securities of countries
and in currency denominations where opportunities for meeting the Portfolio's
investment objective are expected to be the most attractive. The Portfolio may
invest substantially in securities denominated in one or more currencies. Under
normal conditions, the Portfolio invests in the securities of issuers located in
at least three countries, including the United States; investments in securities
of issuers in any one country, other than the United States, will represent no
more than 50% of the Portfolio's total assets.
    
 
   
  In analyzing specific companies for possible investment, the Sub-advisor
ordinarily looks for several of the following characteristics: above-average per
share earnings growth; high return on invested capital; a healthy balance sheet;
sound financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; development of new technologies; efficient service; pricing
flexibility; strong management; and general operating characteristics that will
enable the companies to compete successfully in their respective markets.
    
 
   
  In assessing companies for the Resources Portfolio, the Sub-advisor will also
evaluate, among other factors, their capabilities for expanded exploration and
production, superior exploration programs and production techniques and
facilities, current inventories, expected production and demand levels and the
potential to accumulate new resources.
    
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. Under a defensive strategy, the Portfolio may invest up to
100% of its total assets in cash (U.S. dollars, foreign currencies or
multinational currency units such as euros) and/or high quality debt securities
or money market instruments of U.S. or foreign issuers. In addition, for
temporary defensive purposes, most or all of the Portfolio's investments may be
made in the United States and denominated in U.S. dollars. To the extent the
Portfolio adopts a temporary defensive posture, it will not be invested so as to
achieve directly its investment objective. In addition, pending investment of
proceeds from new sales of Fund shares or to meet its ordinary daily cash needs,
the Portfolio may hold cash (U.S. dollars, foreign currencies or multinational
currency units) and may invest in foreign or domestic high quality money market
instruments. For a full description of money market instruments, see "Money
Market Instruments" in the "Investment Objectives and Policies" section of the
Statement of Additional Information.
    
 
   
  PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Portfolio in privatizations in appropriate
circumstances. In certain foreign countries, the ability of foreign entities
such as the Portfolio to participate in privatizations may be limited by local
law, or the terms on which the Portfolio may be permitted to participate may be
less advantageous than those for local investors. There can be no assurance that
foreign governments will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
    
 
   
  INVESTMENTS IN OTHER INVESTMENT COMPANIES. The Portfolio may invest up to 10%
of its total assets in other investment companies, some of which may be
investment vehicles or companies that are advised by the Sub-advisor or its
affiliates ("Affiliated Funds"). As a shareholder in an investment company, the
Portfolio would bear its ratable share of that investment company's expenses,
including its advisory and administration fees. At the same time, the Portfolio
would continue to pay its own management fees and other expenses. AIM and the
Sub-advisor will waive their advisory fees to the extent that the Portfolio
invests in an Affiliated Fund.
    
 
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Portfolio
may borrow from banks or may borrow through reverse repurchase agreements and
"roll" transactions in connection with meeting requests for the redemptions of
the Funds' shares. The Portfolio also may borrow up to 5% of its total assets
for temporary or emergency purposes other than to meet redemptions of the Funds'
shares. The Portfolio may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Portfolio's borrowings exceed 5% of
its total assets. Any borrowing by the Portfolio may cause greater fluctuation
in the value of its shares than would be the case if the Portfolio did not
borrow.
 
  A reverse repurchase agreement is a borrowing transaction in which the
Portfolio transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash, and agrees to repurchase the security in the
future at an agreed upon price
 
                                        7
<PAGE>   811
 
which includes an interest component. A "roll" borrowing transaction involves
the Portfolio's sale of securities together with its commitment (for which the
Portfolio may receive a fee) to purchase similar, but not identical, securities
at a future date.
 
   
  SECURITIES LENDING. The Portfolio may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Portfolios to retain ownership of the securities loaned and, at the same
time, enhances the Fund's total return. The Portfolio limits its loans of
portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. While a loan is outstanding, the
borrower must maintain with the Portfolio's custodian collateral consisting of
cash, U.S. government securities or certain irrevocable letters of credit equal
to at least the value of the borrowed securities, plus any accrued interest or
such other collateral as permitted by the Portfolio's investment program and
regulatory agencies, and as approved by the Board. The risks in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delays in receiving additional collateral or in recovery of the
securities and possible loss of rights in the collateral should the borrower
fail financially.
    
 
  WHEN-ISSUED OR FORWARD COMMITMENT SECURITIES. The Portfolio may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Portfolio will
purchase or sell when-issued securities or enter into forward commitments only
with the intention of actually receiving or delivering the securities, as the
case may be. No income accrues on securities that have been purchased pursuant
to a forward commitment or on a when-issued basis prior to delivery to the
Portfolio. If the Portfolio disposes of the right to acquire a when-issued
security prior to its acquisition or disposes of its right to deliver or receive
against a forward commitment, it may incur a gain or loss. At the time the
Portfolio enters into a transaction on a when-issued or forward commitment
basis, the Portfolio will segregate cash or liquid securities equal to the value
of the when-issued or forward commitment securities with its custodian and will
mark to market daily such assets. There is a risk that the securities may not be
delivered and that the Portfolio may incur a loss.
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Portfolio may use
forward currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the portfolio. These instruments are often referred to as
"derivatives," which may be defined as financial instruments whose performance
is derived, at least in part, from the performance of another asset (such as a
security, currency or an index of securities). The Portfolio may enter into such
instruments up to the full value of its portfolio assets. See "Risk
Factors -- Options, Futures and Forward Currency Transactions" herein and
"Options, Futures and Currency Strategies" in the Statement of Additional
Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Portfolio may enter into forward currency contracts for the
purchase or sale of a specified currency at a specified future date. Such
contracts may involve the purchase or sale of a foreign currency against the
U.S. dollar or may involve two foreign currencies. The Portfolio may enter into
forward currency contracts either with respect to specific transactions or with
respect to its portfolio positions. The Portfolio also may purchase and sell put
and call options on currencies, futures contracts on currencies and options on
such futures contracts to hedge against movements in exchange rates.
 
   
  In addition, the Portfolio may purchase and sell put and call options on
equity and debt securities to hedge against the risk of fluctuations in the
prices of securities held by the Portfolio or that the Sub-advisor intends to
include in the Portfolio's holdings. The Portfolio also may purchase and sell
put and call options on stock indexes to hedge against overall fluctuations in
the securities markets generally or in a specific market sector.
    
 
  Further, the Portfolio may sell stock index futures contracts and may purchase
put options or write call options on such futures contracts to protect against a
general stock market decline or a decline in a specific market sector that could
affect adversely the Portfolio's holdings. The Portfolio also may purchase stock
index futures contracts and purchase call options or write put options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisitions. The
Portfolio may use interest rate futures contracts and options thereon to hedge
the debt portion of its portfolio against changes in the general level of
interest rates.
 
  OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of that Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this Prospectus
and in the Statement of Additional Information may be changed by the Trust's
Board of Trustees without shareholder approval. The Fund's policies regarding
concentration and lending, and the percentage of the Fund's assets that may be
committed to borrowing, are fundamental policies and may not be changed without
shareholder approval.
 
  The approval of the Fund and of other investors in the Portfolio, if any, is
not required to change the investment objective, policies or limitations of the
Portfolio, unless otherwise specified. Written notice shall be provided to
shareholders of the Fund thirty days prior to any changes in the Portfolio's
investment objective.
 
                                        8
<PAGE>   812
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's or Portfolio's investment policies or
restrictions.
 
   
  The Portfolio is authorized to engage in Short Sales, although it currently
has no intention of doing so, and may purchase American Depositary Receipts,
American Depositary Shares, Global Depositary Receipts and European Depositary
Receipts. See "Short Sales" and "Depositary Receipts," respectively, in the
"Investment Objectives and Policies" section of the Statement of Additional
Information.
    
 
  OTHER INFORMATION REGARDING THE PORTFOLIO. As previously described, the Fund,
unlike mutual funds that directly acquire and manage their own portfolios of
securities, seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio, which is a separate investment company.
Because the Fund will invest only in the Portfolio, the Fund's shareholders will
acquire only an indirect interest in the investments of the Portfolio.
 
  The Fund may redeem its investment in the Portfolio at any time, if the Board
of Trustees of the Trust determines that it is in the best interests of the Fund
and its shareholders to do so. A change in the Portfolio's investment objective,
policies or limitations that is not approved by the Board or the shareholders of
the Fund could require the Fund to redeem its interest in the Portfolio. Any
such redemption could result in a distribution in kind of portfolio securities
(as opposed to a cash distribution) by the Portfolio. Should such a distribution
occur, the Fund could incur brokerage fees or other transaction costs in
converting such securities to cash. In addition, a distribution in kind could
result in a less diversified portfolio of investments for the Fund and could
adversely affect its liquidity. Upon redemption, the Board would consider what
action might be taken, including the investment of all the investable assets of
the Fund in another pooled investment entity having substantially the same
investment objective as the Fund or the retention by the Fund of its own
investment adviser to manage its assets in accordance with its investment
objective, policies and limitations discussed herein.
 
  In addition to selling an interest therein to the Fund, the Portfolio may sell
interests therein to other non-affiliated investment companies and/or other
institutional investors. All institutional investors in the Portfolio will pay a
proportionate share of the Portfolio's expenses and will invest in the Portfolio
on the same terms and conditions. However, if another investment company invests
any or all of its assets in the Portfolio, it would not be required to sell its
shares at the same public offering price as the Fund and may charge different
sales commissions. Therefore, investors in the Fund may experience different
returns than investors in another investment company that invests exclusively in
the Portfolio. As of the date of this Prospectus, the Fund is the only
institutional investor in the Portfolio.
 
  The Fund may be materially affected by the actions of other large investors,
if any, in the Portfolio. For example, as with all open-end investment
companies, if a large investor were to redeem its interest in the Portfolio, (1)
the Portfolio's remaining investors could experience higher pro rata operating
expenses, thereby producing lower returns and (2) the Portfolio's security
holdings may become less diverse, resulting in increased risk. Institutional
investors in the Portfolio that have a greater pro rata ownership interest in
the Portfolio than the Fund could have effective voting control over the
operation of the Portfolio.
 
- --------------------------------------------------------------------------------
 
   
RISK FACTORS
    
 
  GENERAL. There is no assurance that the Fund or the Portfolio will achieve its
investment objective. The Fund's net asset values will fluctuate reflecting
fluctuations in the market value of the Portfolio's securities. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure, and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. The value of equity securities held by the Portfolio will
fluctuate in response to general market and economic developments, as well as
developments affecting the particular issuers of such securities. In addition,
the value of debt securities held by the Portfolio generally will fluctuate with
changes in the perceived creditworthiness of the issuers of such securities and
interest rates.
 
  Because the Portfolio focuses its investments on the natural resources
industries, an investment in it may be more volatile than that of other
investment companies that do not concentrate their investments in such a manner.
Moreover, the value of the shares of the Fund will be especially susceptible to
factors affecting the natural resources industries in which it focuses.
Accordingly, the Fund should not be considered a complete investment program.
 
  NATURAL RESOURCES INDUSTRIES. Natural resource industries may be subject to
greater political, environmental and other governmental regulation than many
other industries. The nature of such regulation continues to evolve in both the
United States and foreign countries, and changes in governmental policies and
the need for regulatory approvals may have a material effect on the products and
services offered by companies in the natural resource industries. For example,
the exploration, development and distribution of coal, oil and gas in the United
States are subject to significant federal and state regulation, which may affect
rates of return on such investments and the kinds of services that may be
offered. Governmental regulation may also hamper the development of new
technologies.
 
  In addition, many natural resource companies historically have been subject to
significant costs associated with compliance with environmental and other safety
regulations. Further, competition is intense for many natural resource
companies. As a result, many
 
                                        9
<PAGE>   813
 
of these companies may be adversely affected in the future and the value of the
securities issued by such companies may be subject to increased share price
volatility. Such companies may also be subject to irregular fluctuations in
earnings due to changes in the availability of money, the level of interest
rates, and other factors.
 
  The value of securities of natural resource companies will fluctuate in
response to market conditions for the particular natural resources with which
the issuers are involved. The price of natural resources will fluctuate due to
changes in worldwide levels of inventory, and changes, perceived or actual, in
production and consumption. With respect to precious metals, such price
fluctuations may be substantial over short periods of time. In addition, the
value of natural resources may fluctuate directly with respect to various stages
of the inflationary cycle and perceived inflationary trends and are subject to
numerous factors, including national and international politics.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to, the reporting requirements of the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. In addition, certain costs attributable to
foreign investing, such as custody charges, are higher than those attributable
to domestic investing. Securities of some foreign companies are less liquid and
their prices may be more volatile than securities of comparable domestic
companies. The Portfolio's interest and dividends from foreign issuers may be
subject to non-U.S. withholding taxes, thereby reducing the Portfolio's net
investment income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Portfolio, political or social instability, or diplomatic
developments which could affect the Portfolio's investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
 
  The Portfolio may invest in issuers domiciled in "emerging markets." Investing
in emerging market countries involves risks in addition to those risks involved
in foreign investing. Many emerging market countries have experienced high rates
of inflation for many years. In addition, emerging markets generally are
dependent heavily upon international trade and, accordingly, have been and
continue to be affected adversely by trade barriers, exchange controls, managed
adjustments in relative currency values and other protectionist measures imposed
or negotiated by the countries with which they trade. The securities markets of
emerging market countries are substantially smaller, less developed, less liquid
and more volatile than the securities markets of the developed countries. In
addition, issuers in emerging markets typically are subject to a greater degree
of change in earnings and business prospects than issuers in developed
countries.
 
  The Portfolio will also be affected favorably or unfavorably by exchange
control regulations or changes in the exchange rates between foreign currencies
and the U.S. dollar. Changes in currency exchange rates will influence the value
of the Fund's shares, and also may affect the value of dividends and interest
earned by the Portfolio and gains and losses realized by the Portfolio.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
   
  LOWER QUALITY DEBT SECURITIES. The Portfolio may invest up to 20% of its total
assets in below investment grade debt securities, that is, rated below BBB by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or Baa
by Moody's Investors Service, Inc. ("Moody's") or, if unrated, deemed to be of
equivalent quality in the judgment of the Sub-adviser. Such investments involve
a high degree of risk. However, the Portfolio will not invest in debt securities
that are in default as to payment of principal and interest.
    
 
  Debt rated Baa by Moody's is considered by Moody's to have speculative
characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B,
Caa, Ca or C by Moody's is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such lower quality debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Debt rated C
by Moody's or S&P is the lowest rated debt that is not in default as to
principal or interest, and such issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Lower
quality debt securities are also generally considered to be subject to greater
risk than securities with higher ratings with regard to a deterioration of
general eco-
 
                                       10
<PAGE>   814
 
nomic conditions. These lower quality debt securities are the equivalent of high
yield, high risk bonds, commonly known as "junk bonds."
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates. See "Description of Debt Ratings" in the Statement of Additional
Information for a full discussion of Moody's and S&P's ratings.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities of corporate issuers frequently have call or
buy-back features which would permit an issuer to call or repurchase the
security from the Portfolio. If an issuer exercises these provisions in a
declining interest rate market, the Portfolio may have to replace the security
with a lower yielding security, resulting in a decreased return for investors.
In addition, the Portfolio may have difficulty disposing of lower quality
securities because they may have a thin trading market. There may be no
established retail secondary market for many of these securities, and the
Portfolio anticipates that such securities could be sold only to a limited
number of dealers or institutional investors. The lack of a liquid secondary
market also may have an adverse impact on market prices of such instruments and
may make it more difficult for the Portfolio to obtain accurate market
quotations for purposes of valuing its investments. The Portfolio may also
acquire lower quality debt securities during an initial underwriting or which
are sold without registration under applicable securities laws. Such securities
involve special considerations and risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Portfolio may invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic recession. The Portfolio may also incur additional expenses to the
extent it is required to seek recovery upon a default in the payment of
principal or interest on portfolio holdings, and the Portfolio may have limited
legal recourse in the event of a default.
 
   
  ILLIQUID SECURITIES. The Portfolio may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." The Sub-advisor believes that carefully selected investments in
joint ventures, cooperatives, partnerships and state enterprises which are
illiquid (collectively, "Special Situations") could enable the Portfolio to
achieve capital appreciation substantially exceeding the appreciation the
Portfolio would realize if they did not make such investments. However, in order
to attempt to limit investment risk, the Portfolio will invest no more than 5%
of its total assets in Special Situations.
    
 
  Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at a price
lower than similar securities that are liquid.
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Portfolio is
authorized to enter into options, futures and forward currency transactions, the
Portfolio might not enter into any such transactions. Options, futures and
foreign currency transactions involve certain risks, which include: (1)
dependence on the Sub-advisor's ability to predict movements in the prices of
individual securities, fluctuations in the general securities markets or in the
appropriate market sector and movements in interest rates and currency markets;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, forward contracts, futures contracts or options thereon and
movements in the price of the currency or security hedged or used for cover; (3)
the fact that skills and techniques needed to trade options, futures contracts
and options thereon or to use forward currency contracts are different from
those needed to select the securities in which the Portfolio invests; (4) lack
of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time; (5) the
possible loss of principal under certain conditions; and (6) the possible
inability of the Portfolio to purchase or sell a portfolio security at a time
when it would otherwise be favorable for it to do so, or the possible need for
the Portfolio to sell a security at a disadvantageous time, due to the need for
the Portfolio to maintain "cover" or to set aside securities in connection with
hedging transactions.
    
 
  INVESTING IN SMALLER COMPANIES. While the Portfolio's holdings normally will
include securities of established suppliers of traditional products and
services, the Portfolio may invest in smaller companies which can benefit from
the development of new products and services. These smaller companies may
present greater opportunities for capital appreciation, but may also involve
greater risks than large, established issuers. Such smaller companies may have
limited product lines, markets or financial resources, and their securities may
trade less frequently and in more limited volume than the securities of larger,
more established companies. As a result,
 
                                       11
<PAGE>   815
 
the prices of the securities of such smaller companies may fluctuate to a
greater degree than the prices of the securities of other issuers.
 
- --------------------------------------------------------------------------------
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees and the Board of Trustees of the Portfolio have
overall responsibility for the operation of the Fund and the Portfolio,
respectively. The Boards have approved all significant agreements between the
Trust and the Portfolio on the one side and persons or companies furnishing
services to the Fund and the Portfolio on the other, including the investment
management and administrative services agreement with AIM, the investment
sub-advisory and sub-administration agreement between AIM and the Sub-advisor,
the agreements with AIM Distributors regarding distribution of the Fund's
shares, the custody agreement and the transfer agency agreement. The day-to-day
operations of the Fund and the Portfolio are delegated to the officers of the
Trust and the Portfolio, subject always to the investment objective and policies
of the Fund and the Portfolio and to the general supervision of the Boards. See
"Trustees and Executive Officers" in the Statement of Additional Information for
information on the Trust's and the Portfolio's Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the investment managers to the Fund and the Portfolio include,
but are not limited to, determining the composition of the investment portfolio
of the Portfolio and placing orders to buy, sell or hold particular securities.
In addition, AIM and the Sub-advisor provide the following administration
services to the Portfolio and the Fund: furnishing corporate officers and
clerical staff; providing office space, services and equipment; and supervising
all matters relating to the Portfolio's and the Fund's operation.
    
 
   
  For administration services, the Fund pays AIM administration fees computed
daily and payable monthly at the annualized rate of 0.25% of the Fund's average
daily net assets. AIM has appointed the Sub-advisor as the Fund's
sub-administrator. In addition, the Fund bears its pro rata portion of the
investment management and administration fees paid by its corresponding
Portfolio to AIM and the Sub-advisor. The Portfolio pays AIM a fee, based on the
Portfolio's average daily net assets at the annualized rate of 0.725% on the
first $500 million, 0.70% on the next $500 million, 0.675% on the next $500
million and 0.65% on all amounts thereafter. Out of its aggregate fees payable
by the Fund and the Portfolio, AIM pays the Sub-advisor sub-advisory and
sub-administration fees equal to 40% of the aggregate fees AIM receives from the
Fund and the Portfolio. The investment management and administration fees paid
by the Fund and the Portfolio are higher than those paid by most mutual funds.
The Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM Distributors
or other agents. AIM has undertaken to limit the Fund's expenses (exclusive of
brokerage commissions, taxes, interest and extraordinary expenses) to the annual
rate of 1.50% of the average daily net assets of the Fund's Advisor Class
shares.
    
 
   
  The Sub-advisor also serves as the Fund's and the Portfolio's pricing and
accounting agent. For these services the Sub-advisor receives a fee consisting
of 0.03% of the first $5 billion of assets, and 0.02% of the assets in excess of
$5 billion, of the AIM Funds that are sub-advised by the Sub-advisor (other than
AIM Eastern Europe Fund). Each of these funds, including the Fund and the
Portfolio, pays an amount based upon its relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Portfolio pursuant to a master investment management
and administrative services agreement (the "Advisory Agreement"). AIM was
organized in 1976 and, together with its subsidiaries, manages or advises
approximately 90 investment company portfolios encompassing a broad range of
investment objectives. The Sub-advisor, 50 California Street, 27th Floor, San
Francisco, California 94111, and 1166 Avenue of the Americas, New York, New York
10036, serves as the sub-advisor to the Portfolio pursuant to an investment
sub-advisory and sub-administration agreement. Prior to May 29, 1998, the
Sub-advisor was known as Chancellor LGT Asset Management, Inc. On May 29, 1998,
Liechtenstein Global Trust AG ("LGT"), the former indirect parent organization
of the Sub-advisor, consummated a purchase agreement with AMVESCAP PLC pursuant
to which AMVESCAP PLC acquired LGT's Asset Management Division, which included
the Sub-advisor and certain other affiliates. As a result of this transaction,
the Sub-advisor is now an indirect wholly owned subsidiary of AMVESCAP PLC.
Prior to the sale, the Sub-advisor and its worldwide asset management affiliates
provided investment management and/or administrative services to institutional,
corporate and individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices, including investment offices in Atlanta,
Boston, Dallas, Denver, Louisville, Miami, Portland (Oregon), Frankfurt, Hong
Kong, London, Singapore, Sydney, Tokyo and Toronto. In managing the Portfolio,
the Sub-advisor employs a team approach, taking advantage of its investment
resources around the world.
    
 
                                       12
<PAGE>   816
 
  The investment professional primarily responsible for the portfolio management
of the Portfolio is as follows:
 
   
<TABLE>
<CAPTION>
                       RESPONSIBILITIES FOR                        BUSINESS EXPERIENCE
NAME/OFFICE               THE PORTFOLIO                              PAST FIVE YEARS
- -----------            --------------------                        -------------------
<S>                    <C>                     <C>
Derek H. Webb San      Portfolio Manager       Head of the Theme Funds for the Sub-advisor since 1997.
Francisco              since Portfolio         Portfolio Manager for the Sub-advisor since 1994. Analyst
                       inception in 1994       for the Sub-advisor from 1992 to 1994.
</TABLE>
    
 
   
  In placing orders for the Portfolio's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions may be executed through
affiliates of AIM or the Sub-advisor. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Funds will bear directly and could result in the realization of
net capital gains which would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement (the
"Distribution Agreement"), with AIM Distributors, a registered broker-dealer and
a wholly owned subsidiary of AIM, to act as the distributor of the Advisor Class
shares of the Fund. Certain Trustees and officers of the Trust are affiliated
with AIM Distributors.
    
 
  The Distribution Agreement provides AIM Distributors with the exclusive right
to distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
 
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST AND THE PORTFOLIO
    
 
   
  ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business
trust on May 7, 1998. On September 8, 1998, the Trust acquired the assets of and
assumed the liabilities of AIM Investment Funds, Inc., a Maryland corporation.
The Fund constitutes one of the thirteen separate and distinct series portfolios
of the Trust. From time to time, the Trust may establish other funds, each
corresponding to a distinct investment portfolio and a distinct series of the
Trust's shares of beneficial interest. Shares of each fund are entitled to one
vote per share (with proportional voting for fractional shares) and are freely
transferable. Shareholders have no preemptive rights. Other than the automatic
conversion of Class B shares to Class A shares, there are no conversion rights.
    
 
   
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
    
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund when issued are
fully paid and nonassessable.
 
  ORGANIZATION OF THE PORTFOLIO. The Portfolio is organized as a subtrust of
Global Investment Portfolio, a Delaware business trust. Under Delaware law, the
Fund and other entities investing in the Portfolio enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances an investor in
the Portfolio may be held liable for the Portfolio's obligations. However, the
Agreement and Declaration of Trust of Global Investment Portfolio disclaims
shareholder liability for acts or obligations of the Portfolio and requires that
notice of such disclaimer be given in each agreement, obligation or instrument
entered into or executed by the Portfolio or a trustee. The Agreement and
Declaration of Trust also provides for indemnification from the Portfolio
property for all losses and expenses of any shareholder held personally liable
for the Portfolio's obligations. Thus the risk of an investor incurring
financial loss on account of such liability is limited to circumstances in which
the Portfolio itself would be unable to meet its obligations and where the other
party was held not to be bound by the disclaimer.
 
                                       13
<PAGE>   817
 
  Whenever the Fund is requested to vote on any proposal of the Portfolio, the
Fund will hold a meeting of the Fund's shareholders and will cast its vote as
instructed by its shareholders. Shares for which no voting instructions are
received will be voted in the same proportion as the shares for which voting
instructions are received.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust, to the
Fund and to the Portfolio.
    
   
    
 
                                       14
<PAGE>   818
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
                  TO THE AIM FAMILY OF FUNDS--Register Mark--
                            FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several of
which offer Advisor Class shares. Only Advisor Class shares are offered through
this Prospectus. Advisor Class shares are available from the following funds
(collectively, the "Advisor Class Funds"):
 
   
<TABLE>
            <S>                                           <C>
            AIM BASIC VALUE FUND                          AIM GLOBAL INFRASTRUCTURE FUND
            AIM DEVELOPING MARKETS FUND                   AIM GLOBAL RESOURCES FUND
            AIM DOLLAR FUND                               AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM EMERGING MARKETS FUND                     AIM GLOBAL TRENDS FUND
            AIM EMERGING MARKETS DEBT FUND                AIM INTERNATIONAL GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM JAPAN GROWTH FUND
            AIM GLOBAL CONSUMER PRODUCTS                  AIM LATIN AMERICAN GROWTH FUND
              AND SERVICES FUND                           AIM MID CAP EQUITY FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM NEW PACIFIC GROWTH FUND
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM SMALL CAP GROWTH FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM STRATEGIC INCOME FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WORLDWIDE GROWTH FUND
</TABLE>
    
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
 
  HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through Financial
Advisers (as defined herein) who have entered into agreements with A I M
Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor Class
shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
 
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment for
Advisor Class shares is $500.
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
                                       A-1
<PAGE>   819
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Advisor Class shares of any Advisor Class Funds not named on the cover of this
Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                                                     Shareholder Name, Shareholder Account Number 
                   OBI:                              (70 character limit)
</TABLE>
 
  It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
 
  HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
  In addition to the Advisor Class Funds, the AIM Funds consist of the following
funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR
LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND,
AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BLUE
CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION
FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED MATURITY TREASURY
FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM SELECT GROWTH FUND,
AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM VALUE FUND and AIM
WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM
LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with the Advisor Class
Funds, the "Multiple Class Funds." For information on purchasing any of the AIM
Funds and to receive a prospectus, please call (800) 347-4246. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
  Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
 
  Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee'
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares. Investors in wrap fee programs and
advisory accounts may only purchase Advisor Class shares through Financial
Advisers who have entered into agreements with AIM Distributors. Investors may
be charged a fee by their agents or brokers for effecting transactions in
Advisor Class shares.
 
  AIM Distributors may, from time to time, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives
 
                                       A-2
<PAGE>   820
 
and their families to places within or outside the United States. The total
amount of such additional bonus payments or other consideration shall not exceed
0.25% of the public offering price of the shares sold. Any such bonus or
incentive programs will not change the price paid by investors for the purchase
of the applicable AIM Fund's shares or the amount that any particular AIM Fund
will receive as proceeds from such sales. Dealers may not use sales of the AIM
Funds' shares to qualify for any incentives to the extent that such incentives
may be prohibited by the laws of any state.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND uses
the amortized cost method of valuing the securities it holds and rounds its per
share net asset value to the nearest whole cent, it is anticipated that the net
asset value of the shares of that fund will remain constant at $1.00 per share.
However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00 net
asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
                                       A-3
<PAGE>   821
 
- --------------------------------------------------------------------------------
 
   
SPECIAL PLANS
    
 
  Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
 
   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance to $5,000 to
establish and maintain an allocation across a range of Advisor Class Funds. The
Program automatically rebalances holdings of Advisor Class Funds to the
established allocation on a periodic basis. Under the Program, a shareholder may
predesignate, on a percentage basis, how the total value of his or her holdings
in a minimum of two, and a maximum of ten, Advisor Class Funds ("Personal
Portfolio") is to be rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more Advisor Class Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other Advisor Class Funds in the
shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the
Advisor Class Fund(s) in a shareholder's Personal Portfolio have appreciated
during a rebalancing period, the Program will result in shares of Advisor Class
Fund(s) that have appreciated most during the period being exchanged for shares
of Advisor Class Fund(s) that have appreciated least. SUCH EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends, Distributions and Tax
Matters -- Dividends and Distributions." Participation in the Program does not
assure that a shareholder will profit from purchases under the Program nor does
it prevent or lessen losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Advisor Class Fund would be 2%
or less. In predesignating percentages, shareholders must use whole percentages
and totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an Advisor Class Fund's
shares. The AIM Funds and AIM Distributors reserve the right to modify, suspend,
or terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which Advisor
Class Funds or what allocation percentages are assigned to the Program, unless
canceled or changed in writing and received by the Transfer Agent in good order
at least five business days prior to the rebalancing date. Certain
dealers/financial institutions may charge a fee for establishing accounts
relating to the Program. Investors should contact their dealers/financial
institutions or AIM Distributors for more information.
    
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the Advisor
Class Funds may participate in an exchange privilege as described below. AIM
Distributors acts as distributor for the Advisor Class Funds which represent a
range of different investment objectives and policies.
 
  Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
 
  Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
 
  An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor
 
                                       A-4
<PAGE>   822
 
Class Fund acquired through exchange must be qualified for sale in the state in
which the shareholder resides; (c) the exchange must be made between accounts
having identical registrations and addresses; (d) the full amount of the
purchase price for the shares being exchanged must have already been received by
the fund; (e) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or Form
W-9 (certifying exempt status) must have been received by the fund; (f) newly
acquired shares (through either an initial or subsequent investment) are held in
an account for at least ten business days, and all other shares are held in an
account for at least one day, prior to the exchange; and (g) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the Advisor Class Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
  Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but under unusual market
conditions such purchases may be delayed for up to five business days if it is
determined that an Advisor Class Fund would be materially disadvantaged by an
immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into an Advisor Class Fund that declares daily dividends ("Dividends,
Distributions and Tax Matters -- Dividends and Distributions," below), and the
release of the exchange proceeds is delayed for the foregoing five-day period,
such shareholder will not begin to accrue dividends until the sixth business day
after the exchange. Advisor Class shares purchased by check may not be exchanged
until it is determined that the check has cleared, which may take up to ten
business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. A shareholder may give exchange information to his Financial
Adviser. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the Advisor Class Funds. AIM Distributors reserves the right to impose
conditions on dealers or investment advisors who make telephone exchanges of
shares of the Advisor Class Funds, including the condition that any such dealer
or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/financial institutions may charge service fees for handling
repurchase transactions.
 
                                       A-5
<PAGE>   823
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the Advisor
Class Funds are redeemed at their net asset value next computed after a request
for redemption in proper form (including signature guarantees and other required
documentation for written redemptions) is received by the Transfer Agent or
certain financial institutions (or their designees) who are authorized to accept
redemption orders on behalf of the AIM Funds, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. Orders for the redemption of Advisor Class shares received on any
business day of an AIM Fund will be confirmed at the price determined as of the
close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the proceeds are to be sent to
the address of record. These requirements may be waived or modified upon notice
to shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such 
    

                                       A-6
<PAGE>   824
   

as certain domestic banks, credit unions, securities dealers, or securities
exchanges. The Transfer Agent will also accept signatures with either: (1) a
signature guaranteed with a medallion stamp of the STAMP Program, or (2) a
signature guaranteed with a medallion stamp of the NYSE Medallion Signature
Program, provided that in either event, the amount of the transaction involved
does not exceed the surety coverage amount indicated on the medallion. For
information regarding whether a particular institution or organization qualifies
as an "eligible guarantor institution," an investor should contact the Client
Services Department of AFS.
    
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
  The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
                                       A-7
<PAGE>   825
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                    DISTRIBUTIONS          DISTRIBUTIONS
                                                                        OF NET                 OF NET
                                     DIVIDENDS FROM                    REALIZED               REALIZED
                                     NET INVESTMENT                   SHORT-TERM              LONG-TERM
FUND                                     INCOME                      CAPITAL GAINS          CAPITAL GAINS
- ----                                 --------------                  -------------          -------------
<S>                                  <C>                             <C>                     <C>
AIM BASIC VALUE FUND...............  declared and paid annually         annually                annually
AIM DEVELOPING MARKETS FUND........  declared and paid annually         annually                annually
AIM DOLLAR FUND....................  declared daily; paid monthly       annually                annually
AIM EMERGING MARKETS FUND..........  declared and paid annually         annually                annually
AIM EMERGING MARKETS DEBT FUND.....  declared and paid monthly          annually                annually
AIM EUROPE GROWTH FUND.............  declared and paid annually         annually                annually
AIM GLOBAL CONSUMER PRODUCTS AND
  SERVICES FUND....................  declared and paid annually         annually                annually
AIM GLOBAL FINANCIAL SERVICES
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL GOVERNMENT INCOME
  FUND.............................  declared and paid monthly          annually                annually
AIM GLOBAL GROWTH & INCOME FUND....  declared and paid quarterly        annually                annually
AIM GLOBAL HEALTH CARE FUND........  declared and paid annually         annually                annually
AIM GLOBAL INFRASTRUCTURE FUND.....  declared and paid annually         annually                annually
AIM GLOBAL RESOURCES FUND..........  declared and paid annually         annually                annually
AIM GLOBAL TELECOMMUNICATIONS
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL TRENDS FUND.............  declared and paid annually         annually                annually
AIM INTERNATIONAL GROWTH FUND......  declared and paid annually         annually                annually
AIM JAPAN GROWTH FUND..............  declared and paid annually         annually                annually
AIM LATIN AMERICAN GROWTH FUND.....  declared and paid annually         annually                annually
AIM MID CAP EQUITY FUND............  declared and paid annually         annually                annually
AIM NEW PACIFIC GROWTH FUND........  declared and paid annually         annually                annually
AIM SMALL CAP GROWTH FUND..........  declared and paid annually         annually                annually
AIM STRATEGIC INCOME FUND..........  declared and paid monthly          annually                annually
AIM WORLDWIDE GROWTH FUND..........  declared and paid annually         annually                annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
 
  Dividends on Advisor Class shares of an Advisor Class Fund are expected to be
higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
                                       A-8
<PAGE>   826
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares. With respect to tax-exempt shareholders,
dividends and distributions from the AIM Funds are not subject to federal income
taxation to the extent permitted under the applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the 
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    

  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
   
  TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS DEBT FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM MID CAP
EQUITY FUND, AIM SMALL CAP GROWTH FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL
TAX INFORMATION. Certain states exempt from income taxes dividends paid by
mutual funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
    
 
                                       A-9
<PAGE>   827
   
  AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
    
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each Advisor Class Fund's transfer agent and
dividend payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-10
<PAGE>   828
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                   GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
        ACCOUNT TYPE                    NUMBER OF:                     ACCOUNT TYPE                   NUMBER OF:
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary

      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application

      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors

      Legal Guardian          Ward, Minor or
                              Incompetent

      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
</TABLE>
- --------------------------------------------------------------------------------
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   829
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   830
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
 
   
GRS-PRO-2
    
<PAGE>   831
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
ADVISOR CLASS OF
    
 
   
AIM GLOBAL TELECOMMUNICATIONS FUND
    
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
PROSPECTUS
SEPTEMBER 8, 1998
 
This Prospectus contains information about AIM GLOBAL TELECOMMUNICATIONS FUND
(the "Fund"), which is one of several series investment portfolios comprising
AIM Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a diversified portfolio which seeks long-term growth of
capital by investing primarily in equity securities of companies throughout the
world engaged in the development, manufacture or sale of telecommunications
services or equipment.
 
   
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or by calling (800)
347-4246. The SEC maintains a Web site at http://www.sec.gov that contains the
Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the fund may
also be obtained from http://www.aimfunds.com.
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   832
   
- --------------------------------------------------------------------------------
    
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     6
  Investment Program...................     6
  Risk Factors.........................     9
  Management...........................    11
  Organization of the Trust............    12
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-4
  Exchange Privilege...................   A-4
  How to Redeem Shares.................   A-5
  Determination of Net Asset Value.....   A-7
  Dividends, Distributions and Tax
     Matters...........................   A-8
  General Information..................  A-10
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
  The Fund is a diversified series of the Trust.
 
  INVESTMENT OBJECTIVE. The Fund seeks long-term growth of capital.
 
  PRINCIPAL INVESTMENTS. The Fund invests primarily in equity securities of
companies throughout the world engaged in the development, manufacture or sale
of telecommunications services or equipment.
 
   
  INVESTMENT MANAGERS. The Portfolio is managed by A I M Advisors, Inc. ("AIM")
and is sub-advised and sub-administered by INVESCO (NY), Inc. (the
"Sub-advisor"). AIM and the Sub-advisor and their worldwide asset management
affiliates provide investment management and/or administrative services to
institutional, corporate and individual clients around the world. AIM and the
Sub-advisor are both indirect wholly owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC and its subsidiaries are an independent investment management group
that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing
presence in Asia. AIM was organized in 1976 and, together with its subsidiaries,
currently advises approximately 90 investment company portfolios.
    
 
   
  PURCHASING SHARES. Advisor Class shares are offered through this Prospectus to
(a) trustees or other fiduciaries purchasing shares for employee benefit plans
which are sponsored by organizations which have at least 1,000 employees; (b)
any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment advisor has investment
discretion over such account, and (ii) the account holder pays such person as
compensation for its advice and other services an annual fee of at least 0.50%
on the assets in the account; (c) any account with assets of at least $10,000 if
(i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the
assets in the account; (d) accounts advised by the Sub-adviser or one of the
companies formerly affiliated with the Asset Management Division of
Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the funds in The AIM Family of Funds that are sub-advised
by the Sub-advisor ("AIM Funds") on May 29, 1998; (e) any of the companies
composing or affiliated with AMVESCAP PLC; and (f) AIM Global Trends Fund.
Pursuant to a separate prospectus, the Fund also offers Class A and Class B
shares, which represent interests in the Fund. The Class A and Class B shares
have different distribution arrangements.
    
 
  Initial investments in Advisor Class shares must be at least $500 and
additional investments must be at least $50. The distributor of the Advisor
Class shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares."
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds").
Advisor Class shares of the Fund may be exchanged for Advisor Class shares of
certain Funds in The AIM Family of Funds in the manner and subject to the
policies and charges set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Advisor Class shareholders of the Fund may redeem all or a
portion of their shares at the Fund's net asset value on any business day. See
"How to Redeem Shares."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters."
    
 
                                        2
<PAGE>   833
 
  RISK FACTORS. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its portfolio holdings. The Fund's policy of concentrating
its investments in companies in its particular industries may cause the Fund's
net asset value to fluctuate more than if it invested in a greater number of
industries.
 
  The Fund may invest in foreign securities. Investments in foreign securities
involve risks relating to political and economic developments abroad and the
differences between the regulations to which U.S. and foreign issuers are
subject. Individual foreign economies also may differ favorably or unfavorably
from the U.S. economy. Changes in foreign currency exchange rates will affect
the Fund's net asset value, earnings and gains and losses realized on sales of
securities. Securities of foreign companies may be less liquid and their prices
more volatile than those of securities of comparable U.S. companies.
 
  The Fund may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs.
 
   
  The Fund may invest up to 5% of its total assets in below investment grade
debt securities. Investments of this type are subject to a greater risk of loss
of principal and interest. See "Investment Program" and "Risk Factors."
    
 
   
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
    
 
                                        3
<PAGE>   834
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Advisor Class shares of the Fund are reflected in the following table(1):
 
<TABLE>
<S>                                                           <C>
Shareholder Transaction Costs:
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................  None
  Sales charges on reinvested distributions to
     shareholders...........................................  None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........  None
  Redemption charges........................................  None
  Exchange fees.............................................  None
Annual Fund Operating Expenses(2): (as a % of average net
  assets)
  Investment management and administration fees.............  0.94%
  12b-1 distribution and service fees.......................  None
  Other expenses (after reimbursements).....................  0.40%
                                                              ----
          Total Fund Operating Expenses.....................  1.34%
                                                              ====
</TABLE>
 
   
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Fund.
    
 
   
(2)Expenses are based on the Fund's fiscal year ended October 31, 1997 restated
   to reflect AIM's undertaking to limit the Fund's expenses (exclusive of
   brokerage commissions, taxes, interest and extraordinary expenses) to the
   annual rate of 1.50% of the average daily net assets of the Fund's Advisor
   Class shares. AIM has voluntarily agreed to continue this limitation through
   May 31, 2000. "Other expenses" include custody, transfer agency, legal, audit
   and other operating expenses. See "Management" herein and the Statement of
   Additional Information for more information. Investors purchasing Advisor
   Class shares through financial planners, trust companies, bank trust
   departments or registered investment advisers, or under a "wrap fee" program,
   will be subject to additional fees charged by such entities or by the
   sponsors of such programs. Where any account advised by one of the companies
   composing or affiliated with AMVESCAP PLC invests in Advisor Class shares of
   a Fund, such account shall not be subject to duplicative advisory fees.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                       1 YEAR   3 YEARS   5 YEARS   10 YEARS
                                                       ------   -------   -------   --------
<S>                                                    <C>      <C>       <C>       <C>
Advisor Class Shares.................................   $14       $43       $74       $162
</TABLE>
    
 
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT EXPENSES, MAY
BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE ASSUMPTION IN THE
HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY REGULATION OF THE SEC
APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS NOT A PREDICTION OF AND
DOES NOT REPRESENT THE FUND'S PROJECTED OR ACTUAL PERFORMANCE.
 
                                        4
<PAGE>   835
 
- --------------------------------------------------------------------------------
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The tables below provide condensed financial information concerning income and
capital changes for Advisor Class shares of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statements and notes, for the
fiscal year ended October 31, 1997, have been audited by PricewaterhouseCoopers
LLP, independent accountants, whose report thereon also is included in the
Statement of Additional Information. The unaudited financial statements and
notes for the semi-annual period ending April 30, 1998, are also included in the
Statement of Additional Information.
    
 
   
                       AIM GLOBAL TELECOMMUNICATIONS FUND
    
   
                  (FORMERLY GT GLOBAL TELECOMMUNICATIONS FUND)
    
 
   
<TABLE>
<CAPTION>
                                                                       ADVISOR CLASS**
                                                    ------------------------------------------------------
                                                      SIX MONTHS
                                                        ENDED                                     JUNE 1,
                                                      APRIL 30,       YEAR ENDED OCTOBER 31,      1995 TO
                                                         1998         -----------------------     OCT. 31,
                                                    (UNAUDITED)(C)     1997(C)       1996(C)        1995
                                                    --------------    ---------     ---------     --------
<S>                                                 <C>               <C>           <C>           <C>
Per Share Operating Performance:
  Net asset value, beginning of period............     $ 18.28         $ 16.81       $ 16.46       $15.24
                                                       -------         -------       -------       ------
Income from investment operations:
  Net investment income (loss)....................       (0.04)          (0.09)        (0.05)          --
  Net realized and unrealized gain (loss) on
     investments..................................        3.36            2.97          1.22         1.22
                                                       -------         -------       -------       ------
  Net increase (decrease) from investment
     operations...................................        3.32            2.88          1.17         1.22
                                                       -------         -------       -------       ------
Distributions:
  From net investment income......................          --              --            --           --
  From net realized gain on investments...........       (1.20)          (1.41)        (0.82)          --
                                                       -------         -------       -------       ------
          Total distributions.....................       (1.20)          (1.41)        (0.82)          --
                                                       -------         -------       -------       ------
Net asset value, end of period....................     $ 20.40         $ 18.28       $ 16.81       $16.46
                                                       =======         =======       =======       ======
          Total investment return(d)..............       19.56%          18.33%         7.49%        7.94%(a)
                                                       =======         =======       =======       ======
Ratios and supplemental data:
  Net assets, end of period (in 000's)............     $ 8,351         $ 4,783       $   945       $  681
Ratio of net investment income to average net
  assets:
  With expense reductions.........................       (0.58)%(b)      (0.51)%       (0.34)%       0.01%(b)
  Without expense reductions......................       (0.59)%(b)      (0.56)%       (0.39)%       0.07%(b)
Ratio of expenses to average net assets:
  With expense reductions.........................        1.37%(b)        1.29%         1.24%        1.27%(b)
  Without expense reductions......................        1.38%(b)        1.34%         1.29%        1.33%(b)
Portfolio turnover rate++.........................          56%(b)          35%           37%          62%
Average commission rate per share paid on
  portfolio transactions++........................     $0.0045         $0.0085       $0.0165          N/A
</TABLE>
    
 
- ---------------
 
   
  ++  Portfolio turnover and average commission rates are calculated on the
      basis of the Fund as a whole without distinguishing among the classes of
      shares issued.
    
   
  **  Commencing June 1, 1995, the Fund began offering Advisor class shares.
    
   
  (a) Not annualized.
    
   
  (b) Annualized.
    
   
  (c) These per share operating performance data were calculated based upon
      average shares outstanding during the period.
    
   
  (d) Total investment return does not include sales charges.
    
   
 N/A  Not Applicable.
    
                                ---------------
 
   
<TABLE>
<CAPTION>
                                                                                 AVERAGE MONTHLY
                                                            AVERAGE MONTHLY         NUMBER OF         AVERAGE AMOUNT
                                          AMOUNT OF DEBT    AMOUNT OF DEBT     REGISTRANT'S SHARES        OF DEBT
                                          OUTSTANDING AT      OUTSTANDING          OUTSTANDING           PER SHARE
               YEAR ENDED                 END OF PERIOD    DURING THE PERIOD    DURING THE PERIOD    DURING THE PERIOD
               ----------                 --------------   -----------------   -------------------   -----------------
<S>                                       <C>              <C>                 <C>                   <C>
Six months ended April 30, 1998.........      $   --          $  776,210            30,210,054            $ 0.026
October 31, 1997........................          --          $8,225,969           113,614,232            $0.0724
</TABLE>
    
 
   
  Average monthly amount of debt outstanding during the period is computed on a
daily basis.
    
 
                                        5
<PAGE>   836
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
 
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVE. The Fund's investment objective is long-term growth of
capital. It seeks its objective by investing primarily in equity securities of
companies throughout the world engaged in the development, manufacture or sale
of telecommunications services or equipment. There can be no assurance that the
Fund will achieve its investment objective.
    
 
   
  INVESTMENT POLICIES. At least 65% of the Fund's total assets normally will be
invested in common and preferred stocks and warrants to acquire such securities
issued by telecommunications companies. A "telecommunications" company is an
entity in which (i) at least 50% of either its revenues or earnings was derived
from telecommunications activities, or (ii) at least 50% of its assets was
devoted to telecommunications activities, based on the company's most recent
fiscal year. The remainder of the assets of the Fund may be invested in debt
securities issued by telecommunications companies and/or equity and debt
securities of companies outside of the telecommunications industry which, in the
opinion of the Sub-advisor, stand to benefit from developments in the
telecommunications industries.
    
 
   
  Global Telecommunications Industries Investment. Telecommunications companies
cover a variety of sectors, ranging from companies concentrating on established
technologies to those primarily engaged in emerging or developing technologies.
The characteristics of companies focusing on the same technology will vary among
countries depending upon the extent to which the technology is established in
the particular country. The Sub-advisor will allocate the Fund's investments
among these sectors depending upon its assessment of their relative long-term
growth potential.
    
 
  Examples of telecommunications companies include those engaged in designing,
developing or providing the following products and services: communications
equipment and services (including equipment and services for both data and voice
transmission); electronic components and equipment; broadcasting (including
television and radio, satellite, microwave and cable television and
narrowcasting); computer equipment, mobile communications and cellular
radio/paging; electronic mail; local and wide area networking and linkage of
word and data processing systems; publishing and information systems; videotext
and teletext; and emerging technologies combining telephone, television and/or
computer systems.
 
   
  The Sub-advisor believes that there are opportunities for continued growth in
demand for components, products, media and systems to collect, store, retrieve,
transmit, process, distribute, record, reproduce and use information. The
pervasive societal impact of communications and information technologies has
been accelerated by the lower costs and higher efficiencies that result from the
blending of computers with telecommunications systems. Accordingly, companies
engaged in the production of methods for using electronic and, potentially,
video technology to communicate information are expected to be important in the
Fund's portfolio. Older technologies, such as photography and print also may be
represented, however.
    
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
                                        6
<PAGE>   837
 
   
  SELECTION OF INVESTMENTS AND ASSET ALLOCATION. The Fund expects that, from
time to time, a significant portion of its assets may be invested in the
securities of domestic issuers. The industry represented in the Fund, however,
is a global industry with significant, growing markets outside of the United
States. A sizeable proportion of the companies which comprise the
telecommunications industry are headquartered outside of the United States.
    
 
   
  For these reasons, the Sub-advisor believes that a portfolio composed only of
securities of U.S. issuers does not provide the greatest potential for return
from an investment by the Fund. The Sub-advisor uses its financial expertise in
markets located throughout the world and the substantial global resources of
AMVESCAP PLC in attempting to identify those countries and companies then
providing the greatest potential for long-term capital appreciation. In this
fashion, the Sub-advisor seeks to enable shareholders to capitalize on the
substantial investment opportunities and the potential for long-term growth of
capital presented by the global industry represented in the Fund.
    
 
   
  The Sub-advisor allocates the Fund's assets among securities of countries and
in currency denominations where opportunities for meeting the Fund's investment
objective are expected to be the most attractive. The Fund may invest
substantially in securities denominated in one or more currencies. Under normal
conditions, the Fund invests in the securities of issuers located in at least
three countries, including the United States; investments in securities of
issuers in any one country, other than the United States, will represent no more
than 40% of the Fund's total assets.
    
 
   
  In analyzing specific companies for possible investment, the Sub-advisor
ordinarily looks for several of the following characteristics: above-average per
share earnings growth; high return on invested capital; a healthy balance sheet;
sound financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; development of new technologies; efficient service; pricing
flexibility; strong management; and general operating characteristics that will
enable the companies to compete successfully in their respective markets.
    
 
   
  TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-advisor may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. Under a defensive strategy, the Fund may invest up to 100%
of its total assets in cash (U.S. dollars, foreign currencies or multinational
currency units such as euros) and/or high quality debt securities or money
market instruments of U.S. or foreign issuers. In addition, for temporary
defensive purposes, most or all of the Fund's investments may be made in the
United States and denominated in U.S. dollars. To the extent the Fund adopts a
temporary defensive posture, it will not be invested so as to achieve directly
its investment objective. In addition, pending investment of proceeds from new
sales of Fund shares or to meet its ordinary daily cash needs, the Fund may hold
cash (U.S. dollars, foreign currencies or multinational currency units) and may
invest in foreign or domestic high quality money market instruments. For a full
description of money market instruments, see "Money Market Instruments" in the
"Investment Objectives and Policies" section of the Statement of Additional
Information.
    
 
   
  PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Fund in privatizations in appropriate
circumstances. In certain foreign countries, the ability of foreign entities
such as the Fund to participate in privatizations may be limited by local law,
or the terms on which the Fund may be permitted to participate may be less
advantageous than those for local investors. There can be no assurance that
foreign governments will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
    
 
   
  INVESTMENTS IN OTHER INVESTMENT COMPANIES. The Fund may invest up to 10% of
its total assets in other investment companies, some of which may be investment
vehicles or companies that are advised by the Sub-advisor or its affiliates
("Affiliated Funds"). As a shareholder in an investment company, the Fund would
bear its ratable share of that investment company's expenses, including its
advisory and administration fees. At the same time, the Fund would continue to
pay its own management fees and other expenses. AIM and the Sub-advisor will
waive their advisory fees to the extent that the Fund invests in an Affiliated
Fund.
    
 
   
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemptions of the
Fund's shares. The Fund also may borrow up to 5% of its total assets for
temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Fund may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Fund's borrowings exceed 5% of its
total assets. Any borrowing by the Fund may cause greater fluctuation in the
value of its shares than would be the case if the Fund did not borrow.
    
 
  A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash, and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's sale of securities together with its
commitment (for which the Fund may receive a fee) to purchase similar, but not
identical, securities at a future date.
 
   
  SECURITIES LENDING. The Fund may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Fund to retain ownership of the securities loaned and, at the same time,
enhances the Fund's total return. The Fund limits its loans of portfolio
securities to an aggregate of 30% of the value of its total assets, measured at
the time any such loan is made. While a loan is outstanding, the borrower must
maintain with the Fund's custodian collateral consisting of cash, U.S. govern-
    
 
                                        7
<PAGE>   838
 
   
ment securities or certain irrevocable letters of credit equal to at least the
value of the borrowed securities, plus any accrued interest or such other
collateral as permitted by the Fund's investment program and regulatory
agencies, and as approved by the Board. The risks in lending portfolio
securities, as with other extensions of secured credit, consist of possible
delays in receiving additional collateral or in recovery of the securities and
possible loss of rights in the collateral should the borrower fail financially.
    
 
  WHEN-ISSUED OR FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities or enter into forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If
the Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, the Fund will
segregate cash or liquid securities equal to the value of the when-issued or
forward commitment securities with its custodian and will mark to market daily
such assets. There is a risk that the securities may not be delivered and that
the Fund may incur a loss.
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the portfolio. These instruments are often referred to as
"derivatives," which may be defined as financial instruments whose performance
is derived, at least in part, from the performance of another asset (such as a
security, currency or an index of securities). The Fund may enter into such
instruments up to the full value of its portfolio assets. See "Risk
Factors -- Options, Futures and Forward Currency Transactions" herein and
"Options, Futures and Currency Strategies" in the Statement of Additional
Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on such futures
contracts to hedge against movements in exchange rates.
 
   
  In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-advisor intends to include in the
Fund's portfolio. The Fund also may purchase and sell put and call options on
stock indexes to hedge against overall fluctuations in the securities markets
generally or in a specific market sector.
    
 
  Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market decline or a decline in a specific market sector that could
affect adversely the Fund's holdings. The Fund also may purchase stock index
futures contracts and purchase call options or write put options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisitions. The Fund
may use interest rate futures contracts and options thereon to hedge the debt
portion of its portfolio against changes in the general level of interest rates.
 
  OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this Prospectus
and in the Statement of Additional Information may be changed by the Trust's
Board of Trustees without shareholder approval. The Fund's policies regarding
concentration and lending, and the percentage of the Fund's assets that may be
committed to borrowing, are fundamental policies and may not be changed without
shareholder approval.
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
 
   
  The Fund is authorized to engage in Short Sales, although it currently has no
intention of doing so, and may purchase American Depositary Receipts, American
Depositary Shares, Global Depositary Receipts and European Depositary Receipts.
See "Short Sales" and "Depositary Receipts," respectively in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
    
 
                                        8
<PAGE>   839
 
- --------------------------------------------------------------------------------
 
   
RISK FACTORS
    
 
  GENERAL. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate reflecting fluctuations in
the market value of the Fund's positions. Equity securities, particularly common
stocks, generally represent the most junior position in an issuer's capital
structure, and entitle holders to an interest in the assets of an issuer, if
any, remaining after all more senior claims have been satisfied. The value of
equity securities held by the Fund will fluctuate in response to general market
and economic developments, as well as developments affecting the particular
issuers of such securities. In addition, the value of debt securities held by
the Fund generally will fluctuate with changes in the perceived creditworthiness
of the issuers of such securities and interest rates.
 
  Because the Fund focuses its investments on particular industries, an
investment in the Fund may be more volatile than that of other investment
companies that do not concentrate their investments in such a manner. Moreover,
the value of the shares of the Fund will be especially susceptible to factors
affecting the industries in which it focuses. Accordingly, the Fund should not
be considered a complete investment program.
 
  TELECOMMUNICATIONS INDUSTRIES. Telecommunications industries may be subject to
greater governmental regulation than many other industries and changes in
governmental policy and the need for regulatory approvals may have a material
effect on the products and services offered by companies in the
telecommunications industries. Telephone operating companies in the United
States, for example, are subject to both federal and state regulation affecting
permitted rates of return and the kinds of services that may be offered. Certain
types of companies in the telecommunications industries are engaged in fierce
competition for market share that could result in increased share price
volatility.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to, the reporting requirements of the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. In addition, certain costs attributable to
foreign investing, such as custody charges, are higher than those attributable
to domestic investing. Securities of some foreign companies are less liquid and
their prices may be more volatile than securities of comparable domestic
companies. The Fund's interest and dividends from foreign issuers may be subject
to non-U.S. withholding taxes, thereby reducing the Fund's net investment
income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Fund, political or social instability, or diplomatic
developments which could affect the Fund's investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
 
  The Fund may invest in issuers domiciled in "emerging markets." Investing in
emerging market countries involves risks in addition to those risks involved in
foreign investing. Many emerging market countries have experienced high rates of
inflation for many years. In addition, emerging markets generally are dependent
heavily upon international trade and, accordingly, have been and continue to be
affected adversely by trade barriers, exchange controls, managed adjustments in
relative currency values and other protectionist measures imposed or negotiated
by the countries with which they trade. The securities markets of emerging
market countries are substantially smaller, less developed, less liquid and more
volatile than the securities markets of the developed countries. In addition,
issuers in emerging markets typically are subject to a greater degree of change
in earnings and business prospects than issuers in developed countries.
 
  The Fund will also be affected favorably or unfavorably by exchange control
regulations or changes in the exchange rates between foreign currencies and the
U.S. dollar. Changes in currency exchange rates will influence the value of the
Fund's shares, and also may affect the value of dividends and interest earned by
the Fund and gains and losses realized by the Fund.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
  LOWER QUALITY DEBT SECURITIES. The Fund may invest up to 5% of its total
assets in below investment grade debt securities, that
 
                                        9
<PAGE>   840
 
is, rated below BBB by Standard & Poor's, a division of The McGraw-Hill
Companies, Inc. ("S&P"), or Baa by Moody's Investors Service, Inc. ("Moody's")
or, if unrated, deemed to be of equivalent quality in the judgment of the
Sub-adviser. Such investments involve a high degree of risk. However, the Fund
will not invest in debt securities that are in default as to payment of
principal and interest.
 
  Debt rated Baa by Moody's is considered by Moody's to have speculative
characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B,
Caa, Ca or C by Moody's is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such lower quality debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Debt rated C
by Moody's or S&P is the lowest rated debt that is not in default as to
principal or interest, and such issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Lower
quality debt securities are also generally considered to be subject to greater
risk than securities with higher ratings with regard to a deterioration of
general economic conditions. These lower quality debt securities are the
equivalent of high yield, high risk bonds, commonly known as "junk bonds."
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates. See "Description of Debt Ratings" in the Statement of Additional
Information for a full discussion of Moody's and S&P's ratings.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities of corporate issuers frequently have call or
buy-back features which would permit an issuer to call or repurchase the
security from the Fund. If an issuer exercises these provisions in a declining
interest rate market, the Fund may have to replace the security with a lower
yielding security, resulting in a decreased return for investors. In addition,
the Fund may have difficulty disposing of lower quality securities because they
may have a thin trading market. There may be no established retail secondary
market for many of these securities, and the Fund anticipates that such
securities could be sold only to a limited number of dealers or institutional
investors. The lack of a liquid secondary market also may have an adverse impact
on market prices of such instruments and may make it more difficult for the Fund
to obtain accurate market quotations for purposes of valuing the Fund's
portfolio investments. The Fund may also acquire lower quality debt securities
during an initial underwriting or which are sold without registration under
applicable securities laws. Such securities involve special considerations and
risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Fund may invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic recession. The Fund may also incur additional expenses to the extent it
is required to seek recovery upon a default in the payment of principal or
interest on portfolio holdings, and the Fund may have limited legal recourse in
the event of a default.
 
   
  ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." The Sub-advisor believes that carefully selected investments in
joint ventures, cooperatives, partnerships and state enterprises which are
illiquid (collectively, "Special Situations") could enable the Fund to achieve
capital appreciation substantially exceeding the appreciation the Fund would
realize if it did not make such investments. However, in order to attempt to
limit investment risk, the Fund will invest no more than 5% of its total assets
in Special Situations.
    
 
  Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at a price
lower than similar securities that are liquid.
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions, the
Fund might not enter into any such transactions. Options, futures and foreign
currency transactions involve certain risks, which include: (1) dependence on
the Sub-advisor's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets or in the appropriate
market sector and movements in interest rates and currency markets; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, forward contracts, futures contracts or options thereon and movements
in the price of the currency or security hedged or used for cover; (3) the fact
that skills and techniques needed to trade options, futures contracts and
options thereon or to use forward currency contracts are different from those
needed to select the securities in which the Fund invests; (4) lack of assurance
that a liquid secondary market will exist for
    
 
                                       10
<PAGE>   841
 
any particular option, futures contract or option thereon at any particular
time; (5) the possible loss of principal under certain conditions; and (6) the
possible inability of the Fund to purchase or sell a portfolio security at a
time when it would otherwise be favorable for it to do so, or the possible need
for the Fund to sell a security at a disadvantageous time, due to the need for
the Fund to maintain "cover" or to set aside securities in connection with
hedging transactions.
 
  INVESTING IN SMALLER COMPANIES. While the Fund's portfolio normally will
include securities of established suppliers of traditional products and
services, the Fund may invest in smaller companies which can benefit from the
development of new products and services. These smaller companies may present
greater opportunities for capital appreciation, but may also involve greater
risks than large, established issuers. Such smaller companies may have limited
product lines, markets or financial resources, and their securities may trade
less frequently and in more limited volume than the securities of larger, more
established companies. As a result, the prices of the securities of such smaller
companies may fluctuate to a greater degree than the prices of the securities of
other issuers.
- --------------------------------------------------------------------------------
 
MANAGEMENT
 
   
  The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust and persons or companies furnishing services to the Fund on
the other, including the investment management and administration agreement with
AIM, the investment sub-advisory and sub-administration agreement between AIM
and the Sub-advisor, the agreements with AIM Distributors regarding distribution
of the Fund's shares, the custody agreement and the transfer agency agreement.
The day-to-day operations of the Fund are delegated to the officers of the
Trust, subject always to the investment objective and policies of the Fund and
to the general supervision of the Trust's Board of Trustees. See "Trustees and
Executive Officers" in the Statement of Additional Information for information
on the Trust's Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers include, but are not limited to,
determining the composition of the investment portfolio of the Fund and placing
orders to buy, sell or hold particular securities. In addition, AIM and the
Sub-adviser provide the following administration services to the Fund:
furnishing corporate officers and clerical staff; providing office space,
services and equipment; and supervising all matters relating to the Fund's
operation.
    
 
   
  For investment management and administration services provided to the Fund,
the Fund pays AIM a fee computed daily and paid monthly based on the Fund's
average daily net assets at the annualized rate of 0.975% on the first $500
million, 0.95% on the next $500 million, 0.925% on the next $500 million and
0.90% on amounts thereafter. Out of the aggregate fees payable by the Fund, AIM
pays the Sub-advisor sub-advisory and sub-administration fees equal to 40% of
the aggregate fees AIM receives from the Fund.
    
 
   
  The Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM
Distributors or other agents. AIM has undertaken to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary expenses)
to the annual rate of 1.50% of the average daily net assets of the Fund's
Advisor Class shares.
    
 
   
  The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-adviser (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administrative services agreement (the "Advisory Agreement"). AIM was organized
in 1976 and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Fund pursuant to an investment sub-advisory and
sub-administration agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of the Sub-advisor,
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included the Sub-advisor and
certain other affiliates. As a result of this transaction, the Sub-advisor is
now an indirect wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Fund, the Sub-advisor employs a team
approach, taking advantage of its investment resources around the world.
    
 
                                       11
<PAGE>   842
 
  The investment professional primarily responsible for the portfolio management
of the Fund is as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
     NAME/OFFICE               THE FUND                           PAST FIVE YEARS
     -----------         --------------------                   -------------------
<S>                     <C>                      <C>
Michael Mahoney         Portfolio Manager        Portfolio Manager for the Sub-advisor since 1993.
San Francisco           since 1993               Investment Analyst for the Sub-advisor from 1991
                                                 to 1993.
</TABLE>
    
 
   
  In placing orders for the Fund's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions may be executed through
affiliates of AIM or the Sub-advisor. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Funds will bear directly and could result in the realization of
net capital gains which would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement (the
"Distribution Agreement"), with AIM Distributors, a registered broker-dealer and
a wholly owned subsidiary of AIM, to act as the distributor of the Advisor Class
shares of the Fund. Certain Trustees and officers of the Trust are affiliated
with AIM Distributors.
    
 
  The Distribution Agreement provides AIM Distributors with the exclusive right
to distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST
    
 
   
  The Trust was organized as a Delaware business trust on May 7, 1998. On
September 8, 1998, the Trust acquired the assets of and assumed the liabilities
of AIM Investment Funds, Inc., a Maryland corporation. The Fund constitutes one
of the thirteen separate and distinct series portfolios of the Company. From
time to time, the Company has established and may continue to establish other
funds, each corresponding to a distinct investment portfolio and a distinct
series of the Trust's shares of beneficial interest. Shares of each fund are
entitled to one vote per share (with proportional voting for fractional shares)
and are freely transferable. Shareholders have no preemptive rights. Other than
the automatic conversion of Class B shares to Class A shares, there are no
conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges, except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
    
   
    
 
                                       12
<PAGE>   843
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
                  TO THE AIM FAMILY OF FUNDS--Register Mark--
                            FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several of
which offer Advisor Class shares. Only Advisor Class shares are offered through
this Prospectus. Advisor Class shares are available from the following funds
(collectively, the "Advisor Class Funds"):
 
   
<TABLE>
            <S>                                           <C>
            AIM BASIC VALUE FUND                          AIM GLOBAL INFRASTRUCTURE FUND
            AIM DEVELOPING MARKETS FUND                   AIM GLOBAL RESOURCES FUND
            AIM DOLLAR FUND                               AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM EMERGING MARKETS FUND                     AIM GLOBAL TRENDS FUND
            AIM EMERGING MARKETS DEBT FUND                AIM INTERNATIONAL GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM JAPAN GROWTH FUND
            AIM GLOBAL CONSUMER PRODUCTS                  AIM LATIN AMERICAN GROWTH FUND
              AND SERVICES FUND                           AIM MID CAP EQUITY FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM NEW PACIFIC GROWTH FUND
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM SMALL CAP GROWTH FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM STRATEGIC INCOME FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WORLDWIDE GROWTH FUND
</TABLE>
    
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
 
  HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through Financial
Advisers (as defined herein) who have entered into agreements with A I M
Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor Class
shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
 
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment for
Advisor Class shares is $500.
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
                                       A-1
<PAGE>   844
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Advisor Class shares of any Advisor Class Funds not named on the cover of this
Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                                                     Shareholder Name, Shareholder Account Number 
                   OBI:                              (70 character limit)
</TABLE>
 
  It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
 
  HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
  In addition to the Advisor Class Funds, the AIM Funds consist of the following
funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR
LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND,
AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BLUE
CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION
FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED MATURITY TREASURY
FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM SELECT GROWTH FUND,
AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM VALUE FUND and AIM
WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM
LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with the Advisor Class
Funds, the "Multiple Class Funds." For information on purchasing any of the AIM
Funds and to receive a prospectus, please call (800) 347-4246. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
  Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
 
  Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee'
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares. Investors in wrap fee programs and
advisory accounts may only purchase Advisor Class shares through Financial
Advisers who have entered into agreements with AIM Distributors. Investors may
be charged a fee by their agents or brokers for effecting transactions in
Advisor Class shares.
 
  AIM Distributors may, from time to time, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives
 
                                       A-2
<PAGE>   845
 
and their families to places within or outside the United States. The total
amount of such additional bonus payments or other consideration shall not exceed
0.25% of the public offering price of the shares sold. Any such bonus or
incentive programs will not change the price paid by investors for the purchase
of the applicable AIM Fund's shares or the amount that any particular AIM Fund
will receive as proceeds from such sales. Dealers may not use sales of the AIM
Funds' shares to qualify for any incentives to the extent that such incentives
may be prohibited by the laws of any state.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND uses
the amortized cost method of valuing the securities it holds and rounds its per
share net asset value to the nearest whole cent, it is anticipated that the net
asset value of the shares of that fund will remain constant at $1.00 per share.
However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00 net
asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
                                       A-3
<PAGE>   846
 
- --------------------------------------------------------------------------------
 
   
SPECIAL PLANS
    
 
  Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
 
   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance to $5,000 to
establish and maintain an allocation across a range of Advisor Class Funds. The
Program automatically rebalances holdings of Advisor Class Funds to the
established allocation on a periodic basis. Under the Program, a shareholder may
predesignate, on a percentage basis, how the total value of his or her holdings
in a minimum of two, and a maximum of ten, Advisor Class Funds ("Personal
Portfolio") is to be rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more Advisor Class Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other Advisor Class Funds in the
shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the
Advisor Class Fund(s) in a shareholder's Personal Portfolio have appreciated
during a rebalancing period, the Program will result in shares of Advisor Class
Fund(s) that have appreciated most during the period being exchanged for shares
of Advisor Class Fund(s) that have appreciated least. SUCH EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends, Distributions and Tax
Matters -- Dividends and Distributions." Participation in the Program does not
assure that a shareholder will profit from purchases under the Program nor does
it prevent or lessen losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Advisor Class Fund would be 2%
or less. In predesignating percentages, shareholders must use whole percentages
and totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an Advisor Class Fund's
shares. The AIM Funds and AIM Distributors reserve the right to modify, suspend,
or terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which Advisor
Class Funds or what allocation percentages are assigned to the Program, unless
canceled or changed in writing and received by the Transfer Agent in good order
at least five business days prior to the rebalancing date. Certain
dealers/financial institutions may charge a fee for establishing accounts
relating to the Program. Investors should contact their dealers/financial
institutions or AIM Distributors for more information.
    
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the Advisor
Class Funds may participate in an exchange privilege as described below. AIM
Distributors acts as distributor for the Advisor Class Funds which represent a
range of different investment objectives and policies.
 
  Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
 
  Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
 
  An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor
 
                                       A-4
<PAGE>   847
 
Class Fund acquired through exchange must be qualified for sale in the state in
which the shareholder resides; (c) the exchange must be made between accounts
having identical registrations and addresses; (d) the full amount of the
purchase price for the shares being exchanged must have already been received by
the fund; (e) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or Form
W-9 (certifying exempt status) must have been received by the fund; (f) newly
acquired shares (through either an initial or subsequent investment) are held in
an account for at least ten business days, and all other shares are held in an
account for at least one day, prior to the exchange; and (g) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the Advisor Class Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
  Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but under unusual market
conditions such purchases may be delayed for up to five business days if it is
determined that an Advisor Class Fund would be materially disadvantaged by an
immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into an Advisor Class Fund that declares daily dividends ("Dividends,
Distributions and Tax Matters -- Dividends and Distributions," below), and the
release of the exchange proceeds is delayed for the foregoing five-day period,
such shareholder will not begin to accrue dividends until the sixth business day
after the exchange. Advisor Class shares purchased by check may not be exchanged
until it is determined that the check has cleared, which may take up to ten
business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. A shareholder may give exchange information to his Financial
Adviser. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the Advisor Class Funds. AIM Distributors reserves the right to impose
conditions on dealers or investment advisors who make telephone exchanges of
shares of the Advisor Class Funds, including the condition that any such dealer
or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/financial institutions may charge service fees for handling
repurchase transactions.
 
                                       A-5
<PAGE>   848
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the Advisor
Class Funds are redeemed at their net asset value next computed after a request
for redemption in proper form (including signature guarantees and other required
documentation for written redemptions) is received by the Transfer Agent or
certain financial institutions (or their designees) who are authorized to accept
redemption orders on behalf of the AIM Funds, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. Orders for the redemption of Advisor Class shares received on any
business day of an AIM Fund will be confirmed at the price determined as of the
close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the proceeds are to be sent to
the address of record. These requirements may be waived or modified upon notice
to shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such 
    

                                       A-6
<PAGE>   849
   

as certain domestic banks, credit unions, securities dealers, or securities
exchanges. The Transfer Agent will also accept signatures with either: (1) a
signature guaranteed with a medallion stamp of the STAMP Program, or (2) a
signature guaranteed with a medallion stamp of the NYSE Medallion Signature
Program, provided that in either event, the amount of the transaction involved
does not exceed the surety coverage amount indicated on the medallion. For
information regarding whether a particular institution or organization qualifies
as an "eligible guarantor institution," an investor should contact the Client
Services Department of AFS.
    
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
  The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
                                       A-7
<PAGE>   850
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                    DISTRIBUTIONS          DISTRIBUTIONS
                                                                        OF NET                 OF NET
                                     DIVIDENDS FROM                    REALIZED               REALIZED
                                     NET INVESTMENT                   SHORT-TERM              LONG-TERM
FUND                                     INCOME                      CAPITAL GAINS          CAPITAL GAINS
- ----                                 --------------                  -------------          -------------
<S>                                  <C>                             <C>                     <C>
AIM BASIC VALUE FUND...............  declared and paid annually         annually                annually
AIM DEVELOPING MARKETS FUND........  declared and paid annually         annually                annually
AIM DOLLAR FUND....................  declared daily; paid monthly       annually                annually
AIM EMERGING MARKETS FUND..........  declared and paid annually         annually                annually
AIM EMERGING MARKETS DEBT FUND.....  declared and paid monthly          annually                annually
AIM EUROPE GROWTH FUND.............  declared and paid annually         annually                annually
AIM GLOBAL CONSUMER PRODUCTS AND
  SERVICES FUND....................  declared and paid annually         annually                annually
AIM GLOBAL FINANCIAL SERVICES
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL GOVERNMENT INCOME
  FUND.............................  declared and paid monthly          annually                annually
AIM GLOBAL GROWTH & INCOME FUND....  declared and paid quarterly        annually                annually
AIM GLOBAL HEALTH CARE FUND........  declared and paid annually         annually                annually
AIM GLOBAL INFRASTRUCTURE FUND.....  declared and paid annually         annually                annually
AIM GLOBAL RESOURCES FUND..........  declared and paid annually         annually                annually
AIM GLOBAL TELECOMMUNICATIONS
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL TRENDS FUND.............  declared and paid annually         annually                annually
AIM INTERNATIONAL GROWTH FUND......  declared and paid annually         annually                annually
AIM JAPAN GROWTH FUND..............  declared and paid annually         annually                annually
AIM LATIN AMERICAN GROWTH FUND.....  declared and paid annually         annually                annually
AIM MID CAP EQUITY FUND............  declared and paid annually         annually                annually
AIM NEW PACIFIC GROWTH FUND........  declared and paid annually         annually                annually
AIM SMALL CAP GROWTH FUND..........  declared and paid annually         annually                annually
AIM STRATEGIC INCOME FUND..........  declared and paid monthly          annually                annually
AIM WORLDWIDE GROWTH FUND..........  declared and paid annually         annually                annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
 
  Dividends on Advisor Class shares of an Advisor Class Fund are expected to be
higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
                                       A-8
<PAGE>   851
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares. With respect to tax-exempt shareholders,
dividends and distributions from the AIM Funds are not subject to federal income
taxation to the extent permitted under the applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the 
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    

  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
   
  TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS DEBT FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM MID CAP
EQUITY FUND, AIM SMALL CAP GROWTH FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL
TAX INFORMATION. Certain states exempt from income taxes dividends paid by
mutual funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
    
 
                                       A-9
<PAGE>   852
   
  AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
    
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each Advisor Class Fund's transfer agent and
dividend payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-10
<PAGE>   853
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                   GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
        ACCOUNT TYPE                    NUMBER OF:                     ACCOUNT TYPE                   NUMBER OF:
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary

      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application

      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors

      Legal Guardian          Ward, Minor or
                              Incompetent

      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
</TABLE>
- --------------------------------------------------------------------------------
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   854
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   855
[AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
<PAGE>   856
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
ADVISOR CLASS OF
    
 
   
AIM LATIN AMERICAN GROWTH FUND
    
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
PROSPECTUS
SEPTEMBER 8, 1998
 
This Prospectus contains information about AIM LATIN AMERICAN GROWTH FUND (The
"Fund"), which is one of several series investment portfolios comprising AIM
Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a non-diversified portfolio which seeks capital
appreciation by investing primarily in equity and debt securities of a broad
range of Latin American issuers.
 
The Fund is designed for long term investors and not as a trading vehicle. The
Fund does not represent a complete investment program, nor is it suitable for
all investors. The Fund may invest significantly in lower quality and unrated
foreign government bonds whose credit quality is generally considered the
equivalent of U.S. corporate debt securities commonly known as "junk bonds."
Investments of this type are subject to a greater risk of loss of principal and
interest. An investment in the Fund should be considered speculative and subject
to special risk factors, related primarily to the Fund's investments in Latin
America. Purchasers should carefully assess the risks associated with an
investment in the Fund.
 
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information dated
September 8, 1998 has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   857
- --------------------------------------------------------------------------------
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     6
  Investment Program...................     6
  Risk Factors.........................     9
  Management...........................    11
  Organization of the Trust............    13
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the AIM Funds.....................   A-2
  Special Plans........................   A-4
  Exchange Privilege...................   A-4
  How to Redeem Shares.................   A-5
  Determination of Net Asset Value.....   A-7
  Dividends, Distributions and Tax
     Matters...........................   A-8
  General Information..................  A-10
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
  The Fund is a non-diversified series of the Trust.
 
  INVESTMENT OBJECTIVE. The Fund seeks capital appreciation.
 
  PRINCIPAL INVESTMENT. The Fund normally invests at least 65% of its total
assets in equity and debt securities issued by Latin American companies and
governments.
 
   
  INVESTMENT MANAGERS. The Fund is managed by A I M Advisors, Inc. ("AIM") and
is sub-advised and sub-administered by INVESCO (NY), Inc. (the "Sub-advisor").
AIM and the Sub-advisor and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-advisor are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
AIM was organized in 1976 and, together with its subsidiaries, currently advises
approximately 90 investment company portfolios.
    
 
   
  PURCHASING SHARES. Advisor Class shares are offered through this Prospectus to
(a) trustees or other fiduciaries purchasing shares for employee benefit plans
which are sponsored by organizations which have at least 1,000 employees; (b)
any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment advisor has investment
discretion over such account, and (ii) the account holder pays such person as
compensation for its advice and other services an annual fee of at least 0.50%
on the assets in the account; (c) any account with assets of a least $10,000 if
(i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the
assets in the account; (d) accounts advised by the Sub-advisor or one of the
companies formerly affiliated with the Asset Management Division of
Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the funds in The AIM Family of Funds on May 29, 1998; and
(e) any of the companies affiliated with AMVESCAP PLC. Pursuant to a separate
prospectus, the Fund also offers Class A and Class B shares, which represent
interests in the Fund. The Class A and Class B shares have different
distribution arrangements.
    
 
  Initial investments in Advisor Class shares must be at least $500 and
additional investments must be at least $50. The distributor of the Advisor
Class shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares."
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds").
Advisor Class shares of the Fund may be exchanged for Advisor Class shares of
certain funds in The AIM Family of Funds in the manner and subject to the
policies and charges set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Advisor Class shareholders of the Fund may redeem all or a
portion of their shares at net asset value on any business day. See "How to
Redeem Shares."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without
payment of a sales charge in the Fund's shares or may be invested in shares of
the other funds in The AIM Family of Funds. See "Dividends, Distributions and
Tax Matters."
    
 
                                        2
<PAGE>   858
 
  RISK FACTORS. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset values will fluctuate, reflecting fluctuations
in the market value of the portfolio holdings. The Fund will invest primarily in
foreign securities. Investments in foreign securities involve risks relating to
political and economic developments abroad and the differences between the
regulations to which U.S. and foreign issuers are subject. Individual foreign
economies also may differ favorably or unfavorably from the U.S. economy.
Changes in foreign currency exchange rates will affect the Fund's net asset
value, earnings and gains and losses realized on sales of securities. Securities
of foreign companies may be less liquid and their prices more volatile than
those of securities of comparable U.S. companies.
 
   
  The Fund may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs. There is no limitation
on the percentage of the Fund's total assets that may be invested in below
investment grade debt securities. Investments of this type are subject to a
greater risk of loss of principal and interest. See "Investment Program" and
"Risk Factors."
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   859
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Advisor Class shares of the Fund are reflected in the following table(1):
 
<TABLE>
<S>                                                           <C>
Shareholder Transaction Costs:
  Maximum sales charge on purchases of shares (as a % of
     offering price)........................................    None
  Sales charges on reinvested distributions to
     shareholders...........................................    None
  Maximum deferred sales charge (as a % of net asset value
     at time of purchase or sale, whichever is less)........    None
  Redemption charges........................................    None
Exchange fees:
  -- On first four exchanges each year......................    None
  -- On each additional exchange............................   $7.50
Annual Fund Operating Expenses(2): (as a % of average net
  assets)
  Investment management and administration fees.............    0.98%
  12b-1 distribution and service fees.......................    None
  Other expenses (after reimbursements).....................    0.52%
                                                               -----
          Total Fund Operating Expenses.....................    1.50%
                                                               =====
</TABLE>
 
   
(1)This table is intended to assist investors in understanding the various costs
   and expenses associated with investing in the Fund.
    
 
   
(2)Expenses are based on the Fund's fiscal year ended October 31, 1997 restated
   to reflect AIM's undertaking to limit the Fund's expenses (exclusive of
   brokerage commissions, taxes, interest and extraordinary expenses) to the
   annual rate of 1.50% of the average daily net assets of the Fund's Advisor
   Class shares. AIM has voluntarily agreed to continue this limitation through
   May 31, 2000. Without reimbursements, "Other expenses" and "Total Fund
   Operating Expenses" would have been 0.58% and 1.56%, respectively, for
   Advisor Class shares of the Fund. "Other expenses" include custody, transfer
   agent, legal, audit and other operating expenses. See "Management" herein and
   the Statement of Additional Information for more information. Investors
   purchasing Advisor Class shares through financial planners, trust companies,
   bank trust departments or registered investment advisors, or under a "wrap
   fee" program, will be subject to additional fees charged by such entities or
   by the sponsors of such programs. Where any account advised by one of the
   companies affiliated with AMVESCAP PLC invests in Advisor Class shares of the
   Fund, such account shall not be subject to duplicative advisory fees.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                       1 YEAR   3 YEARS   5 YEARS   10 YEARS
                                                       ------   -------   -------   --------
<S>                                                    <C>      <C>       <C>       <C>
Advisor Class Shares.................................   $15       $48       $82       $180
</TABLE>
    
 
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND
THE ASSUMPTION IN THE HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY
REGULATION OF THE SEC APPLICABLE TO ALL MUTUAL FUNDS. THE 5% ANNUAL RETURN IS
NOT A PREDICTION OF AND DOES NOT REPRESENT THE FUND'S PROJECTED OR ACTUAL
PERFORMANCE.
 
                                        4
<PAGE>   860
 
   
- --------------------------------------------------------------------------------
    
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The tables below provide condensed financial information concerning income and
capital changes for Advisor Class shares of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statements and notes, for the
fiscal year ended October 31, 1997 and the semi-annual period ended April 30,
1998 have been audited by PricewaterhouseCoopers LLP, independent accountants,
whose report thereon also is included in the Statement of Additional
Information.
    
 
   
                         AIM LATIN AMERICAN GROWTH FUND
    
   
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
    
 
   
<TABLE>
<CAPTION>
                                                  SIX MONTHS
                                                     ENDED        YEAR ENDED OCT. 31,      JUNE 1, 1995
                                                   APRIL 30,     ----------------------         TO
                                                    1998(A)       1997(A)      1996(A)     OCT. 31, 1995
                                                  -----------    ---------    ---------    -------------
<S>                                               <C>            <C>          <C>          <C>
ADVISOR CLASS*
Per Share Operating Performance:
Net asset value, beginning of period............    $ 19.57       $ 17.94      $ 15.40        $15.95
                                                    -------       -------      -------        ------
Income from investment operations:
  Net investment income (loss)..................       0.13**        0.19         0.17          0.09
  Net realized and unrealized gain (loss) on
     investments................................       1.15          1.44         2.58         (0.64)
                                                    -------       -------      -------        ------
     Net increase (decrease) from investment
       operations...............................       1.28          1.63         2.75         (0.55)
                                                    -------       -------      -------        ------
Distributions:
  From net investment income....................      (0.15)           --        (0.14)           --
  From net realized gain on investments.........         --            --           --            --
  In excess of net investment income............         --            --        (0.07)           --
                                                    -------       -------      -------        ------
          Total distributions...................      (0.15)           --        (0.21)           --
                                                    -------       -------      -------        ------
Net asset value, end of period..................    $ 20.70       $ 19.57      $ 17.94        $15.40
                                                    =======       =======      =======        ======
Total investment return.........................       6.64%(b)      8.91%       18.16%        (3.45)%(b)
                                                    -------       -------      -------        ------
Ratios and supplemental data:
Net assets, end of period (in 000's)............    $   757       $   636      $   818        $  369
Ratio of net investment income (loss) to average
  net assets....................................
  With expense reductions and reimbursements....       1.40%(c)     1.02%        0.96%          1.36%(c)
  Without expense reductions and
     reimbursements.............................       1.21%(c)      0.92%        0.89%         1.35%(c)
Ratio of operating expenses to average net
  assets:
  With expense reductions.......................       1.49%(c)      1.46%        1.53%         1.61%(c)
  Without expense reductions....................       1.68%(c)      1.56%        1.60%         1.62%(c)
Ratio of interest expense to average net
  assets+.......................................       0.16%(c)       N/A          N/A           N/A
Portfolio turnover rate+........................         27%(c)       130%         101%          125%(c)
Average commission rate per share paid on
  portfolio transactions+.......................    $0.0016       $0.0007      $0.0005           N/A
</TABLE>
    
 
- ---------------
 
   
+
    
   
    
   
     Portfolio turnover, average commission rates and ratio of interest expense
     to average net assets are calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares issued.
    
 
   
*
    
   
    
   
     Commencing June 1, 1995, the Fund began offering Advisor Class shares.
    
 
   
**
    
   
    
   
     Before reimbursement, the net investment income per share would have been
     reduced by $0.02.
    
 
   
(a)  These selected per share data were calculated based upon average shares
     outstanding during the period.
    
 
   
(b)  Not annualized.
    
 
   
(c)  Annualized.
    
 
   
N/A  Not Applicable.
    
 
   
<TABLE>
<CAPTION>
                                                        AVERAGE AMOUNT
                                                           OF DEBT          AVERAGE MONTHLY       AVERAGE AMOUNT
                                       AMOUNT OF DEBT    OUTSTANDING     NUMBER OF REGISTRANT'S    OF DEBT PER
                                       OUTSTANDING AT     DURING THE       SHARES OUTSTANDING      SHARE DURING
             YEAR ENDED                END OF PERIOD        PERIOD         DURING THE PERIOD        THE PERIOD
             ----------                --------------   --------------   ----------------------   --------------
<S>                                    <C>              <C>              <C>                      <C>
Six months ended April 30, 1998......    $       --       $3,165,121           13,623,707            $ 0.232
October 31, 1997.....................    $3,238,000       $1,519,383           16,973,475            $0.0895
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed on a daily
basis.
    
 
                                        5
<PAGE>   861
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
   
- --------------------------------------------------------------------------------
    
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVE. The Fund's investment objective is capital appreciation.
The Fund normally invests at least 65% of its total assets in the securities of
a broad range of Latin American issuers. The Fund may invest in common stock,
preferred stock, rights, warrants and securities convertible into common stock,
and other substantially similar forms of equity securities with comparable risk
characteristics, as well as bonds, notes, debentures or other forms of
indebtedness that may be developed in the future. Normally, the Fund will invest
a majority of its assets in equity securities. The Fund may also invest up to
35% of its total assets in a combination of equity and debt securities of U.S.
issuers. There can be no assurance that the Fund will meet its investment
objective.
    
 
   
  INVESTMENT POLICIES. For purposes of this Prospectus, unless otherwise
indicated, the Fund defines Latin America to include the following countries:
Argentina, the Bahamas, Barbados, Belize, Bolivia, Brazil, Chile, Colombia,
Costa Rica, Dominican Republic, Ecuador, El Salvador, French Guiana, Guatemala,
Guyana, Haiti, Honduras, Jamaica, Mexico, the Netherlands Antilles, Nicaragua,
Panama, Paraguay, Peru, Suriname, Trinidad and Tobago, Uruguay and Venezuela.
Under current market conditions, the Fund expects to invest primarily in
securities issued by companies and governments in Mexico, Chile, Brazil and
Argentina. The Fund may invest more than 25% of its total assets in any of these
four countries but does not expect to invest more than 60% of its total assets
in any one country.
    
 
   
  The Fund defines securities of Latin American issuers to include: (a)
securities of companies organized under the laws of, or having a principal
office located in, a Latin American country; (b) securities of companies that
derive 50% or more of their total revenues from business in Latin America,
provided that, in the Sub-advisor's view, the value of such issuers' securities
reflect Latin American developments to a greater extent than developments
elsewhere; (c) securities issued or guaranteed by the government of a country in
Latin America, its agencies or instrumentalities, or municipalities, or the
central bank of such country; (d) U.S. dollar-denominated securities or
securities denominated in a Latin American currency issued by companies to
finance operations in Latin America; and (e) securities of Latin American
issuers, as defined herein, in the form of depositary shares. For purposes of
the foregoing definition, the Fund's purchases of securities issued by companies
outside of Latin America to finance their Latin American operations will be
limited to securities, the performance of which is materially related to such
company's Latin American activities.
    
 
   
  In allocating investments among the various Latin American countries, the
Sub-advisor looks principally at the stage of industrialization, potential for
productivity gains through economic deregulation, the impact of financial
liberalization and monetary conditions and the political outlook in each
country. In allocating assets between equity and debt securities, the
Sub-advisor will consider, among other factors: the level and anticipated
direction of interest rates; expected rates of economic growth and corporate
profits growth; changes in Latin American government policy including regulation
governing industry, trade, financial markets, and foreign and domestic
investment; substance and likely development of government finances; and the
condition of the balance of payments and changes in the terms of trade. In
evaluating investments in securities of U.S. issuers, the Sub-advisor will
consider, among other factors, the issuer's Latin American business activities
and the impact that development in Latin America may have on the issuer's
operations and financial condition.
    
 
                                        6
<PAGE>   862
 
  Certain sectors of the economies of certain Latin American countries are
closed to equity investments by foreigners. Further, due to the absence of
securities markets and publicly owned corporations and due to restrictions on
direct investment by foreign entities in certain Latin American countries, the
Fund may be able to invest in such countries solely or primarily through
governmentally approved investment vehicles or companies. In addition, the
portion of the Fund's assets invested directly in Chile may be less than the
portion invested in other Latin American countries because, at present, capital
directly invested in Chile normally cannot be repatriated for at least one year.
As a result, the Fund currently intends to limit most of its Chilean investments
to indirect investments through American Depositary Receipts ("ADRs") and
established Chilean investment companies, the shares of which are not subject to
repatriation restrictions.
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
  INVESTMENTS IN DEBT SECURITIES. Under normal circumstances, the Fund may
invest up to 50% of its total assets in debt securities. There is no limitation
on the percentage of its assets that may be invested in debt securities that are
rated below investment grade. Investment in below investment grade debt
securities involves a high degree of risk and can be speculative. These debt
securities are the equivalent of high yield, high risk bonds, commonly known as
"junk bonds." Most debt securities in which the Fund will invest are not rated;
if rated, it is expected that such ratings would be below investment grade.
However, the Fund will not invest in debt securities that are in default in
payment as to principal or interest. See "Risk Factors -- Risks Associated with
Debt Securities."
 
  The Fund may invest in "Brady Bonds," which are debt restructurings that
provide for the exchange of cash and loans for newly issued bonds. Brady Bonds
have been issued by the countries of Albania, Argentina, Brazil, Bulgaria, Costa
Rica, Dominican Republic, Ecuador, Ivory Coast, Jordan, Mexico, Nigeria, Panama,
Peru, Philippines, Poland, Uruguay, Venezuela and Vietnam, and are expected to
be issued by other emerging market countries. As of the date of this Prospectus,
the Fund is not aware of the occurrence of any payment defaults on Brady Bonds.
Investors should recognize, however, that Brady Bonds do not have a long payment
history. In addition, Brady Bonds are often rated below investment grade.
 
  The Fund may invest in either collateralized or uncollateralized Brady Bonds.
U.S. dollar-denominated, collateralized Brady Bonds, which may be fixed rate par
bonds or floating rate discount bonds, are collateralized in full as to
principal by U.S. Treasury zero coupon bonds having the same maturity as the
bonds. Interest payments on such bonds generally are collateralized by cash or
securities in an amount that, in the case of fixed rate bonds, is equal to at
least one year of rolling interest payments or, in the case of floating rate
bonds, initially is equal to at least one year's rolling interest payments based
on the applicable interest rate at the time of issuance and is adjusted at
regular intervals thereafter.
 
  Capital appreciation in debt securities may arise as a result of a favorable
change in relative foreign exchange rates, in relative interest rate levels
and/or in the creditworthiness of issuers. The receipt of income from debt
securities owned by the Fund is incidental to its objective of capital
appreciation.
 
  TEMPORARY DEFENSIVE STRATEGIES. The Fund may invest up to 100% of its assets
in cash (U.S. dollars, foreign currencies, multinational units such as Euros)
and/or high quality debt securities or money market instruments to generate
income to defray its expenses, for temporary defensive purposes and pending
investment in accordance with its investment objective and policies.
 
   
  In addition, the Fund may be primarily invested in U.S. securities for
temporary defensive purposes or pending investment of the proceeds of sales of
new Fund shares. The Fund may assume a temporary defensive position when, due to
political, market or other factors broadly affecting Latin American markets, the
Sub-advisor determines that opportunities for capital appreciation in those
markets would be significantly limited over an extended period or that investing
in those markets presents undue risk of loss. For a full description of money
market instruments, see "Temporary Defensive Strategies" in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
    
 
   
  INVESTMENT IN OTHER INVESTMENT COMPANIES OR VEHICLES. The Fund may be able to
invest in certain countries solely or primarily through governmentally
authorized investment vehicles or companies, some of which may be investment
vehicles or companies that are advised by the Sub-advisor or its affiliates
("Affiliated Funds"). Pursuant to the Investment Company Act of 1940 (the "1940
Act"), the Fund generally may invest up to 10% of its total assets in the
aggregate in shares of other investment companies and up to 5% of its total
assets in any one investment company, as long as each investment does not
represent more than 3% of the outstanding voting stock of the acquired
investment company at the time of investment.
    
 
   
  Investment in other investment companies may involve the payment of
substantial premiums above the value of such investment companies' portfolio
securities and is subject to limitations under the 1940 Act and market
availability. The Fund does not intend to invest in such investment companies
unless, in the judgment of the Sub-advisor, the potential benefits of such
investment justify the payment of any applicable premium or sales charge. As a
shareholder in an investment company, the Fund would bear its ratable share of
that investment company's expenses, including its advisory and administration
fees. At the same time the Fund would continue to pay its own management fees
and other expenses. AIM and the Sub-advisor will waive their advisory fees to
the extent that the Fund invests in an Affiliated Fund.
    
 
  SECURITIES LENDING. The Fund may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows a
Fund to retain ownership of the securities loaned and, at the same time,
enhances the Fund's total return. At all times
 
                                        7
<PAGE>   863
 
   
a loan is outstanding, the Fund's borrower must maintain with the Fund's
custodian collateral consisting of cash, U.S. government securities or certain
irrevocable letters of credit equal to at least the value of the borrowed
securities plus any accrued interest or such other collateral as permitted by
the Fund's investment program and regulatory agencies, and as approved by the
Board. The Fund limits its loans of portfolio securities to an aggregate of 30%
of the value of its total assets, measured at the time any such loan is made.
The risks in lending portfolio securities, as with other extensions of secured
credit, consist of possible delays in receiving additional collateral or in
recovery of the loaned securities and possible loss of rights in the collateral
should the borrower fail financially.
    
 
   
  PRIVATIZATIONS. The governments in some Latin American countries have been
engaged in programs of selling part or all of their stakes in government owned
or controlled enterprises ("privatizations"). The Sub-advisor believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Fund in privatizations in appropriate
circumstances. In certain Latin American countries, the ability of foreign
entities such as the Fund to participate in privatizations may be limited by
local law, or the terms on which the Fund may be permitted to participate may be
less advantageous than those afforded local investors. There can be no assurance
that Latin American governments and governments in emerging markets will
continue to sell companies currently owned or controlled by them or that
privatization programs will be successful.
    
 
  BORROWING. It is a fundamental policy of the Fund that it may borrow an amount
up to 33 1/3% of its total assets in order to meet redemption requests.
Borrowing may cause greater fluctuation in the value of the Fund's shares than
would be the case if the Fund did not borrow, but also may enable the Fund to
retain favorable securities positions rather than liquidating such positions to
meet redemptions. It is a nonfundamental policy of the Fund, that the Fund will
not purchase securities during times when outstanding borrowings represent 5% or
more of each Fund's total assets.
 
  WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities and forward commitments only with the intention
of actually receiving or delivering the securities, as the case may be. No
income accrues on securities that have been purchased pursuant to a forward
commitment or on a when-issued basis prior to delivery to the Fund. If the Fund
disposes of the right to acquire a when-issued security prior to its acquisition
or disposes of its right to deliver or receive against a forward commitment, it
may incur a gain or loss. At the time the Fund enters into a transaction on a
when-issued or forward commitment basis, the Fund will segregate cash or liquid
securities equal to the value of the when-issued or forward commitment
securities with its custodian bank and will mark to market daily such assets.
There is a risk that the securities may not be delivered and that the Fund may
incur a loss.
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment risk normally associated with the
portfolio. These instruments are often referred to as "derivatives," which may
be defined as financial instruments whose performance is derived, at least in
part, from the performance of another asset (such as a security, currency or an
index of securities). The Fund may enter into such instruments up to the full
value of its portfolio assets. See "Risk Factors -- Options, Futures and Foreign
Currency Transactions" herein and "Options, Futures and Currency Strategies" in
the Statement of Additional Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on such futures
contracts to hedge against movements in exchange rates.
 
   
  Only a limited market, if any, currently exists for options and futures
transactions relating to currencies of most Latin American markets, to
securities denominated in such currencies or to securities of issuers domiciled
or principally engaged in business in such emerging markets. To the extent that
such a market does not exist, the Sub-advisor may not be able to effectively
hedge its investment in such markets.
    
 
   
  The Fund may purchase and sell put and call options on securities to hedge
against the risk of fluctuations in the prices of securities held by the Fund or
that the Sub-advisor intends to include in the Fund's portfolio. The Fund also
may purchase and sell put and call options on indices to hedge against overall
fluctuations in the securities markets generally or in a specific market sector.
    
 
  Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market decline or a decline in a specific market sector that could
adversely affect the Fund's portfolio. The Fund also may purchase stock index
futures contracts and purchase call options or write put options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisitions. The Fund
may use interest rate futures contracts and options thereon to hedge the debt
portion of its portfolios against changes in the general level of interest
rates.
 
                                        8
<PAGE>   864
 
  OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations as
fundamental policies which also may not be changed without shareholder approval.
A complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information may be changed by the Trust's Board of Trustees without shareholder
approval. If a percentage restriction on investment or utilization of assets in
an investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
 
   
  The Fund is authorized to engage in Short Sales, although it currently has no
intention of doing so, and may purchase American Depositary Receipts, American
Depositary Shares, Global Depositary Receipts and European Depositary Receipts.
See "Short Sales" and "Depositary Receipts," respectively, in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
    
   
- --------------------------------------------------------------------------------
    
 
   
RISK FACTORS
    
 
  GENERAL. There is no assurance that the Fund will achieve its investment
objective. Investing in the Fund entails a substantial degree of risk and an
investment in the Fund should be considered speculative. Investors are strongly
advised to consider carefully the special risks involved in Latin America, which
are in addition to the usual risks of investing in developed markets around the
world.
 
  The Fund's net asset value will fluctuate, reflecting fluctuations in the
market value of its portfolio positions and its net currency exposure. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. The value of equity securities held by the Fund will fluctuate
in response to general market and economic developments, as well as developments
affecting the particular issuers of such securities.
 
  The Fund is classified under the 1940 Act as a "non-diversified" fund. As a
result, the Fund will be able to invest in a fewer number of issuers than if it
were classified under the 1940 Act as a "diversified" fund. To the extent that
the Fund invests in a smaller number of issuers, the value of its shares may
fluctuate more widely and it may be subject to greater investment and credit
risk with respect to its portfolio.
 
  Investing in securities of Latin American issuers involves risks relating to
potential political and economic instability of certain Latin American countries
and the risks of expropriation, nationalization, confiscation of assets and
property or the imposition of restrictions on foreign investment and on
repatriation of capital invested. In the event of such expropriation,
nationalization or other confiscation, the Fund could lose its entire investment
in any such country.
 
  The securities markets of Latin American countries are substantially smaller,
less developed, less liquid and more volatile than the major securities markets
in the United States. Disclosure and regulatory standards are in many respects
less stringent than U.S. standards. Furthermore, there is a lower level of
monitoring and regulation of the markets and the activities of investors in such
markets, and enforcement of existing regulations has been extremely limited.
 
  The limited size of many Latin American securities markets and limited trading
volume in issuers compared to volume of trading in U.S. securities could cause
prices to be erratic for reasons apart from factors that affect the quality of
the securities. For example, limited market size may cause prices to be unduly
influenced by traders who control large positions. Adverse publicity and
investors' perceptions, whether or not based on fundamental analysis, may
decrease the value and liquidity of portfolio securities, especially in these
markets.
 
  Further, there is a risk that an emergency situation may arise in one or more
Latin American markets as a result of which prices for portfolio securities in
such markets may not be readily available. Section 22(e) of the 1940 Act permits
a registered investment company, such as the Fund, to suspend redemption of its
shares for any period during which an emergency exists, as determined by the
SEC. Accordingly, when the Fund believes that circumstances dictate, it will
promptly apply to the SEC for a determination that such an emergency exists
within the meaning of Section 22(e) of the 1940 Act. During the period
commencing from the Fund's identification of such conditions until the date of
any SEC action, the Fund's portfolio securities in the affected markets will be
valued at fair value determined in good faith by or under the direction of the
Trust's Board of Trustees.
 
  The economies of individual Latin American countries may differ favorably or
unfavorably from the U.S. economy in such respects as the rate of growth of
gross domestic product, the rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position. Most Latin American countries
have experienced substantial, and in some periods extremely high, rates of
inflation for many years. Inflation and rapid fluctuations in inflation rates
have had and may continue to have very negative effects on the economies and
securities markets of certain Latin American countries. Furthermore, certain
Latin American countries may impose withholding taxes on dividends payable to
the Fund at a higher rate than those imposed by other foreign countries. This
may reduce the Fund's investment income available for distribution to
shareholders.
 
                                        9
<PAGE>   865
 
  Companies in Latin America are subject to accounting, auditing and financial
standards and requirements that differ, in some cases significantly, from those
applicable to U.S. companies. There is substantially less publicly available
information about Latin American companies and the governments of Latin American
countries than there is about U.S. companies and the U.S. Government.
 
  Certain Latin American countries are among the largest debtors to commercial
banks and foreign governments. At times certain Latin American countries have
declared moratoria on the payment of principal and/or interest on external debt.
The Fund may invest in debt securities, including Brady Bonds, issued as part of
debt restructurings and such debt is to be considered speculative. There is a
history of defaults with respect to commercial bank loans by public and private
entities issuing Brady Bonds.
 
  RISKS ASSOCIATED WITH DEBT SECURITIES. The value of the debt securities held
by the Fund generally will vary inversely with market interest rates. If
interest rates in a market fall, the Fund's debt securities issued by
governments or companies in that market ordinarily will increase in value. If
market interest rates increase, however, the debt securities owned by the Fund
in that market will likely decrease in value.
 
  The Fund may invest up to 50% of its total assets in debt securities of any
rating. Such investments involve a high degree of risk.
 
  Debt rated Baa by Moody's Investors Service, Inc. ("Moody's") is considered by
Moody's to have speculative characteristics. Debt rated BB, B, CCC, CC or C by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), and
debt rated Ba, B, Caa, Ca or C by Moody's is regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. While such
lower quality debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions. Debt rated C by Moody's or S&P is the lowest rated debt that is not
in default as to principal or interest and such issues so rated can be regarded
as having extremely poor prospects of ever attaining any real investment
standing. Lower quality debt securities are also generally considered to be
subject to greater risk than securities with higher ratings with regard to a
deterioration of general economic conditions. These foreign debt securities are
the equivalent of high yield, high risk bonds, commonly known as "junk bonds."
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates.
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. Similarly, certain Latin American governments that issue lower
quality debt securities are among the largest debtors to commercial banks,
foreign governments and supranational organizations such as the World Bank, and
may not be able or willing to make principal and/or interest repayments as they
come due. The risk of loss due to default by the issuer is significantly greater
for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities frequently have call or buy-back features which
would permit an issuer to call or repurchase the security from the Fund. In
addition, the Fund may have difficulty disposing of lower quality securities
because they may have a thin trading market. There may be no established retail
secondary market for many of these securities, and the Fund anticipates that
such securities could be sold only to a limited number of dealers or
institutional investors. The lack of a liquid secondary market also may have an
adverse impact on market prices of such instruments and may make it more
difficult for the Fund to obtain accurate market quotations for purposes of
valuing the Fund's portfolio. The Fund may also acquire lower quality debt
securities during an initial underwriting or which are sold without registration
under applicable securities laws. Such securities involve special considerations
and risks.
 
  In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Fund may invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic recession.
 
  The Fund may also incur additional expenses to the extent it is required to
seek recovery upon a default in the payment of principal or interest on its
portfolio holdings, and the Fund may have limited legal recourse in the event of
a default. Debt securities issued by governments in Latin American markets can
differ from debt obligations issued by private entities in that remedies from
defaults generally must be pursued in the courts of the defaulting government,
and legal recourse is therefore somewhat diminished. Political conditions, in
terms of a government's willingness to meet the terms of its debt obligations,
also are of considerable significance. There can be no assurance that the
holders of commercial bank debt may not contest payments to the holders of debt
securities issued by governments in Latin American markets in the event of
default by the governments under commercial bank loan agreements.
 
                                       10
<PAGE>   866
 
   
  ILLIQUID SECURITIES. The Fund may invest up to 10% of its net assets in
securities for which no readily available market exists, so-called "Illiquid
Securities." The Fund may invest in joint ventures, cooperatives, partnerships
and state enterprises and other similar vehicles which are illiquid
(collectively, "Special Situations"). The Sub-advisor believes that carefully
selected investments in Special Situations could enable the Fund to achieve
capital appreciation substantially exceeding the appreciation the Fund would
realize if it did not make such investments. However, in order to limit
investment risk, the Fund will invest no more than 5% of its total assets in
Special Situations.
    
 
  Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at a price
lower than similar securities that are liquid.
 
  CURRENCY RISK. Because the Fund may invest substantially in securities
denominated in currencies other than the U.S. dollar, and since the Fund may
hold foreign currencies, the Fund will be affected favorably or unfavorably by
exchange control regulations or changes in the exchange rates between such
currencies and the U.S. dollar. Changes in currency exchange rates will
influence the value of the Fund's shares, and also may affect the value of
dividends and interest earned by the Fund and gains and losses realized by the
Fund. Currencies generally are evaluated on the basis of fundamental economic
criteria (e.g., relative inflation and interest rate levels and trends, growth
rate forecasts, balance of payments status and economic policies) as well as
technical and political data. Exchange rates are determined by the forces of
supply and demand in the foreign exchange markets. These forces are affected by
the international balance of payments and other economic and financial
conditions, government intervention, speculation and other factors. If the
currency in which a security is denominated appreciates against the U.S. dollar,
the dollar value of the security will increase. Conversely, a decline in the
exchange rate of the currency would adversely affect the value of the security
expressed in dollars.
 
  Many of the currencies of Latin American countries have experienced steady
devaluations relative to the U.S. dollar, and major devaluations have
historically occurred in certain countries. Any devaluations in the currencies
in which the Fund's portfolio securities are denominated may have a detrimental
impact on the Fund.
 
  Some countries also may have fixed currencies whose values against the U.S.
dollar are not independently determined. In addition, there is a risk that
certain countries may restrict the free conversion of their currencies into
other currencies. Further, certain currencies may not be internationally traded.
 
   
  OPTIONS, FUTURES AND FOREIGN CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions, the
Fund might not enter into any such transactions. Options, futures and foreign
currency transactions involve certain risks, which include: (1) dependence on
the Sub-advisor's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets and movements in
interest rates and currency markets; (2) imperfect correlation, or even no
correlation, between movements in the price of forward contracts, options,
futures contracts or options thereon and movements in the price of the currency
or security hedged or used for cover; (3) the fact that skills and techniques
needed to trade options, futures contracts and options thereon or to use forward
currency contracts are different from those needed to select the securities in
which the Fund invests; (4) lack of assurance that a liquid secondary market
will exist for any particular option, futures contract or option thereon at any
particular time; (5) the possible loss of principal under certain conditions;
and (6) the possible inability of a Fund to purchase or sell a portfolio
security at a time when it would otherwise be favorable for it to do so, or the
possible need for the Fund to sell a security at a disadvantageous time, due to
the need for the Fund to maintain "cover" or to set aside securities in
connection with hedging transactions.
    
- --------------------------------------------------------------------------------
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust on the one side and persons or companies furnishing services
to the Fund on the other, including the investment management and administration
agreement with AIM, the investment sub-advisory and sub-administration agreement
between AIM and the Sub-advisor, the agreements with AIM Distributors regarding
distribution of the Fund's shares, the custody agreement and the transfer agency
agreement. The day to day operations of the Fund are delegated to the officers
of the Trust,
    
 
                                       11
<PAGE>   867
 
   
subject always to the investment objective and policies of the Fund and to the
general supervision of the Trust's Board of Trustees. See "Trustees and
Executive Officers" in the Statement of Additional Information for information
on the Trust's Board of Trustees.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers and administrators include, but
are not limited to, determining the composition of the Fund's portfolio and
placing orders to buy, sell or hold particular securities; furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operation. For these services,
the Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on its average daily net assets, at the annualized rate
of 0.975% on the first $500 million, 0.95% on the next $500 million, 0.925% on
the next $500 million, and 0.90% on amounts thereafter. Out of the aggregate
fees payable by the Fund, AIM pays the Sub-advisor sub-advisory and
sub-administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administration fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-advisor, AIM Distributors or other agents. AIM has
undertaken to limit the Fund's expenses (exclusive of brokerage commissions,
taxes, interest and extraordinary expenses) to the annual rate of 1.50% of the
average daily net assets of the Fund's Advisor Class shares.
    
 
   
  The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-advisor (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement (the "Advisory Agreement"). AIM was organized in 1976
and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Fund pursuant to an investment sub-advisory and
sub-administration agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of the Sub-advisor,
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included the Sub-advisor and
certain other affiliates. As a result of this transaction, the Sub-advisor is
now an indirect wholly-owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices in Atlanta, Boston, Dallas, Denver,
Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore,
Sydney, Tokyo and Toronto. In managing the Fund, the Sub-advisor employs a team
approach, taking advantage of its investment resources around the world.
    
 
  The investment professionals primarily responsible for the portfolio
management of the Fund are as follows:
 
   
<TABLE>
<CAPTION>
                          RESPONSIBILITIES FOR                 BUSINESS EXPERIENCE
      NAME/OFFICE               THE FUND                         PAST FIVE YEARS
      -----------         --------------------                 -------------------
<S>                       <C>                    <C>
Francesco Bertoni           Portfolio Manager    Portfolio Manager for the Sub-advisor since June
  London                    since 1998           1998. Investment Director of INVESCO Asset
                                                 Management Ltd. (London) ("INVESCO London"), an
                                                 affiliate of the Sub-advisor, since 1994.
                                                 Portfolio Manager for INVESCO London from 1990
                                                 to 1994.
David Manuel                Portfolio Manager    Portfolio Manager for the Sub-advisor and
  London                    since 1997           INVESCO GT Asset Management PLC (London), an
                                                 affiliate of the Sub-advisor, since November
                                                 1997. Investment Analyst and Portfolio Manager
                                                 for Abbey Life Investment Services Ltd.
                                                 (Bournemouth) from 1987 to 1997, and Head of
                                                 Latin American Equities from 1994 to 1997.
</TABLE>
    
 
   
  In placing securities orders for the Fund's portfolio transactions, the
Sub-advisor seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-advisor may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions may be executed
through affiliates
    
 
                                       12
<PAGE>   868
 
   
of AIM or the Sub-advisor. High portfolio turnover (over 100%) involves
correspondingly greater brokerage commissions and other transaction costs that
the Fund will bear directly and could result in the realization of net capital
gains which would be taxable when distributed to shareholders. See "Dividends,
Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement (the
"Distribution Agreement"), with AIM Distributors, a registered broker-dealer and
a wholly owned subsidiary of AIM, to act as the distributor of the Advisor Class
shares of the Fund. Certain Trustees and officers of the Trust are affiliated
with AIM Distributors.
    
 
  The Distribution Agreement provides AIM Distributors with the exclusive right
to distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST
    
 
   
  The Trust was organized as a Delaware business trust on May 7, 1998. On
September 8, 1998, the Trust acquired the assets of and assumed the liabilities
of AIM Investment Funds, Inc., a Maryland Corporation. The Fund constitutes one
of the thirteen separate and distinct series portfolios of the Trust. From time
to time, the Trust may establish other funds, each corresponding to a distinct
investment portfolio and a distinct series of the Trust's shares of beneficial
interest. Shares of each fund are entitled to one vote per share (with
proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
    
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
   
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
    
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
    
 
                                       13
<PAGE>   869
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
                  TO THE AIM FAMILY OF FUNDS--Register Mark--
                            FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several of
which offer Advisor Class shares. Only Advisor Class shares are offered through
this Prospectus. Advisor Class shares are available from the following funds
(collectively, the "Advisor Class Funds"):
 
   
<TABLE>
            <S>                                           <C>
            AIM BASIC VALUE FUND                          AIM GLOBAL INFRASTRUCTURE FUND
            AIM DEVELOPING MARKETS FUND                   AIM GLOBAL RESOURCES FUND
            AIM DOLLAR FUND                               AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM EMERGING MARKETS FUND                     AIM GLOBAL TRENDS FUND
            AIM EMERGING MARKETS DEBT FUND                AIM INTERNATIONAL GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM JAPAN GROWTH FUND
            AIM GLOBAL CONSUMER PRODUCTS                  AIM LATIN AMERICAN GROWTH FUND
              AND SERVICES FUND                           AIM MID CAP EQUITY FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM NEW PACIFIC GROWTH FUND
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM SMALL CAP GROWTH FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM STRATEGIC INCOME FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WORLDWIDE GROWTH FUND
</TABLE>
    
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
 
  HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through Financial
Advisers (as defined herein) who have entered into agreements with A I M
Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor Class
shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
 
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment for
Advisor Class shares is $500.
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
                                       A-1
<PAGE>   870
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Advisor Class shares of any Advisor Class Funds not named on the cover of this
Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                                                     Shareholder Name, Shareholder Account Number 
                   OBI:                              (70 character limit)
</TABLE>
 
  It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
 
  HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
  In addition to the Advisor Class Funds, the AIM Funds consist of the following
funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR
LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND,
AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BLUE
CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION
FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED MATURITY TREASURY
FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM SELECT GROWTH FUND,
AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM VALUE FUND and AIM
WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM
LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with the Advisor Class
Funds, the "Multiple Class Funds." For information on purchasing any of the AIM
Funds and to receive a prospectus, please call (800) 347-4246. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
  Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
 
  Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee'
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares. Investors in wrap fee programs and
advisory accounts may only purchase Advisor Class shares through Financial
Advisers who have entered into agreements with AIM Distributors. Investors may
be charged a fee by their agents or brokers for effecting transactions in
Advisor Class shares.
 
  AIM Distributors may, from time to time, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives
 
                                       A-2
<PAGE>   871
 
and their families to places within or outside the United States. The total
amount of such additional bonus payments or other consideration shall not exceed
0.25% of the public offering price of the shares sold. Any such bonus or
incentive programs will not change the price paid by investors for the purchase
of the applicable AIM Fund's shares or the amount that any particular AIM Fund
will receive as proceeds from such sales. Dealers may not use sales of the AIM
Funds' shares to qualify for any incentives to the extent that such incentives
may be prohibited by the laws of any state.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND uses
the amortized cost method of valuing the securities it holds and rounds its per
share net asset value to the nearest whole cent, it is anticipated that the net
asset value of the shares of that fund will remain constant at $1.00 per share.
However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00 net
asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
                                       A-3
<PAGE>   872
 
- --------------------------------------------------------------------------------
 
   
SPECIAL PLANS
    
 
  Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
 
   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance to $5,000 to
establish and maintain an allocation across a range of Advisor Class Funds. The
Program automatically rebalances holdings of Advisor Class Funds to the
established allocation on a periodic basis. Under the Program, a shareholder may
predesignate, on a percentage basis, how the total value of his or her holdings
in a minimum of two, and a maximum of ten, Advisor Class Funds ("Personal
Portfolio") is to be rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more Advisor Class Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other Advisor Class Funds in the
shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the
Advisor Class Fund(s) in a shareholder's Personal Portfolio have appreciated
during a rebalancing period, the Program will result in shares of Advisor Class
Fund(s) that have appreciated most during the period being exchanged for shares
of Advisor Class Fund(s) that have appreciated least. SUCH EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends, Distributions and Tax
Matters -- Dividends and Distributions." Participation in the Program does not
assure that a shareholder will profit from purchases under the Program nor does
it prevent or lessen losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Advisor Class Fund would be 2%
or less. In predesignating percentages, shareholders must use whole percentages
and totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an Advisor Class Fund's
shares. The AIM Funds and AIM Distributors reserve the right to modify, suspend,
or terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which Advisor
Class Funds or what allocation percentages are assigned to the Program, unless
canceled or changed in writing and received by the Transfer Agent in good order
at least five business days prior to the rebalancing date. Certain
dealers/financial institutions may charge a fee for establishing accounts
relating to the Program. Investors should contact their dealers/financial
institutions or AIM Distributors for more information.
    
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the Advisor
Class Funds may participate in an exchange privilege as described below. AIM
Distributors acts as distributor for the Advisor Class Funds which represent a
range of different investment objectives and policies.
 
  Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
 
  Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
 
  An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor
 
                                       A-4
<PAGE>   873
 
Class Fund acquired through exchange must be qualified for sale in the state in
which the shareholder resides; (c) the exchange must be made between accounts
having identical registrations and addresses; (d) the full amount of the
purchase price for the shares being exchanged must have already been received by
the fund; (e) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or Form
W-9 (certifying exempt status) must have been received by the fund; (f) newly
acquired shares (through either an initial or subsequent investment) are held in
an account for at least ten business days, and all other shares are held in an
account for at least one day, prior to the exchange; and (g) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the Advisor Class Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
  Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but under unusual market
conditions such purchases may be delayed for up to five business days if it is
determined that an Advisor Class Fund would be materially disadvantaged by an
immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into an Advisor Class Fund that declares daily dividends ("Dividends,
Distributions and Tax Matters -- Dividends and Distributions," below), and the
release of the exchange proceeds is delayed for the foregoing five-day period,
such shareholder will not begin to accrue dividends until the sixth business day
after the exchange. Advisor Class shares purchased by check may not be exchanged
until it is determined that the check has cleared, which may take up to ten
business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. A shareholder may give exchange information to his Financial
Adviser. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the Advisor Class Funds. AIM Distributors reserves the right to impose
conditions on dealers or investment advisors who make telephone exchanges of
shares of the Advisor Class Funds, including the condition that any such dealer
or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/financial institutions may charge service fees for handling
repurchase transactions.
 
                                       A-5
<PAGE>   874
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the Advisor
Class Funds are redeemed at their net asset value next computed after a request
for redemption in proper form (including signature guarantees and other required
documentation for written redemptions) is received by the Transfer Agent or
certain financial institutions (or their designees) who are authorized to accept
redemption orders on behalf of the AIM Funds, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. Orders for the redemption of Advisor Class shares received on any
business day of an AIM Fund will be confirmed at the price determined as of the
close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the proceeds are to be sent to
the address of record. These requirements may be waived or modified upon notice
to shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such 
    

                                       A-6
<PAGE>   875
   

as certain domestic banks, credit unions, securities dealers, or securities
exchanges. The Transfer Agent will also accept signatures with either: (1) a
signature guaranteed with a medallion stamp of the STAMP Program, or (2) a
signature guaranteed with a medallion stamp of the NYSE Medallion Signature
Program, provided that in either event, the amount of the transaction involved
does not exceed the surety coverage amount indicated on the medallion. For
information regarding whether a particular institution or organization qualifies
as an "eligible guarantor institution," an investor should contact the Client
Services Department of AFS.
    
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
  The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
                                       A-7
<PAGE>   876
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                    DISTRIBUTIONS          DISTRIBUTIONS
                                                                        OF NET                 OF NET
                                     DIVIDENDS FROM                    REALIZED               REALIZED
                                     NET INVESTMENT                   SHORT-TERM              LONG-TERM
FUND                                     INCOME                      CAPITAL GAINS          CAPITAL GAINS
- ----                                 --------------                  -------------          -------------
<S>                                  <C>                             <C>                     <C>
AIM BASIC VALUE FUND...............  declared and paid annually         annually                annually
AIM DEVELOPING MARKETS FUND........  declared and paid annually         annually                annually
AIM DOLLAR FUND....................  declared daily; paid monthly       annually                annually
AIM EMERGING MARKETS FUND..........  declared and paid annually         annually                annually
AIM EMERGING MARKETS DEBT FUND.....  declared and paid monthly          annually                annually
AIM EUROPE GROWTH FUND.............  declared and paid annually         annually                annually
AIM GLOBAL CONSUMER PRODUCTS AND
  SERVICES FUND....................  declared and paid annually         annually                annually
AIM GLOBAL FINANCIAL SERVICES
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL GOVERNMENT INCOME
  FUND.............................  declared and paid monthly          annually                annually
AIM GLOBAL GROWTH & INCOME FUND....  declared and paid quarterly        annually                annually
AIM GLOBAL HEALTH CARE FUND........  declared and paid annually         annually                annually
AIM GLOBAL INFRASTRUCTURE FUND.....  declared and paid annually         annually                annually
AIM GLOBAL RESOURCES FUND..........  declared and paid annually         annually                annually
AIM GLOBAL TELECOMMUNICATIONS
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL TRENDS FUND.............  declared and paid annually         annually                annually
AIM INTERNATIONAL GROWTH FUND......  declared and paid annually         annually                annually
AIM JAPAN GROWTH FUND..............  declared and paid annually         annually                annually
AIM LATIN AMERICAN GROWTH FUND.....  declared and paid annually         annually                annually
AIM MID CAP EQUITY FUND............  declared and paid annually         annually                annually
AIM NEW PACIFIC GROWTH FUND........  declared and paid annually         annually                annually
AIM SMALL CAP GROWTH FUND..........  declared and paid annually         annually                annually
AIM STRATEGIC INCOME FUND..........  declared and paid monthly          annually                annually
AIM WORLDWIDE GROWTH FUND..........  declared and paid annually         annually                annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
 
  Dividends on Advisor Class shares of an Advisor Class Fund are expected to be
higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
                                       A-8
<PAGE>   877
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares. With respect to tax-exempt shareholders,
dividends and distributions from the AIM Funds are not subject to federal income
taxation to the extent permitted under the applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the 
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    

  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
   
  TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS DEBT FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM MID CAP
EQUITY FUND, AIM SMALL CAP GROWTH FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL
TAX INFORMATION. Certain states exempt from income taxes dividends paid by
mutual funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
    
 
                                       A-9
<PAGE>   878
   
  AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
    
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each Advisor Class Fund's transfer agent and
dividend payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-10
<PAGE>   879
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                   GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
        ACCOUNT TYPE                    NUMBER OF:                     ACCOUNT TYPE                   NUMBER OF:
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary

      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application

      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors

      Legal Guardian          Ward, Minor or
                              Incompetent

      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
</TABLE>
- --------------------------------------------------------------------------------
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   880
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   881
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02109
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
 
   
LAG-PRO-2
    
<PAGE>   882
 
                                                                    [APPLICATION
                                                                         INSIDE]
 
 [AIM LOGO APPEARS HERE]       THE AIM FAMILY OF FUNDS--Registered Trademark--
 
   
ADVISOR CLASS OF
    
 
   
AIM STRATEGIC INCOME FUND
    
   
(A SERIES PORTFOLIO OF AIM INVESTMENT FUNDS)
    
PROSPECTUS
SEPTEMBER 8, 1998
 
This Prospectus contains information about AIM STRATEGIC INCOME FUND (the
"Fund"), which is one of several series investment portfolios comprising AIM
Investment Funds (the "Trust"), an open-end, series, management investment
company. The Fund is a non-diversified portfolio which primarily seeks high
current income and secondarily seeks capital appreciation. The Fund allocates
its assets among debt securities of issuers in: (1) the United States; (2)
developed foreign countries; and (3) emerging markets.
 
   
The Fund is designed for long-term investors and not as a trading vehicle, does
not represent a complete investment program and is not suitable for all
investors. An investment in the Fund involves risk factors that should be
reviewed carefully by potential investors. The Fund is authorized to borrow
money for investment purposes, which would increase the volatility of its
performance and involves additional risks. See "Investment Objectives and
Policies" and "Risk Factors."
    
 
   
This Prospectus sets forth concisely information about the Fund that prospective
investors should know before investing. It should be read and retained for
future reference. A Statement of Additional Information, dated September 8,
1998, has been filed with the Securities and Exchange Commission (the "SEC") and
is incorporated herein by reference. The Statement of Additional Information is
available without charge upon written request to the Trust at 11 Greenway Plaza,
Suite 100, Houston, Texas 77046-1173, or by calling (800) 347-4246. The SEC
maintains a Web site at http://www.sec.gov that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding the Fund. Additional information about the Fund may also
be obtained from http://www.aimfunds.com.
    
 
   
THE STRATEGIC INCOME FUND INVESTS UP TO 50% OF ITS TOTAL ASSETS IN LOWER QUALITY
AND UNRATED FOREIGN GOVERNMENT BONDS WHOSE CREDIT QUALITY IS GENERALLY
CONSIDERED THE EQUIVALENT OF U.S. CORPORATE DEBT SECURITIES COMMONLY KNOWN AS
"JUNK BONDS." INVESTMENTS OF THIS TYPE ARE SUBJECT TO A GREATER RISK OF LOSS OF
PRINCIPAL AND INTEREST. PURCHASERS SHOULD CAREFULLY ASSESS THE RISKS ASSOCIATED
WITH AN INVESTMENT IN THE FUND. SEE "INVESTMENT PROGRAM" AND "RISK FACTORS."
    
 
   
Effective November 9, 1998, no more than 65% of the Fund's total assets may be
invested in non-investment grade debt securities. See "Investment
Program -- Investment Policies."
    
 
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>   883
 
- --------------------------------------------------------------------------------
 
   
                               TABLE OF CONTENTS
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
SUMMARY................................     2
THE FUND...............................     4
  Table of Fees and Expenses...........     4
  Financial Highlights.................     5
  Performance..........................     6
  Investment Program...................     6
  Risk Factors.........................    11
  Management...........................    16
  Organization of the Trust............    17
    
   
INVESTOR'S GUIDE TO THE AIM FAMILY OF
  FUNDS--Registered Trademark--........   A-1
  Introduction to The AIM Family of
     Funds.............................   A-1
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
  How to Purchase Shares...............   A-1
  Terms and Conditions of Purchase of
     the
     AIM Funds.........................   A-2
  Special Plans........................   A-4
  Exchange Privilege...................   A-4
  How to Redeem Shares.................   A-5
  Determination of Net Asset Value.....   A-7
  Dividends, Distributions and Tax
     Matters...........................   A-8
  General Information..................  A-10
  Appendix A...........................  A-11
APPLICATION INSTRUCTIONS...............   B-1
</TABLE>
    
 
                                    SUMMARY
- --------------------------------------------------------------------------------
 
   
THE FUND
    
 
   
  The Fund is a non-diversified series of the Trust.
    
 
  INVESTMENT OBJECTIVES. The Fund primarily seeks high current income and
secondarily seeks capital appreciation.
 
   
  PRINCIPAL INVESTMENTS. The Fund allocates its assets primarily among debt
securities of issuers in: (1) the United States; (2) developed foreign
countries; and (3) emerging markets, and selects particular securities in each
sector based on their relative investment merit.
    
 
   
  INVESTMENT MANAGERS. The Fund is managed by A I M Advisors, Inc. ("AIM") and
is sub-advised and sub-administered by INVESCO (NY), Inc. (the "Sub-advisor").
AIM and the Sub-advisor and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-advisor are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
AIM was organized in 1976 and, together with its subsidiaries, currently advises
approximately 90 investment company portfolios.
    
 
   
  PURCHASING SHARES. Advisor Class shares are offered through this Prospectus to
(a) trustees or other fiduciaries purchasing shares for employee benefit plans
which are sponsored by organizations which have at least 1,000 employees; (b)
any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment advisor has investment
discretion over such account, and (ii) the account holder pays such person as
compensation for its advice and other services an annual fee of at least 0.50%
on the assets in the account; (c) any account with assets of a least $10,000 if
(i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the
assets in the account; (d) accounts advised by the Sub-advisor or one of the
companies formerly affiliated with the Asset Management Division of
Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the funds in The AIM Family of Funds on May 29, 1998; and
(e) any of the companies composing or affiliated with AMVESCAP PLC. Pursuant to
a separate prospectus, the Fund also offers Class A and Class B shares, which
represent interests in the Fund. The Class A and Class B shares have different
distribution arrangements.
    
 
  Initial investments in Advisor Class shares must be at least $500 and
additional investments must be at least $50. The distributor of the Advisor
Class shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares."
 
   
  EXCHANGE PRIVILEGE. The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds" or the "AIM Funds").
Advisor Class shares of the Fund may be exchanged for Advisor Class shares of
certain Funds in the AIM Family of Funds in the manner and subject to the
policies and charges set forth herein. See "Exchange Privilege."
    
 
  REDEEMING SHARES. Advisor Class shareholders of the Fund may redeem all or a
portion of their shares at net asset value on any business day. See "How to
Redeem Shares."
 
   
  DISTRIBUTIONS. The Fund currently declares and pays dividends from net
investment income, if any, on a monthly basis. The Fund generally makes
distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be
    
 
                                        2
<PAGE>   884
 
reinvested at net asset value without payment of a sales charge in the Fund's
shares or may be invested in shares of the other funds in The AIM Family of
Funds. See "Dividends, Distributions and Tax Matters."
 
  RISK FACTORS. There is no assurance that the Fund will achieve its investment
objectives. The Fund's net asset value will fluctuate, reflecting fluctuations
in the market value of its portfolio holdings. The value of debt securities held
by the Fund generally fluctuates inversely with interest rate movements.
 
   
  The Fund will invest in foreign securities. Investments in foreign securities
involve risks relating to political and economic developments abroad and the
differences between the regulations to which U.S. and foreign issuers are
subject. Individual foreign economies also may differ favorably or unfavorably
from the U.S. economy. Changes in foreign currency exchange rates will affect
the Fund's net asset value, earnings and gains and losses realized on sales of
securities. Securities of foreign companies may be less liquid and their prices
more volatile than those of securities of comparable U.S. companies. The Fund
may invest in securities of issuers in emerging markets. Such investments entail
greater risks than investing in securities of issuers in developed markets.
    
 
  The Fund may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs.
 
   
  The Fund may invest up to 50% of its total assets in debt securities rated
below investment grade or, if not rated, determined by the Sub-advisor to be of
comparable quality. Investments of this type are subject to greater risk of loss
of principal and interest. See "Investment Program" and "Risk Factors."
Effective November 9, 1998, under normal market conditions, no more than 65% of
the Fund's total assets may be invested in non-investment grade debt securities.
    
 
  THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
 
                                        3
<PAGE>   885
 
   
                                    THE FUND
    
- --------------------------------------------------------------------------------
 
TABLE OF FEES AND EXPENSES
 
  The expenses and maximum transaction costs associated with investing in the
Advisor Class shares of the Fund are reflected in the following table(1):
 
<TABLE>
<S>                                                            <C>
Shareholder Transaction Costs:
  Maximum sales charge on purchases of shares (as a % of       None
     offering price)........................................
  Sales charges on reinvested distributions to                 None
     shareholders...........................................
  Maximum deferred sales charge (as a % of net asset value     None
     at time of purchase or sale, whichever is less)........
  Redemption charges........................................   None
  Exchange fees.............................................   None
Annual Fund Operating Expenses(2): (as a % of average net
  assets)
  Investment management and administration fees.............   0.73%
  12b-1 distribution and service fees.......................   None
  Other expenses............................................   0.36%
                                                               ----
          Total Fund Operating Expenses.....................   1.09%
                                                               ====
</TABLE>
 
   
(1)  This table is intended to assist investors in understanding the various
     costs and expenses associated with investing in the Fund.
    
 
   
(2)  Expenses are based on the Fund's fiscal year ended October 31, 1997. "Other
     expenses" include custody, transfer agent, legal, audit and other operating
     expenses. See "Management" herein and the Statement of Additional
     Information for more information. Investors purchasing Advisor Class shares
     through financial planners, trust companies, bank trust departments or
     registered investment advisors, or under a "wrap fee' program, will be
     subject to additional fees charged by such entities or by the sponsors of
     such programs. Where any account advised by one of the companies composing
     or affiliated with AMVESCAP PLC invests in Advisor Class shares of the
     Fund, such account shall not be subject to duplicative advisory fees.
     Effective November 1, 1997, AIM has voluntarily agreed to limit the Fund's
     expenses (exclusive of brokerage commissions, taxes, interest and
     extraordinary expenses) to the annual rate of 1.40% of the average daily
     net assets of the Fund's Advisor Class shares through May 31, 2000.
    
 
   
  HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES. An investor would have directly or
indirectly paid the following expenses at the end of the periods shown on a
$1,000 investment in the Fund, assuming a 5% annual return:
    
 
   
<TABLE>
<CAPTION>
                                                       1 YEAR   3 YEARS   5 YEARS   10 YEARS
                                                       ------   -------   -------   --------
<S>                                                    <C>      <C>       <C>       <C>
Advisor Class Shares.................................   $11       $35       $60       $133
</TABLE>
    
 
   
  THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT EXPENSES, MAY
BE MORE OR LESS THAN THOSE SHOWN. THE TABLE AND THE ASSUMPTION IN THE
HYPOTHETICAL EXAMPLE OF A 5% ANNUAL RETURN ARE REQUIRED BY REGULATION OF THE SEC
APPLICABLE TO ALL MUTUAL FUNDS; THE 5% ANNUAL RETURN IS NOT A PREDICTION OF AND
DOES NOT REPRESENT THE FUND'S PROJECTED OR ACTUAL PERFORMANCE.
    
 
                                        4
<PAGE>   886
 
- --------------------------------------------------------------------------------
 
   
FINANCIAL HIGHLIGHTS
    
 
   
  The table below provides condensed financial information concerning income and
capital changes for one Advisor Class share of the Fund. For the period March
29, 1988 (commencement of operations) to October 22, 1992, the Strategic Income
Fund was named G.T. Global Bond Fund and operated under different investment
objectives, policies and limitations. This information is supplemented by the
financial statements and accompanying notes appearing in the Statement of
Additional Information. The financial statements and notes, for the fiscal year
ended October 31, 1997 and the semi-annual period ending April 30, 1998, have
been audited by PricewaterhouseCoopers LLP, independent accountants, whose
report thereon also is included in the Statement of Additional Information.
    
 
   
                           AIM STRATEGIC INCOME FUND
    
   
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
    
 
   
<TABLE>
<CAPTION>
                                                                              ADVISOR CLASS**
                                                              -----------------------------------------------
                                                              SIX MONTHS        YEAR ENDED          JUNE 1,
                                                                ENDED           OCTOBER 31,         1995 TO
                                                              APRIL 30,      -----------------    OCTOBER 31,
                                                               1998(C)        1997     1996(C)      1995(c)
                                                              ----------     ------    -------    -----------
<S>                                                           <C>            <C>       <C>        <C>
Per Share Operating Performance:
Net asset value, beginning of period........................    $12.02       $11.77    $10.33       $10.32
                                                                ------       ------    ------       ------
Income from investment operations:
  Net investment income.....................................      0.55***      0.79      0.93         0.41
  Net realized and unrealized gain (loss) on investments....      0.18         0.34      1.44        (0.04)
                                                                ------       ------    ------       ------
    Net increase (decrease) from investment operations......      0.73         1.13      2.37         0.37
                                                                ------       ------    ------       ------
Distributions:
  From net investment income................................     (0.44)       (0.82)    (0.86)       (0.34)
  From net realized gain on investments.....................        --           --        --           --
  In excess of net investment income........................        --        (0.06)    (0.07)          --
  Return of capital.........................................        --           --        --        (0.02)
  From sources other than net investment income.............        --           --        --           --
                                                                ------       ------    ------       ------
    Total distributions.....................................     (0.44)       (0.88)    (0.93)       (0.36)
                                                                ------       ------    ------       ------
Net asset value, end of period..............................    $12.31       $12.02    $11.77       $10.33
                                                                ======       ======    ======       ======
Total investment return(d)..................................      6.09%(a)     9.86%    23.39%        3.72%(a)
Ratios and supplemental data:
Net assets, end of period (in 000's)........................    $  777       $  533    $  479       $  443
Ratio of net investment income to average net assets........      8.13%(b)     6.53%     8.44%        9.99%(b)
Ratio of operating expenses to average net assets:
  With expense reductions...................................      1.11%(b)     1.00%     1.03%        1.07%(b)
  Without expense reductions................................      1.11%(b)     1.09%     1.05%        1.10%(b)
Ratio of interest expenses to average net assets ++.........      0.01%(b)      N/A       N/A          N/A
Portfolio turnover rate ++..................................       244%(b)      149%      177%         238%(b)
</TABLE>
    
 
- ---------------
 
   
<TABLE>
<C>   <S>
 ++   Portfolio turnover and ratio of interest expenses to average
      net assets are calculated on the basis of the Fund as a
      whole without distinguishing between the classes of shares
      issued.
  *   Net investment income per share reflects an interest payment
      received from the conversion of Vnesheconombank loan
      agreements. Without such a payment, net investment income
      would have been $0.44 per share for Advisor Class.
 **   Commencing June 1, 1995, the Fund began offering Advisor
      Class shares.
(a)   Not annualized.
(b)   Annualized.
(c)   These selected per share data were calculated based upon
      average shares outstanding during the period.
(d)   Total investment return does not include sales charges.
N/A   Not Applicable.
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                                                                           AVERAGE MONTHLY
                                                                          AVERAGE             NUMBER OF         AVERAGE AMOUNT
                                                    AMOUNT OF DEBT    AMOUNT OF DEBT     REGISTRANT'S SHARES      OF DEBT PER
                                                    OUTSTANDING AT      OUTSTANDING          OUTSTANDING             SHARE
YEAR ENDED                                          END OF PERIOD    DURING THE PERIOD    DURING THE PERIOD    DURING THE PERIOD
- ----------                                          --------------   -----------------   -------------------   -----------------
<S>                                                 <C>              <C>                 <C>                   <C>
Six months ended April 30, 1998...................    $1,000,000        $  161,644           33,389,895             $ 0.005
October 31, 1997..................................            --        $3,575,910           39,263,038             $0.0911
</TABLE>
    
 
   
  Average amount of debt outstanding during the period is computed on a daily
basis.
    
 
                                        5
<PAGE>   887
 
- --------------------------------------------------------------------------------
 
PERFORMANCE
 
  All advertisements of the Fund will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of the Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
 
  The Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return.
 
  The Fund's total return shows its overall change in value, including changes
in share price and assuming all the Fund's dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical compounded annual rate of return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT
VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS
ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To illustrate the components of
overall performance, the Fund may separate its cumulative and average annual
returns into income results and capital gains or losses.
 
  Yield is computed in accordance with standardized formulas described in the
Statement of Additional Information and can be expected to fluctuate from time
to time and is not necessarily indicative of future results. Accordingly, yield
information may not provide a basis for comparison with investments which pay a
fixed rate of interest for a stated period of time. Yield reflects investment
income net of expenses over the relevant period attributable to a Fund share,
expressed as an annualized percentage of the net asset value per share for
Advisor Class shares.
 
  Yield is a function of the type and quality of the Fund's investments, the
maturity of the securities held in the Fund's portfolio and the operating
expense ratio of the Fund. A shareholder's investment in the Fund is not insured
or guaranteed. These factors should be carefully considered by the investor
before making an investment in the Fund.
 
  From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of any Fund. Such practices will
have the effect of increasing the Fund's yield and total return. The performance
of the Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
 
- --------------------------------------------------------------------------------
 
   
INVESTMENT PROGRAM
    
 
   
  INVESTMENT OBJECTIVE. The Fund primarily seeks high current income and
secondarily seeks capital appreciation. There can be no assurance that the Fund
will achieve its investment objective.
    
 
   
  INVESTMENT POLICIES. The Fund invests in debt securities of issuers in: (1)
the United States; (2) developed foreign countries; and (3) emerging markets.
The Fund selects debt securities from those issued by governments, their
agencies and instrumentalities; central banks; and commercial banks and other
corporate entities. Debt securities in which the Fund may invest include bonds,
notes, debentures, and other similar instruments including mortgage-backed and
asset-backed securities of foreign issuers as well as domestic issuers. The Fund
normally invests at least 50% of its net assets in U.S. and foreign debt and
other fixed income securities that, at the time of purchase, are rated at least
investment grade by Moody's or S&P or, if not rated, determined by the
Sub-advisor to be of comparable quality. No more than 50% of the Fund's total
assets may be invested in securities rated below investment grade. Such
securities involve a high degree of risk and are predominantly speculative. They
are the equivalent of high yield, high risk bonds, commonly known as "junk
bonds." The Fund may also invest in securities that are in default as to payment
of principal and/or interest.
    
 
   
  Beginning November 9, 1998, the following changes to non-fundamental
investment policies of the Fund will become effective: (1) the non-fundamental
investment policy of the Fund relating to investment grade debt securities will
be removed and replaced in its entirety with the following: "Under normal market
conditions, the Fund will invest at least 35% of its total assets in U.S. and
foreign debt and other fixed income securities that, at the time of purchase,
are either rated at least investment grade by Moody's or S&P or, if not rated,
are determined by the Sub-advisor to be of comparable quality"; (2) the
non-fundamental investment policy of the Fund relating to non-investment grade
debt securities will be removed and replaced in its entirety with the following:
"No more than 65% of the Fund's total assets may be invested in debt securities
that, at the time of purchase are either rated below investment grade or, if not
rated are determined by the Sub-advisor to be of comparable quality by Moody's
or S&P, or, if not rated, are determined by the Sub-Advisor to be of comparable
quality"; and (3) a new non-fundamental investment policy of the Fund relating
to investments in equity securities will be added to read in its entirety as
follows: "The Fund may invest up to 35% of its total assets in equity
securities."
    
 
                                        6
<PAGE>   888
 
   
  The Fund's investments in emerging market securities may consist substantially
of Brady Bonds (see "General Policies -- Brady Bonds," below) and other
sovereign debt securities issued by emerging market governments that are traded
in the markets of developed countries or groups of developed countries. The
Sub-advisor may invest in debt securities of emerging market issuers that it
determines to be suitable investments for the Fund without regard to ratings.
Currently, the substantial majority of emerging market debt securities are
considered to have a credit quality below investment grade. The Fund also may
invest in below-investment grade debt securities of corporate issuers in the
United States and in developed foreign countries, subject to the overall 50%
limitation.
    
 
- --------------------------------------------------------------------------------
 
   
CERTAIN INVESTMENT STRATEGIES AND POLICIES.  In pursuit of its objectives and
policies, the Fund may employ one or more of the following strategies in order
to enhance investment results:
    
 
  ASSET ALLOCATION. The Fund invests in debt obligations allocated among diverse
markets and denominated in various currencies, including U.S. dollars, or in
multinational currency units such as Euros. The Fund is designed for investors
who wish to accept the risks entailed in such investments, which are different
from those associated with a portfolio consisting entirely of securities of U.S.
issuers denominated in U.S. dollars. The Fund may purchase securities that are
issued by the government or a company or financial institution of one country
but denominated in the currency of another country (or a multinational currency
unit).
 
   
  The Sub-advisor allocates the assets of the Fund in securities of issuers in
countries and in currency denominations where the combination of fixed income
market returns, the price appreciation potential of fixed income securities and
currency exchange rate movements will present opportunities primarily for high
current income and secondarily for capital appreciation. In so doing, the Sub-
advisor intends to take full advantage of the different yield, risk and return
characteristics that investment in the fixed income markets of different
countries can provide for U.S. investors. Fundamental economic strength, credit
quality and currency and interest rate trends are the principal determinants of
the emphasis given to various country, geographic and industry sectors within
the Fund. Securities held by the Fund may be invested in without limitation as
to maturity.
    
 
   
  The Sub-advisor selects securities of particular issuers on the basis of its
views as to the best values then currently available in the marketplace. Such
values are a function of yield, maturity, issue classification and quality
characteristics, coupled with expectations regarding the local and world
economies, movements in the general level and term of interest rates, currency
values, political developments and variations in the supply of funds available
for investment in the world bond market relative to the demands placed upon it.
    
 
   
  The Sub-advisor generally evaluates currencies on the basis of fundamental
economic criteria (e.g., relative inflation, interest rate levels and trends,
growth rate forecasts, balance of payments status and economic policies) as well
as technical and political data. The Sub-advisor may seek to protect the Fund
against such negative currency movements through the use of sophisticated
investment techniques. See "Options, Futures and Forward Currency Transactions"
and "Swaps, Caps, Floors and Collars."
    
 
   
  According to the Sub-advisor, as of the date of this Prospectus, more than 50%
of the value of all outstanding government debt obligations throughout the world
is represented by obligations denominated in currencies other than the U.S.
dollar. Moreover, from time to time, the debt securities of issuers located
outside the United States have substantially outperformed the debt obligations
of U.S. issuers. Accordingly, the Sub-advisor believes that the Fund's policy of
investing in debt securities throughout the world may enable the achievement of
results superior to those produced by mutual funds with similar objectives to
those of the Fund that invest solely in debt securities of U.S. issuers.
    
 
  The Fund is designed for investors who wish to accept the risks entailed in
such investments, which are different from those associated with a portfolio
consisting entirely of securities of U.S. issuers denominated in U.S. dollars.
 
   
  TEMPORARY DEFENSIVE STRATEGIES. The Sub-advisor may employ a temporary
defensive investment strategy if it determines such a strategy to be warranted
due to market, economic or political conditions. Pursuant to such a defensive
strategy, the Fund temporarily may hold cash (U.S. dollars, foreign currencies
or multinational currency units, such as the euros) and/or invest up to 100% of
its assets in high quality debt securities or money market instruments of U.S.
or foreign issuers. In addition, for temporary defensive purposes, most or all
of the Fund's investments may be made in the United States and denominated in
U.S. dollars. To the extent the Fund employs a temporary defensive strategy, it
will not be invested so as to achieve directly its investment objectives. In
addition, pending investment of proceeds from new sales of Fund shares or to
meet ordinary daily cash needs, the Fund may hold cash (U.S. dollars, foreign
currencies or multinational currency units) and may invest in high quality
foreign or domestic money market instruments. For a full description of money
market instruments, see "Selection of Debt Investments" in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
    
 
   
  EMERGING MARKET SECURITIES. The Fund considers "emerging markets" to consist
of all countries determined by the Sub-advisor to have developing or emerging
economies and markets. These countries generally include every country in the
world except the United States, Canada, Japan, Australia, New Zealand and most
countries located in Western Europe. The Fund will consider investment in the
following emerging markets:
    
 
     Algeria
     Argentina
     Bolivia
     Botswana
     Brazil
     Bulgaria
     Chile
     China
     Colombia
 
                                        7
<PAGE>   889
 
     Costa Rica
     Cyprus
     Czech Republic
     Dominican Republic
     Ecuador
     Egypt
     El Salvador
     Finland
     Ghana
     Greece
     Hong Kong
     Hungary
     India
     Indonesia
     Israel
     Ivory Coast
     Jamaica
     Jordan
     Kazakhstan
     Kenya
     Lebanon
     Malaysia
     Mauritius
     Mexico
     Morocco
     Nicaragua
     Nigeria
     Oman
     Pakistan
     Panama
     Paraguay
     Peru
     Philippines
     Poland
     Portugal
     Republic of Slovakia
     Russia
     Singapore
     Slovenia
     South Africa
     South Korea
     Sri Lanka
     Swaziland
     Taiwan
     Thailand
     Turkey
     Ukraine
     Uruguay
     Venezuela
     Zambia
     Zimbabwe
 
  The Fund will not be invested in all such markets at all times. Moreover,
investing in some of those markets currently may not be desirable or feasible,
due to the lack of adequate custody arrangements, overly burdensome repatriation
requirements and similar restrictions, the lack of organized and liquid
securities markets, unacceptable political risks or for other reasons.
 
  As used in this Prospectus and the Statement of Additional Information, an
issuer in an emerging market is an entity: (i) for which the principal
securities trading market is an emerging market, as defined above; (ii) that
(alone or on a consolidated basis) derives 50% or more of its total revenue from
either goods produced, sales made or services performed in emerging markets; or
(iii) organized under the laws of, or with a principal office in, an emerging
market.
 
  BRADY BONDS. The Fund may invest in "Brady Bonds," which are debt
restructurings that provide for the exchange of cash and loans for newly issued
bonds. Brady Bonds have been issued by the countries of Albania, Argentina,
Brazil, Bulgaria, Costa Rica, Dominican Republic, Ecuador, Ivory Coast, Jordan,
Mexico, Nigeria, Panama, Peru, Philippines, Poland, Uruguay, Venezuela and
Vietnam and are expected to be issued by other emerging market countries. As of
the date of this Prospectus, the Fund is not aware of the occurrence of any
payment defaults on Brady Bonds. Investors should recognize, however, that Brady
Bonds do not have a long payment history. In addition, Brady Bonds are often
rated below investment grade.
 
  The Fund may invest in either collateralized or uncollateralized Brady Bonds.
U.S. dollar-denominated, collateralized Brady Bonds, which may be fixed rate par
bonds or floating rate discount bonds, are collateralized in full as to
principal by U.S. Treasury zero coupon bonds having the same maturity as the
bonds. Interest payments on such bonds generally are collateralized by cash or
securities in an amount that, in the case of fixed rate bonds, is equal to at
least one year of rolling interest payments or, in the case of floating rate
bonds, initially is equal to at least one year's rolling interest payments based
on the applicable interest rate at the time of issuance and is adjusted at
regular intervals thereafter.
 
  MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The Fund may invest in
mortgage-backed and asset-backed securities of U.S. and foreign issuers,
including privately issued mortgage-backed and asset-backed securities.
Mortgage-backed securities represent direct or indirect interests in pools of
underlying mortgage loans that are secured by real property. Investors typically
receive payments out of the interest on and principal of the underlying
mortgages. Asset-backed securities are similar to mortgage-backed securities,
except that the underlying assets are other financial assets or financial
receivables, such as motor vehicle installment sales contracts, home equity
loans, leases of various types of real and personal property, and receivables
from credit cards. Any mortgage-backed and asset-backed securities purchased by
the Fund will be subject to the same rating requirements that apply to its other
investments.
 
  LOAN PARTICIPATIONS AND ASSIGNMENTS. The Fund may invest in fixed and floating
rate loans ("Loans") arranged through private negotiations between a foreign
entity and one or more financial institutions ("Lenders"). The majority of the
Fund's investments in Loans in emerging markets is expected to be in the form of
participations in Loans ("Participations") and assignments of portions of Loans
from third parties ("Assignments"). Participations typically will result in the
Fund having a contractual relationship only with the Lender, not with the
borrower government. The Fund will have the right to receive payments of
principal, interest and any fees to which it is entitled only from the Lender
selling the Participation and only upon receipt by the Lender of the payments
from the borrower. In connection with purchasing Participations, the Fund
generally will have no right to enforce compliance by the borrower with the
terms of the loan agreement relating to the loan ("Loan Agreement"), nor any
rights of set-off against the borrower, and the Fund may not directly benefit
from any collateral supporting the Loan in which it has purchased the
Participation. As a result, the Fund will assume the credit risk of both the
borrower and the Lender that is selling the Participation.
 
   
  In the event of the insolvency of the Lender selling a Participation, the Fund
may be treated as a general creditor of the Lender and may not benefit from any
set-off between the Lender and the borrower. The Fund will acquire
Participations only if the Lender interpositioned between the Fund and the
borrower is determined by the Sub-advisor to be creditworthy. When the Fund
purchases As-
    
 
                                        8
<PAGE>   890
 
signments from Lenders, the Fund will acquire direct rights against the borrower
on the Loan. However, since Assignments are arranged through private
negotiations between potential assignees and assignors, the rights and
obligations acquired by the Fund as the purchaser of an Assignment may differ
from, and be more limited than, those held by the assigning Lender.
 
  WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities and forward commitments only with the intention
of actually receiving or delivering the securities, as the case may be. No
income accrues on securities that have been purchased pursuant to a forward
commitment or on a when-issued basis prior to delivery of the securities. If the
Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, the Fund will
segregate cash or liquid securities equal to the value of the when-issued or
forward commitment securities with its custodian and will mark to market daily
such assets. There is a risk that the securities may not be delivered and that
the Fund may incur a loss.
 
  The Fund may also sell securities on a "when, as and if issued" basis for
hedging purposes. Under such a transaction, the Fund is required to deliver at a
future date a security it does not presently hold, but which it has a right to
receive if the security is issued. Issuance of the security may not occur, in
which case the Fund would have no obligation to the other party, and would not
receive payment for the sale. Selling securities on a "when, as and if issued"
basis may reduce risk of loss to the extent that such a sale wholly or partially
offsets unfavorable price movements on the investments being hedged. However,
such sales also limit the amount the Fund can receive if the "when, as and if
issued" security is in fact issued.
 
   
  BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund is
authorized to borrow money from banks in an amount up to 33 1/3% of its total
assets (including the amount borrowed), less all liabilities and indebtedness
other than the borrowings and may use the proceeds of such borrowings for
investment purposes. The Fund will borrow for investment purposes only when the
Sub-advisor believes that such borrowings will benefit the Fund after taking
into account considerations such as the costs of the borrowing and the likely
investment returns on the securities purchased with the borrowed monies.
    
 
  Borrowing for investment purposes is known as leveraging, which is a
speculative practice. Such borrowing by the Fund creates the opportunity for
increased net income and appreciation but, at the same time, involves special
risk considerations. For example, leveraging might exaggerate changes in the net
asset value of Fund shares and in the yield realized by the Fund. Although the
principal amount of such borrowings will be fixed, the Fund's assets may change
in value during the time the borrowing is outstanding. By leveraging the Fund,
changes in net asset values, higher or lower, may be greater in degree than if
leverage was not employed. To the extent the income derived from the assets
obtained with borrowed funds exceeds the interest and other expenses that the
Fund will have to pay, the Fund's net income will be greater than if borrowing
was not used. Conversely, if the income from the assets obtained with borrowed
funds is not sufficient to cover the cost of borrowing, the net income of the
Fund will be less than if borrowing were not used, and therefore the amount
available for distribution to shareholders as dividends will be reduced. The
Fund expects that some of its borrowings may be made on a secured basis.
 
  In addition to the foregoing borrowings, the Fund may borrow money for
temporary or emergency purposes or payments in an amount not exceeding 5% of the
value of its total assets (not including the amount borrowed) provided that the
total amount borrowed by the Fund for any purpose does not exceed 33 1/3% of its
total assets.
 
  The Fund may also enter into reverse repurchase agreements with a bank or
recognized securities dealer, although the Fund currently has no intention of
doing so with respect to more than 5% of its total assets. Under a reverse
repurchase agreement, the Fund would sell securities and agree to repurchase
them at a particular price at a future date. At the time the Fund enters into a
reverse repurchase agreement, it will establish and maintain a segregated
account with an approved custodian containing cash or liquid securities having a
value not less than the repurchase price, including accrued interest. Reverse
repurchase agreements involve the risk that the market value of the securities
retained in lieu of sale by the Fund may decline below the price of the
securities the Fund has sold but is obligated to repurchase. In the event the
buyer of securities under a reverse repurchase agreement files for bankruptcy or
becomes insolvent, such buyer or its trustee or receiver may receive an
extension of time to determine whether to enforce the Fund's obligation to
repurchase the securities, and the Fund's use of the proceeds of the reverse
repurchase agreement may effectively be restricted pending such decision.
 
  The Fund also may enter into "dollar rolls," in which the Fund sells fixed
income securities for delivery in the current month and simultaneously contracts
to repurchase substantially similar (same type, coupon and maturity) securities
on a specified future date. During the roll period, the Fund would forego
principal and interest paid on such securities. The Fund would be compensated by
the difference between the current sales price and the forward price for the
future purchase, as well as by the interest earned on the cash proceeds of the
initial sale. See "Investment Objectives and Policies" in the Statement of
Additional Information.
 
  Reverse repurchase agreements and dollar rolls will be treated as borrowings
and will be deducted from the Fund's assets for purposes of calculating
compliance with the Fund's borrowing limitation. See "Investment Limitations" in
the Statement of Additional Information.
 
                                        9
<PAGE>   891
 
   
  SECURITIES LENDING. The Fund may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Fund to retain ownership of the securities loaned and, at the same time,
enhances the Fund's total return. At all times a loan is outstanding, the Fund
requires the borrower to maintain with the Fund's custodian, collateral
consisting of cash, U.S. government securities or certain irrevocable letters of
credit equal to at least the value of the borrowed securities, plus any accrued
interest or such other collateral as permitted by the Fund's investment program
and regulatory agencies, and as approved by the Board. The Fund limits its loans
of portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. The risks in lending portfolio
securities, as with other extensions of secured credit, consist of possible
delays in receiving additional collateral or in recovery of the loaned
securities and possible loss of rights in the collateral should the borrower
fail financially.
    
 
  ZERO COUPON SECURITIES. The Fund may invest in certain zero coupon securities
that are "stripped" U.S. Treasury notes and bonds. It also may invest in zero
coupon and other deep discount securities issued by foreign governments and
domestic and foreign corporations, including certain Brady Bonds and other
foreign debt and in payment-in-kind securities. Zero coupon securities pay no
interest to holders prior to maturity, and payment-in-kind securities pay
interest in the form of additional securities. However, a portion of the
original issue discount on zero coupon securities and the "interest" on
payment-in-kind securities will be included in the Fund's income. Accordingly,
for the Fund to continue to qualify for tax treatment as a regulated investment
company and to avoid a certain excise tax (see "Taxes" in the Statement of
Additional Information), it may be required to distribute an amount that is
greater than the total amount of cash it actually receives. These distributions
must be made from the Fund's cash assets or, if necessary, from the proceeds of
sales of portfolio securities. The Fund will not be able to purchase additional
income-producing securities with cash used to make such distributions, and its
current income ultimately may be reduced as a result. Zero coupon and
payment-in-kind securities usually trade at a deep discount from their face or
par value and will be subject to greater fluctuations of market value in
response to changing interest rates than debt obligations of comparable
maturities that make current distributions of interest in cash.
 
  SYNTHETIC SECURITY POSITIONS. The Fund may utilize combinations of futures on
bonds and forward currency contracts to create investment positions that have
substantially the same characteristics as bonds of the same type as those on
which the futures contracts are written. Investment positions of this type are
generally referred to as "synthetic securities."
 
   
  For example, in order to establish a synthetic security position for the Fund
that is comparable to owning a Japanese government bond, the Sub-advisor might
purchase futures contracts on Japanese government bonds in the desired principal
amount and purchase forward currency contracts for Japanese Yen in an amount
equal to the then current purchase price for such bonds in the Japanese cash
market, with each contract having approximately the same delivery date.
    
 
   
  The Sub-advisor might roll over the futures and forward currency contract
positions before taking delivery in order to continue the Fund's investment
position, or the Sub-advisor might close out those positions, thus effectively
selling the synthetic security. Further, the amount of each contract might be
adjusted in response to market conditions and the forward currency contract
might be changed in amount or eliminated in order to hedge against currency
fluctuations.
    
 
   
  The Sub-advisor would create synthetic security positions for the Fund when it
believes that it can obtain a better yield or achieve cost savings in comparison
to purchasing actual bonds or when comparable bonds are not readily available in
the market. Synthetic security positions are subject to the risk that changes in
the value of purchased futures contracts may differ from changes in the value of
the bonds that might otherwise have been purchased in the cash market. Also,
while the Sub-advisor believes that the cost of creating synthetic security
positions generally will be materially lower than the cost of acquiring
comparable bonds in the cash market, the Fund will incur transaction costs in
connection with each purchase of a futures or forward currency contract. The use
of futures contracts and forward currency contracts to create synthetic security
positions also is subject to substantially the same risks as those that exist
when these instruments are used in connection with hedging strategies. See
"Options, Futures and Forward Currency Transactions" below and "Options, Futures
and Currency Strategies" in the Statement of Additional Information.
    
 
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies, and options on futures contracts to attempt to
hedge against the overall level of investment and currency risk normally
associated with the Fund's investment. The Fund also may enter into interest
rate, currency and index swaps and purchase or sell related caps, floors and
collars and other similar instruments. See "Swaps, Caps, Floors and Collars"
below. These instruments are often referred to as "derivatives," which may be
defined as financial instruments whose performance is derived, at least in part,
from the performance of another asset (such as a security, currency or an index
of securities). The Fund may enter into such instruments up to the full value of
its portfolio assets. See "Risk Factors -- Options, Futures and Currency
Transactions" herein and "Options, Futures and Currency Strategies" in the
Statement of Additional Information.
 
  To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to the
Fund's portfolio positions. The Fund also may purchase and sell put and call
options on currencies, futures contracts on currencies and options on such
futures contracts to hedge against movements in exchange rates.
 
                                       10
<PAGE>   892
 
   
  In addition, the Fund may purchase and sell put and call options on securities
to hedge against the risk of fluctuations in the prices of securities held by
the Fund or that the Sub-advisor intends to include in the Fund's portfolio. The
Fund also may purchase and sell put and call options on indices to hedge against
overall fluctuations in the securities markets generally or in a specific market
sector.
    
 
  Further, the Fund may sell index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general market or market sector decline that could adversely affect the Fund's
portfolio. The Fund also may purchase index futures contracts and purchase call
options or write put options on such contracts to hedge against a general market
or market sector advance and thereby attempt to lessen the cost of future
securities acquisitions. The Fund may use interest rate futures contracts and
options thereon to hedge its portfolio against changes in the general level of
interest rates.
 
  SWAPS, CAPS, FLOORS AND COLLARS. The Fund may enter into interest rate,
currency and index swaps, and purchase or sell related caps, floors and collars
and other derivative instruments. The Fund expects to enter into these
transactions primarily to preserve a return or spread on a particular investment
or portion of its portfolio, to protect against currency fluctuations, as a
technique for managing the portfolio's duration (i.e., the price sensitivity to
changes in interest rates) or to protect against any increase in the price of
securities the Fund anticipates purchasing at a later date. The Fund intends to
use these transactions as hedges, and will not sell interest rate caps or floors
if it does not own securities or other instruments providing an income stream
roughly equivalent to what the Fund may be obligated to pay.
 
  Interest rate swaps involve the exchange by the Fund with another party of
their respective commitments to pay or receive interest (for example, an
exchange of floating rate payments for fixed rate payments) with respect to a
notional amount of principal. A currency swap is an agreement to exchange cash
flows on a notional amount based on changes in the values of the reference
indices.
 
  The purchase of a cap entitles the purchaser to receive payments on a notional
principal amount from the party selling the cap to the extent that a specified
index exceeds a predetermined interest rate. The purchase of an interest rate
floor entitles the purchaser to receive payments on a notional principal amount
from the party selling the floor to the extent that a specified index falls
below a predetermined interest rate or amount. A collar is a combination of a
cap and a floor that preserves a certain return within a predetermined range of
interest rates or values.
 
  INDEXED COMMERCIAL PAPER. The Fund may invest without limitation in commercial
paper which is indexed to certain specific foreign currency exchange rates. The
terms of such commercial paper provide that its principal amount is adjusted
upwards or downwards (but not below zero) at maturity to reflect changes in the
exchange rate between two currencies while the obligation is outstanding. The
Fund will purchase such commercial paper with the currency in which it is
denominated and, at maturity, will receive interest and principal payments
thereon in that currency, but the amount of principal payable by the issuer at
maturity will change in proportion to the change (if any) in the exchange rate
between the two specified currencies between the date the instrument is issued
and the date the instrument matures. While such commercial paper entails the
risk of loss of principal, the potential for realizing gains as a result of
changes in foreign currency exchange rates enables the Fund to hedge against a
decline in the U.S. dollar value of investments denominated in foreign
currencies while seeking to provide an attractive money market rate of return.
The Fund will not purchase such commercial paper for speculation.
 
  OTHER INDEXED SECURITIES. The Fund may invest in certain other indexed
securities, which are securities whose prices are indexed to the prices of other
securities, securities indices, currencies, precious metals or other
commodities, or other financial indicators. Indexed securities typically, but
not always, are debt securities or deposits whose value at maturity or coupon
rate is determined by reference to a specific instrument or statistic. The
performance of indexed securities depends to a great extent on the performance
of the security, currency, or other instrument to which they are indexed, and
may also be influenced by interest rate changes in the United States and abroad.
At the same time, indexed securities are subject to the credit risks associated
with the issuer of the security, and their values may decline substantially if
the issuer's creditworthiness deteriorates. Indexed securities may be more
volatile than the underlying instruments. New forms of indexed securities
continue to be developed. The Fund may invest in such securities to the extent
consistent with its investment objectives.
 
  OTHER INFORMATION. The Fund's investment objectives may not be changed without
the approval of a majority of the Fund's outstanding voting securities. A
"majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations which
also may not be changed without shareholder approval. A complete description of
these limitations is included in the Statement of Additional Information. The
Fund's other investment policies described herein and in the Statement of
Additional Information may be changed by the Trust Board of Trustees without
shareholder approval.
 
  The Fund is authorized to make short sales of securities, although it has no
current intention of doing so. See "Investment Objectives and Policies -- Short
Sales" in the Statement of Additional Information.
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
 
                                       11
<PAGE>   893
 
- --------------------------------------------------------------------------------
 
   
RISK FACTORS
    
 
   
  GENERAL. There is no assurance that the Fund will achieve its investment
objectives. The Fund's net asset value will fluctuate, reflecting fluctuations
in the market value of its portfolio positions and its net currency exposure.
The value of fixed income securities held by the Fund generally fluctuates
inversely with interest rate movements. Longer term bonds held by the Fund are
subject to greater interest rate risk. The value of equity securities held by
the Fund will fluctuate in response to general market and economic developments,
as well as developments affecting the particular issuers of such securities.
Equity securities, particularly common stocks, generally represent the most
junior position in an issuer's capital structure, and entitle holders to an
interest in the assets of an issuer, if any, remaining after all more senior
claims have been satisfied.
    
 
  NON-DIVERSIFIED CLASSIFICATION. The Fund is classified under the Investment
Company Act of 1940 (the "1940 Act") as a "non-diversified" fund. As a result,
the Fund will be able to invest in a fewer number of issuers than if it were
classified under the 1940 Act as a "diversified" fund. To the extent that the
Fund invests in a smaller number of issuers, the value of the Fund's shares may
fluctuate more widely and the Fund may be subject to greater investment and
credit risk with respect to its portfolios.
 
  FOREIGN INVESTING. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally are not registered with the SEC, nor
are the issuers thereof usually subject to the SEC's reporting requirements.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available with respect to U.S. securities and
issuers. Foreign companies generally are not subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to U.S. companies. In addition, certain costs
attributable to foreign investing, such as custody charges, are higher than
those attributable to domestic investing. Securities of some foreign companies
are less liquid and their prices may be more volatile than securities of
comparable domestic companies. The Fund's interest and dividends from foreign
issuers may be subject to non-U.S. withholding taxes, thereby reducing their net
investment income.
 
  With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Fund, political or social instability, or diplomatic
developments which could affect the investments of the Fund in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
 
  CURRENCY RISK. Since the Fund normally invests substantially in securities
denominated in currencies other than the U.S. dollar, and because they may hold
foreign currencies, they will be affected favorably or unfavorably by exchange
control regulations or changes in the exchange rates between such currencies and
the U.S. dollar. Changes in currency exchange rates will influence the value of
the Fund's shares, and also may affect the value of dividends and interest
earned by the Fund and gains and losses realized by the Fund. Currencies
generally are evaluated on the basis of fundamental economic criteria (e.g.,
relative inflation and interest rate levels and trends, growth rate forecasts,
balance of payments status and economic policies) as well as technical and
political data. The exchange rates between the U.S. dollar and other currencies
are determined by supply and demand in the currency exchange markets, the
international balance of payments, governmental intervention, speculation and
other economic and political conditions. If the currency in which a security is
denominated appreciates against the U.S. dollar, the dollar value of the
security will increase. Conversely, a decline in the exchange rate of the
currency would adversely affect the value of the security expressed in U.S.
dollars.
 
  In addition, many of the currencies in emerging market countries have
experienced steady devaluations relative to the U.S. dollar and major
devaluations have historically occurred in certain countries.
 
   
  Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain are members of the European Economic and
Monetary Union (the "EEMU"). The EEMU intends to establish a common European
currency for participating countries which will be known as the "euro." It is
anticipated that each participating country will supplement its existing
currency with the euro on January 1, 1999, and will replace its existing
currency with the euro on July 1, 2002. Any other European country which is a
member of the EEMU may elect to participate in the EEMU and may supplement its
existing currency with the euro after January 1, 1999.
    
 
   
  The expected introduction of the euro presents unique risks and uncertainties,
including whether the payment and operational systems of banks and other
financial institutions will be ready by January 1, 1999; how outstanding
financial contracts will be treated after January 1, 1999; the establishment of
exchange rates for existing currencies and the euro; and the creation of
suitable clearing and settlement systems for the euro. These and other factors
could cause market disruptions before or after the introduction of the euro and
could adversely affect the value of securities held by the Fund.
    
 
  INVESTING IN EMERGING MARKETS. Because of the special risks associated with
investing in emerging markets, an investment in the Fund should be considered
speculative. Investors are strongly advised to consider carefully the special
risks involved in emerging markets, which are in addition to the usual risks of
investing in developed foreign markets around the world.
 
  Investing in emerging markets involves risks relating to potential political
and economic instability within such markets and the risks of expropriation,
nationalization, confiscation of assets and property or the imposition of
restrictions on foreign investment and on repatriation of capital invested. In
the event of such expropriation, nationalization or other confiscation in any
emerging market, the Fund could lose its entire investment in that market.
 
                                       12
<PAGE>   894
 
  Many emerging market countries have experienced substantial, and in some
periods extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries.
 
  Economies in emerging markets generally are dependent heavily upon
international trade and, accordingly, have been and may continue to be affected
adversely by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been and may continue
to be affected adversely by economic conditions in the countries in which they
trade.
 
  The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the United States and
other major markets. There also may be a lower level of monitoring and
regulation of emerging securities markets and the activities of investors in
such markets, and enforcement of existing regulations has been extremely
limited.
 
  In addition, brokerage commissions, custodial services and other costs
relating to investment in foreign markets generally are more expensive than in
the United States, particularly with respect to emerging markets. Such markets
have different settlement and clearance procedures. In certain markets there
have been times when settlements have been unable to keep pace with the volume
of securities transactions, making it difficult to conduct such transactions.
The inability of the Fund to make intended securities purchases due to
settlement problems could cause the Fund to forego attractive investment
opportunities. Inability to dispose of a portfolio security caused by settlement
problems could result in losses to the Fund due to subsequent declines in value
of the portfolio security or, if the Fund has entered into a contract to sell
the security, could result in possible liability to the purchaser.
 
  The risk also exists that an emergency situation may arise in one or more
emerging markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for the Fund's portfolio securities in such
markets may not be readily available. Section 22(e) of the 1940 Act permits a
registered investment company to suspend redemption of its shares for any period
during which an emergency exists, as determined by the SEC. Accordingly, when
the Fund believes that appropriate circumstances warrant, it will promptly apply
to the SEC for a determination that an emergency exists within the meaning of
Section 22(e) of the 1940 Act. During the period commencing from the Fund's
identification of such conditions until the date of SEC action, the portfolio
securities of the Fund in the affected markets will be valued at fair value as
determined in good faith by or under the direction of the Trust's Board of
Trustees.
 
  MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The yield characteristics of
mortgage-backed and asset-backed securities differ from those of traditional
bonds. Among the major differences are that interest and principal payments are
made more frequently (usually monthly) and that principal may be prepaid at any
time because the underlying mortgage loans or other assets generally may be
prepaid at any time. Generally, prepayments on fixed-rate mortgage loans will
increase during a period of falling interest rates and decrease during a period
of rising interest rates. Mortgage-backed and asset-backed securities may also
decrease in value as a result of increasing market interest rates and, because
of prepayments, may benefit less than other bonds from declining interest rates.
Reinvestments of prepayments may occur at lower interest rates than the original
investment, thus adversely affecting the yield of the Fund. Actual prepayment
experience may cause the yield of a mortgage-backed security to differ from what
was assumed when the Fund purchased the security. The market for privately
issued mortgage-backed and asset-backed securities is smaller and less liquid
than the market for U.S. government mortgage-backed securities.
 
  Foreign mortgage-backed securities markets are substantially smaller than U.S.
markets, but have been established in several countries, including Germany,
Denmark, Sweden, Canada and Australia, and may be developed elsewhere. Foreign
mortgage-backed securities generally are structured similar to domestic
mortgage-backed securities, and they normally present substantially similar
investment risks as well as the other risks normally associated with foreign
securities.
 
  LOAN PARTICIPATIONS AND ASSIGNMENTS. The Fund may have difficulty disposing of
Assignments and Participations. The liquidity of such securities is limited and,
the Fund anticipates that such securities could be sold only to a limited number
of institutional investors. The lack of a liquid secondary market could have an
adverse impact on the value of such securities and on the Fund's ability to
dispose of particular Assignments or Participations when necessary to meet the
Fund's liquidity needs or in response to a specific economic event, such as a
deterioration in the creditworthiness of the borrower. The lack of a liquid
secondary market for Assignments and Participations also may make it more
difficult for the Fund to assign a value to those securities for purposes of
valuing the Fund's portfolio and calculating its net asset value.
 
  SOVEREIGN DEBT. The Fund may invest in sovereign debt securities of emerging
market governments, including Brady Bonds. Investments in such securities
involve special risks. The issuer of the debt or the governmental authorities
that control the repayment of the debt may be unable or unwilling to repay
principal or interest when due in accordance with the terms of such debt.
Periods of economic uncertainty may result in the volatility of market prices of
sovereign debt obligations and in turn the Fund's net asset value, to a greater
extent than the volatility inherent in domestic fixed income securities.
 
  A sovereign debtor's willingness or ability to repay principal and pay
interest in a timely manner may be affected by, among other factors, its cash
flow situation, the extent of its foreign reserves, the availability of
sufficient foreign exchange on the date a payment is due, the relative size of
the debt service burden to the economy as a whole, the sovereign debtor's policy
toward principal international lenders and the political constraints to which a
sovereign debtor may be subject. Emerging market governments could default
 
                                       13
<PAGE>   895
 
on their sovereign debt. Such sovereign debtors also may be dependent on
expected disbursements from foreign governments, multilateral agencies and other
entities abroad to reduce principal and interest arrearages on their debt. The
commitment on the part of these governments, agencies and others to make such
disbursements may be conditioned on a sovereign debtor's implementation of
economic reforms and/or economic performance and the timely service of such
debtor's obligations. Failure to implement such reforms, achieve such levels of
economic performance or repay principal or interest when due, may result in the
cancellation of such third parties' commitments to lend funds to the sovereign
debtor, which may further impair such debtor's ability or willingness to timely
service its debts.
 
   
  The occurrence of political, social or diplomatic changes in one or more of
the countries issuing sovereign debt could adversely affect the Fund's
investments. Emerging markets are faced with social and political issues and
some of them have experienced high rates of inflation in recent years and have
extensive internal debt. Among other effects, high inflation and internal debt
service requirements may adversely affect the cost and availability of future
domestic sovereign borrowing to finance governmental programs, and may have
other adverse social, political and economic consequences. Political changes or
a deterioration of a country's domestic economy or balance of trade may affect
the willingness of countries to service their sovereign debt. Although the
Sub-advisor intends to manage the Fund in a manner that will minimize the
exposure to such risks, there can be no assurance that adverse political changes
will not cause the Fund to suffer a loss of interest or principal on any of its
holdings.
    
 
  In recent years, some of the emerging market countries in which the Fund
expects to invest have encountered difficulties in servicing their sovereign
debt obligations. Some of these countries have withheld payments of interest
and/or principal of sovereign debt. These difficulties have also led to
agreements to restructure external debt obligations -- in particular, commercial
bank loans, typically by rescheduling principal payments, reducing interest
rates and extending new credits to finance interest payments on existing debt.
In the future, holders of emerging market sovereign debt securities may be
requested to participate in similar rescheduling of such debt. Certain emerging
market countries are among the largest debtors to commercial banks and foreign
governments. Currently, Brazil, Mexico and Argentina are the largest debtors
among developing countries. At times certain emerging market countries have
declared moratoria on the payment of principal and interest on external debt;
such a moratorium is currently in effect in certain emerging market countries.
There is no bankruptcy proceeding by which a creditor may collect in whole or in
part sovereign debt on which an emerging market government has defaulted.
 
  The ability of emerging market governments to make timely payments on their
sovereign debt securities is likely to be influenced strongly by a country's
balance of trade and its access to trade and other international credits. A
country whose exports are concentrated in a few commodities could be vulnerable
to a decline in the international prices of one or more of such commodities.
Increased protectionism on the part of a country's trading partners could also
adversely affect its exports. Such events could diminish a country's trade
account surplus, if any. To the extent that a country receives payment for its
exports in currencies other than hard currencies, its ability to make hard
currency payments could be affected.
 
  Investors should also be aware that certain sovereign debt instruments in
which the Fund may invest involve great risk. As noted above, sovereign debt
obligations issued by emerging market governments generally are deemed to be the
equivalent in terms of quality to securities rated below investment grade by
Moody's and S&P. Such securities are regarded as predominantly speculative with
respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligations and involve major risk exposure to
adverse conditions. Some of such securities, with respect to which the issuer
currently may not be paying interest or may be in payment default, may be
comparable to securities rated D by S&P or C by Moody's. The Fund may have
difficulty disposing of and valuing certain sovereign debt obligations because
there may be a limited trading market for such securities. Because there is no
liquid secondary market for many of these securities, the Fund anticipates that
such securities could be sold only to a limited number of dealers or
institutional investors.
 
   
  LOWER QUALITY DEBT SECURITIES. Under normal market conditions the Fund may
invest up to 65% of its total assets in debt securities rated below investment
grade. Such investments involve a high degree of risk.
    
 
  Debt rated Baa by Moody's is considered by Moody's to have speculative
characteristics. Debt rated BB, B, CCC, CC or C by S&P and debt rated Ba, B,
Caa, Ca or C by Moody's is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such lower quality debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Debt rated C
by Moody's or S&P is the lowest quality debt that is not in default as to
principal or interest and such issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Lower
quality debt securities are also generally considered to be subject to greater
risk than higher quality securities with regard to a deterioration of general
economic conditions. These securities are the equivalent of high yield, high
risk bonds, commonly known as "junk bonds." As noted above, the Fund may invest
in debt securities rated below C, which are in default as to principal and/or
interest.
 
  Ratings of debt securities represent the rating agency's opinion regarding
their quality and are not a guarantee of quality. Rating agencies attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit quality in response to subsequent events, so that an
issuer's current financial condition may be better or worse than a rating
indicates. See "Appendix A" for a discussion of Moody's and S&P's ratings.
 
                                       14
<PAGE>   896
 
  The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
 
  Lower quality debt securities of corporate issuers frequently have call or
buy-back features which would permit an issuer to call or repurchase the
security from the Fund. If an issuer exercises these provisions in a declining
interest rate market, the Fund may have to replace the security with a lower
yielding security, resulting in a decreased return for investors. In addition,
the Fund may have difficulty disposing of lower quality securities because there
may be a thin trading market for such securities. There may be no established
retail secondary market for many of these securities, and the Fund anticipates
that such securities could be sold only to a limited number of dealers or
institutional investors. The lack of a liquid secondary market also may have an
adverse impact on market prices of such instruments and may make it more
difficult for the Fund to obtain accurate market quotations for purposes of
valuing the securities in the portfolios of the Fund. Adverse publicity and
investor perceptions, whether or not based on fundamental analysis, may also
decrease the values and liquidity of lower quality securities, especially in a
thinly traded market. The Fund also may acquire lower quality debt securities
during an initial underwriting or may acquire lower quality debt securities
which are sold without registration under applicable securities laws. Such
securities involve special considerations and risks.
 
  Factors having an adverse effect on the market value of lower rated securities
or their equivalents purchased by the Fund will adversely impact net asset value
of the Fund. See "Risk Factors" in the Statement of Additional Information. In
addition to the foregoing, such factors may include: (i) potential adverse
publicity; (ii) heightened sensitivity to general economic or political
conditions; and (iii) the likely adverse impact of a major economic recession.
The Fund also may incur additional expenses to the extent it is required to seek
recovery upon a default in the payment of principal or interest on its portfolio
holdings, and the Fund may have limited legal recourse in the event of a
default. Debt securities issued by governments in emerging markets can differ
from debt obligations issued by private entities in that remedies from defaults
generally must be pursued in the courts of the defaulting government, and legal
recourse is therefore somewhat diminished. Political conditions, in terms of a
government's willingness to meet the terms of its debt obligations, also are of
considerable significance. There can be no assurance that the holders of
commercial bank debt may not contest payments to the holders of debt securities
issued by governments in emerging markets in the event of default by the
governments under commercial bank loan agreements.
 
   
  As of October 31, 1997, the Fund had 89.27% of its total net assets in debt
securities that received a rating from Moody's and 4.00% of its total net assets
in debt securities that were not so rated. In addition, the Fund had 6.73% of
its total net assets in cash and net receivables. The Fund had the following
percentages of its total net assets invested in rated securities: Aaa -- 41.23%,
Aa -- 12.68%, A -- 1.31%, Baa -- 3.75%, Ba -- 24.30%, B -- 6.00%, Caa -- 0.00%,
Ca -- 0.00%, C -- 0.00%. Included under the unrated category are securities held
by the Fund which, while unrated, have been determined by the Sub-advisor to be
of comparable quality to securities in the following rating categories:
Ba -- 1.03%; and B -- 2.97%. It should be noted that the allocation of the
investments of the Fund by rating on any given date will vary and should not be
considered representative of the future portfolio composition of the Fund.
    
 
   
  OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions, the
Fund might not enter into any such transactions. In addition, issuers in
emerging markets typically are subject to a greater degree of change in earnings
and business prospects than issuers in developed countries. Options, futures and
foreign currency transactions involve certain risks, which include: (1)
dependence on the Sub-advisor's ability to predict movements in the prices of
individual securities, fluctuations in the general securities markets or in the
appropriate market sector and movements in interest rates and currency markets;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, forward contracts, futures contracts or options thereon and
movements in the price of the currency or security hedged or used for cover; (3)
the fact that skills and techniques needed to trade options, futures contracts
and options thereon or to use forward currency contracts are different from
those needed to select the securities in which the Fund invests; (4) lack of
assurance that a liquid secondary market will exist for any particular option,
futures contract or option thereon at any particular time; (5) the possible loss
of principal under certain conditions; and (6) the possible inability of the
Fund to purchase or sell a portfolio security at a time when it would otherwise
be favorable for it to do so, or the possible need for the Fund to sell a
security at a disadvantageous time, due to the need for the Fund or Portfolio to
maintain "cover" or to set aside securities in connection with hedging
transactions.
    
 
  ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets, in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
 
                                       15
<PAGE>   897
 
- --------------------------------------------------------------------------------
 
   
MANAGEMENT
    
 
   
  The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust and persons or companies furnishing services to the Fund
including the investment management and administration agreement with AIM, the
investment sub-advisory and sub-administration agreement between AIM and the
Sub-advisor, the agreements with AIM Distributors regarding distribution of the
Fund's shares, the custody agreement and the transfer agency agreement. The
day-to-day operations of the Fund are delegated to the officers of the Trust,
subject always to the investment objectives and policies of the Fund and to the
general supervision of the Trust's Board of Trustees. See "Trustees and
Executive Officers" in the Statement of Additional Information for information
on the Trustees of the Trust.
    
 
   
  INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-advisor as the Fund's investment managers and administrators include, but
are not limited to, determining the composition of the investment portfolio of
the Fund and placing orders to buy, sell or hold particular securities. In
addition, AIM and the Sub-advisor provide the following administration services
to the Fund: furnishing corporate officers and clerical staff; providing office
space, services and equipment; and supervising all matters relating to the
Fund's operation.
    
 
   
  The Fund pays AIM investment management and administration fees computed daily
and payable monthly, based on the average daily net assets, for such services at
the annualized rate of .725% on the first $500 million, .70% on the next $1
billion, .675% on the next $1 billion, and .65% on amounts thereafter. Out of
the aggregate fees payable by the Fund, AIM pays the Sub-advisor sub-advisory
and sub-administration fees equal to 40% of the aggregate fees AIM receives from
the Fund. The investment management and administration fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-advisor, AIM Distributors or any other agents. Effective
November 1, 1997, AIM has undertaken to limit the expenses of the Advisor Class
shares of the Fund (exclusive of brokerage commissions, taxes, interest and
extraordinary expenses) to the maximum annual rate of 1.40% of the average daily
net assets of the Fund's Advisor Class shares.
    
 
   
  The Sub-advisor also serves as the Fund's pricing and accounting agent. For
these services the Sub-advisor receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-advisor (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
    
 
   
  AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement (the "Advisory Agreement"). AIM was organized in 1976
and, together with its subsidiaries, manages or advises approximately 90
investment company portfolios encompassing a broad range of investment
objectives. The Sub-advisor, 50 California Street, 27th Floor, San Francisco,
California 94111, and 1166 Avenue of the Americas, New York, New York 10036,
serves as the sub-advisor to the Fund pursuant to an investment sub-advisory and
sub-administration agreement. Prior to May 29, 1998, the Sub-advisor was known
as Chancellor LGT Asset Management, Inc. On May 29, 1998, Liechtenstein Global
Trust AG ("LGT"), the former indirect parent organization of the Sub-advisor,
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included the Sub-advisor and
certain other affiliates. As a result of this transaction, the Sub-advisor is
now an indirect wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-advisor and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
    
 
   
  AIM and the Sub-advisor and their worldwide asset management affiliates
provide investment management and/or administrative services to institutional,
corporate and individual clients around the world. AIM and the Sub-advisor are
both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
    
 
   
  In addition to the investment resources of their Houston, San Francisco and
New York offices, AIM and the Sub-advisor draw upon the expertise, personnel,
data and systems of other offices, including investment offices in Atlanta,
Boston, Dallas, Denver, Louisville, Miami, Portland (Oregon), Frankfurt, Hong
Kong, London, Singapore, Sydney, Tokyo and Toronto. In managing the Fund, the
Sub-advisor employs a team approach, taking advantage of its investment
resources around the world.
    
 
                                       16
<PAGE>   898
 
  The investment professional primarily responsible for the portfolio management
of the Fund is as follows:
 
   
<TABLE>
<CAPTION>
                         RESPONSIBILITIES FOR                   BUSINESS EXPERIENCE
     NAME/OFFICE            THE PORTFOLIO                         PAST FIVE YEARS
     -----------         --------------------                   -------------------
<S>                     <C>                      <C>
Cheng-Hock Lau          Portfolio Manager        Chief Investment Officer for Global Fixed Income
New York                since 1996               and Portfolio Manager for the Sub-advisor since
                                                 October 1996. Senior Portfolio Manager for
                                                 Global/International Fixed Income for the
                                                 Sub-advisor from July 1995 to October 1996.
                                                 Employed by Chancellor Capital Management, Inc.
                                                 ("Chancellor Capital"), a predecessor of the
                                                 Sub-Advisor, from 1995 to October 1996. Senior
                                                 Vice President and Senior Portfolio Manager for
                                                 Fiduciary Trust Company International from 1993 to
                                                 1995. Vice President at Bankers Trust Company from
                                                 1991 to 1993.
David B. Hughes         Portfolio Manager        Head of Global Fixed Income, North America, and
New York                since 1998               Portfolio Manager for the Sub-Advisor since
                                                 January 1998. Senior Portfolio Manager for
                                                 Global/International Fixed Income for the
                                                 Sub-Advisor from July 1995 to December 1997.
                                                 Employed by Chancellor Capital from July 1995 to
                                                 October 1996. Assistant Vice President of
                                                 Fiduciary Trust Company International from 1994 to
                                                 1995. Assistant Treasurer at the Bankers Trust
                                                 Company from 1991 to 1994.
Craig Munro             Portfolio Manager        Portfolio Manager for the Sub-advisor since August
New York                since 1998               1997. Vice President and Senior Analyst in the
                                                 Emerging Markets Group of the Global Fixed Income
                                                 Division of Merrill Lynch Asset Management from
                                                 1993 to August 1997.
Kevin J. Rogers         Portfolio Manager        Portfolio Manager for the Sub-advisor since July
New York                since 1998               1997. High Yield Bond Analyst at Fidelity
                                                 Management & Research Company (Boston) from 1988
                                                 to 1997.
</TABLE>
    
 
   
  In placing orders for the Fund's securities transactions, the Sub-advisor
seeks to obtain the best net results. Consistent with its obligation to obtain
the best net results, the Sub-advisor may consider a broker/dealer's sale of
shares of the AIM Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions for the Fund may be
executed through affiliates of AIM or the Sub-advisor. High portfolio turnover
(over 100%) involves correspondingly greater brokerage commissions and other
transaction costs that the Fund will bear directly and could result in the
realization of net capital gains which would be taxable when distributed to
shareholders. See "Dividends, Distributions and Tax Matters."
    
 
   
  DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement (the
"Distribution Agreement"), with AIM Distributors, a registered broker-dealer and
a wholly owned subsidiary of AIM, to act as the distributor of the Advisor Class
shares of the Fund. Certain Trustees and officers of the Trust are affiliated
with AIM Distributors.
    
 
  The Distribution Agreement provides AIM Distributors with the exclusive right
to distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
 
- --------------------------------------------------------------------------------
 
   
ORGANIZATION OF THE TRUST
    
 
   
  The Trust was organized as a Delaware business trust on May 7, 1998. On
September 8, 1998, the Trust acquired the assets of and assumed the liabilities
of AIM Investment Funds, Inc., a Maryland corporation. The Fund constitutes one
of the thirteen separate and distinct series portfolios of the Trust.
    
 
  From time to time, the Trust may establish other funds, each corresponding to
a distinct investment portfolio and a distinct series of the Trust's shares.
Shares of each fund are entitled to one vote per share (with proportional voting
for fractional shares) and are freely transferable. Shareholders have no
preemptive rights. Other than the automatic conversion of Class B shares to
Class A shares, there are no conversion rights.
 
  On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that Class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
 
                                       17
<PAGE>   899
 
  Normally there will be no annual meeting of shareholders in any year, except
as required under the 1940 Act. Shares of the Fund and the Trust's other series
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
 
  Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may also
issue an unlimited number of shares of the Fund. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal in earnings, assets
and voting privileges except that each class normally has exclusive voting
rights with respect to its distribution plan and bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund, when issued, are
fully paid and nonassessable.
 
   
  LEGAL COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800 acts as counsel to the Trust and the
Fund.
    
 
                                       18
<PAGE>   900
 
     THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND TO
                           SHAREHOLDER ASSISTANCE IS
             (800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
                                INVESTOR'S GUIDE
                  TO THE AIM FAMILY OF FUNDS--Register Mark--
                            FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
 
INTRODUCTION TO THE AIM FAMILY OF FUNDS
 
  THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several of
which offer Advisor Class shares. Only Advisor Class shares are offered through
this Prospectus. Advisor Class shares are available from the following funds
(collectively, the "Advisor Class Funds"):
 
   
<TABLE>
            <S>                                           <C>
            AIM BASIC VALUE FUND                          AIM GLOBAL INFRASTRUCTURE FUND
            AIM DEVELOPING MARKETS FUND                   AIM GLOBAL RESOURCES FUND
            AIM DOLLAR FUND                               AIM GLOBAL TELECOMMUNICATIONS FUND
            AIM EMERGING MARKETS FUND                     AIM GLOBAL TRENDS FUND
            AIM EMERGING MARKETS DEBT FUND                AIM INTERNATIONAL GROWTH FUND
            AIM EUROPE GROWTH FUND                        AIM JAPAN GROWTH FUND
            AIM GLOBAL CONSUMER PRODUCTS                  AIM LATIN AMERICAN GROWTH FUND
              AND SERVICES FUND                           AIM MID CAP EQUITY FUND
            AIM GLOBAL FINANCIAL SERVICES FUND            AIM NEW PACIFIC GROWTH FUND
            AIM GLOBAL GOVERNMENT INCOME FUND             AIM SMALL CAP GROWTH FUND
            AIM GLOBAL GROWTH & INCOME FUND               AIM STRATEGIC INCOME FUND
            AIM GLOBAL HEALTH CARE FUND                   AIM WORLDWIDE GROWTH FUND
</TABLE>
    
 
  IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
 
HOW TO PURCHASE SHARES
 
  Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
 
  HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through Financial
Advisers (as defined herein) who have entered into agreements with A I M
Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor Class
shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
 
  Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for
non-resident aliens) or Form W-9 (certifying exempt status) accompanying the
registration information will be subject to backup withholding. See the Account
Application for applicable IRS penalties. The minimum initial investment for
Advisor Class shares is $500.
 
  AFS' mailing address is:
                              A I M Fund Services, Inc.
                              P.O. Box 4739
                              Houston, TX 77210-4739
 
                                       A-1
<PAGE>   901
 
  For additional information or assistance, investors should call the Client
Services Department of AFS at:
 
                               (800) 959-4246
 
  Advisor Class shares of any Advisor Class Funds not named on the cover of this
Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
 
  INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
 
<TABLE>
                   <S>                               <C>
                   Beneficiary Bank ABA/Routing #:   113000609
                   Beneficiary Account Number:       00100366807
                   Beneficiary Account Name:         A I M Fund Services, Inc.
                   RFB:                              Fund name, Reference Number (16 character limit)
                                                     Shareholder Name, Shareholder Account Number 
                   OBI:                              (70 character limit)
</TABLE>
 
  It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
 
  HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
 
  BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
 
  BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
 
- --------------------------------------------------------------------------------
 
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
 
  In addition to the Advisor Class Funds, the AIM Funds consist of the following
funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR
LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND,
AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED FUND, AIM BLUE
CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION
FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED MATURITY TREASURY
FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM SELECT GROWTH FUND,
AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM VALUE FUND and AIM
WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM
LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with the Advisor Class
Funds, the "Multiple Class Funds." For information on purchasing any of the AIM
Funds and to receive a prospectus, please call (800) 347-4246. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
 
  Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
 
  Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee'
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares. Investors in wrap fee programs and
advisory accounts may only purchase Advisor Class shares through Financial
Advisers who have entered into agreements with AIM Distributors. Investors may
be charged a fee by their agents or brokers for effecting transactions in
Advisor Class shares.
 
  AIM Distributors may, from time to time, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives
 
                                       A-2
<PAGE>   902
 
and their families to places within or outside the United States. The total
amount of such additional bonus payments or other consideration shall not exceed
0.25% of the public offering price of the shares sold. Any such bonus or
incentive programs will not change the price paid by investors for the purchase
of the applicable AIM Fund's shares or the amount that any particular AIM Fund
will receive as proceeds from such sales. Dealers may not use sales of the AIM
Funds' shares to qualify for any incentives to the extent that such incentives
may be prohibited by the laws of any state.
 
  TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
 
  An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
 
  SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND uses
the amortized cost method of valuing the securities it holds and rounds its per
share net asset value to the nearest whole cent, it is anticipated that the net
asset value of the shares of that fund will remain constant at $1.00 per share.
However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00 net
asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
 
  SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form.
 
  MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
 
  FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS AND
ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE ORDER
OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
 
                                       A-3
<PAGE>   903
 
- --------------------------------------------------------------------------------
 
   
SPECIAL PLANS
    
 
  Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
 
  Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
 
  AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
 
   
  PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders with a minimum account balance to $5,000 to
establish and maintain an allocation across a range of Advisor Class Funds. The
Program automatically rebalances holdings of Advisor Class Funds to the
established allocation on a periodic basis. Under the Program, a shareholder may
predesignate, on a percentage basis, how the total value of his or her holdings
in a minimum of two, and a maximum of ten, Advisor Class Funds ("Personal
Portfolio") is to be rebalanced on a quarterly, semiannual, or annual basis.
    
 
  Rebalancing under the Program will be effected through the exchange of shares
of one or more Advisor Class Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other Advisor Class Funds in the
shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the
Advisor Class Fund(s) in a shareholder's Personal Portfolio have appreciated
during a rebalancing period, the Program will result in shares of Advisor Class
Fund(s) that have appreciated most during the period being exchanged for shares
of Advisor Class Fund(s) that have appreciated least. SUCH EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends, Distributions and Tax
Matters -- Dividends and Distributions." Participation in the Program does not
assure that a shareholder will profit from purchases under the Program nor does
it prevent or lessen losses in a declining market.
 
   
  The Program will automatically rebalance the shareholder's Personal Portfolio
on the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Advisor Class Fund would be 2%
or less. In predesignating percentages, shareholders must use whole percentages
and totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing an Advisor Class Fund's
shares. The AIM Funds and AIM Distributors reserve the right to modify, suspend,
or terminate the Program at any time on sixty (60) days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which Advisor
Class Funds or what allocation percentages are assigned to the Program, unless
canceled or changed in writing and received by the Transfer Agent in good order
at least five business days prior to the rebalancing date. Certain
dealers/financial institutions may charge a fee for establishing accounts
relating to the Program. Investors should contact their dealers/financial
institutions or AIM Distributors for more information.
    
 
- --------------------------------------------------------------------------------
 
EXCHANGE PRIVILEGE
 
  TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the Advisor
Class Funds may participate in an exchange privilege as described below. AIM
Distributors acts as distributor for the Advisor Class Funds which represent a
range of different investment objectives and policies.
 
  Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
 
  Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
 
  An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor
 
                                       A-4
<PAGE>   904
 
Class Fund acquired through exchange must be qualified for sale in the state in
which the shareholder resides; (c) the exchange must be made between accounts
having identical registrations and addresses; (d) the full amount of the
purchase price for the shares being exchanged must have already been received by
the fund; (e) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign status) or Form
W-9 (certifying exempt status) must have been received by the fund; (f) newly
acquired shares (through either an initial or subsequent investment) are held in
an account for at least ten business days, and all other shares are held in an
account for at least one day, prior to the exchange; and (g) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the Advisor Class Funds.
 
  THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
 
  THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
 
  Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but under unusual market
conditions such purchases may be delayed for up to five business days if it is
determined that an Advisor Class Fund would be materially disadvantaged by an
immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into an Advisor Class Fund that declares daily dividends ("Dividends,
Distributions and Tax Matters -- Dividends and Distributions," below), and the
release of the exchange proceeds is delayed for the foregoing five-day period,
such shareholder will not begin to accrue dividends until the sixth business day
after the exchange. Advisor Class shares purchased by check may not be exchanged
until it is determined that the check has cleared, which may take up to ten
business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
 
  In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
 
  EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
 
  EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. A shareholder may give exchange information to his Financial
Adviser. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the Advisor Class Funds. AIM Distributors reserves the right to impose
conditions on dealers or investment advisors who make telephone exchanges of
shares of the Advisor Class Funds, including the condition that any such dealer
or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
 
- --------------------------------------------------------------------------------
 
HOW TO REDEEM SHARES
 
  Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/financial institutions may charge service fees for handling
repurchase transactions.
 
                                       A-5
<PAGE>   905
 
  REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
 
  Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
 
  REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information, and (e) the proceeds of the
redemption do not exceed $50,000. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be
genuine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's taxpayer identification number and current
address, and mailings of confirmations promptly after the transaction.
 
  TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the Advisor
Class Funds are redeemed at their net asset value next computed after a request
for redemption in proper form (including signature guarantees and other required
documentation for written redemptions) is received by the Transfer Agent or
certain financial institutions (or their designees) who are authorized to accept
redemption orders on behalf of the AIM Funds, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. Orders for the redemption of Advisor Class shares received on any
business day of an AIM Fund will be confirmed at the price determined as of the
close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
 
  Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
 
  SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the proceeds are to be sent to
the address of record. These requirements may be waived or modified upon notice
to shareholders.
 
   
  Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission (the "SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such 
    

                                       A-6
<PAGE>   906
   

as certain domestic banks, credit unions, securities dealers, or securities
exchanges. The Transfer Agent will also accept signatures with either: (1) a
signature guaranteed with a medallion stamp of the STAMP Program, or (2) a
signature guaranteed with a medallion stamp of the NYSE Medallion Signature
Program, provided that in either event, the amount of the transaction involved
does not exceed the surety coverage amount indicated on the medallion. For
information regarding whether a particular institution or organization qualifies
as an "eligible guarantor institution," an investor should contact the Client
Services Department of AFS.
    
 
- --------------------------------------------------------------------------------
 
DETERMINATION OF NET ASSET VALUE
 
  The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
 
                                       A-7
<PAGE>   907
 
- --------------------------------------------------------------------------------
 
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
 
DIVIDENDS AND DISTRIBUTIONS
 
   
  Each AIM Fund generally pays dividends and distributions as set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                    DISTRIBUTIONS          DISTRIBUTIONS
                                                                        OF NET                 OF NET
                                     DIVIDENDS FROM                    REALIZED               REALIZED
                                     NET INVESTMENT                   SHORT-TERM              LONG-TERM
FUND                                     INCOME                      CAPITAL GAINS          CAPITAL GAINS
- ----                                 --------------                  -------------          -------------
<S>                                  <C>                             <C>                     <C>
AIM BASIC VALUE FUND...............  declared and paid annually         annually                annually
AIM DEVELOPING MARKETS FUND........  declared and paid annually         annually                annually
AIM DOLLAR FUND....................  declared daily; paid monthly       annually                annually
AIM EMERGING MARKETS FUND..........  declared and paid annually         annually                annually
AIM EMERGING MARKETS DEBT FUND.....  declared and paid monthly          annually                annually
AIM EUROPE GROWTH FUND.............  declared and paid annually         annually                annually
AIM GLOBAL CONSUMER PRODUCTS AND
  SERVICES FUND....................  declared and paid annually         annually                annually
AIM GLOBAL FINANCIAL SERVICES
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL GOVERNMENT INCOME
  FUND.............................  declared and paid monthly          annually                annually
AIM GLOBAL GROWTH & INCOME FUND....  declared and paid quarterly        annually                annually
AIM GLOBAL HEALTH CARE FUND........  declared and paid annually         annually                annually
AIM GLOBAL INFRASTRUCTURE FUND.....  declared and paid annually         annually                annually
AIM GLOBAL RESOURCES FUND..........  declared and paid annually         annually                annually
AIM GLOBAL TELECOMMUNICATIONS
  FUND.............................  declared and paid annually         annually                annually
AIM GLOBAL TRENDS FUND.............  declared and paid annually         annually                annually
AIM INTERNATIONAL GROWTH FUND......  declared and paid annually         annually                annually
AIM JAPAN GROWTH FUND..............  declared and paid annually         annually                annually
AIM LATIN AMERICAN GROWTH FUND.....  declared and paid annually         annually                annually
AIM MID CAP EQUITY FUND............  declared and paid annually         annually                annually
AIM NEW PACIFIC GROWTH FUND........  declared and paid annually         annually                annually
AIM SMALL CAP GROWTH FUND..........  declared and paid annually         annually                annually
AIM STRATEGIC INCOME FUND..........  declared and paid monthly          annually                annually
AIM WORLDWIDE GROWTH FUND..........  declared and paid annually         annually                annually
</TABLE>
    
 
  In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
 
  All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
 
  Dividends on Advisor Class shares of an Advisor Class Fund are expected to be
higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
 
  Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
 
  Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
 
                                       A-8
<PAGE>   908
 
TAX MATTERS
 
  Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
 
   
  TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM Fund
intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax on amounts that it has distributed. Each
AIM Fund also intends to meet the distribution requirements of the Code to avoid
imposition of the Excise Tax. Nevertheless, shareholders normally are subject to
federal income tax, and any applicable state and local income taxes, on the
dividends and distributions received by them from a fund whether in the form of
cash or additional fund shares. With respect to tax-exempt shareholders,
dividends and distributions from the AIM Funds are not subject to federal income
taxation to the extent permitted under the applicable tax exemption.
    
 
   
  Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. An AIM Fund may
divide each net capital gain distribution into a 28% rate gain distribution and
a 20% rate gain distribution (in accordance with its holding periods for the
securities it sold that generated the distributed gain), in which event its
shareholders must treat those portions accordingly; thus, the relevant holding
period is determined by how long the fund has held the securities on which the
gain was realized, not by how long a shareholder has held fund shares. Recent
legislation provides that a maximum tax rate of 20% (10% for taxpayers in the 
15% marginal tax bracket) will apply to gain recognized after December 31, 1997
on capital assets held for more than one year.
    

  Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
 
  Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
 
  For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
 
   
  TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, INDIVIDUALS AND
CERTAIN OTHER NON-CORPORATE SHAREHOLDERS OF A FUND MUST FURNISH THE FUND WITH
THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER PENALTIES OF PERJURY THAT
THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT SUBJECT TO BACKUP
WITHHOLDING FOR ANY REASON.
    
 
  Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
 
  DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
 
   
  AIM BASIC VALUE FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS DEBT FUND, AIM
GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM MID CAP
EQUITY FUND, AIM SMALL CAP GROWTH FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL
TAX INFORMATION. Certain states exempt from income taxes dividends paid by
mutual funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
    
 
                                       A-9
<PAGE>   909
   
  AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
    
 
- --------------------------------------------------------------------------------
 
GENERAL INFORMATION
 
  CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
 
   
  A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each Advisor Class Fund's transfer agent and
dividend payment agent.
    
 
   
  SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
    
 
   
  YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties. Many software systems in
use today are unable to distinguish the year 2000 from the year 1900. This
defect if not cured will likely adversely affect the services that AIM
Management, its subsidiaries and other service providers to the AIM Funds
provide the AIM Funds and their shareholders.
    
 
   
  To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the second quarter of
1999. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm year 2000 compliance
upon installation. No assurance can be given that the Project will be successful
or that the AIM Funds will not otherwise be adversely affected by the year 2000
issue.
    
 
  OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
 
                                      A-10
<PAGE>   910
 
                                                                      APPENDIX A
- --------------------------------------------------------------------------------
 
                          DESCRIPTION OF DEBT RATINGS
 
DESCRIPTION OF BOND RATINGS
 
  Moody's Investors Service, Inc. ("Moody's") rates the debt securities issued
by various entities from "Aaa" to "C." Investment grade ratings are the first
four categories: Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. Ba -- Bonds which are rated Ba
are judged to have speculative elements; their future cannot be considered as
well-assured. Often the protection of interest and principal payments may be
very moderate, and thereby not well safeguarded during both good and bad times
over the future. Uncertainty of position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest. Ca -- Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings. C -- Bonds which are rated C are the lowest rated class of
bonds, and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
 
  ABSENCE OF RATING. Where no rating has been assigned or where a rating has
been suspended or withdrawn, it may be for reasons unrelated to the quality of
the issue.
 
  Should no rating be assigned, the reason may be one of the following:
 
          1. An application for rating was not received or accepted.
 
          2. The issue or issuer belongs to a group of securities or companies
     that are not rated as a matter of policy.
 
          3. There is a lack of essential data pertaining to the issue or
     issuer.
 
          4. The issue was privately placed, in which case the rating is not
     published in Moody's publications.
 
  Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.
 
  Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the Company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the Company ranks in the
lower end of its generic rating category.
 
  Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"),
rates the securities debt of various entities in categories ranging from "AAA"
to "D" according to quality. Investment grade ratings are the first four
categories:
 
  AAA -- An obligation rated "AAA" has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong. AA -- An obligation rated "AA" differs from the highest rated
obligations only in a small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong. A -- An obligation rated "A" is
somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions than obligations in higher rated categories. BBB -- An
obligation rated "BBB" exhibits adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the
obligation. BB, B, CCC, CC, C -- Obligations rated "BB," "B," "CCC," "CC," and
"C" are regarded as having significant speculative characteristics. "BB"
indicates the least degree of speculation and "C" the highest. While such
obligations will likely have some quality and protective characteristics, these
may be outweighed by large uncertainties or major exposures to adverse
conditions. BB -- An obligation rated "BB" is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could lead
to the obligor's inadequate capacity to meet its financial commitment on the
obligation. B -- An obligation rated "B" is more vulnerable to nonpayment than
obligations rated "BB,"
 
                                      A-11
<PAGE>   911
 
but the obligor currently has the capacity to meet its financial commitment on
the obligation. Adverse business, financial, or economic conditions will likely
impair the obligor's capacity or willingness to meet its financial commitment on
the obligation. CCC -- An obligation rated "CCC" is currently vulnerable to
nonpayment, and is dependent upon favorable business, financial, and economic
conditions for the obligor to meet its financial commitment on the obligation.
In the event of adverse business, financial, or economic conditions, the obligor
is not likely to have the capacity to meet its financial commitment on the
obligation. CC -- An obligation rated "CC" is currently highly vulnerable to
nonpayment. C -- The "C" rating may be used to cover a situation where a
bankruptcy petition has been filed or similar action has been taken, but
payments on this obligation are being continued. D -- An obligation rated "D" is
in payment default. The "D" rating category is used when payments on an
obligation are not made on the date due even if the applicable grace period has
not expired, unless S&P believes that such payments will be made during such
grace period. The "D" rating also will be used upon the filing of a bankruptcy
petition or the taking of a similar action if payments on an obligation are
jeopardized.
 
  PLUS (+) OR MINUS (-). The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
 
  NR. Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
 
DESCRIPTION OF COMMERCIAL PAPER RATINGS
 
  Moody's employs the designation "Prime-1" to indicate commercial paper having
a superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. Issues rated Prime-2 have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many of
the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
 
  S&P ratings of commercial paper are graded into several categories ranging
from "A1" for the highest quality obligations to "D" for the lowest. Issues in
the "A" category are delineated with numbers 1, 2, and 3 to indicate the
relative degree of safety. A-1 -- This highest category indicates that the
degree of safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics will be denoted with a plus sign
(+) designation. A-2 -- Capacity for timely payments on issues with this
designation is satisfactory; however, the relative degree of safety is not as
high as for issues designated "A-1."
 
                                      A-12
<PAGE>   912
 
                            APPLICATION INSTRUCTIONS
 
  SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                   GIVE SOCIAL SECURITY                                           GIVE TAXPAYER I.D.
        ACCOUNT TYPE                    NUMBER OF:                     ACCOUNT TYPE                   NUMBER OF:
<S>                           <C>                              <C>                           <C>
      Individual              Individual                       Trust, Estate, Pension        Trust, Estate, Pension
                                                               Plan Trust                    Plan Trust and not
                                                                                             personal TIN of fiduciary

      Joint Individual        First individual listed in the
                              "Account Registration" portion
                              of the Application

      Unif. Gifts to          Minor                            Corporation, Partnership,     Corporation, Partnership,
      Minors/Unif.                                             Other Organization            Other Organization
      Transfers to Minors

      Legal Guardian          Ward, Minor or
                              Incompetent

      Sole Proprietor         Owner of Business                Broker/Nominee                Broker/Nominee
</TABLE>
- --------------------------------------------------------------------------------
 
  Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
 
  BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
 
  An investor is subject to backup withholding if:
 
  (1) the investor fails to furnish a correct TIN to the Fund, or
 
  (2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
 
  (3) the investor is notified by the IRS that the investor is subject to backup
      withholding because the investor failed to report all of the interest and
      dividends on such investor's tax return (for reportable interest and
      dividends only), or
 
  (4) the investor fails to certify to the Fund that the investor is not subject
      to backup withholding under (3) above (for reportable interest and
      dividend accounts opened after 1983 only), or
 
  (5) the investor does not certify his TIN. This applies only to reportable
      interest, dividend, broker or barter exchange accounts opened after 1983,
      or broker accounts considered inactive during 1983.
 
  Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
 
  Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
 
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
  plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
  of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
  instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
  possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
  Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
  Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
  most recent publication of the American Society of Corporate Secretaries,
  Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
 
  Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
 
  IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
 
   
                                                                       MCF-07/98
    
                                       B-1
<PAGE>   913
 
  NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
 
  SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
 
  SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
 
   
                                                                       MCF-07/98
    
                                       B-2
<PAGE>   914
 
[AIM LOGO APPEARS HERE]         THE AIM FAMILY OF FUNDS--Registered Trademark--
 
Investment Manager
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
 
   
Sub-Advisor
    
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
 
Principal Underwriter
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Transfer Agent
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
 
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Independent Accountants
   
PricewaterhouseCoopers LLP
    
   
One Post Office Square
    
   
Boston, MA 02107
    
 
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
<PAGE>   915
 
                                                                    STATEMENT OF
                                                          ADDITIONAL INFORMATION
 
                         CLASS A AND CLASS B SHARES OF
 
                          AIM DEVELOPING MARKETS FUND
                           AIM EMERGING MARKETS FUND
                         AIM LATIN AMERICAN GROWTH FUND
 
                             (SERIES PORTFOLIOS OF
                             AIM INVESTMENT FUNDS)
 
                               11 GREENWAY PLAZA
                                   SUITE 100
                           HOUSTON, TEXAS 77046-1173
                                 (713) 626-1919
 
                             ---------------------
 
        THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND
           IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS OF THE
            ABOVE-NAMED FUNDS, A COPY OF WHICH MAY BE OBTAINED FREE
                OF CHARGE FROM AUTHORIZED DEALERS OR BY WRITING
                           A I M DISTRIBUTORS, INC.,
                    P.O. BOX 4739, HOUSTON, TEXAS 77210-4739
                          OR BY CALLING (800) 347-4246
 
                             ---------------------
 
          STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 8, 1998
RELATING TO THE AIM DEVELOPING MARKETS FUND PROSPECTUS, THE AIM EMERGING MARKETS
                                FUND PROSPECTUS
 AND THE AIM LATIN AMERICAN GROWTH FUND PROSPECTUS EACH DATED SEPTEMBER 8, 1998
<PAGE>   916
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
INTRODUCTION................................................  4
GENERAL INFORMATION ABOUT THE FUNDS.........................  4
  The Trust and Its Shares..................................  4
INVESTMENT OBJECTIVES AND POLICIES..........................  5
  Investment Objectives.....................................  5
  Selection of Equity Investments...........................  5
  Investments in Other Investment Companies.................  6
  Depositary Receipts.......................................  6
  Warrants or Rights........................................  7
  Lending of Portfolio Securities...........................  7
  Commercial Bank Obligations...............................  7
  Repurchase Agreements.....................................  7
  Borrowing, Reverse Repurchase Agreements and "Roll"
     Transactions...........................................  8
  Short Sales...............................................  8
  Temporary Defensive Strategies............................  9
  Samurai and Yankee Bonds..................................  9
  Debt Conversions..........................................  9
  Premium Securities........................................  10
  Indexed Debt Securities...................................  10
  Structured Investments....................................  10
  Stripped Income Securities................................  10
  Floating and Variable Rate Income Securities..............  11
  Swaps, Caps, Floors and Collars...........................  11
OPTIONS, FUTURES AND CURRENCY STRATEGIES....................  11
  Special Risks of Options, Futures and Currency
     Strategies.............................................  11
  Writing Call Options......................................  12
  Writing Put Options.......................................  13
  Purchasing Put Options....................................  13
  Purchasing Call Options...................................  13
  Index Options.............................................  15
  Interest Rate, Currency and Stock Index Futures...........  15
  Options on Futures Contracts..............................  17
  Limitations on Use of Futures, Options on Futures and
     Certain Options on Currencies..........................  17
  Forward Contracts.........................................  18
  Foreign Currency Strategies -- Special Considerations.....  18
  Cover.....................................................  19
RISK FACTORS................................................  19
  Illiquid Securities.......................................  19
  Foreign Securities........................................  20
INVESTMENT LIMITATIONS......................................  25
  Developing Markets Fund...................................  25
  Emerging Markets Fund.....................................  26
  Latin American Fund.......................................  28
EXECUTION OF PORTFOLIO TRANSACTIONS.........................  29
  Portfolio Trading and Turnover............................  30
MANAGEMENT..................................................  31
  Trustees and Executive Officers...........................  31
  Investment Management and Administration Services.........  33
</TABLE>
    
 
                                        2
<PAGE>   917
 
   
<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
THE DISTRIBUTION PLANS......................................  34
  The Class A Plan..........................................  34
  The Class B Plan..........................................  34
  Both Plans................................................  34
THE DISTRIBUTOR.............................................  37
  Expenses of the Funds.....................................  38
NET ASSET VALUE DETERMINATION...............................  38
HOW TO PURCHASE AND REDEEM SHARES...........................  39
QUALIFYING FOR A REDUCED FRONT-END SALES CHARGE.............  40
PROGRAMS AND SERVICES FOR SHAREHOLDERS......................  40
DIVIDEND ORDER..............................................  40
TAXES.......................................................  41
  General...................................................  41
  Foreign Taxes.............................................  41
  Passive Foreign Investment Companies......................  41
  Non-U.S. Shareholders.....................................  42
  Options, Futures and Foreign Currency Transactions........  42
MISCELLANEOUS INFORMATION...................................  43
  Custodian.................................................  43
  Transfer Agency and Accounting Agency Services............  43
  Independent Accountants...................................  43
  Shareholder Liability.....................................  43
  Name......................................................  44
  Control Persons and Principle Holders of Securities.......  44
INVESTMENT RESULTS..........................................  45
  Total Return Quotations...................................  45
  Other Information Regarding Standard Total and
     Non-Standard Total Returns for Developing Markets
     Fund...................................................  48
  Performance Information...................................  48
APPENDIX....................................................  50
  Description of Bond Ratings...............................  50
  Description of Commercial Paper Ratings...................  51
  Absence of Rating.........................................  51
FINANCIAL STATEMENTS........................................  FS
</TABLE>
    
 
                                        3
<PAGE>   918
 
                                  INTRODUCTION
 
   
  This Statement of Additional Information relates to the Class A and Class B
shares of AIM Developing Markets Fund ("Developing Markets Fund"), AIM Emerging
Markets Fund ("Emerging Markets Fund") and AIM Latin American Growth Fund
("Latin American Fund") (each, a "Fund," and collectively, the "Funds").
Developing Markets Fund and Latin American Fund each is a non-diversified, and
Emerging Markets Fund is a diversified series of AIM Investment Funds (the
"Trust"), a registered open-end management investment company organized as a
Delaware business trust. On October 31, 1997, the Developing Markets Fund, which
had no prior operating history, acquired the assets and assumed the liabilities
of G.T. Global Developing Markets Fund, Inc. (the "Predecessor Fund"), a
closed-end investment company.
    
 
   
  A I M Advisors, Inc. ("AIM") serves as the investment manager of and
administrator for, and INVESCO (NY), Inc. (the "Sub-advisor") serves as the
investment sub-advisor and sub-administrator for the Funds.
    
 
   
  The Trust is a series mutual fund. The rules and regulations of the Securities
and Exchange Commission (the "SEC") require all mutual funds to furnish
prospective investors certain information concerning the activities of the fund
being considered for investment. This information for Developing Markets Fund is
included in a Prospectus dated September 8, 1998, for Emerging Markets Fund is
included in a separate Prospectus dated September 8, 1998 and for Latin American
Fund is included in a separate Prospectus dated September 8, 1998. Additional
copies of the Prospectuses and this Statement of Additional Information may be
obtained without charge by writing the principal distributor of the Funds'
shares, A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739, Houston,
TX 77210-4739 or by calling (800) 347-4246. Investors must receive a Prospectus
before they invest.
    
 
  This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Funds. Some of the
information required to be in this Statement of Additional Information is also
included in the Prospectus; and, in order to avoid repetition, reference will be
made to sections of the Prospectus. Additionally, the Prospectus and this
Statement of Additional Information omit certain information contained in the
Registration Statement filed with the SEC. Copies of the Registration Statement,
including items omitted from the Prospectus and this Statement of Additional
Information, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
 
                      GENERAL INFORMATION ABOUT THE FUNDS
 
THE TRUST AND ITS SHARES
 
   
  The Trust previously operated under the name G.T. Investment Funds, Inc.,
which was organized as a Maryland corporation on October 29, 1987. The Trust was
reorganized on September 8, 1998 as a Delaware business trust, and is registered
with the SEC as a diversified open-end series management investment company. The
Trust currently consists of the following portfolios: AIM Global Financial
Services Fund, AIM Global Infrastructure Fund, AIM Global Resources Fund, AIM
Global Consumer Products and Services Fund, AIM Global Healthcare Fund, AIM
Global Telecommunications Fund, AIM Global Government Income Fund, AIM Global
High Income Fund, AIM Strategic Income Fund, AIM Global Growth and Income Fund,
AIM Emerging Markets Fund, AIM Developing Markets Fund, and AIM Latin American
Growth Fund. Each of these funds has three separate classes: Class A, Class B
and Advisor Class shares. All historical financial and other information
contained in this Statement of Additional Information for periods prior to
September 8, 1998, is that of the series of G.T. Investment Funds, Inc. (renamed
AIM Investment Funds, Inc.).
    
 
  This Statement of Additional Information relates solely to the Class A and B
shares of the Fund.
 
  The term "majority of the outstanding shares" of the Trust, of a particular
Fund or of a particular class of a Fund means, respectively, the vote of the
lesser of (a) 67% or more of the shares of the Trust, such Fund or such class
present at a meeting of the Trust's shareholders, if the holders of more than
50% of the outstanding shares of the Trust, such Fund or such class are present
or represented by proxy, or (b) more than 50% of the outstanding shares of the
Trust, such Fund or such class.
 
  Class A, Class B and Advisor Class shares of each Fund have equal rights and
privileges. Each share of a particular class is entitled to one vote, to
participate equally in dividends and distributions declared by the Trust's Board
of Trustees with respect to the class of such Fund and, upon liquidation of the
Fund, to participate proportionately in the net assets of the Fund allocable to
such class remaining after satisfaction of outstanding liabilities of the Fund
allocable to such class. Fund shares are fully paid, non-assessable and fully
transferable when issued and have no preemptive rights and have such conversion
and exchange rights as set forth in the Prospectus and this Statement of
Additional Information. Fractional shares have proportionately the same rights,
including voting rights, as are provided for a full share.
 
                                        4
<PAGE>   919
 
   
  Shareholders of the Funds do not have cumulative voting rights, and therefore
the holders of more than 50% of the outstanding shares of all Funds voting
together for election of trustees may elect all of the members of the Board of
Trustees of the Trust. In such event, the remaining holders cannot elect any
trustees of the Trust.
    
 
                       INVESTMENT OBJECTIVES AND POLICIES
 
INVESTMENT OBJECTIVES
 
  Developing Markets Fund. The primary investment objective of Developing
Markets Fund is long-term capital appreciation. Its secondary investment
objective is income, to the extent consistent with seeking capital appreciation.
The Fund normally invests substantially all of its assets in issuers in the
developing (or "emerging") markets of Asia, Europe, Latin America and elsewhere.
The Fund does not consider the following countries to be emerging markets:
Australia, Austria, Belgium, Canada, Denmark, England, Finland, France, Germany,
Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Spain, Sweden,
Switzerland and the United States.
 
  Emerging Markets Fund. The investment objective of Emerging Markets Fund is
long-term growth of capital. The Fund seeks this objective by investing, under
normal circumstances, at least 65% of its total assets in equity securities of
companies in emerging markets. The Fund does not consider the following
countries to be emerging markets: Australia, Austria, Belgium, Canada, Denmark,
England, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New
Zealand, Norway, Spain, Sweden, Switzerland and United States. The Fund normally
may invest up to 35% of its assets in a combination of (i) debt securities of
government or corporate issuers in emerging markets; (ii) equity and debt
securities of issuers in developed countries, including the United States; (iii)
securities of issuers in emerging markets not included in the list of emerging
markets set forth in the Fund's current Prospectus, if investing therein becomes
feasible and desirable subsequent to the date of the Fund's current Prospectus;
and (iv) cash and money market instruments.
 
   
  In determining what countries constitute emerging markets with respect to
Developing Market Fund and Emerging Markets Fund, the Sub-advisor will consider,
among other things, data, analysis, and classification of countries published or
disseminated by the International Bank for Reconstruction and Development
(commonly known as the World Bank) and the International Finance Corporation
("IFC").
    
 
  Latin American Fund. The investment objective of Latin American Fund is
capital appreciation. The Fund will normally invest at least 65% of its total
assets in securities of a broad range of Latin American issuers. Under current
market conditions, the Fund expects to invest primarily in equity and debt
securities issued by companies and governments in Mexico, Chile, Brazil and
Argentina. Though the Fund can normally invest up to 35% of its total assets in
U.S. securities, the Fund reserves the right to be primarily invested in U.S.
securities for temporary defensive purposes or pending investment of the
proceeds of the offering made hereby.
 
SELECTION OF EQUITY INVESTMENTS
 
   
  In determining the appropriate distribution of investments among various
countries and geographic regions for the Funds, the Sub-advisor ordinarily
considers the following factors: prospects for relative economic growth among
the different countries in which a Fund may invest; expected levels of
inflation; government policies influencing business conditions; the outlook for
currency relationships; and the range of the individual investment opportunities
available to international investors.
    
 
   
  In analyzing companies for investment by each Fund, the Sub-advisor ordinarily
looks for one or more of the following characteristics: an above-average
earnings growth per share; high return on invested capital; healthy balance
sheet; sound financial and accounting policies and overall financial strength;
strong competitive advantages; effective research and product development and
marketing; efficient service; pricing flexibility; strength of management; and
general operating characteristics which will enable the companies to compete
successfully in their respective marketplaces. In certain countries,
governmental restrictions and other limitations on investment may affect the
maximum percentage of equity ownership in any one company by the Funds. In
addition, in some instances only special classes of securities may be purchased
by foreigners and the market prices, liquidity and rights with respect to those
securities may vary from shares owned by nationals.
    
 
  Although the Funds value their assets daily in terms of U.S. dollars, the
Funds do not intend to convert their holdings of foreign currencies into U.S.
dollars on a daily basis. The Funds will do so from time to time, and investors
should be aware of the costs of currency conversion. Although foreign exchange
dealers do not charge a fee for conversion, they do realize a profit based on
the difference ("spread") between the prices at which they are buying and
selling various currencies.
 
                                        5
<PAGE>   920
 
Thus, a dealer may offer to sell a foreign currency to the Funds at one rate,
while offering a lesser rate of exchange should a Fund desire to sell that
currency to the dealer.
 
   
  There may be times when, in the opinion of the Sub-advisor, prevailing market,
economic or political conditions warrant reducing the proportion of each Fund's
assets invested in equity securities and increasing the proportion held in cash
or short-term obligations denominated in U.S. dollars or other currencies. A
portion of each Fund's assets may be held in U.S. dollars or short-term
interest-bearing dollar-denominated securities to provide for ongoing expenses
and redemptions.
    
 
   
  The Funds may be prohibited under the Investment Company Act of 1940, as
amended ("1940 Act"), from purchasing the securities of any foreign company
that, in its most recent fiscal year, derived more than 15% of its gross
revenues from securities-related activities ("securities-related companies"). In
a number of countries, including those in Latin America, commercial banks act as
securities broker/dealers, investment advisors and underwriters or otherwise
engage in securities-related activities, which may limit the Fund's ability to
hold securities issued by such banks. The Fund has obtained an exemption from
the SEC to permit it to invest in certain of these securities subject to certain
restrictions.
    
 
   
  For investment purposes, an issuer is typically considered as located in a
particular country if it (a) is incorporated under the laws of or has its
principal office in that country, or (b) it normally derives 50% or more of its
total revenue from business in that country. However, these are not absolute
requirements, and certain companies incorporated in a particular country and
considered by the Sub-advisor to be located in that country may have substantial
off-shore operations or subsidiaries and/or export sales exceeding in size the
assets or sales in that country.
    
 
INVESTMENTS IN OTHER INVESTMENT COMPANIES
 
   
  The Funds may invest in the securities of investment companies (including
investment vehicles or companies advised by the Sub-advisor or its affiliates
("Affiliated Funds")) within the limits of the 1940 Act. These limitations
currently provide that, in general, each Fund may purchase shares of a
closed-end investment company unless (a) such a purchase would cause the Fund to
own in the aggregate more than 3 percent of the total outstanding voting stock
of the investment company or (b) such a purchase would cause the Fund to have
more than 5 percent of its total assets invested in the investment company or
more than 10 percent of its total assets invested in an aggregate of all such
investment companies. Investment in such investment companies may also involve
the payment of substantial premiums above the value of such companies' portfolio
securities. The Funds do not intend to invest in such investment companies
unless, in the judgment of the Sub-advisor, the potential benefits of such
investments justify the payment of any applicable premiums. The return on such
securities will be reduced by operating expenses of such companies including
payments to the investment managers of those investment companies. With respect
to investments in Affiliated Funds, the Sub-advisor waives its advisory fee to
the extent that such fees are based on assets of the Fund invested in Affiliated
Funds.
    
 
  Certain countries in which the Funds invest presently may be made only by
acquiring shares of other investment companies with local governmental approval
to invest in those countries. At such time as direct investment in those
countries is allowed, the Funds anticipate investing directly in those markets.
 
   
DEPOSITARY RECEIPTS
    
 
   
  Each Fund may hold equity securities of foreign issuers in the form of
American Depositary Receipts ("ADRs"), American Depositary Shares ("ADSs"),
Global Depositary Receipts ("GDRs") and European Depositary Receipts ("EDRs"),
or other securities convertible into securities of eligible issuers. These
securities may not necessarily be denominated in the same currency as the
securities for which they may be exchanged. ADRs and ADSs typically are issued
by an American bank or trust company and evidence ownership of underlying
securities issued by a foreign corporation. EDRs, which are sometimes referred
to as Continental Depository Receipts ("CDRs"), are issued in Europe typically
by foreign banks and trust companies and evidence ownership of either foreign or
domestic securities. GDRs are similar to EDRs and are designed for use in
several international financial markets. Generally, ADRs and ADSs in registered
form are designed for use in United States securities markets and EDRs in bearer
form are designed for use in European securities markets. For purposes of each
Fund's investment policies, a Fund's investments in ADRs, ADSs, GDRs and EDRs
will be deemed to be investments in the equity securities representing
securities of foreign issuers into which they may be converted.
    
 
  ADR facilities may be established as either "unsponsored" or "sponsored."
While ADRs issued under these two types of facilities are in some respects
similar, there are distinctions between them relating to the rights and
obligations of ADR holders and the practices of market participants. A
depository may establish an unsponsored facility without participation by (or
even necessarily the acquiescence of) the issuer of the deposited securities,
although typically the depository requests a letter of non-objection from such
issuer prior to the establishment of the facility. Holders of unsponsored ADRs
                                        6
<PAGE>   921
 
   
generally bear all the costs of such facilities. The depository usually charges
fees upon the deposit and withdrawal of the deposited securities, the conversion
of dividends into U.S. dollars, the disposition of non-cash distributions, and
the performance of other services. The depository of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited securities or to pass-through voting
rights to ADR holders in respect of the deposited securities. Sponsored ADR
facilities are created in generally the same manner as unsponsored facilities,
except that the issuer of the deposited securities enters into a deposit
agreement with the depositary. The deposit agreement sets out the rights and
responsibilities of the issuer, the depository and the ADR holders. With
sponsored facilities, the issuer of the deposited securities generally will bear
some of the costs relating to the facility (such as dividend payment fees of the
depository), although ADR holders continue to bear certain other costs (such as
deposit and withdrawal fees). Under the terms of most sponsored arrangements,
depositories agree to distribute notices of shareholder meetings and voting
instructions, and to provide shareholder communications and other information to
the ADR holders at the request of the issuer of the deposited securities. The
Fund may invest in both sponsored and unsponsored ADRs.
    
 
WARRANTS OR RIGHTS
 
  Warrants or rights may be acquired by each Fund in connection with other
securities or separately and provide a Fund with the right to purchase at a
later date other securities of the issuer. Warrants are securities permitting,
but not obligating, their holder to subscribe for other securities or
commodities. Warrants do not carry with them the right to dividends or voting
rights with respect to the securities that they entitle their holder to
purchase, and they do not represent any rights in the assets of the issuer. As a
result, warrants may be considered more speculative than certain other types of
investments. In addition, the value of a warrant does not necessarily change
with the value of the underlying securities and a warrant ceases to have value
if it is not exercised prior to its expiration date.
 
LENDING OF PORTFOLIO SECURITIES
 
   
  For the purpose of realizing additional income, the Funds may make secured
loans of portfolio securities amounting to not more than 30% (in the case of
Developing Markets Fund and Emerging Markets Fund) or 25% (in the case of Latin
American Fund) of its total assets. Securities loans are made to broker/dealers
or institutional investors pursuant to agreements requiring that the loans
continuously be secured by collateral at least equal at all times to the value
of the securities lent plus any accrued interest, "marked to market" on a daily
basis. The Funds may pay reasonable administrative and custodial fees in
connection with loans of its securities. While the securities loan is
outstanding with respect to a Fund, the Fund will continue to receive the
equivalent of the interest or dividends paid by the issuer on the securities, as
well as interest on the investment of the collateral or a fee from the borrower.
The Fund will have a right to call each loan and obtain the securities within
the stated settlement period. The Fund will not have the right to vote equity
securities while they are lent, but it may call in a loan in anticipation of any
important vote. Loans will be made only to firms deemed by the Sub-advisor to be
of good standing and will not be made unless, in the judgment of the
Sub-advisor, the consideration to be earned from such loans would justify the
risk.
    
 
COMMERCIAL BANK OBLIGATIONS
 
  For the purposes of each Fund's investment policies with respect to bank
obligations, obligations of foreign branches of U.S. banks and of foreign banks
are obligations of the issuing bank and may be general obligations of the parent
bank. Such obligations, however, may be limited by the terms of a specific
obligation and by government regulation. As with investment in non-U.S.
securities in general, investments in the obligations of foreign branches of
U.S. banks and of foreign banks may subject a Fund to investment risks that are
different in some respects from those of investments in obligations of domestic
issuers. Although a Fund typically will acquire obligations issued and supported
by the credit of U.S. or foreign banks having total assets at the time of
purchase in excess of $1 billion, this $1 billion figure is not an investment
policy or restriction of any Fund. For the purposes of calculation with respect
to the $1 billion figure, the assets of a bank will be deemed to include the
assets of its U.S. and non-U.S. branches.
 
REPURCHASE AGREEMENTS
 
   
  A repurchase agreement is a transaction in which a Fund purchases a security
from a bank or recognized securities dealer and simultaneously commits to resell
that security to the bank or dealer at an agreed upon price, date, and market
rate of interest unrelated to the coupon rate or maturity of the purchased
security. Although repurchase agreements carry certain risks not associated with
direct investments in securities, including possible decline in the market value
of the underlying securities and delays and costs to a Fund if the other party
to the repurchase agreement becomes bankrupt, the Funds intend to enter into
repurchase agreements only with banks and dealers believed by the Sub-advisor to
present
    
 
                                        7
<PAGE>   922
 
   
minimum credit risks in accordance with guidelines established by the Trust's
Board of Trustees. The Sub-advisor will review and monitor the creditworthiness
of such institutions under the Board's general supervision.
    
 
  The Funds will invest only in repurchase agreements collateralized at all
times in an amount at least equal to the repurchase price plus accrued interest.
To the extent that the proceeds from any sale of such collateral upon a default
in the obligation to repurchase were less than the repurchase price, a Fund
would suffer a loss. If the financial institution which is party to the
repurchase agreement petitions for bankruptcy or otherwise becomes subject to
bankruptcy or other liquidation proceedings, there may be restrictions on a
Fund's ability to sell the collateral and the Fund could suffer a loss. However,
with respect to financial institutions whose bankruptcy or liquidation
proceedings are subject to the U.S. Bankruptcy Code, each Fund intends to comply
with provisions under the U.S. Bankruptcy Code that would allow it immediately
to resell the collateral. There is no limitation on the amount of a Fund's
assets that may be subject to repurchase agreements at any given time. The Funds
will not enter into a repurchase agreement with a maturity of more than seven
days if, as a result, more than 15% (for Emerging Markets Fund and Developing
Markets Fund) or 10% (for Latin American Fund) of the value of its net assets
would be invested in such repurchase agreements and other illiquid investments.
 
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
 
  No Fund's borrowings will exceed 33 1/3% of the Fund's total assets, i.e.,
each Fund's total assets at all times will equal at least 300% of the amount of
outstanding borrowings. If market fluctuations in the value of a Fund's
portfolio holdings or other factors cause the ratio of the Fund's total assets
to outstanding borrowings to fall below 300%, within three days (excluding
Sundays and holidays) of such event the Fund may be required to sell portfolio
securities to restore the 300% asset coverage, even though from an investment
standpoint such sales might be disadvantageous. Each Fund also may borrow up to
5% of its total assets for temporary or emergency purposes other than to meet
redemptions. Any borrowing by a Fund may cause greater fluctuation in the value
of its shares than would be the case if the Fund did not borrow.
 
  The Funds' fundamental investment limitations permit them to borrow money for
leveraging purposes. Developing Market Fund, however, currently is prohibited,
pursuant to a non-fundamental investment policy, from borrowing money in order
to purchase securities. In addition, Emerging Markets Fund and Latin American
Fund currently are prohibited, pursuant to a non-fundamental investment policy,
from purchasing securities during times when outstanding borrowings represent
more than 5% of its assets. Nevertheless, this policy may be changed in the
future by a vote of a majority of the Trust's Board of Trustees. If a Fund
employs leverage in the future, it would be subject to certain additional risks.
Use of leverage creates an opportunity for greater growth of capital but would
exaggerate any increases or decreases in the Fund's net asset value. When the
income and gains on securities purchased with the proceeds of borrowings exceed
the costs of such borrowings, the Fund's earnings or net asset value will
increase faster than otherwise would be the case; conversely, if such income and
gains fail to exceed such costs, the Fund's earnings or net asset value would
decline faster than would otherwise be the case.
 
   
  Each Fund may enter into reverse repurchase agreements. A reverse repurchase
agreement is a borrowing transaction in which a Fund transfers possession of a
security to another party, such as a bank or broker/dealer in return for cash,
and agrees to repurchase the security in the future at an agreed upon price,
which includes an interest component. Emerging Markets Fund also may engage in
"roll" borrowing transactions which involve the Fund's sale of Government
National Mortgage Association certificates or other securities together with a
commitment (for which the Fund may receive a fee) to purchase similar, but not
identical, securities at a future date. Each Fund will segregate with a
custodian, liquid assets in an amount sufficient to cover its obligations under
"roll" transactions (for Emerging Markets Fund) and reverse repurchase
agreements with broker/dealers. No segregation is required for reverse
repurchase agreements with banks.
    
 
SHORT SALES
 
  The Fund may make short sales of securities, although it has no current
intention of doing so. A short sale is a transaction in which the Fund sells a
security in anticipation that the market price of that security will decline.
The Fund may make short sales (i) as a form of hedging to offset potential
declines in long positions in securities it owns, or anticipates acquiring, and
(ii) in order to maintain portfolio flexibility.
 
  When a Fund makes a short sale of a security it does not own, it must borrow
the security sold short and deliver it to the broker-dealer or other
intermediary through which it made the short sale. The Fund may have to pay a
fee to borrow particular securities and will often be obligated to pay over any
payments received on such borrowed securities.
 
  A Fund's obligation to replace the borrowed security when the borrowing is
called or expires will be secured by collateral deposited with the intermediary.
The Fund will also be required to deposit collateral with its custodian to the
extent, if any, necessary so that the value of both collateral deposits in the
aggregate is at all times equal to at least 100%
                                        8
<PAGE>   923
 
of the current market value of the security sold short. Depending on
arrangements made with the intermediary from which it borrowed the security
regarding payment of any amounts received by the Fund on such security, the Fund
may not receive any payments (including interest) on its collateral deposited
with such intermediary.
 
  If the price of the security sold short increases between the time of the
short sale and the time the Fund replaces the borrowed security, the Fund will
incur a loss; conversely, if the price declines, the Fund will realize a gain.
Any gain will be decreased, and any loss increased, by the transaction costs
associated with the transaction. Although the Fund's gain is limited by the
price at which it sold the security short, its potential loss is theoretically
unlimited.
 
  Neither Emerging Markets Fund nor Latin American Fund will make a short sale
if, after giving effect to such sale, the market value of the securities sold
short exceeds 25% of the value of its total assets or the Fund's aggregate short
sales of the securities of any one issuer exceed the lesser of 2% of the Fund's
net assets or 2% of the securities of any class of the issuer. Moreover, these
Funds may engage in short sales only with respect to securities listed on a
national securities exchange. These Funds may make short sales "against the box"
without respect to such limitations. In this type of short sale, at the time of
the sale the Fund owns the security it has sold short or has the immediate and
unconditional right to acquire at no additional cost the identical security.
 
   
  Developing Markets Fund may only make short sales "against the box." The Fund
might make a short sale "against the box" in order to hedge against market risks
when the Sub-advisor believes that the price of a security may decline, causing
a decline in the value of a security owned by the Fund or a security convertible
into or exchangeable for such security. In such case, any future losses in the
Fund's long position should be reduced by a gain in the short position.
Conversely, any gain in the long position should be reduced by a loss in the
short position. The extent to which such gains or losses in the long position
are reduced will depend upon the amount of the securities sold short relative to
the amount of the securities the Fund owns, either directly or indirectly, and,
in the case where the Fund owns convertible securities, changes in the
investment values or conversion premiums of such securities. There will be
certain additional transaction costs associated with short sales "against the
box," but the Fund will endeavor to offset these costs with income from the
investment of the cash proceeds of short sales.
    
 
TEMPORARY DEFENSIVE STRATEGIES
 
  The Funds may invest in the following types of money market instruments (i.e.,
debt instruments with less than 12 months remaining until maturity) denominated
in U.S. dollars or other currencies (in the case of Latin American Fund, the
currency of any Latin American country): (a) obligations issued or guaranteed by
the U.S. or foreign governments (in the case of Latin American Fund, the
government of any Latin American country), their agencies, instrumentalities or
municipalities; (b) obligations of international organizations designed or
supported by multiple foreign governmental entities to promote economic
reconstruction or development; (c) finance company obligations, corporate
commercial paper and other short-term commercial obligations; (d) bank
obligations (including certificates of deposit, time deposits, demand deposits
and bankers' acceptances); (e) repurchase agreements with respect to the
foregoing; and (f) other substantially similar short-term debt securities with
comparable characteristics.
 
  The Funds may invest in commercial paper rated as low as A-3 by Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P") or P-3 by Moody's
Investors Service, Inc. ("Moody's") or, if not rated, determined by the Manager
to be of comparable quality. Obligations rated A-3 and P-3 are considered by S&P
and Moody's, respectively, to have an acceptable capacity for timely repayment.
However, these securities may be more vulnerable to adverse effects of changes
in circumstances than obligations carrying higher designations.
 
SAMURAI AND YANKEE BONDS
 
  Subject to its fundamental investment restrictions, Developing Markets Fund
and Emerging Markets Fund may invest in yen-denominated bonds sold in Japan by
non-Japanese issuers ("Samurai bonds"), and may invest in dollar-denominated
bonds sold in the United States by non-U.S. issuers ("Yankee bonds"). As
compared with bonds issued in their countries of domicile, such bond issues
normally carry a higher interest rate but are less actively traded. It is the
policy of each of these Funds to invest in Samurai or Yankee bond issues only
after taking into account considerations of quality and liquidity, as well as
yield. In the case of Emerging Markets Fund, these bonds would be issued by
governments which are members of the Organization for Economic Cooperation and
Development or have AAA ratings.
 
DEBT CONVERSIONS
 
  Several Latin American countries have adopted debt conversion programs,
pursuant to which investors may use external debt of a country, directly or
indirectly, to make investments in local companies. The terms of the various
programs vary
 
                                        9
<PAGE>   924
 
   
from country to country, although each program includes significant restrictions
on the application of the proceeds received in the conversion and on the
remittance of profits on the investment and of the invested capital. Latin
American Fund intends to acquire Sovereign Debt, as defined in the Prospectus,
to hold and trade in appropriate circumstances as described in the Prospectus,
as well as to participate in Latin American debt conversion programs. The
Sub-advisor will evaluate opportunities to enter into debt conversion
transactions as they arise but does not currently intend to invest more than 5%
of the Fund's assets in such programs.
    
 
PREMIUM SECURITIES
 
  Developing Markets Fund may invest in income securities bearing coupon rates
higher than prevailing market rates. Such "premium" securities are typically
purchased at prices greater than the principal amounts payable on maturity. The
Fund will not amortize the premium paid for such securities in calculating its
net investment income. As a result, in such cases the purchase of such
securities provides the Fund a higher level of investment income distributable
to shareholders on a current basis than if the Fund purchased securities bearing
current market rates of interest. If securities purchased by the Fund at a
premium are called or sold prior to maturity, the Fund will realize a loss to
the extent the call or sale price is less than the purchase price. Additionally,
the Fund will realize a loss if it holds such securities to maturity.
 
INDEXED DEBT SECURITIES
 
  Developing Markets Fund may invest in debt securities issued by banks and
other business entities not located in developing market countries that are
indexed to certain specific foreign currency exchange rates, interest rates or
other reference rates. The terms of such securities provide that their principal
amount is adjusted upwards or downwards (but ordinarily not below zero) at
maturity to reflect changes in the exchange rate between two currencies (or
other rates) while the obligations are outstanding. While such securities offer
the potential for an attractive rate of return, they also entail the risk of
loss of principal. New forms of such securities continue to be developed. The
Fund may invest in such securities to the extent consistent with its investment
objectives.
 
STRUCTURED INVESTMENTS
 
  Developing Markets Fund may invest a portion of its assets in interests in
entities organized and operated solely for the purpose of restructuring the
investment characteristics of Sovereign Debt. This type of restructuring
involves the deposit with or purchase by an entity, such as a corporation or
trust, of specified instruments (such as commercial bank loans or Brady Bonds)
and the issuance by that entity of one or more classes of securities
("Structured Investments") backed by, or representing interests in, the
underlying instruments. The cash flow on the underlying instruments may be
apportioned among the newly issued Structured Investments to create securities
with different investment characteristics such as varying maturities, payment
priorities and interest rate provisions, and the extent of the payments made
with respect to Structured Investments is dependent on the extent of the cash
flow on the underlying instruments. Because Structured Investments of the type
in which the Fund anticipates it will invest typically involve no credit
enhancement, their credit risk generally will be equivalent to that of the
underlying instruments.
 
  Developing Markets Fund is permitted to invest in a class of Structured
Investments that is either subordinated or not subordinated to the right of
payment of another class. Subordinated Structured Investments typically have
higher yields and present greater risks than unsubordinated Structured
Investments.
 
  Certain issuers of Structured Investments may be deemed to be "investment
companies" as defined in the 1940 Act. As a result, Developing Markets Fund's
investment in these Structured Investments may be limited by the restrictions
contained in the 1940 Act described above under "Investment Objectives and
Policies -- Investments in Other Investment Companies." Structured Investments
are typically sold in private placement transactions, and there currently is no
active trading market for Structured Investments.
 
STRIPPED INCOME SECURITIES
 
   
  Developing Markets Fund may invest a portion of its assets in stripped income
securities, which are obligations representing an interest in all or a portion
of the income or principal components of an underlying or related security, a
pool of securities or other assets. In the most extreme case, one class will
receive all of the interest (the "interest only class" or the "IO class"), while
the other class will receive all of the principal (the "principal-only class" or
the "PO class"). The market values of stripped income securities tend to be more
volatile in response to changes in interest rates than are conventional income
securities.
    
 
                                       10
<PAGE>   925
 
FLOATING AND VARIABLE RATE INCOME SECURITIES
 
  Developing Markets Fund may invest a portion of its assets in floating or
variable rate income securities. Income securities may provide for floating or
variable rate interest or dividend payments. The floating or variable rate may
be determined by reference to a known lending rate, such as a bank's prime rate,
a certificate of deposit rate or the London Inter Bank Offered Rate (LIBOR).
Alternatively, the rate may be determined through an auction or remarketing
process. The rate also may be indexed to changes in the values of interest rate
or securities indexes, currency exchange rates or other commodities. The amount
by which the rate paid on an income security may increase or decrease may be
subject to periodic or lifetime caps. Floating and variable rate income
securities include securities whose rates vary inversely with changes in market
rates of interest. Such securities may also pay a rate of interest determined by
applying a multiple to the variable rate. The extent of increases and decreases
in the value of securities whose rates vary inversely with changes in market
rates of interest generally will be larger than comparable changes in the value
of an equal principal amount of a fixed rate security having similar credit
quality, redemption provisions and maturity.
 
SWAPS, CAPS, FLOORS AND COLLARS
 
  Developing Markets Fund may enter into interest rate, currency and index swaps
and may purchase or sell related caps, floors and collars and other derivative
instruments. The Fund expects to enter into these transactions primarily to
preserve a return or spread on a particular investment or portion of its
portfolio, to protect against currency fluctuations, as a technique for managing
the portfolio's duration (i.e., the price sensitivity to changes in interest
rates) or to protect against any increase in the price of securities the Fund
anticipates purchasing at a later date. The Fund intends to use these
transactions as hedges and will not sell interest rate caps, floors or collars
if it does not own securities or other instruments providing an income stream
roughly equivalent to what the Fund may be obligated to pay.
 
  Interest rate swaps involve the exchange by Developing Markets Fund with
another party of their respective commitments to pay or receive interest (for
example, an exchange of floating rate payments for fixed rate payments) with
respect to a notional amount of principal. A currency swap is an agreement to
exchange cash flows on a notional amount based on changes in the values of the
reference indices.
 
  The purchase of a cap entitles the purchaser to receive payments on a notional
principal amount from the party selling the cap to the extent that a specified
index exceeds a predetermined interest rate. The purchase of an interest rate
floor entitles the purchaser to receive payments on a notional principal amount
from the party selling the floor to the extent that a specified index falls
below a predetermined interest rate or amount. A collar is a combination of a
cap and a floor that preserves a certain return within a predetermined range of
interest rates or values.
 
                    OPTIONS, FUTURES AND CURRENCY STRATEGIES
 
SPECIAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES
 
  The use of options, futures contracts and forward currency contracts ("Forward
Contracts") involves special considerations and risks, as described below. Risks
pertaining to particular instruments are described in the sections that follow.
 
   
          (1) Successful use of most of these instruments depends upon the
     Sub-advisor's ability to predict movements of the overall securities and
     currency markets, which requires different skills than predicting changes
     in the prices of individual securities. While the Sub-advisor is
     experienced in the use of these instruments, there can be no assurance that
     any particular strategy adopted will succeed.
    
 
          (2) There might be imperfect correlation, or even no correlation,
     between price movements of an instrument and price movements of the
     investments being hedged. For example, if the value of an instrument used
     in a short hedge increased by less than the decline in value of the hedged
     investment, the hedge would not be fully successful. Such a lack of
     correlation might occur due to factors unrelated to the value of the
     investments being hedged, such as speculative or other pressures on the
     markets in which the hedging instrument is traded. The effectiveness of
     hedges using hedging instruments on indices will depend on the degree of
     correlation between price movements in the index and price movements in the
     investments being hedged.
 
   
          (3) Hedging strategies, if successful, can reduce risk of loss by
     wholly or partially offsetting the negative effect of unfavorable price
     movements in the investments being hedged. However, hedging strategies can
     also reduce opportunity for gain by offsetting the positive effect of
     favorable price movements in the hedged investments. For example, if a Fund
     entered into a short hedge because the Sub-advisor projected a decline in
     the price of a security in
    
 
                                       11
<PAGE>   926
 
   
     the Fund's portfolio, and the price of that security increased instead, the
     gain from that increase might be wholly or partially offset by a decline in
     the price of the hedging instrument. Moreover, if the price of the hedging
     instrument declined by more than the increase in the price of the security,
     the Fund could suffer a loss. In either such case, the Fund would have been
     in a better position had it not hedged at all.
    
 
   
          (4) As described below, a Fund might be required to maintain assets as
     "cover," maintain segregated accounts or make margin payments when it takes
     positions in instruments involving obligations to third parties (i.e.,
     instruments other than purchased options). If the Fund were unable to close
     out its positions in such instruments, it might be required to continue to
     maintain such assets or accounts or make such payments until the position
     expired or matured. The requirements might impair the Fund's ability to
     sell a portfolio security or make an investment at a time when it would
     otherwise be favorable to do so, or require that the Fund sell a portfolio
     security at a disadvantageous time. A Fund's ability to close out a
     position in an instrument prior to expiration or maturity depends on the
     existence of a liquid secondary market or, in the absence of such a market,
     the ability and willingness of the other party to the transaction ("contra
     party") to enter into a transaction closing out the position. Therefore,
     there is no assurance that any position can be closed out at a time and
     price that is favorable to the Funds.
    
 
WRITING CALL OPTIONS
 
   
  Each Fund may write (sell) call options on securities, indices and currencies.
Call options generally will be written on securities and currencies that, in the
opinion of the Sub-advisor are not expected to make any major price moves in the
near future but that, over the long term, are deemed to be attractive
investments for a Fund.
    
 
  A call option gives the holder (buyer) the right to purchase a security or
currency at a specified price (the exercise price) at any time until (American
Style) or on (European Style) a certain date (the expiration date). So long as
the obligation of the writer of a call option continues, he may be assigned an
exercise notice, requiring him to deliver the underlying security or currency
against payment of the exercise price. This obligation terminates upon the
expiration of the call option, or such earlier time at which the writer effects
a closing purchase transaction by purchasing an option identical to that
previously sold.
 
  Portfolio securities or currencies on which call options may be written will
be purchased solely on the basis of investment considerations consistent with
each Fund's investment objective. When writing a call option, a Fund, in return
for the premium, gives up the opportunity for profit from a price increase in
the underlying security or currency above the exercise price, and retains the
risk of loss should the price of the security or currency decline. Unlike one
who owns securities or currencies not subject to an option, a Fund has no
control over when it may be required to sell the underlying securities or
currencies, since most options may be exercised at any time prior to the
option's expiration. If a call option that a Fund has written expires, the Fund
will realize a gain in the amount of the premium; however, such gain may be
offset by a decline in the market value of the underlying security or currency
during the option period. If the call option is exercised, the Fund will realize
a gain or loss from the sale of the underlying security or currency, which will
be increased or offset by the premium received. The Funds do not consider a
security or currency covered by a call option to be "pledged" as that term is
used in the Funds' policies that limit the pledging or mortgaging of their
assets.
 
  Writing call options can serve as a limited short hedge because declines in
the value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
appreciates to a price higher than the exercise price of the call option, it can
be expected that the option will be exercised and a Fund will be obligated to
sell the security or currency at less than its market value.
 
   
  The premium that a Fund receives for writing a call option is deemed to
constitute the market value of an option. The premium a Fund will receive from
writing a call option will reflect, among other things, the current market price
of the underlying investment, the relationship of the exercise price to such
market price, the historical price volatility of the underlying investment, and
the length of the option period. In determining whether a particular call option
should be written, the Sub-advisor will consider the reasonableness of the
anticipated premium and the likelihood that a liquid secondary market will exist
for those options.
    
 
  Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security or currency from
being called, or to permit the sale of the underlying security or currency.
Furthermore, effecting a closing transaction will permit a Fund to write another
call option on the underlying security or currency with either a different
exercise price, expiration date or both.
 
  Each Fund will pay transaction costs in connection with the writing of options
and in entering into closing purchase contracts. Transaction costs relating to
options activity normally are higher than those applicable to purchases and
sales of portfolio securities.
 
                                       12
<PAGE>   927
 
  The exercise price of the options may be below, equal to or above the current
market values of the underlying securities or currencies at the time the options
are written. From time to time, a Fund may purchase an underlying security or
currency for delivery in accordance with the exercise of an option, rather than
delivering such security or currency from its portfolio. In such cases,
additional costs will be incurred.
 
  A Fund will realize a profit or loss from a closing purchase transaction if
the cost of the transaction is less or more, respectively, than the premium
received from writing the option. Because increases in the market price of a
call option generally will reflect increases in the market price of the
underlying security or currency, any loss resulting from the repurchase of a
call option is likely to be offset in whole or in part by appreciation of the
underlying security or currency owned by the Fund.
 
WRITING PUT OPTIONS
 
  Each Fund may write put options on securities, indices and currencies. A put
option gives the purchaser of the option the right to sell, and the writer
(seller) the obligation to buy, the underlying security or currency at the
exercise price at any time until (American style) or on (European style) the
expiration date. The operation of put options in other respects, including their
related risks and rewards, is identical substantially to that of call options.
 
   
  A Fund generally would write put options in circumstances where the
Sub-advisor wishes to purchase the underlying security or currency for the
Fund's portfolio at a price lower than the current market price of the security
or currency. In such event, the Fund would write a put option at an exercise
price that, reduced by the premium received on the option, reflects the lower
price it is willing to pay. Since the Fund would also receive interest on debt
securities or currencies maintained to cover the exercise price of the option,
this technique could be used to enhance current return during periods of market
uncertainty. The risk in such a transaction would be that the market price of
the underlying security or currency would decline below the exercise price less
the premium received.
    
 
  Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
depreciates to a price lower than the exercise price of the put option, it can
be expected that the put option will be exercised and the Fund will be obligated
to sell the security or currency at more than its market value.
 
PURCHASING PUT OPTIONS
 
  Each Fund may purchase put options on securities, indices and currencies. As
the holder of a put option, a Fund would have the right to sell the underlying
security or currency at the exercise price at any time until (American style) or
on (European style) the expiration date. A Fund may enter into closing sale
transactions with respect to such options, exercise them or permit them to
expire.
 
  A Fund may purchase a put option on an underlying security or currency
("protective put") owned by the Fund to protect against an anticipated decline
in the value of the security or currency. Such protection is provided only
during the life of the put option when the Fund, as the holder of the put
option, is able to sell the underlying security or currency at the put exercise
price regardless of any decline in the underlying security's market price or
currency's exchange value. The premium paid for the put option and any
transaction costs would reduce any profit otherwise available for distribution
when the security or currency is eventually sold.
 
  A Fund also may purchase put options at a time when the Fund does not own the
underlying security or currency. By purchasing put options on a security or
currency it does not own, the Fund seeks to benefit from a decline in the market
price of the underlying security or currency. If the put option is not sold when
it has remaining value, and if the market price of the underlying security or
currency remains equal to or greater than the exercise price during the life of
the put option, the Fund will lose its entire investment in the put option. In
order for the purchase of a put option to be profitable, the market price of the
underlying security or currency must decline sufficiently below the exercise
price to cover the premium and transaction costs, unless the put option is sold
in a closing sale transaction.
 
PURCHASING CALL OPTIONS
 
  Each Fund may purchase call options on securities, indices and currencies. As
the holder of a call option, a Fund would have the right to purchase the
underlying security or currency at the exercise price at any time until
(American style) or on (European style) the expiration date. A Fund may enter
into closing sale transactions with respect to such options, exercise them or
permit them to expire.
 
                                       13
<PAGE>   928
 
  Call options may be purchased by a Fund for the purpose of acquiring the
underlying security or currency for its portfolio. Utilized in this fashion, the
purchase of call options would enable the Fund to acquire the security or
currency at the exercise price of the call option plus the premium paid. At
times, the net cost of acquiring the security or currency in this manner may be
less than the cost of acquiring the security or currency directly. This
technique also may be useful to a Fund in purchasing a large block of securities
that would be more difficult to acquire by direct market purchases. So long as
it holds such a call option, rather than the underlying security or currency
itself, the Fund is partially protected from any unexpected decline in the
market price of the underlying security or currency and, in such event, could
allow the call option to expire, incurring a loss only to the extent of the
premium paid for the option.
 
  A Fund also may purchase call options on underlying securities or currencies
it owns to avoid realizing losses that would result in a reduction of its
current return. For example, where a Fund has written a call option on an
underlying security or currency having a current market value below the price at
which it purchased the security or currency, an increase in the market price
could result in the exercise of the call option written by the Fund and the
realization of a loss on the underlying security or currency. Accordingly, the
Fund could purchase a call option on the same underlying security or currency,
which could be exercised to fulfill the Fund's delivery obligations under its
written call (if it is exercised). This strategy could allow the Fund to avoid
selling the portfolio security or currency at a time when it has an unrealized
loss; however, the Fund would have to pay a premium to purchase the call option
plus transaction costs.
 
  Aggregate premiums paid for put and call options will not exceed 5% of a
Fund's total assets at the time of purchase.
 
  Each Fund may attempt to accomplish objectives similar to those involved in
its use of Forward Contracts by purchasing put or call options on currencies. A
put option gives a Fund as purchaser the right (but not the obligation) to sell
a specified amount of currency at the exercise price at any time until (American
style) or on (European style) the expiration date. A call option gives a Fund as
purchaser the right (but not the obligation) to purchase a specified amount of
currency at the exercise price at any time until (American style) or on
(European style) the expiration date. A Fund might purchase a currency put
option, for example, to protect itself against a decline in the dollar value of
a currency in which it holds or anticipates holding securities. If the
currency's value should decline against the dollar, the loss in currency value
should be offset, in whole or in part, by an increase in the value of the put.
If the value of the currency instead should rise against the dollar, any gain to
the Fund would be reduced by the premium it had paid for the put option. A
currency call option might be purchased, for example, in anticipation of, or to
protect against, a rise in the value against the dollar of a currency in which a
Fund anticipates purchasing securities.
 
  Options may be either listed on an exchange or traded in over-the-counter
("OTC") markets. Listed options are third-party contracts (i.e., performance of
the obligations of the purchaser and seller is guaranteed by the exchange or
clearing corporation), and have standardized strike prices and expiration dates.
OTC options are two-party contracts with negotiated strike prices and expiration
dates. A Fund will not purchase an OTC option unless it believes that daily
valuations for such options are readily obtainable. OTC options differ from
exchange-traded options in that OTC options are transacted with dealers directly
and not through a clearing corporation (which guarantees performance).
Consequently, there is a risk of non-performance by the dealer. Since no
exchange is involved, OTC options are valued on the basis of an average of the
last bid prices obtained from dealers, unless a quotation from only one dealer
is available, in which case only that dealer's price will be used. In the case
of OTC options, there can be no assurance that a liquid secondary market will
exist for any particular option at any specific time.
 
  The staff of the SEC considers purchased OTC options to be illiquid
securities. A Fund may also sell OTC options and, in connection therewith,
segregate assets or cover its obligations with respect to OTC options written by
the Fund. The assets used as cover for OTC options written by the Fund will be
considered illiquid unless the OTC options are sold to qualified dealers who
agree that the Fund may repurchase any OTC option it writes at a maximum price
to be calculated by a formula set forth in the option agreement. The cover for
an OTC option written subject to this procedure would be considered illiquid
only to the extent that the maximum repurchase price under the formula exceeds
the intrinsic value of the option.
 
  A Fund's ability to establish and close out positions in exchange-listed
options depends on the existence of a liquid market. Each Fund intends to
purchase or write only those exchange-traded options for which there appears to
be a liquid secondary market. However, there can be no assurance that such a
market will exist at any particular time. Closing transactions can be made for
OTC options only by negotiating directly with the contra party or by a
transaction in the secondary market if any such market exists. Although each
Fund will enter into OTC options only with contra parties that are expected to
be capable of entering into closing transactions with the Fund, there is no
assurance that the Funds will in fact be able to close out an OTC option
position at a favorable price prior to expiration. In the event of insolvency of
the contra party, a Fund might be unable to close out an OTC option position at
any time prior to its expiration.
 
                                       14
<PAGE>   929
 
INDEX OPTIONS
 
  Puts and calls on indices are similar to puts and calls on securities or
futures contracts except that all settlements are in cash and gain or loss
depends on changes in the index in question (and thus on price movements in the
securities market or a particular market sector generally) rather than on price
movements in individual securities or futures contracts. When a Fund writes a
call on an index, it receives a premium and agrees that, prior to the expiration
date, the purchaser of the call, upon exercise of the call, will receive from
the Fund an amount of cash if the closing level of the index upon which the call
is based is greater than the exercise price of the call. The amount of cash is
equal to the difference between the closing price of the index and the exercise
price of the call times a specified multiple (the "multiplier"), which
determines the total dollar value for each point of such difference. When a Fund
buys a call on an index, it pays a premium and has the same rights as to such
call as are indicated above. When a Fund buys a put on an index, it pays a
premium and has the right, prior to the expiration date, to require the seller
of the put, upon the Fund's exercise of the put, to deliver to the Fund an
amount of cash if the closing level of the index upon which the put is based is
less than the exercise price of the put, which amount of cash is determined by
the multiplier, as described above for calls. When a Fund writes a put on an
index, it receives a premium and the purchaser has the right, prior to the
expiration date, to require the Fund to deliver to it an amount of cash equal to
the difference between the closing level of the index and the exercise price
times the multiplier, if the closing level is less than the exercise price.
 
  The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Fund writes a call
on an index it cannot provide in advance for its potential settlement
obligations by acquiring and holding the underlying securities. A Fund can
offset some of the risk of writing a call index option position by holding a
diversified portfolio of securities similar to those on which the underlying
index is based. However, a Fund cannot, as a practical matter, acquire and hold
a portfolio containing exactly the same securities as underlie the index and, as
a result, bears a risk that the value of the securities held will vary from the
value of the index.
 
  Even if a Fund could assemble a securities portfolio that exactly reproduced
the composition of the underlying index, it still would not be fully covered
from a risk standpoint because of the "timing risk" inherent in writing index
options. When an index option is exercised, the amount of cash that the holder
is entitled to receive is determined by the difference between the exercise
price and the closing index level on the date when the option is exercised. As
with other kinds of options, a Fund, as the call writer, will not know that it
has been assigned until the next business day at the earliest. The time lag
between exercise and notice of assignment poses no risk for the writer of a
covered call on a specific underlying security, such as common stock, because
there the writer's obligation is to deliver the underlying security, not to pay
its value as of a fixed time in the past. So long as the writer already owns the
underlying security, it can satisfy its settlement obligations by simply
delivering it, and the risk that its value may have declined since the exercise
date is borne by the exercising holder. In contrast, even if the writer of an
index call holds securities that exactly match the composition of the underlying
index, it will not be able to satisfy its assignment obligations by delivering
those securities against payment of the exercise price. Instead, it will be
required to pay cash in an amount based on the closing index value on the
exercise date; and by the time it learns that it has been assigned, the index
may have declined, with a corresponding decline in the value of its securities
portfolio. This "timing risk" is an inherent limitation on the ability of index
call writers to cover their risk exposure by holding securities positions.
 
  If a Fund purchases an index option and exercises it before the closing index
value for that day is available, it runs the risk that the level of the
underlying index may subsequently change. If such a change causes the exercised
option to fall out-of-the-money, the Fund will be required to pay the difference
between the closing index value and the exercise price of the option (times the
applicable multiplier) to the assigned writer.
 
INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES
 
  Each Fund may enter into interest rate or currency futures contracts, and may
enter into stock index futures contracts (collectively, "Futures" or "Futures
Contracts"), as a hedge against changes in prevailing levels of interest rates,
currency exchange rates or stock prices in order to establish more definitely
the effective return on securities or currencies held or intended to be acquired
by the Fund. A Fund's transactions may include sales of Futures as an offset
against the effect of expected increases in interest rates, and decreases in
currency exchange rates and stock prices, and purchases of Futures as an offset
against the effect of expected declines in interest rates, and increases in
currency exchange rates and stock prices.
 
  A Fund will only enter into Futures Contracts that are traded on futures
exchanges and are standardized as to maturity date and underlying financial
instrument. Futures exchanges and trading thereon in the United States are
regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC"). Futures are exchanged in London at the London International
Financial Futures Exchange.
 
                                       15
<PAGE>   930
 
  Although techniques other than sales and purchases of Futures Contracts could
be used to reduce a Fund's exposure to interest rate, currency exchange rate and
stock market fluctuations, a Fund may be able to hedge its exposure more
effectively and at a lower cost through using Futures Contracts.
 
  A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument (security
or currency) for a specified price at a designated date, time and place. An
index Futures Contract provides for the delivery, at a designated date, time and
place, of an amount of cash equal to a specified dollar amount times the
difference between the index value at the close of trading on the contract and
the price at which the Futures Contract is originally struck; no physical
delivery of the securities comprising the index is made. Brokerage fees are
incurred when a Futures Contract is bought or sold, and margin deposits must be
maintained at all times the Futures Contract is outstanding.
 
  Although Futures Contracts typically require future delivery of and payment
for financial instruments or currencies, Futures Contracts are usually closed
out before the delivery date. Closing out an open Futures Contract sale or
purchase is effected by entering into an offsetting Futures Contract purchase or
sale, respectively, for the same aggregate amount of the identical financial
instrument or currency and the same delivery date. If the offsetting purchase
price is less than the original sale price, a Fund realizes a gain; if it is
more, a Fund realizes a loss. Conversely, if the offsetting sale price is more
than the original purchase price, a Fund realizes a gain; if it is less, the
Fund realizes a loss. The transaction costs must also be included in these
calculations. There can be no assurance, however, that a Fund will be able to
enter into an offsetting transaction with respect to a particular Futures
Contract at a particular time. If a Fund is not able to enter into an offsetting
transaction, the Fund will continue to be required to maintain the margin
deposits on the Futures Contract.
 
  As an example of an offsetting transaction, the contractual obligations
arising from the sale of one Futures Contract of September Deutschemarks on an
exchange may be fulfilled at any time before delivery under the Futures Contract
is required (i.e., on a specified date in September, the "delivery month") by
the purchase of another Futures Contract of September Deutschemarks on the same
exchange. In such instance the difference between the price at which the Futures
Contract was sold and the price paid for the offsetting purchase, after
allowance for transaction costs, represents the profit or loss to the Fund.
 
  Each Fund's Futures transactions will be entered into for hedging purposes
only; that is, Futures Contracts will be sold to protect against a decline in
the price of securities or currencies that the Fund owns, or Futures Contracts
will be purchased to protect the Fund against an increase in the price of
securities or currencies it has committed to purchase or expects to purchase.
 
  "Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by a Fund in order to initiate Futures trading and to maintain the
Fund's open positions in Futures Contracts. A margin deposit made when the
Futures Contract is entered into ("initial margin") is intended to assure a
Fund's performance under the Futures Contract. The margin required for a
particular Futures Contract is set by the exchange on which the Futures Contract
is traded and may be modified significantly from time to time by the exchange
during the term of the Futures Contract.
 
  Subsequent payments, called "variation margin," to and from the futures
commission merchant through which a Fund entered into the Futures Contract will
be made on a daily basis as the price of the underlying security, currency or
index fluctuates making the Futures Contract more or less valuable, a process
known as marking-to-market.
 
  Risks of Using Futures Contracts. The prices of Futures Contracts are volatile
and are influenced by, among other things, actual and anticipated changes in
interest rates and currency exchange rates, and in stock market movements, which
in turn are affected by fiscal and monetary policies and national and
international political and economic events.
 
  There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities or currencies in a Fund's portfolio being
hedged. The degree of imperfection of correlation depends upon circumstances
such as: variations in speculative market demand for Futures and for securities
or currencies, including technical influences in Futures trading; and
differences between the financial instruments being hedged and the instruments
underlying the standard Futures Contracts available for trading. A decision of
whether, when, and how to hedge involves skill and judgment, and even a
well-conceived hedge may be unsuccessful to some degree because of unexpected
market behavior or interest or currency rate trends.
 
  Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
 
                                       16
<PAGE>   931
 
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
 
  Most U.S. Futures exchanges limit the amount of fluctuation permitted in
Futures Contract and options on Futures Contract prices during a single trading
day. The daily limit establishes the maximum amount that the price of a Futures
Contract or option may vary either up or down from the previous day's settlement
price at the end of a trading session. Once the daily limit has been reached in
a particular type of Futures Contract or option, no trades may be made on that
day at a price beyond that limit. The daily limit governs only price movement
during a particular trading day and therefore does not limit potential losses,
because the limit may prevent the liquidation of unfavorable positions. Futures
Contract and option prices have occasionally moved to the daily limit for
several consecutive trading days with little or no trading, thereby preventing
prompt liquidation of positions and subjecting some traders to substantial
losses.
 
  If a Fund were unable to liquidate a Futures or option on Futures position due
to the absence of a liquid secondary market or the imposition of price limits,
it could incur substantial losses. The Fund would continue to be subject to
market risk with respect to the position. In addition, except in the case of
purchased options, the Fund would continue to be required to make daily
variation margin payments and might be required to maintain the position being
hedged by the Future or option or to maintain cash or securities in a segregated
account.
 
  Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit requirements in the Futures market are less
onerous than margin requirements in the securities markets, there might be
increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
 
OPTIONS ON FUTURES CONTRACTS
 
  Options on Futures Contracts are similar to options on securities or
currencies except that options on Futures Contracts give the purchaser the
right, in return for the premium paid, to assume a position in a Futures
Contract (a long position if the option is a call and a short position if the
option is a put) at a specified exercise price at any time during the period of
the option. Upon exercise of the option, the delivery of the Futures position by
the writer of the option to the holder of the option will be accompanied by
delivery of the accumulated balance in the writer's Futures margin account,
which represents the amount by which the market price of the Futures Contract,
at exercise, exceeds (in the case of a call) or is less than (in the case of a
put) the exercise price of the option on the Futures Contract. If an option is
exercised on the last trading day prior to the expiration date of the option,
the settlement will be made entirely in cash equal to the difference between the
exercise price of the option and the closing level of the securities, currencies
or index upon which the Futures Contract is based on the expiration date.
Purchasers of options who fail to exercise their options prior to the exercise
date suffer a loss of the premium paid.
 
  The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities, foreign currencies or indices.
 
  If a Fund writes an option on a Futures Contract, it will be required to
deposit initial and variation margin pursuant to requirements similar to those
applicable to Futures Contracts. Premiums received from the writing of an option
on a Futures Contract are included in the initial margin deposit.
 
  A Fund may seek to close out an option position by selling an option covering
the same Futures Contract and having the same exercise price and expiration
date. The ability to establish and close out positions on such options is
subject to the maintenance of a liquid secondary market.
 
LIMITATIONS ON USE OF FUTURES, OPTIONS ON FUTURES AND CERTAIN OPTIONS ON
CURRENCIES
 
  To the extent that a Fund enters into Futures Contracts, options on Futures
Contracts, and options on foreign currencies traded on a CFTC-regulated
exchange, in each case other than for bona fide hedging purposes (as defined by
the CFTC), the aggregate initial margin and premiums required to establish those
positions (excluding the amount by which options
 
                                       17
<PAGE>   932
 
   
are "in-the-money") will not exceed 5% of the liquidation value of the Fund's
portfolio, after taking into account unrealized profits and unrealized losses on
any contracts the Fund has entered into. In general, a call option on a Futures
Contract is "in-the-money" if the value of the underlying Futures Contract
exceeds the strike, i.e., exercise, price of the call; a put option on a Futures
Contract is "in-the-money" if the value of the underlying Futures Contract is
exceeded by the strike price of the put. This guideline may be modified by the
Trust's Board of Trustees without a shareholder vote. This limitation does not
limit the percentage of the Fund's assets at risk to 5%.
    
 
FORWARD CONTRACTS
 
  A Forward Contract is an obligation, usually arranged with a commercial bank
or other currency dealer, to purchase or sell a currency against another
currency at a future date and price as agreed upon by the parties. A Fund either
may accept or make delivery of the currency at the maturity of the Forward
Contract. The Fund may also, if its contra party agrees, prior to maturity,
enter into a closing transaction involving the purchase or sale of an offsetting
contract.
 
  A Fund engages in forward currency transactions in anticipation of, or to
protect itself against, fluctuations in exchange rates. A Fund might sell a
particular foreign currency forward, for example, when it holds bonds
denominated in a foreign currency but anticipates, and seeks to be protected
against, a decline in the currency against the U.S. dollar. Similarly, the Fund
might sell the U.S. dollar forward when it holds bonds denominated in U.S.
dollars but anticipates, and seeks to be protected against, a decline in the
U.S. dollar relative to other currencies. Further, the Fund might purchase a
currency forward to "lock in" the price of securities denominated in that
currency that it anticipates purchasing.
 
  Forward Contracts are traded in the interbank market conducted directly
between currency traders (usually large commercial banks) and their customers. A
Forward Contract generally has no deposit requirement and no commissions are
charged at any stage for trades. Each Fund will enter into such Forward
Contracts with major U.S. or foreign banks and securities or currency dealers in
accordance with the guidelines approved by the Trust's Board of Trustees.
 
  Each Fund may enter into Forward Contracts either with respect to specific
transactions or with respect to the Fund's portfolio positions. The precise
matching of the Forward Contract amounts and the value of specific securities
generally will not be possible because the future value of such securities in
foreign currencies will change as a consequence of market movements in the value
of those securities between the date the Forward Contract is entered into and
the date it matures. Accordingly, it may be necessary for a Fund to purchase
additional foreign currency on the spot (i.e., cash) market (and bear the
expense of such purchase) if the market value of the security is less than the
amount of foreign currency the Fund is obligated to deliver and if a decision is
made to sell the security and make delivery of the foreign currency. Conversely,
it may be necessary to sell on the spot market some of the foreign currency the
Fund is obligated to deliver. The projection of short-term currency market
movements is extremely difficult, and the successful execution of a short-term
hedging strategy is highly uncertain. Forward Contracts involve the risk that
anticipated currency movements will not be predicted accurately, causing a Fund
to sustain losses on these contracts and transaction costs.
 
  At or before the maturity of a Forward Contract requiring a Fund to sell a
currency, the Fund either may sell a portfolio security and use the sale
proceeds to make delivery of the currency or retain the security and offset its
contractual obligation to deliver the currency by purchasing a second contract
pursuant to which the Fund will obtain, on the same maturity date, the same
amount of the currency that it is obligated to deliver. Similarly, a Fund may
close out a Forward Contract requiring it to purchase a specified currency by
entering into a second contract, if its contra party agrees, entitling it to
sell the same amount of the same currency on the maturity date of the first
contract. The Fund would realize a gain or loss as a result of entering into
such an offsetting Forward Contract under either circumstance to the extent the
exchange rate or rates between the currencies involved moved between the
execution dates of the first contract and the offsetting contract.
 
  The cost to a Fund of engaging in Forward Contracts varies with factors such
as the currencies involved, the length of the contract period and the market
conditions then prevailing. Because Forward Contracts usually are entered into
on a principal basis, no fees or commissions are involved. The use of Forward
Contracts does not eliminate fluctuations in the prices of the underlying
securities a Fund owns or intends to acquire, but it does establish a rate of
exchange in advance. In addition, while Forward Contract sales limit the risk of
loss due to a decline in the value of the hedged currencies, they also limit any
potential gain that might result should the value of the currencies increase.
 
FOREIGN CURRENCY STRATEGIES -- SPECIAL CONSIDERATIONS
 
  Each Fund may use options on foreign currencies, Futures on foreign
currencies, options on Futures on foreign currencies and Forward Contracts to
hedge against movements in the values of the foreign currencies in which the
Fund's securities are denominated. Such currency hedges can protect against
price movements in a security that a Fund owns or
 
                                       18
<PAGE>   933
 
intends to acquire that are attributable to changes in the value of the currency
in which it is denominated. Such hedges do not, however, protect against price
movements in the securities that are attributable to other causes.
 
   
  A Fund might seek to hedge against changes in the value of a particular
currency when no Futures Contract, Forward Contract or option involving that
currency is available or one of such contracts is more expensive than certain
other contracts. In such cases, a Fund may hedge against price movements in that
currency by entering into a contract on another currency or basket of
currencies, the values of which the Sub-advisor believes will have a positive
correlation to the value of the currency being hedged. The risk that movements
in the price of the contract will not correlate perfectly with movements in the
price of the currency being hedged is magnified when this strategy is used.
    
 
  The value of Futures Contracts, options on Futures Contracts, Forward
Contracts, and options on foreign currencies depends on the value of the
underlying currency relative to the U.S. dollar. Because foreign currency
transactions occurring in the interbank market might involve substantially
larger amounts than those involved in the use of Futures Contracts, Forward
Contracts or options, a Fund could be disadvantaged by dealing in the odd lot
market (generally consisting of transactions of less than $1 million) for the
underlying foreign currencies at prices that are less favorable than for round
lots.
 
  There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirements that quotations available through
dealers or other market sources be firm or revised on a timely basis. Quotation
information generally is representative of very large transactions in the
interbank market and thus might not reflect odd-lot transactions where rates
might be less favorable. The interbank market in foreign currencies is a global,
round-the-clock market. To the extent the U.S. options or Futures markets are
closed while the markets for the underlying currencies remain open, significant
price and rate movements might take place in the underlying markets that cannot
be reflected in the markets for the Futures contracts or options until they
reopen.
 
  Settlement of Futures Contracts, Forward Contracts and options involving
foreign currencies might be required to take place within the country issuing
the underlying currency. Thus, a Fund might be required to accept or make
delivery of the underlying foreign currency in accordance with any U.S. or
foreign regulations regarding the maintenance of foreign banking arrangements by
U.S. residents and might be required to pay any fees, taxes and charges
associated with such delivery assessed in the issuing country.
 
COVER
 
  Transactions using Forward Contracts, Futures Contracts and options (other
than options purchased by a Fund) expose the Fund to an obligation to another
party. No Fund will enter into any such transactions unless it owns either (1)
an offsetting ("covered") position in securities, currencies, or other options,
Forward Contracts or Futures Contracts, or (2) cash, receivables and short-term
debt securities with a value sufficient at all times to cover its potential
obligations not covered as provided in (1) above. The Funds will comply with SEC
guidelines regarding cover for these instruments and, if the guidelines so
require, set aside cash or liquid securities.
 
  Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Forward Contract, Futures Contract or option is
open, unless they are replaced with other appropriate assets. If a large portion
of a Fund's assets are used for cover or otherwise set aside, it could affect
portfolio management or the Fund's ability to meet redemption requests or other
current obligations.
 
                                  RISK FACTORS
 
ILLIQUID SECURITIES
 
  Developing Markets Fund and Emerging Markets Fund each may invest up to 15% of
its net assets, and Latin American Fund up to 10% of its net assets, in illiquid
securities. Securities may be considered illiquid if a Fund cannot reasonably
expect within seven days to sell the security for approximately the amount at
which the Fund values such securities. The sale of illiquid securities, if they
can be sold at all, generally will require more time and result in higher
brokerage charges or dealer discounts and other selling expenses than the sale
of liquid securities, such as securities eligible for trading on U.S. securities
exchanges or in the over-the-counter markets. Moreover, restricted securities
which may be illiquid for purposes of this limitation, often sell, if at all, at
a price lower than similar securities that are not subject to restrictions on
resale.
 
  Illiquid securities include those that are subject to restrictions contained
in the securities laws of other countries. However, securities that are freely
marketable in the country where they are principally traded, but would not be
freely marketable in the United States, will not be considered illiquid. Where
registration is required, a Fund may be obligated to
 
                                       19
<PAGE>   934
 
pay all or part of the registration expenses and a considerable period may
elapse between the time of the decision to sell and the time the Fund may be
permitted to sell a security under an effective registration statement. If,
during such a period, adverse market conditions were to develop, the Fund might
obtain a less favorable price than prevailed when it decided to sell.
 
  Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the Securities Act of 1933, as amended ("1933 Act"), including
private placements, repurchase agreements, commercial paper, foreign securities
and corporate bonds and notes. These instruments are often restricted securities
because the securities are sold in transactions not requiring registration.
Institutional investors generally will not seek to sell these instruments to the
general public, but instead will often depend either on an efficient
institutional market in which such unregistered securities can be readily resold
or on an issuer's ability to honor a demand for repayment. Therefore, the fact
that there are contractual or legal restrictions on resale to the general public
or certain institutions is not dispositive of the liquidity of such investments.
 
  Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of unregistered securities of domestic and foreign
issuers, such as the PORTAL System sponsored by the National Association of
Securities Dealers, Inc. An insufficient number of qualified institutional
buyers interested in purchasing Rule 144A-eligible restricted securities held by
a Fund, however, could affect adversely the marketability of such portfolio
securities and the Fund might be unable to dispose of such securities promptly
or at favorable prices.
 
   
  With respect to liquidity determinations generally, the Trust's Board of
Trustees has the ultimate responsibility for determining whether specific
securities, including restricted securities pursuant to Rule 144A under the 1933
Act, are liquid or illiquid. The Board has delegated the function of making
day-to-day determinations of liquidity to the Sub-advisor in accordance with
procedures approved by the Board. The Sub-advisor takes into account a number of
factors in reaching liquidity decisions, including (i) the frequency of trading
in the security, (ii) the number of dealers who make quotes for the security,
(iii) the number of dealers who have undertaken to make a market in the
security, (iv) the number of other potential purchasers and (v) the nature of
the security and how trading is effected (e.g., the time needed to sell the
security, how offers are solicited and the mechanics of transfer). The
Sub-advisor monitors the liquidity of securities in each Fund's portfolio and
periodically reports such determinations to the Board. If the liquidity
percentage restriction of a Fund is satisfied at the time of investment, a later
increase in the percentage of illiquid securities held by the Fund resulting
from a change in market value or assets will not constitute a violation of that
restriction. If as a result of a change in market value or assets, the
percentage of illiquid securities held by a Fund increases above the applicable
limit, the Sub-advisor will take appropriate steps to bring the aggregate amount
of illiquid assets back within the prescribed limitations as soon as reasonably
practicable, taking into account the effect of any disposition on the Fund.
    
 
FOREIGN SECURITIES
 
  Political, Social and Economic Risks. Investing in securities of non-U.S.
companies may entail additional risks due to the potential political, social and
economic instability of certain countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility of currencies into U.S. dollars and on repatriation
of capital invested. In the event of such expropriation, nationalization or
other confiscation by any country, a Fund could lose its entire investment in
any such country.
 
  In addition, even though opportunities for investment may exist in emerging
markets, any change in the leadership or policies of the governments of those
countries or in the leadership or policies of any other government which
exercises a significant influence over those countries, may halt the expansion
of or reverse the liberalization of foreign investment policies now occurring
and thereby eliminate any investment opportunities which may currently exist.
 
  Investors should note that upon the accession to power of authoritarian
regimes, the governments of a number of Latin American countries previously
expropriated large quantities of real and personal property similar to the
property which will be represented by the securities purchased by the Funds. The
claims of property owners against those governments were never finally settled.
There can be no assurance that any property represented by securities purchased
by the Funds will not also be expropriated, nationalized, or otherwise
confiscated. If such confiscation were to occur, the Funds could lose their
entire investment in such countries. The Funds' investments would similarly be
adversely affected by exchange control regulation in any of those countries.
 
  Religious and Ethnic Stability. Certain countries in which the Funds may
invest may have groups that advocate radical religious or revolutionary
philosophies or support ethnic independence. Any disturbance on the part of such
 
                                       20
<PAGE>   935
 
individuals could carry the potential for widespread destruction or confiscation
of property owned by individuals and entities foreign to such country and could
cause the loss of a Fund's investment in those countries. Instability may also
result from, among other things, (i) authoritarian governments or military
involvement in political and economic decision-making, including changes in
government through extra-constitutional means, (ii) popular unrest associated
with demands for improved political, economic and social conditions and (iii)
hostile relations with neighboring or other countries. Such political, social
and economic instability could disrupt the principal financial markets in which
the Funds invest and adversely affect the value of the Funds' assets.
 
  Foreign Investment Restrictions. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as the Funds. These restrictions
or controls may at times limit or preclude investment in certain securities and
may increase the cost and expenses of the Funds. For example, certain countries
require prior governmental approval before investments by foreign persons may be
made or may limit the amount of investment by foreign persons in a particular
company, or limit the investment by foreign persons to only a specific class of
securities of a company that may have less advantageous terms than securities of
the company available for purchase by nationals. Moreover, the national policies
of certain countries may restrict investment opportunities in issuers or
industries deemed sensitive to national interests. In addition, some countries
require governmental approval for the repatriation of investment income, capital
or the proceeds of securities sales by foreign investors. If there is a
deterioration in a country's balance of payments or for other reasons, a country
may impose restrictions on foreign capital remittances abroad. The Funds could
be adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation, as well as by the application to it of
other restrictions on investments.
 
   
  Non-Uniform Corporate Disclosure Standards and Governmental Regulation.
Foreign companies are subject to accounting, auditing and financial standards
and requirements that differ in some cases significantly from those applicable
to U.S. companies. In particular, the assets, liabilities and profits appearing
on the financial statements of such a company may not reflect its financial
position or results of operations in the way they would be reflected had such
financial statements been prepared in accordance with U.S. generally accepted
accounting principles. Most of the securities held by the Funds will not be
registered with the SEC or regulators of any foreign country, nor will the
issuers thereof be subject to the SEC's reporting requirements. Thus, there will
be less available information concerning most foreign issuers of securities held
by the Funds than is available concerning U.S. issuers. In instances where the
financial statements of an issuer are not deemed to reflect accurately the
financial situation of the issuer, the Sub-advisor will take appropriate steps
to evaluate the proposed investment, which may include on-site inspection of the
issuer, interviews with its management and consultations with accountants,
bankers and other specialists. There is substantially less publicly available
information about foreign companies than there are reports and ratings published
about U.S. companies and the U.S. government. In addition, where public
information is available, it may be less reliable than such information
regarding U.S. issuers. Issuers of securities on foreign jurisdictions are
generally not subject to the same degree of regulation as are U.S. issuers with
respect to such matters as restrictions on market manipulation, insider trading
rules, shareholder proxy requirements and timely disclosure of information. In
addition, for companies that keep accounting records in local currency,
inflation accounting rules in some Latin American countries require, for both
tax and accounting purposes, that certain assets and liabilities be restated on
the company's balance sheet in order to express items in terms of currency of
constant purchasing power. Inflation accounting may indirectly generate losses
or profits.
    
 
  Currency Fluctuations. Because the Funds, under normal circumstances, each
will invest a substantial portion of its total assets in the securities of
foreign issuers which are denominated in foreign currencies, the strength or
weakness of the U.S. dollar against such foreign currencies will account for
part of each Fund's investment performance. A decline in the value of any
particular currency against the U.S. dollar will cause a decline in the U.S.
dollar value of a Fund's holdings of securities and cash denominated in such
currency and, therefore, will cause an overall decline in the Fund's net asset
value and any net investment income and capital gains derived from such
securities to be distributed in U.S. dollars to shareholders of that Fund.
Moreover, if the value of the foreign currencies in which a Fund receives its
income falls relative to the U.S. dollar between receipt of the income and the
making of Fund distributions, the Fund may be required to liquidate securities
in order to make distributions if the Fund has insufficient cash in U.S. dollars
to meet distribution requirements.
 
  The rate of exchange between the U.S. dollar and other currencies is
determined by several factors including the supply and demand for particular
currencies, central bank efforts to support particular currencies, the movement
of interest rates, the pace of business activity in certain other countries and
the United States, and other economic and financial conditions affecting the
world economy.
 
  Although the Funds value their assets daily in terms of U.S. dollars, they do
not intend to convert their holdings of foreign currencies into U.S. dollars on
a daily basis. The Funds will do so from time to time, and investors should be
aware
 
                                       21
<PAGE>   936
 
of the costs of currency conversion. Although foreign exchange dealers do not
charge a fee for conversion, they do realize a profit based on the difference
("spread") between the prices at which they are buying and selling various
currencies. Thus, a dealer may offer to sell a foreign currency to a Fund at one
rate, while offering a lesser rate of exchange should a Fund desire to sell that
currency to the dealer.
 
  Certain Latin American countries may have managed currencies which are
maintained at artificial levels to the U.S. dollar rather than at levels
determined by the market. This type of system can lead to sudden and large
adjustments in the currency which, in turn, can have a disruptive and negative
effect on foreign investors. For example, in late 1994 the value of the Mexican
peso lost more than one-third of its value relative to the dollar. Certain Latin
American countries also may restrict the free conversion of their currency into
foreign currencies, including the U.S. dollar. There is no significant foreign
exchange market for certain currencies and it would, as a result, be difficult
for the Funds to engage in foreign currency transactions designed to protect the
value of the Funds' interests in securities denominated in such currencies.
 
   
  Adverse Market Characteristics. Securities of many foreign issuers may be less
liquid and their prices more volatile than securities of comparable U.S.
issuers. In addition, foreign securities markets and brokers generally are
subject to less governmental supervision and regulation than in the United
States and foreign securities transactions usually are subject to fixed
commissions, which generally are higher than negotiated commissions on U.S.
transactions. In addition, foreign securities transactions may be subject to
difficulties associated with the settlement of such transactions. Delays in
settlement could result in temporary periods when assets of the Funds are
uninvested and no return is earned thereon. The inability of a Fund to make
intended security purchases due to settlement problems could cause the Fund to
miss attractive opportunities. Inability to dispose of a portfolio security due
to settlement problems either could result in losses to a Fund due to subsequent
declines in value of the portfolio security or, if the Fund has entered into a
contract to sell the security, could result in possible liability to the
purchaser. The Sub-advisor will consider such difficulties when determining the
allocation of the Funds' assets, although the Sub-advisor does not believe that
such difficulties will have a material adverse effect on the Funds' portfolio
trading activities.
    
 
  Each Fund may use foreign custodians, which may involve risks in addition to
those related to the use of U.S. custodians. Such risks include uncertainties
relating to (i) determining and monitoring the financial strength, reputation
and standing of the foreign custodian, (ii) maintaining appropriate safeguards
to protect a Fund's investments and (iii) possible difficulties in obtaining and
enforcing judgments against such custodians.
 
   
  A high proportion of the shares of many Latin American companies may be held
by a limited number of persons, which may further limit the number of shares
available for investment by the Funds, particularly the Latin American Fund. A
limited number of issuers in most, if not all, Latin American securities markets
may represent a disproportionately large percentage of market capitalization and
trading value. The limited liquidity of Latin American securities markets also
may affect a Fund's ability to acquire or dispose of securities at the price and
time it wishes to do so. In addition, certain Latin American securities markets,
including those of Argentina, Brazil, Chile and Mexico, are susceptible to being
influenced by large investors trading significant blocks of securities or by
large dispositions of securities resulting from the failure to meet margin calls
when due.
    
 
  The high volatility of certain Latin American securities markets is evidenced
by dramatic movements in the Brazilian and Mexican markets in recent years. This
market volatility may result in greater volatility in a Fund's net asset value
than would be the case for companies investing in domestic securities. If a Fund
were to experience unexpected net redemptions, it could be forced to sell
securities in its portfolio without regard to investment merit, thereby
decreasing the asset base over which Fund expenses can be spread and possibly
reducing the Fund's rate of return.
 
  Withholding Taxes. Each Fund's net investment income from securities of
foreign issuers may be subject to withholding taxes by the foreign issuer's
country, thereby reducing that income or delaying the receipt of income where
those taxes may be recaptured. See "Taxes."
 
  Concentration. To the extent a Fund invests a significant portion of its
assets in securities of issuers located in a particular country or region of the
world, it may be subject to greater risks and may experience greater volatility
than a fund that is more broadly diversified geographically.
 
  Special Considerations Affecting Emerging Markets. Investing in equity
securities of companies in emerging markets may entail greater risks than
investing in equity securities in developed countries. These risks include (i)
less social, political and economic stability; (ii) the small current size of
the markets for such securities and the currently low or nonexistent volume of
trading, which result in a lack of liquidity and in greater price volatility;
(iii) certain national policies which may restrict a Fund's investment
opportunities, including restrictions on investment in issuers or industries
deemed sensitive to national interests; (iv) foreign taxation; and (v) the
absence of developed structures governing private or foreign investment or
allowing for judicial redress for injury to private property.
 
                                       22
<PAGE>   937
 
  Investing in the securities of companies in emerging markets, including the
markets of Latin America and certain Asian markets such as Taiwan, Malaysia and
Indonesia, may entail special risks relating to potential political and economic
instability and the risks of expropriation, nationalization, confiscation or the
imposition of restrictions on foreign investment, convertibility into U.S.
dollars and on repatriation of capital invested. In the event of such
expropriation, nationalization or other confiscation by any country, a Fund
could lose its entire investment in any such country.
 
  Emerging securities markets such as the markets of Latin America are
substantially smaller, less developed, less liquid and more volatile than the
major securities markets. The limited size of emerging securities markets and
limited trading value in issuers compared to the volume of trading in U.S.
securities could cause prices to be erratic for reasons apart from factors that
affect the quality of the securities. For example, limited market size may cause
prices to be unduly influenced by traders who control large positions. Adverse
publicity and investors' perceptions, whether or not based on fundamental
analysis, may decrease the value and liquidity of portfolio securities,
especially in these markets. In addition, securities traded in certain emerging
markets may be subject to risks due to the inexperience of financial
intermediaries, a lack of modern technology, the lack of a sufficient capital
base to expand business operations, and the possibility of permanent or
temporary termination of trading.
 
  Settlement mechanisms in emerging securities markets may be less efficient and
reliable than in more developed markets. In such emerging securities there may
be share registration and delivery delays or failures.
 
  Many emerging market countries including countries in Latin America have
experienced substantial, and in some periods extremely high, rates of inflation
for many years. This has, in turn lead to high interest rates, extreme measures
by governments to keep inflation in check and a generally debilitating effect on
economic growth. Inflation and rapid fluctuations in inflation rates and
corresponding currency devaluations have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries including countries in Latin America.
 
  Special Considerations Affecting Russia and Eastern European Countries.
Investing in Russia and Eastern European countries involves a high degree of
risk and special considerations not typically associated with investing in the
U.S. securities markets and should be considered highly speculative. Such risks
include the following: (1) delays in settling portfolio transactions and risk of
loss arising out of the system of share registration and custody; (2) the risk
that it may be impossible or more difficult than in other countries to obtain
and/or enforce a judgement; (3) pervasiveness of corruption and crime in the
economic system; (4) currency exchange rate volatility and the lack of available
currency hedging instruments; (5) higher rates of inflation (including the risk
of social unrest associated with periods of hyper-inflation) and high
unemployment; (6) controls on foreign investment and local practices disfavoring
foreign investors and limitations on repatriation of invested capital, profits
and dividends, and on the ability of Developing Markets Fund and Emerging
Markets Fund to exchange local currencies for U.S. dollars; (7) political
instability and social unrest and violence; (8) the risk that the governments of
Russia and Eastern European countries may decide not to continue to support the
economic reform programs implemented recently and could follow radically
different political and/or economic policies to the detriment of investors,
including non-market-oriented policies such as the support of certain industries
at the expense of other sectors or investors, or a return to the centrally
planned economy that existed when such countries had a communist form of
government; (9) the financial condition of companies in these countries,
including large amounts of inter-company debt which may create a payments crisis
on a national scale; (10) dependency on exports and the corresponding importance
of international trade; (11) the risk that the tax system in these countries
will not be reformed to prevent inconsistent, retroactive and/or exorbitant
taxation; and (12) the underdeveloped nature of the securities markets.
 
  Special Considerations Affecting Pacific Region Countries. Certain of the
risks associated with international investments are heightened for investments
in Pacific region countries. For example, some of the currencies of Pacific
region countries have experienced steady devaluations relative to the U.S.
dollar, and major adjustments have been made periodically in certain of such
currencies. Certain countries, such as India, face serious exchange constraints.
 
  Many of the Asia Pacific region countries may be subject to a greater degree
of social, political and economic instability than is the case in the United
States. Such instability may result from, among other things, the following: (i)
authoritarian governments or military involvement in political and economic
decision making, and changes in government through extra-constitutional means;
(ii) popular unrest associated with demands for improved political, economic and
social conditions; (iii) internal insurgencies; (iv) hostile relations with
neighboring countries; and (v) ethnic, religious and racial disaffection. Such
social, political and economic instability could significantly disrupt the
principal financial markets in which Developing Markets Fund and Emerging
Markets Fund invest and adversely affect the value of such Funds' assets. In
addition, asset expropriations or future confiscatory levels of taxation
possibly may affect the Funds.
 
  Several of the Asia Pacific region countries have, or in the past have had,
hostile relationships with neighboring nations or have experienced internal
insurgency. Thailand has experienced border conflicts with Laos and Cambodia,
and India is
 
                                       23
<PAGE>   938
 
engaged in border disputes with several of its neighbors, including China and
Pakistan. An uneasy truce exists between North Korea and South Korea, and the
recurrence of hostilities remains possible. Reunification of North Korea and
South Korea could have a detrimental effect on the economy of South Korea. Also,
China continues to claim sovereignty over Taiwan and recently has conducted
military maneuvers near Taiwan.
 
  The economies of most of the Asia Pacific region countries are heavily
dependent upon international trade and are accordingly affected by protective
trade barriers and the economic conditions of their trading partners,
principally the United States, Japan, China and the European Community. The
enactment by the United States or other principal trading partners of
protectionist trade legislation, reduction of foreign investment in the local
economies and general declines in the international securities markets could
have a significant adverse effect upon the securities markets of the Asia
Pacific region countries. In addition, the economies of some of the Asia Pacific
region countries, Australia and Indonesia, for example, are vulnerable to
weakness in world prices for their commodity exports, including crude oil.
 
  China recently assumed sovereignty over Hong Kong in July 1997. Although China
has committed by treaty to preserve the economic and social freedoms enjoyed in
Hong Kong for fifty years, the continuation of the current form of the economic
system in Hong Kong will depend on the actions of the government of China. In
addition, such assumption of sovereignty has increased sensitivity in Hong Kong
to political developments and statements by public figures in China. Business
confidence in Hong Kong, therefore, can be significantly affected by such
developments and statements, which in turn can affect markets and business
performance.
 
  In addition, the Chinese sovereignty over Hong Kong also presents a risk that
the Hong Kong dollar will be devalued and a risk of possible loss of investor
confidence in the Hong Kong markets and dollar. However, factors exist that are
likely to mitigate this risk. First, China has stated its intention to implement
a "one country, two systems" policy, which would preserve monetary sovereignty
and leave control in the hands of the Hong Kong Monetary Authority ("HKMA").
 
  Second, fixed rate parity with the U.S. dollar is seen as critical to
maintaining investors' confidence in the transition to Chinese rule, and,
therefore, it is anticipated that, if international investors lose confidence in
Hong Kong dollar assets, the HKMA would intervene to support the currency,
though such intervention cannot be assured. Third, Hong Kong's and China's
sizable combined foreign exchange reserve may be used to support the value of
the Hong Kong dollar, provided that China does not appropriate such reserves for
other uses, which is not anticipated but cannot be assured. Finally, China would
be likely to experience significant adverse political and economic consequences
if confidence in the Hong Kong dollar and the territory assets were to be
endangered.
 
  Special Considerations Affecting Latin American Countries. Most Latin American
countries have experienced substantial, and in some periods extremely high,
rates of inflation for many years. Inflation and rapid fluctuations in inflation
rates have had and may continue to have very negative effects on the economies
and securities markets of certain Latin American countries. Certain Latin
American countries are also among the largest debtors to commercial banks and
foreign governments. At times certain Latin American countries have declared
moratoria on the payment of principal and/or interest on external debt. In
addition, certain Latin American securities markets have experienced high
volatility in recent years.
 
  Latin American countries may also close certain sectors of their economies to
equity investments by foreigners. Further due to the absence of securities
markets and publicly owned corporations and due to restrictions on direct
investment by foreign entities, investments may only be made in certain Latin
American countries solely or primarily through governmentally approved
investment vehicles or companies.
 
  Certain Latin American countries may have managed currencies that are
maintained at artificial levels to the U.S. dollar rather than at levels
determined by the market. This type of system can lead to sudden and large
adjustments in the currency which, in turn, can have a disruptive and negative
effect on foreign investors. For example, in late 1994, the value of the Mexican
peso lost more than one-third of its value relative to the U.S. dollar.
 
  It should be noted that some Latin American countries require governmental
approval for the repatriation of investment income, capital or the proceeds of
securities sales by foreign investors. For instance, at present, capital
invested directly in Chile cannot under most circumstances be repatriated for at
least one year. The Funds, particularly Latin American Fund, could be adversely
affected by delays in, or a refusal to grant, any required governmental approval
for repatriation, as well as by the application to it of other restrictions on
investments.
 
  Sovereign Debt. Sovereign Debt generally offers high yields, reflecting not
only perceived credit risk, but also the need to compete with other local
investments in domestic financial markets. Certain Latin American countries are
among the largest debtors to commercial banks and foreign governments. A
sovereign debtor's willingness or ability to repay principal and interest due in
a timely manner may be affected by, among other factors, its cash flow
situation, the extent of its foreign reserves, the availability of sufficient
foreign exchange on the date a payment is due, the relative size of the
 
                                       24
<PAGE>   939
 
debt service burden to the economy as a whole, the sovereign debtor's policy
towards the International Monetary Fund and the political constraints to which a
sovereign debtor may be subject. Sovereign debtors may default on their
Sovereign Debt. Sovereign debtors may also be dependent on expected
disbursements from foreign governments, multilateral agencies and others abroad
to reduce principal and interest arrearages on their debt. The commitment on the
part of these governments, agencies and others to make such disbursements may be
conditioned on a sovereign debtor's implementation of economic reforms and/or
economic performance and the timely service of such debtor's obligations.
Failure to implement such reforms, achieve such levels of economic performance
or repay principal or interest when due, may result in the cancellation of such
third parties' commitments to lend funds to the sovereign debtor, which may
further impair such debtor's ability or willingness to timely service its debts.
 
  In recent years, some of the Latin American countries in which the Funds
expect to invest have encountered difficulties in servicing their Sovereign
Debt. Some of these countries have withheld payments of interest and/or
principal of Sovereign Debt. These difficulties have also led to agreements to
restructure external debt obligations -- in particular, commercial bank loans,
typically by rescheduling principal payments, reducing interest rates and
extending new credits to finance interest payments on existing debt. In the
future, holders of Sovereign Debt may be requested to participate in similar
reschedulings of such debt.
 
  The ability of Latin American governments to make timely payments on their
Sovereign Debt is likely to be influenced strongly by a country's balance of
trade and its access to trade and other international credits. A country whose
exports are concentrated in a few commodities could be vulnerable to a decline
in the international prices of one or more of such commodities. Increased
protectionism on the part of a country's trading partners could also adversely
affect its exports. Such events could diminish a country's trade account
surplus, if any. To the extent that a country receives payment for its exports
in currencies other than hard currencies, its ability to make hard currency
payments could be affected.
 
   
  The occurrence of political, social or diplomatic changes in one or more of
the countries issuing Sovereign Debt could adversely affect a Fund's
investments. The countries issuing such instruments are faced with social and
political issues and some of them have experienced high rates of inflation in
recent years and have extensive internal debt. Among other effects, high
inflation and internal debt service requirements may adversely affect the cost
and availability of future domestic sovereign borrowing to finance governmental
programs, and may have other adverse social, political and economic
consequences. Political changes or a deterioration of a country's domestic
economy or balance of trade may affect the willingness of countries to service
their Sovereign Debt. While the Sub-advisor intends to manage each Fund's
portfolio in a manner that will minimize the exposure to such risks, there can
be no assurance that adverse political changes will not cause the Funds to
suffer losses of interest or principal on any of their holdings.
    
 
  Periods of economic uncertainty may result in the volatility of market prices
of Sovereign Debt and in turn, a Fund's net asset value, to a greater extent
than the volatility inherent in domestic securities. The value of Sovereign Debt
will likely vary inversely with changes in prevailing interest rates, which are
subject to considerable variance in the international market. If a Fund were to
experience unexpected net redemptions, it may be forced to sell Sovereign Debt
in its portfolio without regard to investment merit, thereby decreasing its
asset base over which Fund expenses can be spread and possibly reducing its rate
of return.
 
                             INVESTMENT LIMITATIONS
 
DEVELOPING MARKETS FUND
 
   
  Developing Markets Fund has adopted the following investment limitations as
fundamental policies which (unless otherwise noted) may not be changed without
approval of a majority of the Fund's outstanding shares.
    
 
  Developing Markets Fund may not:
 
          (1) issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of Developing Markets Fund's
     total assets (including the amount borrowed but reduced by any liabilities
     not constituting borrowings) at the time of the borrowing, except that the
     Fund may borrow up to an additional 5% of its total assets (not including
     the amount borrowed) for temporary or emergency purposes;
 
          (2) purchase any security if, as a result of that purchase, 25% or
     more of Developing Markets Fund's total assets would be invested in
     securities of issuers having their principal business activities in the
     same industry, except that this limitation does not apply to securities
     issued or guaranteed by the U.S. government, its agencies or
     instrumentalities;
 
                                       25
<PAGE>   940
 
          (3) engage in the business of underwriting securities of other
     issuers, except to the extent that Developing Markets Fund might be
     considered an underwriter under the federal securities laws in connection
     with its disposition of portfolio securities;
 
          (4) purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-backed securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that Developing Markets Fund may exercise rights under
     agreements relating to such securities, including the right to enforce
     security interests and to hold real estate acquired by reason of such
     enforcement until that real estate can be liquidated in an orderly manner;
 
          (5) purchase or sell physical commodities, but Developing Markets Fund
     may purchase, sell or enter into financial options and futures, forward and
     spot currency contracts, swap transactions and other financial contracts or
     derivative instruments; or
 
          (6) make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan.
 
  Notwithstanding any other investment policy, Developing Markets Fund may
invest all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
 
  For purposes of the concentration policy of Developing Markets Fund contained
in limitation (2) above, the Fund intends to comply with the SEC staff position
that securities issued or guaranteed as to principal and interest by any one
single foreign government, or by all supranational organizations in the
aggregate, are considered to be securities of issuers in the same industry.
 
  In addition, to comply with federal tax requirements for qualification as a
"regulated investment company" ("RIC"), Developing Markets Fund's investments
will be limited so that, at the close of each quarter of its taxable year, (a)
not more than 25% of the value of its total assets is invested in the securities
(other than U.S. government securities or the securities of other RICs) of any
one issuer and (b) at least 50% of the value of its total assets is represented
by cash and cash items, U.S. government securities, securities of other RICs and
other securities, with these other securities limited, in respect of any one
issuer, to an amount that does not exceed 5% of the value of its total assets
and that does not represent more than 10% of the issuer's outstanding voting
securities ("Diversification Requirements"). These tax-related limitations may
be changed by the Trust's Board of Trustees to the extent necessary to comply
with changes to applicable tax requirements.
 
  The following investment policy of Developing Markets Fund is not a
fundamental policy and may be changed by vote of the Trust's Board of Trustees
without shareholder approval: Developing Markets Fund will not purchase
securities on margin, provided that the Fund may obtain short-term credits as
may be necessary for the clearance of purchases and sales of securities, and
further provided that the Fund may make margin deposits in connection with its
use of financial options and futures, forward and spot currency contracts, swap
transactions and other financial contracts or derivative instruments.
 
   
  Investors should refer to the Developing Markets Fund's Prospectus for further
information with respect to the Developing Markets Fund's investment objective,
which may not be changed without the approval of its shareholders, and other
investment policies, techniques and limitations, which may be changed without
shareholder approval.
    
 
EMERGING MARKETS FUND
 
  Emerging Markets Fund has adopted the following investment limitations as
fundamental policies which (unless otherwise noted) may not be changed without
approval of a majority of the Fund's outstanding shares.
 
  Emerging Markets Fund may not:
 
          (1) Purchase any security if, as a result of that purchase, 25% or
     more of Emerging Markets Fund's total assets would be invested in
     securities of issuers having their principal business activities in the
     same industry, except that this limitation does not apply to securities
     issued or guaranteed by the U.S. government, its agencies or
     instrumentalities;
 
                                       26
<PAGE>   941
 
          (2) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-backed securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that Emerging Markets Fund may exercise rights under agreements
     relating to such securities, including the right to enforce security
     interests and to hold real estate acquired by reason of such enforcement
     until that real estate can be liquidated in an orderly manner;
 
          (3) Purchase or sell physical commodities, but Emerging Markets Fund
     may purchase, sell or enter into financial options and futures, forward and
     spot currency contracts, swap transactions and other financial contracts or
     derivative instruments;
 
          (4) Engage in the business of underwriting securities of other
     issuers, except to the extent that Emerging Markets Fund might be
     considered an underwriter under the federal securities laws in connection
     with its disposition of portfolio securities;
 
          (5) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan;
 
          (6) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of Emerging Markets Fund's
     total assets (including the amount borrowed but reduced by any liabilities
     not constituting borrowings) at the time of the borrowing, except that the
     Fund may borrow up to an additional 5% of its total assets (not including
     the amount borrowed) for temporary or emergency purposes; or
 
          (7) Purchase securities of any one issuer if, as a result, more than
     5% of Emerging Markets Fund's total assets would be invested in securities
     of that issuer or the Fund would own or hold more than 10% of the
     outstanding voting securities of that issuer, except that up to 25% of the
     Fund's total assets may be invested without regard to this limitation, and
     except that this limitation does not apply to securities issued or
     guaranteed by the U.S. government, its agencies or instrumentalities or to
     securities issued by other investment companies.
 
  Notwithstanding any other investment policy, Emerging Markets Fund may invest
all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
 
  For purposes of Emerging Markets Fund's concentration policy contained in
limitation (1) above, the Fund intends to comply with the SEC staff position
that securities issued or guaranteed as to principal and interest by any single
foreign government or any supranational organizations in the aggregate are
considered to be securities of issuers in the same industry.
 
  The following operating policies of Emerging Markets Fund are not fundamental
policies and may be changed by vote of the Trust's Board of Trustees without
shareholder approval. Emerging Markets Fund may not:
 
          (1) Invest in securities of an issuer if the investment would cause
     Emerging Markets Fund to own more than 10% of any class of securities of
     any one issuer;
 
          (2) Invest in companies for the purpose of exercising control or
     management;
 
          (3) Enter into a futures contract, an option on a futures contract, or
     an option on foreign currency traded on a CFTC-regulated exchange, in each
     case other than for bona fide hedging purposes (as defined by the CFTC), if
     the aggregate initial margin and premiums required to establish all of
     those positions (excluding the amount by which options are "in-the-money")
     exceeds 5% of the liquidation value of Emerging Markets Fund's portfolio,
     after taking into account unrealized profits and unrealized losses on any
     contracts the Fund has entered into;
 
          (4) Borrow money except for temporary or emergency purposes (not for
     leveraging) not in excess of 33 1/3% of the value of Emerging Markets
     Fund's total assets, except that the Fund may purchase securities when
     outstanding borrowings represent less than 5% of the Fund's assets;
 
          (5) Purchase securities on margin, provided that Emerging Markets Fund
     may obtain short-term credits as may be necessary for the clearance of
     purchases and sales of securities, and further provided that the Fund may
     make margin deposits in connection with its use of financial options and
     futures, forward and spot currency contracts, swap transactions and other
     financial contracts or derivative instruments; or
 
                                       27
<PAGE>   942
 
          (6) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities.
 
   
  Investors should refer to the Emerging Markets Fund's Prospectus for further
information with respect to the Emerging Markets Fund's investment objective,
which may not be changed without the approval of its shareholders, and other
investment policies, techniques and limitations, which may be changed without
shareholder approval.
    
 
LATIN AMERICAN FUND
 
  Latin American Fund has adopted the following investment limitations as
fundamental policies which (unless otherwise noted) may not be changed without
approval of a majority of the Fund's outstanding shares.
 
  Latin American Fund may not:
 
          (1) Purchase any security if, as a result of that purchase, 25% or
     more of Latin American Fund's total assets would be invested in securities
     of issuers having their principal business activities in the same industry,
     except that this limitation does not apply to securities issued or
     guaranteed by the U.S. government, its agencies or instrumentalities;
 
          (2) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-backed securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that Latin American Fund may exercise rights under agreements
     relating to such securities, including the right to enforce security
     interests and to hold real estate acquired by reason of such enforcement
     until that real estate can be liquidated in an orderly manner;
 
          (3) Engage in the business of underwriting securities of other
     issuers, except to the extent that Latin American Fund might be considered
     an underwriter under the federal securities laws in connection with its
     disposition of portfolio securities;
 
          (4) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan;
 
          (5) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of Latin American Fund's
     total assets (including the amount borrowed but reduced by any liabilities
     not constituting borrowings) at the time of the borrowing, except that the
     Fund may borrow up to an additional 5% of its total assets (not including
     the amount borrowed) for temporary or emergency purposes; or
 
          (6) Purchase or sell physical commodities, but Latin American Fund may
     purchase, sell or enter into financial options and futures, forward and
     spot currency contracts, swap transactions and other financial contracts or
     derivative instruments.
 
  Notwithstanding any other investment policy, Latin American Fund may invest
all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
 
  For purposes of Latin American Fund's concentration policy contained in
limitation (1), above, the Fund intends to comply with the SEC staff position
that securities issued or guaranteed as to principal and interest by any single
foreign government are considered to be securities of issuers in the same
industry.
 
  The following operating policies of Latin American Fund are not fundamental
policies and may be changed by vote of the Trust's Board of Trustees without
shareholder approval. Latin American Fund may not:
 
          (1) Invest in securities of an issuer if the investment would cause
     Latin American Fund to own more than 10% of any class of securities of any
     one issuer;
 
          (2) Invest in companies for the purpose of exercising control or
     management;
 
          (3) Invest more than 10% of its net assets in illiquid securities,
     including securities that are illiquid by virtue of the absence of a
     readily available market;
 
                                       28
<PAGE>   943
 
          (4) Enter into a futures contract, an option on a futures contract, or
     an option on foreign currency traded on a CFTC-regulated exchange, in each
     case other than for bona fide hedging purposes (as defined by the CFTC), if
     the aggregate initial margin and premiums required to establish all of
     those positions (excluding the amount by which options are "in-the-money")
     exceeds 5% of the liquidation value of Latin American Fund's portfolio,
     after taking into account unrealized profits and unrealized losses on any
     contracts the Fund has entered into;
 
          (5) Make any additional investments while borrowings exceed 5% of
     Latin American Fund's total assets;
 
          (6) Purchase securities on margin, provided that Latin American Fund
     may obtain short-term credits as may be necessary for the clearance of
     purchases and sales of securities, and further provided that the Fund may
     make margin deposits in connection with its use of financial options and
     futures, forward and spot currency contracts, swap transactions and other
     financial contracts or derivative instruments; or
 
          (7) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities.
 
  Latin American Fund has the authority to invest up to 10% of its total assets
in shares of other investment companies pursuant to the 1940 Act. The Fund may
not invest more than 5% of its total assets in any one investment company or
acquire more than 3% of the outstanding voting securities of any one investment
company.
 
   
  Investors should refer to the Latin American Fund's Prospectus for further
information with respect to the Latin American Fund's investment objective,
which may not be changed without the approval of its shareholders, and other
investment policies, techniques and limitations, which may be changed without
shareholder approval.
    
 
                      EXECUTION OF PORTFOLIO TRANSACTIONS
 
   
  Subject to policies established by the Trust's Board of Trustees, the
Sub-advisor is responsible for the execution of each Fund's portfolio
transactions and the selection of broker/dealers who execute such transactions
on behalf of the Funds. In executing portfolio transactions, the Sub-advisor
seeks the best net results for each Fund, taking into account such factors as
the price (including the applicable brokerage commission or dealer spread), size
of the order, difficulty of execution and operational facilities of the firm
involved. Although the Sub-advisor generally seeks reasonably competitive
commission rates and spreads, payment of the lowest commission or spread is not
necessarily consistent with the best net results. While the Funds may engage in
soft dollar arrangements for research services, as described below, the Funds
have no obligation to deal with any broker/dealer or group of broker/dealers in
the execution of portfolio transactions.
    
 
  Debt securities generally are traded on a "net" basis with a dealer acting as
principal for its own account without a stated commission, although the price of
the security usually includes a profit to the dealer. U.S. and foreign
government securities and money market instruments generally are traded in the
OTC markets. In underwritten offerings, securities usually are purchased at a
fixed price which includes an amount of compensation to the underwriter. On
occasion, securities may be purchased directly from an issuer, in which case no
commissions or discounts are paid. Broker/dealers may receive commissions on
futures, currency and options transactions.
 
   
  Consistent with the interests of each Fund, the Sub-advisor may select brokers
to execute a Fund's portfolio transactions, on the basis of the research and
brokerage services they provide to the Sub-advisor for its use in managing the
Fund and its other advisory accounts. Such services may include furnishing
analyses, reports and information concerning issuers, industries, securities,
geographic regions, economic factors and trends, portfolio strategy, and
performance of accounts; and effecting securities transactions and performing
functions incidental thereto (such as clearance and settlement). Research and
brokerage services received from such brokers are in addition to, and not in
lieu of, the services required to be performed by the Sub-advisor under the
investment management and administration contracts. A commission paid to such
brokers may be higher than that which another qualified broker would have
charged for effecting the same transaction, provided that the Sub-advisor
determines in good faith that such commission is reasonable in terms either of
that particular transaction or the overall responsibility of the Sub-advisor to
a Fund and its other clients and that the total commissions paid by the Fund
will be reasonable in relation to the benefits it received over the long term.
Research services may also be received from dealers who execute Fund
transactions in OTC markets.
    
 
   
  The Sub-advisor may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by a Fund toward payment of the Fund's expenses, such as
transfer agent and custodian fees.
    
 
                                       29
<PAGE>   944
 
   
  Investment decisions for each Fund and for other investment accounts managed
by the Sub-advisor are made independently of each other in light of differing
conditions. However, the same investment decision occasionally may be made for
two or more of such accounts including the Funds. In such cases, simultaneous
transactions may occur. Purchases or sales are then allocated as to price or
amount in a manner deemed fair and equitable to all accounts involved. While in
some cases this practice could have a detrimental effect upon the price or value
of the security as far as a Fund is concerned, in other cases, the Sub-advisor
believes that coordination and the ability to participate in volume transactions
will be beneficial to that Fund.
    
 
   
  Under a policy adopted by the Trust's Board of Trustees, and subject to the
policy of obtaining the best net results, the Sub-advisor may consider a
broker/dealer's sale of the shares of a Fund and the other funds for which AIM
or the Sub-advisor serves as investment manager in selecting brokers and dealers
for the execution of portfolio transactions. This policy does not imply a
commitment to execute portfolio transactions through all broker/dealers that
sell shares of the Funds and such other funds.
    
 
  Each Fund contemplates purchasing most foreign equity securities in
over-the-counter markets or stock exchanges located in the countries in which
the respective principal offices of the issuers of the various securities are
located, if that is the best available market. The fixed commissions paid in
connection with most such foreign stock transactions generally are higher than
negotiated commissions on U.S. transactions. There generally is less government
supervision and regulation of foreign stock exchanges and brokers than in the
United States. Foreign security settlements may in some instances be subject to
delays and related administrative uncertainties.
 
  Foreign equity securities may be held by each Fund in the form of ADRs, ADSs,
EDRs, GDRs, CDRs or securities convertible into foreign equity securities. ADRs,
ADSs, EDRs, GDRs and CDRs may be listed on stock exchanges, or traded in the OTC
markets in the United States or Europe, as the case may be. ADRs, like other
securities traded in the United States, will be subject to negotiated commission
rates. The foreign and domestic debt securities and money market instruments in
which a Fund may invest generally are traded in the OTC markets.
 
   
  Each Fund contemplates that, consistent with the policy of obtaining the best
net results, brokerage transactions may be conducted through certain companies
affiliated with AIM or the Sub-advisor. The Trust's Board of Trustees has
adopted procedures in conformity with Rule 17e-1 under the 1940 Act to ensure
that all brokerage commissions paid to such affiliates are reasonable and fair
in the context of the market in which they are operating. Any such transactions
will be effected and related compensation paid only in accordance with
applicable SEC regulations.
    
 
   
  The Funds may engage in certain principal and agency transactions with banks
and their affiliates that own 5% or more of the outstanding voting securities of
a Fund, provided the conditions of an exemptive order received by the Funds from
the SEC are met. In addition, a Fund may purchase or sell a security from or to
another AIM Fund provided the Funds follow procedures adopted by the Boards of
Directors/Trustees of the various AIM Funds, including the Trust. These inter-
fund transactions do not generate brokerage commissions but may result in
custodial fees or taxes or other related expenses.
    
 
  For the fiscal years ended December 31, 1997, 1996 and 1995, the Predecessor
Fund paid aggregate brokerage commissions of $2,212,022, $1,580,879 and
$1,311,090, respectively. For the fiscal years ended October 31, 1997, 1996 and
1995, Emerging Markets Fund paid aggregate brokerage commissions of $3,274,528,
$3,648,347 and $3,307,402, respectively. For the fiscal years ended October 31,
1997, 1996 and 1995, Latin American Fund paid aggregate brokerage commissions of
$2,719,660, $2,094,634 and $891,513, respectively.
 
PORTFOLIO TRADING AND TURNOVER
 
   
  Each Fund engages in portfolio trading when the Sub-advisor has concluded that
the sale of a security owned by the Fund and/or the purchase of another security
of better value can enhance principal and/or increase income. A security may be
sold to avoid any prospective decline in market value, or a security may be
purchased in anticipation of a market rise. Consistent with each Fund's
investment objective, a security also may be sold and a comparable security
purchased coincidentally in order to take advantage of what is believed to be a
disparity in the normal yield and price relationship between the two securities.
Although none of the Funds generally intends to trade for short-term profits,
the securities in a Fund's portfolio will be sold whenever management believes
it is appropriate to do so, without regard to the length of time a particular
security may have been held. Portfolio turnover rate is calculated by dividing
the lesser of sales or purchases of portfolio securities by a Fund's average
month-end portfolio values, excluding short-term investments. The portfolio
turnover rate will not be a limiting factor when the Sub-advisor deems portfolio
changes appropriate. Higher portfolio turnover involves correspondingly greater
brokerage commissions and other transaction costs that a Fund will bear directly
and may result in the realization of net capital gains that are taxable when
distributed to that Fund's shareholders. For the fiscal years ended December 31,
1997 and 1996, the Predecessor Fund's portfolio turnover rates were 184% and
    
 
                                       30
<PAGE>   945
 
138%, respectively. For the fiscal years ended October 31, 1997 and 1996,
Emerging Markets Fund's portfolio turnover rates were 150% and 104%,
respectively. Latin American Fund's portfolio turnover rates for the fiscal
years ended October 31, 1997 and 1996 were 130% and 101%, respectively.
 
   
                                   MANAGEMENT
    
 
   
TRUSTEES AND EXECUTIVE OFFICERS
    
 
  The Trust's Trustees and Executive Officers are listed below. Unless otherwise
indicated, the address of each Executive Officer is 11 Greenway Plaza, Suite
100, Houston, Texas 77046.
 
   
    
 
   
<TABLE>
<CAPTION>
   NAME, ADDRESS AND AGE     POSITIONS HELD WITH REGISTRANT   PRINCIPAL OCCUPATION WITH REGISTRANT
   ---------------------     ------------------------------   ------------------------------------
<S>                          <C>                             <C>
 ROBERT H. GRAHAM (51)       Trustee, Chairman of the Board  Director, President and Chief Executive
                             and President                   Officer, A I M Management Group Inc.;
                                                             Director and President, A I M Advisors,
                                                             Inc.; Director and Senior Vice
                                                             President, A I M Capital Management,
                                                             Inc., A I M Distributors, Inc., A I M
                                                             Fund Services, Inc. and Fund Management
                                                             Company; and Director, AMVESCAP PLC.
 C. DEREK ANDERSON (57)      Trustee                         President, Plantagenet Capital
 220 Sansome Street                                          Management, LLC (an investment
 Suite 400                                                   partnership); Chief Executive Officer,
 San Francisco, CA 94104                                     Plantagenet Holdings, Ltd. (an
                                                             investment banking firm); Director,
                                                             Anderson Capital Management, Inc. since
                                                             1988; Director, PremiumWear, Inc.
                                                             (formerly Munsingwear, Inc.) (a casual
                                                             apparel company); Director, "R" Homes,
                                                             Inc. and various other companies; and
                                                             Trustee, each of the other investment
                                                             companies registered under the 1940 Act
                                                             that is sub-advised or sub-
                                                             administered by the Sub-advisor.
 FRANK S. BAYLEY (59)        Trustee                         Partner, law firm of Baker & McKenzie;
 Two Embarcadero Center                                      Director and Chairman, C.D. Stimson
 Suite 2400                                                  Company (a private investment company);
 San Francisco, CA 94111                                     and Trustee, each of the other
                                                             investment companies registered under
                                                             the 1940 Act that is sub-advised or
                                                             sub-administered by the Sub-advisor.
 ARTHUR C. PATTERSON (54)    Trustee                         Managing Partner, Accel Partners (a
 428 University Avenue                                       venture capital firm); Director,
 Palo Alto, CA 94301                                         Viasoft and PageMart, Inc. (both public
                                                             software companies) and several other
                                                             privately held software and
                                                             communications companies; and Trustee,
                                                             each of the other investment companies
                                                             registered under the 1940 Act that is
                                                             sub-advised or sub-administered by the
                                                             Sub-advisor.
</TABLE>
    
 
                                       31
<PAGE>   946
 
   
<TABLE>
<CAPTION>
   NAME, ADDRESS AND AGE     POSITIONS HELD WITH REGISTRANT   PRINCIPAL OCCUPATION WITH REGISTRANT
   ---------------------     ------------------------------   ------------------------------------
<S>                          <C>                             <C>
 RUTH H. QUIGLEY (63)        Trustee                         Private investor; President, Quigley
 1055 California Street                                      Friedlander & Co., Inc. (a financial
 San Francisco, CA 94108                                     advisory services firm) from 1984 to
                                                             1986; and Trustee, each of the other
                                                             investment companies registered under
                                                             the 1940 Act that is sub-advised or
                                                             sub-administered by the Sub-advisor.
 +JOHN J. ARTHUR (53)        Vice President                  Director, Senior Vice President and
                                                             Treasurer, A I M Advisors, Inc.; Vice
                                                             President and Treasurer, A I M
                                                             Management Group Inc., A I M Capital
                                                             Management, Inc., A I M Distributors,
                                                             Inc., A I M Fund Services, Inc. and
                                                             Fund Management Company.
 KENNETH W. CHANCEY (53)     Vice President and Principal    Senior Vice President -- Mutual Fund
 50 California Street        Accounting Officer              Accounting, the Sub-advisor since 1997;
 San Francisco, CA 94111                                     Vice President -- Mutual Fund
                                                             Accounting, the Sub-advisor from 1992
                                                             to 1997.
 MELVILLE B. COX (54)        Vice President                  Vice President and Chief Compliance
                                                             Officer, A I M Advisors, Inc., A I M
                                                             Capital Management, Inc., A I M
                                                             Distributors, Inc., A I M Fund
                                                             Services, Inc. and Fund Management
                                                             Company.
 GARY T. CRUM (50)           Vice President                  Director and President, A I M Capital
                                                             Management, Inc.; Director and Senior
                                                             Vice President, A I M Management Group
                                                             Inc. and A I M Advisors, Inc.; and
                                                             Director, A I M Distributors, Inc. and
                                                             AMVESCAP PLC.
 HELGE K. LEE (52)           Vice President and Secretary    Chief Legal and Compliance
 50 California Street                                        Officer -- North America, the
 San Francisco, CA 94111                                     Sub-advisor since October 1997;
                                                             Secretary and Chief Legal and
                                                             Compliance Officer, INVESCO (NY) Asset
                                                             Management, Inc., INVESCO (NY), Inc.,
                                                             GT Global Investor Services, Inc. and
                                                             G.T. Insurance since August 1997;
                                                             Secretary and Chief Legal and
                                                             Compliance Officer, GT Global from
                                                             August 1997 to April 1998; Executive
                                                             Vice President of the Asset Management
                                                             Division of Liechtenstein Global Trust
                                                             AG, from October 1996 to May 1998;
                                                             Senior Vice President, General Counsel
                                                             and Secretary of INVESCO (NY) Asset
                                                             Management, Inc., INVESCO (NY), Inc.,
                                                             GT Global, GT Global Investor Services,
                                                             Inc. and G.T. Insurance from May 1994
                                                             to October 1996; and Senior Vice
                                                             President, General Counsel and
                                                             Secretary of Strong/Corneliuson
                                                             Management, Inc. and Secretary of each
                                                             of the Strong Funds from October 1991
                                                             to May 1994.
</TABLE>
    
 
- ---------------
 
<TABLE>
<S>                          <C>                             <C>
+Mr. Arthur and Ms. Relihan are married to each other.
</TABLE>
 
                                       32
<PAGE>   947
 
   
<TABLE>
<CAPTION>
   NAME, ADDRESS AND AGE     POSITIONS HELD WITH REGISTRANT   PRINCIPAL OCCUPATION WITH REGISTRANT
   ---------------------     ------------------------------   ------------------------------------
<S>                          <C>                             <C>
 +CAROL F. RELIHAN (43)      Vice President                  Director, Senior Vice President,
                                                             General Counsel and Secretary, A I M
                                                             Advisors, Inc.; Vice President, General
                                                             Counsel and Secretary, A I M Management
                                                             Group Inc.; Director, Vice President
                                                             and General Counsel, Fund Management
                                                             Company; Vice President and General
                                                             Counsel, A I M Fund Services, Inc.; and
                                                             Vice President, A I M Capital
                                                             Management, Inc. and A I M
                                                             Distributors, Inc.
 DANA R. SUTTON (39)         Vice President and Assistant    Vice President and Fund Controller,
                             Treasurer                       A I M Advisors, Inc.; and Assistant
                                                             Vice President and Assistant Treasurer,
                                                             Fund Management Company.
</TABLE>
    
 
- ---------------
 
   
+Mr. Arthur and Ms. Relihan are married to each other.
    
 
   
  The Board of Trustees has a Nominating and Audit Committee, comprised of Miss
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Trust and its
funds and recommending firms to serve as independent auditors for the Trust. All
of the Trust's Trustees also serve as directors or trustees of some or all of
the other investment companies managed, administered or advised by AIM. All of
the Trust's executive officers hold similar offices with some or all of the
other investment companies managed, administered or advised by AIM. Each Trustee
who is not a director, officer or employee of the Sub-advisor or any affiliated
company is paid aggregate fees of $5,000 a year plus $300 per Fund for each
meeting of the Board attended, and reimbursed travel and other expenses incurred
in connection with attendance at such meetings. Other Trustees and Officers
receive no compensation or expense reimbursement from the Trust. For the fiscal
year ended October 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss
Quigley, who are not directors, officers or employees of the Sub-advisor or any
affiliated company, received total compensation of $38,650, $38,650, $27,850 and
$38,650, respectively, from the Trust for their services as Trustees. For the
fiscal year ended October 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and
Miss Quigley, who are not directors, officers or employees of the Sub-advisor or
any other affiliated company, received total compensation of $117,304, $114,386,
$88,350 and $111,688, respectively, from the investment companies managed or
administered by AIM and sub-advised or sub-administered by the Sub-advisor for
which he or she serves as a Director or Trustee. Fees and expenses disbursed to
the Trustees contained no accrued or payable pension or retirement benefits. As
of June 26, 1998, the Officers and Trustees and their families as a group owned
in the aggregate beneficially or of record less than 1% of the outstanding
shares of the Funds or of all the Trust's series in the aggregate.
    
 
   
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES
    
 
   
  AIM serves as each Fund's investment manager and administrator under an
investment management and administration contract ("Management Contract")
between the Trust and AIM. The Sub-advisor serves as the sub-advisor and sub-
administrator to each Fund under a sub-advisory and sub-administration contract
between AIM and the Sub-advisor ("Sub-Management Contract," and together with
the Management Contract, the "Management Contracts"). As investment managers and
administrators, AIM and the Sub-advisor make all investment decisions for the
Funds and administer each Fund's affairs. Among other things, AIM and the
Sub-advisor furnish the services and pay the compensation and travel expenses of
persons who perform the executive, administrative, clerical and bookkeeping
functions of the Trust and the Funds, and provide suitable office space,
necessary small office equipment and utilities.
    
 
   
  The Management Contracts for each Fund may be renewed for one-year terms,
provided that any such renewal has been specifically approved at least annually
by (i) the Trust's Board of Trustees, or by the vote of a majority of a Fund's
outstanding voting securities (as defined in the 1940 Act) and (ii) a majority
of Trustees who are not parties to the Management Contracts or "interested
persons" of any such party (as defined in the 1940 Act), cast in person at a
meeting called for the specific purpose of voting on such approval. The
Management Contracts provide that with respect to each Fund, the Trust or each
of AIM or the Sub-advisor may terminate the Management Contracts without penalty
upon sixty days' written notice. The Management Contracts terminate
automatically in the event of their assignment (as defined in the 1940 Act).
    
 
                                       33
<PAGE>   948
 
   
  For the fiscal years ended October 31, 1997, 1996 and 1995, the Predecessor
Fund of Developing Markets Fund paid investment management and administration
fees to the Sub-advisor in the amounts of $7,383,823, $7,864,840 and $6,878,640,
respectively. For the fiscal years ended October 31, 1997, 1996 and 1995,
Emerging Markets Fund paid investment management and administration fees to the
Sub-advisor in the amounts of $3,907,922, $4,883,626 and $5,410,744,
respectively. For the fiscal years ended October 31, 1997, 1996 and 1995, Latin
American Fund paid investment management and administration fees to the
Sub-advisor in the amounts of $3,538,586, $3,365,375 and $3,913,429,
respectively.
    
 
   
                             THE DISTRIBUTION PLANS
    
 
   
THE CLASS A PLAN
    
 
  The Trust has adopted a Master Distribution Plan pursuant to Rule 12b-1 under
the 1940 Act relating to the Class A shares of the Funds (the "Class A Plan").
The Class A Plan provides that the Class A shares pay 0.50% per annum of their
average daily net assets as compensation to AIM Distributors for the purpose of
financing any activity which is primarily intended to result in the sale of
Class A shares. Of such amounts, each Fund pays a service fee of 0.25% of the
average daily net assets attributable to Class A shares to selected dealers and
other institutions which furnish continuing personal shareholder services to
their customers who purchase and own Class A shares. Activities appropriate for
financing under the Class A Plan include, but are not limited to, the following:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders; overhead; preparation and distribution of
advertising material and sales literature; expenses of organizing and conducting
sales seminars; supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements; and costs of administering the Class A Plan.
 
   
THE CLASS B PLAN
    
 
  The Trust has also adopted a Master Distribution Plan pursuant to Rule 12b-1
under the 1940 Act relating to Class B shares of the Funds (the "Class B Plan",
and collectively with the Class A Plan, the "Plans"). Under the Class B Plan,
each Fund pays compensation to AIM Distributors at an annual rate of 1.00% of
the average daily net assets attributable to Class B shares. Of such amount,
each Fund pays a service fee of 0.25% of the average daily net assets
attributable to Class B shares to selected dealers and other institutions which
furnish continuing personal shareholder services to their customers who purchase
and own Class B shares. Amounts paid in accordance with the Class B Plan may be
used to finance any activity primarily intended to result in the sale of Class B
shares, including but not limited to printing of prospectuses and statements of
additional information and reports for other than existing shareholders;
overhead; preparation and distribution of advertising material and sales
literature; expenses of organizing and conducting sales seminars; supplemental
payments to dealers and other institutions such as asset-based sales charges or
as payments of service fees under shareholder service arrangements; and costs of
administering the Class B Plan. AIM Distributors may transfer and sell its
rights to payments under the Class B Plan in order to finance distribution
expenditures in respect of Class B shares.
 
   
BOTH PLANS
    
 
  Pursuant to an incentive program, AIM Distributors may enter into agreements
("Shareholder Service Agreements") with investment dealers selected from time to
time by AIM Distributors for the provision of distribution assistance in
connection with the sale of the Funds' shares to such dealers' customers, and
for the provision of continuing personal shareholder services to customers who
may from time to time directly or beneficially own shares of the Funds. The
distribution assistance and continuing personal shareholder services to be
rendered by dealers under the Shareholder Service Agreements may include, but
shall not be limited to, the following: distributing sales literature; answering
routine customer inquiries concerning the Funds; assisting customers in changing
dividend options, account designations and addresses, and in enrolling in any of
the several special investment plans offered in connection with the purchase of
the Funds' shares; assisting in the establishment and maintenance of customer
accounts and records and in the processing of purchase and redemption
transactions; investing dividends and any capital gains distributions
automatically in the Funds' shares; and providing such other information and
services as the Funds or the customer may reasonably request.
 
  Under the Plans, in addition to the Shareholder Service Agreements authorizing
payments to selected dealers, banks may enter into Shareholder Service
Agreements authorizing payments under the Plans to be made to banks which
provide services to their customers who have purchased shares. Services provided
pursuant to Shareholder Service Agreements with banks may include some or all of
the following: answering shareholder inquiries regarding the Funds; performing
sub-accounting; establishing and maintaining shareholder accounts and records;
processing customer purchase and redemption transactions; providing periodic
statements showing a shareholder's account balance and the integration of such
 
                                       34
<PAGE>   949
 
statements with those of other transactions and balances in the shareholder's
other accounts serviced by the bank; forwarding applicable prospectuses, proxy
statements, reports and notices to bank clients who hold Fund shares; and such
other administrative services as the Funds reasonably may request, to the extent
permitted by applicable statute, rule or regulation. Similar agreements may be
permitted under the Plans for institutions which provide recordkeeping for and
administrative services to 401(k) plans.
 
  Financial intermediaries and any other person entitled to receive compensation
for selling Fund shares may receive different compensation for selling shares of
one particular class over another.
 
  Under a Shareholder Service Agreement, each Fund agrees to pay periodically
fees to selected dealers and other institutions who render the foregoing
services to their customers. The fees payable under a Shareholder Service
Agreement generally will be calculated at the end of each payment period for
each business day of the Funds during such period at the annual rate of 0.25% of
the average daily net asset value of the Funds' shares purchased or acquired
through exchange. Fees calculated in this manner shall be paid only to those
selected dealers or other institutions who are dealers or institutions of record
at the close of business on the last business day of the applicable payment
period for the account in which each Fund's shares are held.
 
  Payments pursuant to the Plans are subject to any applicable limitations
imposed by rules of the National Association of Securities Dealers, Inc.
("NASD"). The Plans conform to rules of the NASD by limiting payments made to
dealers and other financial institutions who provide continuing personal
shareholder services to their customers who purchase and own shares of the Funds
to no more than 0.25% per annum of the average daily net assets of the Funds
attributable to the customers of such dealers or financial institutions, and by
imposing a cap on the total sales charges, including asset based sales charges,
that may be paid by the Funds and their respective classes.
 
  AIM Distributors does not act as principal, but rather as agent for the Funds,
in making dealer incentive and shareholder servicing payments under the Plans.
These payments are an obligation of the Funds and not of AIM Distributors.
 
   
  Prior to June 1, 1998, the Trust had adopted a different Rule 12b-1 plan, that
operated as a "reimbursement-type" plan (the "Prior Plan"). The information
provided below relates to payments made under the Prior Plan, which provided for
payments to GT Global Inc., the distributor of the Funds at the time the Prior
Plan was in effect.
    
 
   
  For the fiscal year ended October 31, 1997, each Fund paid the following
amounts under the Prior Plan:
    
 
   
<TABLE>
<CAPTION>
                                                                            % OF CLASS
                                                                           AVERAGE DAILY
                                                                            NET ASSETS
                                                                         -----------------
                                                CLASS A      CLASS B     CLASS A   CLASS B
                                               ----------   ----------   -------   -------
<S>                                            <C>          <C>          <C>       <C>
Emerging Markets Fund........................  $  977,082   $2,022,092    .50%      1.00%
Latin American Growth Fund...................  $1,011,259   $1,587,737    .50%      1.00%
Emerging Markets Fund(1) ....................  $    N/A     $    N/A      .50%      1.00%      
</TABLE>
    
 
   
  Actual fees by category paid by each Fund with regard to the Class A shares
during the year ended October 31, 1997 follows:
    
 
   
<TABLE>
<CAPTION>
                                                             DEVELOPING     EMERGING   LATIN AMERICAN
                                                             MARKETS(1)     MARKETS     GROWTH FUND
                                                             ----------     --------   --------------
<S>                                                          <C>            <C>        <C>
CLASS A
  Compensation to Underwriters to partially offset other
     marketing expenses.....................................   $ N/A      $195,416      $202,252
  Compensation to Dealers including finder's fees...........   $ N/A      $781,666      $809,007
</TABLE>
    

   

- --------------
(1) The Developing Markets Fund adopted a Master Distribution Plan pursuant to 
    Rule 12b-1 under the 1940 Act relating to the Class A shares and Class B 
    shares of the Fund on May 29, 1998.
    


   
    
 
                                       35
<PAGE>   950
 
   
  Actual fees by category paid by each Fund with regard to the Class B Shares
during the year ended October 31, 1997 as follows:
    
 
   
<TABLE>
<CAPTION>
                                                               EMERGING    LATIN AMERICAN
                                                               MARKETS      GROWTH FUND
                                                              ----------   --------------
<S>                                                           <C>          <C>
CLASS B
  Compensation to Underwriters to partially offset upfront
     dealer commissions and other marketing costs..........   $1,516,569     $1,190,803
  Compensation to Dealers..................................   $  505,523     $  396,934
</TABLE>
    
 
   
  The Plans require AIM Distributors to provide the Board of Trustees at least
quarterly with a written report of the amounts expended pursuant to the Plans
and the purposes for which such expenditures were made. The Board of Trustees
reviews these reports in connection with their decisions with respect to the
Plans.
    
 
  As required by Rule 12b-1, the Plans and related forms of Shareholder Service
Agreements were approved by the Board of Trustees, including a majority of the
Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Trust and who have no direct or indirect financial interest in the operation of
the Plans or in any agreements related to the Plans ("Qualified Trustees"). In
approving the Plans in accordance with the requirements of Rule 12b-1, the
Trustees considered various factors and determined that there is a reasonable
likelihood that the Plans would benefit each class of each Fund and their
respective shareholders.
 
  The Plans do not obligate the Funds to reimburse AIM Distributors for the
actual expenses AIM Distributors may incur in fulfilling its obligations under
the Plans. Thus, even if AIM Distributors' actual expenses exceed the fee
payable to AIM Distributors thereunder at any given time, the Funds will not be
obligated to pay more than that fee. If AIM Distributors' expenses are less than
the fee it receives, AIM Distributors will retain the full amount of the fee.
 
   
  Unless terminated earlier in accordance with their terms, the Plans continue
in effect until May 29, 1999 and each year thereafter, as long as such
continuance is specifically approved at least annually by the Board of Trustees,
including a majority of the Qualified Trustees.
    
 
   
  The Plans may be terminated by the vote of a majority of the Qualified
Trustees, or, with respect to a particular class, by the vote of a majority of
the outstanding voting securities of that class.
    
 
  Any change in the Plans that would increase materially the distribution
expenses paid by the applicable class requires shareholder approval; otherwise,
it may be amended by the Trustees, including a majority of the Qualified
Trustees, by votes cast in person at a meeting called for the purpose of voting
upon such amendment. As long as the Plans are in effect, the selection or
nomination of the Qualified Trustees is committed to the discretion of the
Qualified Trustees. In the event the Class A Plan is amended in a manner which
the Board of Trustees determines would materially increase the charges paid
under the Class A Plan, the Class B shares of the Funds will no longer convert
into Class A shares of the same Funds unless the Class B shares, voting
separately, approve such amendment. If the Class B shareholders do not approve
such amendment, the Board of Trustees will (i) create a new class of shares of
the Funds which is identical in all material respects to the Class A shares as
they existed prior to the implementation of the amendment and (ii) ensure that
the existing Class B shares of the Funds will be exchanged or converted into
such new class of shares no later than the date the Class B shares were
scheduled to convert into Class A shares.
 
   
  The principal differences between the Class A Plan and the Class B Plan are:
(i) the Class A Plan allows payment to AIM Distributors or to dealers or
financial institutions of up to 0.50% of average daily net assets of the Class A
shares of each Fund, as compared to 1.00% of such assets of each Fund's Class B
shares; (ii) the Class B Plan obligates the Class B shares to continue to make
payments to AIM Distributors following termination of the Class B shares
Distribution
    
 
                                       36
<PAGE>   951
 
   
Agreement with respect to Class B shares sold by or attributable to the
distribution efforts of AIM Distributors or its predecessor, GT Global, Inc.
unless there has been a complete termination of the Class B Plan (as defined in
such Plan) and (iii) the Class B Plan expressly authorizes AIM Distributors to
assign, transfer or pledge its rights to payments pursuant to the Class B Plan.
    
 
                                THE DISTRIBUTOR
 
   
  Information concerning AIM Distributors and the continuous offering of the
Funds' shares is set forth in the Prospectus under the headings "How to Purchase
Shares" and "Terms and Conditions of Purchase of the AIM Funds." Master
Distribution Agreements with AIM Distributors relating to the Class A and Class
B shares of the Funds were approved by the Board of Trustees on May 7, 1998.
Both such Master Distribution Agreements are hereinafter collectively referred
to as the "Distribution Agreements."
    
 
  The Distribution Agreements provide that AIM Distributors will bear the
expenses of printing from the final proof and distributing the Funds'
prospectuses and statements of additional information relating to public
offerings made by AIM Distributors pursuant to the Distribution Agreements
(other than those prospectuses and statements of additional information
distributed to existing shareholders of the Fund), and any promotional or sales
literature used by AIM Distributors or furnished by AIM Distributors to dealers
in connection with the public offering of the Fund's shares, including expenses
of advertising in connection with such public offerings. AIM Distributors has
not undertaken to sell any specified number of shares of any classes of the
Funds.
 
  AIM Distributors expects to pay sales commissions from its own resources to
dealers and institutions who sell Class B shares of the Funds at the time of
such sales. Payments with respect to Class B shares will equal 4.0% of the
purchase price of the Class B shares sold by the dealer or institution, and will
consist of a sales commission equal to 3.75% of the purchase price of the Class
B shares sold plus an advance of the first year service fee of 0.25% with
respect to such shares. The portion of the payments to AIM Distributors under
the Class B Plan which constitutes an asset-based sales charge (0.75%) is
intended in part to permit AIM Distributors to recoup a portion of such sales
commissions plus financing costs. AIM Distributors anticipates that it will
require a number of years to recoup from Class B Plan payments the sales
commissions paid to dealers and institutions in connection with sales of Class B
shares. In the future, if multiple distributors serve a Fund, each such
distributor (or its assignee or transferee) would receive a share of the
payments under the Class B Plan based on the portion of the Fund's Class B
shares sold by or attributable to the distribution efforts of that distributor.
 
   
  The Trust (on behalf of any class of any Fund) or AIM Distributors may
terminate the Distribution Agreements on sixty (60) days' written notice without
penalty. The Distribution Agreements will terminate automatically in the event
of their assignment. In the event the Class B shares Distribution Agreement is
terminated, AIM Distributors would continue to receive payments of asset based
distribution fees in respect of the outstanding Class B shares attributable to
the distribution efforts of AIM Distributors and its predecessor; provided,
however, that a complete termination of the Class B Plan (as defined in such
Plan) would terminate all payments by the Fund of asset based distribution fees
and service fees to AIM Distributors. Termination of the Class B Plan or
Distribution Agreement does not affect the obligation of Class B shareholders to
pay contingent deferred sales charges.
    
 
   
  The following chart reflects the total sales charges paid in connection with
the sale of Class A shares of each Fund and the amount retained by GT Global,
Inc., the Trust's distributor prior to June 1, 1998, for the fiscal year ended
October 31, 1997.
    
 
   
<TABLE>
<CAPTION>
                                                                     1997
                                                              -------------------
                                                               SALES      AMOUNT
                                                              CHARGES    RETAINED
                                                              --------   --------
<S>                                                           <C>        <C>
Emerging Markets Fund.......................................  $181,914   $39,500
Latin American Growth Fund..................................  $168,598   $50,871
</TABLE>
    
 
   
  Developing Markets Fund pays AIM Distributors sales charges on sales of Class
A shares of the Fund, retains certain amounts of such charges and reallows other
amounts of such charges to brokers/dealers who sell shares.
    
 
                                       37
<PAGE>   952
 
   
  The following chart reflects the contingent deferred sales charges paid by
Class A and Class B shareholders for the fiscal years ended October 31, 1997,
1996 and 1995 for Class A and Class B shares:
    
 
   
<TABLE>
<CAPTION>
                                                                    1997       1996         1995
                                                                    ----       ----         ----
<S>                                                             <C>     <C>     <C>
Emerging Markets Fund.......................................    $1,594,794   $1,287,272   $1,115,487
Latin American Growth Fund..................................    $  923,769   $  843,024      760,248
Developing Markets Fund (1) ................................    $    N/A     $    N/A     $    N/A
</TABLE>
    
 
   
- -----------
(1) Developing Markets Fund pays AIM Distributors a contingent deferred sales
    charge with respect to redemptions of Class B shares and certain Class A
    shares.
    
 
EXPENSES OF THE FUNDS
 
   
  Each Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM
Distributors and other agents. These expenses include, in addition to the
advisory, distribution, transfer agency, pricing and accounting agency and
brokerage fees discussed above, legal and audit expenses, custodian fees,
trustees' fees, organizational fees, fidelity bond and other insurance premiums,
taxes, extraordinary expenses and the expenses of reports and prospectuses sent
to existing investors. The allocation of general Trust expenses and expenses
shared among the Funds and other funds organized as series of the Trust are
allocated on a basis deemed fair and equitable, which may be based on the
relative net assets of the Funds or the nature of the services performed and
relative applicability to the Funds. Expenditures, including costs incurred in
connection with the purchase or sale of portfolio securities, which are
capitalized in accordance with generally accepted accounting principles
applicable to investment companies, are accounted for as capital items and not
as expenses. The ratio of each Fund's expenses to its relative net assets can be
expected to be higher than the expense ratios of funds investing solely in
domestic securities, since the cost of maintaining the custody of foreign
securities and the rate of investment management fees paid by each Fund
generally are higher than the comparable expenses of such other funds.
    
 
   
                         NET ASSET VALUE DETERMINATION
    
 
   
  The net asset value per share of each Fund is normally determined daily as of
the close of trading of the New York Stock Exchange ("NYSE") (generally 4:00
p.m. Eastern time) of each business day of the Funds. In the event the NYSE
closes early ( i.e., before 4:00 p.m. Eastern time) on a particular day, the net
asset value of a Fund is determined as of the close of the NYSE on such day. Net
asset value per share is determined by dividing the value of a Fund's
securities, cash and other assets (including interest accrued but not collected)
attributable to a particular class, less all its liabilities (including accrued
expenses and dividends payable) attributable to that class, by the total number
of shares outstanding of that class. Determination of each Fund's net asset
value per share is made in accordance with generally accepted accounting
principles.
    
 
  Each equity security held by a Fund is valued at its last sales price on the
exchange where the security is principally traded or, lacking any sales on a
particular day, the security is valued at the mean between the closing bid and
asked prices on that day. Each security traded in the over-the-counter market
(but not including securities reported on the NASDAQ National Market System) is
valued at the mean between the last bid and asked prices based upon quotes
furnished by market makers for such securities. Each security reported on the
NASDAQ National Market System is valued at the last sales price on the valuation
date or absent a last sales price, at the mean between the closing bid and asked
prices on that day. Debt securities 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 institution-size trading in similar groups of
securities, developments related to special securities, yield, quality, coupon
rate, maturity, type of issue, individual trading characteristics and other
market data. 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 Trust's officers in a manner specifically
authorized by the Board of Trustees. Short-term obligations having 60 days or
less to maturity are valued on the basis of amortized cost. For purposes of
determining net asset value per share, futures and options contracts generally
will be valued 15 minutes after the close of trading of the NYSE.
 
   
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of each Fund's shares are determined at such
times. Foreign currency exchange rates are also generally determined prior to
the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which such
values are determined and the close of the NYSE which will not be reflected in
the computation of a Fund's net asset value. If events materially affecting the
value of such
    
 
                                       38
<PAGE>   953
 
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 Trustees.
 
                       HOW TO PURCHASE AND REDEEM SHARES
 
  A complete description of the manner in which shares of the Funds may be
purchased appears in the Funds' Prospectuses under the headings "How to Purchase
Shares," "Terms and Conditions of Purchase of the AIM Funds" and "Special
Plans."
 
   
  The sales charge normally deducted on purchases of Class A shares is used to
compensate AIM Distributors and participating dealers for their expenses
incurred in connection with the distribution of the Funds' Class A shares. Since
there is little expenses associated with unsolicited orders placed directly with
AIM Distributors by persons who, because of their relationship with the Funds or
with AIM and its affiliates, are familiar with the Funds, or whose programs for
purchase involve little expense (e.g., because of the size of the transaction
and shareholder records required), AIM Distributors believes that it is
appropriate and in the Funds' best interests that such persons, and certain
other persons whose purchases result in relatively low expenses of distribution,
be permitted to purchase Class A shares of the Funds through AIM Distributors
without payment of a sales charge. The persons who may purchase Class A shares
of the Funds without a sales charge are set forth in the Funds' Prospectuses. In
addition, the Funds offer programs such as Right of Accumulation and Letter of
Intent, which are described in the prospectuses and are designed to permit
investors to aggregate purchases of different funds, or separate purchases over
time, in order to qualify for a lower sales charge rate. See "Terms and
Conditions of Purchase of the AIM Funds -- Reductions in Initial Sales Charges"
in the prospectuses.
    
 
  Class A shares that are subject to a contingent deferred sales charge and that
were purchased before June 1, 1998 are entitled to the following waivers from
the contingent deferred sales charge otherwise due upon redemption: (1) minimum
required distributions made in connection with an IRA, Keogh Plan or custodial
account under Section 403(b) of the Code or other retirement plan following
attainment of age 70 1/2; (2) total or partial redemptions resulting from a
distribution following retirement in the case of a tax-qualified
employer-sponsored retirement plan; (3) when a redemption results from a
tax-free return of an excess contribution pursuant to Section 408(d)(4) or (5)
of the Code or from the death or disability of the employee; (4) redemptions
pursuant to the Fund's right to liquidate a shareholder's account involuntarily;
(5) redemptions pursuant to distributions from a tax-qualified
employer-sponsored retirement plan, which is invested in AIM Funds, which are
permitted to be made without penalty pursuant to the Code, other than tax-free
rollovers or transfers of assets, and the proceeds of which are reinvested in
AIM Funds; (6) redemptions made in connection with participant-directed
exchanges between options in an employer-sponsored benefit plan; (7) redemptions
made for the purpose of providing cash to fund a loan to a participant in a
tax-qualified retirement plan; (8) redemptions made in connection with a
distribution from any retirement plan or account that is permitted in accordance
with the provisions of Section 72(t)(2) of the Code, and the regulations
promulgated thereunder; (9) redemptions made in connection with a distribution
from any retirement plan or account that involves the return of an excess
deferral amount pursuant to Section 401(k)(8) or Section 402(g)(2) of the Code;
(10) redemptions made in connection with a distribution from a qualified
profit-sharing or stock bonus plan described in Section 401(k) of the Code to a
participant or beneficiary under Section 401(k)(2)(B)(IV) of the Code upon
hardship of the covered employee (determined pursuant to Treasury Regulation
Section 1.401(k)-1(d)(2)); and (11) redemptions made by or for the benefit of
certain states, counties or cities, or any instrumentalities, departments or
authorities thereof where such entities are prohibited or limited by applicable
law from paying a sales charge or commission.
 
   
  Class B shares purchased before June 1, 1998 are subject to the following
waivers from the contingent deferred sales charge otherwise due upon redemption,
in addition to the waivers provided for redemptions of currently issued Class B
shares as described in the Prospectus: (1) total or partial redemptions
resulting from a distribution following retirement in the case of a
tax-qualified employer-sponsored retirement; (2) minimum required distributions
made in connection with an IRA, Keogh Plan or custodial account under Section
403(b) of the Code or other retirement plan following attainment of age 70 1/2;
(3) redemptions pursuant to distributions from a tax-qualified
employer-sponsored retirement plan, which is invested in AIM Funds, which are
permitted to be made without penalty pursuant to the Code, other than tax-free
rollovers or transfers of assets, and the proceeds of which are reinvested in
AIM Funds; (4) redemptions made in connection with participant-directed
exchanges between options in an employer-sponsored benefit plan; (5) redemptions
made for the purpose of providing cash to fund a loan to a participant in a
tax-qualified retirement plan; (6) redemptions made in connection with a
distribution from any retirement plan or account that is permitted in accordance
with the provisions of Section 72(t)(2) of the Code, and the regulations
promulgated thereunder; (7) redemptions made in connection with a distribution
from a qualified profit-sharing or stock bonus plan described in Section 401(k)
of the Code to a participant or beneficiary under Section 401(k)(2)(B)(IV) of
the Code upon hardship of the covered employee (determined pursuant to Treasury
Regulation Section 1.401(k)-1(d)(2)); and (8) redemptions made by or for the
    
 
                                       39
<PAGE>   954
 
benefit of certain states, counties or cities, or any instrumentalities,
departments or authorities thereof where such entities are prohibited or limited
by applicable law from paying a sales charge or commission.
 
   
  For purposes of a Letter of Intent entered into prior to June 1, 1998, any
registered investment advisor, trust company or bank trust department which
exercises investment discretion and which intends within thirteen months to
invest $500,000 or more can be treated as a single purchaser, provided further
that such entity places all purchases and redemption orders. Such entities
should be prepared to establish their qualifications for such treatment.
    
 
   
  Complete information concerning the method of exchanging shares of the Funds
for shares of the other AIM Funds is set forth in the prospectuses under the
heading "Exchange Privilege."
    
 
   
  Information concerning redemption of the Funds' shares is set forth in the
Prospectuses under the heading "How to Redeem Shares." In addition to the Funds'
obligation to redeem shares, AIM Distributors may also repurchase shares as an
accommodation to shareholders. To effect a repurchase, those dealers who have
executed Selected Dealer Agreements with AIM Distributors must phone orders to
the order desk of the Funds at (800) 959-4246 and guarantee delivery of all
required documents in good order. A repurchase is effected at the net asset
value per share of the applicable Fund next determined after the repurchase
order is received. Such an arrangement is subject to timely receipt by A I M
Fund Services, Inc. ("AFS"), the Funds' transfer agent, of all required
documents in good order. If such documents are not received within a reasonable
time after the order is placed, the order is subject to cancellation. While
there is no charge imposed by a Fund or by AIM Distributors (other than any
applicable contingent deferred sales charge) when shares are redeemed or
repurchased, dealers may charge a fair service fee for handling the transaction.
    
 
  The right of redemption may be suspended or the date of payment postponed when
(a) trading on the NYSE is restricted, as determined by applicable rules and
regulations of the SEC, (b) the NYSE is closed for other than customary weekend
and holiday closings, (c) the SEC has by order permitted such suspension, or (d)
an emergency as determined by the SEC exists making disposition of portfolio
securities or the valuation of the net assets of a Fund not reasonably
practicable.
 
                QUALIFYING FOR A REDUCED FRONT-END SALES CHARGE
 
   
  As described in each prospectus, the front-end sales charge for Class A shares
is calculated by multiplying an investor's total investment by the applicable
sales charge rate. The applicable rate varies with the amount invested. The
Funds offer programs such as Right of Accumulation and Letter of Intent, which
are described in the prospectus, and are designed to permit investors to
aggregate purchases of different funds, or separate purchases over time, in
order to qualify for a lower sales charge rate. See "Terms and Conditions of
Purchase of the AIM Funds -- Reductions in Initial Sales Charges" in the
prospectus.
    
 
                     PROGRAMS AND SERVICES FOR SHAREHOLDERS
 
  The Funds provide certain services for shareholders and certain investment or
redemption programs. See "Exchange Privilege" and "How to Redeem Shares" in the
Prospectus. All inquiries concerning these programs should be made directly to
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, toll free
at (800) 959-4246.
 
   
                                 DIVIDEND ORDER
    
 
  Dividends may be paid to someone other than the registered owner, or sent to
an address other than the address of record. (Please note that signature
guarantees are required to effect this option.) An investor also may direct that
his or her dividends be invested in one of the AIM Funds and there is no sales
charge for these investments; initial investment minimums apply. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" in the Prospectus.
To effect this option, please contact your authorized dealer. For more
information concerning AIM Funds other than the Funds, please obtain a current
prospectus by contacting your authorized dealer, by writing to A I M Fund
Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, or by calling toll
free (800) 959-4246.
 
                                       40
<PAGE>   955
 
                                     TAXES
 
GENERAL
 
  Each Fund is treated as a separate corporation for federal income tax
purposes. To continue to qualify for treatment as a RIC under the Code, each
Fund must distribute to its shareholders for each taxable year at least 90% of
its investment company taxable income (consisting generally of net investment
income, net short-term capital gain and net gains from certain foreign currency
transactions) ("Distribution Requirement") and must meet several additional
requirements. These requirements include the following: (1) the Fund must derive
at least 90% of its gross income each taxable year from dividends, interest,
payments with respect to securities loans and gains from the sale or other
disposition of securities or foreign currencies, or other income (including
gains from options, Futures or Forward Contracts) derived with respect to its
business of investing in securities or those currencies ("Income Requirement");
and (2) the Diversification Requirements.
 
  Dividends and other distributions declared by a Fund in, and payable to
shareholders of record as of a date in, October, November or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during the following January. Accordingly, those distributions will be
taxed to shareholders for the year in which that December 31 falls.
 
  If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
 
  Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to
the extent it fails to distribute by the end of any calendar year substantially
all of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
 
FOREIGN TAXES
 
  Dividends and interest received by each Fund, and gains realized thereby, may
be subject to income, withholding or other taxes imposed by foreign countries
and U.S. possessions ("foreign taxes") that would reduce the yield and/or total
return on its securities. Tax conventions between certain countries and the
United States may reduce or eliminate foreign taxes, however, and many foreign
countries do not impose taxes on capital gains in respect of investments by
foreign investors. If more than 50% of the value of a Fund's total assets at the
close of its taxable year consists of securities of foreign corporations, the
Fund will be eligible to, and may, file an election with the Internal Revenue
Service that will enable its shareholders, in effect, to receive the benefit of
the foreign tax credit with respect to any foreign taxes paid by it. Pursuant to
the election, the Fund would treat those taxes as dividends paid to its
shareholders and each shareholder would be required to (1) include in gross
income, and treat as paid by him, his share of those taxes, (2) treat his share
of those taxes and of any dividend paid by the Fund that represents income from
foreign and U.S. possessions sources as his own income from those sources and
(3) either deduct the taxes deemed paid by him in computing his taxable income
or, alternatively, use the foregoing information in calculating the foreign tax
credit against his federal income tax. Each Fund will report to its shareholders
shortly after each taxable year their respective shares of the Fund's foreign
taxes and income from sources within, and taxes paid to, foreign countries and
U.S. possessions if it makes this election. Pursuant to the Taxpayer Relief Act
of 1997 ("Tax Act"), individuals who have no more than $300 ($600 for married
persons filing jointly) of creditable foreign taxes included on Form 1099 and
all of whose foreign source income is "qualified passive income" may elect each
year to be exempt from the extremely complicated foreign tax credit limitation
and will be able to claim a foreign tax credit without having to file the
detailed Form 1116 that otherwise is required.
 
PASSIVE FOREIGN INVESTMENT COMPANIES
 
  Each Fund may invest in the stock of "passive foreign investment companies"
("PFICs"). A PFIC is a foreign corporation -- other than a "controlled foreign
corporation" (i.e., a foreign corporation in which, on any day during its
taxable year, more than 50% of the total voting power of all voting stock
therein or the total value of all stock therein is owned, directly, indirectly
or constructively, by "U.S. shareholders," defined as U.S. persons that
individually own, directly, indirectly or constructively, at least 10% of that
voting power) as to which a Fund is a U.S. shareholder (effective with respect
to each Fund for its taxable year beginning November 1, 1998) -- that, in
general, meets either of the following tests: (1) at least 75% of its gross
income is passive or (2) an average of at least 50% of its assets produce, or
are held for the production of, passive income. Under certain circumstances, a
Fund will be subject to federal income tax on a portion of any "excess
distribution" received on, or of any gain from the disposition of, stock of a
PFIC (collectively
 
                                       41
<PAGE>   956
 
"PFIC income"), plus interest thereon, even if the Fund distributes the PFIC
income as a taxable dividend to its shareholders. The balance of the PFIC income
will be included in the Fund's investment company taxable income and,
accordingly, will not be taxable to it to the extent it distributes that income
to its shareholders.
 
  If a Fund invests in a PFIC and elects to treat the PFIC as a "qualified
electing fund" ("QEF"), then in lieu of the foregoing tax and interest
obligation, the Fund would be required to include in income each year its pro
rata share of the QEF's ordinary earnings and net capital gain (i.e., the excess
of net long-term capital gain over net short-term capital loss) -- which most
likely would have to be distributed by the Fund to satisfy the Distribution
Requirement and avoid imposition of the Excise Tax -- even if those earnings and
gain were not received by the Fund from the QEF. In most instances it will be
very difficult, if not impossible, to make this election because of certain
requirements thereof.
 
  Effective for its taxable year beginning November 1, 1998, each Fund may elect
to "mark to market" its stock in any PFIC. "Marking-to-market," in this context,
means including in ordinary income each taxable year the excess, if any, of the
fair market value of the stock over a Fund's adjusted basis therein as of the
end of that year. Pursuant to the election, a Fund also will be allowed to
deduct (as an ordinary, not capital, loss) the excess, if any, of its adjusted
basis in PFIC stock over the fair market value thereof as of the taxable
year-end, but only to the extent of any net mark-to-market gains with respect to
that stock included in income by the Fund for prior taxable years. A Fund's
adjusted basis in each PFIC's stock subject to the election will be adjusted to
reflect the amounts of income included and deductions taken thereunder.
Regulations proposed in 1992 provided a similar election with respect to the
stock of certain PFICs.
 
NON-U.S. SHAREHOLDERS
 
  Dividends paid by a Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership ("foreign shareholder") generally
will be subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply, however, to a dividend paid by a Fund to a foreign
shareholder that is "effectively connected with the conduct of a U.S. trade or
business," in which case the reporting and withholding requirements applicable
to domestic shareholders will apply. A distribution of net capital gain by a
Fund to a foreign shareholder generally will be subject to U.S. federal income
tax (at the rates applicable to domestic persons) only if the distribution is
"effectively connected" or the foreign shareholder is treated as a resident
alien individual for federal income tax purposes.
 
OPTIONS, FUTURES AND FOREIGN CURRENCY TRANSACTIONS
 
  Each Fund's use of hedging transactions, such as selling (writing) and
purchasing options and Futures and entering into Forward Contracts, involves
complex rules that will determine, for federal income tax purposes, the amount,
character and timing of recognition of the gains and losses a Fund realizes in
connection therewith. Gains from the disposition of foreign currencies (except
certain gains that may be excluded by future regulations), and gains from
options, Futures and Forward Contracts derived by a Fund with respect to its
business of investing in securities or foreign currencies, will qualify as
permissible income under the Income Requirement.
 
  Futures and Forward Contracts that are subject to section 1256 of the Code
(other than those that are part of a "mixed straddle") ("Section 1256
Contracts") and that are held by a Fund at the end of its taxable year generally
will be deemed to have been sold at that time at market value for federal income
tax purposes. Sixty percent of any net gain or loss recognized on these deemed
sales, and 60% of any net gain or loss realized from any actual sales of Section
1256 Contracts, will be treated as long-term capital gain or loss, and the
balance will be treated as short-term capital gain or loss. That 60% portion
will qualify for the reduced maximum tax rates on noncorporate taxpayers' net
capital gain enacted by the Tax Act -- 20% (10% for taxpayers in the 15%
marginal tax bracket) for gain recognized on capital assets held for more than
18 months -- instead of the 28% rate in effect before that legislation, which
now applies to gain recognized on capital assets held for more than one year but
not more than 18 months.
 
  Section 988 of the Code also may apply to gains and losses from transactions
in foreign currencies, foreign-currency-denominated debt securities and options,
Futures and Forward Contracts on foreign currencies ("Section 988" gains and
losses). Each Section 988 gain or loss generally is computed separately and
treated as ordinary income or loss. In the case of overlap between sections 1256
and 988, special provisions determine the character and timing of any income,
gain or loss. The Funds attempt to monitor section 988 transactions to minimize
any adverse tax impact.
 
  If a Fund has an "appreciated financial position" -- generally, an interest
(including an interest through an option, Futures or Forward Contract or short
sale) with respect to any stock, debt instrument (other than "straight debt") or
partnership interest the fair market value of which exceeds its adjusted
basis -- and enters into a "constructive sale" of the same or substantially
similar property, the Fund will be treated as having made an actual sale
thereof, with the result that gain will be recognized at that time. A
constructive sale generally consists of a short sale, an offsetting notional
                                       42
<PAGE>   957
 
principal contract or Futures or Forward Contract entered into by a Fund or a
related person with respect to the same or substantially similar property. In
addition, if the appreciated financial position is itself a short sale or such a
contract, acquisition of the underlying property or substantially similar
property will be deemed a constructive sale.
 
   
  The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting each Fund and its shareholders. Investors are urged to
consult their own tax advisors for more detailed information and for information
regarding any foreign, state and local taxes applicable to distributions
received from the Funds.
    
 
   
                           MISCELLANEOUS INFORMATION
    
 
   
  AIM was organized in 1976, and, together with its subsidiaries, manages or
advises approximately 90 investment company portfolios encompassing a broad
range of investment objectives. AIM is a direct, wholly owned subsidiary of
A I M Management Group Inc. ("AIM Management"), a holding company that has been
engaged in the financial services business since 1976. AIM is the sole
shareholder of the Fund's principal underwriter, AIM Distributors. AIM
Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London, EC2M 4YR, England. AMVESCAP PLC and its subsidiaries are
independent investment management groups that have a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia.
    
 
CUSTODIAN
 
  State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, MA 02110, acts as custodian of each Fund's assets. State Street is
authorized to establish and has established separate accounts in foreign
currencies and to cause securities of each Fund to be held in separate accounts
outside the United States in the custody of non-U.S. banks.
 
   
TRANSFER AGENCY AND ACCOUNTING AGENCY SERVICES
    
 
   
  The Transfer Agency and Service Agreement between the Trust and AFS, a
registered transfer agent and wholly-owned subsidiary of AIM, provides that AFS
will perform certain shareholder services for the Funds for a fee per account
serviced. The Transfer Agency and Service Agreement provides that AFS will
receive a per account fee plus out-of-pocket expenses to process orders for
purchases, redemptions and exchanges of shares; prepare and transmit payments
for dividends and distributions declared by the Funds; maintain shareholder
accounts and provide shareholders with information regarding the Funds and their
accounts. The Transfer Agency and Service Agreement became effective on
September 8, 1998. The Sub-advisor serves as each Fund's pricing and accounting
agent. For the fiscal years ended October 31, 1997, 1996 and 1995, Emerging
Markets Fund paid accounting services fees to the Sub-advisor of $103,144,
$125,349 and $33,216, and Latin American Fund paid accounting services fees of
$90,733, $86,436 and $24,138, respectively.
    
 
INDEPENDENT ACCOUNTANTS
 
   
  The Funds' independent accountants are PricewaterhouseCoopers LLP.
PricewaterhouseCoopers LLP conducts an annual audit of each Fund, assists in the
preparation of the Funds' federal and state income tax returns and consults with
the Trust and the Funds as to matters of accounting, regulatory filings, and
federal and state income taxation.
    
 
   
  The audited financial statements of the Trust included in this Statement of
Additional Information have been examined by PricewaterhouseCoopers LLP, as
stated in their opinion appearing herein and are included in reliance upon such
opinion given upon the authority of that firm as experts in accounting and
auditing.
    
 
SHAREHOLDER LIABILITY
 
   
  Under Delaware law, the shareholders of the Trust enjoy the same limitations
extended to shareholders of private, for-profit corporations. There is a remote
possibility, however, that under certain circumstances shareholders of the Trust
may be held personally liable for the Trust's obligations. However, the Trust
Agreement disclaims shareholder liability for acts or obligations of the Trust
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Trust or a trustee. If
a shareholder is held personally liable for the obligations of the Trust, the
Trust Agreement provides that the shareholder shall be entitled out of the
assets belonging to the applicable Fund (or allocable to the applicable Class),
to be held harmless from and indemnified against all loss and expense arising
from such liability in accordance with the Trust's Bylaws and applicable law.
Thus, the risk of a shareholder incurring financial loss on account of such
liability is limited to circumstances in which the Trust itself would be unable
to meet its obligations and where the other party was held not to be bound by
the disclaimer.
    
 
                                       43
<PAGE>   958
 
NAME
 
  Prior to May 29, 1998, Developing Markets Fund, Emerging Markets Fund and
Latin American Fund operated under the names GT Global Developing Markets Fund,
GT Global Emerging Markets Fund, and GT Global Latin America Growth Fund,
respectively.
 
   
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
    

   
   As of August 10, 1998, the Trustees and officers of the Trust, as a group,
owned less than 1% of the outstanding shares of any class of the Trust.
    
 
   
  To the best knowledge of the Trust, the names and addresses of the holders of
5% or more of the outstanding shares of any class of each Fund's equity
securities as of August 10, 1998, and the percentage of the outstanding shares
held by such holders are set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                        PERCENT
                                                                       PERCENT          OWNED OF
                                                                       OWNED OF        RECORD AND
         FUND                    NAME AND ADDRESS OF OWNER             RECORD*        BENEFICIALLY
         ----                    -------------------------             --------       ------------
<S>                     <C>                                            <C>            <C>
Developing Markets      Olde Discount                                   55.67%            -0-
  Fund -- Class B       FBO 05012322
                        751 Griswold Street
                        Detroit, Michigan 48226-3224
                        Raymond James & Assoc. Inc. CSDN                 7.64%            -0-
                        Mary Lynn James IRA
                        1215 W. Los Angeles Circle
                        Broken Arrow, Oklahoma 74011-4215
                        Smith Barney Inc.                                5.16%            -0-
                        150926032
                        388 Greenwich Street
                        New York, New York 10013-2339
                        PaineWebber FBO,                                 5.06%            -0-       
                        Joseph McDonald & Mildred McDonald JJWRO         
                        379 Quarry Pond Court
                        Moriches, New York 11955-1706

Developing Markets      G.T. Capital Holdings, Inc. 401(k) FBO          76.81%            -0-
  Fund -- Advisor       Account 546-33-3477
  Class                 50 California Street, 27th Floor
                        San Francisco, California 94111-4624
                        Attn: Human Resources
Emerging Markets        Wells Fargo Bank NA TTEE FBO                    28.45%            -0-
  Fund -- Advisor       LGT Asset Management AC 5000201000
  Class                 Serp Prft Shr Pln ###-##-####
                        P O Box 9800 MAC 9137-027
                        Calabasas, CA 91372-0800
Emerging Markets        MLPF&S for the Sold Benefit of its               5.72%            -0-
  Fund --               Customers, Security #970E1
  Class A               Attn: Fund Administration
                        4800 Deer Lake Drive East, 2nd Floor
                        Jacksonville, FL 32246-6484
Latin American Fund --  G.T. Capital Holdings, Inc. 401(k) FBO           8.48%            -0-
  Advisor Class         Account 102505451
                        50 California Street, 27th Floor
                        San Francisco, California 94111-4624
                        Attn: Human Resources
</TABLE>
    
   
- -------------------
* The Trust has no knowledge as to whether all or any portion of the shares
  owned of record are also owned beneficially.
    
 
                                       44
<PAGE>   959
 
   
<TABLE>
<CAPTION>
                                                                                        PERCENT
                                                                       PERCENT          OWNED OF
                                                                       OWNED OF        RECORD AND
         FUND                    NAME AND ADDRESS OF OWNER             RECORD*        BENEFICIALLY
         ----                    -------------------------             --------       ------------
<S>                     <C>                                            <C>            <C>
                        G.T. Capital Holdings, Inc. 401(k)FBO            5.35%            -0-
                        Acct ####-##-####
                        50 California Street, 27th Floor
                        San Francisco, California 94111-4624
                        Attn: Human Resources
                        Wells Fargo Bank NA TTEE FBO                     6.45%            -0-
                        LGT Asset Management AC 5000201000
                        Serp Prft Shr Pln ###-##-####
                        P O Box 9800 MAC 9137-027
                        Calabasas, CA 91372-0800
Latin American Fund --  MLPF&S for the Sold Benefit of its               7.99%            -0-
  Class A               Customers, Security #970E1
                        Attn: Fund Administration
                        4800 Deer Lake Drive East, 2nd Floor
                        Jacksonville, FL 32246-6484
</TABLE>
    
 
- ---------------
 
   
* The Trust has no knowledge as to whether all or any portion of the shares
  owned of record are also owned beneficially.
    
 
                               INVESTMENT RESULTS
 
TOTAL RETURN QUOTATIONS
 
  The standard formula for calculating total return, as described in each
Prospectus, is as follows:
 
   
                                       (n)
                                 P(1+T)   =ERV
    
 
<TABLE>
    <S>    <C>  <C>   <C>
    Where  P      =   a hypothetical initial payment of $1,000.
           T      =   average annual total return (assuming the applicable maximum
                      sales load is deducted at the beginning of the 1, 5, or 10
                      year periods).
           n      =   number of years.
           ERV    =   ending redeemable value of a hypothetical $1,000 payment at
                      the end of the 1, 5, or 10 year periods (or fractional
                      portion of such period).
</TABLE>
 
  The standard total returns of Developing Market's Predecessor Fund (recomputed
for Class A shares to reflect the deduction of the maximum sales charge of 4.75%
for Class A shares), stated as average annualized total returns for the periods
shown, were:
 
   
<TABLE>
<CAPTION>
                                                               DEVELOPING     DEVELOPING
                                                              MARKETS FUND   MARKETS FUND
                           PERIOD                              (CLASS A)      (CLASS B)
                           ------                             ------------    ---------
<S>                                                           <C>             <C>
Fiscal year ended Oct. 31, 1997.............................     (9.59)%        (9.68)%
Jan. 11, 1994 (commencement of operations) through Oct. 31,
  1997......................................................     (2.47)%        (1.90)%
</TABLE>
    
 
  Class B shares of Developing Markets Fund have not been in operation for a
full year since the Fund's conversion from a closed-end to an open-end fund.
 
                                       45
<PAGE>   960
 
  The standard total returns for the Class A and Class B shares of Emerging
Markets Fund, stated as average annualized total returns for the periods shown,
were:
 
   
<TABLE>
<CAPTION>
                                                        EMERGING MARKETS   EMERGING MARKETS
                        PERIOD                           FUND (CLASS A)     FUND (CLASS B)
                        ------                          ----------------   ----------------
<S>                                                     <C>                <C>
Fiscal year ended Oct. 31, 1997.......................       (18.51)%           (19.16)%
Oct. 31, 1992 through Oct. 31, 1997...................         2.30%               n/a
April 1, 1993 (commencement of operations) through
  Oct. 31, 1997.......................................          n/a               1.81%
May 18, 1992 (commencement of operations) through Oct.
  31, 1997............................................         1.57%               n/a
</TABLE>
    
 
  The standard total returns for the Class A and Class B shares of Latin
American Fund, stated as average annualized total returns for the periods shown,
were:
 
   
<TABLE>
<CAPTION>
                                                            LATIN AMERICAN   LATIN AMERICAN
                         PERIOD                             FUND (CLASS A)   FUND (CLASS B)
                         ------                             --------------   --------------
<S>                                                         <C>              <C>
Fiscal year ended Oct. 31, 1997..........................        3.34%            3.04%
Oct. 31, 1992 through Oct. 31, 1997......................        7.01%             n/a
April 1, 1993 (commencement of operations) through Oct.
  31, 1997...............................................         n/a             5.20%
Aug. 13, 1991 (commencement of operations) through Oct.
  31, 1997...............................................        7.23%             n/a
</TABLE>
    
 
  Standard total return quotes may be accompanied by total return figures
calculated by alternative methods. For example, average annual total return may
be calculated without assuming payment of the full sales load according to the
following formula:
 
   
                                       (n)
                                 P(1+U)   =ERV
    
 
<TABLE>
    <S>    <C>  <C>   <C>
    Where  P      =   a hypothetical initial payment of $1,000.
           U      =   average annual total return assuming payment of only a
                      stated portion of, or none of, the applicable maximum sales
                      load at the beginning of the stated period.
           n      =   number of years.
           ERV    =   ending redeemable value of a hypothetical $1,000 payment at
                      the end of the stated period.
</TABLE>
 
  The average annual non-standard total returns of Developing Markets Fund's
Predecessor Fund, stated as average annualized total returns for the periods
shown, were:
 
   
<TABLE>
<CAPTION>
                           PERIOD
                           ------
<S>                                                           <C>
Fiscal year ended Oct. 31, 1997.............................  (5.10)%
Jan. 11, 1994 (commencement of operations) through Oct. 31,
  1997......................................................  (1.21)%
</TABLE>
    
 
  The average annual non-standard total returns for the Class A and Class B
shares of Emerging Markets Fund, stated as average annualized total returns for
the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                        EMERGING MARKETS   EMERGING MARKETS
                        PERIOD                           FUND (CLASS A)     FUND (CLASS B)
                        ------                          ----------------   ----------------
<S>                                                     <C>                <C>
Fiscal year ended Oct. 31, 1997.......................       (14.45)%           (14.91)%
Oct. 31, 1992 through Oct. 31, 1997...................         3.30%               n/a
April 1, 1993 (commencement of operations) through
  Oct. 31, 1997.......................................          n/a               2.21%
May 18, 1992 (commencement of operations) through Oct.
  31, 1997............................................         2.48%               n/a
</TABLE>
    
 
                                       46
<PAGE>   961
 
  The average annual non-standard total returns for the Class A and Class B
shares of Latin American Fund, stated as average annualized total returns for
the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                           LATIN AMERICAN   LATIN AMERICAN
                         PERIOD                            FUND (CLASS A)   FUND (CLASS B)
                         ------                            --------------   ---------------
<S>                                                        <C>              <C>
Fiscal year ended Oct. 31, 1997..........................       8.52%            8.04%
Oct. 31, 1991 through Oct. 31, 1997......................       8.06%             n/a
April 1, 1993 (commencement of operations) through Oct.
  31, 1997...............................................        n/a             5.56%
Aug. 13, 1991 (commencement of operations) through Oct.
  31, 1997...............................................       8.07%             n/a
</TABLE>
    
 
  Cumulative total return across a stated period may be calculated as follows:
 
   
                                       (n)
                                 P(1+V)   =ERV
    
 
<TABLE>
    <S>    <C>  <C>   <C>
    Where  P      =   a hypothetical initial payment of $1,000.
           V      =   cumulative total return assuming payment of all of, a stated
                      portion of, or none of, the applicable maximum sales load at
                      the beginning of the stated period.
           n      =   number of years.
           ERV    =   ending redeemable value of a hypothetical $1,000 payment at
                      the end of the stated period.
</TABLE>
 
  The cumulative total return of Developing Markets Fund's Predecessor Fund (not
recomputed to take sales charges into account) for the period January 11, 1994
(commencement of operations) through October 31, 1997 was (4.53)%.
 
  The cumulative total return of Developing Market's Predecessor Fund
(recomputed for Class A shares to reflect the deduction of the maximum sales
charge of 4.75% for Class A shares), stated as aggregate total returns for the
periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                                DEVELOPING     DEVELOPING
                                                               MARKETS FUND   MARKETS FUND
                           PERIOD                               (CLASS A)      (CLASS B)
                           ------                              ------------    ---------
<S>                                                            <C>             <C>
Jan. 11, 1994 (commencement of operations) through Oct. 31,
  1997......................................................      (9.08)%        (7.04)%
</TABLE>
    
 
  Class B shares of Developing Markets Fund have not been in operation for a
full year since the Fund's conversion from a closed-end to an open-end fund.
 
  The cumulative total returns (not taking sales charges into account) for the
Class A and Class B shares of Emerging Markets Fund, stated as aggregate total
returns for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                        EMERGING MARKETS   EMERGING MARKETS
                        PERIOD                           FUND (CLASS A)     FUND (CLASS B)
                        ------                          ----------------   ----------------
<S>                                                     <C>                <C>
April 1, 1993 (commencement of operations) through
  Oct. 31, 1997.......................................         n/a              10.55%
May 18, 1992 (commencement of operations)through Oct.
  31, 1997............................................       14.32%               n/a
</TABLE>
    
 
  The aggregate cumulative total returns (taking sales charges into account) for
the Class A and B shares of Emerging Markets Fund, stated as aggregate total
returns for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                        EMERGING MARKETS   EMERGING MARKETS
                        PERIOD                           FUND (CLASS A)     FUND (CLASS B)
                        ------                          ----------------   ----------------
<S>                                                     <C>                <C>
April 1, 1993 (commencement of operations) through
  Oct. 31, 1997.......................................         n/a               8.55%
May 18, 1992 (commencement of operations) through Oct.
  31, 1997............................................        8.89%               n/a
</TABLE>
    
 
  The cumulative total returns (not taking sales charges into account) for the
Class A and Class B shares of Latin American Fund, stated as aggregate total
returns for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                            LATIN AMERICAN   LATIN AMERICAN
                          PERIOD                            FUND (CLASS A)   FUND (CLASS B)
                          ------                            --------------   --------------
<S>                                                         <C>              <C>
April 1, 1993 (commencement of operations) through Oct.
  31, 1997................................................        n/a            28.14%
Aug. 13, 1991 (commencement of operations) through Oct.
  31, 1996................................................      62.00%             n/a
</TABLE>
    
 
                                       47
<PAGE>   962
 
  The aggregate cumulative total returns (taking sales charges into account) for
the Class A and B shares of Latin American Fund, stated as aggregate total
returns for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                            LATIN AMERICAN   LATIN AMERICAN
                          PERIOD                            FUND (CLASS A)   FUND (CLASS B)
                          ------                            --------------   --------------
<S>                                                         <C>              <C>
April 1, 1993 (commencement of operations) through Oct.
  31, 1997................................................        n/a            26.14%
Aug. 13, 1991 (commencement of operations) through Oct.
  31, 1997................................................     54.303%             n/a
</TABLE>
    
 
OTHER INFORMATION REGARDING STANDARD TOTAL AND NON-STANDARD TOTAL RETURNS FOR
DEVELOPING MARKETS FUND
 
  The standard total and non-standard total return data of Developing Markets
Fund are based on the performance of the Predecessor Fund as a closed-end
investment company. The standard total return data, however, have been
recomputed to reflect the deduction of the current maximum sales charge of 4.75%
for Class A shares which went into effect on November 1, 1997. Future
performance of Developing Markets Fund will be effected by expenses that it will
incur as a series of an open-end investment company.
 
PERFORMANCE INFORMATION
 
  Total return and yield figures for the Funds are neither fixed nor guaranteed,
and no Fund's principal is insured. Performance quotations reflect historical
information and should not be considered representative of a Fund's performance
for any period in the future. Performance is a function of a number of factors
which can be expected to fluctuate. The Funds may provide performance
information in reports, sales literature and advertisements. The Funds may also,
from time to time, quote information about the Funds published or aired by
publications or other media entities which contain articles or segments relating
to investment results or other data about one or more of the Funds. Such
publications or media entities may include the following, among others:
 
     Advertising Age
     Barron's
     Best's Review
     Broker World
     Business Week
     Changing Times
     Christian Science Monitor
     Consumer Reports
     Economist
     EuroMoney
     FACS of the Week
     Financial Planning
     Financial Product News
     Financial World
     Forbes
     Fortune
     Global Finance
     Hartford Courant Inc.
     Institutional Investor
     Insurance Forum
     Insurance Week
     Investor's Daily
     Journal of the American
       Society of CLU & ChFC
     Kiplinger Letter
     Money
     Mutual Fund Forecaster
     Mutual Fund Magazine
     Nation's Business
     New York Times
     Pension World
     Pensions & Investments
     Personal Investor
     Financial Services Week
     Philadelphia Inquirer
     Smart Money
     USA Today
     U.S. News & World Report
     Wall Street Journal
     Washington Post
     CNN
     CNBC
     PBS
 
  The Funds and AIM Distributors may from time to time, in advertisements, sales
literature and reports furnished to present or prospective shareholders, compare
each Fund with the following, or compare each Fund's performance to performance
data of similar mutual funds as published in the following, among others:
 
     Bank Rate National Monitor Index
     Bear Stearns Foreign Bond Index
     Bond Buyer Index
     CDA/Wiesenberger Investment Company Services
       (data and mutual fund rankings and
       comparisons)
     CNBC/Financial News Composite Index
     COFI
     Consumer Price Index
     Datastream
     Donoghue's
     Dow Jones Industrial Average
     EAFE Index
     First Boston High Yield Index
     Fitch (publications)
     Ibbotson Associates International Bond Index
     International Bank for Reconstruction and
       Development (publications)
     International Finance Corporation Emerging
       Markets Database
     International Financial Statistics
     Lehman Bond Indices
     Lipper Analytical Data Services, Inc. (data and
       mutual fund rankings and comparisons)
     Micropal, Inc. (data and mutual fund rankings
       and comparisons)
 
                                       48
<PAGE>   963
 
     Moody's Investors Service (publications)
     Morgan Stanley Capital International All
       Country (AC) World Index
     Morgan Stanley Capital International World
       Indices
     Morningstar, Inc. (data and mutual fund rankings
       and comparisons)
     NASDAQ
     Organization for Economic Cooperation and
       Development (publications)
     Salomon Brothers Global Telecommunications
       Index
     Salomon Brothers World Government Bond
       Index -- Non-U.S.
     Salomon Brothers World Government Bond
       Index
     Standard & Poor's (publications)
     Standard & Poor's 500 Composite Stock Price
       Index
     Stangar
     Wilshire Associates
     World Bank (publications and reports)
     The World Bank Publication of Trends in
       Developing Countries
     Worldscope
 
  Each Fund may also compare its performance to rates on Certificates of Deposit
and other fixed rate investments such as the following:
 
          10-year Treasuries
        30-year Treasuries
        30-day Treasury Bills
 
  Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable but may be subject
to revision and has not been independently verified by the Funds or AIM
Distributors. Advertising for the Funds may from time to time include
discussions of general economic conditions and interest rates. Advertising for
the Funds may also include reference to the use of those Funds as part of an
individual's overall retirement investment program. From time to time, sales
literature and/or advertisements for any of the Funds may disclose (i) the
largest holdings in the Fund's portfolio, (ii) certain selling group members
and/or (iii) certain institutional shareholders.
 
  From time to time, the Funds' sales literature and/or advertisements may
discuss generic topics pertaining to the mutual fund industry. This includes,
but is not limited to, literature addressing general information about mutual
funds, variable annuities, dollar-cost averaging, stocks, bonds, money markets,
certificates of deposit, retirement, retirement plans, asset allocation,
tax-free investing, college planning, and inflation.
 
  Although performance data may be useful to prospective investors when
comparing a Fund's performance with other funds and other potential investments,
investors should note that the methods of computing performance of other
potential investments are not necessarily comparable to the methods employed by
a Fund.
 
                                       49
<PAGE>   964
 
   
                                    APPENDIX
    
 
                          DESCRIPTION OF BOND RATINGS
 
  Moody's Investors Service, Inc. ("Moody's") rates the debt securities issued
by various entities from "Aaa" to "C." Investment grade ratings are the first
four categories: Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bond because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. Ba -- Bonds which are rated Ba
are judged to have speculative elements; their future cannot be considered as
well-assured. Often the protection of interest and principal payments may be
very moderate, and thereby not well safeguarded during other good and bad times
over the future. Uncertainty of position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest. Ca -- Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings. C -- Bonds which are rated C are the lowest rated class of
bonds, and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
 
   
  Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"),
rates the securities debt of various entities in categories ranging from "AAA"
to "D" according to quality. Investment grade ratings are the first four
categories: AAA -- An obligation rated "AAA" has the highest rating assigned by
S&P. The obligor's capacity to meet its financial commitment on the obligation
is extremely strong. AA -- An obligation rated "AA" differs from the highest
rated obligations only in a small degree. The obligor's capacity to meet its
financial commitment on the obligation is very strong. A -- An obligation rated
"A" is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than obligations in higher rated
categories. BBB -- An obligation rated "BBB" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation. BB, B, CCC, CC, C -- Obligations rated "BB," "B,"
"CCC," "CC," and "C" are regarded as having significant speculative
characteristics. "BB" indicates the least degree of speculation and "C" the
highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions. BB -- An obligation rated "BB" is less
vulnerable to nonpayment than other speculative issues. However, it faces major
ongoing uncertainties or exposure to adverse business, financial, or economic
conditions which could lead to the obligor's inadequate capacity to meet its
financial commitment on the obligation. B -- An obligation rated "B" is more
vulnerable to nonpayment than obligations rated "BB," but the obligor currently
has the capacity to meet its financial commitment on the obligation. Adverse
business, financial, or economic conditions will likely impair the obligor's
capacity or willingness to meet its financial commitment on the obligation.
CCC -- An obligation rated "CCC" is currently vulnerable to nonpayment, and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.
CC -- An obligation rated "CC" is currently highly vulnerable to nonpayment.
C -- The "C" rating may be used to cover a situation where a bankruptcy petition
has been filed or similar action has been taken, but payments on this obligation
are being continued. D -- An obligation rated "D" is in payment default. The "D"
rating category is used when payments on an obligation are not made on the date
due even if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The "D" rating also
will be used upon the filing of a bankruptcy petition or the taking of a similar
action if payments on an obligation are jeopardized.
    
 
                                       50
<PAGE>   965
 
  PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
 
  NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
 
                    DESCRIPTION OF COMMERCIAL PAPER RATINGS
 
  Moody's employs the designation "Prime-1" to indicate commercial paper having
a superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. Issues rated Prime-2 have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many of
the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
 
   
  S&P ratings of commercial paper are graded into several categories ranging
from "A-1" for the highest quality obligations to "D" for the lowest. Issues in
the "A" category are delineated with numbers 1, 2, and 3 to indicate the
relative degree of safety. A-1 -- This highest category indicates that the
degree of safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics will be denoted with a plus sign
(+) designation. A-2 -- Capacity for timely payments on issues with this
designation is satisfactory; however, the relative degree of safety is not as
high as for issues designated "A-1."
    
 
   
                               ABSENCE OF RATING
    
 
   
  Where no rating has been assigned or where a rating has been suspended or
withdrawn, it may be for reasons unrelated to the quality of the issue.
    
 
   
  Should no rating be assigned, the reason may be one of the following:
    
 
   
          1. An application for rating was not received or accepted.
    
 
   
          2. The issue or issuer belongs to a group of securities or companies
     that are not rated as a matter of policy.
    
 
   
          3. There is a lack of essential data pertaining to the issue or
     issuer.
    
 
   
          4. The issue was privately placed, in which case the rating is not
     published in Moody's publications.
    
 
   
  Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.
    
 
   
  Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the Company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the Company ranks in the
lower end of its generic rating category.
    
 
                                       51
<PAGE>   966
 
   
                              FINANCIAL STATEMENTS
    
   
    
 
                                       FS
<PAGE>   967

                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
- -------------------------------------------------------------------------------
 
To the Shareholders and Board of Directors of AIM Developing Markets Fund
("Fund"):
 
We have audited the accompanying statement of assets and liabilities of AIM
Developing Markets Fund (formerly GT Global Developing Markets Fund), including
the portfolio of investments, as of April 30, 1998, the related statement of
operations for the six months then ended, the statements of changes in net
assets for the six months then ended, for the ten months ended October 31, 1997
and for the year ended December 31, 1996, and the financial highlights for each
of the periods indicated therein. These financial statements and the financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and the financial
highlights based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1998, by correspondence with the custodians and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of AIM
Developing Markets Fund as of April 30, 1998, the results of its operations for
the six months then ended, the changes in its net assets for the six months then
ended, for the ten months ended October 31, 1997 and for the year ended December
31, 1996, and the financial highlights for each of the periods indicated
therein, in conformity with generally accepted accounting principles.
 



                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
JUNE 17, 1998
 
                                     FS-1
<PAGE>   968
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                            PORTFOLIO OF INVESTMENTS
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (16.8%)
  Telecomunicacoes Brasileiras S.A. (Telebras): .............  BRZL                --             --         3.6
    TELEPHONE NETWORKS
    ADR{\/} .................................................  --              40,191   $  4,895,254          --
    Common ..................................................  --          25,866,258      2,567,399          --
  Telefonos de Mexico, S.A. de C.V. "L" - ADR{\/} ...........  MEX             43,283      2,450,900         1.2
    TELEPHONE NETWORKS
  Telefonica del Peru S.A. - ADR{\/} ........................  PERU           104,070      2,302,549         1.1
    TELEPHONE NETWORKS
  Pick'n Pay Stores Ltd.: ...................................  SAFR                --             --         1.0
    RETAILERS-OTHER
    Common ..................................................  --           1,087,304      2,065,931          --
    "N" .....................................................  --              11,602         21,126          --
  Magyar Tavkozlesi Rt. - ADR-/- {\/} .......................  HGRY            59,100      1,743,450         0.8
    TELEPHONE NETWORKS
  Philippine Long Distance Telephone Co.: ...................  PHIL                --             --         0.7
    TELEPHONE - LONG DISTANCE
    Common ..................................................  --              36,900        990,449          --
    ADR{\/} .................................................  --              19,000        513,000          --
  Mahanagar Telephone Nigam Ltd. ............................  IND            229,700      1,458,413         0.7
    TELECOM - OTHER
  Cifra, S.A. de C.V. "V" ...................................  MEX            820,662      1,443,668         0.7
    RETAILERS-OTHER
  Grupo Televisa, S.A. de C.V. - GDR-/- {\/} ................  MEX             34,300      1,406,300         0.7
    BROADCASTING & PUBLISHING
  Carso Global Telecom "A1" .................................  MEX            295,300      1,133,087         0.5
    TELEPHONE NETWORKS
  Telefonica de Argentina S.A. - ADR{\/} ....................  ARG             27,528      1,061,549         0.5
    TELEPHONE NETWORKS
  Companhia de Saneamento Basico do Estado de Sao Paulo -
   SABESP ...................................................  BRZL         4,531,127      1,030,252         0.5
    BUSINESS & PUBLIC SERVICES
  Cia de Telecomunicaciones de Chile S.A. - ADR{\/} .........  CHLE            39,302        985,006         0.5
    TELEPHONE NETWORKS
  Telecomunicacoes de Sao Paulo S.A. (TELESP)-/- ............  BRZL         3,195,000        834,025         0.4
    TELEPHONE NETWORKS
  Nortel Inversora S.A. - ADR{\/} ...........................  ARG             23,500        699,125         0.3
    TELEPHONE NETWORKS
  Vimpel-Communications - ADR-/- {\/} .......................  RUS             12,900        696,600         0.3
    WIRELESS COMMUNICATIONS
  Telecom Argentina S.A. - ADR{\/} ..........................  ARG             15,800        568,800         0.3
    TELEPHONE NETWORKS
  Hellenic Telecommunications Organization S.A. .............  GREC            19,730        565,042         0.3
    TELEPHONE NETWORKS
  Genting Bhd. ..............................................  MAL            154,000        516,108         0.3
    LEISURE & TOURISM
  Guangshen Railway Co., Ltd. ...............................  HK           2,606,000        487,857         0.2
    TRANSPORTATION - ROAD & RAIL
  Rostelecom - ADR-/- {\/} ..................................  RUS             20,600        441,613         0.2
    TELEPHONE - LONG DISTANCE
  Telekom Malaysia Bhd. .....................................  MAL            143,000        432,865         0.2
    TELEPHONE NETWORKS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-2
<PAGE>   969
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (Continued)
  Danubius Hotel and Spa Rt.-/- .............................  HGRY            16,320   $    398,870         0.2
    LEISURE & TOURISM
  Telecomunicacoes do Parana (TELPAR) .......................  BRZL           616,000        351,769         0.2
    TELECOM - OTHER
  Malaysia International Shipping Bhd. - Foreign ............  MAL            192,000        337,297         0.2
    TRANSPORTATION - SHIPPING
  Indian Hotels Co., Ltd. ...................................  IND             23,150        308,987         0.2
    LEISURE & TOURISM
  Advanced Info. Service - Foreign ..........................  THAI            43,800        306,373         0.1
    WIRELESS COMMUNICATIONS
  Telecomunicacoes de Minas Gerais - Telemig ................  BRZL         1,787,700        275,933         0.1
    TELECOM - OTHER
  Tanjong PLC ...............................................  MAL            116,000        266,486         0.1
    LEISURE & TOURISM
  Santa Isabel S.A. - ADR{\/} ...............................  CHLE            13,514        222,981         0.1
    RETAILERS-FOOD
  Migros Turk T.A.S. ........................................  TRKY           220,300        216,110         0.1
    RETAILERS-FOOD
  Pakistan Telecommunications Co., Ltd. - GDR-/- {\/} .......  PAK              2,900        200,100         0.1
    TELEPHONE NETWORKS
  Super Sol Ltd. ............................................  ISRL            60,231        189,953         0.1
    RETAILERS-FOOD
  Berjaya Sports Toto Bhd. ..................................  MAL             76,000        181,784         0.1
    LEISURE & TOURISM
  Trade House GUM - ADR{\/} .................................  RUS             32,660        163,300         0.1
    RETAILERS-OTHER
  Goody's S.A. ..............................................  GREC             4,850        129,792         0.1
    RESTAURANTS
  Siam Makro Public Co., Ltd. - Foreign .....................  THAI            45,000         74,028          --
    RETAILERS-OTHER
                                                                                        ------------
                                                                                          34,934,131
                                                                                        ------------
Finance (16.2%)
  Alpha Credit Bank .........................................  GREC            17,700      1,867,438         0.9
    BANKS-REGIONAL
  Uniao de Bancos Brasileiros S.A. (Unibanco): ..............  BRZL                --             --         0.9
    BANKS-MONEY CENTER
    Units ...................................................  --          14,649,042      1,127,470          --
    GDR-/- {\/} .............................................  --              18,510        735,773          --
  State Bank of India Ltd. ..................................  IND            218,400      1,584,762         0.8
    BANKS-MONEY CENTER
  Turkiye Garanti Bankasi AS-/- .............................  TRKY        29,372,000      1,558,274         0.8
    BANKS-REGIONAL
  ABSA Group Ltd. ...........................................  SAFR           172,076      1,490,020         0.7
    BANKS-REGIONAL
  Commercial International Bank: ............................  EGPT                --             --         0.6
    BANKS-MONEY CENTER
    144A GDR{.} {\/} ........................................  --              43,400        735,630          --
    Common ..................................................  --              23,940        411,606          --
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-3

<PAGE>   970
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Finance (Continued)
  Yapi ve Kredi Bankasi AS ..................................  TRKY        23,117,092   $  1,133,871         0.5
    BANKS-REGIONAL
  Bank Hapoalim Ltd. ........................................  ISRL           416,100      1,117,568         0.5
    BANKS-REGIONAL
  Credicorp Ltd. - ADR{\/} ..................................  PERU            66,220      1,109,185         0.5
    BANKS-MONEY CENTER
  Akbank T.A.S. .............................................  TRKY        12,775,000      1,086,962         0.5
    BANKS-REGIONAL
  Cathay Life Insurance Co., Ltd. ...........................  TWN            251,000      1,004,914         0.5
    INSURANCE-BROKER
  Grupo Financiero Banamex Accival, S.A. de C.V. "B"-/- .....  MEX            308,800        966,139         0.5
    BANKS-MONEY CENTER
  National Bank of Greece S.A. ..............................  GREC             5,400        950,232         0.5
    BANKS-MONEY CENTER
  Liberty Life Association of Africa Ltd. ...................  SAFR            27,600        934,112         0.5
    INSURANCE-LIFE
  C.G. Smith Ltd. ...........................................  SAFR           178,600        883,721         0.4
    INVESTMENT MANAGEMENT
  China Development Corp.-/- ................................  TWN            303,000        822,520         0.4
    BANKS-MONEY CENTER
  Banco de Galicia y Buenos Aires, S.A. de C.V. - ADR{\/} ...  ARG             28,872        707,364         0.3
    BANKS-MONEY CENTER
  Standard Bank Investment Corporation Ltd. .................  SAFR            11,900        704,226         0.3
    BANKS-MONEY CENTER
  Kazkommertsbank Co. - GDR-/- {\/} .........................  KAZ             26,600        698,250         0.3
    BANKS-REGIONAL
  Banco Frances del Rio de la Plata S.A. - ADR{\/} ..........  ARG             23,368        679,133         0.3
    BANKS-MONEY CENTER
  Aksigorta AS ..............................................  TRKY         9,123,000        675,778         0.3
    INSURANCE - MULTI-LINE
  Banco do Estado de Sao Paulo S.A. - Banespa ...............  BRZL         9,930,000        659,974         0.3
    BANKS-REGIONAL
  Hua Nan Commercial Bank ...................................  TWN            267,000        647,862         0.3
    BANKS-MONEY CENTER
  Ergo Bank S.A. ............................................  GREC             6,800        640,489         0.3
    BANKS-REGIONAL
  National Societe Generale Bank ............................  EGPT            24,000        603,439         0.3
    BANKS-MONEY CENTER
  Nedcor Ltd. ...............................................  SAFR            20,500        584,265         0.3
    BANKS-REGIONAL
  Banco Santander Chile - ADR{\/} ...........................  CHLE            40,700        569,800         0.3
    BANKS-REGIONAL
  MISR International Bank - Reg S GDR-/- {c} {\/} ...........  EGPT            45,000        562,500         0.3
    BANKS-MONEY CENTER
  Banco de A. Edwards - ADR{\/} .............................  CHLE            34,994        562,091         0.3
    BANKS-MONEY CENTER
  Bank Leumi Le - Israel ....................................  ISRL           249,668        456,496         0.2
    BANKS-REGIONAL
  Turkiye Is Bankasi (Isbank) "C" ...........................  TRKY         3,608,400        455,114         0.2
    BANKS-MONEY CENTER
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-4
<PAGE>   971
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Finance (Continued)
  Administradora de Fondos de Pensiones Provida S.A. -
   ADR{\/} ..................................................  CHLE            25,086   $    448,412         0.2
    INVESTMENT MANAGEMENT
  National Development Bank-/- ..............................  SLNKA          116,300        431,898         0.2
    BANKS-REGIONAL
  Bank Slaski S.A. ..........................................  POL              4,766        408,635         0.2
    BANKS-MONEY CENTER
  Banco Rio de La Plata S.A. - ADR-/- {\/} ..................  ARG             26,900        369,875         0.2
    BANKS-MONEY CENTER
  Bank of the Philippine Islands ............................  PHIL           147,000        367,041         0.2
    BANKS-MONEY CENTER
  Commercial Bank of Greece S.A. ............................  GREC             5,800        364,968         0.2
    BANKS-MONEY CENTER
  Inversiones y Representaciones S.A. (IRSA) - GDR{\/} ......  ARG              9,000        349,875         0.2
    REAL ESTATE
  Liberty Investors Ltd. ....................................  SAFR            61,400        312,924         0.2
    INVESTMENT MANAGEMENT
  Muslim Commercial Bank Ltd.-/- ............................  PAK            367,300        291,839         0.1
    BANKS-MONEY CENTER
  Global Menkul Degerler AS-/- ..............................  TRKY        12,103,256        290,769         0.1
    SECURITIES BROKER
  F.I.B.I. Holdings Ltd. ....................................  ISRL             1,520        269,696         0.1
    BANKS-REGIONAL
  Ayala Land, Inc. ..........................................  PHIL           633,600        249,169         0.1
    REAL ESTATE
  National Mortgage Bank of Greece ..........................  GREC             3,040        231,197         0.1
    BANKS-REGIONAL
  OTP Bank Rt. ..............................................  HGRY             4,270        202,446         0.1
    BANKS-MONEY CENTER
  Malayan Banking Bhd. ......................................  MAL             66,000        196,216         0.1
    BANKS-MONEY CENTER
  Egyptian American Bank SAE ................................  EGPT             5,363        137,129         0.1
    BANKS-MONEY CENTER
  Shinhan Bank-/- ...........................................  KOR             24,300         94,652          --
    BANKS-MONEY CENTER
  Samsung Fire & Marine Insurance-/- ........................  KOR                260         76,929          --
    INSURANCE - MULTI-LINE
  Kookmin Bank - GDR-/- {\/} ................................  KOR             10,400         68,224          --
    BANKS-MONEY CENTER
  Bangkok Bank Public Co., Ltd. - Foreign ...................  THAI            20,600         51,767          --
    BANKS-MONEY CENTER
  Thai Farmers Bank Public Co., Ltd. - Foreign ..............  THAI            17,200         39,435          --
    BANKS-MONEY CENTER
                                                                                        ------------
                                                                                          33,980,074
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-5
<PAGE>   972
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Energy (13.3%)
  Centrais Eletricas Brasileiras S.A. (Eletrobras): .........  BRZL                --             --         1.6
    ELECTRICAL & GAS UTILITIES
    "B" ADR{\/} .............................................  --             118,958   $  2,661,685          --
    Common-/- ...............................................  --           9,090,500        373,637          --
    "B" Preferred ...........................................  --           4,460,000        198,955          --
  Petroleo Brasileiro S.A. (Petrobras) Preferred ............  BRZL        11,865,398      3,009,152         1.4
    OIL
  Sasol Ltd. ................................................  SAFR           223,556      2,256,577         1.1
    ENERGY SOURCES
  LUKoil Holding - ADR{\/} ..................................  RUS             31,666      2,058,290         1.0
    OIL
  Unified Energy Systems - Reg S GDR-/- {c} {\/} ............  RUS             57,100      1,827,200         0.9
    ELECTRICAL & GAS UTILITIES
  Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} ....  BRZL            36,144      1,752,984         0.8
    ELECTRICAL & GAS UTILITIES
  YPF S.A. - ADR{\/} ........................................  ARG             37,260      1,299,443         0.6
    ENERGY SOURCES
  Empresa Nacional de Electricidad S.A. - ADR{\/} ...........  CHLE            67,677      1,180,118         0.6
    ELECTRICAL & GAS UTILITIES
  Light - Participacoes S.A. ................................  BRZL         4,613,750      1,129,733         0.5
    ELECTRICAL & GAS UTILITIES
  Enersis S.A. - ADR{\/} ....................................  CHLE            37,038      1,090,306         0.5
    ELECTRICAL & GAS UTILITIES
  Bombay Suburban Electric Supply (BSES) Ltd. ...............  IND            199,850        921,959         0.4
    ELECTRICAL & GAS UTILITIES
  Light - Servicos de Electricidade S.A. ....................  BRZL         2,271,290        913,680         0.4
    ELECTRICAL & GAS UTILITIES
  Cukurova Elektrik AS ......................................  TRKY           308,000        887,928         0.4
    ELECTRICAL & GAS UTILITIES
  MOL Magyar Olaj-es Gazipari RT - Reg S GDR{c} {\/} ........  HGRY            26,400        805,860         0.4
    ENERGY SOURCES
  Manila Electric Co. "B" ...................................  PHIL           281,300        800,704         0.4
    ELECTRICAL & GAS UTILITIES
  Gener S.A. - ADR{\/} ......................................  CHLE            33,092        740,434         0.4
    ELECTRICAL & GAS UTILITIES
  The Hub Power Co., Ltd. - GDR-/- {\/} .....................  PAK             24,800        626,200         0.3
    ENERGY SOURCES
  Perez Companc S.A. "B" ....................................  ARG             71,460        429,518         0.2
    OIL
  Irkutskenergo - ADR{\/} ...................................  RUS             43,300        422,175         0.2
    ELECTRICAL & GAS UTILITIES
  Surgutneftegaz - ADR{\/} ..................................  RUS             54,820        383,740         0.2
    OIL
  Ingwe Coal Corp. ..........................................  SAFR            87,200        312,384         0.2
    COAL
  Petronas Gas Bhd. .........................................  MAL            124,000        301,622         0.1
    OIL
  Chilectra S.A. - ADR{\/} ..................................  CHLE            10,630        293,654         0.1
    ELECTRICAL & GAS UTILITIES
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-6
<PAGE>   973
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Energy (Continued)
  Companhia Brasileira de Petroleo Ipiranga S.A.
   Preferred ................................................  BRZL        19,148,000   $    249,502         0.1
    OIL
  Electricity Generating Public Co., Ltd. - Foreign .........  THAI           126,100        245,013         0.1
    ELECTRICAL & GAS UTILITIES
  Tenaga Nasional Bhd. ......................................  MAL            108,000        217,459         0.1
    ELECTRICAL & GAS UTILITIES
  PTT Exploration and Production Public Co., Ltd. -
   Foreign ..................................................  THAI            14,000        147,979         0.1
    OIL
  Korea Electric Power Corp. ................................  KOR             10,500        143,146         0.1
    ELECTRICAL & GAS UTILITIES
  Companhia Paranaense de Energia - Copel ...................  BRZL        10,185,000        117,571         0.1
    ELECTRICAL & GAS UTILITIES
  Transportadora de Gas del Sur S.A. (TGS) - ADR{\/} ........  ARG              2,000         23,125          --
    GAS PRODUCTION & DISTRIBUTION
  Banpu Public Co., Ltd. - Foreign ..........................  THAI             3,000         20,674          --
    COAL
                                                                                        ------------
                                                                                          27,842,407
                                                                                        ------------
Materials/Basic Industry (10.8%)
  Suez Cement Co. - Reg S GDR{c} {\/} .......................  EGPT           118,295      2,413,218         1.2
    CEMENT
  Helioplis Housing .........................................  EGPT            17,100      2,211,315         1.1
    BUILDING MATERIALS & COMPONENTS
  Kimberly-Clark de Mexico, S.A. de C.V. "A" ................  MEX            406,179      1,997,326         1.0
    PAPER/PACKAGING
  Companhia Vale do Rio Doce Preferred ......................  BRZL            55,700      1,315,173         0.6
    METALS - STEEL
  De Beers Centenary AG - Linked Unit{.:} ...................  SAFR            42,900      1,112,301         0.5
    MISC. MATERIALS & COMMODITIES
  Industrias Penoles S.A. (CP) ..............................  MEX            255,003      1,053,731         0.5
    METALS - NON-FERROUS
  Reliance Industries Ltd. - GDR-/- {\/} ....................  IND            114,420      1,044,083         0.5
    CHEMICALS
  Cemex, S.A. de C.V. "CPO" .................................  MEX            203,800      1,020,203         0.5
    CEMENT
  Apasco, S.A. de C.V. ......................................  MEX            147,133      1,000,574         0.5
    CEMENT
  SA Iron & Steel Industrial Corporation Ltd. (ISCOR) .......  SAFR         2,706,606        873,185         0.4
    METALS - STEEL
  Anglo American Platinum Corporation Ltd. ..................  SAFR            44,900        718,045         0.3
    METALS - NON-FERROUS
  Compania de Minas Buenaventura S.A. - ADR{\/} .............  PERU            44,400        688,200         0.3
    METALS - NON-FERROUS
  Ameriyah Cement Co. .......................................  EGPT            32,500        629,464         0.3
    CEMENT
  Sociedad Quimica y Minera de Chile S.A. - ADR{\/} .........  CHLE            13,500        586,406         0.3
    CHEMICALS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-7
<PAGE>   974
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Materials/Basic Industry (Continued)
  Hindalco Industries Ltd.: .................................  IND                 --             --         0.2
    METALS - NON-FERROUS
    GDR{\/} .................................................  --              26,200   $    510,900          --
    Common ..................................................  --               1,634         31,083          --
  Siderca S.A. "A" ..........................................  ARG            213,000        513,381         0.2
    METALS - STEEL
  Larsen & Toubro Ltd. - Reg S GDR{c} {\/} ..................  IND             37,800        498,015         0.2
    CEMENT
  Grupo Mexico S.A.: ........................................  MEX                 --             --         0.2
    METALS - NON-FERROUS
    "B" .....................................................  --             133,100        432,143          --
    "L" .....................................................  --                 300            956          --
  Nan Ya Plastics Corp. .....................................  TWN            208,000        343,828         0.2
    PLASTICS & RUBBER
  AECI Ltd. .................................................  SAFR            65,400        323,602         0.2
    CHEMICALS
  Turk Sise ve Cam Fabrikalari AS-/- ........................  TRKY         6,248,550        306,485         0.1
    GLASS
  Titan Cement Co., S.A. ....................................  GREC             3,400        291,033         0.1
    BUILDING MATERIALS & COMPONENTS
  Kuala Lumpur Kepong Bhd. ..................................  MAL            123,000        287,554         0.1
    FOREST PRODUCTS
  Makhteshim Chemical Works Ltd.-/- .........................  ISRL            31,439        267,009         0.1
    CHEMICALS
  Pannonplast Rt. ...........................................  HGRY             5,842        247,894         0.1
    MISC. MATERIALS & COMMODITIES
  Torah Portland Cement Co. .................................  EGPT            11,150        236,436         0.1
    CEMENT
  Golden Hope Plantations Bhd. ..............................  MAL            189,000        235,995         0.1
    FOREST PRODUCTS
  Fauji Fertilizer Co., Ltd. ................................  PAK            116,300        229,432         0.1
    CHEMICALS
  Grupo Cementos de Chihuahua, S.A. de C.V. "B" .............  MEX            202,900        216,554         0.1
    CEMENT
  Engro Chemicals Pakistan Ltd. .............................  PAK             90,270        201,238         0.1
    CHEMICALS
  Formosa Plastics Corp. ....................................  TWN            113,000        193,646         0.1
    CHEMICALS
  Agros Holding S.A. "C"-/- .................................  POL              6,953        153,646         0.1
    MISC. MATERIALS & COMMODITIES
  HI Cement Corp. ...........................................  PHIL         1,178,000        141,184         0.1
    CEMENT
  Malakoff Bhd. .............................................  MAL             50,000        132,432         0.1
    FOREST PRODUCTS
  Israel Chemicals Ltd. .....................................  ISRL           101,158        122,029         0.1
    CHEMICALS
  Pohang Iron & Steel Co., Ltd. .............................  KOR              2,130        115,508         0.1
    METALS - STEEL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-8
<PAGE>   975
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Materials/Basic Industry (Continued)
  Maderas y Sinteticos S.A. - ADR{\/} .......................  CHLE             7,000   $     66,938          --
    MISC. MATERIALS & COMMODITIES
                                                                                        ------------
                                                                                          22,762,145
                                                                                        ------------
Multi-Industry/Miscellaneous (9.8%)
  The Saudi Arabian Investment Fund Ltd.-/- {\/} ............  UK             281,000      2,214,280         1.1
    COUNTRY FUNDS
  Barlow Ltd. ...............................................  SAFR           216,924      2,097,326         1.0
    CONGLOMERATE
  Central Asia Regional Growth Fund(::) -/- {\/} ............  IRE            175,000      1,862,000         0.9
    COUNTRY FUNDS
  Haci Omer Sabanci Holding AS ..............................  TRKY        24,915,100      1,820,623         0.9
    CONGLOMERATE
  Rembrandt Group Ltd. ......................................  SAFR           185,300      1,687,046         0.8
    CONGLOMERATE
  NASR (El) City Company For Housing & Construction .........  EGPT            23,005      1,413,024         0.7
    MISCELLANEOUS
  Koc Holding AS ............................................  TRKY         6,419,150      1,362,222         0.7
    CONGLOMERATE
  Grupo Carso, S.A. de C.V. "A1" ............................  MEX            200,900      1,266,595         0.6
    MULTI-INDUSTRY
  Sanluis Corporacion, S.A. de C.V. .........................  MEX            172,177        914,754         0.4
    CONGLOMERATE
  Koor Industries Ltd. - ADR{\/} ............................  ISRL            32,643        828,316         0.4
    CONGLOMERATE
  Dogan Sirketler Grubu Holding AS-/- .......................  TRKY        13,003,000        741,913         0.4
    MULTI-INDUSTRY
  GT Taiwan Fund-/- +X+ {\/} ................................  TWN             49,751        703,483         0.3
    COUNTRY FUNDS
  John Keells Holdings Ltd.-/- ..............................  SLNKA          125,000        661,741         0.3
    MULTI-INDUSTRY
  Anglo American Corporation of South Africa Ltd. ...........  SAFR            10,920        646,231         0.3
    CONGLOMERATE
  Empresas La Moderna, S.A. de C.V. "A"-/- ..................  MEX             80,400        402,949         0.2
    MULTI-INDUSTRY
  Ayala Corp. ...............................................  PHIL           813,300        360,451         0.2
    CONGLOMERATE
  Quinenco S.A. - ADR-/- {\/} ...............................  CHLE            34,700        357,844         0.2
    CONGLOMERATE
  Alfa, S.A. de C.V. "A" ....................................  MEX             63,000        344,380         0.2
    CONGLOMERATE
  Antofagasta Holdings PLC ..................................  UK              46,200        252,246         0.1
    CONGLOMERATE
  ONA (Omnium Nord Africain) S.A. "A" .......................  MOR              1,320        139,891         0.1
    CONGLOMERATE
                                                                                        ------------
                                                                                          20,077,315
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-9
<PAGE>   976
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Consumer Non-Durables (6.8%)
  South African Breweries Ltd. ..............................  SAFR            48,392   $  1,624,400         0.8
    BEVERAGES - ALCOHOLIC
  Hindustan Lever Ltd. ......................................  IND             40,650      1,615,144         0.8
    PERSONAL CARE/COSMETICS
  ITC Ltd. ..................................................  IND             79,900      1,586,827         0.8
    TOBACCO
  Fomento Economico Mexicano, S.A. de C.V. "B" ..............  MEX            206,556      1,531,490         0.7
    BEVERAGES - ALCOHOLIC
  Gruma S.A. "B"-/- .........................................  MEX            423,373        973,708         0.5
    FOOD
  A-Ahram Beverages Co. S.A.E. - 144A GDR{.} {\/} ...........  EGPT            28,114        894,025         0.4
    BEVERAGES - ALCOHOLIC
  Embotelladora Andina S.A. "B" - ADR{\/} ...................  CHLE            41,497        840,314         0.4
    BEVERAGES - NON-ALCOHOLIC
  Eastern Tobacco Co. .......................................  EGPT            31,185        710,312         0.3
    TOBACCO
  C.G. Smith Foods Ltd. .....................................  SAFR            41,000        641,069         0.3
    FOOD
  Compania Cervecerias Unidas S.A. - ADR{\/} ................  CHLE            18,100        500,013         0.2
    BEVERAGES - ALCOHOLIC
  Hellenic Bottling Co. S.A. ................................  GREC            12,620        469,847         0.2
    BEVERAGES - NON-ALCOHOLIC
  Rothmans of Pall Mall Bhd. ................................  MAL             48,800        405,568         0.2
    TOBACCO
  San Miguel Corp. "B" ......................................  PHIL           244,000        402,097         0.2
    BEVERAGES - ALCOHOLIC
  Companhia Cervejaria Brahma Preferred .....................  BRZL           563,721        367,269         0.2
    BEVERAGES - ALCOHOLIC
  SUN Brewing Ltd. - GDR-/- {\/} ............................  RUS             19,500        347,826         0.2
    BEVERAGES - ALCOHOLIC
  Far Eastern Textile Ltd. ..................................  TWN            359,000        326,661         0.2
    TEXTILES & APPAREL
  Pepsi-Gemex S.A. - GDR-/- {\/} ............................  MEX             22,400        303,800         0.1
    BEVERAGES - NON-ALCOHOLIC
  Zaklady Piwowarskie w Zywcu S.A. (Zywiec) .................  POL              1,639        163,224         0.1
    BEVERAGES - ALCOHOLIC
  Carlsberg Brewery Malaysia Bhd. ...........................  MAL             33,900        118,192         0.1
    BEVERAGES - ALCOHOLIC
  Oriental Weavers "C"-/- ...................................  EGPT             5,600        116,855         0.1
    TEXTILES & APPAREL
  Nong Shim Co., Ltd. .......................................  KOR              2,100         91,551          --
    FOOD
  Erciyas Biracilik ve Malt Sanayii AS ......................  TRKY           111,000         18,000          --
    BEVERAGES - ALCOHOLIC
                                                                                        ------------
                                                                                          14,048,192
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-10
<PAGE>   977
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Technology (2.4%)
  Asustek Computer Inc. - Reg. S GDR-/- {c} {\/} ............  TWN            122,448   $  2,525,490         1.2
    COMPUTERS & PERIPHERALS
  Formula Systems Ltd.-/- ...................................  ISRL            16,415        634,454         0.3
    SOFTWARE
  Alcatel Teletas Telekomunikasyon Endustri ve Ticaret AS ...  TRKY         2,885,500        456,365         0.2
    TELECOM TECHNOLOGY
  Tadiran Ltd. ..............................................  ISRL            10,100        393,379         0.2
    TELECOM TECHNOLOGY
  Delta Electronics, Inc. ...................................  TWN             98,000        359,660         0.2
    COMPUTERS & PERIPHERALS
  Clal Electronics Industries Ltd. ..........................  ISRL             2,054        293,333         0.1
    SEMICONDUCTORS
  Samsung Electronics (1/2 of Common Share) - GDR{\/} .......  KOR              9,900        277,200         0.1
    SEMICONDUCTORS
  United Microelectronics Corporation Ltd.-/- ...............  TWN            128,000        240,704         0.1
    SEMICONDUCTORS
                                                                                        ------------
                                                                                           5,180,585
                                                                                        ------------
Consumer Durables (2.1%)
  Bajaj Auto Ltd. ...........................................  IND             79,200      1,188,798         0.6
    AUTOMOBILES
  Imperial Holdings Ltd. ....................................  SAFR            52,840        721,615         0.3
    AUTOMOBILES
  Hon Hai Precision Industry-/- .............................  TWN            101,000        588,171         0.3
    CONSUMER ELECTRONICS
  Qingling Motors Co., Ltd.{*} ..............................  CHNA         1,022,000        442,024         0.2
    AUTOMOBILES
  Tata Engineering and Locomotive Co., Ltd. - GDR{\/} .......  IND             48,000        349,200         0.2
    AUTOMOBILES
  Mahindra & Mahindra Ltd. ..................................  IND             43,300        315,395         0.2
    AUTOMOBILES
  Ford Otomotiv Sanayi AS ...................................  TRKY           324,000        233,514         0.1
    AUTOMOBILES
  Tofas Turk Otomobil Fabrikasi AS ..........................  TRKY         4,219,000        219,608         0.1
    AUTOMOBILES
  Arcelik AS ................................................  TRKY         1,601,300        179,525         0.1
    APPLIANCES & HOUSEHOLD DURABLES
                                                                                        ------------
                                                                                           4,237,850
                                                                                        ------------
Health Care (1.7%)
  Ranbaxy Laboratories Ltd. .................................  IND             79,850      1,334,857         0.6
    MEDICAL TECHNOLOGY & SUPPLIES
  Teva Pharmaceutical Industries Ltd. .......................  ISRL            24,700      1,047,539         0.5
    PHARMACEUTICALS
  Richter Gedeon Rt. - Reg S GDR{c} {\/} ....................  HGRY             6,002        640,714         0.3
    PHARMACEUTICALS
  Egypt International Pharmaceutical Industries Co.
   (EIPICO) .................................................  EGPT             7,000        499,927         0.2
    PHARMACEUTICALS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-11
<PAGE>   978
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Health Care (Continued)
  EGIS Rt. ..................................................  HGRY             4,750   $    247,724         0.1
    PHARMACEUTICALS
  Medison Co., Ltd. .........................................  KOR              8,200         67,174          --
    MEDICAL TECHNOLOGY & SUPPLIES
                                                                                        ------------
                                                                                           3,837,935
                                                                                        ------------
Capital Goods (1.7%)
  NICE-Systems Ltd.-/- ......................................  ISRL            13,650        568,935         0.3
    TELECOM EQUIPMENT
  Taiwan Semiconductor Manufacturing Co.-/- .................  TWN            121,000        522,975         0.3
    MACHINERY & ENGINEERING
  Corporacion GEO, S.A. de C.V. "B"-/- ......................  MEX             51,700        357,688         0.2
    CONSTRUCTION
  ECI Telecommunications Ltd.{\/} ...........................  ISRL            10,600        323,300         0.2
    TELECOM EQUIPMENT
  Arabian International Construction-/- .....................  EGPT             6,298        296,159         0.1
    CONSTRUCTION
  Netas Telekomunik-/- ......................................  TRKY           670,200        249,564         0.1
    TELECOM EQUIPMENT
  Elektrim Spolka Akcyjna S.A. ..............................  POL             13,472        192,514         0.1
    ELECTRICAL PLANT/EQUIPMENT
  Samsung Display Devices Co. ...............................  KOR              3,090        153,921         0.1
    ELECTRICAL PLANT/EQUIPMENT
  Daewoo Heavy Industries ...................................  KOR             30,600        151,510         0.1
    INDUSTRIAL COMPONENTS
  Samsung Electro-Mechanics Co. .............................  KOR              6,600        138,427         0.1
    ELECTRICAL PLANT/EQUIPMENT
  Sindo Ricoh Co. ...........................................  KOR              3,300        116,180         0.1
    OFFICE EQUIPMENT
  Delta Electronics (Thailand) Public Co., Ltd. - Foreign ...  THAI             6,200         63,927          --
    ELECTRICAL PLANT/EQUIPMENT
  LG Electronics ............................................  KOR              4,148         49,403          --
    ELECTRICAL PLANT/EQUIPMENT
  Madeco S.A. - ADR{\/} .....................................  CHLE             2,000         32,000          --
    INDUSTRIAL COMPONENTS
                                                                                        ------------
                                                                                           3,216,503
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $168,597,232) ................                            170,117,137        81.6
                                                                                        ------------       -----
<CAPTION>
 
                                                                           PRINCIPAL       VALUE         % OF NET
FIXED INCOME INVESTMENTS                                       CURRENCY     AMOUNT        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Government & Government Agency Obligations (13.4%)
  Argentina (1.1%)
    Republic of Argentina:
      Par Bond Series L, 5.75% (6% at 4/99) due 3/31/23++ ...  USD          1,270,000        967,581         0.5
      Global Bond, 9.75% due 9/19/27 ........................  USD            419,000        404,021         0.2
      Global Bond, 11.375% due 1/30/17 ......................  USD            358,000        396,038         0.2
      Discount Bond, 6.625% due 3/31/23+ ....................  USD            415,000        357,678         0.2
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-12
<PAGE>   979
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                           PRINCIPAL       VALUE         % OF NET
FIXED INCOME INVESTMENTS                                       CURRENCY     AMOUNT        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Government & Government Agency Obligations (Continued)
  Brazil (2.1%)
    Republic of Brazil:
      C Bond, 5% (8% at 4/00) due 4/15/14 (Effective rate at
       year end is 8%, including "payment-in-kind" bonds.)[.]
       ++ ...................................................  USD          5,175,697   $  4,289,359         2.1
      Debt Conversion Bond Series L, 6.6875% due 4/15/12+ ...  USD            124,000         98,580          --
  Bulgaria (0.9%)
    Republic of Bulgaria:
      Front Loaded Interest Reduction Bond Series A, 2.25%
       (2.5% at 7/98) due 7/28/12++ .........................  USD          1,500,000      1,014,375         0.5
      Interest Arrears Bond, 6.625% due 7/28/11+ ............  USD          1,000,000        790,625         0.4
  Croatia (0.4%)
    Croatian Government Series A, 6.625% due 7/31/10+ .......  USD          1,000,000        898,125         0.4
  Ecuador (0.4%)
    Republic of Ecuador:
      Past Due Interest Bond, 6.625% due 2/27/15[.]+ ........  USD            578,588        371,743         0.2
      Past Due Interest Bond, 6.625% due 2/27/15 -
       Registered[.]+ .......................................  USD            535,194        343,862         0.2
  Jordan (0.9%)
    Kingdom of Jordan, 5% (5.5% at 12/98) due 12/23/23 ......  USD          2,500,000      1,825,000         0.9
  Korea (0.3%)
    Republic of Korea, 8.875% due 4/15/08 ...................  USD            670,000        660,654         0.3
  Pakistan (0.1%)
    Republic of Pakistan, 6% due 2/26/02 - Reg S{c} .........  USD            285,000        268,613         0.1
  Panama (0.4%)
    Republic of Panama:
      Interest Reduction Bond, 3.75% (4% at 7/98) due
       7/17/14++ ............................................  USD          1,173,000        921,538         0.4
      8.875% due 9/30/27 ....................................  USD             67,000         65,627          --
  Peru (0.3%)
    Republic of Peru, Past Due Interest Bond, 4% (4.5% at
     7/98) due 3/7/17++ .....................................  USD            946,000        645,054         0.3
  Philippines (0.3%)
    Republic of Philippines, 8.875% due 4/15/08 - 144A{.} ...  USD            320,000        316,512         0.2
    Bangko Sentral Pilipinas, 8.6% due 6/15/27 ..............  USD            226,000        205,991         0.1
  Russia (5.5%)
    Bank of Foreign Economic Affairs (Vnesheconombank)
     Interest Notes, 6.72% due 12/15/15+ ....................  USD         10,601,311      7,646,196         3.7
    Bank of Foreign Economic Affairs (Vnesheconombank)
     Principal Loans, 3.36% due 12/15/20+ ...................  USD          5,774,860      3,667,036         1.8
  Venezuela (0.7%)
    Republic of Venezuela, 9.25% due 9/15/27{j} .............  USD          1,734,000      1,535,891         0.7
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $26,379,949) ...............................................                             27,690,099
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-13
<PAGE>   980
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                           PRINCIPAL       VALUE         % OF NET
FIXED INCOME INVESTMENTS                                       CURRENCY     AMOUNT        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Corporate Bonds (3.4%)
  Argentina (0.7%)
    Telefonica de Argentina, 9.125% due 5/7/08 - 144A{.} ....  USD          1,504,000   $  1,511,009         0.7
  Brazil (1.0%)
    RBS Participacoes S.A., 11% due 4/1/07 - 144A{.} ........  USD            942,000        946,710         0.5
    Banco Hipotecario Espana, 10% due 4/17/03 - 144A{.} .....  USD            710,000        717,988         0.3
    Comtel Brasileira Ltd. "A", 10.75% due 9/26/04 -
     144A{.} ................................................  USD            165,000        169,125         0.1
    Banco Do Brasil (Cayman), 9.375% due 6/15/07 ............  USD            122,000        120,170         0.1
  China (0.4%)
    Greater Beijing First, 9.5% due 6/15/07 - 144A{.} .......  USD            960,000        764,976         0.4
  Hong Kong (0.3%)
    Road King Infrastructure, 9.5% due 7/15/07 - 144A{.} ....  USD            700,000        571,760         0.3
  Korea (0.2%)
    L.G.-Caltex Oil Corp., 12.75% due 3/31/01 - 144A{.} .....  USD            511,000        519,943         0.2
    Pohang Iron & Steel, 2% due 10/9/00 .....................  JPY          5,500,000         36,996          --
    Korea Development Bank, 4.35% due 5/25/99 ...............  JPY          1,500,000         10,770          --
  Malaysia (0.1%)
    Tenaga Nasional Bhd., 7.875% due 6/15/04 - 144A{.} ......  USD            226,000        213,379         0.1
    Petroliam Nasional Bhd.:
      7.125% due 8/15/05 - 144A{.} ..........................  USD             94,000         83,308          --
      7.625% due 10/15/26 - 144A{.} .........................  USD             88,000         76,868          --
  Mexico (0.2%)
    Petroleos Mexicanos:
      9.25% due 3/30/18 - 144A{.} ...........................  USD            440,000        430,100         0.2
      9.5% due 9/15/27 - 144A{.} ............................  USD              4,000          4,010          --
  Russia (0.5%)
    Lukinter Finance BV Convertible, 3.5% due 5/6/02 -
     144A{.} ................................................  USD            851,000      1,025,455         0.5
    Mosenergo Finance BV, 8.375% due 10/9/02 - 144A{.} ......  USD              5,000          4,425          --
                                                                                        ------------
Total Corporate Bonds (cost $7,326,458) .....................                              7,206,992
                                                                                        ------------
Structured Notes (0.2%)
  Korea (0.2%)
    Fixed Rate Trust Certificate 13.55% due 2/15/02[::]
     (Issued by a newly created Delaware Business Trust,
     collateralized by triple A paper. This trust certificate
     has a credit risk component linked to the value of a
     referenced security: Korean Development Bank 1.875%
     2002.) (cost $470,000) .................................  USD            470,000        467,650         0.2
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $34,176,407) ...........                             35,364,741        17.0
                                                                                        ------------       -----
 
<CAPTION>
 
                                                                            NO. OF         VALUE         % OF NET
RIGHTS                                                         COUNTRY      RIGHTS        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Delta Electronics (Thailand) Public Co., Ltd. (UNAV NP
   RTS), due 5/15/98 - Foreign ..............................  THAI             3,100         31,161          --
    ELECTRICAL PLANT/EQUIPMENT
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 

                                     FS-14
<PAGE>   981
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                            NO. OF         VALUE         % OF NET
RIGHTS                                                         COUNTRY      RIGHTS        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Samsung Electronics Rights, due 5/27/98 - GDR 144A{.}
   {\/} .....................................................  KOR                788          7,835          --
    SEMICONDUCTORS
  Samsung Development Rights, due 5/13/98 ...................  KOR                444   $      7,717          --
    ELECTRICAL PLANT/EQUIPMENT
                                                                                        ------------       -----
 
TOTAL RIGHTS (cost $27,062) .................................                                 46,713          --
                                                                                        ------------       -----
 
<CAPTION>
 
                                                                            NO. OF         VALUE         % OF NET
WARRANTS                                                       COUNTRY     WARRANTS       (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Belle Corp. Warrants, expire 2002 (cost $0) ...............  PHIL           659,400          1,893          --
                                                                                        ------------       -----
    OIL
 
TOTAL INVESTMENTS (cost $202,800,701)  * ....................                            205,530,484        98.6
Other Assets and Liabilities ................................                              2,882,202         1.4
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $208,412,686       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        {*}  Security is denominated in Hong Kong Dollars.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
       {.:}  Each Centenary Linked Unit consists of 1 registered deferred share
             of De Beers Consolidated Mine + 1 Centenary Depositary Receipt.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (See Note 1 of Notes to Financial Statements).
        +X+  The GT Global Developing Markets Fund (the "Fund") has invested in
             the GT Global Taiwan Fund, a fund managed by LGT Asset Management
             Ltd. who is an affiliate of the Fund's manager, Chancellor LGT
             Asset Management, Inc.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
         ++  The coupon rate shown on step-up coupon bond represents the rate at
             period end.
        [.]  Bond pays stated or additional interest with "payment-in-kind"
             (PIK) bonds.
       [::]  Certain events may cause the contract to terminate prior to date
             shown.
        {j}  All or part of the Fund's holdings in this security is segregated
             as collateral for extended settlement of derivative instruments.
             (See Note 1 of Notes to Financial Statements.)
          *  For Federal income tax purposes, cost is $204,117,118 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  17,708,574
                 Unrealized depreciation:           (16,295,208)
                                                  -------------
                 Net unrealized appreciation:     $   1,413,366
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviations:
    ADR--American Depositary Receipt
    GDR--Global Depositary Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-15
<PAGE>   982
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {d}
                                        -------------------------------------------
                                                 FIXED INCOME,
                                                   RIGHTS &      SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS       & OTHER     TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Argentina (ARG/ARS) ..................    3.1         1.8                       4.9
Brazil (BRZL/BRL) ....................   11.7         3.1                      14.8
Bulgaria (BUL/LEV) ...................                0.9                       0.9
Chile (CHLE/CLP) .....................    4.1                                   4.1
China (CHNA/RMB) .....................    0.2         0.4                       0.6
Croatia (CRT/HRK) ....................                0.4                       0.4
Ecuador (ECDR/ECS) ...................                0.4                       0.4
Egypt (EGPT/EGP) .....................    5.8                                   5.8
Greece (GREC/GRD) ....................    2.7                                   2.7
Hong Kong (HK/HKD) ...................    0.2         0.3                       0.5
Hungary (HGRY/HUF) ...................    2.0                                   2.0
India (IND/INR) ......................    6.2                                   6.2
Ireland (IRE/IEP) ....................    0.9                                   0.9
Israel (ISRL/ILS) ....................    3.1                                   3.1
Jordan (JDN/JOD) .....................                0.9                       0.9
Kazakhstan (KAZ/KTS) .................    0.3                                   0.3
Korea (KOR/KRW) ......................    0.7         0.7                       1.4
Malaysia (MAL/MYR) ...................    1.8         0.1                       1.9
Mexico (MEX/MXN) .....................    9.3         0.2                       9.5
Morocco (MOR/MAD) ....................    0.1                                   0.1
Pakistan (PAK/PKR) ...................    0.7         0.1                       0.8
Panama (PAN/PND) .....................                0.4                       0.4
Peru (PERU/PES) ......................    1.9         0.3                       2.2
Philippines (PHIL/PHP) ...............    1.9         0.3                       2.2
Poland (POL/PLZ) .....................    0.5                                   0.5
Russia (RUS/SUR) .....................    3.1         6.0                       9.1
South Africa (SAFR/ZAR) ..............    9.6                                   9.6
Sri Lanka (SLNKA/LKR) ................    0.5                                   0.5
Taiwan (TWN/TWD) .....................    4.1                                   4.1
Thailand (THAI/THB) ..................    0.3                                   0.3
Turkey (TRKY/TRL) ....................    5.6                                   5.6
United Kingdom (UK/GBP) ..............    1.2                                   1.2
United States (US/USD) ...............                               1.4        1.4
Venezuela (VENZ/VEB) .................                0.7                       0.7
                                        ------      -----            ---      -----
Total  ...............................   81.6        17.0            1.4      100.0
                                        ------      -----            ---      -----
                                        ------      -----            ---      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $208,412,686.
 
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                 APRIL 30, 1998
 
<TABLE>
<CAPTION>
                                           MARKET VALUE     CONTRACT    DELIVERY    UNREALIZED
CONTRACTS TO SELL:                        (U.S. DOLLARS)      PRICE       DATE     APPRECIATION
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Japanese Yen............................        37,065       122.90001   7/31/98   $     2,308
Japanese Yen............................        10,953       121.89997   7/31/98           778
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $51,104)......................        48,018                                   3,086
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS A
 PERCENTAGE OF NET ASSETS IS 0.02%.
  Total Open Forward Foreign Currency
   Contracts............................                                           $     3,086
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 of Notes to Financial Statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-16
<PAGE>   983
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                     <C>         <C>
Assets:
  Investments in securities, at value (cost $202,800,701) (Note 1)................  $205,530,484
  U.S. currency.......................................................  $  444,445
  Foreign currencies (cost $2,551,489)................................   2,543,606     2,988,051
                                                                        ----------
  Receivable for securities sold..................................................     4,460,160
  Interest receivable.............................................................       772,897
  Dividends receivable............................................................       682,025
  Receivable from Chancellor LGT Asset Management, Inc. (Note 2)..................       540,059
  Unamortized organizational costs (Note 1).......................................        50,225
  Receivable for Fund shares sold.................................................         4,417
  Receivable for open forward foreign currency contracts (Note 1).................         3,086
                                                                                    ------------
    Total assets..................................................................   215,031,404
                                                                                    ------------
Liabilities:
  Payable for securities purchased................................................     5,089,190
  Payable for Fund shares repurchased.............................................       760,558
  Payable for investment management and administration fees (Note 2)..............       422,779
  Payable for professional fees...................................................       105,562
  Payable for transfer agent fees (Note 2)........................................        71,387
  Payable for service and distribution expenses (Note 2)..........................        50,898
  Payable for custodian fees......................................................        17,067
  Payable for printing and postage expenses.......................................        16,019
  Payable for Directors' fees and expenses (Note 2)...............................        13,860
  Payable for registration and filing fees........................................        10,941
  Payable for fund accounting fees (Note 2).......................................         4,224
  Other accrued expenses..........................................................        56,233
                                                                                    ------------
    Total liabilities.............................................................     6,618,718
                                                                                    ------------
Net assets........................................................................  $208,412,686
                                                                                    ------------
                                                                                    ------------
Class A:
Net asset value and redemption price per share ($208,168,793 DIVIDED BY 16,756,318
 shares outstanding)..............................................................  $      12.42
                                                                                    ------------
                                                                                    ------------
Maximum offering price per share (100/95.25 of $12.42) *..........................  $      13.04
                                                                                    ------------
                                                                                    ------------
Class B:+
Net asset value and offering price per share ($207,318 DIVIDED BY 16,731 shares
 outstanding).....................................................................  $      12.39
                                                                                    ------------
                                                                                    ------------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($36,575
 DIVIDED BY 2,941 shares outstanding).............................................  $      12.44
                                                                                    ------------
                                                                                    ------------
Net assets consist of:
  Paid in capital (Note 4)........................................................  $303,197,267
  Undistributed net investment income.............................................     1,755,638
  Accumulated net realized loss on investments and foreign currency
   transactions...................................................................   (99,259,192)
  Net unrealized depreciation on translation of assets and liabilities in foreign
   currencies.....................................................................       (10,810)
  Net unrealized appreciation of investments......................................     2,729,783
                                                                                    ------------
Total -- representing net assets applicable to capital shares outstanding.........  $208,412,686
                                                                                    ------------
                                                                                    ------------
<FN>
- --------------
   * On sales of $50,000 or more, the offering price is reduced.
   + Redemption price per share is equal to the net asset value per share less
     any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-17
<PAGE>   984
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                            STATEMENT OF OPERATIONS
 
                        Six months ended April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                              <C>          <C>
Investment income: (Note 1)
  Interest income...........................................................................  $ 4,633,495
  Dividend income (net of foreign withholding tax of $104,449)..............................    2,423,523
  Securities lending income.................................................................      155,608
                                                                                              -----------
    Total investment income.................................................................    7,212,626
                                                                                              -----------
Expenses:
  Investment management and administration fees (Note 2)....................................    1,130,939
  Transfer agent fees (Note 2)..............................................................      392,250
  Professional fees.........................................................................      354,647
  Service and distribution expenses: (Note 2)
    Class A....................................................................  $   298,300
    Class B....................................................................          709      299,009
                                                                                 -----------
  Interest expense (Note 1).................................................................      260,016
  Printing and postage expenses.............................................................      147,676
  Custodian fees............................................................................       83,146
  Registration and filing fees..............................................................       78,500
  Fund accounting fees (Note 2).............................................................       37,617
  Amortization of organization costs (Note 1)...............................................       35,087
  Directors' fees and expenses (Note 2).....................................................       15,204
  Other expenses............................................................................        4,477
                                                                                              -----------
    Total expenses before reductions........................................................    2,838,568
                                                                                              -----------
      Expenses reimbursed by Chancellor LGT Asset Management, Inc. (Note 2).................     (540,059)
      Expense reductions (Note 5)...........................................................      (40,839)
                                                                                              -----------
    Total net expenses......................................................................    2,257,670
                                                                                              -----------
Net investment income.......................................................................    4,954,956
                                                                                              -----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
  (Note 1)
  Net realized loss on investments.............................................  (41,994,248)
  Net realized loss on foreign currency transactions...........................   (1,662,852)
                                                                                 -----------
    Net realized loss during the period.....................................................  (43,657,100)
  Net change in unrealized depreciation on translation of assets and
   liabilities in foreign currencies...........................................      196,235
  Net change in unrealized appreciation of investments.........................   43,290,356
                                                                                 -----------
    Net unrealized appreciation during the period...........................................   43,486,591
                                                                                              -----------
Net realized and unrealized loss on investments and foreign currencies......................     (170,509)
                                                                                              -----------
Net increase in net assets resulting from operations........................................  $ 4,784,447
                                                                                              -----------
                                                                                              -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-18
<PAGE>   985
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       STATEMENT OF CHANGES IN NET ASSETS
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
<S>                                                             <C>                <C>                <C>
                                                                SIX MONTHS ENDED   TEN MONTHS ENDED      YEAR ENDED
                                                                 APRIL 30, 1998    OCTOBER 31, 1997   DECEMBER 31, 1996
                                                                ----------------   ----------------   -----------------
Decrease in net assets
Operations:
  Net investment income.......................................   $   4,954,956      $   9,089,483       $ 19,406,553
  Net realized gain (loss) on investments and foreign currency
   transactions...............................................     (43,657,100)        45,653,300            945,154
  Net change in unrealized appreciation (depreciation) on
   translation of assets and liabilities in foreign
   currencies.................................................         196,235           (297,303)            91,835
  Net change in unrealized appreciation (depreciation) of
   investments................................................      43,290,356       (101,078,671)        78,628,364
                                                                ----------------   ----------------   -----------------
    Net increase (decrease) in net assets resulting from
     operations...............................................       4,784,447        (46,633,191)        99,071,906
                                                                ----------------   ----------------   -----------------
Class A:
Distributions to shareholders: (Note 1)
  From net investment income..................................     (11,843,408)                --        (17,407,047)
Class B:
Distributions to shareholders: (Note 1)
  From net investment income..................................          (1,499)                --                 --
Advisor Class:
Distributions to shareholders: (Note 1)
  From net investment income..................................             (46)                --                 --
                                                                ----------------   ----------------   -----------------
    Total distributions.......................................     (11,844,953)                --        (17,407,047)
                                                                ----------------   ----------------   -----------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and reinvested............      11,481,861                 --                 --
  Decrease from capital shares repurchased....................    (253,387,857)                --                 --
                                                                ----------------   ----------------   -----------------
    Net increase (decrease) from capital share transactions...    (241,905,996)                --                 --
                                                                ----------------   ----------------   -----------------
Total decrease in net assets..................................    (248,966,502)       (46,633,191)        81,664,859
Net assets:
  Beginning of period.........................................     457,379,188        504,012,379        422,347,520
                                                                ----------------   ----------------   -----------------
  End of period *.............................................   $ 208,412,686      $ 457,379,188       $504,012,379
                                                                ----------------   ----------------   -----------------
                                                                ----------------   ----------------   -----------------
 * Includes undistributed net investment income of............   $   1,755,638      $   8,645,635       $    363,782
                                                                ----------------   ----------------   -----------------
                                                                ----------------   ----------------   -----------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-19
<PAGE>   986
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                              FINANCIAL HIGHLIGHTS
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                           CLASS A+
                                          ---------------------------------------------------------------------------
                                                                                                     JANUARY 11, 1994
                                                                                                      (COMMENCEMENT
                                          SIX MONTHS     TEN MONTHS            YEAR ENDED             OF OPERATIONS)
                                            ENDED           ENDED             DECEMBER 31,                  TO
                                          APRIL 30,      OCTOBER 31,     -----------------------       DECEMBER 31,
                                           1998 (D)       1997 (E)       1996 (E)      1995 (E)          1994 (E)
                                          ----------     -----------     ---------     ---------     ----------------
<S>                                       <C>            <C>             <C>           <C>           <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $  12.56        $  13.84       $  11.60      $  12.44         $  15.00
                                          ----------     -----------     ---------     ---------     ----------------
Income from investment operations:
  Net investment income.................      0.23*{/\}       0.25           0.53          0.72             0.35
  Net realized and unrealized gain
   (loss) on investments................        --           (1.53)          2.19         (0.84)           (2.46)
                                          ----------     -----------     ---------     ---------     ----------------
    Net increase (decrease) from
     investment operations..............      0.23           (1.28)          2.72         (0.12)           (2.11)
                                          ----------     -----------     ---------     ---------     ----------------
  Redemption fees retained (Note 4).....      0.23              --             --            --               --
                                          ----------     -----------     ---------     ---------     ----------------
  Distributions to shareholders:
    From net investment income..........     (0.60)             --          (0.48)        (0.72)           (0.35)
    From net realized gain on
     investments........................        --              --             --            --            (0.10)
                                          ----------     -----------     ---------     ---------     ----------------
      Total distributions...............     (0.60)             --          (0.48)        (0.72)           (0.45)
                                          ----------     -----------     ---------     ---------     ----------------
Net asset value, end of period..........  $  12.42        $  12.56       $  13.84      $  11.60         $  12.44
                                          ----------     -----------     ---------     ---------     ----------------
                                          ----------     -----------     ---------     ---------     ----------------
    Market value, end of period.........  $    N/A        $  11.81       $  11.63      $   9.75         $   9.75
                                          ----------     -----------     ---------     ---------     ----------------
                                          ----------     -----------     ---------     ---------     ----------------
    Total investment return (based on
     market value)......................       N/A            1.62%(b)      24.18%         6.60%          (32.16)% (b)
    Total investment return (based on
     net asset value)...................      3.68%(b)(c)     (9.25)%(b)    23.59%        (0.95)%         (14.07)% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $208,169        $457,379       $504,012      $422,348         $452,872
Ratio of net investment income to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      3.06%(a)        2.03%(a)       4.07%         6.33%            2.75% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      2.56%(a)        1.95%(a)       4.04%         6.30%            2.75% (a)
Ratio of operating expenses to average
 net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      1.72%(a)        1.75%(a)       1.82%         1.77%            2.01% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      2.22%(a)        1.83%(a)       1.85%         1.80%            2.01% (a)
Ratio of interest expense to average net
 assets (Note 1)+++.....................      0.22%(a)         N/A            N/A           N/A              N/A
Portfolio turnover rate.................        99%(a)         184%(a)        138%           75%              56%
Average commission rate per share paid
 on portfolio transactions..............  $ 0.0017        $ 0.0023       $ 0.0022           N/A              N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon the average
     shares outstanding during the period.
 (e) These financial highlights provide per share information of G.T.
     Global Developing Markets Fund, Inc. ("Predecessor Fund") (See Note 1
     to Notes to Financial Statements) for the periods up to and including
     October 31, 1997. The fees and expenses of the Fund differ from those
     of the Predecessor Fund.
{/\} Net investment income per share reflects an interest payment received
     from the conversion of Vnesheconombank loan agreements. Without such a
     payment net investment would have been $0.09, $0.07 and $0.13 per
     share for Class A, B, and Advisor, respectively.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.03 for Class
     A, B, and Advisor.
  +  All capital shares issued and outstanding October 31, 1997 were
     reclassified as Class A shares.
 ++  Commencing November 1, 1997, the Fund began offering Class B and
     Advisor Class shares.
+++  Portfolio turnover rate, average commission rate, and ratio of
     interest expense to average net assets are calculated on the basis of
     the Fund as whole without distinguishing between the classes of shares
     issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-20
<PAGE>   987
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                              FINANCIAL HIGHLIGHTS
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                              CLASS B++          ADVISOR CLASS++
                                          -----------------     -----------------
                                             SIX MONTHS            SIX MONTHS
                                                ENDED                 ENDED
                                          APRIL 30, 1998(D)     APRIL 30, 1998(D)
                                          -----------------     -----------------
<S>                                       <C>                   <C>
Per Share Operating Performance:
Net asset value, beginning of period....      $ 12.56               $ 12.56
                                          -----------------     -----------------
Income from investment operations:
  Net investment income.................         0.21*{/\}             0.27*{/\}
  Net realized and unrealized gain
   (loss) on investments................        (0.01)                (0.02)
                                          -----------------     -----------------
    Net increase (decrease) from
     investment operations..............         0.20                  0.25
                                          -----------------     -----------------
  Redemption fees retained (Note 4).....         0.23                  0.23
                                          -----------------     -----------------
  Distributions to shareholders:
    From net investment income..........        (0.60)                (0.60)
    From net realized gain on
     investments........................           --                    --
                                          -----------------     -----------------
      Total distributions...............        (0.60)                (0.60)
                                          -----------------     -----------------
Net asset value, end of period..........      $ 12.39               $ 12.44
                                          -----------------     -----------------
                                          -----------------     -----------------
 
    Total investment return (based on
     net asset value)...................         3.36% (b)(c)          3.88% (b)(c)
Ratios and supplemental data:
Net assets, end of period (in 000's)....      $   207               $    37
Ratio of net investment income to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         2.32% (a)             3.32% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         1.82% (a)             2.82% (a)
Ratio of operating expenses to average
 net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         2.46% (a)             1.46% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.96% (a)             1.96% (a)
Ratio of interest expense to average net
 assets (Note 1)+++.....................         0.22% (a)             0.22% (a)
Portfolio turnover rate.................           99% (a)               99% (a)
Average commission rate per share paid
 on portfolio transactions..............      $0.0017               $0.0017
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon the average
     shares outstanding during the period.
{/\} Net investment income per share reflects an interest payment received
     from the conversion of Vnesheconombank loan agreements. Without such a
     payment net investment would have been $0.09, $0.07 and $0.13 per
     share for Class A, B, and Advisor, respectively.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.03 for Class
     A, B, and Advisor.
  +  All capital shares issued and outstanding October 31, 1997 were
     reclassified as Class A shares.
 ++  Commencing November 1, 1997, the Fund began offering Class B and
     Advisor Class shares.
+++  Portfolio turnover rate, average commission rate, and ratio of
     interest expense to average net assets are calculated on the basis of
     the Fund as whole without distinguishing between the classes of shares
     issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-21
<PAGE>   988
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
The following Notes to Financial Statements are for the period ending April 30,
1998, and unless otherwise indicated reflect facts as of that date. Please see
"Note 6 -- Subsequent Events" for a discussion of certain changes which took
place after April 30, 1998.
 
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 6)
 
GT Global Developing Markets Fund ("Fund") is a separate series of G.T.
Investment Funds, Inc. ("Company"). Effective June 1, 1998, the Company was
renamed AIM Investment Funds, Inc. and the Fund was renamed AIM Developing
Markets Fund. The Company is organized as a Maryland corporation and is
registered under the Investment Company Act of 1940, as amended ("1940 Act"), as
an open-end management investment company. The Company has thirteen series of
shares in operation, each series corresponding to a distinct portfolio of
investments.
 
On October 31, 1997, at the close of business, the Fund acquired the assets and
assumed the liabilities of G.T. Global Developing Markets Fund, Inc., a Maryland
corporation registered under the 1940 Act as a non-diversified closed-end
management investment company ("Predecessor Fund"), in exchange for Class A
shares of the Fund in a tax-free reorganization of the Predecessor Fund.
Shareholders of the Predecessor Fund approved the reorganization on October 20,
1997. Prior to October 28, 1997 the Closed-End Fund's shares traded on the New
York Stock Exchange.
 
Commencing November 1, 1997, the Fund began to offer Class A, Class B, and
Advisor Class shares, each of which has equal rights as to assets and voting
privileges except that Class A and Class B each has exclusive voting rights with
respect to its distribution plan. Investment income, realized and unrealized
capital gains and losses, and the common expenses of the Fund are allocated on a
pro rata basis to each class based on the relative net assets of each class to
the total net assets of the Fund. Each class of shares differs in its respective
service and distribution expenses, and may differ in its transfer agent,
registration, and certain other class-specific fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund in the preparation of the financial
statements.
 
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. (the "Manager") to be the primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
asked prices for securities or, if such prices are not available, at prices for
securities of comparative maturity, quality and type; however, when the Manager
deems it appropriate, prices obtained for the day of valuation from a bond
pricing service will be used. Short-term investments with a maturity of 60 days
or less are valued at amortized cost, adjusted for foreign exchange translation
and market fluctuation, if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Fund's Board of Directors.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Fund's Board of Directors.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, other assets and liabilities
are recorded in the books and records of the Fund after translation to U.S.
dollars based on the exchange rates on that day. The cost of each security is
determined using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when earned or incurred.
 
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
existing from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
 
Reported net realized foreign exchange gains and losses arise from sales and
maturities of short-term investments, forward foreign currency contracts, sales
of foreign currencies, currency gains or
 
                                     FS-22
<PAGE>   989
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
losses realized between the trade and settlement dates on securities
transactions, and the differences between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Fund's books and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at year end, resulting from
changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which the value, including accrued
interest, is at least equal to the amount to be repaid to the Fund under each
agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. The Fund could be exposed to risk if a counterparty is
unable to meet the terms of a contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities or to hedge against adverse
fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on an exchange is valued at its last bid price,
or, in the case of an over-the-counter option, is valued at the average of the
last bid prices obtained from brokers, unless a quotation from only one broker
is available, in which case only that broker's price will be used. If an option
expires on its stipulated expiration date or if the Fund enters into a closing
purchase transaction, a gain or loss is realized without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option is extinguished. If a written call option is exercised, a gain or
loss is realized from the sale of the underlying security and the proceeds of
the sale are increased by the premium originally received. If a written put
option is exercised, the cost of the underlying security purchased would be
decreased by the premium originally received. The Fund can write options only on
a covered basis, which, for a call, requires that the Fund hold the underlying
security, and, for a put, requires the Fund to set aside cash, U.S. government
securities or other liquid securities in an amount not less than the exercise
price or otherwise provide adequate cover at all times while the put option is
outstanding. The Fund may use options to manage its exposure to the stock and
bond markets and to fluctuations in currency values or interest rates.
 
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock and bond
markets and to fluctuations in currency values or interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to collection of income on securities, income is
recorded net of all
 
                                     FS-23
<PAGE>   990
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
withholding tax with any rebate recorded when received. The Fund may trade
securities on other than normal settlement terms. This may increase the market
risk if the other party to the transaction fails to deliver and causes the Fund
to subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At April 30, 1998, stocks with an aggregate value of approximately $13,962,416
were on loan to brokers. The loans were secured by cash collateral of
$14,552,194 received by the Fund. For international securities, cash collateral
is received by the Fund against loaned securities in an amount at least equal to
105% of the market value of the loaned securities at the inception of each loan.
This collateral must be maintained at not less than 103% of the market value of
the loaned securities during the period of the loan. For domestic securities,
cash collateral is received by the Fund against loaned securities in an amount
at least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of each loan. The
cash collateral is invested in a securities lending trust which consists of a
portfolio of high quality short duration securities whose average effective
duration is restricted to 120 days or less. For the six months ended April 30,
1998, the Fund received securities lending income of $155,608.
 
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, and unrealized appreciation of securities held, or excise tax on income
and capital gains. The Fund currently has a capital loss carryforward of
$54,472,976 which expires in 2003.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 and timing differences.
 
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the Fund in connection with its organization, its
registration with the Securities and Exchange Commission and with various states
aggregated $353,775. These expenses are being amortized on a straightline basis
over a five-year period.
 
(L) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
 
(M) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
 
(N) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
 
(O) SECURITIES PURCHASED ON A WHEN-ISSUED OR FORWARD COMMITMENT BASIS
The Fund may trade securities on a when-issued or forward commitment basis, with
payment and delivery scheduled for a future date. These transactions are subject
to market fluctuations and are subject to the risk that the value at delivery
may be more or less than the trade date purchase price. Although the Fund will
generally purchase these securities with the intention of acquiring such
securities, they may sell such securities before the settlement date. These
securities are identified on the accompanying Portfolio of Investments. The Fund
has purchased and sold when-issued securities during the period and has set
aside liquid securities as collateral for these commitments.
 
(P) LINE OF CREDIT
The Fund, along with certain other funds advised and/or administered by the
Manager ("GT Funds"), has a line of credit with each of BankBoston and State
Street Bank & Trust Company. The arrangements with the banks allow the Fund and
the GT Funds to borrow an aggregate maximum amount of $250,000,000. The Fund is
limited to borrowing up to 33 1/3% of the value of each Fund's total assets. On
April 30, 1998, the Fund had no loans outstanding.
 
For the six months ended April 30, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $7,671,408, with a weighted average interest rate of 6.29%.
Interest expense for the Fund for the six months ended April 30, 1998 was
$210,460. Other interest expense charges amounted to $49,556.
 
2. RELATED PARTIES (SEE ALSO NOTE 6)
For the period ended April 30, 1998, Chancellor LGT Asset Management, Inc. was
the Fund's investment manager and administrator. The Fund pays the Manager
investment management and administration fees at the annualized rate of 0.975%
on the first $500 million of average daily net assets of the Fund; 0.95% on the
 
                                     FS-24

<PAGE>   991
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
next $500 million; 0.925% on the next $500 million and 0.90% on amounts
thereafter. These fees are computed daily and paid monthly.
 
For the period ended April 30, 1998, GT Global, Inc. ("GT Global"), an affiliate
of the Manager, serves as the Fund's distributor. The Fund offers Class A, Class
B, and Advisor Class shares for purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the six months ended April 30, 1998, GT Global did not
retain any of such sales charges. Purchases of Class A shares exceeding $500,000
may be subject to a contingent deferred sales charge ("CDSC") upon redemption,
in accordance with the Fund's current prospectus. GT Global did not collect
CDSCs for the six months ended April 30, 1998. GT Global also makes ongoing
shareholder servicing and trail commission payments to dealers whose clients
hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global, from its own resources, pays commissions to dealers through
which the sales are made. Certain redemptions of Class B shares made within six
years of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the six months ended April 30, 1998, GT Global did not collect
any CDSCs. In addition, GT Global makes ongoing shareholder servicing and trail
commission payments to dealers whose clients hold Class B shares.
 
Pursuant to the then effective separate distribution plans adopted under 1940
Act Rule 12b-1 by the Company's Board of Directors with respect to the Fund's
Class A shares ("Class A Plan") and Class B shares ("Class B Plan"), the Fund
reimbursed GT Global for a portion of its shareholder servicing and distribution
expenses. Under that Class A Plan, the Fund was permitted to pay GT Global a
service fee at the annualized rate of up to 0.25% of the average daily net
assets of the Fund's Class A shares for GT Global's expenditures incurred in
servicing and maintaining shareholder accounts, and was permitted to pay GT
Global a distribution fee at the annualized rate of up to 0.50% of the average
daily net assets of the Fund's Class A shares, less any amounts paid by the Fund
as the aforementioned service fee, for GT Global's expenditures incurred in
providing services as distributor. All expenses for which GT Global was
reimbursed under the Class A Plan would have been incurred within one year of
such reimbursement.
 
For the period ended April 30, 1998, pursuant to that Class B Plan, the Fund was
permitted to pay GT Global a service fee at the annualized rate of up to 0.25%
of the average daily net assets of the Fund's Class B shares for GT Global's
expenditures incurred in servicing and maintaining shareholder accounts, and was
permitted to pay GT Global a distribution fee at the annualized rate of up to
0.75% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually were permitted to be
carried forward for reimbursement in subsequent years as long as that Plan
continued in effect.
 
The Manager and GT Global voluntarily undertook to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 2.00%, 2.50%, and 1.50% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by the waivers by
the Manager of investment management and administration fees, waivers by GT
Global of payments under the Class A Plan and/or Class B Plan and/or
reimbursements by the Manager or GT Global of portions of the Fund's other
operating expenses.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager or any of its affiliated companies $5,000 per year plus
$300 for each meeting of the board or any committee thereof attended by the
Director.
 
3. PURCHASES AND SALES OF SECURITIES
For the six months ended April 30, 1998, purchases and sales of investment
securities by the Fund, other than U.S. government obligations and short-term
investments, aggregated $120,141,572 and $302,645,182, respectively. There were
no purchases of U.S. government obligations by the Fund for the period. Sales of
U.S. government obligations by the Fund were $7,170,550 for the period.
 
4. CAPITAL SHARES
At April 30, 1998, there were 6,000,000,000 shares of the Company's common stock
authorized, at $0.0001 par value. Of this amount, 200,000,000 were classified as
shares of GT Global Developing Markets Fund; 400,000,000 were classified as
shares of GT Global Government Income Fund; 200,000,000 were classified as
shares of GT Global Health Care Fund; 200,000,000 were classified as shares of
GT Global Strategic Income Fund; 200,000,000 were classified as shares of GT
Global Currency Fund (inactive); 200,000,000 were classified as shares of GT
Global Growth & Income Fund; 200,000,000 were classified as shares of GT Global
Small Companies Fund
 
                                     FS-25
<PAGE>   992
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
(inactive); 200,000,000 were classified as shares of GT Global Latin America
Growth Fund; 200,000,000 were classified as shares of GT Global Emerging Markets
Fund; 400,000,000 were classified as shares of GT Global Telecommunications
Fund; 200,000,000 were classified as shares of GT Global High Income Fund;
200,000,000 were classified as shares of GT Global Financial Services Fund;
200,000,000 were classified as shares of GT Global Natural Resources Fund;
200,000,000 were classified as shares of GT Global Infrastructure Fund; and
200,000,000 were classified as shares of GT Global Consumer Products and
Services Fund. The shares of each of the foregoing series of the Company were
divided equally into two classes, designated Class A and Class B common stock.
With respect to the issuance of Advisor Class shares, 100,000,000 shares were
classified as shares of each of the fifteen series of the Company and designated
as Advisor Class common stock. 1,100,000,000 shares remain unclassified.
Transactions in capital shares of the Fund were as follows:
 
                           CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
                                                   SIX MONTHS ENDED
                                                    APRIL 30, 1998
                                          -----------------------------------
CLASS A                                       SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------
<S>                                       <C>              <C>
Shares sold.............................          252,838  $        3,022,409
Shares issued in connection with
  reinvestment of distributions.........          676,249           8,202,878
                                          ---------------  ------------------
                                                  929,087          11,225,287
Shares repurchased including those
  purchased in connection with open
  ending of the Fund on 11/1/97*........      (20,589,436)       (253,365,429)
                                          ---------------  ------------------
Net decrease............................      (19,660,349) $     (242,140,142)
                                          ---------------  ------------------
                                          ---------------  ------------------
 
<CAPTION>
 
CLASS B
- ----------------------------------------
<S>                                       <C>              <C>
Shares sold.............................           18,606  $          220,436
Shares issued in connection with
  reinvestment of distributions.........              124               1,499
                                          ---------------  ------------------
                                                   18,730             221,935
Shares repurchased......................           (1,999)            (22,428)
                                          ---------------  ------------------
Net increase............................           16,731  $          199,507
                                          ---------------  ------------------
                                          ---------------  ------------------
<CAPTION>
 
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>              <C>
Shares sold.............................            2,937  $           34,593
Shares issued in connection with
  reinvestment of distributions.........                4                  46
                                          ---------------  ------------------
                                                    2,941              34,639
Shares repurchased......................               --                  --
                                          ---------------  ------------------
Net increase............................            2,941  $           34,639
                                          ---------------  ------------------
                                          ---------------  ------------------
</TABLE>
 
- --------------
* The redemption amount for Class A redemptions is net of a 2% redemption fee of
  $4,923,187 incurred in the period from November 1, 1997 to April 30, 1998 in
  connection with redemptions upon the open ending of the Fund.
 
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the six months ended April 30, 1998, the Fund's
expenses were reduced by $40,839 under these arrangements.
 
6. SUBSEQUENT EVENTS
On May 29, 1998, Liechtenstein Global Trust ("LGT"), the former indirect parent
organization of Chancellor LGT Asset Management, Inc. ("Chancellor LGT"),
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included Chancellor LGT and
certain other affiliates. As a result of this transaction, Chancellor LGT was
renamed INVESCO (NY), Inc. and is now an indirect wholly-owned subsidiary of
AMVESCAP PLC. In connection with this transaction, A I M Advisors, Inc. ("AIM"),
an indirect wholly-owned subsidiary of AMVESCAP PLC, became the investment
adviser and administrator of the Fund and INVESCO (NY), Inc. became the
sub-adviser and sub-administrator of the Fund. In addition, A I M Distributors,
Inc. replaced GT Global, Inc. as the Fund's principal underwriter, and the Fund
became subject to compensation-type Rule 12b-1 plans of distribution, which
replaced the Fund's former reimbursement-type Rule 12b-1 plans of distribution.
All of the changes became effective as of the close of business on May 29, 1998.
 
                                     FS-26
<PAGE>   993
                        GT GLOBAL DEVELOPING MARKETS FUND
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
To the Shareholders and Board of Directors of
GT Global Developing Markets Fund ("Fund"):
 
We have audited the accompanying statement of assets and liabilities of GT
Global Developing Markets Fund (formerly G.T. Global Developing Markets Fund,
Inc.), including the portfolio of investments, as of October 31, 1997, the
related statement of operations for the ten months then ended and for the year
ended December 31, 1996, the statements of changes in net assets for the ten
months then ended and for each of the two years in the period ended December 31,
1996, and the financial highlights for each of the periods indicated therein.
These financial statements and the financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997, by correspondence with the custodians and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global Developing Markets Fund as of October 31, 1997, the results of its
operations for the ten months then ended and for the year ended December 31,
1996, the changes in its net assets for the ten months then ended and for each
of the two years in the period ended December 31, 1996, and the financial
highlights for the periods indicated therein, in conformity with generally
accepted accounting principles.
 
'

                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
DECEMBER 15, 1997
 
                                     FS-27
<PAGE>   994
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Energy (13.0%)
  LUKoil Holding - ADR{\/} ................................   RUS              97,586   $  8,172,833         1.8
    OIL
  Sasol Ltd. ..............................................   SAFR            537,556      6,481,964         1.4
    ENERGY SOURCES
  Petroleo Brasileiro S.A. (Petrobras) Preferred ..........   BRZL         27,126,040      5,044,302         1.1
    OIL
  C.A. La Electricidad de Caracas .........................   VENZ          3,443,139      4,526,264         1.0
    ELECTRICAL & GAS UTILITIES
  Companhia Energetica de Minas Gerais (CEMIG) -
   ADR{\/} ................................................   BRZL             94,834      3,793,360         0.8
    ELECTRICAL & GAS UTILITIES
  Centrais Eletricas Brasileiras S.A. (Eletrobras): .......   BRZL                 --             --         0.8
    ELECTRICAL & GAS UTILITIES
    "B" ADR{\/} ...........................................   --              118,958      2,617,076          --
    Preferred .............................................   --            2,112,000        913,846          --
  Chilgener S.A. - ADR{\/} ................................   CHLE            124,972      3,374,244         0.7
    ELECTRICAL & GAS UTILITIES
  Enersis S.A. - ADR{\/} ..................................   CHLE             94,858      3,130,314         0.7
    ELECTRICAL & GAS UTILITIES
  Empresa Nacional de Electricidad S.A. - ADR{\/} .........   CHLE            127,657      2,569,097         0.6
    ELECTRICAL & GAS UTILITIES
  YPF S.A. - ADR{\/} ......................................   ARG              68,960      2,206,720         0.5
    OIL
  The Hub Power Co., Ltd. - GDR-/- {\/} ...................   PAK              70,300      2,196,875         0.5
    ENERGY SOURCES
  Light - Participacoes S.A. ..............................   BRZL          7,485,850      1,914,922         0.4
    ELECTRICAL & GAS UTILITIES
  Light - Servicos de Electricidade S.A. ..................   BRZL          5,322,290      1,767,016         0.4
    ELECTRICAL & GAS UTILITIES
  Surgutneftegaz - ADR-/- {\/} ............................   RUS             174,640      1,484,440         0.3
    OIL
  PTT Exploration and Production Public Co., Ltd. -
   Foreign ................................................   THAI            138,800      1,415,622         0.3
    OIL
  Unified Energy Systems - Reg S GDR-/- {c} {\/} ..........   RUS              40,700      1,271,875         0.3
    ELECTRICAL & GAS UTILITIES
  Manila Electric Co. "B" .................................   PHIL            361,110      1,111,108         0.2
    ELECTRICAL & GAS UTILITIES
  Bombay Suburban Electric Supply (BSES) Ltd. .............   IND             200,000      1,004,209         0.2
    ELECTRICAL & GAS UTILITIES
  MOL Magyar Olaj-es Gazipari RT - Reg S GDR{c} {\/} ......   HGRY             43,600        942,850         0.2
    ENERGY SOURCES
  Mosenergo: ..............................................   RUS                  --             --         0.2
    ELECTRICAL & GAS UTILITIES
    ADR-/- {\/} ...........................................   --               10,964        460,488          --
    144A ADR{.} {\/} ......................................   --               10,000        420,000          --
  Korea Electric Power Corp. - ADR{\/} ....................   KOR              93,330        764,139         0.2
    ELECTRICAL & GAS UTILITIES
  Electricity Generating Public Co., Ltd. - Foreign .......   THAI            447,200        745,333         0.2
    ELECTRICAL & GAS UTILITIES
  Perez Companc S.A. ......................................   ARG             100,460        629,257         0.1
    OIL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-28
<PAGE>   995
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Energy (Continued)
  Tenaga Nasional Bhd. ....................................   MAL             235,000   $    508,261         0.1
    ELECTRICAL & GAS UTILITIES
  Yukong Ltd. .............................................   KOR              10,980        148,688          --
    OIL
  Guangdong Electric Power Development Co., Ltd. "B"{*} ...   CHNA            201,000        113,371          --
    ENERGY SOURCES
                                                                                        ------------
                                                                                          59,728,474
                                                                                        ------------
Multi-Industry/Miscellaneous (11.6%)
  Barlow Ltd. .............................................   SAFR            657,524      6,629,920         1.4
    CONGLOMERATE
  PT Telekomunikasi Indonesia .............................   INDO          5,018,500      4,683,001         1.0
    MULTI-INDUSTRY
  Anglo American Corporation of South Africa Ltd. .........   SAFR            104,020      4,498,162         1.0
    CONGLOMERATE
  Grupo Carso, S.A. de C.V. "A1" ..........................   MEX             567,700      3,610,164         0.8
    MULTI-INDUSTRY
  Delta Corporation Ltd. (subdivision)-/- .................   ZBBW          2,472,400      3,520,823         0.8
    MULTI-INDUSTRY
  ITC Ltd.: ...............................................   IND                  --             --         0.7
    MULTI-INDUSTRY
    Common ................................................   --              136,000      2,102,842          --
    GDR-/- {\/} ...........................................   --               44,370        811,971          --
  Billiton PLC-/- .........................................   SAFR            980,865      2,875,301         0.6
    CONGLOMERATE
  The Saudi Arabian Investment Fund Ltd.-/- {\/} ..........   UK              281,000      2,810,000         0.6
    COUNTRY FUNDS
  PT Gudang Garam .........................................   INDO            949,500      2,697,744         0.6
    MULTI-INDUSTRY
  China Resources Enterprise Ltd. .........................   HK              870,000      2,386,028         0.5
    CONGLOMERATE
  Shanghai Industrial Holdings Ltd. .......................   HK              471,000      2,096,041         0.5
    MULTI-INDUSTRY
  Sanluis Corporacion, S.A. de C.V. .......................   MEX             263,477      2,044,708         0.4
    CONGLOMERATE
  Central Asia Regional Growth Fund-/- {\/} ...............   IRE             210,000      1,999,200         0.4
    COUNTRY FUNDS
  Malaysian Resources Corp., Bhd. .........................   MAL           2,396,000      1,425,077         0.3
    CONGLOMERATE
  Koc Holding AS ..........................................   TRKY          3,234,900      1,216,923         0.3
    CONGLOMERATE
  Empresas La Moderna, S.A. de C.V. "A"-/- ................   MEX             240,600      1,181,389         0.3
    MULTI-INDUSTRY
  NASR (El) City Company For Housing & Construction-/- ....   EGPT             17,005      1,175,296         0.3
    MISCELLANEOUS
  PT Bimantara Citra ......................................   INDO          1,219,000      1,120,529         0.2
    MULTI-INDUSTRY
  PT Hanjaya Mandala Sampoerna ............................   INDO            590,500      1,032,141         0.2
    MULTI-INDUSTRY
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-29
<PAGE>   996
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Multi-Industry/Miscellaneous (Continued)
  Koor Industries Ltd.: ...................................   ISRL                 --             --         0.2
    CONGLOMERATE
    ADR{\/} ...............................................   --               22,043   $    471,169          --
    Common ................................................   --                2,850        294,482          --
  Graboplast Rt. ..........................................   HGRY             13,452        725,231         0.2
    MISCELLANEOUS
  GT Taiwan Fund-/- +X+ {\/} ..............................   TWN              49,751        626,368         0.1
    COUNTRY FUNDS
  Quinenco S.A. - ADR-/- {\/} .............................   CHLE             32,400        473,850         0.1
    CONGLOMERATE
  Discount Investment Corp. ...............................   ISRL             11,613        316,356         0.1
    MULTI-INDUSTRY
                                                                                        ------------
                                                                                          52,824,716
                                                                                        ------------
Services (11.3%)
  Telecomunicacoes Brasileiras S.A. (Telebras): ...........   BRZL                 --             --         2.3
    TELEPHONE NETWORKS
    ADR{\/} ...............................................   --               57,481      5,834,322          --
    Common ................................................   --           49,594,258      4,408,329          --
  Telefonos de Mexico, S.A. de C.V. "L" - ADR{\/} .........   MEX             176,363      7,627,700         1.7
    TELEPHONE NETWORKS
  Compania Anonima Nacional Telefonos de Venezuela (CANTV)
   - ADR{\/} ..............................................   VENZ            114,579      5,012,831         1.1
    TELEPHONE NETWORKS
  Pick'n Pay Stores Ltd.: .................................   SAFR                 --             --         0.8
    RETAILERS-OTHER
    Common ................................................   --            1,889,154      2,847,477          --
    "N" ...................................................   --              780,702      1,071,234          --
  Cia de Telecomunicaciones de Chile S.A. - ADR{\/} .......   CHLE            128,402      3,563,156         0.8
    TELEPHONE NETWORKS
  Telefonica del Peru S.A. - ADR{\/} ......................   PERU            155,070      3,062,633         0.7
    TELEPHONE NETWORKS
  Cifra, S.A. de C.V.: ....................................   MEX                  --             --         0.3
    RETAILERS-OTHER
    "C" ...................................................   --              636,000      1,104,431          --
    "A" ...................................................   --              306,000        563,626          --
    "B" ...................................................   --               66,334        132,509          --
  Companhia de Saneamento Basico do Estado de Sao Paulo -
   SABESP-/- ..............................................   BRZL          9,188,127      1,666,932         0.4
    BUSINESS & PUBLIC SERVICES
  Mahanagar Telephone Nigam Ltd. ..........................   IND             233,600      1,627,623         0.4
    TELECOM - OTHER
  Telefonica de Argentina S.A. - ADR{\/} ..................   ARG              55,228      1,553,288         0.3
    TELEPHONE NETWORKS
  Indian Hotels Co., Ltd.: ................................   IND                  --             --         0.2
    LEISURE & TOURISM
    GDR-/- {\/} ...........................................   --               35,200        607,200          --
    Common ................................................   --               25,850        418,541          --
  Migros Turk T.A.S. ......................................   TRKY            848,300        890,294         0.2
    RETAILERS-FOOD
  Portugal Telecom S.A. - Registered ......................   PORT             20,551        843,433         0.2
    TELEPHONE NETWORKS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-30
<PAGE>   997
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Services (Continued)
  TelecomAsia Corp. - Foreign-/- ..........................   THAI          1,878,600   $    841,164         0.2
    TELEPHONE NETWORKS
  PT Citra Marga Nusaphala Persada ........................   INDO          2,847,000        812,862         0.2
    BUSINESS & PUBLIC SERVICES
  PT Indosat ..............................................   INDO            344,500        779,683         0.2
    TELECOM - OTHER
  Santa Isabel S.A. - ADR{\/} .............................   CHLE             40,666        752,321         0.2
    RETAILERS-FOOD
  Sonae Investimentos-Sociedade Gestora de Participacoes
   Sociais S.A. ...........................................   PORT             18,602        695,194         0.2
    RETAILERS-OTHER
  Danubius Hotel and Spa Rt.-/- ...........................   HGRY             21,940        686,611         0.2
    LEISURE & TOURISM
  Konsortium Perkapalan Bhd. ..............................   MAL             267,000        501,277         0.1
    TRANSPORTATION - SHIPPING
  Pakistan Telecommunications Co., Ltd. - GDR-/- {\/} .....   PAK               6,000        486,000         0.1
    TELEPHONE NETWORKS
  Advanced Info. Service - Foreign ........................   THAI             85,700        460,478         0.1
    WIRELESS COMMUNICATIONS
  Investec-Consultoria Internacional S.A.-/- ..............   PORT             14,612        457,144         0.1
    BROADCASTING & PUBLISHING
  Super Sol Ltd. ..........................................   ISRL            154,231        443,830         0.1
    RETAILERS-FOOD
  BEC World Public Co., Ltd. - Foreign ....................   THAI             77,800        406,418         0.1
    BROADCASTING & PUBLISHING
  Estabelecimentos Jeronimo Martins & Filho, Sociedade
   Gestora de Participacoes Sociais S.A. ..................   PORT              3,854        252,110         0.1
    RETAILERS-OTHER
  Siam Makro Public Co., Ltd. - Foreign-/- ................   THAI            170,000        224,129          --
    RETAILERS-OTHER
  PT Matahari Putra Prima .................................   INDO          1,035,000        201,811          --
    RETAILERS-APPAREL
  Telecomunicacoes de Sao Paulo S.A. (TELESP) Preferred ...   BRZL            495,118        129,349          --
    TELEPHONE NETWORKS
  Guangshen Railway Co., Ltd. .............................   HK              162,000         50,298          --
    TRANSPORTATION - ROAD & RAIL
                                                                                        ------------
                                                                                          51,016,238
                                                                                        ------------
Materials/Basic Industry (10.9%)
  Kimberly-Clark de Mexico, S.A. de C.V. "A" ..............   MEX           1,389,779      6,125,014         1.3
    PAPER/PACKAGING
  SA Iron & Steel Industrial Corp., Ltd. (ISCOR) ..........   SAFR          9,521,806      4,948,964         1.1
    METALS - STEEL
  Sappi Ltd. ..............................................   SAFR            587,133      3,722,985         0.8
    FOREST PRODUCTS
  Helwan Portland Cement Co.-/- ...........................   EGPT            166,230      3,507,942         0.8
    CEMENT
  Suez Cement Co. - Reg S GDR{c} {\/} .....................   EGPT            158,195      3,282,546         0.7
    CEMENT
  Apasco S.A. .............................................   MEX             428,533      2,617,387         0.6
    CEMENT
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-31
<PAGE>   998
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Materials/Basic Industry (Continued)
  Industrias Penoles S.A. (CP) ............................   MEX             634,803   $  2,527,808         0.6
    METALS - NON-FERROUS
  Ameriyah Cement Co.-/- ..................................   EGPT             94,500      2,390,294         0.5
    CEMENT
  De Beers Centenary AG - Linked Unit{=} ..................   SAFR             78,000      1,861,622         0.4
    MISC. MATERIALS & COMMODITIES
  Torah Portland Cement Co.-/- ............................   EGPT             67,950      1,858,632         0.4
    CEMENT
  Hindalco Industries Ltd. ................................   IND              63,600      1,660,561         0.4
    METALS - NON-FERROUS
  Paints & Chemical Industry: .............................   EGPT                 --             --         0.3
    CHEMICALS
    Common-/- .............................................   --               31,400      1,052,916          --
    144A GDR{.} -/- {\/} ..................................   --               44,000        440,000          --
  Pohang Iron & Steel Co., Ltd. - ADR{\/} .................   KOR              88,870      1,444,138         0.3
    METALS - STEEL
  Turk Sise ve Cam Fabrikalari AS-/- ......................   TRKY         16,264,000      1,396,565         0.3
    GLASS
  North Cairo Flour Mills-/- ..............................   EGPT             32,010      1,393,376         0.3
    MISC. MATERIALS & COMMODITIES
  Pannonplast Rt. .........................................   HGRY             20,732      1,138,897         0.2
    MISC. MATERIALS & COMMODITIES
  Helioplis Housing-/- ....................................   EGPT              8,000      1,094,353         0.2
    BUILDING MATERIALS & COMPONENTS
  Grupo Industrial Minera Mexico "L" ......................   MEX             277,300        823,598         0.2
    METALS - NON-FERROUS
  Maanshan Iron and Steel Co. "H"{*} ......................   CHNA          4,939,000        785,895         0.2
    METALS - STEEL
  Sociedad Quimica y Minera de Chile S.A. - ADR{\/} .......   CHLE             12,200        632,875         0.1
    CHEMICALS
  Israel Chemicals Ltd. ...................................   ISRL            499,158        625,750         0.1
    CHEMICALS
  Cosco Pacific Ltd. ......................................   HK              516,000        600,776         0.1
    PAPER/PACKAGING
  Cimpor-Cimentos de Portugal, SGPS S.A. ..................   PORT             21,964        555,972         0.1
    CEMENT
  PT Aneka Tambang-/- .....................................   INDO          1,364,500        532,117         0.1
    METALS - NON-FERROUS
  Engro Chemicals Pakistan Ltd. ...........................   PAK             137,800        435,263         0.1
    CHEMICALS
  HI Cement Corp. .........................................   PHIL          3,961,000        361,117         0.1
    CEMENT
  Cahya Mata Sarawak Bhd. .................................   MAL             355,000        345,509         0.1
    BUILDING MATERIALS & COMPONENTS
  Siam Cement Co., Ltd. - Foreign .........................   THAI             39,800        338,597         0.1
    CEMENT
  Agros Holding S.A.-/- ...................................   POL              16,123        338,212         0.1
    MISC. MATERIALS & COMMODITIES
  Compania de Minas Buenaventura S.A. - ADR{\/} ...........   PERU             16,000        287,000         0.1
    METALS - NON-FERROUS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-32
<PAGE>   999
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Materials/Basic Industry (Continued)
  PT Indah Kiat Pulp & Paper Corp.Tbk .....................   INDO            709,000   $    271,553         0.1
    PAPER/PACKAGING
  Fauji Fertilizer Co., Ltd. ..............................   PAK             116,300        258,997         0.1
    MISC. MATERIALS & COMMODITIES
                                                                                        ------------
                                                                                          49,657,231
                                                                                        ------------
Finance (8.3%)
  ABSA Group Ltd. .........................................   SAFR            761,136      4,509,849         1.0
    BANKS-REGIONAL
  Uniao Bancos Brasileiras "A" Preferred ..................   BRZL        142,972,483      3,628,783         0.8
    BANKS-MONEY CENTER
  State Bank of India Ltd.: ...............................   IND                  --             --         0.7
    BANKS-MONEY CENTER
    Common ................................................   --              267,000      1,931,961          --
    GDR{\/} ...............................................   --               71,640      1,318,176          --
  Administradora de Fondos de Pensiones Provida S.A. -
   ADR{\/} ................................................   CHLE            142,366      2,384,631         0.5
    INVESTMENT MANAGEMENT
  Egyptian American Bank SAE-/- ...........................   EGPT             57,663      1,857,088         0.4
    BANKS-MONEY CENTER
  Commercial International Bank: ..........................   EGPT                 --             --         0.4
    BANKS-MONEY CENTER
    144A GDR{.} {\/} ......................................   --               58,000      1,261,500          --
    Common ................................................   --               23,940        553,789          --
  Banco de A. Edwards - ADR{\/} ...........................   CHLE            100,934      1,753,728         0.4
    BANKS-MONEY CENTER
  Credicorp Ltd. - ADR{\/} ................................   PERU             94,800      1,700,475         0.4
    BANKS-MONEY CENTER
  Global Menkul Degerler AS-/- ............................   TRKY         69,103,256      1,601,182         0.4
    SECURITIES BROKER
  Banco LatinoAmericano de Exportaciones S.A. (Bladex)
   "E"{\/} ................................................   PAN              37,631      1,495,832         0.3
    OTHER FINANCIAL
  Turkiye Is Bankasi (Isbank) "C" .........................   TRKY         15,098,500      1,461,119         0.3
    BANKS-MONEY CENTER
  Banco Frances del Rio de la Plata S.A. - ADR{\/} ........   ARG              48,968      1,205,837         0.3
    BANKS-MONEY CENTER
  Aksigorta A.S. ..........................................   TRKY         15,080,000      1,171,573         0.3
    INSURANCE - MULTI-LINE
  Liberty Life Association of Africa Ltd. .................   SAFR             37,400        933,056         0.2
    INSURANCE-LIFE
  BPI-SGPS S.A. ...........................................   PORT             40,637        914,217         0.2
    BANKS-MONEY CENTER
  Yapi ve Kredi Bankasi AS ................................   TRKY         29,106,092        888,639         0.2
    BANKS-REGIONAL
  Kookmin Bank - GDR-/- {\/} ..............................   KOR             128,480        822,272         0.2
    BANKS-MONEY CENTER
  Ayala Land, Inc. "B" ....................................   PHIL          1,723,800        675,278         0.1
    REAL ESTATE
  Bank Leumi Le - Israel ..................................   ISRL            406,668        624,411         0.1
    BANKS-REGIONAL
  Metroplex Bhd. ..........................................   MAL           1,751,000        610,141         0.1
    REAL ESTATE
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-33
<PAGE>   1000
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Finance (Continued)
  Turkiye Garanti Bankasi AS ..............................   TRKY         11,565,600   $    599,025         0.1
    BANKS-REGIONAL
  Bank Hapoalim Ltd. ......................................   ISRL            244,830        579,448         0.1
    BANKS-REGIONAL
  Muslim Commercial Bank Ltd.-/- ..........................   PAK             546,500        558,844         0.1
    BANKS-MONEY CENTER
  JSC Kazkommertsbank Co. - GDR-/- {\/} (.) ...............   KAZ              26,600        558,600         0.1
    BANKS-REGIONAL
  SM Prime Holdings, Inc. .................................   PHIL          2,664,600        470,670         0.1
    REAL ESTATE
  Thai Farmers Bank Public Co., Ltd. - Foreign ............   THAI            166,400        455,323         0.1
    BANKS-REGIONAL
  Bank Slaski S.A. ........................................   POL               7,316        426,767         0.1
    BANKS-MONEY CENTER
  Banco Santander Chile - ADR{\/} .........................   CHLE             28,100        365,300         0.1
    BANKS-REGIONAL
  Land and House Public Co., Ltd. - Foreign ...............   THAI            392,300        341,555         0.1
    REAL ESTATE
  Belle Corp.-/- ..........................................   PHIL          3,297,000        300,581         0.1
    REAL ESTATE
  Malaysian Assurance Alliance Bhd. .......................   MAL             116,200        209,432          --
    INSURANCE - MULTI-LINE
  Bangkok Bank Public Co., Ltd. - Foreign .................   THAI             56,400        196,418          --
    BANKS-MONEY CENTER
  C & P Homes, Inc. .......................................   PHIL          1,382,000        104,339          --
    REAL ESTATE
                                                                                        ------------
                                                                                          38,469,839
                                                                                        ------------
Consumer Non-Durables (6.5%)
  South African Breweries Ltd. ............................   SAFR            226,892      6,037,874         1.3
    BEVERAGES - ALCOHOLIC
  Fomento Economico Mexicano, S.A. de C.V. "B" ............   MEX             738,356      5,217,126         1.1
    BEVERAGES - ALCOHOLIC
  Gruma S.A. "B"-/- .......................................   MEX             883,073      3,468,838         0.8
    FOOD
  Companhia Cervejaria Brahma Preferred ...................   BRZL          4,662,721      2,918,430         0.6
    BEVERAGES - ALCOHOLIC
  C.G. Smith Foods Ltd. ...................................   SAFR            174,000      2,496,050         0.5
    FOOD
  Eastern Tobacco Co.-/- ..................................   EGPT             90,785      2,276,300         0.5
    TOBACCO
  A-Ahram Beverages Co. S.A.E. - 144A GDR{.} -/- {\/} .....   EGPT             62,514      1,719,135         0.4
    BEVERAGES - ALCOHOLIC
  Embotelladora Andina S.A.: ..............................   CHLE                 --             --         0.4
    BEVERAGES - NON-ALCOHOLIC
    "B" ADR{\/} ...........................................   --               41,497        850,689          --
    "A" ADR{\/} ...........................................   --               34,400        825,600          --
  Hindustan Lever Ltd. ....................................   IND              40,650      1,438,245         0.3
    PERSONAL CARE/COSMETICS
  San Miguel Corp. "B" ....................................   PHIL            851,600        958,353         0.2
    BEVERAGES - ALCOHOLIC
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-34
<PAGE>   1001
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Consumer Non-Durables (Continued)
  Compania Cervecerias Unidas S.A. ADR{\/} ................   CHLE             36,800   $    897,000         0.2
    BEVERAGES - ALCOHOLIC
  Zaklady Piwowarskie w Zywcu S.A. (Zywiec) ...............   POL               4,461        333,293         0.1
    BEVERAGES - ALCOHOLIC
  Reliance Industries Ltd. - GDR-/- {\/} (.) ..............   IND              12,100        255,008         0.1
    TEXTILES & APPAREL
  Kuala Lumpur Kepong Bhd. ................................   MAL              60,000        144,187          --
    OTHER CONSUMER GOODS
  La Tondena Distillers, Inc. .............................   PHIL            137,900         84,469          --
    BEVERAGES - ALCOHOLIC
                                                                                        ------------
                                                                                          29,920,597
                                                                                        ------------
Technology (2.3%)
  Asustek Computer Inc. - Reg. S GDR-/- {c} {\/} ..........   TWN             830,248     10,149,782         2.2
    COMPUTERS & PERIPHERALS
  Clal Electronics Industries Ltd. ........................   ISRL              2,754        399,041         0.1
    SEMICONDUCTORS
  LG Information & Communication ..........................   KOR               2,728        156,860          --
    TELECOM TECHNOLOGY
                                                                                        ------------
                                                                                          10,705,683
                                                                                        ------------
Capital Goods (1.6%)
  New World Infrastructure Ltd.-/- ........................   HK            1,076,000      2,129,728         0.5
    CONSTRUCTION
  Cheung Kong Infrastructure Holdings .....................   HK              643,000      1,663,648         0.4
    CONSTRUCTION
  United Engineers Ltd. ...................................   MAL             428,000      1,015,680         0.2
    CONSTRUCTION
  Irkutskenergo - ADR-/- {\/} .............................   RUS              68,712        927,612         0.2
    ELECTRICAL PLANT/EQUIPMENT
  Daewoo Heavy Industries .................................   KOR              99,000        577,500         0.1
    INDUSTRIAL COMPONENTS
  Elektrim Spolka Akcyjna S.A. ............................   POL              58,947        555,592         0.1
    ELECTRICAL PLANT/EQUIPMENT
  ECI Telecommunications Ltd.{\/} .........................   ISRL             16,200        447,525         0.1
    TELECOM EQUIPMENT
  Sungmi Telecom Electronics Co. ..........................   KOR                 184          8,999          --
    TELECOM EQUIPMENT
                                                                                        ------------
                                                                                           7,326,284
                                                                                        ------------
Health Care (1.6%)
  Egypt International Pharmaceutical Industries Co.
   (EIPICO) ...............................................   EGPT             33,200      2,402,118         0.5
    PHARMACEUTICALS
  Richter Gedeon Rt. - Reg S GDR{c} {\/} ..................   HGRY             17,552      1,632,336         0.4
    PHARMACEUTICALS
  Ranbaxy Laboratories Ltd. ...............................   IND              79,850      1,555,391         0.3
    MEDICAL TECHNOLOGY & SUPPLIES
  Teva Pharmaceutical Industries Ltd. .....................   ISRL             25,548      1,189,452         0.3
    PHARMACEUTICALS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-35
<PAGE>   1002
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Health Care (Continued)
  PT Kalbe Farma - Foreign ................................   INDO            479,000   $    293,538         0.1
    PHARMACEUTICALS
                                                                                        ------------
                                                                                           7,072,835
                                                                                        ------------
Consumer Durables (1.4%)
  Arcelik AS ..............................................   TRKY         12,233,800      1,367,315         0.3
    APPLIANCES & HOUSEHOLD
  Bajaj Auto Ltd. .........................................   IND              79,200      1,261,094         0.3
    AUTOMOBILES
  Qingling Motors Co., Ltd.{*} ............................   CHNA          1,671,000      1,091,662         0.2
    AUTOMOBILES
  Tata Engineering and Locomotive Co., Ltd.: ..............   IND                  --             --         0.2
    AUTOMOBILES
    GDR{\/} ...............................................   --               48,000        499,200          --
    Common ................................................   --               25,000        219,069          --
  Samsung Electronics Co. - 144A GDR{.} -/- {\/} ..........   KOR              34,850        705,713         0.2
    CONSUMER ELECTRONICS
  PT Astra International, Inc. ............................   INDO            785,000        584,923         0.1
    AUTOMOBILES
  Mahindra & Mahindra Ltd. ................................   IND              43,300        430,653         0.1
    AUTOMOBILES
                                                                                        ------------
                                                                                           6,159,629
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $359,966,965) ..............                              312,881,526        68.5
                                                                                        ------------       -----
<CAPTION>
 
                                                                          PRINCIPAL        VALUE         % OF NET
FIXED INCOME INVESTMENTS                                     CURRENCY      AMOUNT         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Government & Government Agency Obligations (10.1%)
  Argentina (1.2%)
    Republic of Argentina:
      Global Bond, 11.375% due 1/30/17 ....................   USD           2,741,000      2,617,655         0.6
      Par Bond Series L, 5.5% due 3/31/23++ ...............   USD           2,690,000      1,830,881         0.4
      Global Bond, 11% due 10/9/06 ........................   USD             720,000        713,700         0.2
  Brazil (0.4%)
    Republic of Brazil, Par Z-L Bond, 5.25% due
     4/15/24++ ............................................   USD           3,020,000      1,996,975         0.4
  Bulgaria (2.1%)
    Republic of Bulgaria:
      Front Loaded Interest Reduction Bond Series A, 2.25%
       due 7/28/12++ ......................................   USD           9,017,000      4,914,265         1.1
      Interest Arrears Bond, 6.6875% due 7/28/11 -
       Euro+ ..............................................   USD           7,099,000      4,663,156         1.0
  Ecuador (0.4%)
    Republic of Ecuador, Discount Bond, 6.6875% due 2/28/25
     - Euro+ ..............................................   USD           2,845,000      1,998,613         0.4
  Mexico (2.2%)
    United Mexican States:
      Discount Bond Series A, 6.6925% due 12/31/19+ +/+ ...   USD           6,110,000      5,533,369         1.2
      Global Bond, 9.875% due 1/15/07 .....................   USD           1,615,000      1,633,169         0.4
      Global Bond, 11.375% due 9/15/16 ....................   USD           1,455,000      1,547,756         0.3
      Global Bond, 11.5% due 5/15/26 ......................   USD           1,421,000      1,534,680         0.3
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-36
<PAGE>   1003
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                          PRINCIPAL        VALUE         % OF NET
FIXED INCOME INVESTMENTS                                     CURRENCY      AMOUNT         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Government & Government Agency Obligations (Continued)
  Panama (0.6%)
    Republic of Panama, Interest Reduction Bond, 3.75% due
     7/17/14++ ............................................   USD           3,536,000   $  2,486,250         0.6
  Peru (0.3%)
    Republic of Peru, Past Due Interest Bond, 4% due
     3/7/17++ .............................................   USD           2,533,000      1,443,810         0.3
  South Africa (0.8%)
    Republic of South Africa, 13% due 8/31/10{j} ..........   ZAR          20,173,000      3,807,589         0.8
  United States (1.6%)
    United States Treasury:
      6.375% due 8/15/27 ..................................   USD           4,032,000      4,149,180         0.9
      5.875% due 9/30/02 ..................................   USD           3,033,000      3,049,587         0.7
  Venezuela (0.5%)
    Republic of Venezuela, Par Bond Series A, 6.75% due
     3/31/20+/+ ...........................................   USD           2,543,000      2,128,173         0.5
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $49,316,056) .............................................                               46,048,808
                                                                                        ------------
Sovereign Debt (4.9%)
  Russia (4.9%)
    Bank for Foreign Economic Affairs (Vnesheconombank)
     Loan Agreement:
      Assignment ** -/- {j} ...............................   USD          22,635,000     20,131,003         4.4
      Participation ** -/- ................................   DEM           4,186,000      2,227,112         0.5
                                                                                        ------------
Total Sovereign Debt (cost $12,006,889) ...................                               22,358,115
                                                                                        ------------
Corporate Bonds (3.2%)
  Argentina (0.5%)
    Supermercados Norte, 10.875% due 2/9/04 - 144A{.} .....   USD           1,193,000      1,109,490         0.3
    Acindar Industrial Argentina, 11.25% due 2/15/04 ......   USD             661,000        654,390         0.2
  Brazil (0.2%)
    RBS Participacoes S.A., 11% due 4/1/07 - 144A{.} ......   USD           1,107,000      1,079,325         0.2
  China (0.6%)
    Panda Global Energy Co., 12.5% due 4/15/04{.} .........   USD           2,139,000      2,010,660         0.4
    Greater Beijing First, 9.5% due 6/15/07 - 144A{.} .....   USD             960,000        876,000         0.2
  Dominican Republic (0.1%)
    Tricom S.A., 11.375% due 9/1/04 - 144A{.} .............   USD             652,000        645,480         0.1
  Hong Kong (0.1%)
    Road King Infrastructure, 9.5% due 7/15/07 -
     144A{.} ..............................................   USD             700,000        652,750         0.1
  India (0.2%)
    Tata Electric Co., 8.5% due 8/19/17 - 144A{.} .........   USD           1,093,000        954,189         0.2
  Indonesia (0.1%)
    Pratama Datakom Asia BV, 12.75% due 7/15/05 -
     144A{.} ..............................................   USD             653,000        574,640         0.1
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-37
<PAGE>   1004
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                          PRINCIPAL        VALUE         % OF NET
FIXED INCOME INVESTMENTS                                     CURRENCY      AMOUNT         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Corporate Bonds (Continued)
  Mexico (0.8%)
    Petroleos Mexicanos:
      9.5% due 9/15/27 - 144A{.} ..........................   USD           2,104,000   $  1,930,420         0.4
      8.85% due 9/15/07 - 144A{.} .........................   USD           1,050,000      1,009,313         0.2
    Copamex Industrias S.A., 11.375% due 4/30/04 -
     144A{.} ..............................................   USD             996,000      1,088,130         0.2
  Russia (0.4%)
    Lukinter Finance BV Convertible, 3.5% due 5/6/02 -
     144A{.} ..............................................   USD             851,000      1,144,595         0.3
    Mosenergo Finance BV, 8.375% due 10/9/02 - 144A{.} ....   USD             555,000        488,400         0.1
  South Africa (0.2%)
    Eskom, 11% due 6/1/08 .................................   ZAR           4,990,000        826,527         0.2
                                                                                        ------------
Total Corporate Bonds (cost $15,533,169) ..................                               15,044,309
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $76,856,114) .........                               83,451,232        18.2
                                                                                        ------------       -----
 
<CAPTION>
 
                                                                         UNDERLYING
                                                                           NOMINAL         VALUE         % OF NET
OPTIONS                                                      CURRENCY      AMOUNT         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
  Federal Republic of Brazil Debt Conversion Bond, Call
   Option, strike 82.25, expires 1/12/98 (cost
   $312,660) ..............................................   USD          17,370,000        126,732          --
                                                                                        ------------       -----
    GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS
<CAPTION>
 
                                                                           NO. OF          VALUE         % OF NET
RIGHTS                                                       COUNTRY       RIGHTS         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
  PT Matahari Putra Prima Rights, expire 12/3/97 ..........   INDO          2,070,000        115,320          --
    RETAILERS-APPAREL
  Telecomunicacoes de Sao Paulo S.A. (TELESP) Rights,
   expire 11/12/97 ........................................   BRZL            257,975            234          --
    TELEPHONE NETWORKS
                                                                                        ------------       -----
 
TOTAL RIGHTS (cost $0) ....................................                                  115,554          --
                                                                                        ------------       -----
<CAPTION>
 
                                                                           NO. OF          VALUE         % OF NET
WARRANTS                                                     COUNTRY      WARRANTS        (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
  Belle Corp. Warrants, expire 2002 (cost $0) .............   PHIL            659,400            122          --
                                                                                        ------------       -----
    OIL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-38
<PAGE>   1005
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- -----------------------------------------------------------                             ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
  Dated October 31, 1997, with State Street Bank & Trust
   Co., due November 3, 1997, for an effective yield of
   5.57%, collateralized by $34,850,000 U.S. Treasury Bond,
   8.875% due 8/15/17 (market value of collateral is
   $45,720,975, including accrued interest).
   (cost $44,816,933)  ....................................                             $ 44,816,933         9.8
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $481,952,672)  * ..................                              441,392,099        96.5
Other Assets and Liabilities ..............................                               15,987,089         3.5
                                                                                        ------------       -----
 
NET ASSETS ................................................                             $457,379,188       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
        +X+  The GT Global Developing Markets Fund (the "Fund") has invested in
             the GT Global Taiwan Fund, a fund managed by LGT Asset Management
             Ltd. who is an affiliate of the Fund's manager, Chancellor LGT
             Asset Management, Inc.
         **  Underlying loan agreement currently in default.
        {j}  All or part of the Fund's holdings in this security is segregated
             as collateral for when-issued securities. See Note 1 to the
             Financial Statements.
         ++  The coupon rate shown on step-up coupon bond represents the rate at
             period end.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
        +/+  Issued with detachable warrants or value recovery rights. The
             current market value of each warrant or right is zero.
        {*}  Security denominated in Hong Kong Dollars.
        {=}  Each Centenary Linked Unit consists of 1 registered deferred share
             of De Beers Consolidated Mine + 1 Centenary Depositary Receipt.
        (.)  Restricted securities: At October 31, 1997, the Fund owned the
             following restricted securities constituting 0.2% of net assets
             which may not be publicly sold without registration under the
             Securities Act of 1933 (Note 1). Additional information on the
             securities is as follows:
 
<TABLE>
<CAPTION>
                                 ACQUISITION                              MARKET VALUE
DESCRIPTION                         DATE        SHARES        COST          PER SHARE
- ------------------------------  -------------  ---------  -------------  ---------------
<S>                             <C>            <C>        <C>            <C>
JSC Kazkommertsbank Co. -
 GDR..........................     7/15/97        26,600   $   500,080      $   21.00
Reliance Industries - GDR.....     5/20/94        12,100       223,850          21.08
</TABLE>
 
          *  For Federal income tax purposes, cost is $483,269,089 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  26,262,525
                 Unrealized depreciation:           (68,139,515)
                                                  -------------
                 Net unrealized depreciation:     $ (41,876,990)
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviations:
    ADR--American Depository Receipt
    GDR--Global Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-39
<PAGE>   1006
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {D}
                                        -------------------------------------------
                                                 FIXED INCOME,
                                                   RIGHTS &      SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS       & OTHER     TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Argentina (ARG/ARS) ..................    1.2         1.7                       2.9
Brazil (BRZL/BRL) ....................    7.6         0.6                       8.2
Bulgaria (BUL/LEV) ...................                2.1                       2.1
Chile (CHLE/CLP) .....................    4.8                                   4.8
China (CHNA/RMB) .....................    0.4         0.6                       1.0
Dominican Republic (DR/USD) ..........                0.1                       0.1
Ecuador (ECDR/ECS) ...................                0.4                       0.4
Egypt (EGPT/EGP) .....................    5.7                                   5.7
Hong Kong (HK/HKD) ...................    2.0         0.1                       2.1
Hungary (HGRY/HUF) ...................    1.2                                   1.2
India (IND/INR) ......................    3.8         0.2                       4.0
Indonesia (INDO/IDR) .................    2.9         0.1                       3.0
Ireland (IRE/IEP) ....................    0.4                                   0.4
Israel (ISRL/ILS) ....................    1.2                                   1.2
Kazakhstan (KAZ/KTS) .................    0.1                                   0.1
Korea (KOR/KRW) ......................    1.0                                   1.0
Malaysia (MAL/MYR) ...................    0.9                                   0.9
Mexico (MEX/MXN) .....................    8.1         3.0                      11.1
Pakistan (PAK/PKR) ...................    0.9                                   0.9
Panama (PAN/PND) .....................    0.3         0.6                       0.9
Peru (PERU/PES) ......................    1.2         0.3                       1.5
Philippines (PHIL/PHP) ...............    0.8                                   0.8
Poland (POL/PLZ) .....................    0.4                                   0.4
Portugal (PORT/PTE) ..................    0.9                                   0.9
Russia (RUS/SUR) .....................    2.8         5.3                       8.1
South Africa (SAFR/ZAR) ..............   10.5         1.0                      11.5
Taiwan (TWN/TWD) .....................    2.3                                   2.3
Thailand (THAI/THB) ..................    1.2                                   1.2
Turkey (TRKY/TRL) ....................    2.4                                   2.4
United Kingdom (UK/GBP) ..............    0.6                                   0.6
United States (US/USD) ...............                1.6           13.3       14.9
Venezuela (VENZ/VEB) .................    2.1         0.5                       2.6
Zimbabwe (ZBBW/ZWD) ..................    0.8                                   0.8
                                        ------      -----          -----      -----
Total  ...............................   68.5        18.2           13.3      100.0
                                        ------      -----          -----      -----
                                        ------      -----          -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $457,379,188.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                OCTOBER 31, 1997
 
<TABLE>
<CAPTION>
                                           MARKET VALUE     CONTRACT    DELIVERY    UNREALIZED
CONTRACTS TO SELL:                        (U.S. DOLLARS)      PRICE       DATE    (DEPRECIATION)
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Deutsche Marks..........................     1,681,647         1.84950  11/06/97   $  (113,656)
Indonesian Rupiahs......................     1,114,206      3610.00000  11/05/97        (6,173)
South African Rands.....................     3,338,977         5.04500   1/30/98       (73,645)
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $5,941,356)...................     6,134,830                                (193,474)
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS A
 PERCENTAGE OF NET ASSETS IS 1.34%.
  Total Open Forward Foreign Currency
   Contracts............................                                           $  (193,474)
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-40
<PAGE>   1007
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                               <C>         <C>
Assets:
  Investments in securities, at value (cost $481,952,672) (Note 1)..........................  $441,392,099
  U.S. currency.................................................................  $1,159,740
  Foreign currencies (cost $14,108,834).........................................  14,122,604   15,282,344
                                                                                  ----------
  Receivable for securities sold............................................................   13,029,046
  Interest receivable.......................................................................    1,251,368
  Dividends receivable......................................................................      366,109
  Unamortized organizational costs (Note 1).................................................       85,312
  Miscellaneous receivable..................................................................       11,894
                                                                                              -----------
    Total assets............................................................................  471,418,172
                                                                                              -----------
Liabilities:
  Payable for securities purchased..........................................................   12,905,923
  Payable for investment management and administration fees (Note 2)........................      722,480
  Payable for open forward foreign currency contracts (Note 1)..............................      193,474
  Payable for professional fees.............................................................       39,732
  Payable for printing and postage expenses.................................................       37,656
  Payable for custodian fees................................................................       30,062
  Payable for Directors' fees and expenses (Note 2).........................................       15,494
  Payable for transfer agent fees (Note 2)..................................................        5,964
  Payable for fund accounting fees (Note 2).................................................        4,387
  Payable for registration and filing fees..................................................        2,127
  Other accrued expenses....................................................................       81,685
                                                                                              -----------
    Total liabilities.......................................................................   14,038,984
                                                                                              -----------
Net assets..................................................................................  $457,379,188
                                                                                              -----------
                                                                                              -----------
Class A:
Net asset value per share ($457,379,188 DIVIDED BY 36,416,667 shares outstanding)...........  $     12.56
                                                                                              -----------
                                                                                              -----------
Net assets consist of:
  Paid in capital (Note 4)..................................................................  $545,103,263
  Undistributed net investment income.......................................................    8,645,635
  Accumulated net realized loss on investments and foreign currency transactions............  (55,602,092)
  Net unrealized depreciation on translation of assets and liabilities in foreign
   currencies...............................................................................     (207,045)
  Net unrealized depreciation of investments................................................  (40,560,573)
                                                                                              -----------
Total -- representing net assets applicable to capital shares outstanding...................  $457,379,188
                                                                                              -----------
                                                                                              -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-41
<PAGE>   1008
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                            STATEMENTS OF OPERATIONS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                               TEN MONTHS
                                                                                  ENDED       YEAR ENDED
                                                                               OCTOBER 31,   DECEMBER 31,
                                                                                  1997           1996
                                                                              -------------  -------------
<S>                                                                           <C>            <C>
Investment income: (Note 1)
  Interest income...........................................................   $11,436,242    $20,641,051
  Dividend income (net of foreign withholding tax of $365,717 and $420,409,
   respectively)............................................................     5,481,523      7,351,830
  Other income..............................................................            --         74,487
                                                                              -------------  -------------
    Total investment income.................................................    16,917,765     28,067,368
                                                                              -------------  -------------
Expenses:
  Investment management fees (Note 2).......................................     6,274,911      6,673,159
  Administration fees (Note 2)..............................................     1,108,912      1,191,681
  Custodian fees (Note 1)...................................................       317,289        332,166
  Fund accounting fees (Note 2).............................................       108,484        119,321
  Professional fees.........................................................        92,091        101,382
  Printing and postage expenses.............................................        33,504         65,880
  Transfer agent fees (Note 2)..............................................        63,520        190,834
  Amortization of organization costs (Note 1)...............................        58,930         70,949
  Directors' fees and expenses (Note 2).....................................        25,536         38,064
  Registration and filing fees..............................................            --          3,000
  Other expenses............................................................       119,278         37,139
                                                                              -------------  -------------
    Total expenses before reductions........................................     8,202,455      8,823,575
      Expense reductions (Notes 1 & 5)......................................      (374,173)      (162,760)
                                                                              -------------  -------------
    Total net expenses......................................................     7,828,282      8,660,815
                                                                              -------------  -------------
Net investment income.......................................................     9,089,483     19,406,553
                                                                              -------------  -------------
Net realized and unrealized gain (loss) on investments and foreign
  currencies: (Note 1)
  Net realized gain on investments..........................................    46,804,651      1,845,666
  Net realized loss on foreign currency transactions........................    (1,151,351)      (900,512)
                                                                              -------------  -------------
    Net realized gain during the periods....................................    45,653,300        945,154
                                                                              -------------  -------------
  Net change in unrealized appreciation (depreciation) on translation of
   assets and liabilities in foreign currencies.............................      (297,303)        91,835
  Net change in unrealized appreciation (depreciation) of investments.......  (101,078,671)    78,628,364
                                                                              -------------  -------------
    Net unrealized appreciation (depreciation) during the periods...........  (101,375,974)    78,720,199
                                                                              -------------  -------------
Net realized and unrealized gain (loss) on investments and foreign
 currencies.................................................................   (55,722,674)    79,665,353
                                                                              -------------  -------------
Net increase (decrease) in net assets resulting from operations.............   $(46,633,191)  $99,071,906
                                                                              -------------  -------------
                                                                              -------------  -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-42
<PAGE>   1009
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                      STATEMENTS OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
 
                                                                    TEN MONTHS
                                                                       ENDED      YEAR ENDED DECEMBER 31,
                                                                    OCTOBER 31,   ------------------------
                                                                       1997          1996         1995
                                                                   -------------  -----------  -----------
<S>                                                                <C>            <C>          <C>
Increase (Decrease) in net assets
Operations:
  Net investment income..........................................   $ 9,089,483   $19,406,553  $26,375,900
  Net realized gain (loss) on investments and foreign currency
   transactions..................................................    45,653,300       945,154  (78,379,558)
  Net change in unrealized appreciation (depreciation) on
   translation of assets and liabilities in foreign currencies...      (297,303)       91,835       (3,021)
  Net change in unrealized appreciation (depreciation) of
   investments...................................................  (101,078,671)   78,628,364   47,401,359
                                                                   -------------  -----------  -----------
    Net increase (decrease) in net assets resulting from
     operations..................................................   (46,633,191)   99,071,906   (4,605,320)
                                                                   -------------  -----------  -----------
Distributions to shareholders: (Note 1)
  From net investment income.....................................            --   (17,407,047) (26,292,834)
                                                                   -------------  -----------  -----------
Capital share transactions: (Note 4)
  Adjustment to estimate of initial offering expenses............            --            --      373,757
                                                                   -------------  -----------  -----------
    Total increase (decrease) in net assets......................   (46,633,191)   81,664,859  (30,524,397)
Net assets:
  Beginning of period............................................   504,012,379   422,347,520  452,871,917
                                                                   -------------  -----------  -----------
  End of period *................................................   $457,379,188  $504,012,379 $422,347,520
                                                                   -------------  -----------  -----------
                                                                   -------------  -----------  -----------
 * Includes undistributed net investment income (loss) of........   $ 8,645,635   $   363,782  $    (7,034)
                                                                   -------------  -----------  -----------
                                                                   -------------  -----------  -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-43
<PAGE>   1010
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements and market price
data for the shares.
 
<TABLE>
<CAPTION>
                                                                               JANUARY 11, 1994
                                                                                (COMMENCEMENT
                                          TEN MONTHS         YEAR ENDED         OF OPERATIONS)
                                             ENDED          DECEMBER 31,              TO
                                          OCTOBER 31,  ----------------------    DECEMBER 31,
                                             1997         1996        1995           1994
                                          -----------  ----------  ----------  ----------------
<S>                                       <C>          <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $   13.84   $   11.60   $   12.44      $   15.00
                                          -----------  ----------  ----------  ----------------
Income from investment operations:
  Net investment income.................        0.25        0.53        0.72           0.35
  Net realized and unrealized gain
   (loss) on investments................       (1.53)       2.19       (0.84)         (2.46)
                                          -----------  ----------  ----------  ----------------
    Net increase (decrease) from
     investment operations..............       (1.28)       2.72       (0.12)         (2.11)
                                          -----------  ----------  ----------  ----------------
Distributions to shareholders:
  From net investment income............          --       (0.48)      (0.72)         (0.35)
  From net realized gain on
   investments..........................          --          --          --          (0.10)
                                          -----------  ----------  ----------  ----------------
    Total distributions.................          --       (0.48)      (0.72)         (0.45)
                                          -----------  ----------  ----------  ----------------
Net asset value, end of period..........   $   12.56   $   13.84   $   11.60      $   12.44
                                          -----------  ----------  ----------  ----------------
                                          -----------  ----------  ----------  ----------------
Market value, end of period.............   $   11.81   $   11.63   $    9.75      $    9.75
                                          -----------  ----------  ----------  ----------------
                                          -----------  ----------  ----------  ----------------
 
Total investment return (based on market
 value).................................        1.62%(b)     24.18%      6.60%       (32.16)% (b)
 
Total investment return (based on net
 asset value)...........................       (9.25)%(b)     23.59%     (0.95)%       (14.07)% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $ 457,379   $ 504,012   $ 422,348      $ 452,872
Ratio of net investment income to
 average net assets.....................        2.03%(a)      4.07%      6.33%         2.75 % (a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................        1.75%(a)      1.82%      1.77%         2.01 % (a)
  Without expense reductions............        1.83%(a)      1.85%      1.80%         2.01 % (a)
Portfolio turnover rate.................         184%(a)       138%        75%           56 %
Average commission rate per share paid
 on portfolio transactions..............   $  0.0023   $  0.0022         N/A            N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
N/A  Not Applicable.
 
These financial highlights provide per share financial information of G.T.
Global Developing Markets Fund, Inc. ("Predecessor Fund") for the periods
shown. The fees and expenses of the Fund differ from those of the
Predecessor Fund (See Note 2).
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-44
<PAGE>   1011
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Developing Markets Fund ("Fund") is a separate series of G.T.
Investment Funds, Inc. ("Company"). The Company is organized as a Maryland
corporation and is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as an open-end management investment company. The Company
has thirteen series of shares in operation, each series corresponding to a
distinct portfolio of investments.
 
On October 31, 1997, at the close of business, the Fund acquired the assets and
assumed the liabilities of G.T. Global Developing Markets Fund, Inc., a Maryland
corporation registered under the 1940 Act as a non-diversified closed-end
management investment company ("Predecessor Fund"), in exchange for Class A
shares of the Fund in a tax-free reorganization of the Predecessor Fund.
Shareholders of the Predecessor Fund approved the reorganization on October 20,
1997. Prior to October 28, 1997 the Closed-End Fund's shares traded on the New
York Stock Exchange. As a result of the reorganization of the Predecessor Fund
into the Fund, the Fund has a fiscal year end of October 31 to coincide with the
fiscal years of the other series of the Company. Class A shares of the Fund
issued in connection with the reorganization of the Predecessor Fund will be
subject to a 2% redemption fee for redemptions until May 1, 1998. The financial
statements presented are the financial statements for the Predecessor Fund.
 
Commencing November 1, 1997, the Fund began to offer Class A, Class B, and
Advisor Class shares, each of which has equal rights as to assets and voting
privileges except that Class A and Class B each has exclusive voting rights with
respect to its distribution plan. Investment income, realized and unrealized
capital gains and losses, and the common expenses of the Fund are allocated on a
pro rata basis to each class based on the relative net assets of each class to
the total net assets of the Fund. Each class of shares differs in its respective
service and distribution expenses, and may differ in its transfer agent,
registration, and certain other class-specific fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund in the preparation of the financial
statements.
 
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. (the "Manager") to be the primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
asked prices for securities or, if such prices are not available, at prices for
securities of comparative maturity, quality and type; however, when the Manager
deems it appropriate, prices obtained for the day of valuation from a bond
pricing service will be used. Short-term investments with a maturity of 60 days
or less are valued at amortized cost, adjusted for foreign exchange translation
and market fluctuation, if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Fund's Board of Directors.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Fund's Board of Directors.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, other assets and liabilities
are recorded in the books and records of the Fund after translation to U.S.
dollars based on the exchange rates on that day. The cost of each security is
determined using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when earned or incurred.
 
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
existing from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
 
Reported net realized foreign exchange gains and losses arise from sales and
maturities of short-term investments, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from
 
                                     FS-45
<PAGE>   1012
                       GT GLOBAL DEVELOPING MARKETS FUND
 
changes in the value of assets and liabilities other than investments in
securities at year end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which the value, including accrued
interest, is at least equal to the amount to be repaid to the Fund under each
agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. The Fund could be exposed to risk if a counterparty is
unable to meet the terms of a contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities or to hedge against adverse
fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on a traded exchange is valued at its last bid
price, or, in the case of an over-the-counter option, is valued at the average
of the last bid prices obtained from brokers, unless a quotation from only one
broker is available, in which case only that broker's price will be used. If an
option expires on its stipulated expiration date or if the Fund enters into a
closing purchase transaction, a gain or loss is realized without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option is extinguished. If a written call option is exercised, a gain or
loss is realized from the sale of the underlying security and the proceeds of
the sale are increased by the premium originally received. If a written put
option is exercised, the cost of the underlying security purchased would be
decreased by the premium originally received. The Fund can write options only on
a covered basis, which, for a call, requires that the Fund hold the underlying
security, and, for a put, requires the Fund to set aside cash, U.S. government
securities or other liquid securities in an amount not less than the exercise
price or otherwise provide adequate cover at all times while the put option is
outstanding. The Fund may use options to manage its exposure to the stock and
bond markets and to fluctuations in currency values or interest rates.
 
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock and bond
markets and to fluctuations in currency values or interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to collection of income on securities, income is
recorded net of all withholding tax with any rebate recorded when received. The
Fund may trade securities on other than normal settlement terms. This may
increase the market risk if the other party to the transaction fails to deliver
and causes the Fund to subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1997, stocks with an aggregate value of approximately $29,571,465
were on loan to brokers. The loans were secured by cash collateral of
$33,239,507 received by the Fund. For international
 
                                     FS-46
<PAGE>   1013
                       GT GLOBAL DEVELOPING MARKETS FUND
 
securities, cash collateral is received by the Fund against loaned securities in
an amount at least equal to 105% of the market value of the loaned securities at
the inception of each loan. This collateral must be maintained at not less than
103% of the market value of the loaned securities during the period of the loan.
For domestic securities, cash collateral is received by the Fund against loaned
securities in an amount at least equal to 102% of the market value of the loaned
securities at the inception of each loan. This collateral must be maintained at
not less than 100% of the market value of the loaned securities during the
period of each loan. For the period ended October 31, 1997, the Fund received
securities lending income of $302,308 which was used to reduce the Fund's
custodian fees and administrative expenses.
 
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, and unrealized appreciation of securities held, or excise tax on income
and capital gains. The Fund currently has a capital loss carryforward of
$54,472,976 which expires in 2003.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 and timing differences.
 
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the Fund in connection with its organization, its
registration with the Securities and Exchange Commission and with various states
aggregated $353,775. These expenses are being amortized on a straightline basis
over a five-year period.
 
(L) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
 
(M) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
 
(N) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult. At the end of the period, restricted
securities (excluding 144A issues) are shown at the end of the Fund's Portfolio
of Investments.
 
(O) SECURITIES PURCHASED ON A WHEN-ISSUED OR FORWARD COMMITMENT BASIS
The Fund may trade securities on a when-issued or forward commitment basis, with
payment and delivery scheduled for a future date. These transactions are subject
to market fluctuations and are subject to the risk that the value at delivery
may be more or less than the trade date purchase price. Although the Fund will
generally purchase these securities with the intention of acquiring such
securities, they may sell such securities before the settlement date. These
securities are identified on the accompanying Portfolio of Investments. The Fund
has purchased and sold when-issued securities during the period and has set
aside liquid securities as collateral for these commitments.
 
(P) LINE OF CREDIT
The Fund, along with certain other funds advised and/or administered by the
Manager ("GT Funds"), has a line of credit with each of BankBoston and State
Street Bank & Trust Company. The arrangements with the banks allow the GT Funds
to borrow an aggregate maximum amount of $200,000,000. The Fund is limited to
borrowing up to 33 1/3% of the value of the Fund's total assets. On October 31,
1997, the Fund had no loans outstanding.
 
For the period ended October 31, 1997, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $12,607,909, with a weighted average interest rate of 6.29%.
Interest expense for the Fund for the period ended October 31, 1997 was $24,241,
and is included in "Other Expenses" on the Statement of Operations.
 
2. RELATED PARTIES
 
(A) PREDECESSOR FUND THROUGH OCTOBER 31, 1997
Chancellor LGT Asset Management, Inc. was the Predecessor Fund's investment
manager and administrator. The Predecessor Fund paid the Manager investment
management fees, which were computed weekly and paid monthly, at the annualized
rate of 1.40% of the funds average weekly net assets. The Manager also acted as
administrator of the Predecessor Fund and paid the Manager administration fees,
which were computed and paid monthly, at an annualized rate of 0.25% of the
Fund's average weekly net assets.
 
The Manager was the pricing and accounting agent for the Predecessor Fund. The
monthly fee for these services to the Manager was a percentage, not to exceed
0.03% annually, of the Predecessor Fund's average daily net assets. The annual
fee rate was derived by applying 0.03% to the first $5 billion of assets of all
registered mutual funds advised by the Manager and 0.02% to the assets in excess
of
 
                                     FS-47
<PAGE>   1014
                       GT GLOBAL DEVELOPING MARKETS FUND
 
$5 billion and allocating the result according to the Predecessor Fund's average
daily net assets.
 
The Predecessor Fund paid each of its Directors who was not an employee, officer
or director of the Manager or any of its affiliated companies $5,000 per year
plus $300 for each meeting of the board or any committee thereof attended by the
Director.
 
(B) THE FUND COMMENCING NOVEMBER 1, 1997
Chancellor LGT Asset Management, Inc. is the Fund's investment manager and
administrator. The Fund pays the Manager investment management and
administration fees at the annualized rate of 0.975% on the first $500 million
of average daily net assets of the Fund; 0.95% on the next $500 million; 0.925%
on the next $500 million and 0.90% on amounts thereafter. These fees are
computed daily and paid monthly.
 
GT Global, Inc. ("GT Global"), an affiliate of the Manager, serves as the Fund's
distributor. The Fund offers Class A, Class B, and Advisor Class shares for
purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. Purchases of Class A shares exceeding $500,000 may be subject to
a contingent deferred sales charge ("CDSC") upon redemption, in accordance with
the Fund's current prospectus. GT Global also makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class A
shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global, from its own resources, pays commissions to dealers through
which the sales are made. Certain redemptions of Class B shares made within six
years of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. In addition, GT Global makes ongoing shareholder servicing and trail
commission payments to dealers whose clients hold Class B shares.
 
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.50% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global is reimbursed under the Class A Plan will have
been incurred within one year of such reimbursement.
 
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
 
The Manager and GT Global voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 2.00%, 2.50%, and 1.50% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by the waivers by
the Manager of investment management and administration fees, waivers by GT
Global of payments under the Class A Plan and/or Class B Plan and/or
reimbursements by the Manager or GT Global of portions of the Fund's other
operating expenses.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager or any of its affiliated companies $5,000 per year plus
$300 for each meeting of the board or any committee thereof attended by the
Director.
 
3. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1997, purchases and sales of investment
securities by the Fund, other than U.S. government obligations and short-term
investments, aggregated $736,422,573 and $765,404,012, respectively. Purchases
of U.S. government obligations by the Fund were $7,226,388 for the year. There
were no sales of U.S. government obligations by the Fund for the year.
 
4. CAPITAL SHARES
At October 31, 1997, the Predecessor Fund was authorized to issue 100 million
shares of capital stock, $0.001 par value, all of which was classified as Common
Stock.
 
At October 31, 1997, there were 6,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 200,000,000 were
classified as shares of GT Global Developing Markets Fund; 400,000,000 were
classified as shares of GT
 
                                     FS-48
<PAGE>   1015
                       GT GLOBAL DEVELOPING MARKETS FUND
 
Global Government Income Fund; 200,000,000 were classified as shares of GT
Global Health Care Fund; 200,000,000 were classified as shares of GT Global
Strategic Income Fund; 200,000,000 were classified as shares of GT Global
Currency Fund (inactive); 200,000,000 were classified as shares of GT Global
Growth & Income Fund; 200,000,000 were classified as shares of GT Global Small
Companies Fund (inactive); 200,000,000 were classified as shares of GT Global
Latin America Growth Fund; 400,000,000 were classified as shares of GT Global
Telecommunications Fund; 200,000,000 were classified as shares of GT Global
Emerging Markets Fund; 200,000,000 were classified as shares of GT Global High
Income Fund; 200,000,000 were classified as shares of GT Global Financial
Services Fund; 200,000,000 were classified as shares of GT Global Natural
Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; and 200,000,000 were classified as shares of GT Global
Consumer Products and Services Fund. The shares of each of the foregoing series
of the Company were divided equally into two classes, designated Class A and
Class B common stock. With respect to the issuance of Advisor Class shares,
100,000,000 shares were classified as shares of each of the fourteen series of
the Company and designated as Advisor Class common stock. 1,100,000,000 shares
remain unclassified.
 
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the year ended October 31, 1997, the Fund's expenses
 
were reduced by $71,865 under these arrangements.
 
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
 
For its fiscal year ended October 31, 1997, the total amount of income received
by the Fund from sources within foreign countries and possessions of the United
States was approximately $.7797 per share (representing an approximate total of
$15,509,507). The total amount of taxes paid by the Fund to such countries was
approximately $.0213 per share (representing an approximate total of $424,399).
 
                                     FS-49
<PAGE>   1016
                            AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
To the Shareholders of AIM Emerging Markets Fund
(formerly GT Global Emerging Markets Fund) and
Board of Directors of AIM Investment Funds, Inc.:
 
We have audited the accompanying statement of assets and liabilities of AIM
Emerging Markets Fund (formerly GT Global Emerging Markets Fund), one of the
funds organized as a series of AIM Investment Funds, Inc., including the
portfolio of investments, as of April 30, 1998, the related statement of
operations for the six months then ended, the statements of changes in net
assets for the six months then ended and for the year ended October 31, 1997,
and the financial highlights for each of the periods indicated therein. These
financial statements and the financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1998 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of AIM
Emerging Markets Fund as of April 30, 1998, the results of its operations for
the six months then ended, the changes in its net assets for the six months then
ended and for the year ended October 31, 1997, and the financial highlights for
each of the periods indicated therein, in conformity with generally accepted
accounting principles.
 


                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
JUNE 17, 1998
 
                                     FS-50
<PAGE>   1017
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                            PORTFOLIO OF INVESTMENTS
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (19.8%)
  Telecomunicacoes Brasileiras S.A. (Telebras): .............   BRZL               --             --         4.6
    TELEPHONE NETWORKS
    ADR{\/} .................................................   --             50,962   $  6,207,802          --
    Common ..................................................   --         30,136,813      2,991,280          --
  Telefonos de Mexico, S.A. de C.V. "L" - ADR{\/} ...........   MEX            51,127      2,895,066         1.4
    TELEPHONE NETWORKS
  Telefonica del Peru S.A. - ADR{\/} ........................   PERU          119,250      2,638,406         1.3
    TELEPHONE NETWORKS
  Pick'n Pay Stores Ltd.: ...................................   SAFR               --             --         1.1
    RETAILERS-OTHER
    Common ..................................................   --          1,191,699      2,264,287          --
    "N" .....................................................   --             25,198         45,883          --
  Magyar Tavkozlesi Rt. - ADR-/- {\/} .......................   HGRY           67,990      2,005,705         1.0
    TELEPHONE NETWORKS
  Cifra, S.A. de C.V. "V" ...................................   MEX         1,080,730      1,901,166         0.9
    RETAILERS-OTHER
  Grupo Televisa, S.A. de C.V. - GDR-/- {\/} ................   MEX            41,300      1,693,300         0.8
    BROADCASTING & PUBLISHING
  Philippine Long Distance Telephone Co.: ...................   PHIL               --             --         0.7
    TELEPHONE - LONG DISTANCE
    ADR{\/} .................................................   --             30,200        815,400          --
    Common ..................................................   --             21,500        577,091          --
  Carso Global Telecom "A1" .................................   MEX           339,700      1,303,453         0.6
    TELEPHONE NETWORKS
  Mahanagar Telephone Nigam Ltd.: ...........................   IND                --             --         0.6
    TELECOM - OTHER
    GDR-/- {\/} .............................................   --             43,300        694,965          --
    Common ..................................................   --             84,400        535,873          --
  Companhia de Saneamento Basico do Estado de Sao Paulo -
   SABESP ...................................................   BRZL        5,368,655      1,220,682         0.6
    BUSINESS & PUBLIC SERVICES
  Telefonica de Argentina S.A. - ADR{\/} ....................   ARG            30,983      1,194,782         0.6
    TELEPHONE NETWORKS
  Cia de Telecomunicaciones de Chile S.A. - ADR{\/} .........   CHLE           47,107      1,180,619         0.6
    TELEPHONE NETWORKS
  Telecomunicacoes de Sao Paulo S.A. (TELESP)-/- ............   BRZL        3,945,000      1,029,805         0.5
    TELEPHONE NETWORKS
  Nortel Inversora S.A. - ADR{\/} ...........................   ARG            27,900        830,025         0.4
    TELEPHONE NETWORKS
  Vimpel-Communications - ADR-/- {\/} .......................   RUS            14,700        793,800         0.4
    WIRELESS COMMUNICATIONS
  Telecom Argentina S.A. - ADR{\/} ..........................   ARG            19,400        698,400         0.3
    TELEPHONE NETWORKS
  Hellenic Telecommunications Organization S.A. .............   GREC           24,180        692,484         0.3
    TELEPHONE NETWORKS
  Genting Bhd. ..............................................   MAL           183,000        613,297         0.3
    LEISURE & TOURISM
  Guangshen Railway Co., Ltd. ...............................   HK          3,195,000        598,121         0.3
    TRANSPORTATION - ROAD & RAIL
  Telekom Malaysia Bhd. .....................................   MAL           171,000        517,622         0.3
    TELEPHONE NETWORKS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-51
<PAGE>   1018
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (Continued)
  Rostelecom - ADR-/- {\/} ..................................   RUS            24,100   $    516,644         0.3
    TELEPHONE - LONG DISTANCE
  Danubius Hotel and Spa Rt.-/- .............................   HGRY           19,037        465,275         0.2
    LEISURE & TOURISM
  Malaysia International Shipping Bhd. - Foreign ............   MAL           240,000        421,622         0.2
    TRANSPORTATION - SHIPPING
  Telecomunicacoes do Parana (TELPAR) .......................   BRZL          719,000        410,588         0.2
    TELECOM - OTHER
  Advanced Info. Service - Foreign ..........................   THAI           54,600        381,917         0.2
    WIRELESS COMMUNICATIONS
  Telecomunicacoes de Minas Gerais - Telemig ................   BRZL        2,245,200        346,548         0.2
    TELECOM - OTHER
  Tanjong PLC ...............................................   MAL           142,000        326,216         0.2
    LEISURE & TOURISM
  Pakistan Telecommunications Co., Ltd. - GDR-/- {\/} .......   PAK             3,700        255,300         0.1
    TELEPHONE NETWORKS
  Berjaya Sports Toto Bhd. ..................................   MAL            98,000        234,405         0.1
    LEISURE & TOURISM
  Migros Turk T.A.S. ........................................   TRKY          238,400        233,866         0.1
    RETAILERS-FOOD
  Santa Isabel S.A. - ADR{\/} ...............................   CHLE           12,144        200,376         0.1
    RETAILERS-FOOD
  Trade House GUM - ADR{\/} .................................   RUS            38,320        191,600         0.1
    RETAILERS-OTHER
  Super Sol Ltd. ............................................   ISRL           56,545        178,328         0.1
    RETAILERS-FOOD
  Goody's S.A. ..............................................   GREC            6,230        166,723         0.1
    RESTAURANTS
  Siam Makro Public Co., Ltd. - Foreign .....................   THAI           53,400         87,847          --
    RETAILERS-OTHER
  Indian Hotels Co., Ltd. ...................................   IND             2,700         36,037          --
    LEISURE & TOURISM
                                                                                        ------------
                                                                                          40,392,606
                                                                                        ------------
Finance (19.1%)
  Alpha Credit Bank .........................................   GREC           21,400      2,257,807         1.1
    BANKS-REGIONAL
  Uniao de Bancos Brasileiros S.A. (Unibanco): ..............   BRZL               --             --         1.0
    BANKS-MONEY CENTER
    Units{=} ................................................   --         16,569,429      1,275,274          --
    GDR-/- {\/} .............................................   --             21,670        861,383          --
  Turkiye Garanti Bankasi AS-/- .............................   TRKY       37,629,400      1,996,355         1.0
    BANKS-REGIONAL
  ABSA Group Ltd. ...........................................   SAFR          176,757      1,530,553         0.8
    BANKS-REGIONAL
  Yapi ve Kredi Bankasi AS ..................................   TRKY       27,168,347      1,332,582         0.7
    BANKS-REGIONAL
  Bank Hapoalim Ltd. ........................................   ISRL          494,510      1,328,163         0.7
    BANKS-REGIONAL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-52
<PAGE>   1019
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- - -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Finance (Continued)
  Commercial International Bank: ............................   EGPT               --             --         0.6
    BANKS-MONEY CENTER
    144A GDR{.} {\/} ........................................   --             63,000   $  1,067,850          --
    Common ..................................................   --             14,000        240,705          --
  Credicorp Ltd. - ADR{\/} ..................................   PERU           77,770      1,302,648         0.6
    BANKS-MONEY CENTER
  Akbank T.A.S. .............................................   TRKY       15,141,000      1,288,273         0.6
    BANKS-REGIONAL
  Cathay Life Insurance Co., Ltd. ...........................   TWN           319,000      1,277,161         0.6
    INSURANCE-BROKER
  National Bank of Greece S.A. ..............................   GREC            6,700      1,178,992         0.6
    BANKS-MONEY CENTER
  Grupo Financiero Banamex Accival, S.A. de C.V. "B"-/- .....   MEX           374,300      1,171,068         0.6
    BANKS-MONEY CENTER
  State Bank of India Ltd. ..................................   IND           146,487      1,062,944         0.5
    BANKS-MONEY CENTER
  Liberty Life Association of Africa Ltd. ...................   SAFR           30,100      1,018,723         0.5
    INSURANCE-LIFE
  China Development Corp.-/- ................................   TWN           353,000        958,250         0.5
    BANKS-MONEY CENTER
  C.G. Smith Ltd. ...........................................   SAFR          189,300        936,665         0.5
    INVESTMENT MANAGEMENT
  Nedcor Ltd. ...............................................   SAFR           30,400        866,423         0.4
    BANKS-REGIONAL
  Standard Bank Investment Corporation Ltd. .................   SAFR           13,930        824,358         0.4
    BANKS-MONEY CENTER
  Ergo Bank S.A. ............................................   GREC            8,600        810,030         0.4
    BANKS-REGIONAL
  Aksigorta AS ..............................................   TRKY       10,482,500        776,481         0.4
    INSURANCE - MULTI-LINE
  Hua Nan Commercial Bank ...................................   TWN           318,000        771,611         0.4
    BANKS-MONEY CENTER
  Banco do Estado de Sao Paulo S.A. - Banespa ...............   BRZL       11,550,000        767,643         0.4
    BANKS-REGIONAL
  National Societe Generale Bank ............................   EGPT           30,000        754,298         0.4
    BANKS-MONEY CENTER
  MISR International Bank - Reg S GDR-/- {c} {\/} ...........   EGPT           57,300        716,250         0.4
    BANKS-MONEY CENTER
  Banco de Galicia y Buenos Aires, S.A. de C.V. - ADR{\/} ...   ARG            28,226        691,537         0.3
    BANKS-MONEY CENTER
  Banco de A. Edwards - ADR{\/} .............................   CHLE           42,284        679,187         0.3
    BANKS-MONEY CENTER
  Banco Frances del Rio de la Plata S.A. - ADR{\/} ..........   ARG            23,178        673,611         0.3
    BANKS-MONEY CENTER
  Turkiye Is Bankasi (Isbank) "C" ...........................   TRKY        4,775,900        602,366         0.3
    BANKS-MONEY CENTER
  Bank Leumi Le - Israel ....................................   ISRL          298,645        546,046         0.3
    BANKS-REGIONAL
  Kazkommertsbank Co. - GDR-/- {\/} .........................   KAZ            19,530        512,663         0.3
    BANKS-REGIONAL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-53
<PAGE>   1020
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Finance (Continued)
  Administradora de Fondos de Pensiones Provida S.A. -
   ADR{\/} ..................................................   CHLE           28,448   $    508,508         0.3
    INVESTMENT MANAGEMENT
  Bank Slaski S.A. ..........................................   POL             5,773        494,974         0.2
    BANKS-MONEY CENTER
  Commercial Bank of Greece S.A. ............................   GREC            7,460        469,425         0.2
    BANKS-MONEY CENTER
  Banco Santander Chile - ADR{\/} ...........................   CHLE           33,100        463,400         0.2
    BANKS-REGIONAL
  National Development Bank-/- ..............................   SLNKA         120,200        446,381         0.2
    BANKS-REGIONAL
  Banco Rio de La Plata S.A. - ADR-/- {\/} ..................   ARG            32,100        441,375         0.2
    BANKS-MONEY CENTER
  Inversiones y Representaciones S.A. (IRSA) - GDR{\/} ......   ARG            10,750        417,906         0.2
    REAL ESTATE
  Bank of the Philippine Islands ............................   PHIL          145,200        362,547         0.2
    BANKS-MONEY CENTER
  F.I.B.I. Holdings Ltd. ....................................   ISRL            1,851        328,426         0.2
    BANKS-REGIONAL
  Liberty Investors Ltd. ....................................   SAFR           63,600        324,137         0.2
    INVESTMENT MANAGEMENT
  Muslim Commercial Bank Ltd.-/- ............................   PAK           403,000        320,204         0.2
    BANKS-MONEY CENTER
  Ayala Land, Inc. ..........................................   PHIL          807,600        317,596         0.2
    REAL ESTATE
  Global Menkul Degerler AS-/- ..............................   TRKY       13,011,257        312,583         0.2
    SECURITIES BROKER
  National Mortgage Bank of Greece ..........................   GREC            3,810        289,757         0.1
    BANKS-REGIONAL
  OTP Bank Rt. ..............................................   HGRY            5,370        254,599         0.1
    BANKS-MONEY CENTER
  Malayan Banking Bhd. ......................................   MAL            83,000        246,757         0.1
    BANKS-MONEY CENTER
  Egyptian American Bank SAE ................................   EGPT            7,490        191,515         0.1
    BANKS-MONEY CENTER
  Shinhan Bank-/- ...........................................   KOR            26,400        102,831         0.1
    BANKS-MONEY CENTER
  Samsung Fire & Marine Insurance-/- ........................   KOR               300         88,764          --
    INSURANCE - MULTI-LINE
  Kookmin Bank - GDR-/- {\/} ................................   KOR            12,100         79,376          --
    BANKS-MONEY CENTER
  Bangkok Bank Public Co., Ltd. - Foreign ...................   THAI           24,110         60,587          --
    BANKS-MONEY CENTER
  Thai Farmers Bank Public Co., Ltd. - Foreign ..............   THAI           19,300         44,250          --
    BANKS-MONEY CENTER
  Housing Development Finance Corp. .........................   IND                 5            407          --
    OTHER FINANCIAL
                                                                                        ------------
                                                                                          38,644,205
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-54
<PAGE>   1021
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Energy (15.2%)
  Petroleo Brasileiro S.A. (Petrobras) Preferred ............   BRZL       13,807,080   $  3,501,577         1.7
    OIL
  Centrais Eletricas Brasileiras S.A. (Eletrobras): .........   BRZL               --             --         1.5
    ELECTRICAL & GAS UTILITIES
    "B" - ADR{\/} ...........................................   --             89,855      2,010,506          --
    "B" Preferred ...........................................   --         13,148,000        586,515          --
    Common-/- ...............................................   --         10,494,500        431,344          --
  LUKoil Holding - ADR{\/} ..................................   RUS            36,976      2,403,440         1.2
    OIL
  Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} ....   BRZL           44,739      2,169,842         1.1
    ELECTRICAL & GAS UTILITIES
  Sasol Ltd. ................................................   SAFR          214,407      2,164,227         1.1
    ENERGY SOURCES
  Unified Energy Systems - Reg S GDR-/- {c} {\/} ............   RUS            67,500      2,160,000         1.1
    ELECTRICAL & GAS UTILITIES
  YPF S.A. - ADR{\/} ........................................   ARG            45,665      1,592,567         0.8
    ENERGY SOURCES
  Empresa Nacional de Electricidad S.A. - ADR{\/} ...........   CHLE           80,362      1,401,312         0.7
    ELECTRICAL & GAS UTILITIES
  Light - Participacoes S.A. ................................   BRZL        5,481,073      1,342,108         0.7
    ELECTRICAL & GAS UTILITIES
  Enersis S.A. - ADR{\/} ....................................   CHLE           44,268      1,303,139         0.6
    ELECTRICAL & GAS UTILITIES
  Light - Servicos de Electricidade S.A. ....................   BRZL        2,772,561      1,115,328         0.6
    ELECTRICAL & GAS UTILITIES
  Cukurova Elektrik AS ......................................   TRKY          358,000      1,032,072         0.5
    ELECTRICAL & GAS UTILITIES
  MOL Magyar Olaj-es Gazipari RT - Reg S GDR{c} {\/} ........   HGRY           32,360        987,789         0.5
    ENERGY SOURCES
  Gener S.A. - ADR{\/} ......................................   CHLE           37,873        847,408         0.4
    ELECTRICAL & GAS UTILITIES
  The Hub Power Co., Ltd. - GDR-/- {\/} .....................   PAK            24,750        624,938         0.3
    ENERGY SOURCES
  Manila Electric Co. "B" ...................................   PHIL          201,900        574,697         0.3
    ELECTRICAL & GAS UTILITIES
  Irkutskenergo - ADR{\/} ...................................   RUS            52,000        507,000         0.3
    ELECTRICAL & GAS UTILITIES
  Perez Companc S.A. "B" ....................................   ARG            77,418        465,329         0.2
    OIL
  Surgutneftegaz - ADR{\/} ..................................   RUS            63,555        444,885         0.2
    OIL
  Petronas Gas Bhd. .........................................   MAL           153,000        372,162         0.2
    OIL
  Chilectra S.A. - ADR{\/} ..................................   CHLE           13,100        361,888         0.2
    ELECTRICAL & GAS UTILITIES
  Ingwe Coal Corp. ..........................................   SAFR          100,200        358,955         0.2
    COAL
  Pakistan State Oil Co., Ltd. ..............................   PAK            65,184        329,102         0.2
    OIL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-55
<PAGE>   1022
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Energy (Continued)
  Companhia Brasileira de Petroleo Ipiranga S.A.
   Preferred ................................................   BRZL       23,126,000   $    301,336         0.1
    OIL
  BSES Ltd. - Reg. S GDR-/- {c} {\/} ........................   IND            18,330        301,070         0.1
    ELECTRICAL & GAS UTILITIES
  Electricity Generating Public Co., Ltd. - Foreign .........   THAI          127,400        247,539         0.1
    ELECTRICAL & GAS UTILITIES
  Tenaga Nasional Bhd. ......................................   MAL           122,000        245,649         0.1
    ELECTRICAL & GAS UTILITIES
  PTT Exploration and Production Public Co., Ltd. -
   Foreign ..................................................   THAI           16,600        175,461         0.1
    OIL
  Korea Electric Power Corp. ................................   KOR            12,500        170,412         0.1
    ELECTRICAL & GAS UTILITIES
  Companhia Paranaense de Energia - Copel ...................   BRZL        8,012,000         92,487          --
    ELECTRICAL & GAS UTILITIES
  Transportadora de Gas del Sur S.A. (TGS) - ADR{\/} ........   ARG             2,400         27,750          --
    GAS
  Banpu Public Co., Ltd. - Foreign ..........................   THAI            2,600         17,917          --
    COAL
                                                                                        ------------
                                                                                          30,667,751
                                                                                        ------------
Materials/Basic Industry (12.7%)
  Suez Cement Co. - Reg S GDR{c} {\/} .......................   EGPT          140,235      2,860,794         1.4
    CEMENT
  Helioplis Housing .........................................   EGPT           20,165      2,607,671         1.3
    BUILDING MATERIALS & COMPONENTS
  Kimberly-Clark de Mexico, S.A. de C.V. "A" ................   MEX           492,744      2,422,997         1.2
    PAPER/PACKAGING
  Companhia Vale do Rio Doce Preferred ......................   BRZL           69,200      1,633,931         0.8
    METALS - STEEL
  Industrias Penoles S.A. (CP) ..............................   MEX           289,887      1,197,880         0.6
    METALS - NON-FERROUS
  Reliance Industries Ltd. - GDR-/- {\/} ....................   IND           121,000      1,104,125         0.5
    CHEMICALS
  Apasco, S.A. de C.V. ......................................   MEX           159,381      1,083,866         0.5
    CEMENT
  De Beers Centenary AG - Linked Unit{.:} ...................   SAFR           41,800      1,083,780         0.5
    MISC. MATERIALS & COMMODITIES
  Cemex, S.A. de C.V.: ......................................   MEX                --             --         0.5
    CEMENT
    "CPO" ...................................................   --            171,700        859,514          --
    "A" .....................................................   --             43,400        217,256          --
  SA Iron & Steel Industrial Corporation Ltd. (ISCOR) .......   SAFR        2,970,244        958,238         0.5
    METALS - STEEL
  Anglo American Platinum Corporation Ltd. ..................   SAFR           51,600        825,191         0.4
    METALS - NON-FERROUS
  Ameriyah Cement Co. .......................................   EGPT           42,386        820,937         0.4
    CEMENT
  Compania de Minas Buenaventura S.A. - ADR{\/} .............   PERU           50,900        788,950         0.4
    METALS - NON-FERROUS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-56
<PAGE>   1023
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Materials/Basic Industry (Continued)
  Hindalco Industries Ltd.: .................................   IND                --             --         0.3
    METALS - NON-FERROUS
    "GDR"{\/} ...............................................   --             34,200   $    666,900          --
    Common ..................................................   --              1,802         34,278          --
  Sociedad Quimica y Minera de Chile S.A. - ADR{\/} .........   CHLE           14,670        637,228         0.3
    CHEMICALS
  Larsen & Toubro Ltd. - Reg S GDR{c} {\/} ..................   IND            37,100        488,793         0.2
    CEMENT
  Grupo Mexico S.A. "L" .....................................   MEX           147,100        468,914         0.2
    METALS - NON-FERROUS
  Siderca S.A. "A" ..........................................   ARG           187,600        452,161         0.2
    METALS - STEEL
  Nan Ya Plastics Corp. .....................................   TWN           255,000        421,520         0.2
    PLASTICS & RUBBER
  Kuala Lumpur Kepong Bhd. ..................................   MAL           153,000        357,689         0.2
    FOREST PRODUCTS
  Titan Cement Co., S.A. ....................................   GREC            4,000        342,392         0.2
    BUILDING MATERIALS & COMPONENTS
  AECI Ltd. .................................................   SAFR           66,900        331,024         0.2
    CHEMICALS
  Makhteshim Chemical Works Ltd.-/- .........................   ISRL           37,330        317,040         0.2
    CHEMICALS
  Pannonplast Rt. ...........................................   HGRY            7,188        305,009         0.2
    MISC. MATERIALS & COMMODITIES
  Torah Portland Cement Co. .................................   EGPT           14,100        298,990         0.1
    CEMENT
  Dhan Fibres Ltd.-/- .......................................   PAK         4,273,000        291,010         0.1
    CHEMICALS
  Turk Sise ve Cam Fabrikalari AS-/- ........................   TRKY        5,880,600        288,438         0.1
    GLASS
  Golden Hope Plantations Bhd. ..............................   MAL           227,000        283,443         0.1
    FOREST PRODUCTS
  Grupo Cementos de Chihuahua, S.A. de C.V. "B" .............   MEX           241,000        257,218         0.1
    CEMENT
  Formosa Plastics Corp. ....................................   TWN           127,000        217,637         0.1
    CHEMICALS
  HI Cement Corp. ...........................................   PHIL        1,623,000        194,517         0.1
    CEMENT
  Agros Holding S.A. "C"-/- .................................   POL             8,726        192,826         0.1
    MISC. MATERIALS & COMMODITIES
  Malakoff Bhd. .............................................   MAL            66,000        174,811         0.1
    FOREST PRODUCTS
  Engro Chemicals Pakistan Ltd. .............................   PAK            77,924        173,714         0.1
    CHEMICALS
  Israel Chemicals Ltd. .....................................   ISRL          130,676        157,637         0.1
    CHEMICALS
  Fauji Fertilizer Co., Ltd. ................................   PAK            71,900        141,841         0.1
    CHEMICALS
  Pohang Iron & Steel Co., Ltd. .............................   KOR             2,310        125,269         0.1
    METALS - STEEL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-57
<PAGE>   1024
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Materials/Basic Industry (Continued)
  Maderas y Sinteticos S.A. - ADR{\/} .......................   CHLE            8,400   $     80,325          --
    MISC. MATERIALS & COMMODITIES
  Associated Cement Cos., Ltd. ..............................   IND                51          2,009          --
    CEMENT
  Dewan Salman Fibre Ltd.-/- ................................   PAK                 4              2          --
    CHEMICALS
                                                                                        ------------
                                                                                          26,167,765
                                                                                        ------------
Multi-Industry/Miscellaneous (10.6%)
  Haci Omer Sabanci Holding AS: .............................   TRKY               --             --         1.1
    CONGLOMERATE
    Common ..................................................   --         27,128,500      1,982,363          --
    Reg S ADR-/- {c} {\/} ...................................   --             10,700        193,938          --
  Barlow Ltd. ...............................................   SAFR          220,377      2,130,711         1.0
    CONGLOMERATE
  The Saudi Arabian Investment Fund Ltd.-/- {\/} ............   UK            263,400      2,075,592         1.0
    COUNTRY FUNDS
  Rembrandt Group Ltd. ......................................   SAFR          213,660      1,945,247         1.0
    CONGLOMERATE
  NASR (El) City Company For Housing & Construction .........   EGPT           27,170      1,668,849         0.8
    MISCELLANEOUS
  Central Asia Regional Growth Fund-/- {\/} (::) ............   IRE           156,000      1,659,840         0.8
    COUNTRY FUNDS
  Koc Holding AS ............................................   TRKY        7,734,450      1,641,345         0.8
    CONGLOMERATE
  Grupo Carso, S.A. de C.V. "A1" ............................   MEX           251,000      1,582,456         0.8
    MULTI-INDUSTRY
  Dogan Sirketler Grubu Holding AS-/- .......................   TRKY       15,917,000        908,177         0.4
    MULTI-INDUSTRY
  Sanluis Corporacion, S.A. de C.V. .........................   MEX           160,832        854,479         0.4
    CONGLOMERATE
  Koor Industries Ltd. - ADR{\/} ............................   ISRL           31,615        802,231         0.4
    CONGLOMERATE
  John Keells Holdings Ltd.-/- ..............................   SLNKA         143,750        761,003         0.4
    MULTI-INDUSTRY
  Anglo American Corporation of South Africa Ltd. ...........   SAFR           12,207        722,393         0.4
    CONGLOMERATE
  Romanian Growth Fund-/- ...................................   ROM            75,800        526,810         0.3
    COUNTRY FUNDS
  Empresas La Moderna, S.A. de C.V. "A"-/- ..................   MEX            97,800        490,155         0.2
    MULTI-INDUSTRY
  Ayala Corp. ...............................................   PHIL          803,400        356,064         0.2
    CONGLOMERATE
  Alfa, S.A. de C.V. "A" ....................................   MEX            64,000        349,847         0.2
    CONGLOMERATE
  Antofagasta Holdings PLC ..................................   UK             56,300        307,390         0.2
    CONGLOMERATE
  Quinenco S.A. - ADR-/- {\/} ...............................   CHLE           27,900        287,719         0.1
    CONGLOMERATE
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-58
<PAGE>   1025
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Multi-Industry/Miscellaneous (Continued)
  ONA (Omnium Nord Africain) S.A. "A" .......................   MOR             1,590   $    168,505         0.1
    CONGLOMERATE
  KEC International Ltd. ....................................   IND               300            287          --
    MISCELLANEOUS
                                                                                        ------------
                                                                                          21,415,401
                                                                                        ------------
Consumer Non-Durables (8.2%)
  Fomento Economico Mexicano, S.A. de C.V. "B" ..............   MEX           277,610      2,058,313         1.0
    BEVERAGES - ALCOHOLIC
  Hindustan Lever Ltd. ......................................   IND            51,000      2,026,379         1.0
    PERSONAL CARE/COSMETICS
  ITC Ltd. ..................................................   IND            92,128      1,829,677         0.9
    TOBACCO
  South African Breweries Ltd. ..............................   SAFR           53,912      1,809,693         0.9
    BEVERAGES - ALCOHOLIC
  Gruma S.A. "B"-/- .........................................   MEX           495,083      1,138,632         0.6
    FOOD
  A-Ahram Beverages Co. S.A.E. - 144A GDR{.} {\/} ...........   EGPT           33,135      1,053,693         0.5
    BEVERAGES - ALCOHOLIC
  Eastern Tobacco Co. .......................................   EGPT           43,845        998,674         0.5
    TOBACCO
  Embotelladora Andina S.A. "B" - ADR{\/} ...................   CHLE           42,247        855,502         0.4
    BEVERAGES - NON-ALCOHOLIC
  Compania Cervecerias Unidas S.A. - ADR{\/} ................   CHLE           21,346        589,683         0.3
    BEVERAGES - ALCOHOLIC
  Hellenic Bottling Co. S.A. ................................   GREC           15,140        563,667         0.3
    BEVERAGES - NON-ALCOHOLIC
  C.G. Smith Foods Ltd. .....................................   SAFR           33,000        515,982         0.3
    FOOD
  San Miguel Corp. "B" ......................................   PHIL          309,000        509,213         0.3
    BEVERAGES - ALCOHOLIC
  Companhia Cervejaria Brahma Preferred .....................   BRZL          663,129        432,034         0.2
    BEVERAGES - ALCOHOLIC
  SUN Brewing Ltd. - GDR-/- {\/} ............................   RUS            22,600        403,122         0.2
    BEVERAGES - ALCOHOLIC
  Far Eastern Textile Ltd. ..................................   TWN           428,000        389,445         0.2
    TEXTILES & APPAREL
  Rothmans of Pall Mall Bhd. ................................   MAL            45,900        381,466         0.2
    TOBACCO
  Pepsi-Gemex S.A. - GDR-/- {\/} ............................   MEX            26,300        356,694         0.2
    BEVERAGES - NON-ALCOHOLIC
  Zaklady Piwowarskie w Zywcu S.A. (Zywiec) .................   POL             2,018        200,968         0.1
    BEVERAGES - ALCOHOLIC
  Carlsberg Brewery Malaysia Bhd. ...........................   MAL            44,500        155,149         0.1
    BEVERAGES - ALCOHOLIC
  Nong Shim Co., Ltd. .......................................   KOR             2,000         87,191          --
    FOOD
  Oriental Weavers "C"-/- ...................................   EGPT            3,400         70,948          --
    TEXTILES & APPAREL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-59
<PAGE>   1026
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Consumer Non-Durables (Continued)
  Erciyas Biracilik ve Malt Sanayii AS ......................   TRKY          136,000   $     22,054          --
    BEVERAGES - ALCOHOLIC
                                                                                        ------------
                                                                                          16,448,179
                                                                                        ------------
Technology (2.7%)
  Asustek Computer Inc. - Reg. S GDR-/- {c} {\/} ............   TWN           128,164      2,643,383         1.3
    COMPUTERS & PERIPHERALS
  Formula Systems Ltd.-/- ...................................   ISRL           16,415        634,454         0.3
    SOFTWARE
  Alcatel Teletas Telekomunikasyon Endustri ve Ticaret AS ...   TRKY        3,198,100        505,806         0.3
    TELECOM TECHNOLOGY
  Delta Electronics, Inc. ...................................   TWN           120,000        440,400         0.2
    COMPUTERS & PERIPHERALS
  Clal Electronics Industries Ltd. ..........................   ISRL            2,459        351,172         0.2
    SEMICONDUCTORS
  Samsung Electronics (1/2 of Common Share) - GDR{\/} .......   KOR            11,300        316,400         0.2
    SEMICONDUCTORS
  United Microelectronics Corporation Ltd.-/- ...............   TWN           158,000        297,119         0.1
    SEMICONDUCTORS
  Tadiran Ltd. ..............................................   ISRL            7,000        272,639         0.1
    TELECOM TECHNOLOGY
                                                                                        ------------
                                                                                           5,461,373
                                                                                        ------------
Health Care (2.1%)
  Teva Pharmaceutical Industries Ltd. .......................   ISRL           29,600      1,255,350         0.6
    PHARMACEUTICALS
  Ranbaxy Laboratories Ltd. .................................   IND            75,000      1,253,779         0.6
    MEDICAL TECHNOLOGY & SUPPLIES
  Richter Gedeon Rt. - Reg S GDR{c} {\/} ....................   HGRY            7,266        775,646         0.4
    PHARMACEUTICALS
  Egypt International Pharmaceutical Industries Co.
   (EIPICO) .................................................   EGPT            9,000        642,763         0.3
    PHARMACEUTICALS
  EGIS Rt. ..................................................   HGRY            5,920        308,743         0.2
    PHARMACEUTICALS
  Medison Co., Ltd. .........................................   KOR            10,200         83,559          --
    MEDICAL TECHNOLOGY & SUPPLIES
                                                                                        ------------
                                                                                           4,319,840
                                                                                        ------------
Consumer Durables (1.8%)
  Imperial Holdings Ltd. ....................................   SAFR           58,161        794,282         0.4
    AUTOMOBILES
  Hon Hai Precision Industry-/- .............................   TWN           120,400        701,146         0.3
    CONSUMER ELECTRONICS
  Qingling Motors Co., Ltd.{*} ..............................   CHNA        1,475,000        637,951         0.3
    AUTOMOBILES
  Tata Engineering and Locomotive Co., Ltd.: ................   IND                --             --         0.3
    AUTOMOBILES
    GDR{\/} .................................................   --             84,000        611,100          --
    Common ..................................................   --                980          6,859          --
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-60
<PAGE>   1027
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Consumer Durables (Continued)
  Mahindra & Mahindra Ltd. - GDR{\/} ........................   IND            42,600   $    317,370         0.2
    AUTOMOBILES
  Ford Otomotiv Sanayi AS ...................................   TRKY          377,000        271,712         0.1
    AUTOMOBILES
  Tofas Turk Otomobil Fabrikasi AS ..........................   TRKY        4,909,000        255,524         0.1
    AUTOMOBILES
  Arcelik AS ................................................   TRKY        2,024,800        227,005         0.1
    APPLIANCES & HOUSEHOLD DURABLES
  BEC World Public Co., Ltd. ................................   THAI            6,100         32,238          --
    CONSUMER ELECTRONICS
                                                                                        ------------
                                                                                           3,855,187
                                                                                        ------------
Capital Goods (1.8%)
  NICE-Systems Ltd.-/- ......................................   ISRL           15,910        663,132         0.3
    TELECOM EQUIPMENT
  Taiwan Semiconductor Manufacturing Co.-/- .................   TWN           145,000        626,706         0.3
    MACHINERY & ENGINEERING
  Corporacion GEO, S.A. de C.V. "B"-/- ......................   MEX            63,800        441,403         0.2
    CONSTRUCTION
  ECI Telecommunications Ltd.{\/} ...........................   ISRL           13,100        399,550         0.2
    TELECOM EQUIPMENT
  Arabian International Construction-/- .....................   EGPT            7,319        344,170         0.2
    CONSTRUCTION
  Netas Telekomunik-/- ......................................   TRKY          724,500        269,784         0.1
    TELECOM EQUIPMENT
  Elektrim Spolka Akcyjna S.A. ..............................   POL            15,630        223,352         0.1
    ELECTRICAL PLANT/EQUIPMENT
  Samsung Display Devices Co. ...............................   KOR             3,690        183,809         0.1
    ELECTRICAL PLANT/EQUIPMENT
  Daewoo Heavy Industries ...................................   KOR            36,240        179,436         0.1
    INDUSTRIAL COMPONENTS
  Samsung Electro-Mechanics Co. .............................   KOR             6,200        130,037         0.1
    ELECTRICAL PLANT/EQUIPMENT
  Sindo Ricoh Co. ...........................................   KOR             3,100        109,139         0.1
    OFFICE EQUIPMENT
  Delta Electronics (Thailand) Public Co., Ltd. - Foreign ...   THAI            8,000         82,487          --
    ELECTRICAL PLANT/EQUIPMENT
  LG Electronics ............................................   KOR             5,225         62,230          --
    ELECTRICAL PLANT/EQUIPMENT
  Madeco S.A. - ADR{\/} .....................................   CHLE            2,400         38,400          --
    INDUSTRIAL COMPONENTS
                                                                                        ------------
                                                                                           3,753,635
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $185,429,876) ................                            191,125,942        94.0
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-61
<PAGE>   1028
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                           PRINCIPAL       VALUE         % OF NET
FIXED INCOME INVESTMENTS                                       CURRENCY     AMOUNT        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Government & Government Agency Obligations (1.2%)
  Pakistan (0.1%)
    Republic of Pakistan, 6% due 2/26/02 - Reg S{c} .........   USD           250,000   $    235,625         0.1
  Russia (1.1%)
    Bank for Foreign Economic Affairs (Venesheconombank)
     Interest Notes, 6.72% due 12/15/15+ ....................   USD         3,000,000      2,163,750         1.1
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $2,264,540) ................................................                              2,399,375
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $2,264,540) ............                              2,399,375         1.2
                                                                                        ------------       -----
<CAPTION>
 
                                                                            NO. OF         VALUE         % OF NET
RIGHTS                                                         COUNTRY      RIGHTS        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Delta Electronics (Thailand) Public Co., Ltd. (UNAV NP
   RTS), due 5/15/98 - Foreign ..............................   THAI            4,000         40,207          --
    ELECTRICAL PLANT/EQUIPMENT
  Samsung Development Rights, due 5/13/98 ...................   KOR               530          9,210          --
    ELECTRICAL PLANT/EQUIPMENT
  Samsung Electronics Rights, due 5/27/98 - GDR 144A{.}
   {\/} .....................................................   KOR               899          8,943          --
    SEMICONDUCTORS
                                                                                        ------------       -----
 
TOTAL RIGHTS (cost $34,933) .................................                                 58,360          --
                                                                                        ------------       -----
<CAPTION>
 
                                                                            NO. OF         VALUE         % OF NET
WARRANTS                                                       COUNTRY     WARRANTS       (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Belle Corp. Warrants, expire 2002 (cost $0) ...............   PHIL          708,400          2,034          --
                                                                                        ------------       -----
    OIL
 
TOTAL INVESTMENTS (cost $187,729,349)  * ....................                            193,585,711        95.2
Other Assets and Liabilities ................................                              9,695,248         4.8
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $203,280,959       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (See Note 1 of Notes to Financial Statements).
       {\/}  U.S. currency denominated.
        {*}  Security denominated in Hong Kong Dollars.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
       {.:}  Each Centenary Linked Unit consists of 1 registered deferred share
             of De Beers Consolidated Mine + 1 Centenary Depositary Receipt.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
        {=}  Each unit represents one preferred share of Unibanco and one
             preferred "B" share of Unibanco Holdings.
          *  For Federal income tax purposes, cost is $189,023,855 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  21,939,088
                 Unrealized depreciation:           (17,377,232)
                                                  -------------
                 Net unrealized appreciation:     $   4,561,856
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviations:
    ADR--American Depositary Receipt
    GDR--Global Depositary Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-62
<PAGE>   1029
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {d}
                                        -------------------------------------------
                                                 FIXED INCOME,
                                                   RIGHTS &
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS        OTHER      TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Argentina (ARG/ARS) ..................    3.5                                   3.5
Brazil (BRZL/BRL) ....................   14.2                                  14.2
Chile (CHLE/CLP) .....................    4.5                                   4.5
China (CHNA/RMB) .....................    0.3                                   0.3
Egypt (EGPT/EGP) .....................    7.0                                   7.0
Greece (GREC/GRD) ....................    3.3                                   3.3
Hong Kong (HK/HKD) ...................    0.3                                   0.3
Hungary (HGRY/HUF) ...................    2.6                                   2.6
India (IND/INR) ......................    5.2                                   5.2
Ireland (IRE/IEP) ....................    0.8                                   0.8
Israel (ISRL/ILS) ....................    3.7                                   3.7
Kazakhstan (KAZ/KTS) .................    0.3                                   0.3
Korea (KOR/KRW) ......................    0.9                                   0.9
Malaysia (MAL/MYR) ...................    2.2                                   2.2
Mexico (MEX/MXN) .....................   11.0                                  11.0
Morocco (MOR/MAD) ....................    0.1                                   0.1
Pakistan (PAK/PKR) ...................    1.1         0.1                       1.2
Peru (PERU/PES) ......................    2.3                                   2.3
Philippines (PHIL/PHP) ...............    2.0                                   2.0
Poland (POL/PLZ) .....................    0.5                                   0.5
Romania (ROM/ROL) ....................    0.3                                   0.3
Russia (RUS/SUR) .....................    3.8         1.1                       4.9
South Africa (SAFR/ZAR) ..............   10.8                                  10.8
Sri Lanka (SLNKA/LKR) ................    0.6                                   0.6
Taiwan (TWN/TWD) .....................    4.2                                   4.2
Thailand (THAI/THB) ..................    0.4                                   0.4
Turkey (TRKY/TRL) ....................    6.9                                   6.9
United Kingdom (UK/GBP) ..............    1.2                                   1.2
United States (US/USD) ...............                               4.8        4.8
                                        ------        ---            ---      -----
Total  ...............................   94.0         1.2            4.8      100.0
                                        ------        ---            ---      -----
                                        ------        ---            ---      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $203,280,959.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-63
<PAGE>   1030
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                           <C>         <C>
Assets:
  Investments in securities, at value (cost $187,729,349) (Note 1)......  $193,585,711
  U.S. currency.............................................  $      738
  Foreign currencies (cost $8,611,907)......................   8,665,582     8,666,320
                                                              ----------
  Receivable for Fund shares sold.......................................     3,696,199
  Receivable for securities sold........................................     3,162,673
  Dividends receivable..................................................       805,918
  Receivable from Chancellor LGT Asset Management, Inc. (Note 2)........       459,815
  Interest receivable...................................................        90,413
                                                                          ------------
    Total assets........................................................   210,467,049
                                                                          ------------
Liabilities:
  Payable for loan outstanding (Note 1).................................     3,353,000
  Payable for securities purchased......................................     1,872,212
  Payable for Fund shares repurchased...................................       788,130
  Payable for investment management and administration fees (Note 2)....       479,744
  Payable for transfer agent fees (Note 2)..............................       243,519
  Payable for printing and postage expenses.............................       131,413
  Payable for service and distribution expenses (Note 2)................       123,207
  Payable for custodian fees............................................        57,525
  Payable for professional fees.........................................        33,130
  Payable for registration and filing fees..............................        22,556
  Payable for fund accounting fees (Note 2).............................         4,139
  Payable for Directors' fees and expenses (Note 2).....................         1,115
  Other accrued expenses................................................        76,400
                                                                          ------------
    Total liabilities...................................................     7,186,090
                                                                          ------------
Net assets..............................................................  $203,280,959
                                                                          ------------
                                                                          ------------
Class A:
Net asset value and redemption price per share ($100,647,556 DIVIDED BY
 8,035,606 shares outstanding)..........................................  $      12.53
                                                                          ------------
                                                                          ------------
Maximum offering price per share (100/95.25 of $12.53) *................  $      13.15
                                                                          ------------
                                                                          ------------
Class B:+
Net asset value and offering price per share ($100,831,448 DIVIDED BY
 8,244,890 shares outstanding)..........................................  $      12.23
                                                                          ------------
                                                                          ------------
Advisor Class:
Net asset value, offering price per share, and redemption price per
 share ($1,801,955 DIVIDED BY 142,562 shares outstanding)...............  $      12.64
                                                                          ------------
                                                                          ------------
Net assets consist of:
  Paid in capital (Note 4)..............................................  $246,288,977
  Undistributed net investment income...................................        73,763
  Accumulated net realized loss on investments and foreign currency
   transactions.........................................................   (48,990,457)
  Net unrealized appreciation on translation of assets and liabilities
   in foreign currencies................................................        52,314
  Net unrealized appreciation of investments............................     5,856,362
                                                                          ------------
Total -- representing net assets applicable to capital shares
 outstanding............................................................  $203,280,959
                                                                          ------------
                                                                          ------------
<FN>
- --------------
   * On sales of $50,000 or more, the offering price is reduced.
   + Redemption price per share is equal to the net asset value per share less
     any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-64
<PAGE>   1031
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                            STATEMENT OF OPERATIONS
 
                        Six months ended April 30, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                              <C>          <C>
Investment income: (Note 1)
  Dividend income (net of foreign withholding tax of $111,452)..............................  $ 2,595,058
  Securities lending income.................................................................       85,994
  Interest income...........................................................................       73,454
                                                                                              -----------
    Total investment income.................................................................    2,754,506
                                                                                              -----------
Expenses:
  Investment management and administration fees (Note 2)....................................    1,027,785
  Service and distribution expenses: (Note 2)
    Class A....................................................................  $   249,648
    Class B....................................................................      540,658      790,306
                                                                                 -----------
  Transfer agent fees (Note 2)..............................................................      778,300
  Interest expense (Note 1).................................................................      347,489
  Custodian fees............................................................................      121,000
  Printing and postage expenses.............................................................      108,600
  Professional fees.........................................................................       68,214
  Registration and filing fees..............................................................       47,060
  Fund accounting fees (Note 2).............................................................       27,756
  Directors' fees and expenses (Note 2).....................................................        6,878
  Other expenses (Note 1)...................................................................        5,429
                                                                                              -----------
    Total expenses before reductions........................................................    3,328,817
                                                                                              -----------
      Expenses reimbursed by Chancellor LGT Asset Management, Inc...........................     (609,815)
      Expense reductions (Note 5)...........................................................      (38,259)
                                                                                              -----------
    Total net expenses......................................................................    2,680,743
                                                                                              -----------
Net investment income.......................................................................       73,763
                                                                                              -----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
  (Note 1)
  Net realized loss on investments.............................................  (35,414,012)
  Net realized loss on foreign currency transactions...........................   (2,083,497)
                                                                                 -----------
    Net realized loss during the period.....................................................  (37,497,509)
  Net change in unrealized appreciation on translation of assets and
   liabilities in foreign currencies...........................................      672,976
  Net change in unrealized appreciation of investments.........................   40,080,042
                                                                                 -----------
    Net unrealized appreciation during the period...........................................   40,753,018
                                                                                              -----------
Net realized and unrealized gain on investments and foreign currencies......................    3,255,509
                                                                                              -----------
Net increase in net assets resulting from operations........................................  $ 3,329,272
                                                                                              -----------
                                                                                              -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-65
<PAGE>   1032
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       STATEMENT OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                        SIX MONTHS ENDED      YEAR ENDED
                                                                         APRIL 30, 1998    OCTOBER 31, 1997
                                                                        ----------------   ----------------
<S>                                                                     <C>                <C>
Decrease in net assets
Operations:
  Net investment income (loss)........................................   $      73,763      $    (1,050,632)
  Net realized gain (loss) on investments and foreign currency
   transactions.......................................................     (37,497,509)          26,113,895
  Net change in unrealized appreciation (depreciation) on translation
   of assets and liabilities in foreign currencies....................         672,976             (282,179)
  Net change in unrealized appreciation (depreciation) of
   investments........................................................      40,080,042          (52,070,476)
                                                                        ----------------   ----------------
    Net increase (decrease) in net assets resulting from operations...       3,329,272          (27,289,392)
                                                                        ----------------   ----------------
Class A:
Distributions to shareholders: (Note 1)
  From net investment income..........................................              --              (37,319)
  In excess of net investment income..................................              --             (104,807)
Advisor Class: (Note 1)
Distributions to shareholders:
  From net investment income..........................................              --               (4,161)
  In excess of net investment income..................................              --              (11,686)
                                                                        ----------------   ----------------
    Total distributions...............................................              --             (157,973)
                                                                        ----------------   ----------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and reinvested....................     296,466,663        1,140,272,411
  Decrease from capital shares repurchased............................    (339,416,025)      (1,314,030,266)
                                                                        ----------------   ----------------
    Net decrease from capital share transactions......................     (42,949,362)        (173,757,855)
                                                                        ----------------   ----------------
Total decrease in net assets..........................................     (39,620,090)        (201,205,220)
Net assets:
  Beginning of period.................................................     242,901,049          444,106,269
                                                                        ----------------   ----------------
  End of period.......................................................   $ 203,280,959*     $   242,901,049*
                                                                        ----------------   ----------------
                                                                        ----------------   ----------------
 * Includes undistributed net investment income of....................   $      73,763      $            --
                                                                        ----------------   ----------------
                                                                        ----------------   ----------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-66
<PAGE>   1033
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                          CLASS A+
                                          ------------------------------------------------------------------------
                                          SIX MONTHS
                                            ENDED                         YEAR ENDED OCTOBER 31,
                                          APRIL 30,      ---------------------------------------------------------
                                           1998 (d)      1997 (d)    1996 (d)    1995 (d)      1994        1993
                                          ----------     ---------   ---------   ---------   ---------   ---------
<S>                                       <C>            <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $  12.20       $  14.26    $  13.85    $  18.81    $  14.42    $  11.10
                                          ----------     ---------   ---------   ---------   ---------   ---------
Income from investment operations:
  Net investment income (loss)..........      0.02*            --        0.11        0.13       (0.02)       0.02**
  Net realized and unrealized gain
   (loss) on investments................      0.31          (2.05)       0.30       (4.32)       4.68        3.38
                                          ----------     ---------   ---------   ---------   ---------   ---------
    Net increase (decrease) from
     investment operations..............      0.33          (2.05)       0.41       (4.19)       4.66        3.40
                                          ----------     ---------   ---------   ---------   ---------   ---------
Distributions to shareholders:
  From net investment income............        --             --          --          --       (0.01)      (0.08)
  From net realized gain on
   investments..........................        --             --          --       (0.77)      (0.26)         --
  In excess of net investment income....        --          (0.01)         --          --          --          --
                                          ----------     ---------   ---------   ---------   ---------   ---------
    Total distributions.................        --          (0.01)         --       (0.77)      (0.27)      (0.08)
                                          ----------     ---------   ---------   ---------   ---------   ---------
Net asset value, end of period..........  $  12.53       $  12.20    $  14.26    $  13.85    $  18.81    $  14.42
                                          ----------     ---------   ---------   ---------   ---------   ---------
                                          ----------     ---------   ---------   ---------   ---------   ---------
 
Total investment return (c).............      2.79%(b)     (14.45)%      2.96%     (23.04)%     32.58%      30.90%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $100,648       $113,319    $224,964    $252,457    $417,322    $187,808
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      0.31%(a)      (0.01)%      0.76%       0.89%      (0.11)%       0.1%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................     (0.30)%(a)     (0.09)%      0.64%       0.87%        N/A       (0.11)%
Ratio of operating expenses to average
 net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      1.96%(a)       2.10%       1.96%       2.12%       2.06%        2.4%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      2.57%(a)       2.18%       2.08%       2.14%        N/A        2.61%
Ratio of interest expense to average net
 assets (Note 1)++++....................      0.33%(a)        N/A         N/A         N/A         N/A         N/A
Portfolio turnover rate++++.............       117%(a)        150%        104%        114%        100%         99%
Average commission rate per share paid
 on portfolio transactions++++..........  $ 0.0016       $ 0.0015    $ 0.0040         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a)  Annualized
 (b)  Not annualized
 (c)  Total investment return does not include sales charges.
 (d)  These selected per share data were calculated based upon average
      shares outstanding during the period.
   *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.03.
  **  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
 ***  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
   +  All capital shares issued and outstanding as of March 31, 1993, were
      reclassified as Class A shares.
  ++  Commencing April 1, 1993, the Fund began offering Class B shares.
 +++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++  Portfolio turnover rate, average commission rate, and ratio of
      interest expense to average net assets are calculated on the basis of
      the Fund as a whole without distinguishing between the classes of
      shares issued.
 N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-67
<PAGE>   1034
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                           CLASS B++
                                          ---------------------------------------------------------------------------
                                                                                                           APRIL 1,
                                          SIX MONTHS                                                         1993
                                            ENDED                    YEAR ENDED OCTOBER 31,                   TO
                                          APRIL 30,       ---------------------------------------------   OCTOBER 31,
                                           1998 (d)       1997 (d)    1996 (d)    1995 (d)      1994         1993
                                          ----------      ---------   ---------   ---------   ---------   -----------
<S>                                       <C>             <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $  11.94        $  14.02    $  13.68    $  18.68    $  14.39     $ 11.47
                                          ----------      ---------   ---------   ---------   ---------   -----------
Income from investment operations:
  Net investment income (loss)..........     (0.01) *        (0.08)       0.04        0.06       (0.12)       0.00***
  Net realized and unrealized gain
   (loss) on investments................      0.30           (2.00)       0.30       (4.29)       4.67        2.92
                                          ----------      ---------   ---------   ---------   ---------   -----------
    Net increase (decrease) from
     investment operations..............      0.29           (2.08)       0.34       (4.23)       4.55        2.92
                                          ----------      ---------   ---------   ---------   ---------   -----------
Distributions to shareholders:
  From net investment income............        --              --          --          --          --          --
  From net realized gain on
   investments..........................        --              --          --       (0.77)      (0.26)         --
  In excess of net investment income....        --              --          --          --          --          --
                                          ----------      ---------   ---------   ---------   ---------   -----------
    Total distributions.................        --              --          --       (0.77)      (0.26)         --
                                          ----------      ---------   ---------   ---------   ---------   -----------
Net asset value, end of period..........  $  12.23        $  11.94    $  14.02    $  13.68    $  18.68     $ 14.39
                                          ----------      ---------   ---------   ---------   ---------   -----------
                                          ----------      ---------   ---------   ---------   ---------   -----------
 
Total investment return (c).............      2.51%(b)      (14.91)%      2.49%     (23.37)%     31.77%       25.5% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $100,831        $127,658    $216,004    $225,861    $291,289     $32,318
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......     (0.19)%(a)      (0.51)%      0.26%       0.39%      (0.61)%      (0.4)% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................     (0.80)%(a)      (0.59)%      0.14%       0.37%        N/A       (0.61)% (a)
Ratio of operating expenses to average
 net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      2.46%(a)        2.60%       2.46%       2.62%       2.56%        2.9% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      3.07%(a)        2.68%       2.58%       2.64%        N/A        3.11% (a)
Ratio of interest expense to average net
 assets (Note 1)++++....................      0.33%(a)         N/A         N/A         N/A         N/A         N/A
Portfolio turnover rate++++.............       117%(a)         150%        104%        114%        100%         99%
Average commission rate per share paid
 on portfolio transactions++++..........  $ 0.0016        $ 0.0015    $ 0.0040         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a)  Annualized
 (b)  Not annualized
 (c)  Total investment return does not include sales charges.
 (d)  These selected per share data were calculated based upon average
      shares outstanding during the period.
   *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.03.
  **  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
 ***  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
   +  All capital shares issued and outstanding as of March 31, 1993, were
      reclassified as Class A shares.
  ++  Commencing April 1, 1993, the Fund began offering Class B shares.
 +++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++  Portfolio turnover rate, average commission rate, and ratio of
      interest expense to average net assets are calculated on the basis of
      the Fund as a whole without distinguishing between the classes of
      shares issued.
 N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-68
<PAGE>   1035
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                         ADVISOR CLASS+++
                                          -----------------------------------------------
                                          SIX MONTHS   YEAR ENDED OCTOBER    JUNE 1, 1995
                                            ENDED              31,                TO
                                          APRIL 30,    -------------------   OCTOBER 31,
                                           1998 (d)    1997 (d)   1996 (d)       1995
                                          ----------   --------   --------   ------------
<S>                                       <C>          <C>        <C>        <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $ 12.27     $ 14.38    $ 13.88      $14.71
                                          ----------   --------   --------   ------------
Income from investment operations:
  Net investment income (loss)..........      0.05*       0.05       0.18        0.08
  Net realized and unrealized gain
   (loss) on investments................      0.32       (2.05)      0.32       (0.91)
                                          ----------   --------   --------   ------------
    Net increase (decrease) from
     investment operations..............      0.37       (2.00)      0.50       (0.83)
                                          ----------   --------   --------   ------------
Distributions to shareholders:
  From net investment income............        --       (0.03)        --          --
  From net realized gain on
   investments..........................        --          --         --          --
  In excess of net investment income....        --       (0.08)        --          --
                                          ----------   --------   --------   ------------
    Total distributions.................        --       (0.11)        --          --
                                          ----------   --------   --------   ------------
Net asset value, end of period..........   $ 12.64     $ 12.27    $ 14.38      $13.88
                                          ----------   --------   --------   ------------
                                          ----------   --------   --------   ------------
 
Total investment return (c).............      3.10%(b)  (14.05)%     3.60%      (5.71)% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $ 1,802     $ 1,924    $ 3,139      $1,675
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      0.81%(a)    0.49%      1.26%       1.39% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      0.20%(a)    0.41%      1.14%       1.37% (a)
Ratio of operating expenses to average
 net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      1.46%(a)    1.60%      1.46%       1.62% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      2.07%(a)    1.68%      1.58%       1.64% (a)
Ratio of interest expense to average net
 assets (Note 1)++++....................      0.33%(a)     N/A        N/A         N/A
Portfolio turnover rate++++.............       117%(a)     150%       104%        114%
Average commission rate per share paid
 on portfolio transactions++++..........   $0.0016     $0.0015    $0.0040         N/A
</TABLE>
 
- ----------------
 
 (a)  Annualized
 (b)  Not annualized
 (c)  Total investment return does not include sales charges.
 (d)  These selected per share data were calculated based upon average
      shares outstanding during the period.
   *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.03.
  **  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
 ***  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
   +  All capital shares issued and outstanding as of March 31, 1993, were
      reclassified as Class A shares.
  ++  Commencing April 1, 1993, the Fund began offering Class B shares.
 +++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++  Portfolio turnover rate, average commission rate, and ratio of
      interest expense to average net assets are calculated on the basis of
      the Fund as a whole without distinguishing between the classes of
      shares issued.
 N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-69
<PAGE>   1036
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
 
The following Notes to Financial Statements are for the period ending April 30,
1998, and unless otherwise indicated reflect facts as of that date. Please see
"Note 6 -- Subsequent Events" for a discussion of certain changes which took
place after April 30, 1998.
 
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 6)
GT Global Emerging Markets Fund ("Fund") is a separate series of G.T. Investment
Funds, Inc. ("Company"). Effective June 1, 1998, the Company was renamed AIM
Investment Funds, Inc. and the Fund was renamed AIM Emerging Markets Fund. The
Company is organized as a Maryland corporation and is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as a diversified,
open-end management investment company. The Company has thirteen series of
shares in operation, each series corresponding to a distinct portfolio of
investments.
 
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective service and distribution expenses, and
may differ in its transfer agent, registration, and certain other class-specific
fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund in the preparation of the financial
statements.
 
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or in the principal over-the-counter market in which
such securities are traded, as of the close of business on the day the
securities are being valued , or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. (the "Manager") to be the primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when GT
Capital deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments with a maturity of 60
days or less are valued at amortized cost adjusted for foreign exchange
translation and market fluctuation, if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records are maintained in U.S. dollars. The market values of
foreign securities, currency holdings, and other assets and liabilities are
recorded in the books and records of the Fund after translation to U.S. dollars
based on the exchange rates on that day. The cost of each security is determined
using historical exchange rates. Income and withholding taxes are translated at
prevailing exchange rates when earned or incurred.
 
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from 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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains or losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. government securities or other
high quality debt securities of which the value,
 
                                     FS-70
<PAGE>   1037
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
including accrued interest, is at least equal to the amount to be repaid to the
Fund under each agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. The Fund could be exposed to risk if a counterparty is
unable to meet the terms of the contract or if the value of the currency changes
unfavorably. The Fund may enter into Forwards Contracts in connection with
planned purchases or sales of securities, or to hedge against adverse
fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on an exchange is valued at its last bid price,
or, in the case of an over-the-counter option, is valued at the average of the
last bid prices obtained from brokers. If an option expires on its stipulated
expiration date or if the Fund enters into a closing purchase transaction, a
gain or loss is realized without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is extinguished.
If a written call option is exercised, a gain or loss is realized from the sale
of the underlying security and the proceeds of the sale are increased by the
premium originally received. If a written put option is exercised, the cost of
the underlying security purchased would be decreased by the premium originally
received. The Fund can write options only on a covered basis, which, for a call,
requires that the Fund hold the underlying securities and, for a put, requires
the Fund to set aside cash, U.S. government securities, or other liquid
securities in an amount not less than the exercise price or otherwise provide
adequate cover at all times while the put option is outstanding. The Fund may
use options to manage its exposure to the stock market and to fluctuations in
currency values or interest rates.
 
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund would realize a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund would
realize a gain or loss, depending on whether proceeds from the closing sale
transaction are greater or less than the cost of the option. If the Fund
exercises a call option, the cost of the securities acquired by exercising the
call is increased by the premium paid to buy the call. If the Fund exercises a
put option, it realizes a gain or loss from the sale of the underlying security,
and the proceeds from such sale are decreased by the premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund may trade
securities on other than normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At April 30, 1998, stocks with an aggregate value of approximately $16,035,409
were on loan to brokers. The loans were secured by cash collateral of
$16,583,830 received by the Fund. For international securities, cash collateral
is received by the Fund against loaned securities in an amount at least equal to
105% of the market value of the loaned securities at the inception of each loan.
This collateral must be maintained at not less than 103% of the market value of
the loaned securities during the period of the loan. For domestic
 
                                     FS-71
<PAGE>   1038
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
securities, cash collateral is received by the Fund against loaned securities in
the amount at least equal to 102% of the market value of the loaned securities
at the inception of each loan. This collateral must be maintained at not less
than 100% of the market value of the loaned securities during the period of each
loan. The cash collateral is invested in a securities lending trust which
consists of a portfolio of high quality short duration securities whose average
effective duration is restricted to 120 days or less. For the six months ended
April 30, 1998, the Fund received securities lending fees of $85,994.
 
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains. The Fund currently has a capital loss carryforward of
$10,198,442, of which $5,776,568 expires in 2003 and $4,421,874 expires in 2004.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 and timing differences.
 
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
 
(L) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
 
(M) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
 
(N) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised and/or
administered by the Manager, has a line of credit with each of BankBoston and
State Street Bank & Trust Company. The arrangements with the banks allow the
Fund and the GT Funds to borrow an aggregate maximum amount of $250,000,000. The
Fund is limited to borrowing up to 33 1/3% of the value of its total assets. On
April 30, 1998, the Fund had $3,353,000 in loans outstanding.
 
For the six months ended April 30, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $10,572,144, with a weighted average interest rate of 6.29%.
Interest expense for the Fund for the six months ended April 30, 1998 was
$334,748. Other interest expense charges amounted to $12,741.
 
2. RELATED PARTIES (SEE ALSO NOTE 6)
For the period ended April 30, 1998, Chancellor LGT Asset Management, Inc. was
the Fund's investment manager and administrator. The Fund pays investment
management and administration fees to the Manager at the annualized rate of
0.975% on the first $500 million of average daily net assets of the Fund; 0.95%
on the next $500 million; 0.925% on the next $500 million and 0.90% on amounts
thereafter. These fees are computed daily and paid monthly.
 
For the period ended April 30, 1998, GT Global, Inc. ("GT Global"), an affiliate
of the Manager, serves as the Fund's distributor. The Fund offers Class A, Class
B, and Advisor Class shares for purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the six months ended April 30, 1998, GT Global retained
$8,591 of such sales charges. Purchases of Class A shares exceeding $500,000 may
be subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Fund's current prospectus. GT Global collected CDSCs in the
amount of $1,590 for the six months ended April 30, 1998. GT Global also makes
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global, from its own resources, pays commissions to dealers through
which the sales are made. Certain redemptions of Class B shares made within six
years of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the six months ended April 30, 1998, GT Global collected CDSCs
in the amount of $565,010. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
 
Pursuant to the then effective separate distribution plans adopted under 1940
Act Rule 12b-1 by the Company's Board of Directors with respect to the Fund's
Class A shares ("Class A Plan") and Class B
 
                                     FS-72
<PAGE>   1039
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
shares ("Class B Plan"), the Fund reimbursed GT Global for a portion of its
shareholder servicing and distribution expenses. Under that Class A Plan, the
Fund was permitted to pay GT Global a service fee at the annualized rate of up
to 0.25% of the average daily net assets of the Fund's Class A shares for GT
Global's expenditures incurred in servicing and maintaining shareholder
accounts, and was permitted to pay GT Global a distribution fee at the
annualized rate of up to 0.50% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global was reimbursed under the Class A Plan would
have been incurred within one year of such reimbursement.
 
For the period ended April 30, 1998, pursuant to that Class B Plan, the Fund was
permitted to pay GT Global a service fee at the annualized rate of up to 0.25%
of the average daily net assets of the Fund's Class B shares for GT Global's
expenditures incurred in servicing and maintaining shareholder accounts, and was
permitted to pay GT Global a distribution fee at the annualized rate of up to
0.75% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually were permitted to be
carried forward for reimbursement in subsequent years as long as that Plan
continued in effect.
 
The Manager and GT Global voluntarily undertook to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 2.00%, 2.50%, and 1.50% of the average
daily net assets of the Fund's Class A, Class B and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.
 
3. PURCHASES AND SALES OF SECURITIES
For the six months ended April 30, 1998, purchases and sales of investment
securities by the Fund, other than short-term investments, aggregated
$123,495,635 and $178,354,580 respectively. There were no purchases or sales of
U.S. government obligations by the Fund for the six months ended April 30, 1998.
 
4. CAPITAL SHARES
At April 30, 1998, there were 6,000,000,000 shares of the Company's common stock
authorized, at $0.0001 par value. Of this amount, 200,000,000 were classified as
shares of the Fund; 400,000,000 were classified as shares of GT Global
Government Income Fund; 200,000,000 were classified as shares of GT Global
Developing Markets Fund; 200,000,000 were classified as shares of GT Global
Health Care Fund; 200,000,000 were classified as shares of GT Global Strategic
Income Fund; 200,000,000 were classified as shares of GT Global Currency Fund
(inactive); 200,000,000 were classified as shares of GT Global Growth & Income
Fund; 200,000,000 were classified as shares of GT Global Small Companies Fund
(inactive); 200,000,000 were classified as shares of GT Global Latin America
Growth Fund; 400,000,000 were classified as shares of GT Global
Telecommunications Fund; 200,000,000 were classified as shares of GT Global High
Income Fund; 200,000,000 were classified as shares of GT Global Financial
Services Fund; 200,000,000 were classified as shares of GT Global Natural
Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; and 200,000,000 were classified as shares of GT Global
Consumer Products and Services Fund. The shares of each of the foregoing series
of the Company were divided equally into two classes, designated Class A and
Class B common stock. With respect to the issuance of Advisor Class shares,
100,000,000 shares were classified as shares of each of the fifteen series of
the Company and designated as Advisor Class common stock. 1,100,000,000 shares
remain unclassified. Transactions in capital shares of the Fund were as follows:
 
                                     FS-73
<PAGE>   1040
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                           CAPITAL SHARE TRANSACTIONS
 
<TABLE>
<CAPTION>
                                               SIX MONTHS ENDED               YEAR ENDED
                                                APRIL 30, 1998             OCTOBER 31, 1997
                                          --------------------------  --------------------------
CLASS A                                     SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................   17,134,342  $ 200,989,101   57,294,454  $ 859,844,827
Shares issued in connection with
  reinvestment of distributions.........           --             --        8,654        123,333
                                          -----------  -------------  -----------  -------------
                                           17,134,342    200,989,101   57,303,108    859,968,160
Shares repurchased......................  (18,390,591)  (216,637,505) (63,783,507)  (962,241,730)
                                          -----------  -------------  -----------  -------------
Net decrease............................   (1,256,249) $ (15,648,404)  (6,480,399) $(102,273,570)
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
CLASS B
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    4,798,521  $  55,553,088   16,394,355  $ 245,887,976
Shares repurchased......................   (7,248,568)   (83,530,468) (21,109,926)  (316,251,415)
                                          -----------  -------------  -----------  -------------
Net decrease............................   (2,450,047) $ (27,977,380)  (4,715,571) $ (70,363,439)
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    3,375,138  $  39,924,474    2,213,447  $  34,400,471
Shares issued in connection with
  reinvestment of distributions.........           --             --        1,106         15,804
                                          -----------  -------------  -----------  -------------
                                            3,375,138     39,924,474    2,214,553     34,416,275
Shares repurchased......................   (3,389,407)   (39,248,052)  (2,275,943)   (35,537,121)
                                          -----------  -------------  -----------  -------------
Net increase (decrease).................      (14,269) $     676,422      (61,390) $  (1,120,846)
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the six months ended April 30, 1998, the Fund's
expenses were reduced by $38,259 under these arrangements.
 
6. SUBSEQUENT EVENTS
On May 29, 1998, Liechtenstein Global Trust ("LGT"), the former indirect parent
organization of Chancellor LGT Asset Management, Inc. ("Chancellor LGT"),
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included Chancellor LGT and
certain other affiliates. As a result of this transaction, Chancellor LGT was
renamed INVESCO (NY), Inc. and is now an indirect wholly-owned subsidiary of
AMVESCAP PLC. In connection with this transaction, A I M Advisors, Inc. ("AIM"),
an indirect wholly-owned subsidiary of AMVESCAP PLC, became the investment
adviser and administrator of the Fund and INVESCO (NY), Inc. became the
sub-adviser and sub-administrator of the Fund. In addition, A I M Distributors,
Inc. replaced GT Global, Inc. as the Fund's principal underwriter, and the Fund
became subject to compensation-type Rule 12b-1 plans of distribution, which
replaced the Fund's former reimbursement-type Rule 12b-1 plans of distribution.
All of the changes became effective as of the close of business on May 29, 1998.
 
                                     FS-74
<PAGE>   1041
                         GT GLOBAL EMERGING MARKETS FUND
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
ANNUAL REPORT
To the Shareholders of GT Global Emerging Markets Fund and
Board of Directors of G.T. Investment Funds, Inc.:
 
We have audited the accompanying statement of assets and liabilities of GT
Global Emerging Markets Fund, one of the funds organized as a series of G.T.
Investment Funds, Inc., including the portfolio of investments, as of October
31, 1997, the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global Emerging Markets Fund as of October 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
 


                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
DECEMBER 15, 1997
 
                                     FS-75
<PAGE>   1042
                        GT GLOBAL EMERGING MARKETS FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Energy (18.6%)
  LUKoil Holding - ADR{\/} .................................   RUS             68,826   $  5,764,178         2.4
    OIL
  Sasol Ltd. ...............................................   SAFR           402,507      4,853,515         2.0
    ENERGY SOURCES
  Petroleo Brasileiro S.A. (Petrobras) Preferred ...........   BRZL        22,113,561      4,112,192         1.7
    OIL
  Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} ...   BRZL            85,389      3,415,560         1.4
    ELECTRICAL & GAS UTILITIES
  C.A. La Electricidad de Caracas ..........................   VENZ         2,529,153      3,324,761         1.4
    ELECTRICAL & GAS UTILITIES
  Centrais Eletricas Brasileiras S.A.-Eletrobras "B" -
   ADR{\/} .................................................   BRZL           133,855      2,944,810         1.2
    ELECTRICAL & GAS UTILITIES
  Chilgener S.A. - ADR{\/} .................................   CHLE            88,263      2,383,101         1.0
    ELECTRICAL & GAS UTILITIES
  Enersis S.A. - ADR{\/} ...................................   CHLE            64,238      2,119,854         0.9
    ELECTRICAL & GAS UTILITIES
  Empresa Nacional de Electricidad S.A. - ADR{\/} ..........   CHLE           100,922      2,031,055         0.8
    ELECTRICAL & GAS UTILITIES
  Light - Servicos de Electricidade S.A. ...................   BRZL         5,020,561      1,666,841         0.7
    ELECTRICAL & GAS UTILITIES
  Light - Participacoes S.A. ...............................   BRZL         6,360,473      1,627,044         0.7
    ELECTRICAL & GAS UTILITIES
  YPF S.A. - ADR{\/} .......................................   ARG             49,065      1,570,080         0.7
    OIL
  The Hub Power Co., Ltd. - GDR-/- {\/} ....................   PAK             49,150      1,535,938         0.6
    ENERGY SOURCES
  Unified Energy Systems - Reg S GDR-/- {c} {\/} ...........   RUS             37,000      1,156,246         0.5
    ELECTRICAL & GAS UTILITIES
  Surgutneftegaz - ADR-/- {\/} .............................   RUS            123,235      1,047,498         0.4
    OIL
  PTT Exploration and Production Public Co., Ltd. -
   Foreign .................................................   THAI           101,800      1,038,259         0.4
    OIL
  MOL Magyar Olaj-es Gazipari RT - Reg S GDR{c} {\/} .......   HGRY            35,800        774,175         0.3
    ENERGY SOURCES
  Manila Electric Co. "B" ..................................   PHIL           236,700        728,308         0.3
    ELECTRICAL & GAS UTILITIES
  Mosenergo - 144A ADR{.} {\/} .............................   RUS             15,000        630,000         0.3
    ELECTRICAL & GAS UTILITIES
  Electricity Generating Public Co., Ltd. - Foreign ........   THAI           329,100        548,500         0.2
    ELECTRICAL & GAS UTILITIES
  Perez Companc S.A. .......................................   ARG             74,818        468,642         0.2
    OIL
  Tenaga Nasional Bhd. .....................................   MAL            194,000        419,585         0.2
    ELECTRICAL & GAS UTILITIES
  Korea Electric Power Corp. - ADR{\/} .....................   KOR             44,271        362,469         0.2
    ELECTRICAL & GAS UTILITIES
  BSES Ltd. - Reg. S GDR{c} ................................   IND             19,100        296,050         0.1
    ELECTRICAL & GAS UTILITIES
  Yukong Ltd. ..............................................   KOR              7,543        102,145          --
    OIL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-76
<PAGE>   1043
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Energy (Continued)
  Guangdong Electric Power Development Co., Ltd. "B"+X+ ....   CHNA           127,800   $     72,084          --
    ENERGY SOURCES
  Pakistan State Oil Co., Ltd. .............................   PAK                 20            216          --
    OIL
                                                                                        ------------
                                                                                          44,993,106
                                                                                        ------------
Multi-Industry/Miscellaneous (16.1%)
  Barlow Ltd. ..............................................   SAFR           407,077      4,104,623         1.7
    CONGLOMERATE
  Anglo American Corporation of South Africa Ltd. ..........   SAFR            82,607      3,572,195         1.5
    CONGLOMERATE
  Delta Corporation Ltd. (subdivision)-/- ..................   ZBBW         2,187,074      3,114,504         1.3
    MULTI-INDUSTRY
  PT Telekomunikasi Indonesia ..............................   INDO         3,075,500      2,869,896         1.2
    MULTI-INDUSTRY
  Grupo Carso, S.A. de C.V. "A1" ...........................   MEX            396,200      2,519,547         1.0
    MULTI-INDUSTRY
  ITC Ltd.: ................................................   IND                 --             --         1.0
    MULTI-INDUSTRY
    Common .................................................   --             123,928      1,916,184          --
    GDR-/- {\/} ............................................   --              25,987        475,562          --
  The Saudi Arabian Investment Fund Ltd.-/- {\/} ...........   UK             211,000      2,110,000         0.9
    COUNTRY FUNDS
  PT Gudang Garam ..........................................   INDO           625,500      1,777,187         0.7
    MULTI-INDUSTRY
  China Resources Enterprise Ltd. ..........................   HK             623,000      1,708,616         0.7
    CONGLOMERATE
  Malaysian Resources Corp., Bhd. ..........................   MAL          2,556,000      1,520,240         0.6
    CONGLOMERATE
  Shanghai Industrial Holdings Ltd. ........................   HK             339,000      1,508,616         0.6
    MULTI-INDUSTRY
  Central Asia Regional Growth Fund-/- {\/} ................   IRE            156,000      1,485,120         0.6
    COUNTRY FUNDS
  NASR (El) City Company For Housing & Construction-/- .....   EGPT            18,870      1,304,195         0.5
    MISCELLANEOUS
  Billiton PLC-/- ..........................................   SAFR           395,102      1,158,199         0.5
    CONGLOMERATE
  Sanluis Corporacion, S.A. de C.V. ........................   MEX            145,432      1,128,622         0.5
    CONGLOMERATE
  John Keells Holdings Ltd. ................................   SLNKA          183,000        934,142         0.4
    MULTI-INDUSTRY
  Empresas La Moderna, S.A. de C.V. "A"-/- .................   MEX            186,000        913,293         0.4
    MULTI-INDUSTRY
  PT Bimantara Citra .......................................   INDO           965,000        887,047         0.4
    MULTI-INDUSTRY
  Romanian Growth Fund{\/} .................................   ROM             75,800        784,530         0.3
    COUNTRY FUNDS
  Koc Holding AS ...........................................   TRKY         1,827,500        687,480         0.3
    CONGLOMERATE
  Rembrandt Group Ltd. .....................................   SAFR            77,200        633,971         0.3
    CONGLOMERATE
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-77
<PAGE>   1044
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Multi-Industry/Miscellaneous (Continued)
  Koor Industries Ltd. - ADR{\/} ...........................   ISRL            22,315   $    476,983         0.2
    CONGLOMERATE
  PT Hanjaya Mandala Sampoerna .............................   INDO           262,000        457,953         0.2
    MULTI-INDUSTRY
  Discount Investment Corp. ................................   ISRL            12,474        339,811         0.1
    MULTI-INDUSTRY
  Quinenco S.A. - ADR-/- {\/} ..............................   CHLE            21,500        314,438         0.1
    CONGLOMERATE
  KEC International Ltd.-/- ................................   IND            160,500        162,280         0.1
    MISCELLANEOUS
                                                                                        ------------
                                                                                          38,865,234
                                                                                        ------------
Services (15.6%)
  Telecomunicacoes Brasileiras S.A. (Telebras): ............   BRZL                --             --         3.0
    TELEPHONE NETWORKS
    ADR{\/} ................................................   --              37,332      3,789,198          --
    Common .................................................   --          38,472,813      3,419,767          --
  Telefonos de Mexico, S.A. de C.V. "L" - ADR{\/} ..........   MEX            122,827      5,312,268         2.2
    TELEPHONE NETWORKS
  Compania Anonima Nacional Telefonos de Venezuela (CANTV) -
   ADR{\/} .................................................   VENZ            85,004      3,718,925         1.5
    TELEPHONE NETWORKS
  Pick'n Pay Stores Ltd.: ..................................   SAFR                --             --         1.4
    RETAILERS-OTHER
    Common .................................................   --           1,646,589      2,481,865          --
    "N" ....................................................   --             719,798        987,665          --
  Cia de Telecomunicaciones de Chile S.A. - ADR{\/} ........   CHLE            84,227      2,337,299         1.0
    TELEPHONE NETWORKS
  Telefonica del Peru S.A. - ADR{\/} .......................   PERU           100,740      1,989,615         0.8
    TELEPHONE NETWORKS
  Cifra, S.A. de C.V.: .....................................   MEX                 --             --         0.6
    RETAILERS-OTHER
    "C" ....................................................   --             593,000      1,029,760          --
    "A" ....................................................   --             275,000        506,527          --
    "B" ....................................................   --              26,656         53,248          --
  Companhia de Saneamento Basico do Estado de Sao Paulo -
   SABESP-/- ...............................................   BRZL         7,509,655      1,362,419         0.6
    BUSINESS & PUBLIC SERVICES
  Telefonica de Argentina S.A. - ADR{\/} ...................   ARG             42,183      1,186,397         0.5
    TELEPHONE NETWORKS
  Telecomunicacoes de Sao Paulo S.A. (TELESP) Preferred ....   BRZL         3,388,663        885,282         0.4
    TELEPHONE NETWORKS
  TelecomAsia Corp. - Foreign-/- ...........................   THAI         1,521,400        681,224         0.3
    TELEPHONE NETWORKS
  Santa Isabel S.A. - ADR{\/} ..............................   CHLE            36,543        676,046         0.3
    RETAILERS-FOOD
  PT Indosat ...............................................   INDO           264,500        598,625         0.3
    TELECOM - OTHER
  Danubius Hotel and Spa Rt.-/- ............................   HGRY            19,037        595,762         0.2
    LEISURE & TOURISM
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-78
<PAGE>   1045
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Services (Continued)
  PT Citra Marga Nusaphala Persada .........................   INDO         2,073,000   $    591,873         0.2
    BUSINESS & PUBLIC SERVICES
  Mahanagar Telephone Nigam Ltd. ...........................   IND             84,400        588,062         0.2
    TELECOM - OTHER
  Portugal Telecom S.A. - Registered .......................   PORT            13,630        559,388         0.2
    TELEPHONE NETWORKS
  Sonae Investimentos-Sociedade Gestora de Participacoes
   Sociais S.A. ............................................   PORT            14,423        539,017         0.2
    RETAILERS-OTHER
  Migros Turk T.A.S. .......................................   TRKY           479,400        503,132         0.2
    RETAILERS-FOOD
  Investec-Consultoria Internacional S.A.-/- ...............   PORT            15,692        490,933         0.2
    BROADCASTING & PUBLISHING
  Super Sol Ltd. ...........................................   ISRL           127,545        367,036         0.2
    RETAILERS-FOOD
  Advanced Info. Service - Foreign .........................   THAI            68,300        366,985         0.2
    WIRELESS COMMUNICATIONS
  Indian Hotels Co., Ltd. ..................................   IND                 --             --         0.1
    LEISURE & TOURISM
    GDR-/- {\/} ............................................   --              20,200        348,450          --
    Common .................................................   --               3,000         48,573          --
  Konsortium Perkapalan Bhd. ...............................   MAL            182,000        341,694         0.1
    TRANSPORTATION - SHIPPING
  Pakistan Telecommunications Co., Ltd. - GDR-/- {\/} ......   PAK              3,700        299,700         0.1
    TELEPHONE NETWORKS
  Guangshen Railway Co., Ltd. ..............................   HK             924,000        286,882         0.1
    TRANSPORTATION - ROAD & RAIL
  Vimpel-Communications - ADR-/- {\/} ......................   RUS              8,500        278,375         0.1
    WIRELESS COMMUNICATIONS
  BEC World Public Co., Ltd. - Foreign .....................   THAI            53,000        276,866         0.1
    BROADCASTING & PUBLISHING
  Estabelecimentos Jeronimo Martins & Filho, Sociedade
   Gestora de Participacoes Sociais S.A. ...................   PORT             4,141        270,885         0.1
    RETAILERS-OTHER
  Himachal Futuristic Communications Ltd. ..................   IND            450,000        241,423         0.1
    TELECOM - OTHER
  PT Matahari Putra Prima ..................................   INDO         1,109,000        216,240         0.1
    RETAILERS-APPAREL
                                                                                        ------------
                                                                                          38,227,406
                                                                                        ------------
Materials/Basic Industry (15.5%)
  Kimberly-Clark de Mexico, S.A. de C.V. "A" ...............   MEX          1,012,344      4,461,588         1.8
    PAPER/PACKAGING
  SA Iron & Steel Industrial Corp., Ltd. (ISCOR) ...........   SAFR         6,948,244      3,611,353         1.5
    METALS - STEEL
  Suez Cement Co. - Reg S GDR{c} {\/} ......................   EGPT           169,935      3,526,151         1.5
    CEMENT
  Sappi Ltd. ...............................................   SAFR           427,859      2,713,035         1.1
    FOREST PRODUCTS
  Helwan Portland Cement Co.-/- ............................   EGPT           104,210      2,199,138         0.9
    CEMENT
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-79
<PAGE>   1046
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Materials/Basic Industry (Continued)
  Ameriyah Cement Co.-/- ...................................   EGPT            84,386   $  2,134,469         0.9
    CEMENT
  Industrias Penoles S.A. (CP) .............................   MEX            452,187      1,800,625         0.7
    METALS - NON-FERROUS
  Torah Portland Cement Co.-/- .............................   EGPT            60,900      1,665,794         0.7
    CEMENT
  De Beers Centenary AG - Linked Unit ......................   SAFR            68,900      1,644,432         0.7
    MISC. MATERIALS & COMMODITIES
  Apasco S.A. ..............................................   MEX            254,481      1,554,315         0.6
    CEMENT
  North Cairo Flour Mills-/- ...............................   EGPT            30,170      1,313,282         0.5
    MISC. MATERIALS & COMMODITIES
  Helioplis Housing-/- .....................................   EGPT             8,500      1,162,750         0.5
    BUILDING MATERIALS & COMPONENTS
  Pannonplast Rt. ..........................................   HGRY            18,188        999,145         0.4
    MISC. MATERIALS & COMMODITIES
  Pohang Iron & Steel Co., Ltd.: ...........................   KOR                 --             --         0.5
    METALS - STEEL
    ADR{\/} ................................................   --              52,475        852,719          --
    Common .................................................   --               2,580        114,060          --
  Paints & Chemical Industry-/- ............................   EGPT            20,500        687,413         0.3
    CHEMICALS
  Grupo Industrial Minera Mexico "L" .......................   MEX            231,300        686,975         0.3
    METALS - NON-FERROUS
  Cimpor-Cimentos de Portugal, SGPS S.A. ...................   PORT            23,585        597,004         0.2
    CEMENT
  Cosco Pacific Ltd. .......................................   HK             462,000        537,904         0.2
    PAPER/PACKAGING
  Hindalco Industries Ltd. .................................   IND             19,350        505,218         0.2
    METALS - NON-FERROUS
  Siam Cement Co., Ltd. - Foreign ..........................   THAI            57,200        486,627         0.2
    CEMENT
  Israel Chemicals Ltd. ....................................   ISRL           386,976        485,117         0.2
    CHEMICALS
  Maanshan Iron and Steel Co. "H"+X+ .......................   CHNA         2,874,000        457,312         0.2
    METALS - STEEL
  Sociedad Quimica y Minera de Chile S.A. - ADR{\/} ........   CHLE             8,500        440,938         0.2
    CHEMICALS
  PT Aneka Tambang-/- ......................................   INDO           940,000        366,574         0.2
    METALS - NON-FERROUS
  Dhan Fibres Ltd.-/- ......................................   PAK          4,273,000        325,286         0.1
    CHEMICALS
  Turk Sise ve Cam Fabrikalari AS-/- .......................   TRKY         3,564,000        306,035         0.1
    GLASS
  HI Cement Corp. ..........................................   PHIL         3,197,000        291,464         0.1
    CEMENT
  Engro Chemicals Pakistan Ltd. ............................   PAK             85,412        269,787         0.1
    CHEMICALS
  Agros Holding S.A.-/- ....................................   POL             11,876        249,123         0.1
    MISC. MATERIALS & COMMODITIES
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-80
<PAGE>   1047
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Materials/Basic Industry (Continued)
  Cahya Mata Sarawak Bhd. ..................................   MAL            229,000   $    222,878         0.1
    BUILDING MATERIALS & COMPONENTS
  Compania de Minas Buenaventura S.A. - ADR{\/} ............   PERU            11,800        211,663         0.1
    METALS - NON-FERROUS
  PT Indah Kiat Pulp & Paper Corp. Tbk .....................   INDO           517,000        198,015         0.1
    PAPER/PACKAGING
  Associated Cement Cos., Ltd. .............................   IND              5,086        163,542         0.1
    CEMENT
  Fauji Fertilizer Co., Ltd. ...............................   PAK             71,900        160,119         0.1
    MISC. MATERIALS & COMMODITIES
  Dewan Salman Fibre Ltd.-/- ...............................   PAK                  4              3          --
    CHEMICALS
                                                                                        ------------
                                                                                          37,401,853
                                                                                        ------------
Finance (15.1%)
  State Bank of India Ltd. .................................   IND            646,650      4,679,037         1.9
    BANKS-REGIONAL
  Uniao Bancos Brasileiras "A" Preferred ...................   BRZL       155,867,458      3,956,070         1.6
    BANKS-MONEY CENTER
  ABSA Group Ltd. ..........................................   SAFR           631,687      3,742,844         1.5
    BANKS-REGIONAL
  Egyptian American Bank SAE-/- ............................   EGPT            72,790      2,344,266         1.0
    BANKS-MONEY CENTER
  Administradora de Fondos de Pensiones Provida S.A. -
   ADR{\/} .................................................   CHLE           114,258      1,913,822         0.8
    INVESTMENT MANAGEMENT
  Malayan Banking Bhd. .....................................   MAL            401,800      1,556,990         0.6
    BANKS-MONEY CENTER
  Banco LatinoAmericano de Exportaciones S.A. (Bladex)
   "E"{\/} .................................................   PAN             36,337      1,444,396         0.6
    OTHER FINANCIAL
  Global Menkul Degerler AS-/- .............................   TRKY        60,574,257      1,403,558         0.6
    SECURITIES BROKER
  Banco de A. Edwards - ADR{\/} ............................   CHLE            74,184      1,288,947         0.5
    BANKS-MONEY CENTER
  Credicorp Ltd. - ADR{\/} .................................   PERU            67,200      1,205,400         0.5
    BANKS-MONEY CENTER
  Aksigorta A.S. ...........................................   TRKY        14,655,000      1,138,555         0.5
    INSURANCE - MULTI-LINE
  Commercial International Bank ............................   EGPT                --             --         0.4
    BANKS-MONEY CENTER
    144A GDR{.} {\/} .......................................   --              37,000        804,750          --
    Common .................................................   --              14,000        323,853          --
  Liberty Life Association of Africa Ltd. ..................   SAFR            36,900        920,582         0.4
    INSURANCE-LIFE
  Banco Frances del Rio de la Plata S.A. - ADR{\/} .........   ARG             34,978        861,333         0.4
    BANKS-MONEY CENTER
  Turkiye Is Bankasi (Isbank) "C" ..........................   TRKY         8,527,300        825,208         0.3
    BANKS-MONEY CENTER
  Kookmin Bank - GDR-/- {\/} ...............................   KOR            100,650        644,160         0.3
    BANKS-MONEY CENTER
  BPI-SGPS S.A. ............................................   PORT            27,269        613,475         0.3
    BANKS-MONEY CENTER
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-81
<PAGE>   1048
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Finance (Continued)
  Thai Farmers Bank Public Co., Ltd. - Foreign .............   THAI           205,700   $    562,861         0.2
    BANKS-REGIONAL
  SM Prime Holdings, Inc. ..................................   PHIL         2,860,800        505,326         0.2
    REAL ESTATE
  Yapi ve Kredi Bankasi AS .................................   TRKY        16,419,347        501,299         0.2
    BANKS-REGIONAL
  C.G. Smith Ltd. ..........................................   SAFR           109,100        476,320         0.2
    INVESTMENT MANAGEMENT
  Nedcor Ltd. ..............................................   SAFR            22,000        461,954         0.2
    BANKS-REGIONAL
  Bank Hapoalim Ltd. .......................................   ISRL           191,250        452,638         0.2
    BANKS-REGIONAL
  Metroplex Bhd. ...........................................   MAL          1,242,000        432,779         0.2
    REAL ESTATE
  JSC Kazkommertsbank Co. - GDR-/- {\/} ....................   KAZ             19,530        410,130         0.2
    BANKS-REGIONAL
  Muslim Commercial Bank Ltd.-/- ...........................   PAK            379,600        388,174         0.2
    BANKS-MONEY CENTER
  Bank Leumi Le - Israel ...................................   ISRL           242,645        372,565         0.2
    BANKS-REGIONAL
  Turkiye Garanti Bankasi AS ...............................   TRKY         6,533,800        338,410         0.1
    BANKS-REGIONAL
  Bank Slaski S.A. .........................................   POL              5,773        336,758         0.1
    BANKS-MONEY CENTER
  Belle Corp.-/- ...........................................   PHIL         3,542,000        322,917         0.1
    REAL ESTATE
  Ayala Land, Inc. "B" .....................................   PHIL           670,000        262,464         0.1
    REAL ESTATE
  Banco Santander Chile - ADR{\/} ..........................   CHLE            18,800        244,400         0.1
    BANKS-REGIONAL
  Land and House Public Co., Ltd. - Foreign ................   THAI           273,000        237,687         0.1
    REAL ESTATE
  Malaysian Assurance Alliance Bhd. ........................   MAL             79,100        142,565         0.1
    INSURANCE - MULTI-LINE
  Bangkok Bank Public Co., Ltd. - Foreign ..................   THAI            39,600        137,910         0.1
    BANKS-MONEY CENTER
  C & P Homes, Inc. ........................................   PHIL         1,487,000        112,266         0.1
    REAL ESTATE
  HDFC Bank Ltd. ...........................................   IND                500          1,118          --
    BANKS-MONEY CENTER
  Housing Development Finance Corp.-/- .....................   IND                  5            422          --
    OTHER FINANCIAL
                                                                                        ------------
                                                                                          36,368,209
                                                                                        ------------
Consumer Non-Durables (9.0%)
  South African Breweries Ltd. .............................   SAFR           158,112      4,207,554         1.7
    BEVERAGES - ALCOHOLIC
  Fomento Economico Mexicano, S.A. de C.V. "B" .............   MEX            530,710      3,749,927         1.5
    BEVERAGES - ALCOHOLIC
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-82
<PAGE>   1049
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Consumer Non-Durables (Continued)
  Gruma S.A. "B"-/- ........................................   MEX            678,283   $  2,664,393         1.1
    FOOD
  Eastern Tobacco Co.-/- ...................................   EGPT            99,245      2,488,422         1.0
    TOBACCO
  Companhia Cervejaria Brahma Preferred ....................   BRZL         3,909,129      2,446,752         1.0
    BEVERAGES - ALCOHOLIC
  C.G. Smith Foods Ltd. ....................................   SAFR           123,000      1,764,449         0.7
    FOOD
  A-Ahram Beverages Co. S.A.E. - 144A GDR{.} -/- {\/} ......   EGPT            48,235      1,326,463         0.5
    BEVERAGES - ALCOHOLIC
  Embotelladora Andina S.A. "B" - ADR{\/} ..................   CHLE            51,047      1,046,464         0.4
    BEVERAGES - NON-ALCOHOLIC
  San Miguel Corp. "B" .....................................   PHIL           877,800        987,838         0.4
    BEVERAGES - ALCOHOLIC
  Compania Cervecerias Unidas S.A. ADR{\/} .................   CHLE            30,046        732,371         0.3
    BEVERAGES - ALCOHOLIC
  Graboplast Rt. (Australian Certificates) .................   HGRY            10,319        556,323         0.2
    OTHER CONSUMER GOODS
  Kuala Lumpur Kepong Bhd. .................................   MAL            108,000        259,537         0.1
    OTHER CONSUMER GOODS
  Zaklady Piwowarskie w Zywcu S.A. (Zywiec) ................   POL              3,416        255,218         0.1
    BEVERAGES - ALCOHOLIC
  La Tondena Distillers, Inc. ..............................   PHIL           149,400         91,513          --
    BEVERAGES - ALCOHOLIC
                                                                                        ------------
                                                                                          22,577,224
                                                                                        ------------
Technology (3.7%)
  Asustek Computer Inc. - Reg. S GDR-/- {c} {\/} ...........   TWN            695,564      8,503,270         3.5
    COMPUTERS & PERIPHERALS
  Clal Electronics Industries Ltd. .........................   ISRL             2,159        312,828         0.1
    SEMICONDUCTORS
  LG Information & Communication ...........................   KOR              1,956        112,470         0.1
    TELECOM TECHNOLOGY
                                                                                        ------------
                                                                                           8,928,568
                                                                                        ------------
Capital Goods (2.5%)
  New World Infrastructure Ltd.-/- .........................   HK             929,000      1,838,771         0.8
    CONSTRUCTION
  Cheung Kong Infrastructure Holdings ......................   HK             586,000      1,516,171         0.6
    CONSTRUCTION
  United Engineers Ltd. ....................................   MAL            318,000        754,641         0.3
    CONSTRUCTION
  Irkutskenergo - ADR-/- {\/} ..............................   RUS             48,200        650,700         0.3
    ELECTRICAL PLANT/EQUIPMENT
  Daewoo Heavy Industries ..................................   KOR             86,000        501,667         0.2
    INDUSTRIAL COMPONENTS
  Elektrim Spolka Akcyjna S.A. .............................   POL             45,830        431,961         0.2
    ELECTRICAL PLANT/EQUIPMENT
  ECI Telecommunications Ltd.{\/} ..........................   ISRL             9,100        251,388         0.1
    TELECOM EQUIPMENT
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-83
<PAGE>   1050
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Capital Goods (Continued)
  Sungmi Telecom Electronics Co. ...........................   KOR                189   $      9,247          --
    TELECOM EQUIPMENT
  Gujarat Telephone Cables-/- ..............................   IND              6,200            853          --
    TELECOM EQUIPMENT
                                                                                        ------------
                                                                                           5,955,399
                                                                                        ------------
Consumer Durables (2.3%)
  Bajaj Auto Ltd. - GDR{\/} ................................   IND             81,000      1,441,800         0.6
    AUTO PARTS
  Arcelik AS ...............................................   TRKY         9,393,800      1,049,901         0.4
    APPLIANCES & HOUSEHOLD DURABLES
  Qingling Motors Co., Ltd.+X+ .............................   CHNA         1,475,000        963,616         0.4
    AUTOMOBILES
  Tata Engineering and Locomotive Co., Ltd. ................   IND            107,410        941,208         0.4
    AUTOMOBILES
  Samsung Electronics Co.: .................................   KOR                 --             --         0.3
    CONSUMER ELECTRONICS
    Common .................................................   --              14,801        586,279          --
    144A GDR{.} -/- {\/} ...................................   --               8,200        166,050          --
  PT Astra International, Inc. .............................   INDO           592,000        441,114         0.2
    AUTOMOBILES
                                                                                        ------------
                                                                                           5,589,968
                                                                                        ------------
Health Care (1.8%)
  Ranbaxy Laboratories Ltd. ................................   IND             75,000      1,460,918         0.6
    MEDICAL TECHNOLOGY & SUPPLIES
  Richter Gedeon Rt. - Reg S GDR{c} {\/} ...................   HGRY            14,046      1,306,278         0.5
    PHARMACEUTICALS
  Teva Pharmaceutical Industries Ltd. ......................   ISRL            16,640        774,717         0.3
    PHARMACEUTICALS
  Egypt International Pharmaceutical Industries Co.
   (EIPICO) ................................................   EGPT            10,000        723,529         0.3
    PHARMACEUTICALS
  PT Kalbe Farma ...........................................   INDO           524,000        321,114         0.1
    PHARMACEUTICALS
  Core Healthcare ..........................................   IND                 50             20          --
    PHARMACEUTICALS
                                                                                        ------------
                                                                                           4,586,576
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $277,841,143) ...............                             243,493,543       100.2
                                                                                        ------------       -----
<CAPTION>
 
                                                                            NO. OF         VALUE         % OF NET
RIGHTS                                                        COUNTRY       RIGHTS        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
  PT Matahari Putra Prima Rights, expire 12/3/97 ...........   INDO                --        123,565         0.1
    RETAILERS-APPAREL
  Telecomunicacoes de Sao Paulo S.A. (TELESP) Rights, expire
   11/12/97 ................................................   BRZL                --            224          --
    TELEPHONE NETWORKS
                                                                                        ------------       -----
 
TOTAL RIGHTS (cost $0) .....................................                                 123,789         0.1
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-84
<PAGE>   1051
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                            NO. OF         VALUE         % OF NET
WARRANTS                                                      COUNTRY      WARRANTS       (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
  Belle Corp. Warrants, expire 2002 (cost $0) ..............   PHIL           708,400   $        131          --
    OIL
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $277,841,143)  * ...................                             243,617,463       100.3
Other Assets and Liabilities ...............................                                (716,414)       (0.3)
                                                                                        ------------       -----
 
NET ASSETS .................................................                            $242,901,049       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        +X+  Denominated in Hong Kong Dollars.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
          *  For Federal income tax purposes, cost is $279,135,649 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  17,948,897
                 Unrealized depreciation:           (53,467,083)
                                                  -------------
                 Net unrealized depreciation:     $ (35,518,186)
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviations:
    ADR--American Depository Receipt
    GDR--Global Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-85
<PAGE>   1052
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {D}
                                        -------------------------------------------
                                                 FIXED INCOME,
                                                   RIGHTS &      SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS       & OTHER     TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Argentina (ARG/ARS) ..................    1.8                                   1.8
Brazil (BRZL/BRL) ....................   12.3                                  12.3
Chile (CHLE/CLP) .....................    6.4                                   6.4
China (CHNA/RMB) .....................    0.6                                   0.6
Egypt (EGPT/EGP) .....................    9.0                                   9.0
Hong Kong (HK/HKD) ...................    3.0                                   3.0
Hungary (HGRY/HUF) ...................    1.6                                   1.6
India (IND/INR) ......................    5.4                                   5.4
Indonesia (INDO/IDR) .................    3.7         0.1                       3.8
Ireland (IRE/IEP) ....................    0.6                                   0.6
Israel (ISRL/ILS) ....................    1.6                                   1.6
Kazakhstan (KAZ/KTS) .................    0.2                                   0.2
Korea (KOR/KRW) ......................    1.6                                   1.6
Malaysia (MAL/MYR) ...................    2.3                                   2.3
Mexico (MEX/MXN) .....................   10.7                                  10.7
Pakistan (PAK/PKR) ...................    1.2                                   1.2
Panama (PAN/PND) .....................    0.6                                   0.6
Peru (PERU/PES) ......................    1.4                                   1.4
Philippines (PHIL/PHP) ...............    1.3                                   1.3
Poland (POL/PLZ) .....................    0.5                                   0.5
Portugal (PORT/PTE) ..................    1.2                                   1.2
Romania (ROM/ROL) ....................    0.3                                   0.3
Russia (RUS/SUR) .....................    4.0                                   4.0
South Africa (SAFR/ZAR) ..............   15.4                                  15.4
Sri Lanka (SLNKA/LKR) ................    0.4                                   0.4
Taiwan (TWN/TWD) .....................    3.5                                   3.5
Thailand (THAI/THB) ..................    1.8                                   1.8
Turkey (TRKY/TRL) ....................    2.7                                   2.7
United Kingdom (UK/GBP) ..............    0.9                                   0.9
United States (US/USD) ...............                              (0.3)      (0.3)
Venezuela (VENZ/VEB) .................    2.9                                   2.9
Zimbabwe (ZBBW/ZWD) ..................    1.3                                   1.3
                                        ------      -----          -----      -----
Total  ...............................  100.2         0.1           (0.3)     100.0
                                        ------      -----          -----      -----
                                        ------      -----          -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $242,901,049.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-86
<PAGE>   1053
                        GT GLOBAL EMERGING MARKETS FUND
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                               <C>         <C>
Assets:
  Investments in securities, at value (cost $277,841,143) (Note 1)..........................  $243,617,463
  U.S. currency.................................................................  $  136,655
  Foreign currencies (cost $10,678,505).........................................  10,060,667   10,197,322
                                                                                  ----------
  Receivable for securities sold............................................................    7,396,760
  Receivable for Fund shares sold...........................................................    1,950,008
  Dividends receivable......................................................................      337,748
                                                                                              -----------
    Total assets............................................................................  263,499,301
                                                                                              -----------
Liabilities:
  Payable for securities purchased..........................................................   12,193,150
  Payable for loan outstanding (Note 1).....................................................    6,184,000
  Payable for Fund shares repurchased.......................................................    1,396,848
  Payable for investment management and administration fees (Note 2)........................      246,040
  Payable for service and distribution expenses (Note 2)....................................      199,887
  Payable for printing and postage expenses.................................................      140,103
  Payable for transfer agent fees (Note 2)..................................................      104,492
  Payable for custodian fees (Note 1).......................................................       43,774
  Payable for professional fees.............................................................       42,768
  Payable for registration and filing fees..................................................       23,221
  Payable for fund accounting fees (Note 2).................................................        6,498
  Payable for Directors' fees and expenses (Note 2).........................................        4,348
  Other accrued expenses....................................................................       13,123
                                                                                              -----------
    Total liabilities.......................................................................   20,598,252
                                                                                              -----------
Net assets..................................................................................  $242,901,049
                                                                                              -----------
                                                                                              -----------
Class A:
Net asset value and redemption price per share ($113,318,585 DIVIDED BY 9,291,855 shares
 outstanding)...............................................................................  $     12.20
                                                                                              -----------
                                                                                              -----------
Maximum offering price per share (100/95.25 of $12.20) *....................................  $     12.81
                                                                                              -----------
                                                                                              -----------
Class B:+
Net asset value and offering price per share ($127,658,086 DIVIDED BY 10,694,937 shares
 outstanding)...............................................................................  $     11.94
                                                                                              -----------
                                                                                              -----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($1,924,378
 DIVIDED BY 156,831 shares outstanding).....................................................  $     12.27
                                                                                              -----------
                                                                                              -----------
Net assets consist of:
  Paid in capital (Note 4)..................................................................  $289,238,339
  Accumulated net realized loss on investments and foreign currency transactions............  (11,492,948)
  Net unrealized depreciation on translation of assets and liabilities in foreign
   currencies...............................................................................     (620,662)
  Net unrealized depreciation of investments................................................  (34,223,680)
                                                                                              -----------
Total -- representing net assets applicable to capital shares outstanding...................  $242,901,049
                                                                                              -----------
                                                                                              -----------
<FN>
- --------------
   * On sales of $50,000 or more, the offering price is reduced.
   + Redemption price per share is equal to the net asset value per share less
     any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-87
<PAGE>   1054
                        GT GLOBAL EMERGING MARKETS FUND
 
                            STATEMENT OF OPERATIONS
 
                          Year ended October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                              <C>          <C>
Investment income: (Note 1)
  Dividend income (net of foreign withholding tax of $260,697)..............................  $ 7,205,935
  Interest income...........................................................................    1,168,490
                                                                                              -----------
    Total investment income.................................................................    8,374,425
                                                                                              -----------
Expenses:
  Investment management and administration fees (Note 2)....................................    3,907,922
  Service and distribution expenses: (Note 2)
    Class A....................................................................  $   977,082
    Class B....................................................................    2,022,092    2,999,174
                                                                                 -----------
  Transfer agent fees (Note 2)..............................................................    1,516,844
  Custodian fees (Note 1)...................................................................      349,533
  Printing and postage expenses.............................................................      237,674
  Registration and filing fees..............................................................      113,378
  Fund accounting fees (Note 2).............................................................      103,144
  Audit fees................................................................................       72,348
  Legal fees................................................................................       35,687
  Amortization of organization costs (Note 1)...............................................       16,342
  Directors' fees and expenses (Note 2).....................................................       13,636
  Other expenses (Note 1)...................................................................      385,661
                                                                                              -----------
    Total expenses before reductions........................................................    9,751,343
                                                                                              -----------
      Expense reductions (Notes 1 & 5)......................................................     (326,286)
                                                                                              -----------
    Total net expenses......................................................................    9,425,057
                                                                                              -----------
Net investment loss.........................................................................   (1,050,632)
                                                                                              -----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
  (Note 1)
  Net realized gain on investments.............................................   29,128,765
  Net realized loss on foreign currency transactions...........................   (3,014,870)
                                                                                 -----------
    Net realized gain during the year.......................................................   26,113,895
  Net change in unrealized depreciation on translation of assets and
   liabilities in foreign currencies...........................................     (282,179)
  Net change in unrealized depreciation of investments.........................  (52,070,476)
                                                                                 -----------
    Net unrealized depreciation during the year.............................................  (52,352,655)
                                                                                              -----------
Net realized and unrealized loss on investments and foreign currencies......................  (26,238,760)
                                                                                              -----------
Net decrease in net assets resulting from operations........................................  $(27,289,392)
                                                                                              -----------
                                                                                              -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-88
<PAGE>   1055
                        GT GLOBAL EMERGING MARKETS FUND
 
                      STATEMENTS OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                               YEAR ENDED      YEAR ENDED
                                                                              OCTOBER 31,     OCTOBER 31,
                                                                                  1997            1996
                                                                             --------------  --------------
<S>                                                                          <C>             <C>
Decrease in net assets
Operations:
  Net investment income (loss).............................................  $   (1,050,632) $    2,628,437
  Net realized gain (loss) on investments and foreign currency
   transactions............................................................      26,113,895      (5,528,958)
  Net change in unrealized appreciation (depreciation) on translation of
   assets and liabilities in foreign currencies............................        (282,179)         31,246
  Net change in unrealized appreciation (depreciation) of investments......     (52,070,476)     22,530,391
                                                                             --------------  --------------
    Net increase (decrease) in net assets resulting from operations........     (27,289,392)     19,661,116
                                                                             --------------  --------------
Class A:
Distributions to shareholders: (Note 1)
  From net investment income...............................................         (37,319)             --
  In excess of net investment income.......................................        (104,807)             --
Advisor Class:
Distributions to shareholders: (Note 1)
  From net investment income...............................................          (4,161)             --
  In excess of net investment income.......................................         (11,686)             --
                                                                             --------------  --------------
    Total distributions....................................................        (157,973)             --
                                                                             --------------  --------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and reinvested.........................   1,140,272,411   1,443,673,824
  Decrease from capital shares repurchased.................................  (1,314,030,266) (1,499,221,358)
                                                                             --------------  --------------
    Net decrease from capital share transactions...........................    (173,757,855)    (55,547,534)
                                                                             --------------  --------------
Total decrease in net assets...............................................    (201,205,220)    (35,886,418)
Net assets:
  Beginning of year........................................................     444,106,269     479,992,687
                                                                             --------------  --------------
  End of year *............................................................  $  242,901,049  $  444,106,269
                                                                             --------------  --------------
                                                                             --------------  --------------
  * Includes undistributed net investment income of........................  $           --  $       41,480
                                                                             --------------  --------------
                                                                             --------------  --------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-89
<PAGE>   1056
                        GT GLOBAL EMERGING MARKETS FUND
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS A+
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)    1996 (D)    1995 (D)      1994        1993
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   14.26   $   13.85   $   18.81   $   14.42   $   11.10
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income (loss)..........         --        0.11        0.13       (0.02)       0.02*
  Net realized and unrealized gain
   (loss) on investments................      (2.05)       0.30       (4.32)       4.68        3.38
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............      (2.05)       0.41       (4.19)       4.66        3.40
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............         --          --          --       (0.01)      (0.08)
  From net realized gain on
   investments..........................         --          --       (0.77)      (0.26)         --
  In excess of net investment income....      (0.01)         --          --          --          --
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (0.01)         --       (0.77)      (0.27)      (0.08)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $   12.20   $   14.26   $   13.85   $   18.81   $   14.42
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............     (14.45)%      2.96%     (23.04)%     32.58%      30.90%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 113,319   $ 224,964   $ 252,457   $ 417,322   $ 187,808
Ratio of net investment income (loss) to
 average net assets.....................      (0.01)%      0.76%       0.89%      (0.11)%       0.1%*
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................       2.10%       1.96%       2.12%       2.06%        2.4%*
  Without expense reductions............       2.18%       2.08%       2.14%        N/A         N/A
Portfolio turnover rate++++.............        150%        104%        114%        100%         99%
Average commission rate per share paid
 on portfolio transactions++++..........  $  0.0015   $  0.0040         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
  +  All capital shares issued and outstanding as of March 31, 1993, were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.02 for the year ended October 31, 1993.
     Without such reimbursements, the expense ratios would have been 2.61%
     and the ratio of net investment income to average net assets would
     have been 0.36% (See Note 2).
 * * Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.02. Without such reimbursements, the
     expense ratio would have been 3.63% and the ratio of net investment
     income to average net assets would have been (0.76%) (see Note 2).
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-90
<PAGE>   1057
                        GT GLOBAL EMERGING MARKETS FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
                                                                   CLASS B++
                                          -----------------------------------------------------------
                                                                                           APRIL 1,
                                                                                             1993
                                                      YEAR ENDED OCTOBER 31,                  TO
                                          ----------------------------------------------  OCTOBER 31,
                                           1997 (D)    1996 (D)    1995 (D)      1994        1993
                                          ----------  ----------  ----------  ----------  -----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   14.02   $   13.68   $   18.68   $   14.39    $   11.47
                                          ----------  ----------  ----------  ----------  -----------
Income from investment operations:
  Net investment income (loss)..........      (0.08)       0.04        0.06       (0.12)        0.00**
  Net realized and unrealized gain
   (loss) on investments................      (2.00)       0.30       (4.29)       4.67         2.92
                                          ----------  ----------  ----------  ----------  -----------
    Net increase (decrease) from
     investment operations..............      (2.08)       0.34       (4.23)       4.55         2.92
                                          ----------  ----------  ----------  ----------  -----------
Distributions to shareholders:
  From net investment income............         --          --          --          --           --
  From net realized gain on
   investments..........................         --          --       (0.77)      (0.26)          --
  In excess of net investment income....         --          --          --          --           --
                                          ----------  ----------  ----------  ----------  -----------
    Total distributions.................         --          --       (0.77)      (0.26)          --
                                          ----------  ----------  ----------  ----------  -----------
Net asset value, end of period..........  $   11.94   $   14.02   $   13.68   $   18.68    $   14.39
                                          ----------  ----------  ----------  ----------  -----------
                                          ----------  ----------  ----------  ----------  -----------
 
Total investment return (c).............     (14.91)%      2.49%     (23.37)%     31.77%        25.5%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 127,658   $ 216,004   $ 225,861   $ 291,289    $  32,318
Ratio of net investment income (loss) to
 average net assets.....................      (0.51)%      0.26%       0.39%      (0.61)%       (0.4)%**(a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................       2.60%       2.46%       2.62%       2.56%         2.9%**(a)
  Without expense reductions............       2.68%       2.58%       2.64%        N/A          N/A
Portfolio turnover rate++++.............        150%        104%        114%        100%          99%
Average commission rate per share paid
 on portfolio transactions++++..........  $  0.0015   $  0.0040         N/A         N/A          N/A
 
<CAPTION>
 
                                                      ADVISOR CLASS+++
                                          ----------------------------------------
                                             YEAR                    JUNE 1, 1995
                                             ENDED      YEAR ENDED        TO
                                          OCTOBER 31,   OCTOBER 31,   OCTOBER 31,
                                           1997 (D)      1996 (D)        1995
                                          -----------   -----------  -------------
<S>                                       <C>           <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $ 14.38       $   13.88     $   14.71
                                          -----------   -----------  -------------
Income from investment operations:
  Net investment income (loss)..........      0.05            0.18          0.08
  Net realized and unrealized gain
   (loss) on investments................     (2.05)           0.32         (0.91)
                                          -----------   -----------  -------------
    Net increase (decrease) from
     investment operations..............     (2.00)           0.50         (0.83)
                                          -----------   -----------  -------------
Distributions to shareholders:
  From net investment income............     (0.03)             --            --
  From net realized gain on
   investments..........................        --              --            --
  In excess of net investment income....     (0.08)             --            --
                                          -----------   -----------  -------------
    Total distributions.................     (0.11)             --            --
                                          -----------   -----------  -------------
Net asset value, end of period..........   $ 12.27       $   14.38     $   13.88
                                          -----------   -----------  -------------
                                          -----------   -----------  -------------
Total investment return (c).............    (14.05)%          3.60%        (5.71)%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $ 1,924       $   3,139     $   1,675
Ratio of net investment income (loss) to
 average net assets.....................      0.49%           1.26%         1.39%(a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................      1.60%           1.46%         1.62%(a)
  Without expense reductions............      1.68%           1.58%         1.64%(a)
Portfolio turnover rate++++.............       150%            104%          114%
Average commission rate per share paid
 on portfolio transactions++++..........   $0.0015       $  0.0040           N/A
</TABLE>
 
- ----------------
 
  +  All capital shares issued and outstanding as of March 31, 1993, were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.02 for the year ended October 31, 1993.
     Without such reimbursements, the expense ratios would have been 2.61%
     and the ratio of net investment income to average net assets would
     have been 0.36% (See Note 2).
 * * Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.02. Without such reimbursements, the
     expense ratio would have been 3.63% and the ratio of net investment
     income to average net assets would have been (0.76%) (see Note 2).
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-91
<PAGE>   1058
                        GT GLOBAL EMERGING MARKETS FUND
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Emerging Markets Fund ("Fund") is a separate series of G.T. Investment
Funds, Inc. ("Company"). The Company is organized as a Maryland corporation and
is registered under the Investment Company Act of 1940, as amended ("1940 Act"),
as a diversified, open-end management investment company. The Company has
thirteen series of shares in operation, each series corresponding to a distinct
portfolio of investments.
 
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective service and distribution expenses, and
may differ in its transfer agent, registration, and certain other class-specific
fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
 
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or in the principal over-the-counter market in which
such securities are traded, as of the close of business on the day the
securities are being valued , or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. (the "Manager") to be the primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when GT
Capital deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments are valued at
amortized cost adjusted for foreign exchange translation and market fluctuation,
if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records are maintained in U.S. dollars. The market values of
foreign securities, currency holdings, and other assets and liabilities are
recorded in the books and records of the Fund after translation to U.S. dollars
based on the exchange rates on that day. The cost of each security is determined
using historical exchange rates. Income and withholding taxes are translated at
prevailing exchange rates when earned or incurred.
 
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from 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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains or losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. government securities or other
high quality debt securities of which the value, including accrued interest, is
at least equal to the amount to be repaid to the Fund under each agreement at
its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract
 
                                     FS-92
<PAGE>   1059
                        GT GLOBAL EMERGING MARKETS FUND
 
fluctuates with changes in currency exchange rates. The Forward Contract is
marked-to-market daily and the change in market value is recorded by the Fund as
an unrealized gain or loss. When the Forward Contract is closed, the Fund
records a realized gain or loss equal to the difference between the value at the
time it was opened and the value at the time it was closed. The Fund could be
exposed to risk if a counterparty is unable to meet the terms of the contract or
if the value of the currency changes unfavorably. The Fund may enter into
Forwards Contracts in connection with planned purchases or sales of securities,
or to hedge against adverse fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on a traded exchange is valued at its last bid
price, or, in the case of an over-the-counter option, is valued at the average
of the last bid prices obtained from brokers. If an option expires on its
stipulated expiration date or if the Fund enters into a closing purchase
transaction, a gain or loss is realized without regard to any unrealized gain or
loss on the underlying security, and the liability related to such option is
extinguished. If a written call option is exercised, a gain or loss is realized
from the sale of the underlying security and the proceeds of the sale are
increased by the premium originally received. If a written put option is
exercised, the cost of the underlying security purchased would be decreased by
the premium originally received. The Fund can write options only on a covered
basis, which, for a call, requires that the Fund hold the underlying securities
and, for a put, requires the Fund to set aside cash, U.S. government securities,
or other liquid, high grade debt securities in an amount not less than the
exercise price or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund may use options to manage its exposure to the
stock market and to fluctuations in currency values or interest rates.
 
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund would realize a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund would
realize a gain or loss, depending on whether proceeds from the closing sale
transaction are greater or less than the cost of the option. If the Fund
exercises a call option, the cost of the securities acquired by exercising the
call is increased by the premium paid to buy the call. If the Fund exercises a
put option, it realizes a gain or loss from the sale of the underlying security,
and the proceeds from such sale are decreased by the premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund may trade
securities on other than normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1997, stocks with an aggregate value of approximately $17,629,705
were on loan to brokers. The loans were secured by cash collateral of
$18,687,600 received by the Fund. For international securities, cash collateral
is received by the Fund against loaned securities in an amount at least equal to
105% of the market value of the loaned securities at the inception of each loan.
This collateral must be maintained at not less than 103% of the market value of
the loaned securities during the period of the loan. For domestic securities,
cash collateral is received by the Fund against loaned securities in the amount
at least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of each loan. For
the year ended October 31, 1997, the Fund received fees of $186,729 which were
used to reduce the Fund's custodian and administrative expenses.
 
                                     FS-93
<PAGE>   1060
                        GT GLOBAL EMERGING MARKETS FUND
 
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains. The Fund currently has a capital loss carryforward of
$10,198,442, of which $5,776,568 expires in 2003 and $4,421,874 expires in 2004.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 and timing differences.
 
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the Fund in connection with its organization, its initial
registration with the Securities and Exchange Commission and with various states
and the initial public offering of its shares aggregated $150,006. These
expenses were being amortized on a straightline basis over a five-year period.
 
(L) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
 
(M) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
 
(N) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
 
(O) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised or administered by
the Manager, has a line of credit with each of BankBoston and State Street Bank
& Trust Company. The arrangements with the banks allow the Fund and the GT Funds
to borrow an aggregate maximum amount of $200,000,000. The Fund is limited to
borrowing up to 33 1/3% of the value of each Fund's total assets. On October 31,
1997, the Fund had $6,184,000 in loans outstanding.
 
For the year ended October 31, 1997, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $9,375,490 with a weighted average interest rate of 6.37%.
Interest expense for the Fund for the year ended October 31, 1997 was $165,714,
included in "Other Expenses" on the Statement of Operations.
 
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc. is the Fund's investment manager and
administrator. Fund pays investment management and administration fees to the
Manager at the annualized rate of 0.975% on the first $500 million of average
daily net assets of the Fund; 0.95% on the next $500 million; 0.925% on the next
$500 million and 0.90% on amounts thereafter. These fees are computed daily and
paid monthly.
 
GT Global, Inc. ("GT Global"), an affiliate of the Manager, serves as the Fund's
distributor. The Fund offers Class A, Class B, and Advisor Class shares for
purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the year ended October 31, 1997, GT Global retained $39,500
of such sales charges. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Fund's current prospectus. GT Global collected CDSCs in the
amount of $13,158 for the year ended October 31, 1997. GT Global also makes
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global, from its own resources, pays commissions to dealers through
which the sales are made. Certain redemptions of Class B shares made within six
years of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the year ended October 31, 1997, GT Global collected CDSCs in
the amount of $1,581,636. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
 
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT
 
                                     FS-94
<PAGE>   1061
                        GT GLOBAL EMERGING MARKETS FUND
 
Global a distribution fee at the annualized rate of up to 0.50% of the average
daily net assets of the Fund's Class A shares, less any amounts paid by the Fund
as the aforementioned service fee, for GT Global's expenditures incurred in
providing services as distributor. All expenses for which GT Global is
reimbursed under the Class A Plan will have been incurred within one year of
such reimbursement.
 
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
 
The Manager and GT Global voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 2.40% 2.90%, and 1.90% of the average
daily net assets of the Fund's Class A, Class B and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.
 
Effective November 1, 1997, the Manager and GT Global have undertaken to limit
each Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expenses) to the annual rate of 2.00%, 2.50% and 1.50% of the
average daily net assets of the Fund's Class A, Class B and Advisor Class
shares, respectively. This undertaking may be changed or eliminated in the
future.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and LGT and GT Global, is the transfer agent of the Fund. For performing
shareholder servicing, reporting, and general transfer agent services, GT
Services receives an annual maintenance fee of $17.50 per account, a new account
fee of $4.00 per account, a per transaction fee of $1.75 for all transactions
other than exchanges and per exchange fee of $2.25. GT Services also is
reimbursed by the Fund for its out-of-pocket expenses for such items as postage,
forms, telephone charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.
 
3. PURCHASES AND SALES OF SECURITIES
For the period then ended October 31, 1997, purchases and sales of investment
securities by the Fund, other than short-term investments, aggregated
$551,048,488 and $663,636,335 respectively. There were no purchases or sales of
U.S. government obligations by the Fund for the year ended October 31, 1997.
 
4. CAPITAL SHARES
At October 31, 1997, there were 6,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 200,000,000 were
classified as shares of the Fund; 400,000,000 were classified as shares of GT
Global Government Income Fund; 200,000,000 were classified as shares of GT
Global Developing Markets Fund; 200,000,000 were classified as shares of GT
Global Health Care Fund; 200,000,000 were classified as shares of GT Global
Strategic Income Fund; 200,000,000 were classified as shares of GT Global
Emerging Markets Fund; 200,000,000 were classified as shares of GT Global
Currency Fund (inactive); 200,000,000 were classified as shares of GT Global
Growth & Income Fund; 200,000,000 were classified as shares of GT Global Small
Companies Fund (inactive); 200,000,000 were classified as shares of GT Global
Latin America Growth Fund; 400,000,000 were classified as shares of GT Global
Telecommunications Fund; 200,000,000 were classified as shares of GT Global High
Income Fund; 200,000,000 were classified as shares of GT Global Financial
Services Fund; 200,000,000 were classified as shares of GT Global Natural
Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; and 200,000,000 were classified as shares of GT Global
Consumer Products and Services Fund. The shares of each of the foregoing series
of the Company were divided equally into two classes, designated Class A and
Class B common stock. With respect to the issuance of Advisor Class shares,
100,000,000 shares were classified as shares of each of the fifteen series of
the Company and designated as Advisor Class common stock. 1,100,000,000 shares
remain unclassified. Transactions in capital shares of the Fund were as follows:
 
                                     FS-95
<PAGE>   1062
                        GT GLOBAL EMERGING MARKETS FUND
 
                           CAPITAL SHARE TRANSACTIONS
 
<TABLE>
<CAPTION>
                                                  YEAR ENDED                  YEAR ENDED
                                               OCTOBER 31, 1997            OCTOBER 31, 1996
                                          --------------------------  --------------------------
CLASS A                                     SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................   57,294,454  $ 859,844,827   75,574,030  $1,106,260,084
Shares issued in connection with
  reinvestment of distributions.........        8,654        123,333           --             --
                                          -----------  -------------  -----------  -------------
                                           57,303,108    859,968,160   75,574,030  1,106,260,084
Shares repurchased......................  (63,783,507)  (962,241,730) (78,034,654) (1,146,692,253)
                                          -----------  -------------  -----------  -------------
Net decrease............................   (6,480,399) $(102,273,570)  (2,460,624) $ (40,432,169)
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
                                                  YEAR ENDED                  YEAR ENDED
                                               OCTOBER 31, 1997            OCTOBER 31, 1996
                                          --------------------------  --------------------------
CLASS B                                     SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................   16,394,355  $ 245,887,976   22,439,885  $ 323,192,109
Shares repurchased......................  (21,109,926)  (316,251,415) (23,539,619)  (339,644,019)
                                          -----------  -------------  -----------  -------------
Net decrease............................   (4,715,571) $ (70,363,439)  (1,099,734) $ (16,451,910)
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
                                                  YEAR ENDED                  YEAR ENDED
                                               OCTOBER 31, 1997            OCTOBER 31, 1996
                                          --------------------------  --------------------------
ADVISOR CLASS                               SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    2,213,447  $  34,400,471      966,362  $  14,221,631
Shares issued in connection with
  reinvestment of distributions.........        1,106         15,804           --             --
                                          -----------  -------------  -----------  -------------
                                            2,214,553     34,416,275      966,362     14,221,631
Shares repurchased......................   (2,275,943)   (35,537,121)    (868,859)   (12,885,086)
                                          -----------  -------------  -----------  -------------
Net increase (decrease).................      (61,390) $  (1,120,846)      97,503  $   1,336,545
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the year ended October 31, 1997, the Fund's expenses
were reduced by $139,557 under these arrangements.
 
6. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
Investments of 5% or more of an issuer's outstanding voting securities by the
Fund are defined in the Investment Company Act of 1940 as an affiliated company.
There were no investments in affiliated companies at October 31, 1997.
 
Transactions during the period with companies that are or were affiliates are as
follows:
 
<TABLE>
<CAPTION>
                                                                                                                  NET
                                                                                            PURCHASES  SALES    REALIZED  DIVIDEND
                                                                                              COST    PROCEEDS    GAIN     INCOME
                                                                                            --------  --------  --------  --------
<S>                                                                                         <C>       <C>       <C>       <C>
Sun Brewing Ltd. - 144A GDR...............................................................        --        --        --        --
</TABLE>
 
                                     FS-96
<PAGE>   1063
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
To the Shareholders of AIM Latin American Growth Fund and Board of Directors of
G.T. Investment Funds, Inc.:
 
We have audited the accompanying statement of assets and liabilities of AIM
Latin American Growth Fund (formerly GT Global Latin America Growth Fund), one
of the funds organized as a series of A I M Investment Funds, Inc., including
the portfolio of investments, as of April 30, 1998, the related statement of
operations for the six months then ended, the statements of changes in net
assets for the six months then ended and for the year ended October 31, 1997,
and the financial highlights for each of the periods indicated therein. These
financial statements and the financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1998, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of AIM
Latin American Growth Fund as of April 30, 1998, the results of operations for
the six months then ended, the changes in its net assets for the six months then
ended and for the year ended October 31, 1997, and the financial highlights for
each of the periods indicated therein, in conformity with generally accepted
accounting principles.


 
                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
JUNE 17, 1998
 
                                     FS-97
<PAGE>   1064
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                            PORTFOLIO OF INVESTMENTS
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (29.0%)
  Telecomunicacoes Brasileiras S.A. (Telebras): .............   BRZL               --             --         8.5
    TELEPHONE NETWORKS
    ADR{\/} .................................................   --            104,140   $ 12,685,554          --
    Common ..................................................   --         82,307,027      8,169,521          --
  Nortel Inversora S.A. - ADR{\/} ...........................   ARG           170,200      5,063,450         2.1
    TELEPHONE NETWORKS
  Telecomunicacoes de Sao Paulo S.A. (TELESP): ..............   BRZL               --             --         2.0
    TELEPHONE NETWORKS
    Preferred ...............................................   --          7,873,727      2,678,513          --
    Common-/- ...............................................   --          8,857,100      2,312,063          --
  Companhia de Saneamento Basico do Estado de Sao Paulo -
   SABESP ...................................................   BRZL       21,222,622      4,825,432         2.0
    BUSINESS & PUBLIC SERVICES
  Cifra, S.A. de C.V.: ......................................   MEX                --             --         2.0
    RETAILERS-OTHER
    "C" .....................................................   --          1,894,600      3,225,517          --
    "V" .....................................................   --            505,530        889,303          --
    "V" - ADR{\/} ...........................................   --             37,489        656,058          --
  Telefonos de Mexico, S.A. de C.V. "L" - ADR{\/} ...........   MEX            82,800      4,688,550         1.9
    TELEPHONE NETWORKS
  Grupo Televisa, S.A. de C.V. - GDR-/- {\/} ................   MEX           110,900      4,546,900         1.9
    BROADCASTING & PUBLISHING
  Telefonica del Peru S.A. - ADR{\/} ........................   PERU          195,700      4,329,863         1.8
    TELEPHONE NETWORKS
  Controladora Comercial Mexicana, S.A. de C.V.: ............   MEX                --             --         1.5
    RETAILERS-FOOD
    UBC[.] ..................................................   --          2,682,000      3,324,793          --
    GDR{\/} .................................................   --             13,900        342,288          --
  Telefonica de Argentina S.A. - ADR{\/} ....................   ARG            90,900      3,505,331         1.4
    TELEPHONE NETWORKS
  Telecomunicacoes do Rio de Janeiro S.A. (TELERJ)
   Preferred ................................................   BRZL       21,618,581      3,403,012         1.4
    TELEPHONE NETWORKS
  Cia de Telecomunicaciones de Chile S.A. - ADR{\/} .........   CHLE          119,700      2,999,981         1.2
    TELEPHONE NETWORKS
  Carso Global Telecom "A1" .................................   MEX           477,700      1,832,969         0.7
    TELEPHONE NETWORKS
  Santa Isabel S.A. - ADR{\/} ...............................   CHLE           36,684        605,286         0.2
    RETAILERS-FOOD
  El Puerto de Liverpool, S.A. de C.V. ......................   MEX           283,200        417,946         0.2
    RETAILERS-OTHER
  Supermercados Unimarc S.A. - ADR (Chile)-/- {\/} ..........   CHLE           33,000        356,813         0.1
    RETAILERS-FOOD
  Cintra S.A. ...............................................   MEX           165,800        160,515         0.1
    TRANSPORTATION - AIRLINES
                                                                                        ------------
                                                                                          71,019,658
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-98
<PAGE>   1065
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Energy (23.7%)
  Centrais Eletricas Brasileiras S.A. (Eletrobras): .........   BRZL               --             --         4.2
    ELECTRICAL & GAS UTILITIES
    "B" Preferred ...........................................   --        122,369,830   $  5,458,754          --
    Common-/- ...............................................   --        119,990,000      4,931,815          --
  Petroleo Brasileiro S.A. (Petrobras) Preferred ............   BRZL       38,899,000      9,865,072         4.0
    OIL
  Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} ....   BRZL          112,200      5,441,700         2.2
    ELECTRICAL & GAS UTILITIES
  Light - Servicos de Electricidade S.A. ....................   BRZL       11,949,000      4,806,769         2.0
    ELECTRICAL & GAS UTILITIES
  Enersis S.A. - ADR{\/} ....................................   CHLE          146,900      4,324,369         1.8
    ELECTRICAL & GAS UTILITIES
  YPF S.A. - ADR{\/} ........................................   ARG           119,500      4,167,563         1.7
    ENERGY SOURCES
  Empresa Nacional de Electricidad S.A. - ADR{\/} ...........   CHLE          223,400      3,895,538         1.6
    ELECTRICAL & GAS UTILITIES
  Harken Energy Corp.-/- ....................................   US            568,300      3,658,431         1.5
    OIL
  Gener S.A. - ADR{\/} ......................................   CHLE          121,819      2,725,700         1.1
    ELECTRICAL & GAS UTILITIES
  Companhia Brasileira de Petroleo Ipiranga S.A.
   Preferred ................................................   BRZL      173,785,000      2,264,448         0.9
    OIL
  Light - Participacoes S.A. ................................   BRZL        8,815,400      2,158,559         0.9
    ELECTRICAL & GAS UTILITIES
  C.A. La Electricidad de Caracas ...........................   VENZ        3,289,577      2,021,991         0.8
    ELECTRICAL & GAS UTILITIES
  Perez Companc S.A. "B" ....................................   ARG           198,696      1,194,282         0.5
    OIL
  Companhia Paulista de Forca e Luz .........................   BRZL               --             --         0.3
    ELECTRICAL & GAS UTILITIES
    Common ..................................................   --          5,030,000        695,007          --
    Preferred ...............................................   --             13,535          1,587          --
  Companhia Paranaense de Energia - Copel ...................   BRZL       45,050,000        520,035         0.2
    ELECTRICAL & GAS UTILITIES
                                                                                        ------------
                                                                                          58,131,620
                                                                                        ------------
Finance (13.0%)
  Uniao de Bancos Brasileiros S.A. (Unibanco) Units{=} ......   BRZL       83,494,700      6,426,208         2.6
    BANKS-MONEY CENTER
  Banco Frances del Rio de la Plata S.A. - ADR{\/} ..........   ARG           108,700      3,159,094         1.3
    BANKS-MONEY CENTER
  Banco Rio de La Plata S.A. - ADR-/- {\/} ..................   ARG           213,300      2,932,875         1.2
    BANKS-MONEY CENTER
  Banco LatinoAmericano de Exportaciones S.A. (Bladex)
   "E"{\/} ..................................................   PAN            76,135      2,721,826         1.1
    OTHER FINANCIAL
  Grupo Financiero Banorte, S.A. de C.V. "B"-/- .............   MEX         1,640,271      2,711,192         1.1
    BANKS-MONEY CENTER
  Administradora de Fondos de Pensiones Provida S.A. -
   ADR{\/} ..................................................   CHLE          149,900      2,679,463         1.1
    INVESTMENT MANAGEMENT
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-99
<PAGE>   1066
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Finance (Continued)
  Banco BHIF - ADR{\/} ......................................   CHLE          195,500   $  2,431,531         1.0
    BANKS-MONEY CENTER
  Credicorp Ltd. - ADR{\/} ..................................   PERU          124,782      2,090,099         0.9
    BANKS-MONEY CENTER
  Banco de A. Edwards - ADR{\/} .............................   CHLE          125,100      2,009,419         0.8
    BANKS-MONEY CENTER
  Grupo Financiero Banamex Accival, S.A. de C.V. "B"-/- .....   MEX           479,900      1,501,458         0.6
    BANKS-MONEY CENTER
  Inversiones y Representaciones S.A. (IRSA) - GDR{\/} ......   ARG            36,000      1,399,500         0.6
    REAL ESTATE
  Banco de Galicia y Buenos Aires, S.A. de C.V. - ADR{\/} ...   ARG            42,100      1,031,450         0.4
    BANKS-MONEY CENTER
  Banco Wiese - ADR{\/} .....................................   PERU          131,400        706,275         0.3
    BANKS-MONEY CENTER
                                                                                        ------------
                                                                                          31,800,390
                                                                                        ------------
Materials/Basic Industry (12.8%)
  Kimberly-Clark de Mexico, S.A. de C.V. "A" ................   MEX         1,895,100      9,318,880         3.8
    PAPER/PACKAGING
  Apasco, S.A. de C.V. ......................................   MEX           717,000      4,875,939         2.0
    CEMENT
  Companhia Vale do Rio Doce Preferred ......................   BRZL          193,403      4,566,577         1.9
    METALS - STEEL
  Sociedad Quimica y Minera de Chile S.A. - ADR{\/} .........   CHLE           95,100      4,130,906         1.7
    CHEMICALS
  Industrias Penoles S.A. (CP) ..............................   MEX           634,600      2,622,309         1.1
    METALS - NON-FERROUS
  Grupo Mexico S.A. "L" .....................................   MEX           412,324      1,314,374         0.5
    METALS - NON-FERROUS
  Siderca S.A. "A" ..........................................   ARG           543,400      1,309,725         0.5
    METALS - STEEL
  Grupo Cementos de Chihuahua, S.A. de C.V. "B" .............   MEX         1,026,500      1,095,580         0.4
    CEMENT
  Corcemar S.A. .............................................   ARG           158,000        948,095         0.4
    CEMENT
  Corporacion Venezolana de Cementos, S.A.C.A.: .............   VENZ               --             --         0.3
    CEMENT
    "A" .....................................................   --            347,758        454,148          --
    "B" .....................................................   --            161,928        211,769          --
  Compania de Minas Buenaventura S.A. - ADR{\/} .............   PERU           36,000        558,000         0.2
    METALS - NON-FERROUS
                                                                                        ------------
                                                                                          31,406,302
                                                                                        ------------
Multi-Industry/Miscellaneous (8.1%)
  Grupo Carso, S.A. de C.V. "A1" ............................   MEX           871,100      5,491,941         2.2
    MULTI-INDUSTRY
  Alfa, S.A. de C.V. "A" ....................................   MEX           830,100      4,537,619         1.9
    CONGLOMERATE
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-100
<PAGE>   1067
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Multi-Industry/Miscellaneous (Continued)
  Itausa Investimentos Itau S.A. Preferred ..................   BRZL        3,833,289   $  3,251,675         1.3
    MULTI-INDUSTRY
  Desc, S.A. de C.V. - ADR{\/} ..............................   MEX            93,800      2,702,613         1.1
    CONGLOMERATE
  Sanluis Corporacion, S.A. de C.V. .........................   MEX           455,500      2,420,012         1.0
    CONGLOMERATE
  Empresas La Moderna, S.A. de C.V. "A"-/- ..................   MEX           287,000      1,438,388         0.6
    MULTI-INDUSTRY
                                                                                        ------------
                                                                                          19,842,248
                                                                                        ------------
Consumer Non-Durables (6.9%)
  Fomento Economico Mexicano, S.A. de C.V. "B" ..............   MEX           976,750      7,242,019         3.0
    BEVERAGES - ALCOHOLIC
  Compania Cervecerias Unidas S.A. - ADR{\/} ................   CHLE          128,300      3,544,288         1.4
    BEVERAGES - ALCOHOLIC
  Companhia Cervejaria Brahma Preferred .....................   BRZL        3,006,000      1,958,435         0.8
    BEVERAGES - ALCOHOLIC
  Grupo Industrial Maseca, S.A. de C.V. "B" .................   MEX         2,653,900      1,917,576         0.8
    FOOD
  Pepsi-Gemex S.A. - GDR-/- {\/} ............................   MEX           122,800      1,665,475         0.7
    BEVERAGES - NON-ALCOHOLIC
  Embotelladora Andina S.A. - ADR{\/} .......................   CHLE           15,000        338,438         0.1
    BEVERAGES - NON-ALCOHOLIC
  Sudamtex de Venezuela "B" - ADR{\/} .......................   VENZ           32,592        138,516         0.1
    TEXTILES & APPAREL
  Mavesa S.A. - ADR{\/} .....................................   VENZ           24,090         96,360          --
    FOOD
  Cerveceria Backus & Johnston S.A. "T" .....................   PERU           75,905         59,133          --
    BEVERAGES - ALCOHOLIC
                                                                                        ------------
                                                                                          16,960,240
                                                                                        ------------
Capital Goods (1.3%)
  Corporacion GEO, S.A. de C.V. "B"-/- ......................   MEX           271,000      1,874,923         0.8
    CONSTRUCTION
  ARA, S.A. de C.V.-/- ......................................   MEX           230,000      1,148,642         0.5
    CONSTRUCTION
                                                                                        ------------
                                                                                           3,023,565
                                                                                        ------------
Consumer Durables (0.5%)
  Brasmotor S.A. Preferred ..................................   BRZL        8,532,000      1,182,617         0.5
    APPLIANCES & HOUSEHOLD DURABLES
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $228,528,134) ................                            233,366,640        95.3
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-101
<PAGE>   1068
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                           PRINCIPAL       VALUE         % OF NET
FIXED INCOME INVESTMENTS                                       CURRENCY     AMOUNT        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Corporate Bonds (0.0%)
  Brazil (0.0%)
    Companhia Vale do Rio Doce - Non Convertible (cost
     $0) ....................................................   BRL           276,400             --          --
                                                                                        ------------       -----
<CAPTION>
 
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- - -------------------------------------------------------------                           ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Dated April 30, 1998, with State Street Bank & Trust Co.,
   due May 1, 1998, for an effective yield of 5.44%,
   collateralized by $8,935,000 U.S. Treasury Bills, 6.125%
   due 8/31/98 (market value of collateral is $9,046,688,
   including accrued interest). (cost $8,868,000) ...........                           $  8,868,000         3.6
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $237,396,134)  * ....................                            242,234,640        98.9
Other Assets and Liabilities ................................                              2,658,295         1.1
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $244,892,935       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        [.]  Each unit represents 3 "B" shares and 1 "C" share.
        {=}  Each unit represents one preferred share of Unibanco and one
             preferred "B" share of Unibanco Holdings.
          *  For Federal income tax purposes, cost is $237,686,922 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  24,173,992
                 Unrealized depreciation:           (19,626,274)
                                                  -------------
                 Net unrealized appreciation:     $   4,547,718
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviations:
             ADR--American Depositary Receipt
             GDR--Global Depositary Receipt
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                                                                PERCENTAGE OF NET ASSETS {D}
                                                                          -----------------------------------------
                                                                                          SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)                                        EQUITY          & OTHER         TOTAL
- ------------------------------------------------------------------------  -----------  -----------------  ---------
<S>                                                                       <C>          <C>                <C>
Argentina (ARG/ARS) ....................................................        10.1                           10.1
Brazil (BRZL/BRL) ......................................................        35.7                           35.7
Chile (CHLE/CLP) .......................................................        12.1                           12.1
Mexico (MEX/MXN) .......................................................        30.4                           30.4
Panama (PAN/PND) .......................................................         1.1                            1.1
Peru (PERU/PES) ........................................................         3.2                            3.2
United States (US/USD) .................................................         1.5             4.7            6.2
Venezuela (VENZ/VEB) ...................................................         1.2                            1.2
                                                                               -----             ---      ---------
Total  .................................................................        95.3             4.7          100.0
                                                                               -----             ---      ---------
                                                                               -----             ---      ---------
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $244,892,935.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-102
<PAGE>   1069
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                               <C>         <C>
Assets:
  Investments in securities, at value (cost $237,396,134) (Note 1)..........................  $242,234,640
  U.S. currency.................................................................  $      427
  Foreign currencies (cost $7,378,125)..........................................   7,381,624     7,382,051
                                                                                  ----------
  Dividends receivable......................................................................     2,201,350
  Receivable for Fund shares sold...........................................................       199,570
  Receivable from Chancellor LGT Asset Management, Inc. (Note 2)............................       195,122
  Interest receivable.......................................................................         2,619
                                                                                              ------------
    Total assets............................................................................   252,215,352
                                                                                              ------------
Liabilities:
  Payable for securities purchased..........................................................     3,531,832
  Payable for Fund shares repurchased.......................................................     2,891,492
  Payable for investment management and administration fees (Note 2)........................       306,451
  Payable for transfer agent fees (Note 2)..................................................       217,388
  Payable for service and distribution expenses (Note 2)....................................       147,048
  Payable for printing and postage expenses.................................................        67,469
  Payable for custodian fees................................................................        49,709
  Payable for professional fees.............................................................        45,778
  Payable for registration and filing fees..................................................         6,621
  Payable for fund accounting fees (Note 2).................................................         2,722
  Payable for Directors' fees and expenses (Note 2).........................................           158
  Other accrued expenses....................................................................        55,749
                                                                                              ------------
    Total liabilities.......................................................................     7,322,417
                                                                                              ------------
Net assets..................................................................................  $244,892,935
                                                                                              ------------
                                                                                              ------------
Class A:
Net asset value and redemption price per share ($131,814,677 DIVIDED BY 6,364,611 shares
 outstanding)...............................................................................  $      20.71
                                                                                              ------------
                                                                                              ------------
Maximum offering price per share (100/95.25 of $20.71) *....................................  $      21.74
                                                                                              ------------
                                                                                              ------------
Class B:+
Net asset value and offering price per share ($112,321,626 DIVIDED BY 5,507,298 shares
 outstanding)...............................................................................  $      20.40
                                                                                              ------------
                                                                                              ------------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($756,632 DIVIDED
 BY 36,559 shares outstanding)..............................................................  $      20.70
                                                                                              ------------
                                                                                              ------------
Net assets consist of:
  Paid in capital (Note 4)..................................................................  $250,779,254
  Undistributed net investment income.......................................................       891,469
  Accumulated net realized loss on investments and foreign currency transactions............   (11,599,724)
  Net unrealized depreciation on translation of assets and liabilities in foreign
   currencies...............................................................................       (16,570)
  Net unrealized appreciation of investments................................................     4,838,506
                                                                                              ------------
Total -- representing net assets applicable to capital shares outstanding...................  $244,892,935
                                                                                              ------------
                                                                                              ------------
<FN>
- --------------
   * On sales of $50,000 or more, the offering price is reduced.
   + Redemption price per share is equal to the net asset value per share less
     any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-103
<PAGE>   1070
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                            STATEMENT OF OPERATIONS
 
                        Six months ended April 30, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                                <C>         <C>
Investment income: (Note 1)
  Dividend income (net of foreign withholding tax of $275,465)...............................  $3,895,778
  Securities lending income..................................................................      92,678
  Interest income............................................................................      74,780
                                                                                               ----------
    Total investment income..................................................................   4,063,236
                                                                                               ----------
Expenses:
  Investment management and administration fees (Note 2).....................................   1,294,289
  Service and distribution expenses: (Note 2)
    Class A......................................................................  $  355,309
    Class B......................................................................     611,111     966,420
                                                                                   ----------
  Transfer agent fees (Note 2)...............................................................     579,200
  Interest expense (Note 1)..................................................................     208,858
  Printing and postage expenses..............................................................      96,111
  Custodian fees.............................................................................      92,129
  Professional fees..........................................................................      79,345
  Registration and filing fees...............................................................      48,630
  Fund accounting fees (Note 2)..............................................................      35,020
  Directors' fees and expenses (Note 2)......................................................       5,249
  Other expenses.............................................................................       6,335
                                                                                               ----------
    Total expenses before reimbursement......................................................   3,411,586
                                                                                               ----------
      Expenses reimbursed by Chancellor LGT Asset Management, Inc. (Note 2)..................    (245,122)
                                                                                               ----------
    Total net expenses.......................................................................   3,166,464
                                                                                               ----------
Net investment income........................................................................     896,772
                                                                                               ----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
  (Note 1)
  Net realized gain on investments...............................................   3,786,790
  Net realized loss on foreign currency transactions.............................    (156,400)
                                                                                   ----------
    Net realized gain during the period......................................................   3,630,390
  Net change in unrealized depreciation on translation of assets and liabilities
   in foreign currencies.........................................................      (9,849)
  Net change in unrealized appreciation of investments...........................  13,997,378
                                                                                   ----------
    Net unrealized appreciation during the period............................................  13,987,529
                                                                                               ----------
Net realized and unrealized gain on investments and foreign currencies.......................  17,617,919
                                                                                               ----------
Net increase in net assets resulting from operations.........................................  $18,514,691
                                                                                               ----------
                                                                                               ----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-104
<PAGE>   1071
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                       STATEMENT OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                  SIX MONTHS ENDED      YEAR ENDED
                                                                                   APRIL 30, 1998    OCTOBER 31, 1997
                                                                                  ----------------   ----------------
<S>                                                                               <C>                <C>
Decrease in net assets
Operations:
  Net investment income.........................................................   $     896,772     $      1,116,958
  Net realized gain on investments and foreign currency transactions............       3,630,390           84,545,615
  Net change in unrealized appreciation (depreciation) on translation of assets
   and liabilities in foreign currencies........................................          (9,849)              25,640
  Net change in unrealized appreciation (depreciation) of investments...........      13,997,378          (47,707,162)
                                                                                  ----------------   ----------------
    Net increase in net assets resulting from operations........................      18,514,691           37,981,051
                                                                                  ----------------   ----------------
Class A:
Distributions to shareholders: (Note 1)
  From net investment income....................................................        (219,488)                  --
Advisor Class:
Distributions to shareholders: (Note 1)
  From net investment income....................................................          (5,487)                  --
                                                                                  ----------------   ----------------
    Total distributions.........................................................        (224,975)                  --
                                                                                  ----------------   ----------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and reinvested..............................     410,769,788        1,267,100,757
  Decrease from capital shares repurchased......................................    (477,746,631)      (1,327,093,718)
                                                                                  ----------------   ----------------
    Net decrease from capital share transactions................................     (66,976,843)         (59,992,961)
                                                                                  ----------------   ----------------
Total decrease in net assets....................................................     (48,687,127)         (22,011,910)
Net assets:
  Beginning of period...........................................................     293,580,062          315,591,972
                                                                                  ----------------   ----------------
  End of period *...............................................................   $ 244,892,935     $    293,580,062
                                                                                  ----------------   ----------------
                                                                                  ----------------   ----------------
 * Includes undistributed net investment income of..............................   $     891,469     $        219,672
                                                                                  ----------------   ----------------
                                                                                  ----------------   ----------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-105
<PAGE>   1072
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                         CLASS A+
                                          ----------------------------------------------------------------------
                                          SIX MONTHS
                                            ENDED                       YEAR ENDED OCTOBER 31,
                                          APRIL 30,    ---------------------------------------------------------
                                           1998 (d)    1997 (d)    1996 (d)    1995 (d)    1994 (d)    1993 (d)
                                          ----------   ---------   ---------   ---------   ---------   ---------
<S>                                       <C>          <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $  19.50     $  17.95    $  15.38    $  26.11    $  19.78    $  15.59
                                          ----------   ---------   ---------   ---------   ---------   ---------
Income from investment operations:
  Net investment income (loss)..........      0.09*        0.11        0.09        0.15       (0.08)       0.18**
  Net realized and unrealized gain
   (loss) on investments................      1.15         1.44        2.59       (9.28)       6.75        5.21
                                          ----------   ---------   ---------   ---------   ---------   ---------
    Net increase (decrease) from
     investment operations..............      1.24         1.55        2.68       (9.13)       6.67        5.39
                                          ----------   ---------   ---------   ---------   ---------   ---------
Distributions to shareholders:
  From net investment income............     (0.03)          --       (0.08)         --       (0.19)      (0.12)
  From net realized gain on
   investments..........................        --           --          --       (1.60)      (0.15)      (1.08)
  In excess of net investment income....        --           --       (0.03)         --          --          --
                                          ----------   ---------   ---------   ---------   ---------   ---------
    Total distributions.................     (0.03)          --       (0.11)      (1.60)      (0.34)      (1.20)
                                          ----------   ---------   ---------   ---------   ---------   ---------
Net asset value, end of period..........  $  20.71     $  19.50    $  17.95    $  15.38    $  26.11    $  19.78
                                          ----------   ---------   ---------   ---------   ---------   ---------
                                          ----------   ---------   ---------   ---------   ---------   ---------
 
Total investment return (c).............      6.50%(b)     8.52%      17.52%     (37.16)%     34.10%       37.1%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $131,815     $159,496    $177,373    $182,462    $336,960    $129,280
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Note 1)............      0.90%(a)     0.52%       0.46%       0.86%      (0.29)%      1.29%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      0.71%(a)     0.42%       0.39%       0.85%        N/A         1.2%
Ratio of operating expenses to average
 net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Note 1)............      1.99%(a)     1.96%       2.03%       2.11%       2.04%        2.4%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      2.18%(a)     2.06%       2.10%       2.12%        N/A        2.49%
Ratio of interest expense to average net
 assets (Note 1)++++....................      0.16%(a)      N/A         N/A         N/A         N/A         N/A
Portfolio turnover rate++++.............        27%(a)      130%        101%        125%        155%        112%
Average commission rate per share paid
 on portfolio transactions++++..........  $ 0.0016     $ 0.0007    $ 0.0005         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a)  Annualized
 (b)  Not annualized
 (c)  Total investment return does not include sales charges.
 (d)  These selected per share data were calculated based upon average
      shares outstanding during the period.
   *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
  **  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
   +  All capital shares issued and outstanding as of March 31, 1993 were
      reclassified as Class A shares.
  ++  Commencing April 1, 1993, the Fund began offering Class B shares.
 +++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++  Portfolio turnover rate, average commission rate, and ratio of
      interest expense to average net assets are calculated on the basis of
      the Fund as a whole without distinguishing between the classes of
      shares issued.
 N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-106
<PAGE>   1073
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                          CLASS B++
                                          --------------------------------------------------------------------------
                                          SIX MONTHS                                                   APRIL 1, 1993
                                            ENDED                 YEAR ENDED OCTOBER 31,                    TO
                                          APRIL 30,    ---------------------------------------------    OCTOBER 31,
                                           1998 (d)    1997 (d)    1996 (d)    1995 (d)    1994 (d)      1993 (d)
                                          ----------   ---------   ---------   ---------   ---------   -------------
<S>                                       <C>          <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $  19.23     $  17.78    $  15.21    $  25.94    $  19.75      $ 16.26
                                          ----------   ---------   ---------   ---------   ---------   -------------
Income from investment operations:
  Net investment income (loss)..........      0.04*        0.01       (0.00)       0.06       (0.22)       (0.07)
  Net realized and unrealized gain
   (loss) on investments................      1.13         1.44        2.59       (9.19)       6.74         3.56
                                          ----------   ---------   ---------   ---------   ---------   -------------
    Net increase (decrease) from
     investment operations..............      1.17         1.45        2.59       (9.13)       6.52         3.49
                                          ----------   ---------   ---------   ---------   ---------   -------------
Distributions to shareholders:
  From net investment income............        --           --       (0.01)         --       (0.18)          --
  From net realized gain on
   investments..........................        --           --          --       (1.60)      (0.15)          --
  In excess of net investment income....        --           --       (0.01)         --          --           --
                                          ----------   ---------   ---------   ---------   ---------   -------------
    Total distributions.................        --           --       (0.02)      (1.60)      (0.33)          --
                                          ----------   ---------   ---------   ---------   ---------   -------------
Net asset value, end of period..........  $  20.40     $  19.23    $  17.78    $  15.21    $  25.94      $ 19.75
                                          ----------   ---------   ---------   ---------   ---------   -------------
                                          ----------   ---------   ---------   ---------   ---------   -------------
 
Total investment return (c).............      6.19%(b)     8.04%      17.02%     (37.42)%     33.33%        21.5% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $112,322     $133,448    $137,400    $134,527    $211,673      $13,576
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Note 1)............      0.40%(a)     0.02%      (0.04)%      0.36%      (0.79)%       (0.7)% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      0.21%(a)    (0.08)%     (0.11)%      0.35%        N/A          N/A
Ratio of operating expenses to average
 net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Note 1)............      2.49%(a)     2.46%       2.53%       2.61%       2.54%         2.9% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      2.68%(a)     2.56%       2.60%       2.62%        N/A          N/A
Ratio of interest expense to average net
 assets (Note 1)++++....................      0.16%(a)      N/A         N/A         N/A         N/A          N/A
Portfolio turnover rate++++.............        27%(a)      130%        101%        125%        155%         112%
Average commission rate per share paid
 on portfolio transactions++++..........  $ 0.0016     $ 0.0007    $ 0.0005         N/A         N/A          N/A
</TABLE>
 
- ----------------
 
 (a)  Annualized
 (b)  Not annualized
 (c)  Total investment return does not include sales charges.
 (d)  These selected per share data were calculated based upon average
      shares outstanding during the period.
   *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
  **  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
   +  All capital shares issued and outstanding as of March 31, 1993 were
      reclassified as Class A shares.
  ++  Commencing April 1, 1993, the Fund began offering Class B shares.
 +++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++  Portfolio turnover rate, average commission rate, and ratio of
      interest expense to average net assets are calculated on the basis of
      the Fund as a whole without distinguishing between the classes of
      shares issued.
 N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
                                    
                                     FS-107
<PAGE>   1074
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                         ADVISOR CLASS+++
                                          -----------------------------------------------
                                          SIX MONTHS       YEAR ENDED        JUNE 1, 1995
                                            ENDED          OCTOBER 31,            TO
                                          APRIL 30,    -------------------   OCTOBER 31,
                                           1998 (d)    1997 (d)   1996 (d)       1995
                                          ----------   --------   --------   ------------
<S>                                       <C>          <C>        <C>        <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $ 19.57     $ 17.94    $ 15.40      $15.95
                                          ----------   --------   --------   ------------
Income from investment operations:
  Net investment income (loss)..........      0.13*       0.19       0.17        0.09
  Net realized and unrealized gain
   (loss) on investments................      1.15        1.44       2.58       (0.64)
                                          ----------   --------   --------   ------------
    Net increase (decrease) from
     investment operations..............      1.28        1.63       2.75       (0.55)
                                          ----------   --------   --------   ------------
Distributions to shareholders:
  From net investment income............     (0.15)         --      (0.14)         --
  From net realized gain on
   investments..........................        --          --         --          --
  In excess of net investment income....        --          --      (0.07)         --
                                          ----------   --------   --------   ------------
    Total distributions.................     (0.15)         --      (0.21)         --
                                          ----------   --------   --------   ------------
Net asset value, end of period..........   $ 20.70     $ 19.57    $ 17.94      $15.40
                                          ----------   --------   --------   ------------
                                          ----------   --------   --------   ------------
 
Total investment return (c).............      6.64%(b)    8.91%     18.16%      (3.45)% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $   757     $   636    $   818      $  369
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Note 1)............      1.40%(a)    1.02%      0.96%       1.36% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      1.21%(a)    0.92%      0.89%       1.35% (a)
Ratio of operating expenses to average
 net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Note 1)............      1.49%(a)    1.46%      1.53%       1.61% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      1.68%(a)    1.56%      1.60%       1.62% (a)
Ratio of interest expense to average net
 assets (Note 1)++++....................      0.16%(a)     N/A        N/A         N/A
Portfolio turnover rate++++.............        27%(a)     130%       101%        125%
Average commission rate per share paid
 on portfolio transactions++++..........   $0.0016     $0.0007    $0.0005         N/A
</TABLE>
 
- ----------------
 
 (a)  Annualized
 (b)  Not annualized
 (c)  Total investment return does not include sales charges.
 (d)  These selected per share data were calculated based upon average
      shares outstanding during the period.
   *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
  **  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
   +  All capital shares issued and outstanding as of March 31, 1993 were
      reclassified as Class A shares.
  ++  Commencing April 1, 1993, the Fund began offering Class B shares.
 +++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++  Portfolio turnover rate, average commission rate, and ratio of
      interest expense to average net assets are calculated on the basis of
      the Fund as a whole without distinguishing between the classes of
      shares issued.
 N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-108
<PAGE>   1075
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
 
The following Notes to Financial Statements are for the period ending April 30,
1998, and unless otherwise indicated reflect facts as of that date. Please see
"Note 5 -- Subsequent Events" for a discussion of certain changes which took
place after April 30, 1998.
 
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 5)
GT Global Latin America Growth Fund ("Fund") is a separate series of GT
Investment Funds, Inc. ("Company"). Effective June 1, 1998, the Company was
renamed A I M Investment Funds, Inc. and the Fund was renamed AIM Latin American
Growth Fund. The Company is organized as a Maryland corporation and is
registered under the Investment Company Act of 1940, as amended ("1940 Act"), as
a non-diversified, open-end management investment company. The Company has
thirteen series of shares in operation, each series corresponding to a distinct
portfolio of investments.
 
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective service and distribution expenses, and
may differ in its transfer agent, registration, and certain other class-specific
fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
 
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. ("the Manager") to be the primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments with maturity of 60
days or less are valued at amortized cost adjusted for foreign exchange
translation and market fluctuation, if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records are maintained in U.S. dollars. The market values of
foreign securities, currency holdings, and other assets and liabilities are
recorded in the books and records of the Fund after translation to U.S. dollars
based on the exchange rates on that day. The cost of each security is determined
using historical exchange rates. Income and withholding taxes are translated at
prevailing exchange rates when earned or incurred.
 
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from 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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which
 
                                     FS-109
<PAGE>   1076
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
the value, including accrued interest, is at least equal to the amount to be
repaid to the Fund under each agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. Forward Contracts involve market risk in excess of the
amount shown in the Fund's "Statement of Assets and Liabilities." The Fund could
be exposed to risk if a counterparty is unable to meet the terms of the contract
or if the value of the currency changes unfavorably. The Fund may enter into
Forward Contracts in connection with planned purchases or sales of securities,
or to hedge against adverse fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on an exchange is valued at its last bid price,
or, in the case of an over-the-counter option, is valued at the average of the
last bid prices obtained from brokers. If an option expires on its stipulated
expiration date or if the Fund enters into a closing purchase transaction, a
gain or loss is realized without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is extinguished.
If a written call option is exercised, a gain or loss is realized from the sale
of the underlying security and the proceeds of the sale are increased by the
premium originally received. If a written put option is exercised, the cost of
the underlying security purchased would be decreased by the premium originally
received. The Fund can write options only on a covered basis, which, for a call,
requires that the fund hold the underlying securities and, for a put, requires
the Fund to maintain in a segregated account cash, U.S. government securities,
or other liquid securities in an amount not less than the exercise price or
otherwise provide adequate cover at all times while the put option is
outstanding. The Fund may use options to manage its exposure to the stock or
bond market and to fluctuations in currency values or interest rates.
 
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock or bond
market and to fluctuations in currency values or interest rates. At April 30,
1998, the fund had no open futures contracts.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Interest income is recorded on the
accrual basis. Where a high level of uncertainty exists as to its collection,
income is recorded net of all withholding tax with any rebate recorded when
received. The Fund may trade securities on other than normal settlement terms.
This may increase the risk if the other party to the transaction fails to
deliver and causes the Fund to subsequently invest at less advantageous prices.
 
(H) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any
 
                                     FS-110
<PAGE>   1077
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
excise tax under Section 4982 of the Code. Therefore, no provision has been made
for Federal taxes on income, capital gains, or unrealized appreciation of
securities held, and excise tax on income and capital gains. The Fund currently
has a capital loss carry forward of $14,939,326, of which $8,211,999 expires in
2003 and $6,727,327 expires in 2004.
 
(I) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 and timing differences.
 
(J) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
 
(K) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
 
(L) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
 
(M) PORTFOLIO SECURITIES LOANED
At April 30, 1998, stocks with an aggregate value of approximately $29,932,877
were on loan to brokers. The loans were secured by cash collateral of
$30,797,802. For international securities, cash collateral is received by the
Fund against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by the Fund against loaned securities in an amount at
least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. The
cash collateral is invested in a securities lending trust which consists of a
portfolio of high quality short duration securities whose average effective
duration is restricted to 120 days or less. For the six months ended April 30,
1998, the Fund received $92,678 of income from securities lending.
 
(N) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised and/or
administered by the Manager, has a line of credit with each of BankBoston and
State Street Bank & Trust Company. The arrangements with the banks allow the
Fund and the GT Funds to borrow an aggregate maximum amount of $250,000,000. The
Fund is limited to borrowing up to 33 1/3% of the value of each Fund's total
assets. On April 30, 1998, the Fund had no loans outstanding.
 
For the six months ended April 30, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $8,818,847, with a weighted average interest rate of 6.28%.
Interest expense for the Fund for the six months ended April 30, 1998, was
$201,369. Other interest expense charges amounted to $7,489.
 
2. RELATED PARTIES (SEE ALSO NOTE 5)
For the period ended April 30, 1998, Chancellor LGT Asset Management, Inc. was
the Fund's investment manager and administrator. The Fund pays investment
management and administration fees to the Manager at the annualized rate of
0.975% of the first $500 million of average daily net assets of the Fund; 0.95%
of the next $500 million; 0.925% of the next $500 million and 0.90% on amounts
thereafter. These fees are computed daily and paid monthly.
 
For the period ended April 30, 1998, GT Global Inc. ("GT Global"), an affiliate
of the Manager, is the Fund's distributor. The Fund offers Class A, Class B and
Advisor Class shares for purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the period ended April 30, 1998, GT Global retained $15,816
of such sales charges. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Fund's current prospectus. GT Global collected CDSCs in the
amount of $74 for the period ended April 30, 1998. GT Global also makes ongoing
shareholder servicing and trail commission payments to dealers whose clients
hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the six months ended April 30, 1998, GT Global collected CDSCs
in the amount of $513,130. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
 
                                     FS-111
<PAGE>   1078
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
Pursuant to the then effective separate distribution plans adopted under 1940
Act Rule 12b-1 by the Company's Board of Directors with respect to the Fund's
Class A shares ("Class A Plan") and Class B shares ("Class B Plan"), the Fund
reimbursed GT Global for a portion of its shareholder servicing and distribution
expenses. Under that Class A Plan, the Fund was permitted to pay GT Global a
service fee at the annualized rate of up to 0.25% of the average daily net
assets of the Fund's Class A shares for GT Global's expenditures incurred in
servicing and maintaining shareholder accounts, and was permitted to pay GT
Global a distribution fee at the annualized rate of up to 0.50% of the average
daily net assets of the Fund's Class A shares, less any amounts paid by the Fund
as the aforementioned service fee, for GT Global's expenditures incurred in
providing services as distributor. All expenses for which GT Global was
reimbursed under the Class A Plan would have been incurred within one year of
such reimbursement.
 
For the period ended April 30, 1998, pursuant to that Class B Plan, the Fund was
permitted to pay GT Global a service fee at the annualized rate of up to 0.25%
of the average daily net assets of the Fund's Class B shares for GT Global's
expenditures incurred in servicing and maintaining shareholder accounts, and was
permitted to pay GT Global a distribution fee at the annualized rate of up to
0.75% of the average daily net assets of the Fund's Class B Shares for GT
Global's expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually were permitted to be
carried forward for reimbursement in subsequent years as long as that Plan
continued in effect.
 
The Manager and GT Global voluntarily undertook to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 2.00%, 2.50%, and 1.50% of the average
net assets of the Fund's Class A, Class B and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the results according to the Funds average daily net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.
 
3. PURCHASES AND SALES OF SECURITIES
For the six months ended April 30, 1998, purchases and sales of investment
securities by the Fund, other than short-term investments, aggregated
$36,018,185 and $101,582,285. There were no purchases or sales of U.S.
government obligations for the six months ended April 30, 1998.
 
4. CAPITAL SHARES
At April 30, 1998, there were 6,000,000,000 shares of the Company's common stock
authorized, at $0.0001 par value. Of this amount, 200,000,000 were classified as
shares of the Fund; 400,000,000 were classified as shares of GT Global
Government Income Fund; 200,000,000 were classified as shares of GT Global
Developing Markets Fund; 200,000,000 were classified as shares of GT Global
Health Care Fund; 200,000,000 were classified as shares of GT Global Strategic
Income Fund; 200,000,000 were classified as shares of GT Global Currency Fund
(inactive); 200,000,000 were classified as shares of GT Global Growth & Income
Fund; 200,000,000 were classified as shares of GT Global Small Companies Fund
(inactive); 200,000,000 were classified as shares of GT Global Natural Resources
Fund; 200,000,000 were classified as shares of GT Global Infrastructure Fund;
400,000,000 were classified as shares of GT Global Telecommunications Fund;
200,000,000 were classified as shares of GT Global Emerging Markets Fund; and
200,000,000 were classified as shares of GT Global Financial Services Fund;
200,000,000 were classified as shares of GT Global High Income Fund; and
200,000,000 were classified as shares of GT Global Consumer Products and
Services Fund. The shares of each of the foregoing series of the Company were
divided equally into two classes, designated Class A and Class B common stock.
With respect to the issuance of Advisor Class shares, 100,000,000 shares were
classified as shares of each of the fifteen series of the Company and designated
as Advisor Class common stock. 1,100,000,000 shares remain unclassified.
Transactions in capital shares of the Fund were as follows:
 
                                     FS-112
<PAGE>   1079
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                           CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
                                                   SIX MONTHS ENDED                        YEAR ENDED
                                                    APRIL 30, 1998                      OCTOBER 31, 1997
                                          -----------------------------------  -----------------------------------
CLASS A                                       SHARES             AMOUNT            SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       13,405,201  $      265,384,384       46,171,230  $      937,785,689
Shares issued in connection with
  reinvestment of distributions.........            8,768             183,853               --                  --
                                          ---------------  ------------------  ---------------  ------------------
                                               13,413,969         265,568,237       46,171,230         937,785,689
Shares repurchased......................      (15,226,871)       (303,415,633)     (47,874,889)       (980,118,186)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (1,812,902) $      (37,847,396)      (1,703,659) $      (42,332,497)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
 
<CAPTION>
 
CLASS B
- ----------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................        6,421,237  $      124,959,479       14,424,170  $      299,346,687
Shares issued in connection with
  reinvestment of distributions.........               --                  --               --                  --
                                          ---------------  ------------------  ---------------  ------------------
                                                6,421,237         124,959,479       14,424,170         299,346,687
Shares repurchased......................       (7,853,666)       (154,120,468)     (15,210,392)       (316,506,347)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (1,432,429) $      (29,160,989)        (786,222) $      (17,159,660)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
<CAPTION>
 
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................        1,027,199  $       20,236,630        1,448,623  $       29,968,381
Shares issued in connection with
  reinvestment of distributions.........              260               5,442               --                  --
                                          ---------------  ------------------  ---------------  ------------------
                                                1,027,459          20,242,072        1,448,623          29,968,381
Shares repurchased......................       (1,023,376)        (20,210,530)      (1,461,777)        (30,469,185)
                                          ---------------  ------------------  ---------------  ------------------
Net increase (decrease).................            4,083  $           31,542          (13,154) $         (500,804)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
5. SUBSEQUENT EVENTS
On May 29, 1998, Liechtenstein Global Trust ("LGT"), the former indirect parent
organization of Chancellor LGT Asset Management, Inc. ("Chancellor LGT"),
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included Chancellor LGT and
certain other affiliates. As a result of this transaction, Chancellor LGT was
renamed INVESCO (NY), Inc. and is now an indirect wholly-owned subsidiary of
AMVESCAP PLC. In connection with this transaction, A I M Advisors, Inc. ("AIM"),
an indirect wholly-owned subsidiary of AMVESCAP PLC, became the investment
adviser and administrator of the Fund and INVESCO (NY), Inc. became the
sub-adviser and sub-administrator of the Fund. In addition, A I M Distributors,
Inc. replaced GT Global, Inc. as the Fund's principal underwriter and the Fund
became subject to compensation-type Rule 12b-1 plans of distribution, which
replaced the Fund's former reimbursement-type Rule 12b-1 plans of distribution.
All of the changes became effective as of the close of business on May 29, 1998.
 
                                     FS-113
<PAGE>   1080
                       GT GLOBAL LATIN AMERICA GROWTH FUND
 
                        REPORT OF INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
ANNUAL REPORT
To the Shareholders of GT Global Latin America Growth Fund and Board of
Directors of G.T. Investment Funds, Inc.:
 
We have audited the accompanying statement of assets and liabilities of GT
Global Latin America Growth Fund, one of the funds organized as a series of G.T.
Investment Funds, Inc., including the portfolio of investments, as of October
31, 1997, the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global Latin America Growth Fund as of October 31, 1997, the results of
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended in conformity with generally accepted
accounting principles.
 


                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
DECEMBER 15, 1997
 
                                     FS-114
<PAGE>   1081
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (28.3%)
  Telecomunicacoes Brasileiras S.A. (Telebras): .............   BRZL               --             --        10.4
    TELEPHONE NETWORKS
    ADR{\/} .................................................   --            208,900   $ 21,203,350          --
    Common ..................................................   --        106,900,000      9,502,114          --
  Telefonos de Mexico, S.A. de C.V. "L" - ADR{\/} ...........   MEX           170,500      7,374,125         2.5
    TELEPHONE NETWORKS
  Cifra, S.A. de C.V.: ......................................   MEX                --             --         2.3
    RETAILERS-OTHER
    "C" .....................................................   --          3,340,500      5,800,868          --
    "B" - ADR{\/} ...........................................   --            335,792        648,079          --
    "A" .....................................................   --            104,372        192,244          --
  Compania Anonima Nacional Telefonos de Venezuela (CANTV) -
   ADR{\/} ..................................................   VENZ          147,400      6,448,750         2.2
    TELEPHONE NETWORKS
  Telefonica del Peru S.A. - ADR{\/} ........................   PERU          254,100      5,018,475         1.7
    TELEPHONE NETWORKS
  Companhia de Saneamento Basico do Estado de Sao Paulo -
   SABESP-/- ................................................   BRZL       26,748,622      4,852,798         1.7
    BUSINESS & PUBLIC SERVICES
  Cia de Telecomunicaciones de Chile S.A. - ADR{\/} .........   CHLE          163,000      4,523,250         1.5
    TELEPHONE NETWORKS
  Telecomunicacoes de Sao Paulo S.A. (TELESP): ..............   BRZL               --             --         1.2
    TELEPHONE NETWORKS
    Preferred ...............................................   --         11,109,390      2,902,308          --
    Common-/- ...............................................   --          2,802,000        597,306          --
  Santa Isabel S.A. - ADR{\/} ...............................   CHLE          181,100      3,350,350         1.1
    RETAILERS-FOOD
  Telecomunicacoes do Rio de Janeiro S.A. (TELERJ)
   Preferred ................................................   BRZL       34,694,581      3,304,546         1.1
    TELEPHONE NETWORKS
  Controladora Comercial Mexicana, S.A. de C.V.: ............   MEX                --             --         1.0
    RETAILERS-FOOD
    UBC .....................................................   --          2,682,000      2,665,940          --
    GDR{\/} .................................................   --             13,900        276,263          --
  Telefonica de Argentina S.A. - ADR{\/} ....................   ARG            90,900      2,556,563         0.9
    TELEPHONE NETWORKS
  Grupo Televisa, S.A. de C.V. - GDR-/- {\/} ................   MEX            47,000      1,457,000         0.5
    BROADCASTING & PUBLISHING
  Supermercados Unimarc S.A. - ADR (Chile){\/} -/- ..........   CHLE           33,000        495,000         0.2
    RETAILERS-FOOD
                                                                                        ------------
                                                                                          83,169,329
                                                                                        ------------
Energy (24.6%)
  Centrais Eletricas Brasileiras S.A. (Eletrobras): .........   BRZL               --             --         4.7
    ELECTRICAL & GAS UTILITIES
    "B" Preferred ...........................................   --         20,252,000      8,762,885          --
    Common-/- ...............................................   --         11,999,000      4,843,573          --
  Petroleo Brasileiro S.A. (Petrobras) Preferred ............   BRZL       48,642,000      9,045,365         3.1
    OIL
  C.A. La Electricidad de Caracas ...........................   VENZ        5,672,038      7,456,318         2.5
    ELECTRICAL & GAS UTILITIES
  Light - Servicos de Electricidade S.A. ....................   BRZL       17,602,000      5,843,915         2.0
    ELECTRICAL & GAS UTILITIES
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-115
<PAGE>   1082
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Energy (Continued)
  Enersis S.A. - ADR{\/} ....................................   CHLE          174,500   $  5,758,500         2.0
    ELECTRICAL & GAS UTILITIES
  Empresa Nacional de Electricidad S.A. - ADR{\/} ...........   CHLE          254,300      5,117,788         1.7
    ELECTRICAL & GAS UTILITIES
  YPF S.A. - ADR{\/} ........................................   ARG           148,900      4,764,800         1.6
    OIL
  Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} ....   BRZL          112,200      4,488,000         1.5
    ELECTRICAL & GAS UTILITIES
  Harken Energy Corp.-/- ....................................   US            674,500      4,426,406         1.5
    OIL
  Chilgener S.A. - ADR{\/} ..................................   CHLE          121,819      3,289,113         1.1
    ELECTRICAL & GAS UTILITIES
  Light - Participacoes S.A. ................................   BRZL       10,585,000      2,707,701         0.9
    ELECTRICAL & GAS UTILITIES
  Companhia Brasileira de Petroleo Ipiranga S.A.
   Preferred ................................................   BRZL      173,785,000      2,522,279         0.9
    OIL
  Perez Companc S.A. "B" ....................................   ARG           377,196      2,362,665         0.8
    OIL
  Compania Paulista de Forca e Luz ..........................   BRZL        5,030,000        736,842         0.3
    ELECTRICAL & GAS UTILITIES
                                                                                        ------------
                                                                                          72,126,150
                                                                                        ------------
Materials/Basic Industry (13.4%)
  Kimberly-Clark de Mexico, S.A. de C.V. "A" ................   MEX         2,614,000     11,520,383         3.9
    PAPER/PACKAGING
  Apasco, S.A. de C.V. ......................................   MEX         1,331,000      8,129,461         2.8
    CEMENT
  Companhia Vale do Rio Doce Preferred ......................   BRZL          306,600      5,923,966         2.0
    METALS - STEEL
  Sociedad Quimica y Minera de Chile S.A. - ADR{\/} .........   CHLE           95,100      4,933,313         1.7
    CHEMICALS
  Grupo Industrial Minera Mexico "L" ........................   MEX         1,406,724      4,178,055         1.4
    METALS - NON-FERROUS
  Industrias Penoles S.A. (CP) ..............................   MEX           978,200      3,895,228         1.3
    METALS - NON-FERROUS
  Corporacion Venezolana de Cementos, S.A.C.A.: .............   VENZ               --             --         0.3
    CEMENT
    "A" .....................................................   --            347,758        704,225          --
    "B" .....................................................   --            161,928        324,987          --
                                                                                        ------------
                                                                                          39,609,618
                                                                                        ------------
Multi-Industry/Miscellaneous (10.6%)
  Alfa, S.A. de C.V. "A" ....................................   MEX         1,356,600      9,942,984         3.4
    CONGLOMERATE
  Grupo Carso, S.A. de C.V. "A1" ............................   MEX         1,357,000      8,629,545         2.9
    MULTI-INDUSTRY
  Sanluis Corporacion, S.A. de C.V.-/- ......................   MEX           830,200      6,442,750         2.2
    CONGLOMERATE
  Desc, S.A. de C.V. - ADR{\/} ..............................   MEX            93,800      3,177,475         1.1
    CONGLOMERATE
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-116
<PAGE>   1083
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Multi-Industry/Miscellaneous (Continued)
  Empresas La Moderna, S.A. de C.V. "A"-/- ..................   MEX           355,000   $  1,743,114         0.6
    MULTI-INDUSTRY
  Commercial Del Plata-/- ...................................   ARG           697,410      1,032,786         0.4
    CONGLOMERATE
                                                                                        ------------
                                                                                          30,968,654
                                                                                        ------------
Finance (9.9%)
  Uniao Bancos Brasileiras "A" Preferred ....................   BRZL      247,114,000      6,271,997         2.1
    BANKS-MONEY CENTER
  Banco LatinoAmericano de Exportaciones S.A. (Bladex)
   "E"{\/} ..................................................   PAN            89,035      3,539,141         1.2
    OTHER FINANCIAL
  Banco BHIF - ADR-/-{\/} ...................................   CHLE          195,500      3,396,813         1.2
    BANKS-MONEY CENTER
  Grupo Financiero Banorte "B"-/- ...........................   MEX         2,279,000      3,138,743         1.1
    BANKS-MONEY CENTER
  Credicorp Ltd. - ADR{\/} ..................................   PERU          140,320      2,516,990         0.9
    BANKS-MONEY CENTER
  Administradora de Fondos de Pensiones Provida S.A. -
   ADR{\/} ..................................................   CHLE          149,900      2,510,825         0.9
    INVESTMENT MANAGEMENT
  Banco Provincial S.A. .....................................   VENZ        1,196,992      2,390,332         0.8
    BANKS-MONEY CENTER
  Banco de A. Edwards - ADR{\/} .............................   CHLE          125,100      2,173,613         0.7
    BANKS-MONEY CENTER
  Banco Frances del Rio de la Plata S.A. - ADR{\/} ..........   ARG            58,000      1,428,250         0.5
    BANKS-MONEY CENTER
  ARA, S.A. de C.V.-/- ......................................   MEX           230,000        848,383         0.3
    REAL ESTATE
  Banco Wiese - ADR{\/} .....................................   PERU          131,400        730,913         0.2
    BANKS-MONEY CENTER
                                                                                        ------------
                                                                                          28,946,000
                                                                                        ------------
Consumer Non-Durables (8.1%)
  Fomento Economico Mexicano, S.A. de C.V. "B" ..............   MEX         1,274,500      9,005,449         3.1
    BEVERAGES - ALCOHOLIC
  Grupo Industrial Maseca, S.A. de C.V. "B" .................   MEX         4,980,000      4,830,898         1.6
    FOOD
  Companhia Cervejaria Brahma Preferred .....................   BRZL        6,838,000      4,279,949         1.5
    BEVERAGES - ALCOHOLIC
  Compania Cervecerias Unidas S.A. - ADR{\/} ................   CHLE          138,800      3,383,250         1.2
    BEVERAGES - ALCOHOLIC
  Mavesa S.A. - ADR{\/} .....................................   VENZ          147,500      1,106,250         0.4
    FOOD
  Sudamtex de Venezuela "B" - ADR{\/} .......................   VENZ           53,200        691,600         0.2
    TEXTILES & APPAREL
  Embotelladora Andina S.A. - ADR{\/} .......................   CHLE           15,000        360,000         0.1
    BEVERAGES - NON-ALCOHOLIC
  Cerveceria Backus & Johnston S.A. "T" .....................   PERU           75,905         69,463          --
    BEVERAGES - ALCOHOLIC
                                                                                        ------------
                                                                                          23,726,859
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-117
<PAGE>   1084
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Consumer Durables (0.9%)
  Brasmotor S.A. Preferred ..................................   BRZL       18,327,000   $  2,576,819         0.9
    APPLIANCES & HOUSEHOLD DURABLES
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $290,305,760) ................                            281,123,429        95.8
                                                                                        ------------       -----
<CAPTION>
 
                                                                            NO. OF         VALUE         % OF NET
RIGHTS                                                         COUNTRY      RIGHTS        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Telecomunicacoes do Rio de Janeiro S.A. (TELERJ) Rights -
   Preferred, expire 11/12/97 ...............................   BRZL        1,689,830         22,993          --
    TELEPHONE NETWORKS
  Telecomunicacoes de Sao Paulo S.A. (TELESP) Rights, expire
   11/12/97 .................................................   BRZL          513,280            466          --
    TELEPHONE NETWORKS
                                                                                        ------------       -----
 
TOTAL RIGHTS (cost $0) ......................................                                 23,459          --
                                                                                        ------------       -----
<CAPTION>
 
                                                                           PRINCIPAL       VALUE         % OF NET
FIXED INCOME INVESTMENTS                                       CURRENCY     AMOUNT        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Corporate Bonds (0.0%)
  Brazil (0.0%)
    Companhia Vale do Rio Doce - Non Convertible (cost
     $0) ....................................................   BRL           276,400             --          --
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $290,305,760)  * ....................                            281,146,888        95.8
Other Assets and Liabilities ................................                             12,433,174         4.2
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $293,580,062       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
       {\/}  U.S. currency denominated.
        -/-  Non-income producing security.
          *  For Federal income tax purposes, cost is $290,596,548 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  26,409,562
                 Unrealized depreciation:           (35,859,222)
                                                  -------------
                 Net unrealized depreciation:     $  (9,449,660)
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviations:
    ADR--American Depository Receipt
    GDR--Global Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-118
<PAGE>   1085
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                          PERCENTAGE OF NET ASSETS{d}
                                         -----------------------------
                                                   SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)     EQUITY    & OTHER       TOTAL
- --------------------------------------   -----     -------       -----
<S>                                      <C>       <C>           <C>
Argentina (ARG/ARS) ..................    4.2                      4.2
Brazil (BRZL/BRL) ....................   34.3                     34.3
Chile (CHLE/CLP) .....................   13.4                     13.4
Mexico (MEX/MXN) .....................   32.0                     32.0
Panama (PAN/PND) .....................    1.2                      1.2
Peru (PERU/PES) ......................    2.8                      2.8
United States (US/USD) ...............    1.5       4.2            5.7
Venezuela (VENZ/VEB) .................    6.4                      6.4
                                         -----     -------       -----
Total  ...............................   95.8       4.2          100.0
                                         -----     -------       -----
                                         -----     -------       -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $293,580,062.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-119
<PAGE>   1086
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                                   <C>        <C>
Assets:
  Investments in securities, at value (cost $290,305,760) (Note 1).............................  $281,146,888
  U.S. currency.....................................................................  $     924
  Foreign currencies (cost $44,025).................................................     44,033       44,957
                                                                                      ---------
  Receivable for Fund shares sold..............................................................   14,119,361
  Receivable for securities sold...............................................................    4,099,448
  Dividends receivable.........................................................................      686,435
  Miscellaneous receivable.....................................................................       19,727
                                                                                                 -----------
    Total assets...............................................................................  300,116,816
                                                                                                 -----------
Liabilities:
  Payable for loan outstanding (Note 1)........................................................    3,238,000
  Payable for Fund shares repurchased..........................................................    2,418,769
  Payable for investment management and administration fees (Note 2)...........................      305,562
  Payable for service and distribution expenses (Note 2).......................................      233,877
  Payable for transfer agent fees (Note 2).....................................................      174,161
  Payable for printing and postage expenses....................................................       87,242
  Payable for professional fees................................................................       37,498
  Payable for custodian fees (Note 1)..........................................................       17,552
  Payable for registration and filing fees.....................................................        5,729
  Payable for Directors' fees and expenses (Note 2)............................................        5,654
  Payable for fund accounting fees (Note 2)....................................................        5,612
  Other accrued expenses.......................................................................        7,098
                                                                                                 -----------
    Total liabilities..........................................................................    6,536,754
                                                                                                 -----------
Net assets.....................................................................................  $293,580,062
                                                                                                 -----------
                                                                                                 -----------
Class A:
Net asset value and redemption price per share ($159,496,474 DIVIDED BY 8,177,513 shares
 outstanding)..................................................................................  $     19.50
                                                                                                 -----------
                                                                                                 -----------
Maximum offering price per share (100/95.25 of $19.50) *.......................................  $     20.47
                                                                                                 -----------
                                                                                                 -----------
Class B:+
Net asset value and offering price per share ($133,448,007 DIVIDED BY 6,939,727 shares
 outstanding)..................................................................................  $     19.23
                                                                                                 -----------
                                                                                                 -----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($635,581 DIVIDED BY
 32,476 shares outstanding)....................................................................  $     19.57
                                                                                                 -----------
                                                                                                 -----------
Net assets consist of:
  Paid in capital (Note 4).....................................................................  $317,756,097
  Undistributed net investment income..........................................................      219,672
  Accumulated net realized loss on investments and foreign currency transactions...............  (15,230,114)
  Net unrealized depreciation on translation of assets and liabilities in foreign currencies...       (6,721)
  Net unrealized depreciation of investments...................................................   (9,158,872)
                                                                                                 -----------
Total -- representing net assets applicable to capital shares outstanding......................  $293,580,062
                                                                                                 -----------
                                                                                                 -----------
<FN>
- --------------
   * On sales of $50,000 or more, the offering price is reduced.
   + Redemption price per share is equal to the net asset value per share less
     any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-120
<PAGE>   1087
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                            STATEMENT OF OPERATIONS
 
                          Year ended October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                              <C>          <C>
Investment income: (Note 1)
  Dividend income (net of foreign withholding tax of $266,649)..............................  $ 8,471,075
  Interest income...........................................................................      530,160
                                                                                              -----------
    Total investment income.................................................................    9,001,235
                                                                                              -----------
Expenses:
  Investment management and administration fees (Note 2)....................................    3,538,586
  Service and distribution expenses: (Note 2)
    Class A....................................................................  $ 1,011,259
    Class B....................................................................    1,587,737    2,598,996
                                                                                 -----------
  Transfer agent fees (Note 2)..............................................................    1,261,524
  Custodian fees (Note 1)...................................................................      196,565
  Printing and postage expenses.............................................................      175,200
  Fund accounting fees (Note 2).............................................................       90,733
  Audit fees................................................................................       73,365
  Registration and filing fees..............................................................       64,495
  Legal fees................................................................................       17,155
  Directors' fees and expenses (Note 2).....................................................       13,140
  Other expenses (Note 1)...................................................................      215,751
                                                                                              -----------
    Total expenses before reductions........................................................    8,245,510
                                                                                              -----------
      Expense reductions (Notes 1 & 6)......................................................     (361,233)
                                                                                              -----------
    Total net expenses......................................................................    7,884,277
                                                                                              -----------
Net investment income.......................................................................    1,116,958
                                                                                              -----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
  (Note 1)
  Net realized gain on investments.............................................   85,442,902
  Net realized loss on foreign currency transactions...........................     (897,287)
                                                                                 -----------
    Net realized gain during the year.......................................................   84,545,615
  Net change in unrealized depreciation on translation of assets and
   liabilities in foreign currencies...........................................       25,640
  Net change in unrealized depreciation of investments.........................  (47,707,162)
                                                                                 -----------
    Net unrealized depreciation during the year.............................................  (47,681,522)
                                                                                              -----------
Net realized and unrealized gain on investments and foreign currencies......................   36,864,093
                                                                                              -----------
Net increase in net assets resulting from operations........................................  $37,981,051
                                                                                              -----------
                                                                                              -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-121
<PAGE>   1088
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                       STATEMENT OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                              YEAR ENDED     YEAR ENDED
                                                                              OCTOBER 31,    OCTOBER 31,
                                                                                 1997           1996
                                                                             -------------  -------------
<S>                                                                          <C>            <C>
Decrease in net assets
Operations:
  Net investment income....................................................  $   1,116,958  $     878,406
  Net realized gain (loss) on investments and foreign currency
   transactions............................................................     84,545,615     (4,964,724)
  Net change in unrealized appreciation on translation of assets and
   liabilities in foreign currencies.......................................         25,640        608,089
  Net change in unrealized appreciation (depreciation) of investments......    (47,707,162)    63,484,288
                                                                             -------------  -------------
    Net increase in net assets resulting from operations...................     37,981,051     60,006,059
                                                                             -------------  -------------
Class A:
Distributions to shareholders: (Note 1)
  From net investment income...............................................             --       (842,524)
  In excess of net investment income.......................................             --       (381,092)
Class B:
Distributions to shareholders: (Note 1)
  From net investment income...............................................             --        (93,201)
  In excess of net investment income.......................................             --        (42,157)
Advisor Class:
Distributions to shareholders: (Note 1)
  From net investment income...............................................             --         (4,285)
  In excess of net investment income.......................................             --         (1,938)
                                                                             -------------  -------------
    Total distributions....................................................             --     (1,365,197)
                                                                             -------------  -------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and reinvested.........................  1,267,100,757  1,551,794,195
  Decrease from capital shares repurchased.................................  (1,327,093,718) (1,612,200,649)
                                                                             -------------  -------------
    Net decrease from capital share transactions...........................    (59,992,961)   (60,406,454)
                                                                             -------------  -------------
Total decrease in net assets...............................................    (22,011,910)    (1,765,592)
Net assets:
  Beginning of year........................................................    315,591,972    317,357,564
                                                                             -------------  -------------
  End of year *............................................................  $ 293,580,062  $ 315,591,972
                                                                             -------------  -------------
                                                                             -------------  -------------
 * Includes undistributed net investment income of.........................  $     219,672             --
                                                                             -------------  -------------
                                                                             -------------  -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-122
<PAGE>   1089
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS A+
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (A)    1996 (A)    1995 (A)    1994 (A)    1993 (A)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   17.95   $   15.38   $   26.11   $   19.78   $   15.59
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income (loss)..........       0.11        0.09        0.15       (0.08)       0.18*
  Net realized and unrealized gain
   (loss) on investments................       1.44        2.59       (9.28)       6.75        5.21
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       1.55        2.68       (9.13)       6.67        5.39
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............         --       (0.08)         --       (0.19)      (0.12)
  From net realized gain on
   investments..........................         --          --       (1.60)      (0.15)      (1.08)
  In excess of net investment income....         --       (0.03)         --          --          --
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................         --       (0.11)      (1.60)      (0.34)      (1.20)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $   19.50   $   17.95   $   15.38   $   26.11   $   19.78
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (d).............       8.52%      17.52%     (37.16)%     34.10%       37.1%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 159,496   $ 177,373   $ 182,462   $ 336,960   $ 129,280
Ratio of net investment income (loss) to
 average net assets.....................       0.52%       0.46%       0.86%      (0.29)%       1.3%*
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   6)...................................       1.96%       2.03%       2.11%       2.04%        2.4%*
  Without expense reductions............       2.06%       2.10%       2.12%        N/A         N/A
Portfolio turnover rate++++.............        130%        101%        125%        155%        112%
Average commission rate per share paid
 on portfolio transactions++++..........  $  0.0007   $  0.0005         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
  +  All capital shares issued and outstanding as of March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.02 for the year ended October 31, 1993.
     Without such reimbursements, the expense ratio would have been 2.49%
     and the ratio of net investment income to average net assets would
     have been 1.25% for the year ended October 31, 1993.
 (a) These selected per share data were calculated based upon average
     shares outstanding during the period.
 (b) Not annualized.
 (c) Annualized.
 (d) Total investment return does not include sales charges.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-123
<PAGE>   1090
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
                                                                    CLASS B++
                                          -------------------------------------------------------------
                                                                                          APRIL 1, 1993
                                                      YEAR ENDED OCTOBER 31,                   TO
                                          ----------------------------------------------   OCTOBER 31,
                                           1997 (A)    1996 (A)    1995 (A)    1994 (A)     1993 (A)
                                          ----------  ----------  ----------  ----------  -------------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   17.78   $   15.21   $   25.94   $   19.75     $ 16.26
                                          ----------  ----------  ----------  ----------  -------------
Income from investment operations:
  Net investment income (loss)..........       0.01       (0.00)       0.06       (0.22)      (0.07)
  Net realized and unrealized gain
   (loss) on investments................       1.44        2.59       (9.19)       6.74        3.56
                                          ----------  ----------  ----------  ----------  -------------
    Net increase (decrease) from
     investment operations..............       1.45        2.59       (9.13)       6.52        3.49
                                          ----------  ----------  ----------  ----------  -------------
Distributions to shareholders:
  From net investment income............         --       (0.01)         --       (0.18)         --
  From net realized gain on
   investments..........................         --          --       (1.60)      (0.15)         --
  In excess of net investment income....         --       (0.01)         --          --          --
                                          ----------  ----------  ----------  ----------  -------------
    Total distributions.................         --       (0.02)      (1.60)      (0.33)         --
                                          ----------  ----------  ----------  ----------  -------------
Net asset value, end of period..........  $   19.23   $   17.78   $   15.21   $   25.94     $ 19.75
                                          ----------  ----------  ----------  ----------  -------------
                                          ----------  ----------  ----------  ----------  -------------
 
Total investment return (d).............       8.04%      17.02%     (37.42)%     33.33%       21.5% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 133,448   $ 137,400   $ 134,527   $ 211,673     $13,576
Ratio of net investment income (loss) to
 average net assets.....................       0.02%      (0.04)%      0.36%      (0.79)%      (0.7)% (c)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   6)...................................       2.46%       2.53%       2.61%       2.54%        2.9% (c)
  Without expense reductions............       2.56%       2.60%       2.62%        N/A         N/A
Portfolio turnover rate++++.............        130%        101%        125%        155%        112%
Average commission rate per share paid
 on portfolio transactions++++..........  $  0.0007   $  0.0005         N/A         N/A         N/A
 
<CAPTION>
                                                   ADVISOR CLASS+++
                                          -----------------------------------
 
                                               YEAR ENDED        JUNE 1, 1995
                                               OCTOBER 31,            TO
                                          ---------------------  OCTOBER 31,
                                          1997 (A)    1996 (A)       1995
                                          --------   ----------  ------------
<S>                                       <C>        <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $ 17.94    $   15.40    $   15.95
                                          --------   ----------  ------------
Income from investment operations:
  Net investment income (loss)..........     0.19         0.17         0.09
  Net realized and unrealized gain
   (loss) on investments................     1.44         2.58        (0.64)
                                          --------   ----------  ------------
    Net increase (decrease) from
     investment operations..............     1.63         2.75        (0.55)
                                          --------   ----------  ------------
Distributions to shareholders:
  From net investment income............       --        (0.14)          --
  From net realized gain on
   investments..........................       --           --           --
  In excess of net investment income....       --        (0.07)          --
                                          --------   ----------  ------------
    Total distributions.................       --        (0.21)          --
                                          --------   ----------  ------------
Net asset value, end of period..........  $ 19.57    $   17.94    $   15.40
                                          --------   ----------  ------------
                                          --------   ----------  ------------
Total investment return (d).............     8.91%       18.16%       (3.45)%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $   636    $     818    $     369
Ratio of net investment income (loss) to
 average net assets.....................     1.02%        0.96%        1.36 %(c)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   6)...................................     1.46%        1.53%        1.61 %(c)
  Without expense reductions............     1.56%        1.60%        1.62 %(c)
Portfolio turnover rate++++.............      130%         101%         125 %
Average commission rate per share paid
 on portfolio transactions++++..........  $0.0007    $  0.0005          N/A
</TABLE>
 
- ----------------
 
  +  All capital shares issued and outstanding as of March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.02 for the year ended October 31, 1993.
     Without such reimbursements, the expense ratio would have been 2.49%
     and the ratio of net investment income to average net assets would
     have been 1.25% for the year ended October 31, 1993.
 (a) These selected per share data were calculated based upon average
     shares outstanding during the period.
 (b) Not annualized.
 (c) Annualized.
 (d) Total investment return does not include sales charges.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-124
<PAGE>   1091
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Latin America Growth Fund ("Fund") is a separate series of G.T.
Investment Funds, Inc. ("Company"). The Company is organized as a Maryland
corporation and is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as a non-diversified, open-end management investment
company. The Company has thirteen series of shares in operation, each series
corresponding to a distinct portfolio of investments.
 
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective service and distribution expenses, and
may differ in its transfer agent, registration, and certain other class-specific
fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
 
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. ("the Manager") to be the primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments with maturity of 60
days or less are valued at amortized cost adjusted for foreign exchange
translation and market fluctuation, if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records are maintained in U.S. dollars. The market values of
foreign securities, currency holdings, and other assets and liabilities are
recorded in the books and records of the Fund after translation to U.S. dollars
based on the exchange rates on that day. The cost of each security is determined
using historical exchange rates. Income and withholding taxes are translated at
prevailing exchange rates when earned or incurred.
 
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from 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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which the value, including accrued
interest, is at least equal to the amount to be repaid to the Fund under each
agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract
 
                                     FS-125
<PAGE>   1092
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
fluctuates with changes in currency exchange rates. The Forward Contract is
marked-to-market daily and the change in market value is recorded by the Fund as
an unrealized gain or loss. When the Forward Contract is closed, the Fund
records a realized gain or loss equal to the difference between the value at the
time it was opened and the value at the time it was closed. Forward Contracts
involve market risk in excess of the amount shown in the Fund's "Statement of
Assets and Liabilities." The Fund could be exposed to risk if a counterparty is
unable to meet the terms of the contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities, or to hedge against adverse
fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on a traded exchange is valued at its last bid
price, or, in the case of an over-the-counter option, is valued at the average
of the last bid prices obtained from brokers. If an option expires on its
stipulated expiration date or if the Fund enters into a closing purchase
transaction, a gain or loss is realized without regard to any unrealized gain or
loss on the underlying security, and the liability related to such option is
extinguished. If a written call option is exercised, a gain or loss is realized
from the sale of the underlying security and the proceeds of the sale are
increased by the premium originally received. If a written put option is
exercised, the cost of the underlying security purchased would be decreased by
the premium originally received. The Fund can write options only on a covered
basis, which, for a call, requires that the fund hold the underlying securities
and, for a put, requires the Fund to maintain in a segregated account cash, U.S.
government securities, or other liquid securities in an amount not less than the
exercise price or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund may use options to manage its exposure to the
stock or bond market and to fluctuations in currency values or interest rates.
 
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock or bond
market and to fluctuations in currency values or interest rates. At October 31,
1997, the fund had no open futures contracts.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Interest income is recorded on the
accrual basis. Where a high level of uncertainty exists as to its collection,
income is recorded net of all withholding tax with any rebate recorded when
received. The Fund may trade securities on other than normal settlement terms.
This may increase the risk if the other party to the transaction fails to
deliver and causes the Fund to subsequently invest at less advantageous prices.
 
(H) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains. The Fund currently has a capital loss carryforward of
$14,939,326, of which $8,211,999 expires in 2003 and $6,727,327 expires in 2004.
 
(I) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in
 
                                     FS-126
<PAGE>   1093
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
accordance with Federal 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
and timing differences.
 
(J) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
 
(K) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
 
(L) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
 
(M) PORTFOLIO SECURITIES LOANED
At October 31, 1997, stocks with an aggregate value of approximately $32,165,965
were on loan to brokers. The loans were secured by cash collateral of
$34,658,600. For international securities, cash collateral is received by the
Fund against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by the Fund against loaned securities in an amount at
least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. For
the year ended October 31, 1997, the Fund received $315,802 of income from
securities lending which was used to reduce custodian and administrative
expenses.
 
(N) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised or administered by
the Manager, has a line of credit with each of BankBoston and State Street Bank
& Trust Company. The arrangements with the banks allow the Fund and the GT Funds
to borrow an aggregate maximum amount of $200,000,000. The Fund is limited to
borrowing up to 33 1/3% of the value of each Fund's total assets. On October 31,
1997, the Fund had $3,238,000 in loans outstanding.
 
For the year ended October 31, 1997, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $7,810,915, with a weighted average interest rate of 6.37%.
Interest expense for the Fund for the year ended October 31, 1997 was $98,132,
included in "Other Expenses" on the Statement of Operations.
 
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc. is the Funds Portfolios' investment
manager and administrator. The Fund pays investment management and
administration fees to the Manager at the annualized rate of 0.975% of the first
$500 million of average daily net assets of the Fund; 0.95% of the next $500
million; 0.925% of the next $500 million and 0.90% on amounts thereafter. These
fees are computed daily and paid monthly.
 
GT Global Inc. ("GT Global"), an affiliate of the Manager, is the Fund's
distributor. The Fund offers Class A, Class B and Advisor Class shares for
purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the period ended October 31, 1997, GT Global retained
$50,871 of such sales charges. Purchases of Class A shares exceeding $500,000
may be subject to a contingent deferred sales charge ("CDSC") upon redemption,
in accordance with the Fund's current prospectus. GT Global collected CDSCs in
the amount of $282 for the year ended October 31, 1997. GT Global also makes
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the year ended October 31, 1997, GT Global collected CDSCs in
the amount of $923,487. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
 
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.50% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
 
                                     FS-127
<PAGE>   1094
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
All expenses for which GT Global is reimbursed under the Class A Plan will have
been incurred within one year of such reimbursement.
 
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B Shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
 
The Manager and GT Global voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 2.40%, 2.90%, and 1.90% of the average
net assets of the Fund's Class A, Class B and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.
 
Effective November 1, 1997, the Manager and GT Global have undertaken to limit
each Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expenses) to the annual rate of 2.00%, 2.50% and 1.50% of the
average daily net assets of the Fund's Class A, Class B and Advisor Class
shares, respectively. This undertaking may be changed or eliminated in the
future.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the results according to the Funds average daily net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.
 
3. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1997, purchases and sales of investment
securities by the Fund, other than short-term investments, aggregated
$439,672,522 and $508,014,202. There were no purchases or sales of U.S.
government obligations for the year ended October 31, 1997.
 
4. CAPITAL SHARES
At October 31, 1997, there were 6,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 200,000,000 were
classified as shares of the Fund; 400,000,000 were classified as shares of GT
Global Government Income Fund; 200,000,000 were classified as shares of GT
Global Developing Markets Fund; 200,000,000 were classified as shares of GT
Global Health Care Fund; 200,000,000 were classified as shares of GT Global
Strategic Income Fund; 200,000,000 were classified as shares of GT Global
Currency Fund (inactive); 200,000,000 were classified as shares of GT Global
Growth & Income Fund; 200,000,000 were classified as shares of GT Global Small
Companies Fund (inactive); 200,000,000 were classified as shares of GT Global
Natural Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; 400,000,000 were classified as shares of GT Global
Telecommunications Fund; 200,000,000 were classified as shares of GT Global
Emerging Markets Fund; and 200,000,000 were classified as shares of GT Global
Financial Services Fund; 200,000,000 were classified as shares of GT Global High
Income Fund; and 200,000,000 were classified as shares of GT Global Consumer
Products and Services Fund. The shares of each of the foregoing series of the
Company were divided equally into two classes, designated Class A and Class B
common stock. With respect to the issuance of Advisor Class shares, 100,000,000
shares were classified as shares of each of the fifteen series of the Company
and designated as Advisor Class common stock. 1,100,000,000 shares remain
unclassified. Transactions in capital shares of the Fund were as follows:
 
                                     FS-128
<PAGE>   1095
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                           CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
                                                            YEAR ENDED                   YEAR ENDED
                                                         OCTOBER 31,1997              OCTOBER 31, 1996
                                                    --------------------------  ----------------------------
CLASS A                                               SHARES        AMOUNT        SHARES         AMOUNT
- --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................   46,171,230  $ 937,785,689   76,364,877  $ 1,304,172,875
Shares issued in connection with reinvestment of
  distributions...................................           --             --       66,851        1,023,814
                                                    -----------  -------------  -----------  ---------------
                                                     46,171,230    937,785,689   76,431,728    1,305,196,689
Shares repurchased................................  (47,874,889)  (980,118,186) (78,414,835)  (1,346,357,898)
                                                    -----------  -------------  -----------  ---------------
Net decrease......................................   (1,703,659) $ (42,332,497)  (1,983,107) $   (41,161,209)
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
 
<CAPTION>
 
                                                            YEAR ENDED                   YEAR ENDED
                                                         OCTOBER 31, 1997             OCTOBER 31, 1996
                                                    --------------------------  ----------------------------
CLASS B                                               SHARES        AMOUNT        SHARES         AMOUNT
- --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................   14,424,170  $ 299,346,687   13,503,991  $   230,324,732
Shares issued in connection with reinvestment of
  distributions...................................           --             --        6,914          105,073
                                                    -----------  -------------  -----------  ---------------
                                                     14,424,170    299,346,687   13,510,905      230,429,805
Shares repurchased................................  (15,210,392)  (316,506,347) (14,627,921)    (250,064,111)
                                                    -----------  -------------  -----------  ---------------
Net decrease......................................     (786,222) $ (17,159,660)  (1,117,016) $   (19,634,306)
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
<CAPTION>
 
                                                            YEAR ENDED                   YEAR ENDED
                                                         OCTOBER 31, 1997             OCTOBER 31, 1996
                                                    --------------------------  ----------------------------
ADVISOR CLASS                                         SHARES        AMOUNT        SHARES         AMOUNT
- - --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    1,448,623  $  29,968,381      932,074  $    16,161,478
Shares issued in connection with reinvestment of
  distributions...................................           --             --          408            6,223
                                                    -----------  -------------  -----------  ---------------
                                                      1,448,623     29,968,381      932,482       16,167,701
Shares repurchased................................   (1,461,777)   (30,469,185)    (910,792)     (15,778,640)
                                                    -----------  -------------  -----------  ---------------
Net increase (decrease)...........................      (13,154) $    (500,804)      21,690  $       389,061
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
</TABLE>
 
5. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
Investments of 5% or more of an issuer's outstanding voting securities by the
Fund are defined in the Investment Company Act of 1940 as an affiliated company.
There were no investments in affiliated companies at October 31, 1997.
 
Transactions during the year with companies that were affiliates are as follows:
 
<TABLE>
<CAPTION>
                                                                               NET
                                                                             REALIZED
                                                    PURCHASES     SALES        GAIN     DIVIDEND
AFFILIATES                                             COST      PROCEEDS     (LOSS)     INCOME
- --------------------------------------------------  ----------  ----------  ----------  --------
<S>                                                 <C>         <C>         <C>         <C>
Compania Boliviana de Energia Electrica...........  $       --  $9,666,400  $2,805,315  $ 44,960
Sanluis Corporacion, S.A. de C.V..................          --   5,738,935   2,214,183   318,107
</TABLE>
 
6. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the year ended October 31, 1997, the Fund's expenses
were reduced by $45,431 under these arrangements.
 
                                     FS-129
<PAGE>   1096
 
                                                                    STATEMENT OF
                                                          ADDITIONAL INFORMATION
 
   
                         CLASS A AND CLASS B SHARES OF
    
   
                            AIM GLOBAL THEME FUNDS:
    
   
                       AIM GLOBAL FINANCIAL SERVICES FUND
    
                         AIM GLOBAL INFRASTRUCTURE FUND
                           AIM GLOBAL RESOURCES FUND
                 AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
                          AIM GLOBAL HEALTH CARE FUND
                       AIM GLOBAL TELECOMMUNICATIONS FUND
                             (SERIES PORTFOLIOS OF
                             AIM INVESTMENT FUNDS)
 
                               11 GREENWAY PLAZA
                                   SUITE 100
                             HOUSTON, TX 77046-1173
                                 (713) 626-1919
 
                             ---------------------
 
        THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND
           IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS OF THE
             ABOVE-NAMED FUND, A COPY OF WHICH MAY BE OBTAINED FREE
                OF CHARGE FROM AUTHORIZED DEALERS OR BY WRITING
                           A I M DISTRIBUTORS, INC.,
                    P.O. BOX 4739, HOUSTON, TEXAS 77210-4739
                         OR BY CALLING (800) 347-4246.
 
                             ---------------------
 
          STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 8, 1998
         RELATING TO THE AIM GLOBAL FINANCIAL SERVICES FUND PROSPECTUS,
         THE AIM GLOBAL INFRASTRUCTURE FUND PROSPECTUS, THE AIM GLOBAL
          RESOURCES FUND PROSPECTUS, THE AIM GLOBAL CONSUMER PRODUCTS
         AND SERVICES FUND PROSPECTUS, THE AIM GLOBAL HEALTH CARE FUND
        PROSPECTUS AND THE AIM GLOBAL TELECOMMUNICATIONS FUND PROSPECTUS
                          EACH DATED SEPTEMBER 8, 1998
<PAGE>   1097
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                                              PAGE NO.
                                                              --------
<S>                                                           <C>
INTRODUCTION................................................  4
 
GENERAL INFORMATION ABOUT THE FUNDS.........................  4
  The Trust and Its Shares..................................  4
 
INVESTMENT OBJECTIVES AND POLICIES..........................  5
  Investment Objectives.....................................  5
  Selection of Equity Investments...........................  5
  Investments in Other Investment Companies.................  6
  Depositary Receipts.......................................  6
  Warrants or Rights........................................  7
  Lending of Portfolio Securities...........................  7
  Money Market Instruments..................................  7
  Commercial Bank Obligations...............................  7
  Repurchase Agreements.....................................  7
  Borrowing, Reverse Repurchase Agreements and "Roll"
     Transactions...........................................  8
  Short Sales...............................................  8
 
OPTIONS, FUTURES AND CURRENCY STRATEGIES....................  9
  Special Risks of Options, Futures and Currency
     Strategies.............................................  9
  Writing Call Options......................................  10
  Writing Put Options.......................................  10
  Purchasing Put Options....................................  11
  Purchasing Call Options...................................  11
  Index Options.............................................  12
  Interest Rate, Currency and Stock Index Futures
     Contracts..............................................  13
  Options on Futures Contracts..............................  15
  Limitations on Use of Futures, Options on Futures and
     Certain Options on Currencies..........................  15
  Forward Contracts.........................................  16
  Foreign Currency Strategies -- Special Considerations.....  16
  Cover.....................................................  17
 
RISK FACTORS................................................  17
  Illiquid Securities.......................................  17
  Foreign Securities........................................  18
 
INVESTMENT LIMITATIONS......................................  22
  Feeder Funds..............................................  22
  Health Care Fund..........................................  23
  Telecommunications Fund...................................  24
 
EXECUTION OF PORTFOLIO TRANSACTIONS.........................  26
  Portfolio Trading and Turnover............................  27
 
MANAGEMENT..................................................  28
  Trustees and Executive Officers...........................  28
  Investment Management and Administration Services relating
     to the Feeder Funds and the Portfolios.................  30
  Investment Management and Administration Services relating
     to the Health Care Fund and Telecommunications Fund....  30
  Expenses of the Funds and of the Portfolios...............  32
</TABLE>
    
 
                                        2
<PAGE>   1098
 
   
<TABLE>
<CAPTION>
                                                              PAGE NO.
                                                              --------
<S>                                                           <C>
THE DISTRIBUTION PLANS......................................  32
  The Class A Plan..........................................  32
  The Class B Plan..........................................  32
  Both Plans................................................  33
 
THE DISTRIBUTOR.............................................  35
 
NET ASSET VALUE DETERMINATION...............................  36
 
HOW TO PURCHASE AND REDEEM SHARES...........................  37
 
QUALIFYING FOR A REDUCED FRONT-END SALES CHARGE.............  38
 
PROGRAMS AND SERVICES FOR SHAREHOLDERS......................  38
 
DIVIDEND ORDER..............................................  39
 
TAXES.......................................................  39
  Taxation of the Funds.....................................  39
  Taxation of the Theme Portfolios..........................  39
  Foreign Taxes.............................................  40
  Passive Foreign Investment Companies......................  40
  Options, Futures and Foreign Currency Transactions........  41
  Taxation of the Funds' Shareholders.......................  41
 
MISCELLANEOUS INFORMATION...................................  42
  Custodian.................................................  42
  Transfer Agency and Accounting Agency Services............  42
  Independent Accountants...................................  42
  Shareholder Liability.....................................  42
  Names.....................................................  43
  Special Servicing Agreement...............................  43
  Control Persons and Principal Holders of Securities.......  43
 
INVESTMENT RESULTS..........................................  45
  Total Return Quotations...................................  45
  Performance Information...................................  48
  General Information about the Theme Funds and Theme
     Portfolios.............................................  49
  Health Care Fund..........................................  50
  Information about the Global Health Care Industries.......  50
  Telecommunications Fund...................................  50
  Deregulation in the United States.........................  51
  Consumer Products and Services Fund.......................  51
  Infrastructure Fund.......................................  52
  Financial Services Fund...................................  52
  Resources Fund............................................  52
 
APPENDIX....................................................  53
  Description of Bond Ratings...............................  53
  Description of Commercial Paper Ratings...................  54
  Absence of Rating.........................................  54
 
FINANCIAL STATEMENTS........................................  FS
</TABLE>
    
 
                                        3
<PAGE>   1099
 
                                  INTRODUCTION
 
  This Statement of Additional Information relates to the Class A and Class B
shares of AIM Global Financial Services Fund ("Financial Services Fund"), AIM
Global Infrastructure Fund ("Infrastructure Fund"), AIM Global Resources Fund
("Resources Fund"), AIM Global Consumer Products and Services Fund ("Consumer
Products and Services Fund"), AIM Global Health Care Fund ("Health Care Fund")
and AIM Global Telecommunications Fund ("Telecommunications Fund") (each, a
"Fund" or "Theme Fund," and, collectively, the "Funds" or "Theme Funds"). Each
Fund is a diversified series of AIM Investment Funds (the "Trust"), a registered
open-end management investment company organized as a Delaware business trust.
The Financial Services Fund, Infrastructure Fund, Resources Fund and Consumer
Products and Services Fund (each, a "Feeder Fund," and, collectively, the
"Feeder Funds") invest all of their investable assets in the Global Financial
Services Portfolio, Global Infrastructure Portfolio, Global Resources Portfolio
and Global Consumer Products and Services Portfolio (each, a "Portfolio," and,
collectively, the "Portfolios"), respectively.
 
   
  A I M Advisors, Inc. ("AIM") serves as the investment manager of and
administrator for, and INVESCO (NY), Inc. (the "Sub-advisor") serves as the
investment sub-advisor of and sub-administrator for the Health Care Fund,
Telecommunications Fund and the Portfolios (each a "Theme Portfolio," and
collectively the "Theme Portfolios"). AIM and the Sub-advisor also serve as the
administrator and sub-administrator, respectively, for each Feeder Fund.
    
 
   
  The Trust is a series mutual fund. The rules and regulations of the Securities
and Exchange Commission (the "SEC") require all mutual funds to furnish
prospective investors certain information concerning the activities of the fund
being considered for investment. This information for Financial Services Fund is
included in a Prospectus dated September 8, 1998, for Infrastructure Fund is
included in a separate Prospectus dated September 8, 1998, for Resources Fund is
included in a separate Prospectus dated September 8, 1998, for Consumer Products
and Services Fund is included in a separate Prospectus dated September 8, 1998,
for Health Care Fund is included in a separate Prospectus dated September 8,
1998, and for Telecommunications Fund is included in a separate Prospectus dated
September 8, 1998. Additional copies of the Prospectuses and this Statement of
Additional Information may be obtained without charge by writing the principal
distributor of the Funds' shares, A I M Distributors, Inc. ("AIM Distributors"),
P.O. Box 4739, Houston, TX 77210-4739 or by calling (800) 347-4246. Investors
must receive a Prospectus before they invest.
    
 
  This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Funds. Some of the
information required to be in this Statement of Additional Information is also
included in the Prospectus; and, in order to avoid repetition, reference will be
made to sections of the Prospectus. Additionally, the Prospectus and this
Statement of Additional Information omit certain information contained in the
Registration Statement filed with the SEC. Copies of the Registration Statement,
including items from the Prospectus and this Statement of Additional
Information, may be obtained from the SEC by paying the charges described under
its rules and regulations.
 
                      GENERAL INFORMATION ABOUT THE FUNDS
 
THE TRUST AND ITS SHARES
 
   
  The Trust previously operated under the name G.T. Investment Funds, Inc.,
which was organized as a Maryland corporation on October 29, 1987. The Trust was
reorganized on September 8, 1998 as a Delaware business trust, and is registered
with the SEC as a diversified open-end series management investment company. The
Trust currently consists of the following portfolios: each of the six Theme
Funds, AIM Global Government Income Fund, AIM Global High Income Fund, AIM
Strategic Income Fund, AIM Global Growth and Income Fund, AIM Emerging Markets
Fund, AIM Developing Markets Fund, and AIM Latin American Growth Fund. Each of
these funds has three separate classes: Class A, Class B and Advisor Class
shares. All historical financial and other information contained in this
Statement of Additional Information for periods prior to September 8, 1998, is
that of the series of G.T. Investment Funds, Inc. (renamed AIM Investment Funds,
Inc.).
    
 
  This Statement of Additional Information relates solely to the Class A and B
shares of the Funds.
 
  The term "majority of the outstanding shares" of the Trust, of a particular
Fund or of a particular class of a Fund or of a particular Portfolio means,
respectively, the vote of the lesser of (a) 67% or more of the shares of the
Trust, such Fund or such class present at a meeting of the Trust's shareholders,
if the holders of more than 50% of the outstanding shares of the Trust, such
Fund or such class are present or represented by proxy, or (b) more than 50% of
the outstanding shares of the Trust, such Fund or such class.
 
  Class A, Class B and Advisor Class shares of each Fund have equal rights and
privileges. Each share of a particular class is entitled to one vote, to
participate equally in dividends and distributions declared by the Trust's Board
of Trustees with
 
                                        4
<PAGE>   1100
 
respect to the class of such Fund and, upon liquidation of the Fund, to
participate proportionately in the net assets of the Fund allocable to such
class remaining after satisfaction of outstanding liabilities of the Fund
allocable to such class. Fund shares are fully paid, non-assessable and fully
transferable when issued and have no preemptive rights and have such conversion
and exchange rights as set forth in the Prospectus and this Statement of
Additional Information. Fractional shares have proportionately the same rights,
including voting rights, as are provided for a full share.
 
   
  Shareholders of the Funds do not have cumulative voting rights, and therefore
the holders of more than 50% of the outstanding shares of all Funds voting
together for election of trustees may elect all of the members of the Board of
Trustees of the Trust. In such event, the remaining holders cannot elect any
trustees of the Trust.
    
 
                       INVESTMENT OBJECTIVES AND POLICIES
 
INVESTMENT OBJECTIVES
 
  The investment objective of each Feeder Fund is long-term capital growth. The
investment objective of the Health Care Fund and Telecommunications Fund is
long-term capital appreciation and long-term growth of capital, respectively.
 
  Each Feeder Fund seeks to achieve its investment objective by investing all of
its investable assets in a Portfolio, each of which is a subtrust (a "series")
of Global Investment Portfolio (an open-end management investment company), with
an investment objective that is identical to that of its corresponding Feeder
Fund. Whenever the phrase "all of a Fund's investable assets" is used herein and
in the Prospectus, it means that the only investment securities held by a Feeder
Fund will be its interest in its corresponding Portfolio. A Feeder Fund may
withdraw its investment in its corresponding Portfolio at any time, if the Board
of Trustees of the Trust determines that it is in the best interests of the Fund
and its shareholders to do so. Upon any such withdrawal, a Feeder Fund's assets
would be invested in accordance with the investment policies of its
corresponding Portfolio described below and in the Prospectus.
 
SELECTION OF EQUITY INVESTMENTS
 
   
  With respect to the Resources Portfolio, the Sub-advisor has identified four
areas that it expects will create investment opportunities: (i) improving
supply/demand fundamentals, which may result in higher commodity prices; (ii)
privatization of state-owned natural resource businesses; (iii) management which
can improve production efficiencies without correspondingly increasing commodity
prices; and (iv) service companies with emerging technologies that can enhance
productivity or reduce production costs. Of course, there is no certainty that
these factors will produce the anticipated results.
    
 
   
  With respect to the Telecommunications Fund, the Sub-advisor has identified
four areas that it expects will create investment opportunities: (i)
deregulation of companies in the industry, which will allow competition to
promote greater efficiencies; (ii) privatization of state-owned
telecommunications businesses; (iii) development of infrastructure in
underdeveloped countries and upgrading of services in other countries; and (iv)
emerging technologies that will enhance productivity and reduce costs in the
telecommunications industry. Of course, there is no certainty that these factors
will produce the anticipated results.
    
 
   
  There may be times when, in the opinion of the Sub-advisor, prevailing market,
economic or political conditions warrant reducing the proportion of the Theme
Portfolios' assets invested in equity securities and increasing the proportion
held in cash (U.S. dollars, foreign currencies or multinational currency units)
or invested in debt securities or high quality money market instruments issued
by corporations, or the U.S., or a foreign government. A portion of each Theme
Portfolio's assets normally will be held in cash (U.S. dollars, foreign
currencies or multinational currency units) or invested in foreign or domestic
high quality money market instruments pending investment of proceeds from new
sales of Fund shares to provide for ongoing expenses and to satisfy redemptions.
    
 
   
  For each Theme Portfolio's investment purposes, an issuer is typically
considered as located in a particular country if it (a) is organized under the
laws of or has its principal office in a particular country, or (b) normally
derives 50% or more of its total revenues from business in that country,
provided that, in the Sub-advisor's view, the value of such issuer's securities
will tend to reflect such country's development to a greater extent than
developments elsewhere. However, these are not absolute requirements, and
certain companies incorporated in a particular country and considered by the
Sub-advisor to be located in that country may have substantial foreign
operations or subsidiaries and/or export sales exceeding in size the assets or
sales in that country.
    
 
  In certain countries, governmental restrictions and other limitations on
investment may affect a Theme Portfolio's ability to invest in such countries.
In addition, in some instances only special classes of securities may be
purchased by
 
                                        5
<PAGE>   1101
 
   
foreigners and the market prices, liquidity and rights with respect to those
securities may vary from shares owned by nationals. The Sub-advisor is not aware
at this time of the existence of any investment or exchange control regulations
which might substantially impair the operations of the Theme Portfolios as
described in the Prospectus and this Statement of Additional Information.
Restrictions may in the future, however, make it undesirable to invest in
certain countries. None of the Theme Portfolios has a present intention of
making any significant investment in any country or stock market in which the
Sub-advisor considers the political or economic situation to threaten a Theme
Portfolio with substantial or total loss of its investment in such country or
market.
    
 
INVESTMENTS IN OTHER INVESTMENT COMPANIES
 
   
  Each Theme Portfolio may invest in the securities of investment companies
(including investment vehicles or companies advised by the Sub-advisor or its
affiliates ("Affiliated Funds")) within the limits of the Investment Company Act
of 1940, as amended (the "1940 Act"). These limitations currently provide that,
in general, a Theme Portfolio may purchase shares of an investment company
unless (a) such a purchase would cause a Theme Portfolio to own in the aggregate
more than 3% of the total outstanding voting stock of the investment company or
(b) such a purchase would cause the Theme Portfolio to have more than 5% of its
assets invested in the investment company or more than 10% of its assets
invested in an aggregate of all such investment companies. The foregoing
restrictions do not apply to the investment of the Financial Services Fund,
Infrastructure Fund, Resources Fund and Consumer Products and Services Fund in
their corresponding Portfolios. Investment in closed-end investment companies
may involve the payment of substantial premiums above the value of such
companies' portfolio securities. Each Theme Portfolio does not intend to invest
in such investment companies unless, in the judgment of the Sub-advisor, the
potential benefits of such investments justify the payment of any applicable
premiums. The return on such securities will be reduced by operating expenses of
such companies, including payments to the investment managers of those
investment companies. With respect to investments in Affiliated Funds, the
Sub-advisor waives its advisory fee to the extent that such fees are based on
assets of a Theme Portfolio invested in Affiliated Funds.
    
 
DEPOSITARY RECEIPTS
 
  A Theme Portfolio may hold securities of foreign issuers in the form of
American Depositary Receipts ("ADRs"), American Depositary Shares ("ADSs"),
Global Depositary Receipts ("GDRs") and European Depositary Receipts ("EDRs") or
other securities convertible into securities of eligible foreign issuers. These
securities may not necessarily be denominated in the same currency as the
securities for which they may be exchanged. ADRs and ADSs are typically issued
by an American bank or trust company and evidence ownership of underlying
securities issued by a foreign corporation. EDRs, which are sometimes referred
to as Continental Depositary Receipts ("CDRs"), are issued in Europe typically
by foreign banks and trust companies and evidence ownership of either foreign or
domestic securities. GDRs are similar to EDRs and are designed for use in
several international financial markets. Generally, ADRs and ADSs in registered
form are designed for use in U.S. securities markets and EDRs in bearer form are
designed for use in European securities markets. For purposes of each Theme
Portfolio's investment policies, a Theme Portfolio's investments in ADRs, ADSs,
GDRs and EDRs will be deemed to be investments in the equity securities
representing securities of foreign issuers into which they may be converted.
 
  ADR facilities may be established as either "unsponsored" or "sponsored."
While ADRs issued under these two types of facilities are in some respects
similar, there are distinctions between them relating to the rights and
obligations of ADR holders and the practices of market participants. A
depository may establish an unsponsored facility without participation by (or
even necessarily the acquiescence of) the issuer of the deposited securities,
although typically the depository requests a letter of non-objection from such
issuer prior to the establishment of the facility. Holders of unsponsored ADRs
generally bear all the costs of such facilities. The depository usually charges
fees upon the deposit and withdrawal of the deposited securities, the conversion
of dividends into U.S. dollars, the disposition of non-cash distributions, and
the performance of other services. The depository of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited securities or to pass-through voting
rights to ADR holders in respect of the deposited securities. Sponsored ADR
facilities are created in generally the same manner as unsponsored facilities,
except that the issuer of the deposited securities enters into a deposit
agreement with the depository. The deposit agreement sets out the rights and
responsibilities of the issuer, the depository and the ADR holders. With
sponsored facilities, the issuer of the deposited securities generally will bear
some of the costs relating to the facility (such as dividend payment fees of the
depository), although ADR holders continue to bear certain other costs (such as
deposit and withdrawal fees). Under the terms of most sponsored arrangements,
depositories agree to distribute notices of shareholder meetings and voting
instructions, and to provide shareholder communications and other information to
the ADR holders at the request of the issuer of the deposited securities. The
Theme Portfolios may invest in both sponsored and unsponsored ADRs.
 
                                        6
<PAGE>   1102
 
WARRANTS OR RIGHTS
 
   
  Warrants or rights may be acquired by a Theme Portfolio in connection with
other securities or separately and provide the Theme Portfolio with the right to
purchase at a later date other securities of the issuer. Warrants are securities
permitting, but not obligating, their holder to subscribe for other securities
or commodities. Warrants do not carry with them the right to dividends or voting
rights with respect to the securities that they entitle their holder to
purchase, and they do not represent any rights in the assets of the issuer. As a
result, warrants may be considered more speculative than certain other types of
investments. In addition, the value of a warrant does not necessarily change
with the value of the underlying securities and a warrant ceases to have value
if it is not exercised prior to its expiration date.
    
 
LENDING OF PORTFOLIO SECURITIES
 
   
  For the purpose of realizing additional income, each Theme Portfolio may make
secured loans of its securities holdings amounting to not more than 30% of its
total assets. Securities loans are made to broker/dealers or institutional
investors pursuant to agreements requiring that the loans be continuously
secured by collateral at least equal at all times to the value of the securities
lent plus any accrued interest, "marked to market" on a daily basis. The Theme
Portfolios may pay reasonable administrative and custodial fees in connection
with the loans of their securities. While the securities loan is outstanding, a
Theme Portfolio will continue to receive the equivalent of the interest or
dividends paid by the issuer on the securities, as well as interest on the
investment of the collateral or a fee from the borrower. A Theme Portfolio will
have a right to call each loan and obtain the securities within the stated
settlement period. A Theme Portfolio will not have the right to vote equity
securities while they are being lent, but it may call in a loan in anticipation
of any important vote. Loans will only be made to firms deemed by the
Sub-advisor to be of good standing and will not be made unless, in the judgment
of the Sub-advisor, the consideration to be earned from such loans would justify
the risk.
    
 
MONEY MARKET INSTRUMENTS
 
   
  Money market instruments in which the Theme Portfolios may invest include U.S.
government securities, high-grade commercial paper, bank certificates of
deposit, bankers' acceptances and repurchase agreements related to any of the
foregoing. "High-grade commercial paper" refers to commercial paper rated A-1 by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc., or P-1 by
Moody's Investors Services, Inc. or, if not rated, determined by the Sub-advisor
to be of comparable quality.
    
 
COMMERCIAL BANK OBLIGATIONS
 
  For the purposes of each Theme Portfolio's investment policies with respect to
bank obligations, obligations of foreign branches of U.S. banks and of foreign
banks are obligations of the issuing bank and may be general obligations of the
parent bank. Such obligations may, however, be limited by the terms of a
specific obligation and by government regulation. As with investments in
non-U.S. securities in general, investments in the obligations of foreign
branches of U.S. banks and of foreign banks may subject each Theme Portfolio to
investment risks that are different in some respects from those of investments
in obligations of U.S. issuers. Although each Theme Portfolio will typically
acquire obligations issued and supported by the credit of U.S. or foreign banks
having total assets at the time of purchase of $1 billion or more, this $1
billion figure is not an investment policy or restriction of each Theme
Portfolio. For the purposes of calculation with respect to the $1 billion
figure, the assets of a bank will be deemed to include the assets of its U.S.
and non-U.S. branches.
 
REPURCHASE AGREEMENTS
 
   
  A repurchase agreement is a transaction in which a Theme Portfolio purchases a
security from a bank or recognized securities dealer and simultaneously commits
to resell that security to the bank or dealer at an agreed upon price, date, and
market rate of interest unrelated to the coupon rate or maturity of the
purchased security. Although repurchase agreements carry certain risks not
associated with direct investments in securities, including possible decline in
the market value of the underlying securities and delays and costs to the Theme
Portfolio if the other party to the repurchase agreement becomes bankrupt, the
Theme Portfolios intend to enter into repurchase agreements only with banks and
dealers believed by the Sub-advisor to present minimal credit risks in
accordance with guidelines established by the Trust's or the Portfolios' Board
of Trustees, as applicable. The Sub-advisor will review and monitor the
creditworthiness of such institutions under the applicable Board's general
supervision.
    
 
  Each Theme Portfolio will invest only in repurchase agreements collateralized
at all times in an amount at least equal to the repurchase price plus accrued
interest. To the extent that the proceeds from any sale of such collateral upon
a default in the obligation to repurchase were less than the repurchase price, a
Theme Portfolio would suffer a loss. If the financial institution which is party
to the repurchase agreement petitions for bankruptcy or otherwise becomes
subject to
 
                                        7
<PAGE>   1103
 
bankruptcy or other liquidation proceedings, there may be restrictions on a
Theme Portfolio's ability to sell the collateral and a Theme Portfolio could
suffer a loss. However, with respect to financial institutions whose bankruptcy
or liquidation proceedings are subject to the U.S. Bankruptcy Code, each Theme
Portfolio intends to comply with provisions under such Code that would allow the
immediate resale of such collateral. Each Theme Portfolio will not enter into a
repurchase agreement with a maturity of more than seven days if, as a result,
more than 15% of the value of its net assets (except for Health Care Fund, more
than 10% of the value of its total assets) would be invested in such repurchase
agreements and other illiquid investments.
 
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
 
  Each Theme Portfolio's borrowings will not exceed 33 1/3% of its total assets,
i.e., the Theme Portfolio's total assets at all times will equal at least 300%
of the amount of outstanding borrowings. If market fluctuations in the value of
a Theme Portfolio's securities holdings or other factors cause the ratio of a
Theme Portfolio's total assets to outstanding borrowings to fall below 300%,
within three days (excluding Sundays and holidays) of such event that Theme
Portfolio may be required to sell portfolio securities to restore the 300% asset
coverage, even though from an investment standpoint such sales might be
disadvantageous. Each Theme Portfolio may also borrow up to 5% of its total
assets for temporary or emergency purposes other than to meet redemptions. Any
borrowing by a Theme Portfolio may cause greater fluctuation in the value of its
shares than would be the case if that Theme Portfolio did not borrow.
 
  Each Theme Portfolio's fundamental investment limitations permit the Theme
Portfolio to borrow money for leveraging purposes. However, each Theme Portfolio
(except the Health Care Fund) is currently prohibited, pursuant to a non-
fundamental investment policy, from borrowing money in order to purchase
securities. Nevertheless, this policy may be changed in the future by the
Trust's or the Portfolios' Board of Trustees, as applicable. If a Theme
Portfolio employs leverage in the future, it would be subject to certain
additional risks. Use of leverage creates an opportunity for greater growth of
capital but would exaggerate any increases or decreases in the net asset value
of the Financial Services Fund, Infrastructure Fund, Resources Fund, Consumer
Products and Services Fund or a Theme Portfolio. When the income and gains on
securities purchased with the proceeds of borrowings exceed the costs of such
borrowings, a Theme Portfolio's earnings or a Fund's net asset value will
increase faster than otherwise would be the case; conversely, if such income and
gains fail to exceed such costs, a Theme Portfolio's earnings or a Fund's net
asset value would decline faster than would otherwise be the case.
 
   
  Each Theme Portfolio may enter into reverse repurchase agreements. A reverse
repurchase agreement is a borrowing transaction in which the Portfolio transfers
possession of a security to another party, such as a bank or broker/dealer, in
return for cash, and agrees to repurchase the security in the future at an
agreed upon price, which includes an interest component. Each Theme Portfolio
may also engage in "roll" borrowing transactions, which involve the sale of
Government National Mortgage Association certificates or other securities
together with a commitment (for which the Theme Portfolio may receive a fee) to
purchase similar, but not identical, securities at a future date. Each Theme
Portfolio will segregate with a custodian, liquid assets in an amount sufficient
to cover its obligations under "roll" transactions and reverse repurchase
agreements with broker/dealers. No segregation is required for reverse
repurchase agreements with banks.
    
 
SHORT SALES
 
  Each Theme Portfolio may make short sales of securities. A short sale is a
transaction in which a Theme Portfolio sells a security in anticipation that the
market price of that security will decline. A Theme Portfolio may make short
sales (i) as a form of hedging to offset potential declines in long positions in
securities it owns, or anticipates acquiring, or in similar securities, and (ii)
in order to maintain flexibility in its securities holdings.
 
  When a Theme Portfolio makes a short sale of a security it does not own, it
must borrow the security sold short and deliver it to the broker/dealer or other
intermediary through which it made the short sale. The Theme Portfolio may have
to pay a fee to borrow particular securities and will often be obligated to pay
over any payments received on such borrowed securities.
 
  A Theme Portfolio's obligation to replace the borrowed security when the
borrowing is called or expires will be secured by collateral deposited with the
intermediary. The Theme Portfolio will also be required to deposit collateral
with its custodian to the extent, if any, necessary so that the value of both
collateral deposits in the aggregate is at all times equal to at least 100% of
the current market value of the security sold short. Depending on arrangements
made with the intermediary from which it borrowed the security regarding payment
of any amounts received by that Theme Portfolio on such security, a Theme
Portfolio may not receive any payments (including interest) on its collateral
deposited with such intermediary.
 
                                        8
<PAGE>   1104
 
  If the price of the security sold short increases between the time of the
short sale and the time a Theme Portfolio replaces the borrowed security, that
Theme Portfolio will incur a loss; conversely, if the price declines, the Theme
Portfolio will realize a gain. Any gain will be decreased, and any loss
increased, by the transaction costs associated with the transaction. Although a
Theme Portfolio's gain is limited by the price at which it sold the security
short, its potential loss theoretically is unlimited.
 
  No Theme Portfolio will make a short sale if, after giving effect to such
sale, the market value of the securities sold short exceeds 25% of the value of
its total assets or the Theme Portfolio's aggregate short sales of the
securities of any one issuer exceed the lesser of 2% of the Theme Portfolio's
net assets or 2% of the securities of any class of the issuer. Moreover, a Theme
Portfolio may engage in short sales only with respect to securities listed on a
national securities exchange. A Theme Portfolio may make short sales "against
the box" without respect to such limitations. In this type of short sale, at the
time of the sale the Theme Portfolio owns the security it has sold short or has
the immediate and unconditional right to acquire at no additional cost the
identical security.
 
                    OPTIONS, FUTURES AND CURRENCY STRATEGIES
 
SPECIAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES
 
  The use of options, futures contracts and forward currency contracts ("Forward
Contracts") involves special considerations and risks, as described below. Risks
pertaining to particular instruments are described in the sections that follow.
 
   
          (1) Successful use of most of these instruments depends upon the
     Sub-advisor's ability to predict movements of the overall securities and
     currency markets, which requires different skills than predicting changes
     in the prices of individual securities. While the Sub-advisor is
     experienced in the use of these instruments, there can be no assurance that
     any particular strategy adopted will succeed.
    
 
          (2) There might be imperfect correlation, or even no correlation,
     between price movements of an instrument and price movements of the
     investments being hedged. For example, if the value of an instrument used
     in a short hedge increased by less than the decline in value of the hedged
     investment, the hedge would not be fully successful. Such a lack of
     correlation might occur due to factors unrelated to the value of the
     investments being hedged, such as speculative or other pressures on the
     markets in which the hedging instrument is traded. The effectiveness of
     hedges using hedging instruments on indices will depend on the degree of
     correlation between price movements in the index and price movements in the
     investments being hedged.
 
   
          (3) Hedging strategies, if successful, can reduce risk of loss by
     wholly or partially offsetting the negative effect of unfavorable price
     movements in the investments being hedged. However, hedging strategies can
     also reduce opportunity for gain by offsetting the positive effect of
     favorable price movements in the hedged investments. For example, if a
     Theme Portfolio entered into a short hedge because the Sub-advisor
     projected a decline in the price of a security in the Theme Portfolio's
     portfolio, and the price of that security increased instead, the gain from
     that increase might be wholly or partially offset by a decline in the price
     of the hedging instrument. Moreover, if the price of the hedging instrument
     declined by more than the increase in the price of the security, the Theme
     Portfolio could suffer a loss. In either such case, the Theme Portfolio
     would have been in a better position had it not hedged at all.
    
 
          (4) As described below, the Theme Portfolio might be required to
     maintain assets as "cover," maintain segregated accounts or make margin
     payments when it takes positions in instruments involving obligations to
     third parties (i.e., instruments other than purchased options). If the
     Theme Portfolio were unable to close out its positions in such instruments,
     it might be required to continue to maintain such assets or accounts or
     make such payments until the position expired or matured. The requirements
     might impair the Theme Portfolio's ability to sell a portfolio security or
     make an investment at a time when it would otherwise be favorable to do so,
     or require that the Theme Portfolio sell a portfolio security at a
     disadvantageous time. The Theme Portfolio's ability to close out a position
     in an instrument prior to expiration or maturity depends on the existence
     of a liquid secondary market or, in the absence of such a market, the
     ability and willingness of the other party to the transaction ("contra
     party") to enter into a transaction closing out the position. Therefore,
     there is no assurance that any position can be closed out at a time and
     price that is favorable to the Theme Portfolio.
 
                                        9
<PAGE>   1105
 
WRITING CALL OPTIONS
 
   
  Each Theme Portfolio may write (sell) call options on securities, indices and
currencies. Call options generally will be written on securities and currencies
that, in the opinion of the Sub-advisor are not expected to make any major price
moves in the near future but that, over the long term, are deemed to be
attractive investments for the Theme Portfolios.
    
 
  A call option gives the holder (buyer) the right to purchase a security or
currency at a specified price (the exercise price) at any time until (American
style) or on (European style) a certain date (the expiration date). So long as
the obligation of the writer of a call option continues, he or she may be
assigned an exercise notice, requiring him or her to deliver the underlying
security or currency against payment of the exercise price. This obligation
terminates upon the expiration of the call option, or such earlier time at which
the writer effects a closing purchase transaction by purchasing an option
identical to that previously sold.
 
  Portfolio securities or currencies on which call options may be written will
be purchased solely on the basis of investment considerations consistent with
each Theme Portfolio's investment objective. When writing a call option, a Theme
Portfolio, in return for the premium, gives up the opportunity for profit from a
price increase in the underlying security or currency above the exercise price,
and retains the risk of loss should the price of the security or currency
decline. Unlike one who owns securities or currencies not subject to an option,
a Theme Portfolio has no control over when it may be required to sell the
underlying securities or currencies, since most options may be exercised at any
time prior to the option's expiration. If a call option that a Theme Portfolio
has written expires, the Theme Portfolio will realize a gain in the amount of
the premium; however, such gain may be offset by a decline in the market value
of the underlying security or currency during the option period. If the call
option is exercised, the Theme Portfolio will realize a gain or loss from the
sale of the underlying security or currency, which will be increased or offset
by the premium received. Each Theme Portfolio does not consider a security or
currency covered by a call option to be "pledged" as that term is used in that
Theme Portfolio's policy that limits the pledging or mortgaging of its assets.
 
  Writing call options can serve as a limited short hedge because declines in
the value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
appreciates to a price higher than the exercise price of the call option, it can
be expected that the option will be exercised and a Theme Portfolio will be
obligated to sell the security or currency at less than its market value.
 
   
  The premium that a Theme Portfolio receives for writing a call option is
deemed to constitute the market value of an option. The premium the Theme
Portfolio will receive from writing a call option will reflect, among other
things, the current market price of the underlying investment, the relationship
of the exercise price to such market price, the historical price volatility of
the underlying investment, and the length of the option period. In determining
whether a particular call option should be written, the Sub-advisor will
consider the reasonableness of the anticipated premium and the likelihood that a
liquid secondary market will exist for those options.
    
 
  Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security or currency from
being called, or to permit the sale of the underlying security or currency.
Furthermore, effecting a closing transaction will permit a Theme Portfolio to
write another call option on the underlying security or currency with either a
different exercise price or expiration date, or both.
 
  Each Theme Portfolio will pay transaction costs in connection with the writing
of options and in entering into closing purchase contracts. Transaction costs
relating to options activity are normally higher than those applicable to
purchases and sales of portfolio securities.
 
  The exercise price of the options may be below, equal to or above the current
market values of the underlying securities, indices or currencies at the time
the options are written. From time to time, a Theme Portfolio may purchase an
underlying security or currency for delivery in accordance with the exercise of
an option, rather than delivering such security or currency from its portfolio.
In such cases, additional costs will be incurred.
 
  A Theme Portfolio will realize a profit or loss from a closing purchase
transaction if the cost of the transaction is less or more, respectively, than
the premium received from writing the option. Because increases in the market
price of a call option generally will reflect increases in the market price of
the underlying security or currency, any loss resulting from the repurchase of a
call option is likely to be offset in whole or in part by appreciation of the
underlying security or currency owned by a Theme Portfolio.
 
WRITING PUT OPTIONS
 
  Each Theme Portfolio may write put options on securities, indices and
currencies. A put option gives the purchaser of the option the right to sell,
and the writer (seller) the obligation to buy, the underlying security or
currency at the
 
                                       10
<PAGE>   1106
 
exercise price at any time until (American style) or on (European style) the
expiration date. The operation of put options in other respects, including their
related risks and rewards, is substantially identical to that of call options.
 
   
  A Theme Portfolio generally would write put options in circumstances where the
Sub-advisor wishes to purchase the underlying security or currency for a Theme
Portfolio's holdings at a price lower than the current market price of the
security or currency. In such event, a Theme Portfolio would write a put option
at an exercise price that, reduced by the premium received on the option,
reflects the lower price it is willing to pay. Since the Theme Portfolio would
also receive interest on debt securities or currencies maintained to cover the
exercise price of the option, this technique could be used to enhance current
return during periods of market uncertainty. The risk in such a transaction
would be that the market price of the underlying security or currency would
decline below the exercise price less the premium received.
    
 
  Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
depreciates to a price lower than the exercise price of the put option, it can
be expected that the put option will be exercised and a Theme Portfolio will be
obligated to purchase the security or currency at greater than its market value.
 
PURCHASING PUT OPTIONS
 
  Each Theme Portfolio may purchase put options on securities, indices and
currencies. As the holder of a put option, a Theme Portfolio would have the
right to sell the underlying security or currency at the exercise price at any
time until (American style) or on (European style) the expiration date. A Theme
Portfolio may enter into closing sale transactions with respect to such options,
exercise such option or permit such option to expire.
 
  Each Theme Portfolio may purchase a put option on an underlying security or
currency ("protective put") owned by the Theme Portfolio in order to protect
against an anticipated decline in the value of the security or currency. Such
hedge protection is provided only during the life of the put option when the
Theme Portfolio, as the holder of the put option, is able to sell the underlying
security or currency at the put exercise price regardless of any decline in the
underlying security's market price or currency's exchange value. The premium
paid for the put option and any transaction costs would reduce any profit
otherwise available for distribution when the security or currency is eventually
sold.
 
  A Theme Portfolio may also purchase put options at a time when it does not own
the underlying security or currency. By purchasing put options on a security or
currency it does not own, that Theme Portfolio seeks to benefit from a decline
in the market price of the underlying security or currency. If the put option is
not sold when it has remaining value, and if the market price of the underlying
security or currency remains equal to or greater than the exercise price during
the life of the put option, the Theme Portfolio will lose its entire investment
in the put option. In order for the purchase of a put option to be profitable,
the market price of the underlying security or currency must decline
sufficiently below the exercise price to cover the premium and transaction
costs, unless the put option is sold in a closing sale transaction.
 
PURCHASING CALL OPTIONS
 
  Each Theme Portfolio may purchase call options on securities, indices and
currencies. As the holder of a call option, the Theme Portfolio would have the
right to purchase the underlying security or currency at the exercise price at
any time until (American style) or on (European style) the expiration date. A
Theme Portfolio may enter into closing sale transactions with respect to such
options, exercise such options or permit such options to expire.
 
  Call options may be purchased by a Theme Portfolio for the purpose of
acquiring the underlying security or currency for its portfolio. Utilized in
this fashion, the purchase of call options would enable a Theme Portfolio to
acquire the security or currency at the exercise price of the call option plus
the premium paid. At times, the net cost of acquiring the security or currency
in this manner may be less than the cost of acquiring the security or currency
directly. This technique may also be useful to a Theme Portfolio in purchasing a
large block of securities that would be more difficult to acquire by direct
market purchases. So long as it holds such a call option, rather than the
underlying security or currency itself, the Theme Portfolio is partially
protected from any unexpected decline in the market price of the underlying
security or currency and, in such event, could allow the call option to expire,
incurring a loss only to the extent of the premium paid for the option.
 
  A Theme Portfolio may also purchase call options on underlying securities or
currencies it owns to avoid realizing losses that would result in a reduction of
its current return. For example, where a Theme Portfolio has written a call
option on an underlying security or currency having a current market value below
the price at which it purchased the security or currency, an increase in the
market price could result in the exercise of the call option written by the
Theme Portfolio and the realization of a loss on the underlying security or
currency. Accordingly, the Theme Portfolio could purchase a call option on the
same underlying security or currency, which could be exercised to fulfill the
Theme
 
                                       11
<PAGE>   1107
 
Portfolio's delivery obligations under its written call (if it is exercised).
This strategy could allow the Theme Portfolio to avoid selling the portfolio
security or currency at a time when it has an unrealized loss; however, the
Theme Portfolio would have to pay a premium to purchase the call option plus
transaction costs.
 
  Aggregate premiums paid for put and call options will not exceed 5% of each
Theme Portfolio's total assets at the time of each purchase.
 
  A Theme Portfolio may attempt to accomplish objectives similar to those
involved in using Forward Contracts, by purchasing put or call options on
currencies. A put option gives the Theme Portfolio as purchaser the right (but
not the obligation) to sell a specified amount of currency at the exercise price
at any time until (American style) or on (European style) the expiration date of
the option. A call option gives the Theme Portfolio as purchaser the right (but
not the obligation) to purchase a specified amount of currency at the exercise
price at any time until (American style) or on (European style) the expiration
date of the option. A Theme Portfolio might purchase a currency put option, for
example, to protect itself against a decline in the dollar value of a currency
in which it holds or anticipates holding securities. If the currency's value
should decline against the dollar, the loss in currency value should be offset,
in whole or in part, by an increase in the value of the put. If the value of the
currency instead should rise against the dollar, any gain to a Theme Portfolio
would be reduced by the premium it had paid for the put option. A currency call
option might be purchased, for example, in anticipation of, or to protect
against, a rise in the value against the dollar of a currency in which a Theme
Portfolio anticipates purchasing securities.
 
  Options may be either listed on an exchange or traded in over-the-counter
("OTC") markets. Listed options are third-party contracts (i.e., performance of
the obligations of the purchaser and seller is guaranteed by the exchange or
clearing corporation) and have standardized strike prices and expiration dates.
OTC options are two-party contracts with negotiated strike prices and expiration
dates. A Theme Portfolio will not purchase an OTC option unless it believes that
daily valuations for such options are readily obtainable. OTC options differ
from exchange-traded options in that OTC options are transacted with dealers
directly and not through a clearing corporation (which guarantees performance).
Consequently, there is a risk of non-performance by the dealer. Since no
exchange is involved, OTC options are valued on the basis of an average of the
last bid prices obtained from dealers, unless a quotation from only one dealer
is available, in which case only that dealer's price will be used. In the case
of OTC options, there can be no assurance that a liquid secondary market will
exist for any particular option at any specific time.
 
  The staff of the SEC considers purchased OTC options to be illiquid
securities. A Theme Portfolio may also sell OTC options and, in connection
therewith, segregate assets or cover its obligations with respect to OTC options
written by the Theme Portfolio. The assets used as cover for OTC options written
by a Theme Portfolio will be considered illiquid unless the OTC options are sold
to qualified dealers who agree that the Theme Portfolio may repurchase any OTC
option it writes at a maximum price to be calculated by a formula set forth in
the option agreement. The cover for an OTC option written subject to this
procedure would be considered illiquid only to the extent that the maximum
repurchase price under the formula exceeds the intrinsic value of the option.
 
  A Theme Portfolio's ability to establish and close out positions in
exchange-listed options depends on the existence of a liquid market. A Theme
Portfolio intends to purchase or write only those exchange-traded options for
which there appears to be a liquid secondary market. However, there can be no
assurance that such a market will exist at any particular time. Closing
transactions can be made for OTC options only by negotiating directly with the
contra party or by a transaction in the secondary market if any such market
exists. Although a Theme Portfolio will enter into OTC options only with contra
parties that are expected to be capable of entering into closing transactions
with the Theme Portfolio, there is no assurance that the Theme Portfolio will in
fact be able to close out an OTC option position at a favorable price prior to
expiration. In the event of insolvency of the contra party, the Theme Portfolio
might be unable to close out an OTC option position at any time prior to its
expiration.
 
INDEX OPTIONS
 
  Puts and calls on indices are similar to puts and calls on securities or
futures contracts except that all settlements are in cash and gain or loss
depends on changes in the index in question (and thus on price movements in the
securities market or a particular market sector generally) rather than on price
movements in individual securities or futures contracts. When a Theme Portfolio
writes a call on an index, it receives a premium and agrees that, prior to the
expiration date, the purchaser of the call, upon exercise of the call, will
receive from the Theme Portfolio an amount of cash if the closing level of the
index upon which the call is based is greater than the exercise price of the
call. The amount of cash is equal to the difference between the closing price of
the index and the exercise price of the call times a specified multiple (the
"multiplier"), which determines the total dollar value for each point of such
difference. When a Theme Portfolio buys a call on an index, it pays a premium
and has the same rights as to such call as are indicated above. When a Theme
Portfolio
 
                                       12
<PAGE>   1108
 
buys a put on an index, it pays a premium and has the right, prior to the
expiration date, to require the seller of the put, upon the Theme Portfolio's
exercise of the put, to deliver to the Theme Portfolio an amount of cash if the
closing level of the index upon which the put is based is less than the exercise
price of the put, which amount of cash is determined by the multiplier, as
described above for calls. When the Theme Portfolio writes a put on an index, it
receives a premium and the purchaser has the right, prior to the expiration
date, to require the Theme Portfolio to deliver to it an amount of cash equal to
the difference between the closing level of the index and the exercise price
times the multiplier, if the closing level is less than the exercise price.
 
  The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Theme Portfolio
writes a call on an index it cannot provide in advance for its potential
settlement obligations by acquiring and holding the underlying securities. A
Theme Portfolio can offset some of the risk of writing a call index option
position by holding a diversified portfolio of securities similar to those on
which the underlying index is based. However, a Theme Portfolio cannot, as a
practical matter, acquire and hold a portfolio containing exactly the same
securities as underlie the index and, as a result, bears a risk that the value
of the securities held will vary from the value of the index.
 
  Even if a Theme Portfolio could assemble a securities portfolio that exactly
reproduced the composition of the underlying index, it still would not be fully
covered from a risk standpoint because of the "timing risk" inherent in writing
index options. When an index option is exercised, the amount of cash that the
holder is entitled to receive is determined by the difference between the
exercise price and the closing index level on the date when the option is
exercised. As with other kinds of options, the Theme Portfolio, as the call
writer, will not know that it has been assigned until the next business day at
the earliest. The time lag between exercise and notice of assignment poses no
risk for the writer of a covered call on a specific underlying security, such as
common stock, because there the writer's obligation is to deliver the underlying
security, not to pay its value as of a fixed time in the past. So long as the
writer already owns the underlying security, it can satisfy its settlement
obligations by simply delivering it, and the risk that its value may have
declined since the exercise date is borne by the exercising holder. In contrast,
even if the writer of an index call holds securities that exactly match the
composition of the underlying index, it will not be able to satisfy its
assignment obligations by delivering those securities against payment of the
exercise price. Instead, it will be required to pay cash in an amount based on
the closing index value on the exercise date; and by the time it learns that it
has been assigned, the index may have declined, with a corresponding decline in
the value of its securities portfolio. This "timing risk" is an inherent
limitation on the ability of index call writers to cover their risk exposure by
holding securities positions.
 
  If a Theme Portfolio purchases an index option and exercises it before the
closing index value for that day is available, it runs the risk that the level
of the underlying index may subsequently change. If such a change causes the
exercised option to fall out-of-the-money, the Theme Portfolio will be required
to pay the difference between the closing index value and the exercise price of
the option (times the applicable multiplier) to the assigned writer.
 
INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES CONTRACTS
 
  Each Theme Portfolio may enter into interest rate or currency futures
contracts, and may enter into stock index futures contracts (collectively,
"Futures" or "Futures Contracts"), as a hedge against changes in prevailing
levels of interest rates, currency exchange rates or stock price levels in order
to establish more definitely the effective return on securities or currencies
held or intended to be acquired by the Theme Portfolio. A Theme Portfolio's
hedging may include sales of Futures as an offset against the effect of expected
increases in interest rates, and decreases in currency exchange rates and stock
prices, and purchases of Futures as an offset against the effect of expected
declines in interest rates, and increases in currency exchange rates or stock
prices.
 
  Each Theme Portfolio only will enter into Futures Contracts that are traded on
futures exchanges and are standardized as to maturity date and underlying
financial instrument. Futures exchanges and trading thereon in the United States
are regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC"). Futures are exchanged in London at the London International
Financial Futures Exchange.
 
  Although techniques other than sales and purchases of Futures Contracts could
be used to reduce a Theme Portfolio's exposure to interest rate, currency
exchange rate and stock market fluctuations, that Theme Portfolio may be able to
hedge its exposure more effectively and at a lower cost through using Futures
Contracts.
 
  A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument (security
or currency) for a specified price at a designated date, time and place. A stock
index Futures Contract provides for the delivery, at a designated date, time and
place, of an amount of cash equal to a specified dollar amount times the
difference between the stock index value at the close of trading on the contract
and the price at which the Futures Contract is originally struck; no physical
delivery of stocks comprising the index is made. Brokerage
 
                                       13
<PAGE>   1109
 
fees are incurred when a Futures Contract is bought or sold, and margin deposits
must be maintained at all times the Futures Contract is outstanding.
 
  Although Futures Contracts typically require future delivery of and payment
for financial instruments or currencies, Futures Contracts usually are closed
out before the delivery date. Closing out an open Futures Contract sale or
purchase is effected by entering into an offsetting Futures Contract purchase or
sale, respectively, for the same aggregate amount of the identical financial
instrument or currency and the same delivery date. If the offsetting purchase
price is less than the original sale price, the Theme Portfolio realizes a gain;
if it is more, the Theme Portfolio realizes a loss. Conversely, if the
offsetting sale price is more than the original purchase price, the Theme
Portfolio realizes a gain; if it is less, the Theme Portfolio realizes a loss.
The transaction costs must also be included in these calculations. There can be
no assurance, however, that a Theme Portfolio will be able to enter into an
offsetting transaction with respect to a particular Futures Contract at a
particular time. If a Theme Portfolio is not able to enter into an offsetting
transaction, that Theme Portfolio will continue to be required to maintain the
margin deposits on the Futures Contract.
 
  As an example of an offsetting transaction, the contractual obligations
arising from the sale of one Futures Contract of September Deutschemarks on an
exchange may be fulfilled at any time before delivery under the Futures Contract
is required (i.e., on a specified date in September, the "delivery month") by
the purchase of another Futures Contract of September Deutschemarks on the same
exchange. In such instance, the difference between the price at which the
Futures Contract was sold and the price paid for the offsetting purchase, after
allowance for transaction costs, represents the profit or loss to the Theme
Portfolio.
 
  Each Theme Portfolio's Futures transactions will be entered into for hedging
purposes only; that is, Futures Contracts will be sold to protect against a
decline in the price of securities or currencies that a Theme Portfolio owns, or
Futures Contracts will be purchased to protect a Theme Portfolio against an
increase in the price of securities or currencies it has committed to purchase
or expects to purchase.
 
  "Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by a Theme Portfolio in order to initiate Futures trading and maintain
the Theme Portfolio's open positions in Futures Contracts. A margin deposit made
when the Futures Contract is entered into ("initial margin") is intended to
ensure the Theme Portfolio's performance under the Futures Contract. The margin
required for a particular Futures Contract is set by the exchange on which the
Futures Contract is traded and may be significantly modified from time to time
by the exchange during the term of the Futures Contract.
 
  Subsequent payments, called "variation margin," to and from the futures
commission merchant through which the Theme Portfolio entered into the Futures
Contract will be made on a daily basis as the price of the underlying security,
currency or index fluctuates making the Futures Contract more or less valuable,
a process known as marking-to-market.
 
  Risks of Using Futures Contracts. The prices of Futures Contracts are volatile
and are influenced by, among other things, actual and anticipated changes in
interest rates and currency exchange rates, and in stock market movements, which
in turn are affected by fiscal and monetary policies and national and
international political and economic events.
 
  There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities or currencies in a Theme Portfolio's
portfolio being hedged. The degree of imperfection of correlation depends upon
circumstances such as variations in speculative market demand for Futures and
for securities or currencies, including technical influences in Futures trading;
and differences between the financial instruments being hedged and the
instruments underlying the standard Futures Contracts available for trading. A
decision of whether, when and how to hedge involves skill and judgment, and even
a well-conceived hedge may be unsuccessful to some degree because of unexpected
market behavior or interest or currency rate trends.
 
  Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
 
  Most U.S. Futures exchanges limit the amount of fluctuation permitted in
Futures Contract and options on Futures Contracts prices during a single trading
day. The daily limit establishes the maximum amount that the price of a Futures
Contract or option may vary either up or down from the previous day's settlement
price at the end of a trading session. Once the daily limit has been reached in
a particular type of Futures Contract or option, no trades may be made on that
day at a price beyond that limit. The daily limit governs only price movement
during a particular trading day and therefore
 
                                       14
<PAGE>   1110
 
does not limit potential losses, because the limit may prevent the liquidation
of unfavorable positions. Futures Contract and option prices have occasionally
moved to the daily limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of positions and subjecting some
traders to substantial losses.
 
  If a Theme Portfolio were unable to liquidate a Futures or option on Futures
position due to the absence of a liquid secondary market or the imposition of
price limits, it could incur substantial losses. The Theme Portfolio would
continue to be subject to market risk with respect to the position. In addition,
except in the case of purchased options, the Theme Portfolio would continue to
be required to make daily variation margin payments and might be required to
maintain the position being hedged by the Future or option or to maintain cash
or securities in a segregated account.
 
  Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit requirements in the Futures market are less
onerous than margin requirements in the securities markets, there might be
increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
 
OPTIONS ON FUTURES CONTRACTS
 
  Options on Futures Contracts are similar to options on securities or
currencies except that options on Futures Contracts give the purchaser the
right, in return for the premium paid, to assume a position in a Futures
Contract (a long position if the option is a call and a short position if the
option is a put) at a specified exercise price at any time during the period of
the option. Upon exercise of the option, the delivery of the Futures position by
the writer of the option to the holder of the option will be accompanied by
delivery of the accumulated balance in the writer's Futures margin account,
which represents the amount by which the market price of the Futures Contract,
at exercise, exceeds (in the case of a call) or is less than (in the case of a
put) the exercise price of the option on the Futures Contract. If an option is
exercised on the last trading day prior to the expiration date of the option,
the settlement will be made entirely in cash equal to the difference between the
exercise price of the option and the closing level of the securities, currencies
or index upon which the Futures Contract is based on the expiration date.
Purchasers of options who fail to exercise their options prior to the exercise
date suffer a loss of the premium paid.
 
  The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities, foreign currencies or indices.
 
  If a Theme Portfolio writes an option on a Futures Contract, it will be
required to deposit initial and variation margin pursuant to requirements
similar to those applicable to Futures Contracts. Premiums received from the
writing of an option on a Futures Contract are included in the initial margin
deposit.
 
  A Theme Portfolio may seek to close out an option position by selling an
option covering the same Futures Contract and having the same exercise price and
expiration date. The ability to establish and close out positions on such
options is subject to the maintenance of a liquid secondary market.
 
LIMITATIONS ON USE OF FUTURES, OPTIONS ON FUTURES AND CERTAIN OPTIONS ON
CURRENCIES
 
  To the extent that a Theme Portfolio enters into Futures Contracts, options on
Futures Contracts, and options on foreign currencies traded on a CFTC-regulated
exchange, in each case other than for bona fide hedging purposes (as defined by
the CFTC), the aggregate initial margin and premiums required to establish those
positions (excluding the amount by which options are "in-the-money") will not
exceed 5% of the liquidation value of the Theme Portfolio, after taking into
account unrealized profits and unrealized losses on any contracts the Theme
Portfolio has entered into. In general, a call option on a Futures Contract is
"in-the-money" if the value of the underlying Futures Contract exceeds the
strike, i.e., exercise, price of the call; a put option on a Futures Contract is
"in-the-money" if the value of the underlying Futures Contract is exceeded by
the strike price of the put. This guideline may be modified by the Trust's Board
of Trustees and the Portfolio's Board of Trustees, as applicable, without a
shareholder vote. This limitation does not limit the percentage of a Theme
Portfolio's assets at risk to 5%.
 
                                       15
<PAGE>   1111
 
FORWARD CONTRACTS
 
  A Forward Contract is an obligation, usually arranged with a commercial bank
or other currency dealer, to purchase or sell a currency against another
currency at a future date and price as agreed upon by the parties. A Theme
Portfolio either may accept or make delivery of the currency at the maturity of
the Forward Contract. A Theme Portfolio may also, if its contra party agrees
prior to maturity, enter into a closing transaction involving the purchase or
sale of an offsetting contract.
 
  A Theme Portfolio engages in forward currency transactions in anticipation of,
or to protect itself against, fluctuations in exchange rates. A Theme Portfolio
might sell a particular foreign currency forward, for example, when it holds
bonds denominated in a foreign currency but anticipates, and seeks to be
protected against, a decline in the currency against the U.S. dollar. Similarly,
a Theme Portfolio might sell the U.S. dollar forward when it holds bonds
denominated in U.S. dollars but anticipates, and seeks to be protected against,
a decline in the U.S. dollar relative to other currencies. Further, a Theme
Portfolio might purchase a currency forward to "lock in" the price of securities
denominated in that currency that it anticipates purchasing.
 
  Forward Contracts are traded in the interbank market conducted directly
between currency traders (usually large commercial banks) and their customers. A
Forward Contract generally has no deposit requirement, and no commissions are
charged at any stage for trades. Each Theme Portfolio will enter into such
Forward Contracts with major U.S. or foreign banks and securities or currency
dealers in accordance with guidelines approved by the Trust's or the Portfolios'
Board of Trustees, as applicable.
 
  A Theme Portfolio may enter into Forward Contracts either with respect to
specific transactions or with respect to overall investments of that Theme
Portfolio. The precise matching of the Forward Contract amounts and the value of
specific securities generally will not be possible because the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the Forward Contract
is entered into and the date it matures. Accordingly, it may be necessary for
that Theme Portfolio to purchase additional foreign currency on the spot (i.e.,
cash) market (and bear the expense of such purchase) if the market value of the
security is less than the amount of foreign currency the Theme Portfolio is
obligated to deliver and if a decision is made to sell the security and make
delivery of the foreign currency. Conversely, it may be necessary to sell on the
spot market some of the foreign currency the Theme Portfolio is obligated to
deliver. The projection of short-term currency market movements is extremely
difficult, and the successful execution of a short-term hedging strategy is
highly uncertain. Forward Contracts involve the risk that anticipated currency
movements will not be predicted accurately, causing a Theme Portfolio to sustain
losses on these contracts and transaction costs.
 
  At or before the maturity of a Forward Contract requiring a Theme Portfolio to
sell a currency, that Theme Portfolio either may sell a security and use the
sale proceeds to make delivery of the currency or retain the security and offset
its contractual obligation to deliver the currency by purchasing a second
contract pursuant to which the Theme Portfolio will obtain, on the same maturity
date, the same amount of the currency that it is obligated to deliver.
Similarly, a Theme Portfolio may close out a Forward Contract requiring it to
purchase a specified currency by entering into a second contract, if its contra
party agrees, entitling it to sell the same amount of the same currency on the
maturity date of the first contract. A Theme Portfolio would realize a gain or
loss as a result of entering into such an offsetting Forward Contract under
either circumstance to the extent the exchange rate or rates between the
currencies involved moved between the execution dates of the first contract and
the offsetting contract.
 
  The cost to a Theme Portfolio of engaging in Forward Contracts varies with
factors such as the currencies involved, the length of the contract period and
the market conditions then prevailing. Because Forward Contracts are usually
entered into on a principal basis, no fees or commissions are involved. The use
of Forward Contracts does not eliminate fluctuations in the prices of the
underlying securities a Theme Portfolio owns or intends to acquire, but it does
establish a rate of exchange in advance. In addition, while Forward Contract
sales limit the risk of loss due to a decline in the value of the hedged
currencies, they also limit any potential gain that might result should the
value of the currencies increase.
 
FOREIGN CURRENCY STRATEGIES -- SPECIAL CONSIDERATIONS
 
  A Theme Portfolio may use options on foreign currencies, Futures on foreign
currencies, options on Futures on foreign currencies and Forward Contracts to
hedge against movements in the values of the foreign currencies in which the
Theme Portfolio's securities are denominated. Such currency hedges can protect
against price movements in a security that the Theme Portfolio owns or intends
to acquire that are attributable to changes in the value of the currency in
which it is denominated. Such hedges do not, however, protect against price
movements in the securities that are attributable to other causes.
 
                                       16
<PAGE>   1112
 
   
  A Theme Portfolio might seek to hedge against changes in the value of a
particular currency when no Futures Contract, Forward Contract or option
involving that currency is available or one of such contracts is more expensive
than certain other contracts. In such cases, the Theme Portfolio may hedge
against price movements in that currency by entering into a contract on another
currency or basket of currencies, the values of which the Sub-advisor believes
will have a positive correlation to the value of the currency being hedged. The
risk that movements in the price of the contract will not correlate perfectly
with movements in the price of the currency being hedged is magnified when this
strategy is used.
    
 
  The value of Futures Contracts, options on Futures Contracts, Forward
Contracts and options on foreign currencies depends on the value of the
underlying currency relative to the U.S. dollar. Because foreign currency
transactions occurring in the interbank market might involve substantially
larger amounts than those involved in the use of Futures Contracts, Forward
Contracts or options, the Theme Portfolio could be disadvantaged by dealing in
the odd lot market (generally consisting of transactions of less than $1
million) for the underlying foreign currencies at prices that are less favorable
than for round lots.
 
  There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirements that quotations available through
dealers or other market sources be firm or revised on a timely basis. Quotation
information generally is representative of very large transactions in the
interbank market and thus might not reflect odd-lot transactions where rates
might be less favorable. The interbank market in foreign currencies is a global,
round-the-clock market. To the extent the U.S. options or Futures markets are
closed while the markets for the underlying currencies remain open, significant
price and rate movements might take place in the underlying markets that cannot
be reflected in the markets for the Futures contracts or options until they
reopen.
 
  Settlement of Futures Contracts, Forward Contracts and options involving
foreign currencies might be required to take place within the country issuing
the underlying currency. Thus, the Theme Portfolio might be required to accept
or make delivery of the underlying foreign currency in accordance with any U.S.
or foreign regulations regarding the maintenance of foreign banking arrangements
by U.S. residents and might be required to pay any fees, taxes and charges
associated with such delivery assessed in the issuing country.
 
COVER
 
  Transactions using Forward Contracts, Futures Contracts and options (other
than options purchased by a Theme Portfolio) expose the Theme Portfolio to an
obligation to another party. A Theme Portfolio will not enter into any such
transactions unless it owns either (1) an offsetting ("covered") position in
securities, currencies, or other options, Forward Contracts or Futures
Contracts, or (2) cash, receivables and short-term debt securities with a value
sufficient at all times to cover its potential obligations not covered as
provided in (1) above. Each Theme Portfolio will comply with SEC guidelines
regarding cover for these instruments and, if the guidelines so require, set
aside cash or liquid securities.
 
  Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Forward Contract, Futures Contract or option is
open, unless they are replaced with other appropriate assets. If a large portion
of a Theme Portfolio's assets is used for cover or otherwise set aside, it could
affect portfolio management or the Theme Portfolio's ability to meet redemption
requests or other current obligations.
 
                                  RISK FACTORS
 
ILLIQUID SECURITIES
 
  Each Theme Portfolio may invest up to 15% of its net assets in illiquid
securities. Securities may be considered illiquid if a Theme Portfolio cannot
reasonably expect within seven days to sell the securities for approximately the
amount at which that Theme Portfolio values such securities. See "Investment
Limitations." The sale of illiquid securities, if they can be sold at all,
generally will require more time and result in higher brokerage charges or
dealer discounts and other selling expenses than will the sale of liquid
securities such as securities eligible for trading on U.S. securities exchanges
or in OTC markets. Moreover, restricted securities, which may be illiquid for
purposes of this limitation, often sell, if at all, at a price lower than
similar securities that are not subject to restrictions on resale.
 
  Illiquid securities include those that are subject to restrictions contained
in the securities laws of other countries. However, securities that are freely
marketable in the country where they are principally traded, but would not be
freely marketable in the United States, will not be considered illiquid. Where
registration is required, a Theme Portfolio may be obligated to pay all or part
of the registration expenses and a considerable period may elapse between the
time of the decision to sell and the time the Theme Portfolio may be permitted
to sell a security under an effective registration
 
                                       17
<PAGE>   1113
 
statement. If, during such a period, adverse market conditions were to develop,
the Theme Portfolio might obtain a less favorable price than prevailed when it
decided to sell.
 
  Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the Securities Act of 1933, as amended ("1933 Act"), including
private placements, repurchase agreements, commercial paper, foreign securities
and corporate bonds and notes. These instruments are often restricted securities
because the securities are sold in transactions not requiring registration.
Institutional investors generally will not seek to sell these instruments to the
general public, but instead will often depend either on an efficient
institutional market in which such unregistered securities can be readily resold
or on an issuer's ability to honor a demand for repayment. Therefore, the fact
that there are contractual or legal restrictions on resale to the general public
or certain institutions is not dispositive of the liquidity of such investments.
 
  Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of unregistered securities of domestic and foreign
issuers, such as the PORTAL System sponsored by the National Association of
Securities Dealers, Inc. An insufficient number of qualified institutional
buyers interested in purchasing Rule 144A-eligible restricted securities held by
a Theme Portfolio, however, could affect adversely the marketability of such
portfolio securities and the Theme Portfolio might be unable to dispose of such
securities promptly or at favorable prices.
 
   
  With respect to liquidity determinations generally, the Trust's or the
Portfolios' Board of Trustees, as applicable, has the ultimate responsibility
for determining whether specific securities, including restricted securities
pursuant to Rule 144A under the 1933 Act, are liquid or illiquid. Each Board has
delegated the function of making day-to-day determinations of liquidity to the
Sub-advisor, in accordance with procedures approved by that Board. The
Sub-advisor takes into account a number of factors in reaching liquidity
decisions, including, but not limited to, (i) the frequency of trading in the
security; (ii) the number of dealers that make quotes for the security; (iii)
the number of dealers that have undertaken to make a market in the security;
(iv) the number of other potential purchasers; and (v) the nature of the
security and how trading is effected (e.g., the time needed to sell the
security, how offers are solicited and the mechanics of transfer). The Sub-
advisor monitors the liquidity of securities held by each Theme Portfolio and
periodically reports such determinations to the Trust's or the Portfolios' Board
of Trustees, as applicable. If the liquidity percentage restriction of a Theme
Portfolio is satisfied at the time of investment, a later increase in the
percentage of illiquid securities held by the Theme Portfolio resulting from a
change in market value or assets will not constitute a violation of that
restriction. If as a result of a change in market value or assets, the
percentage of illiquid securities held by the Theme Portfolio increases above
the applicable limit, the Sub-advisor will take appropriate steps to bring the
aggregate amount of illiquid assets back within the prescribed limitations as
soon as reasonably practicable, taking into account the effect of any
disposition on the Theme Portfolio.
    
 
FOREIGN SECURITIES
 
  Political, Social and Economic Risks. Investing in securities of non-U.S.
companies may entail additional risks due to the potential political, social and
economic instability of certain countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment convertibility of currencies into U.S. dollars and on repatriation of
capital invested. In the event of such expropriation, nationalization or other
confiscation by any country, a Theme Portfolio could lose its entire investment
in any such country.
 
  Religious, Political and Ethnic Instability. Certain countries in which a
Theme Portfolio may invest may have groups that advocate radical religious or
revolutionary philosophies or support ethnic independence. Any disturbance on
the part of such individuals could carry the potential for widespread
destruction or confiscation of property owned by individuals and entities
foreign to such country and could cause the loss of a Theme Portfolio's
investment in those countries. Instability may also result from, among other
things: (i) authoritarian governments or military involvement in political and
economic decision-making, including changes in government through
extra-constitutional means; (ii) popular unrest associated with demands for
improved political, economic and social conditions; and (iii) hostile relations
with neighboring or other countries. Such political, social and economic
instability could disrupt the principal financial markets in which a Theme
Portfolio invests and adversely affect the value of a Theme Portfolio's assets.
 
  Foreign Investment Restrictions. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as a Theme Portfolio. These
restrictions or controls may at times limit or preclude investment in certain
securities and may increase the cost and expenses of a
 
                                       18
<PAGE>   1114
 
Theme Portfolio. For example, certain countries require prior governmental
approval before investments by foreign persons may be made, or may limit the
amount of investment by foreign persons in a particular company or limit the
investment by foreign persons to only a specific class of securities of a
company that may have less advantageous terms than securities of the company
available for purchase by nationals. Moreover, the national policies of certain
countries may restrict investment opportunities in issuers or industries deemed
sensitive to national interests. In addition, some countries require
governmental approval for the repatriation of investment income, capital or the
proceeds of securities sales by foreign investors. In addition, if there is a
deterioration in a country's balance of payments or for other reasons, a country
may impose restrictions on foreign capital remittances abroad. A Theme Portfolio
could be adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation, as well as by the application to it of
other restrictions on investments.
 
   
  Non-Uniform Corporate Disclosure Standards and Governmental
Regulation. Foreign companies are subject to accounting, auditing and financial
standards and requirements that differ, in some cases significantly, from those
applicable to U.S. companies. In particular, the assets, liabilities and profits
appearing on the financial statements of such a company may not reflect its
financial position or results of operations in the way they would be reflected
had such financial statements been prepared in accordance with U.S. generally
accepted accounting principles. Most of the foreign securities held by a Theme
Portfolio will not be registered with the SEC or regulators of any foreign
country, nor will the issuers thereof be subject to the SEC's reporting
requirements. Thus, there will be less available information concerning most
foreign issuers of securities held by a Theme Portfolio than is available
concerning U.S. issuers. In instances where the financial statements of an
issuer are not deemed to reflect accurately the financial situation of the
issuer, the Sub-advisor will take appropriate steps to evaluate the proposed
investment, which may include on-site inspection of the issuer, interviews with
its management and consultations with accountants, bankers and other
specialists. There is substantially less publicly available information about
foreign companies than there are reports and ratings published about U.S.
companies and the U.S. government. In addition, where public information is
available, it may be less reliable than such information regarding U.S. issuers.
Issuers of securities in foreign jurisdictions are generally not subject to the
same degree of regulation as are U.S. issuers with respect to such matters as
restrictions on market manipulation, insider trading rules, shareholder proxy
requirements and timely disclosure of information.
    
 
  Currency Fluctuations. Because each Theme Portfolio, under normal
circumstances, will invest a substantial portion of its total assets in the
securities of foreign issuers which are denominated in foreign currencies, the
strength or weakness of the U.S. dollar against such foreign currencies will
account for part of a Theme Portfolio's investment performance. A decline in the
value of any particular currency against the U.S. dollar will cause a decline in
the U.S. dollar value of that Theme Portfolio's holdings of securities and cash
denominated in such currency and, therefore, will cause an overall decline in
the appropriate Fund's net asset value and any net investment income and capital
gains derived from such securities to be distributed in U.S. dollars to
shareholders of that Fund. Moreover, if the value of the foreign currencies in
which a Theme Portfolio receives its income falls relative to the U.S. dollar
between receipt of the income and the making of Theme Portfolio distributions,
the Theme Portfolio may be required to liquidate securities in order to make
distributions if the Theme Portfolio has insufficient cash in U.S. dollars to
meet distribution requirements.
 
  The rate of exchange between the U.S. dollar and other currencies is
determined by several factors, including the supply and demand for particular
currencies, central bank efforts to support particular currencies, the relative
movement of interest rates and the pace of business activity in the other
countries and the United States, and other economic and financial conditions
affecting the world economy.
 
  Although each Theme Portfolio values its assets daily in terms of U.S.
dollars, the Portfolios do not intend to convert their holdings of foreign
currencies into U.S. dollars on a daily basis. Each Portfolio will do so, from
time to time, and investors should be aware of the costs of currency conversion.
Although foreign exchange dealers do not charge a fee for conversion, they do
realize a profit based on the difference ("spread") between the prices at which
they buy and sell various currencies. Thus, a dealer may offer to sell a foreign
currency to a Portfolio at one rate, while offering a lesser rate of exchange
should a Portfolio desire to sell that currency to the dealer.
 
  Adverse Market Characteristics. Securities of many foreign issuers may be less
liquid and their prices more volatile than securities of comparable U.S.
issuers. In addition, foreign securities markets and brokers generally are
subject to less governmental supervision and regulation than in the United
States, and foreign securities transactions usually are subject to fixed
commissions, which generally are higher than negotiated commissions on U.S.
transactions. In addition, foreign securities transactions may be subject to
difficulties associated with the settlement of such transactions. Delays in
settlement could result in temporary periods when assets of a Theme Portfolio
are uninvested and no return is earned thereon. The inability of a Theme
Portfolio to make intended security purchases due to settlement problems could
cause that Theme Portfolio to miss attractive investment opportunities.
Inability to dispose of a portfolio security due to settlement problems either
could result in losses to that Theme Portfolio due to subsequent declines in
value of the
 
                                       19
<PAGE>   1115
 
   
portfolio security or, if that Theme Portfolio has entered into a contract to
sell the security, could result in possible liability to the purchaser. The
Sub-advisor will consider such difficulties when determining the allocation of a
Theme Portfolio's assets, although the Sub-advisor does not believe that such
difficulties will have a material adverse effect on a Theme Portfolio's
portfolio trading activities.
    
 
  Each Theme Portfolio may use foreign custodians, which may involve risks in
addition to those related to its use of U.S. custodians. Such risks include
uncertainties relating to determining and monitoring the foreign custodian's
financial strength, reputation and standing; maintaining appropriate safeguards
concerning that Theme Portfolio's investments; and possible difficulties in
obtaining and enforcing judgments against such custodians.
 
  Withholding Taxes. Each Theme Portfolio's net investment income from foreign
issuers may be subject to withholding taxes by the foreign issuer's country,
thereby reducing that income or delaying the receipt of income when those taxes
may be recaptured. See "Taxes."
 
  Concentration. To the extent a Theme Portfolio invests a significant portion
of its assets in securities of issuers located in a particular country or region
of the world, such Portfolio may be subject to greater risks and may experience
greater volatility than a fund that is more broadly diversified geographically.
 
   
  Special Considerations Affecting Western European Countries. The countries
that are members of the European Economic Community ("Common Market")
(Australia, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, Netherlands, Portugal, Spain, Sweden and the United Kingdom)
eliminated certain import tariffs and quotas and other trade barriers with
respect to one another over the past several years. The Sub-advisor believes
that this deregulation should improve the prospects for economic growth in many
Western European countries. Among other things, the deregulation could enable
companies domiciled in one country to avail themselves of lower labor costs
existing in other countries. In addition, this deregulation could benefit
companies domiciled in one country by opening additional markets for their goods
and services in other countries. Since, however, it is not clear what the exact
form or effect of these Common Market reforms will be on business in Western
Europe, it is impossible to predict the long-term impact of the implementation
of these programs on the securities owned by a Theme Portfolio.
    
 
  Special Considerations Affecting Russia and Eastern European
Countries. Investing in Russia and Eastern European countries involves a high
degree of risk and special considerations not typically associated with
investing in the United States securities markets, and should be considered
highly speculative. Such risks include: (1) delays in settling portfolio
transactions and risk of loss arising out of the system of share registration
and custody; (2) the risk that it may be impossible or more difficult than in
other countries to obtain and/or enforce a judgement; (3) pervasiveness of
corruption and crime in the economic system; (4) currency exchange rate
volatility and the lack of available currency hedging instruments; (5) higher
rates of inflation (including the risk of social unrest associated with periods
of hyper-inflation) and high unemployment; (6) controls on foreign investment
and local practices disfavoring foreign investors and limitations on
repatriation of invested capital, profits and dividends, and on a fund's ability
to exchange local currencies for U.S. dollars; (7) political instability and
social unrest and violence; (8) the risk that the governments of Russia and
Eastern European countries may decide not to continue to support the economic
reform programs implemented recently and could follow radically different
political and/or economic policies to the detriment of investors, including
non-market-oriented policies such as the support of certain industries at the
expense of other sectors or investors, or a return to the centrally planned
economy that existed when such countries had a communist form of government; (9)
the financial condition of companies in these countries, including large amounts
of inter-company debt which may create a payments crisis on a national scale;
(10) dependency on exports and the corresponding importance of international
trade; (11) the risk that the tax system in these countries will not be reformed
to prevent inconsistent, retroactive and/or exorbitant taxation; and (12) the
underdeveloped nature of the securities markets.
 
  Special Considerations Affecting Japan. Japan's economic growth has declined
significantly since 1990. The general government position has deteriorated as a
result of weakening economic growth and stimulative measures taken to support
economic activity and to restore financial stability. Although the decline in
interest rates and fiscal stimulation packages have helped to contain
recessionary forces, uncertainties remain. Japan is also heavily dependent upon
international trade, so its economy is especially sensitive to trade barriers
and disputes. Japan has had difficult relations with its trading partners,
particularly the United States, where the trade imbalance is the greatest. It is
possible that trade sanctions and other protectionist measures could impact
Japan adversely in both the short and the long term.
 
  The common stocks of many Japanese companies trade at high price-earnings
ratios. Differences in accounting methods make it difficult to compare the
earnings of Japanese companies with those of companies in other countries,
especially in the U.S. In general, however, reported net income in Japan is
understated relative to U.S. accounting standards and this is one reason why
price-earnings ratios of the stocks of Japanese companies have tended
historically to be higher than those for U.S. stocks. In addition, Japanese
companies have tended to have higher growth rates than U.S. companies and
 
                                       20
<PAGE>   1116
 
Japanese interest rates have generally been lower than in the U.S., both of
which factors tend to result in lower discount rates and higher price-earnings
ratios in Japan than in the U.S.
 
  The Japanese securities markets are less regulated than those in the United
States. Evidence has emerged from time to time of distortion of market prices to
serve political or other purposes. Shareholders' rights are not always equally
enforced. In addition, Japan's banking industry is undergoing problems related
to bad loans and declining values in real estate.
 
  Special Considerations Affecting Pacific Region Countries. Certain of the
risks associated with international investments are heightened for investments
in Pacific region countries. For example, some of the currencies of Pacific
region countries have experienced steady devaluations relative to the U.S.
dollar, and major adjustments have been made periodically in certain of such
currencies. Certain countries, such as India, face serious exchange constraints.
Jurisdictional disputes also exist between South Korea and North Korea. In
addition, the Theme Portfolios may invest in Hong Kong, which reverted to
Chinese Administration on July 1, 1997. Investments in Hong Kong may be subject
to expropriation, national, nationalization or confiscation, in which case a
Theme Portfolio could lose its entire investment in Hong Kong. In addition, the
reversion of Hong Kong also presents a risk that the Hong Kong dollar will be
devalued and a risk of possible loss of investor confidence in Hong Kong's
currency, stock market and assets.
 
  Special Considerations Affecting Latin American Countries. Most Latin American
countries have experienced substantial, and in some periods extremely high,
rates of inflation for many years. Inflation and rapid fluctuations in inflation
rates have had and may continue to have very negative effects on the economies
and securities markets of certain Latin American countries. Certain Latin
American countries are also among the largest debtors to commercial banks and
foreign governments. At times certain Latin American countries have declared
moratoria on the payment of principal and/or interest on external debt. In
addition, certain Latin American securities markets have experienced high
volatility in recent years.
 
  Latin American countries may also close certain sectors of their economies to
equity investments by foreigners. Further due to the absence of securities
markets and publicly owned corporations and due to restrictions on direct
investment by foreign entities, investments may only be made in certain Latin
American countries solely or primarily through governmentally approved
investment vehicles or companies.
 
  Certain Latin American countries may have managed currencies that are
maintained at artificial levels to the U.S. dollar rather than at levels
determined by the market. This type of system can lead to sudden and large
adjustments in the currency which, in turn, can have a disruptive and negative
effect on foreign investors. For example, in late 1994, the value of the Mexican
peso lost more than one-third of its value relative to the U.S. dollar.
 
  Special Considerations Affecting Emerging Markets. Investing in the securities
of companies in emerging markets may entail special risks relating to potential
political and economic instability and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility of currencies into U.S. dollars and on repatriation
of capital invested. In the event of such expropriation, nationalization or
other confiscation by any country, a Theme Portfolio could lose its entire
investment in any such country.
 
  Emerging securities markets are substantially smaller, less developed, less
liquid and more volatile than the major securities markets. The limited size of
emerging securities markets and limited trading value in issuers compared to the
volume of trading in U.S. securities could cause prices to be erratic for
reasons apart from factors that affect the quality of the securities. For
example, limited market size may cause prices to be unduly influenced by traders
who control large positions. Adverse publicity and investors' perceptions,
whether or not based on fundamental analysis, may decrease the value and
liquidity of portfolio securities, especially in these markets. In addition,
securities traded in certain emerging markets may be subject to risks due to the
inexperience of financial intermediaries, a lack of modern technology, the lack
of a sufficient capital base to expand business operations, and the possibility
of permanent or temporary termination of trading.
 
  Settlement mechanisms in emerging securities markets may be less efficient and
reliable than in more developed markets. In such emerging securities there may
be share registration and delivery delays or failures.
 
  Many emerging market countries have experienced substantial, and in some
periods extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates and corresponding currency devaluations have had
and may continue to have negative effects on the economies and securities
markets of certain emerging market countries.
 
                                       21
<PAGE>   1117
 
                             INVESTMENT LIMITATIONS
 
FEEDER FUNDS
 
  The Financial Services Fund, Infrastructure Fund, Resources Fund and Consumer
Products and Services Fund each has the following fundamental investment policy
to enable it to invest in the Financial Services Portfolio, Infrastructure
Portfolio, Resources Portfolio and Consumer Products and Services Portfolio,
respectively:
 
  Notwithstanding any other investment policy of the Fund, the Fund may invest
all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
 
  All other fundamental investment policies, and the non-fundamental investment
policies, of each Feeder Fund and its corresponding Portfolio are identical.
Therefore, although the following discusses the investment policies of each
Portfolio and its Board of Trustees, it applies equally to each Feeder Fund and
its Board of Trustees.
 
  Each Portfolio has adopted the following investment limitations as fundamental
policies that (unless otherwise noted) may not be changed without approval by
the affirmative vote of a majority of the outstanding shares of the Portfolio.
Whenever a Feeder Fund is requested to vote on a change in the investment
limitations of its corresponding Portfolio, the Fund will hold a meeting of its
shareholders and will cast its votes as instructed by its shareholders.
 
          No Portfolio may:
 
          (1) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-backed securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that the Portfolio may exercise rights under agreements relating
     to such securities, including the right to enforce security interests and
     to hold real estate acquired by reason of such enforcement until that real
     estate can be liquidated in an orderly manner;
 
          (2) Purchase or sell physical commodities, but the Portfolio may
     purchase, sell or enter into financial options and futures, forward and
     spot currency contracts, swap transactions and other financial contracts or
     derivative instruments;
 
          (3) Engage in the business of underwriting securities of other
     issuers, except to the extent that the Portfolio might be considered an
     underwriter under the federal securities laws in connection with its
     disposition of portfolio securities;
 
          (4) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan;
 
          (5) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of the Portfolio's total
     assets (including the amount borrowed but reduced by any liabilities not
     constituting borrowings) at the time of the borrowing, except that the
     Portfolio may borrow up to an additional 5% of its total assets (not
     including the amount borrowed) for temporary or emergency purposes; or
 
          (6) Purchase securities of any one issuer if, as a result, more than
     5% of the Portfolio's total assets would be invested in securities of that
     issuer or the Portfolio would own or hold more than 10% of the outstanding
     voting securities of that issuer, except that up to 25% of the Portfolio's
     total assets may be invested without regard to this limitation, and except
     that this limitation does not apply to securities issued or guaranteed by
     the U.S. government, its agencies or instrumentalities or to securities
     issued by other investment companies.
 
  The following investment policies of each Portfolio are not fundamental
policies and may be changed by vote of the Portfolios' Board of Trustees without
shareholder approval. No Portfolio may:
 
          (1) Invest in securities of an issuer if the investment would cause
     the Portfolio to own more than 10% of any class of securities of any one
     issuer;
 
          (2) Invest in companies for the purpose of exercising control or
     management;
 
          (3) Invest more than 15% of its net assets in illiquid securities,
     including securities that are illiquid by virtue of the absence of a
     readily available market;
 
                                       22
<PAGE>   1118
 
          (4) Enter into a futures contract, an option on a futures contract, or
     an option on foreign currency traded on a CFTC-regulated exchange, in each
     case other than for bona fide hedging purposes (as defined by the CFTC), if
     the aggregate initial margin and premiums required to establish all of
     those positions (excluding the amount by which options are "in-the-money")
     exceeds 5% of the liquidation value of the Portfolio's portfolio, after
     taking into account unrealized profits and unrealized losses on any
     contracts the Portfolio has entered into;
 
          (5) Borrow money except for temporary or emergency purposes (other
     than to meet redemptions). While borrowings exceed 5% of the Portfolio's
     total assets, the Portfolio will not make any additional investments;
 
          (6) Invest more than 10% of its total assets in shares of other
     investment companies and may not invest more than 5% of its total assets in
     any one investment company or acquire more than 3% of the outstanding
     voting securities of any one investment company;
 
          (7) Purchase securities on margin, provided that each Portfolio may
     obtain short-term credits as may be necessary for the clearance of
     purchases and sales of securities, and further provided that the Portfolio
     may make margin deposits in connection with its use of financial options
     and futures, forward and spot currency contracts, swap transactions and
     other financial contracts or derivative instruments; or
 
          (8) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities.
 
   
  Investors should refer to the Prospectus for further information with respect
to the investment objective of each Feeder Fund, which may not be changed
without the approval of the Fund's shareholders, and its corresponding
Portfolio's investment objective, which may be changed without the approval of
the Portfolio's shareholders, and other investment policies, techniques and
limitations, which may or may not be changed without shareholder approval.
    
 
HEALTH CARE FUND
 
  The Health Care Fund has adopted the following investment limitations as
fundamental policies, which (unless otherwise noted) may not be changed without
approval by the affirmative vote of the lesser of (i) 67% of its shares
represented at a meeting at which more than 50% of the outstanding shares are
represented, or (ii) more than 50% of the outstanding shares.
 
  The Health Care Fund may not:
 
          (1) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-backed securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that the Health Care Fund may exercise rights under agreements
     relating to such securities, including the right to enforce security
     interests and to hold real estate acquired by reason of such enforcement
     until that real estate can be liquidated in an orderly manner;
 
          (2) Engage in the business of underwriting securities of other
     issuers, except to the extent that the Health Care Fund might be considered
     an underwriter under the federal securities laws in connection with its
     disposition of portfolio securities;
 
          (3) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan;
 
          (4) Purchase or sell physical commodities, but the Health Care Fund
     may purchase, sell or enter into financial options and futures, forward and
     spot currency contracts, swap transactions and other financial contracts or
     derivative instruments;
 
          (5) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of the Health Care Fund's
     total assets (including the amount borrowed but reduced by any liabilities
     not constituting borrowings) at the time of the borrowing, except that the
     Health Care Fund may borrow up to an additional 5% of its total assets (not
     including the amount borrowed) for temporary or emergency purposes; or
 
          (6) Purchase securities of any one issuer if, as a result, more than
     5% of the Health Care Fund's total assets would be invested in securities
     of that issuer or the Health Care Fund would own or hold more than 10% of
     the outstanding voting securities of that issuer, except that up to 25% of
     the Health Care Fund's total assets may be
 
                                       23
<PAGE>   1119
 
     invested without regard to this limitation, and except that this limitation
     does not apply to securities issued or guaranteed by the U.S. government,
     its agencies or instrumentalities or to securities issued by other
     investment companies.
 
  Notwithstanding any other investment policy of the Health Care Fund, the
Health Care Fund may invest all of its investable assets (cash, securities and
receivables related to securities) in an open-end management investment company
having substantially the same investment objective, policies and limitations as
the Fund.
 
  The following investment policies of the Health Care Fund are not fundamental
policies and may be changed by vote of the Trust's Board of Trustees without
shareholder approval. The Health Care Fund will not:
 
          (1) Purchase securities for which there is no readily available
     market, or enter into repurchase agreements or purchase time deposits
     maturing in more than seven days, or purchase OTC options or hold assets
     set aside to cover OTC options written by the Health Care Fund, if
     immediately after and as a result, the value of such securities would
     exceed, in the aggregate, 15% of the Health Care Fund's net assets;
 
          (2) Purchase securities on margin, provided that the Health Care Fund
     may obtain short-term credits as may be necessary for the clearance of
     purchases and sales of securities, and further provided that the Health
     Care Fund may make margin deposits in connection with its use of financial
     options and futures, forward and spot currency contracts, swap transactions
     and other financial contracts or derivative instruments; or
 
          (3) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities; or
 
          (4) Borrow money except for temporary or emergency purposes (other
     than to meet redemptions). While borrowings exceed 5% of the Health Care
     Fund's total assets, it will not make any additional investments.
 
  Investors should refer to the Health Care Fund's Prospectus for further
information with respect to the Health Care Fund's investment objective, which
may not be changed without the approval of its shareholders, and other
investment policies, techniques and limitations, which may be changed without
shareholder approval.
 
TELECOMMUNICATIONS FUND
 
  The Telecommunications Fund has adopted the following investment limitations
as fundamental policies, which (unless otherwise noted) may not be changed
without approval by the affirmative vote of the lesser of (i) 67% of its shares
represented at a meeting at which more than 50% of the outstanding shares are
represented, or (ii) more than 50% of the outstanding shares.
 
  The Telecommunications Fund may not:
 
          (1) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-backed securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that the Telecommunications Fund may exercise rights under
     agreements relating to such securities, including the right to enforce
     security interests and to hold real estate acquired by reason of such
     enforcement until that real estate can be liquidated in an orderly manner;
 
          (2) Purchase or sell physical commodities, but the Telecommunications
     Fund may purchase, sell or enter into financial options and futures,
     forward and spot currency contracts, swap transactions and other financial
     contracts or derivative instruments;
 
          (3) Engage in the business of underwriting securities of other
     issuers, except to the extent that the Telecommunications Fund might be
     considered an underwriter under the federal securities laws in connection
     with its disposition of portfolio securities;
 
          (4) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan;
 
          (5) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of the Telecommunications
     Fund's total assets (including the amount borrowed but reduced by any
     liabilities not constituting borrowings) at the time of the borrowing,
     except that the Telecommunications Fund may borrow up
 
                                       24
<PAGE>   1120
 
     to an additional 5% of its total assets (not including the amount borrowed)
     for temporary or emergency purposes; or
 
          (6) Purchase securities of any one issuer if, as a result, more than
     5% of the Telecommunications Fund's total assets would be invested in
     securities of that issuer or the Telecommunications Fund would own or hold
     more than 10% of the outstanding voting securities of that issuer, except
     that up to 25% of the Telecommunications Fund's total assets may be
     invested without regard to this limitation, and except that this limitation
     does not apply to securities issued or guaranteed by the U.S. government,
     its agencies or instrumentalities or to securities issued by other
     investment companies.
 
  Notwithstanding any other investment policy of the Telecommunications Fund,
the Telecommunications Fund may invest all of its investable assets (cash,
securities and receivables related to securities) in an open-end management
investment company having substantially the same investment objective, policies
and limitations as the Fund.
 
  The following investment policies of the Telecommunications Fund are not
fundamental policies and may be changed by vote of the Trust's Board of Trustees
without shareholder approval. The Telecommunications Fund may not:
 
          (1) Invest in securities of an issuer if the investment would cause
     the Telecommunications Fund to own more than 10% of any class of securities
     of any one issuer;
 
          (2) Invest in companies for the purpose of exercising control or
     management;
 
          (3) Invest more than 15% of its net assets in illiquid securities,
     including securities that are illiquid by virtue of the absence of a
     readily available market;
 
          (4) Enter into a futures contract, an option on a futures contract, or
     an option on foreign currency traded on a CFTC-regulated exchange, in each
     case other than for bona fide hedging purposes (as defined by the CFTC), if
     the aggregate initial margin and premiums required to establish all of
     those positions (excluding the amount by which options are "in-the-money")
     exceeds 5% of the liquidation value of the Fund's portfolio, after taking
     into account unrealized profits and unrealized losses on any contracts the
     Fund has entered into;
 
          (5) Borrow money except for temporary or emergency purposes (other
     than to meet redemptions). While borrowings exceed 5% of the
     Telecommunications Fund's total assets, it will not make any additional
     investments;
 
          (6) Purchase securities on margin, provided that the
     Telecommunications Fund may obtain short-term credits as may be necessary
     for the clearance of purchases and sales of securities, and further
     provided that the Telecommunications Fund may make margin deposits in
     connection with its use of financial options and futures, forward and spot
     currency contracts, swap transactions and other financial contracts or
     derivative instruments; or
 
          (7) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities.
 
   
  Investors should refer to the Telecommunications Fund's Prospectus for further
information with respect to the Telecommunications Fund's investment objective,
which may not be changed without the approval of its shareholders, and other
investment policies, techniques and limitations, which may be changed without
shareholder approval.
    
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of a Fund's or Portfolio's investment policies or
restrictions. A Fund or Portfolio may exchange securities, exercise conversion
or subscription rights, warrants or other rights to purchase common stock or
other equity securities and may hold, except to the extent limited by the 1940
Act, any such securities so acquired without regard to the Fund's or Portfolio's
investment policies and restrictions. The original cost of the securities so
acquired will be included in any subsequent determination of a Fund's or
Portfolio's compliance with the investment percentage limitations referred to
above and in the Prospectus.
 
                                       25
<PAGE>   1121
 
                      EXECUTION OF PORTFOLIO TRANSACTIONS
 
   
  Subject to policies established by the Trust's and the Portfolios' Board of
Trustees, the Sub-advisor is responsible for the execution of each Theme
Portfolio's securities transactions and the selection of broker/dealers who
execute such transactions on behalf of each Theme Portfolio. In executing
transactions, the Sub-advisor seeks the best net results for each Theme
Portfolio, taking into account such factors as the price (including the
applicable brokerage commission or dealer spread), size of the order, difficulty
of execution and operational facilities of the firm involved. Although the Sub-
advisor generally seeks reasonably competitive commission rates and spreads,
payment of the lowest commission or spread is not necessarily consistent with
the best net results. While each Theme Portfolio may engage in soft dollar
arrangements for research services, as described below, it has no obligation to
deal with any broker/dealer or group of broker/dealers in the execution of
portfolio transactions.
    
 
   
  Consistent with the interests of each Theme Portfolio, the Sub-advisor may
select broker/dealers to execute that Theme Portfolio's portfolio transaction on
the basis of the research and brokerage services they provide to the Sub-advisor
for its use in managing that Theme Portfolio and its other advisory accounts.
Such services may include furnishing analyses, reports and information
concerning issuers, industries, securities, geographic regions, economic factors
and trends, portfolio strategy, and performance of accounts; and effecting
securities transactions and performing functions incidental thereto (such as
clearance and settlement). Research and brokerage services received from such
broker are in addition to, and not in lieu of, the services required to be
performed by the Sub-advisor under the applicable investment management and
administration contract. A commission paid to such broker may be higher than
that which another qualified broker would have charged for effecting the same
transaction, provided that the Sub-advisor determines in good faith that such
commission is reasonable in terms either of that particular transaction or the
overall responsibility of the Sub-advisor to the Theme Portfolio and its other
clients and that the total commissions paid by that Theme Portfolio will be
reasonable in relation to the benefits it received over the long term. Research
services may also be received from dealers who execute portfolio transactions in
OTC markets.
    
 
   
  The Sub-advisor may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by a Theme Portfolio toward payment of its expenses, such
as custodian fees.
    
 
   
  Investment decisions for a Theme Portfolio and for other investment accounts
managed by the Sub-advisor are made independently of each other in light of
differing conditions. However, the same investment decision occasionally may be
made for two or more of such accounts, including a Theme Portfolio. In such
cases, simultaneous transactions may occur. Purchases or sales are then
allocated as to price or amount in a manner deemed fair and equitable to all
accounts involved. While in some cases this practice could have a detrimental
effect upon the price or value of the security as far as a Theme Portfolio is
concerned, in other cases the Sub-advisor believes that coordination and the
ability to participate in volume transactions will be beneficial to that Theme
Portfolio.
    
 
   
  Under a policy adopted by the Trust's and the Portfolios' Board of Trustees,
and subject to the policy of obtaining the best net results, the Sub-advisor may
consider a broker/dealer's sale of the shares of the Theme Funds and the other
portfolios for which AIM or the Sub-advisor serves as investment manager or
administrator in selecting broker/dealers for the execution of portfolio
transactions. This policy does not imply a commitment to execute portfolio
transactions through all broker/dealers that sell shares of the Theme Funds and
such other portfolios.
    
 
  Each Theme Portfolio contemplates purchasing most foreign equity securities in
OTC markets or stock exchanges located in the countries in which the respective
principal offices of the issuers of the various securities are located, if that
is the best available market. The fixed commissions paid in connection with most
such foreign stock transactions generally are higher than negotiated commissions
on U.S. transactions. There generally is less government supervision and
regulation of foreign stock exchanges and brokers than in the United States.
Foreign security settlements may in some instances be subject to delays and
related administrative uncertainties.
 
  Foreign equity securities may be held by a Theme Portfolio in the form of
ADRs, ADSs, EDRs, CDRs or securities convertible into foreign equity securities.
ADRs, ADSs, EDRs and CDRs may be listed on stock exchanges, or traded in the OTC
markets in the United States or Europe, as the case may be. ADRs, like other
securities traded in the United States, will be subject to negotiated commission
rates. The foreign and domestic debt securities and money market instruments in
which a Theme Portfolio may invest are generally traded in the OTC markets.
 
   
  A Theme Portfolio does not have any obligation to deal with any broker/dealer
or group of broker/dealers in the execution of securities transactions. Each
Theme Portfolio contemplates that, consistent with the policy of obtaining the
best net results, brokerage transactions may be conducted through certain
companies that are affiliated with AIM or the Sub-advisor. The Trust's or the
Portfolios' Board of Trustees, as applicable, has adopted procedures in
conformity with
    
 
                                       26
<PAGE>   1122
 
Rule 17e-1 under the 1940 Act to ensure that all brokerage commissions paid to
such affiliates are reasonable and fair in the context of the market in which
they are operating. Any such transactions will be effected and related
compensation paid only in accordance with applicable SEC regulations.
 
   
  The Portfolios may engage in certain principal and agency transactions with
banks and their affiliates that own 5% or more of the outstanding voting
securities of a Portfolio, provided the conditions of an exemptive order
received by the Funds from the SEC are met. In addition, a Portfolio may
purchase or sell a security from or to another AIM Fund provided the Portfolios
follow procedures adopted by the Boards of Directors/Trustees of the various AIM
Funds, including the Trust. These inter-fund transactions do not generate
brokerage commissions but may result in custodial fees or taxes or other related
expenses.
    
 
  For the fiscal years ended October 31, 1997, 1996 and 1995, the Health Care
Fund paid aggregate brokerage commissions of $1,150,118, $1,619,500 and
$545,743, respectively. For the fiscal years ended October 31, 1997, 1996 and
1995, the Telecommunications Fund paid aggregate brokerage commissions of
$2,254,069, $2,848,733 and $2,253,982, respectively. For the fiscal years ended
October 31, 1997, 1996 and 1995, the Financial Services Portfolio paid aggregate
brokerage commissions of $250,893, $77,822 and $38,814, respectively. For the
fiscal years ended October 31, 1997, 1996 and 1995, the Infrastructure Portfolio
paid aggregate brokerage commissions of $131,543, $124,164 and $122,399,
respectively. For the fiscal years ended October 31, 1997, 1996 and 1995, the
Resources Portfolio paid aggregate brokerage commissions of $1,281,212, $496,370
and $98,462, respectively. For the fiscal years ended October 31, 1997, 1996 and
for the fiscal period December 30, 1994 (commencement of operations) to October
31, 1995, the Consumer Products and Services Portfolio paid aggregate brokerage
commissions of $1,454,348, $356,459 and $17,605, respectively. For the fiscal
years ended October 31, 1997 and 1996, the Health Care Fund paid to LGT Bank in
Liechtenstein AG, which was an "affiliated" broker, aggregate brokerage
commissions of $23,081 and $32,898, respectively, for transactions involving
purchases and sales of portfolio securities which represented 2.01% and 2.03%,
respectively of the total brokerage commissions paid by the Health Care Fund and
1.61% and 1.71%, respectively, of the aggregate dollar amount of transactions
involving payment of commissions by the Health Care Fund. For fiscal year ended
October 31, 1997, the Telecommunications Fund paid to LGT Bank in Liechtenstein,
AG, which was an "affiliated" broker, aggregate brokerage commissions of
$220,584 for transactions involving purchases and sales of portfolio securities
which represented 1.00% of the total brokerage commissions paid by the Fund and
 .67% of the aggregate dollar amount of transactions involving payment of
commissions by the Fund.
 
PORTFOLIO TRADING AND TURNOVER
 
  Although each Theme Portfolio does not intend generally to trade for
short-term profits, the securities held by that Theme Portfolio will be sold
whenever management believes it is appropriate to do so, without regard to the
length of time a particular security may have been held. Portfolio turnover rate
is calculated by dividing the lesser of sales or purchases of portfolio
securities by each Theme Portfolio's average month-end portfolio value,
excluding short-term investments. The portfolio turnover rate will not be a
limiting factor when management deems portfolio changes appropriate. Higher
portfolio turnover involves correspondingly greater brokerage commissions and
other transaction costs that the Theme Portfolio will bear directly, and may
result in the realization of net capital gains that are taxable when distributed
to each Fund's shareholders. For the fiscal years ended October 31, 1996 and
1997, the Telecommunications Fund's portfolio turnover rates were 37% and 35%,
respectively. For the fiscal years ended October 31, 1996 and 1997, the Health
Care Fund's portfolio turnover rates were 157% and 149%, respectively. For the
fiscal years ended October 31, 1996 and 1997, the portfolio turnover rates for
the Financial Services Portfolio, Infrastructure Portfolio and Resources
Portfolio were 103% and 91%, 41% and 41%, and 94% and 321%, respectively. For
the fiscal years ended October 31, 1996 and 1997, the portfolio turnover rates
for the Consumer Products and Services Portfolio were 169% and 392%,
respectively.
 
                                       27
<PAGE>   1123
 
   
                                   MANAGEMENT
    
 
TRUSTEES AND EXECUTIVE OFFICERS
 
  The Trust's Trustees and Executive Officers and the Portfolios' Trustees and
Executive Officers are listed below. Unless otherwise indicated, the address of
each Executive Officer is 11 Greenway Plaza, Suite 100, Houston, Texas 77046.
 
   
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
   NAME, ADDRESS AND AGE     POSITIONS HELD WITH REGISTRANT   PRINCIPAL OCCUPATION WITH REGISTRANT
   ---------------------     ------------------------------   ------------------------------------
- ----------------------------------------------------------------------------------------------------
<S>                          <C>                             <C>
 ROBERT H. GRAHAM (51)       Trustee, Chairman of the Board  Director, President, and Chief
                             and President                   Executive Officer, A I M Management
                                                             Group Inc.; Director and President,
                                                             A I M Advisors, Inc.; Director and
                                                             Senior Vice President, A I M Capital
                                                             Management, Inc., A I M Distributors,
                                                             Inc., A I M Fund Services, Inc. and
                                                             Fund Management Company; and Director,
                                                             AMVESCAP PLC.
- ----------------------------------------------------------------------------------------------------
 C. DEREK ANDERSON (57)      Trustee                         President, Plantagenet Capital
 220 Sansome Street                                          Management, LLC (an investment
 Suite 400                                                   partnership); Chief Executive Officer,
 San Francisco, CA 94104                                     Plantagenet Holdings, Ltd. (an
                                                             investment banking firm); Director,
                                                             Anderson Capital Management, Inc. since
                                                             1988; Director, PremiumWear, Inc.
                                                             (formerly Munsingwear, Inc.) (a casual
                                                             apparel company); Director, "R" Homes,
                                                             Inc. and various other companies; and
                                                             Trustee, each of the other investment
                                                             companies registered under the 1940 Act
                                                             that is sub-advised or sub-administered
                                                             by the Sub-advisor.
- ----------------------------------------------------------------------------------------------------
 FRANK S. BAYLEY (59)        Trustee                         Partner, law firm of Baker & McKenzie;
 Two Embarcadero Center                                      Director and Chairman, C.D. Stimson
 Suite 2400                                                  Company (a private investment company);
 San Francisco, CA 94111                                     and Trustee, each of the other
                                                             investment companies registered under
                                                             the 1940 Act that is sub-advised or
                                                             sub-administered by the Sub-advisor.
- ----------------------------------------------------------------------------------------------------
 ARTHUR C. PATTERSON (54)    Trustee                         Managing Partner, Accel Partners (a
 428 University Avenue                                       venture capital firm); Director,
 Palo Alto, CA 94301                                         Viasoft and PageMart, Inc. (both public
                                                             software companies) and several other
                                                             privately held software and
                                                             communications companies; and Trustee,
                                                             each of the other investment companies
                                                             registered under the 1940 Act that is
                                                             sub-advised or sub-administered by the
                                                             Sub-advisor.
- ----------------------------------------------------------------------------------------------------
 RUTH H. QUIGLEY (63)        Trustee                         Private investor; President, Quigley
 1055 California Street                                      Friedlander & Co., Inc. (a financial
 San Francisco, CA 94108                                     advisory services firm) from 1984 to
                                                             1986; and Trustee, each of the other
                                                             investment companies registered under
                                                             the 1940 Act that is sub-advised or
                                                             sub-administered by the Sub-advisor.
- ----------------------------------------------------------------------------------------------------
 +JOHN J. ARTHUR (53)        Vice President                  Director, Senior Vice President and
                                                             Treasurer, A I M Advisors, Inc.; Vice
                                                             President and Treasurer, A I M
                                                             Management Group Inc., A I M Capital
                                                             Management, Inc., A I M Distributors,
                                                             Inc., A I M Fund Services, Inc. and
                                                             Fund Management Company.
- ----------------------------------------------------------------------------------------------------
</TABLE>
    
 
- ---------------
 
<TABLE>
<S>                          <C>                             <C>
+ Mr. Arthur and Ms. Relihan are married to each other.
</TABLE>
 
                                       28
<PAGE>   1124
 
   
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
   NAME, ADDRESS AND AGE     POSITIONS HELD WITH REGISTRANT   PRINCIPAL OCCUPATION WITH REGISTRANT
   ---------------------     ------------------------------   ------------------------------------
- ----------------------------------------------------------------------------------------------------
<S>                          <C>                             <C>
 KENNETH W. CHANCEY (53)     Vice President and Principal    Senior Vice President -- Mutual Fund
 50 California Street        Accounting Officer              Accounting, the Sub-advisor since 1997;
 San Francisco, CA 94111                                     Vice President -- Mutual Fund
                                                             Accounting, the Sub-advisor from 1992
                                                             to 1997.
- ----------------------------------------------------------------------------------------------------
 MELVILLE B. COX (54)        Vice President                  Vice President and Chief Compliance
                                                             Officer, A I M Advisors, Inc., A I M
                                                             Capital Management, Inc., A I M
                                                             Distributors, Inc., A I M Fund
                                                             Services, Inc. and Fund Management
                                                             Company.
- ----------------------------------------------------------------------------------------------------
 GARY T. CRUM (50)           Vice President                  Director and President, A I M Capital
                                                             Management, Inc.; Director and Senior
                                                             Vice President, A I M Management Group
                                                             Inc., and A I M Advisors, Inc.; and
                                                             Director, A I M Distributors, Inc. and
                                                             AMVESCAP PLC.
- ----------------------------------------------------------------------------------------------------
 HELGE K. LEE (52)           Vice President and Secretary    Chief Legal and Compliance
 50 California Street                                        Officer -- North America, the
 San Francisco, CA 94111                                     Sub-advisor since October 1997;
                                                             Secretary and Chief Legal and
                                                             Compliance Officer, INVESCO (NY) Asset
                                                             Management, Inc., INVESCO (NY), Inc.,
                                                             GT Global Investor Services, Inc. and
                                                             G.T. Insurance since August 1997;
                                                             Secretary and Chief Legal and
                                                             Compliance Officer, GT Global from
                                                             August 1997 to April 1998; Executive
                                                             Vice President of the Asset Management
                                                             Division of Liechtenstein Global Trust
                                                             AG, from October 1996 to May 1998;
                                                             Senior Vice President, General Counsel
                                                             and Secretary of INVESCO (NY) Asset
                                                             Management, Inc., INVESCO (NY), Inc.,
                                                             GT Global, GT Global Investor Services,
                                                             Inc. and G.T. Insurance from May 1994
                                                             to October 1996; and Senior Vice
                                                             President, General Counsel and
                                                             Secretary of Strong/Corneliuson
                                                             Management, Inc. and Secretary of each
                                                             of the Strong Funds from October 1991
                                                             to May 1994.
- ----------------------------------------------------------------------------------------------------
 +CAROL F. RELIHAN (43)      Vice President                  Director, Senior Vice President,
                                                             General Counsel and Secretary, A I M
                                                             Advisors, Inc.; Vice President, General
                                                             Counsel and Secretary, A I M Management
                                                             Group Inc.; Director, Vice President
                                                             and General Counsel, Fund Management
                                                             Company; Vice President and General
                                                             Counsel, A I M Fund Services, Inc.; and
                                                             Vice President, A I M Capital
                                                             Management, Inc. and A I M
                                                             Distributors, Inc.
- ----------------------------------------------------------------------------------------------------
 DANA R. SUTTON (39)         Vice President and Assistant    Vice President and Fund Controller,
                             Treasurer                       A I M Advisors, Inc.; and Assistant
                                                             Vice President and Assistant Treasurer,
                                                             Fund Management Company.
- ----------------------------------------------------------------------------------------------------
</TABLE>
    
 
- ---------------
 
   
+ Mr. Arthur and Ms. Relihan are married to each other.
    
 
   
  The Board of Trustees has a Nominating and Audit Committee, comprised of Miss
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Directors, reviewing audits of the Trust and its
funds and recommending firms to serve as independent auditors of the Trust. All
of the Trust's Trustees also serve as directors or trustees of some or all of
the other investment companies managed, administered or advised by AIM. All of
the Trust's executive officers hold similar offices with some or all of the
other investment companies managed, administered or advised by AIM. Each Trustee
who is not a director, officer or employee of the Sub-advisor or any affiliated
company is paid aggregate fees of $5,000 a year, plus $300 per Fund for each
meeting of the Board attended, and reimbursed travel and other expenses incurred
in connection with attendance at such meetings. Other Trustees and Officers
receive no compensation or expense reimbursement from the Trust. For the fiscal
year ended October 31, 1997,
    
 
                                       29
<PAGE>   1125
 
   
Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley, who are not directors,
officers or employees of the Sub-advisor or any affiliated company, received
total compensation of $38,650, $38,650, $27,850 and $38,650, respectively, from
the Trust for their services as Trustees. For the fiscal year ended October 31,
1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley, who are not
directors, officers or employees of the Sub-advisor or any other affiliated
company, received total compensation of $117,304, $114,386, $88,350 and
$111,688, respectively, from the investment companies managed or administered by
AIM and sub-advised or sub-administered by the Sub-advisor for which he or she
serves as a Director or Trustee. Fees and expenses disbursed to the Directors
contained no accrued or payable pension or retirement benefits. As of May 7,
1998, the Officers and Trustees and their families as a group owned in the
aggregate beneficially or of record less than 1% of the outstanding shares of
each Fund or of all the Trust's series in the aggregate.
    
 
   
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES RELATING TO THE FEEDER
FUNDS AND THE PORTFOLIOS
    
 
   
  AIM serves as each Portfolio's investment manager and administrator under an
investment management and administration contract between each Portfolio and AIM
("Portfolio Management Contract"). The Sub-advisor serves as each Portfolio's
sub-advisor and sub-administrator under a sub-advisory and sub-administration
agreement between AIM and the Sub-advisor ("Portfolio Management Sub-Contract,"
and together with the Portfolio Management Contract, the "Portfolio Management
Contracts"). AIM serves as administrator to each Feeder Fund under an
administration contract between the Trust and AIM ("Administration Contract").
The Sub-advisor serves as sub-administrator to each Feeder Fund under a
sub-administration contract between AIM and the Sub-advisor ("Administration
Sub-Contract," and together with the Administration Contract, the
"Administration Contracts"). The Administration Contracts will not be deemed
advisory contracts, as defined under the 1940 Act. As investment managers and
administrators, AIM and the Sub-advisor make all investment decisions for each
Portfolio and, as administrators, administer each Portfolio's and each Feeder
Fund's affairs. Among other things, AIM and the Sub-advisor furnish the services
and pay the compensation and travel expenses of persons who perform the
executive, administrative, clerical and bookkeeping functions of each Portfolio
and each Feeder Fund and provide suitable office space, necessary small office
equipment and utilities.
    
 
   
  The Portfolio Management Contracts may be renewed with respect to a Portfolio
for additional one-year terms, provided that any such renewal has been
specifically approved at least annually by (i) the Portfolios' Board of Trustees
or the vote of a majority of the Portfolio's outstanding voting securities (as
defined in the 1940 Act) and (ii) a majority of Trustees who are not parties to
the Portfolio Management Contracts or "interested persons' of any such party (as
defined in the 1940 Act), cast in person at a meeting called for the specific
purpose of voting on such approval. The Portfolio Management Contracts provide
that with respect to each Portfolio, and the Administration Contracts provide
that with respect to each Feeder Fund, either the Trust, each Portfolio or each
of AIM or the Sub-advisor may terminate the Contracts without penalty upon sixty
days' written notice to the other party. The Portfolio Management Contracts
terminate automatically in the event of their assignment (as defined in the 1940
Act).
    
 
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES RELATING TO THE HEALTH CARE
FUND AND TELECOMMUNICATIONS FUND
 
   
  AIM serves as the investment manager and administrator to the Health Care Fund
and Telecommunications Fund under an Investment Management and Administration
Contract ("Management Contract") between the Trust and AIM. The Sub-advisor
serves as the sub-advisor and sub-administrator to the Health Care Fund and
Telecommunications Fund under a Sub-Advisory and Sub-Administration Contract
between AIM and the Sub-advisor ("Sub-Management Contract," and together with
the Management Contract, the "Management Contracts"). As investment managers and
administrators, AIM and the Sub-advisor make all investment decisions for the
Health Care Fund and Telecommunications Fund and administer the Health Care
Fund's and Telecommunications Fund's affairs. Among other things, AIM and the
Sub-advisor furnish the services and pay the compensation and travel expenses of
persons who perform the executive, administrative, clerical and bookkeeping
functions of the Trust and the Health Care Fund and Telecommunications Fund, and
provide suitable office space, necessary small office equipment and utilities.
    
 
   
  The Management Contracts may be renewed for additional one-year terms with
respect to the Health Care Fund and Telecommunications Fund, provided that any
such renewal has been specifically approved at least annually by: (i) the
Trust's Board of Trustees, or by the vote of a majority of the Health Care Fund
and Telecommunications Fund's outstanding voting securities (as defined in the
1940 Act), and (ii) a majority of Trustees who are not parties to the Management
Contracts or "interested persons" of any such party (as defined in the 1940
Act), cast in person at a meeting called for the specific purpose of voting on
such approval. The Management Contracts provide that with respect to the Health
Care Fund and Telecommunications Fund either the Trust or each of AIM or the
Sub-advisor may terminate the
    
 
                                       30
<PAGE>   1126
 
Contracts without penalty upon sixty days' written notice to the other party.
The Management Contracts terminate automatically in the event of their
assignment (as defined in the 1940 Act).
 
   
  The following table discloses the amount of investment management and
administration fees paid by the Theme Portfolios to the Sub-advisor during the
periods shown:
    
 
                                HEALTH CARE FUND
 
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,                                         AMOUNT PAID
- ----------------------                                         -----------
<S>                                                            <C>
1997........................................................   $5,820,067
1996........................................................    5,495,494
1995........................................................    4,453,857
</TABLE>
 
                            TELECOMMUNICATIONS FUND
 
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,                                         AMOUNT PAID
- ----------------------                                         -----------
<S>                                                            <C>
1997........................................................   $17,999,111
1996........................................................    23,119,601
1995........................................................    23,861,460
</TABLE>
 
                          FINANCIAL SERVICES PORTFOLIO
 
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,                                         AMOUNT PAID
- ----------------------                                         -----------
<S>                                                            <C>
1997........................................................    $346,965
1996........................................................      99,991
1995........................................................      51,353
</TABLE>
 
                            INFRASTRUCTURE PORTFOLIO
 
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,                                         AMOUNT PAID
- ----------------------                                         -----------
<S>                                                            <C>
1997........................................................    $772,727
1996........................................................     635,456
1995........................................................     601,421
</TABLE>
 
                              RESOURCES PORTFOLIO
 
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,                                         AMOUNT PAID
- ----------------------                                         -----------
<S>                                                            <C>
1997........................................................    $979,215
1996........................................................     425,745
1995........................................................     213,856
</TABLE>
 
                    CONSUMER PRODUCTS AND SERVICES PORTFOLIO
 
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,                                         AMOUNT PAID
- ----------------------                                         -----------
<S>                                                            <C>
1997........................................................   $1,207,854
1996........................................................      422,640
Dec. 30, 1994 (commencement of operations) to Oct. 31,
  1995......................................................       16,284
</TABLE>
 
   
  For the fiscal years ended October 31, 1995 and 1996, the Sub-advisor
reimbursed the Financial Services Portfolio, Infrastructure Portfolio and
Resources Portfolio for their respective investment management and
administration fees in the amounts of $51,353 and $103,267; $0 and $0; and
$213,856 and $0, respectively. Each of these Portfolios had no reimbursement for
the fiscal year ended October 31, 1997. For the fiscal years ended October 31,
1995, 1996 and 1997, the Financial Services Fund, Infrastructure Fund and
Resources Fund paid administration fees of $18,756, $34,865 and $119,765;
$208,892, $218,735 and $266,025; and $74,485, $147,614 and $338,578,
respectively. However, the Sub-
    
                                       31
<PAGE>   1127
 
   
advisor reimbursed those Funds for such fees in the amounts of $18,756, $34,865
and $0; $177,376, $0 and $0; and $74,485, $0 and $0, respectively. For the
fiscal period December 30, 1994 (commencement of operations) to October 31,
1995, and for the fiscal years ended October 31, 1996 and 1997, the Sub-advisor
reimbursed the Consumer Products and Services Portfolio for investment
management and administration fees in the amounts of $16,284, $0 and $0,
respectively. For the same periods, the Consumer Products and Services Fund paid
$5,933, $147,623 and $416,297, respectively, in administration fees; however,
the Sub-advisor reimbursed the Fund in the amounts of $5,933, $0 and $0,
respectively.
    
 
   
EXPENSES OF THE FUNDS AND OF THE PORTFOLIOS
    
 
   
  Each Fund and each Portfolio pays all expenses not assumed by AIM, the
Sub-advisor, AIM Distributors and other agents. These expenses include, in
addition to the advisory, administration, distribution, transfer agency, pricing
and accounting agency and brokerage fees discussed above, legal and audit
expenses, custodian fees, trustees' fees, organizational fees, fidelity bond and
other insurance premiums, taxes, extraordinary expenses and expenses of reports
and prospectuses sent to existing investors. The allocation of general Trust
expenses and expenses shared among the Funds and other funds organized as series
of the Trust are allocated on a basis deemed fair and equitable, which may be
based on the relative net assets of the Funds or the nature of the service
performed and relative applicability to the Funds. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio securities, which
are capitalized in accordance with generally accepted accounting principles
applicable to investment companies, are accounted for as capital items and not
as expenses. The ratio of each Fund's expenses to its relative net assets can be
expected to be higher than the expense ratios of funds investing solely in
domestic securities, since the cost of maintaining the custody of foreign
securities and the rate of investment management fees paid by the Funds or the
Portfolios generally are higher than the comparable expenses of such other
funds.
    
 
   
                             THE DISTRIBUTION PLANS
    
 
   
THE CLASS A PLAN
    
 
  The Trust has adopted a Master Distribution Plan pursuant to Rule 12b-1 under
the 1940 Act relating to the Class A shares of the Funds (the "Class A Plan").
The Class A Plan provides that the Class A shares pay 0.50% per annum of their
average daily net assets as compensation to AIM Distributors for the purpose of
financing any activity which is primarily intended to result in the sale of
Class A shares. Of such amounts, each Fund pays a service fee of 0.25% of the
average daily net assets attributable to Class A shares to selected dealers and
other institutions which furnish continuing personal shareholder services to
their customers who purchase and own Class A shares. Activities appropriate for
financing under the Class A Plan include, but are not limited to, the following:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders; overhead; preparation and distribution of
advertising material and sales literature; expenses of organizing and conducting
sales seminars; supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements; and costs of administering the Class A Plan.
 
   
THE CLASS B PLAN
    
 
  The Trust has also adopted a Master Distribution Plan pursuant to Rule 12b-1
under the 1940 Act relating to Class B shares of the Funds (the "Class B Plan",
and collectively with the Class A Plan, the "Plans"). Under the Class B Plan,
each Fund pays compensation to AIM Distributors at an annual rate of 1.00% of
the average daily net assets attributable to Class B shares. Of such amount,
each Fund pays a service fee of 0.25% of the average daily net assets
attributable to Class B shares to selected dealers and other institutions which
furnish continuing personal shareholder services to their customers who purchase
and own Class B shares. Amounts paid in accordance with the Class B Plan may be
used to finance any activity primarily intended to result in the sale of Class B
shares, including but not limited to printing of prospectuses and statements of
additional information and reports for other than existing shareholders;
overhead; preparation and distribution of advertising material and sales
literature; expenses of organizing and conducting sales seminars; supplemental
payments to dealers and other institutions such as asset-based sales charges or
as payments of service fees under shareholder service arrangements; and costs of
administering the Class B Plan. AIM Distributors may transfer and sell its
rights to payments under the Class B Plan in order to finance distribution
expenditures in respect of Class B shares.
 
                                       32
<PAGE>   1128
 
   
BOTH PLANS
    
 
  Pursuant to an incentive program, AIM Distributors may enter into agreements
("Shareholder Service Agreements") with investment dealers selected from time to
time by AIM Distributors for the provision of distribution assistance in
connection with the sale of the Funds' shares to such dealers' customers, and
for the provision of continuing personal shareholder services to customers who
may from time to time directly or beneficially own shares of the Funds. The
distribution assistance and continuing personal shareholder services to be
rendered by dealers under the Shareholder Service Agreements may include, but
shall not be limited to, the following: distributing sales literature; answering
routine customer inquiries concerning the Fund; assisting customers in changing
dividend options, account designations and addresses, and in enrolling in any of
the several special investment plans offered in connection with the purchase of
a Fund's shares; assisting in the establishment and maintenance of customer
accounts and records and in the processing of purchase and redemption
transactions; investing dividends and any capital gains distributions
automatically in a Fund's shares; and providing such other information and
services as a Fund or the customer may reasonably request.
 
  Under the Plans, in addition to the Shareholder Service Agreements authorizing
payments to selected dealers, banks may enter into Shareholder Service
Agreements authorizing payments under the Plans to be made to banks which
provide services to their customers who have purchased shares. Services provided
pursuant to Shareholder Service Agreements with banks may include some or all of
the following: answering shareholder inquiries regarding the Funds; performing
sub-accounting; establishing and maintaining shareholder accounts and records;
processing customer purchase and redemption transactions; providing periodic
statements showing a shareholder's account balance and the integration of such
statements with those of other transactions and balances in the shareholder's
other accounts serviced by the bank; forwarding applicable prospectuses, proxy
statements, reports and notices to bank clients who hold Fund shares; and such
other administrative services as a Fund reasonably may request, to the extent
permitted by applicable statute, rule or regulation. Similar agreements may be
permitted under the Plans for institutions which provide recordkeeping for and
administrative services to 401(k) plans.
 
  Financial intermediaries and any other person entitled to receive compensation
for selling Fund shares may receive different compensation for selling shares of
one particular class over another.
 
  Under a Shareholder Service Agreement, each Fund agrees to pay periodically
fees to selected dealers and other institutions who render the foregoing
services to their customers. The fees payable under a Shareholder Service
Agreement generally will be calculated at the end of each payment period for
each business day of a Fund during such period at the annual rate of 0.25% of
the average daily net asset value of the Fund's shares purchased or acquired
through exchange. Fees calculated in this manner shall be paid only to those
selected dealers or other institutions who are dealers or institutions of record
at the close of business on the last business day of the applicable payment
period for the account in which each Fund's shares are held.
 
  Payments pursuant to the Plans are subject to any applicable limitations
imposed by rules of the National Association of Securities Dealers, Inc.
("NASD"). The Plans conform to rules of the NASD by limiting payments made to
dealers and other financial institutions who provide continuing personal
shareholder services to their customers who purchase and own shares of the Funds
to no more than 0.25% per annum of the average daily net assets of the funds
attributable to the customers of such dealers or financial institutions, and by
imposing a cap on the total sales charges, including asset based sales charges,
that may be paid by the Fund and its respective classes.
 
  AIM Distributors does not act as principal, but rather as agent for the Funds,
in making dealer incentive and shareholder servicing payments under the Plans.
These payments are an obligation of a Fund and not of AIM Distributors.
 
   
  Prior to June 1, 1998, the Trust had adopted a different Rule 12b-1 plan, that
operated as a "reimbursement-type" plan (the "Prior Plan"). The information
provided below relates to payments made under the Prior Plan, which provided for
payments to GT Global Inc., the distributor of the Trust at the time the Prior
Plan was in effect.
    
 
   
  For the fiscal year ended October 31, 1997, each Fund paid the following
amounts under the Prior Plan:
    
 
   
<TABLE>
<CAPTION>
                                                CLASS A      CLASS B     CLASS A   CLASS B
                                               ----------   ----------   -------   -------
                                                                            % OF CLASS
                                                                           AVERAGE DAILY
                                                                            NET ASSETS
<S>                                            <C>          <C>          <C>       <C>
Health Care Fund.............................  $2,327,631   $1,316,284     .50%     1.00%
Telecommunications Fund......................  $5,105,842   $8,933,516     .50%     1.00%
Financial Services Fund......................  $   97,454   $  280,650     .50%     1.00%
Infrastructure Fund..........................  $  218,486   $  621,768     .50%     1.00%
Resources Fund...............................  $  291,788   $  733,200     .50%     1.00%
Consumer Products and Services Fund..........  $  351,953   $  941,035     .50%     1.00%
</TABLE>
    
 
                                       33
<PAGE>   1129
 
   
  Actual fees by category paid by each Fund with regard to the Class A shares
during the year ended October 31, 1997 follows:
    
 
   
<TABLE>
<CAPTION>
                                                                                                        CONSUMER
                                                                                                        PRODUCTS
                               HEALTH                          FINANCIAL                                  AND
                                CARE      TELECOMMUNICATIONS   SERVICES    INFRASTRUCTURE   RESOURCES   SERVICES
                                FUND             FUND            FUND           FUND          FUND        FUND
                             ----------   ------------------   ---------   --------------   ---------   --------
<S>                          <C>          <C>                  <C>         <C>              <C>         <C>
CLASS A
  Compensation to
     Underwriters to
     partially offset other
     marketing expenses....  $  465,526       $1,021,168       $ 19,491       $ 43,697      $ 58,358    $ 70,391
  Compensation to Dealers
     including finder's
     fees..................  $1,862,105       $4,084,674       $ 77,963       $174,789      $233,430    $281,562
</TABLE>
    
 
   
  Actual fees by category paid by each Fund with regard to the Class B Shares
during the year ended October 31, 1997 as follows:
    
 
   
<TABLE>
<CAPTION>
                                                                                                       CONSUMER
                                                                                                       PRODUCTS
                             HEALTH                          FINANCIAL                                   AND
                              CARE      TELECOMMUNICATIONS   SERVICES    INFRASTRUCTURE   RESOURCES    SERVICES
                              FUND             FUND            FUND           FUND          FUND         FUND
                           ----------   ------------------   ---------   --------------   ---------   ----------
<S>                        <C>          <C>                  <C>         <C>              <C>         <C>
CLASS B
  Compensation to
     Underwriters to
     partially offset
     upfront dealer
     commissions and
     other marketing
     costs...............  $  987,213       $6,700,137       $210,488       $466,326      $549,900    $  705,776
  Compensation to
     Dealers.............  $  329,071       $2,333,379       $ 70,163       $155,442      $183,300    $  235,259
</TABLE>
    
 
   
  The Plans require AIM Distributors to provide the Board of Trustees at least
quarterly with a written report of the amounts expended pursuant to the Plans
and the purposes for which such expenditures were made. The Board of Trustees
reviews these reports in connection with their decisions with respect to the
Plans.
    
 
  As required by Rule 12b-1, the Plans and related forms of Shareholder Service
Agreements were approved by the Board of Trustees, including a majority of the
trustees who are not "interested persons" (as defined in the 1940 Act) of the
Trust and who have no direct or indirect financial interest in the operation of
the Plans or in any agreements related to the Plans ("Qualified Trustees"). In
approving the Plans in accordance with the requirements of Rule 12b-1, the
Trustees considered various factors and determined that there is a reasonable
likelihood that the Plans would benefit each class of each Fund and their
respective shareholders.
 
  The Plans do not obligate the Funds to reimburse AIM Distributors for the
actual expenses AIM Distributors may incur in fulfilling its obligations under
the Plans. Thus, even if AIM Distributors' actual expenses exceed the fee
payable to AIM Distributors thereunder at any given time, a Fund will not be
obligated to pay more than that fee. If AIM Distributors' expenses are less than
the fee it receives, AIM Distributors will retain the full amount of the fee.
 
   
  Unless terminated earlier in accordance with their terms, the Plans continue
in effect until May 29, 1999 and each year thereafter, as long as such
continuance is specifically approved at least annually by the Board of Trustees,
including a majority of the Qualified Trustees.
    
 
   
  The Plans may be terminated by the vote of a majority of the Qualified
Trustees, or, with respect to a particular class, by the vote of a majority of
the outstanding voting securities of that class.
    
 
  Any change in the Plans that would increase materially the distribution
expenses paid by the applicable class requires shareholder approval; otherwise,
it may be amended by the trustees, including a majority of the Qualified
Trustees, by votes cast in person at a meeting called for the purpose of voting
upon such amendment. As long as the Plans are in effect, the selection or
nomination of the Qualified Trustees is committed to the discretion of the
Qualified Trustees. In the event the Class A Plan is amended in a manner which
the Board of Trustees determines would materially increase the charges paid
under the Class A Plan, the Class B shares of each Fund will no longer convert
into Class A shares of the same Fund unless the Class B shares, voting
separately, approve such amendment. If the Class B shareholders do not approve
such amendment, the Board of Trustees will (i) create a new class of shares of
the Fund which is identical in all material
                                       34
<PAGE>   1130
 
respects to the Class A shares as they existed prior to the implementation of
the amendment and (ii) ensure that the existing Class B shares of the Fund will
be exchanged or converted into such new class of shares no later than the date
the Class B shares were scheduled to convert into Class A shares.
 
   
  The principal differences between the Class A Plan, on the one hand, and the
Class B Plan, on the other hand, are: (i) the Class A Plan allows payment to AIM
Distributors or to dealers or financial institutions of up to 0.50% of average
daily net assets of the Class A shares of each Fund, as compared to 1.00% of
such assets of the Funds' Class B shares; (ii) the Class B Plan obligates the
Class B shares to continue to make payments to AIM Distributors following
termination of the Class B shares Distribution Agreement with respect to Class B
shares sold by or attributable to the distribution efforts of AIM Distributors
or its predecessor, GT Global, Inc. unless there has been a complete termination
of the Class B Plan (as defined in such Plan) and (iii) the Class B Plan
expressly authorizes AIM Distributors to assign, transfer or pledge its rights
to payments pursuant to the Class B Plan.
    
 
                                THE DISTRIBUTOR
 
   
  Information concerning AIM Distributors and the continuous offering of each
Fund's shares is set forth in the Prospectus under the headings "How to Purchase
Shares" and "Terms and Conditions of Purchase of the AIM Funds." Master
Distribution Agreements with AIM Distributors relating to the Class A and Class
B shares of the Funds were approved by the Board of Trustees on May 7, 1998.
Both such Master Distribution Agreements are hereinafter collectively referred
to as the "Distribution Agreements."
    
 
  The Distribution Agreements provide that AIM Distributors will bear the
expenses of printing from the final proof and distributing each Fund's
prospectuses and statements of additional information relating to public
offerings made by AIM Distributors pursuant to the Distribution Agreements
(other than those prospectuses and statements of additional information
distributed to existing shareholders of the Fund), and any promotional or sales
literature used by AIM Distributors or furnished by AIM Distributors to dealers
in connection with the public offering of each Fund's shares, including expenses
of advertising in connection with such public offerings. AIM Distributors has
not undertaken to sell any specified number of shares of any classes of any
Fund.
 
  AIM Distributors expects to pay sales commissions from its own resources to
dealers and institutions who sell Class B shares of the Funds at the time of
such sales. Payments with respect to Class B shares will equal 4.0% of the
purchase price of the Class B shares sold by the dealer or institution, and will
consist of a sales commission equal to 3.75% of the purchase price of the Class
B shares sold plus an advance of the first year service fee of 0.25% with
respect to such shares. The portion of the payments to AIM Distributors under
the Class B Plan which constitutes an asset-based sales charge (0.75%) is
intended in part to permit AIM Distributors to recoup a portion of such sales
commissions plus financing costs. AIM Distributors anticipates that it will
require a number of years to recoup from Class B Plan payments the sales
commissions paid to dealers and institutions in connection with sales of Class B
shares. In the future, if multiple distributors serve a Fund, each such
distributor (or its assignee or transferee) would receive a share of the
payments under the Class B Plan based on the portion of the Fund's Class B
shares sold by or attributable to the distribution efforts of that distributor.
 
   
  The Trust (on behalf of any class of a Fund) or AIM Distributors may terminate
the Distribution Agreements on sixty (60) days' written notice without penalty.
The Distribution Agreements will terminate automatically in the event of their
assignment. In the event the Class B shares Distribution Agreement is
terminated, AIM Distributors would continue to receive payments of asset based
distribution fees in respect of the outstanding Class B shares attributable to
the distribution efforts of AIM Distributors and its predecessor; provided,
however, that a complete termination of the Class B Plan (as defined in such
Plan) would terminate all payments by the Fund of asset based distribution fees
and service fees to AIM Distributors. Termination of the Class B Plan or
Distribution Agreement does not affect the obligation of Class B shareholders to
pay contingent deferred sales charges.
    
 
                                       35
<PAGE>   1131
 
   
  The following chart reflects the total sales charges paid in connection with
the sale of Class A shares of each Fund and the amount retained by GT Global,
Inc., the Trust's distributor prior to June 1, 1998, for the fiscal year ended
October 31, 1997.
    
 
   
<TABLE>
<CAPTION>
                                                                     1997
                                                              -------------------
                                                               SALES      AMOUNT
                                                              CHARGES    RETAINED
                                                              --------   --------
<S>                                                           <C>        <C>
Health Care Fund............................................  $213,880   $ 54,971
Telecommunications Fund.....................................  $497,045   $131,495
Financial Services Fund.....................................  $ 84,341   $ 22,263
Infrastructure Fund.........................................  $100,622   $ 24,983
Resources Fund..............................................  $221,895   $ 63,915
Consumer Products and Services Fund.........................  $286,139   $ 85,990
</TABLE>
    
 
   
  The following chart reflects the contingent deferred sales charges paid by
Class A and Class B shareholders for the fiscal year ended October 31, 1997, for
Class A and Class B shares:
    
 
   
<TABLE>
<CAPTION>
                                                                 1997
                                                              ----------
<S>                                                           <C>
Health Care Fund............................................  $  545,758
Telecommunications Fund.....................................  $7,116,869
Financial Services Fund.....................................  $   81,031
Infrastructure Fund.........................................  $  261,619
Resources Fund..............................................  $  417,878
Consumer Products and Services Fund.........................  $  508,410
</TABLE>
    
 
   
                         NET ASSET VALUE DETERMINATION
    
 
  The net asset value per share of each Fund is normally determined daily as of
the close of trading of the New York Stock Exchange ("NYSE") (generally 4:00
p.m. Eastern time) on each business day of the Fund. In the event the NYSE
closes early (i.e., before 4:00 p.m. Eastern time) on a particular day, the net
asset value of a Fund is determined as of the close of the NYSE on such day. Net
asset value per share is determined by dividing the value of each Theme
Portfolio's securities, cash and other assets (including interest accrued but
not collected) attributable to a particular class, less all its liabilities
(including accrued expenses and dividends payable) attributable to that class,
by the total number of shares outstanding of that class. Determination of each
Fund's net asset value per share is made in accordance with generally accepted
accounting principles.
 
  Each equity security held by a Theme Portfolio is valued at its last sales
price on the exchange where the security is principally traded or, lacking any
sales on a particular day, the security is valued at the mean between the
closing bid and asked prices on that day. Each security traded in the
over-the-counter market (but not including securities reported on the NASDAQ
National Market System) is valued at the mean between the last bid and asked
prices based upon quotes furnished by market makers for such securities. Each
security reported on the NASDAQ National Market System is valued at the last
sales price on the valuation date or absent a last sales price, at the mean
between the closing bid and asked prices on that day. Debt securities 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 institution-size
trading in similar groups of securities, developments related to special
securities, yield, quality, coupon rate, maturity, type of issue, individual
trading characteristics and other market data. 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 Trust's
officers in a manner specifically authorized by the Board of Trustees.
Short-term obligations having 60 days or less to maturity are valued on the
basis of amortized cost. For purposes of determining net asset value per share,
futures and options contracts generally will be valued 15 minutes after the
close of trading of the NYSE.
 
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of each Fund's shares are determined at such
times. Foreign currency exchange rates are also generally determined prior to
the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which such
values are determined and the close of the NYSE which will not be reflected in
the computation of a Fund's net asset value. If events materially affecting the
value of such
 
                                       36
<PAGE>   1132
 
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 Trustees of the Fund and the Portfolio.
 
                       HOW TO PURCHASE AND REDEEM SHARES
 
  A complete description of the manner in which shares of the Funds may be
purchased appears in the Funds' Prospectuses under the headings "How to Purchase
Shares," "Terms and Conditions of Purchases of the AIM Funds" and "Special
Plans."
 
   
  The sales charge normally deducted on purchases of Class A shares is used to
compensate AIM Distributors and participating dealers for their expenses
incurred in connection with the distribution of the Funds' Class A shares. Since
there is little expenses associated with unsolicited orders placed directly with
AIM Distributors by persons who, because of their relationship with the Funds or
with AIM and its affiliates, are familiar with the Funds, or whose programs for
purchase involve little expense (e.g., because of the size of the transaction
and shareholder records required), AIM Distributors believes that it is
appropriate and in the Funds' best interests that such persons, and certain
other persons whose purchases result in relatively low expenses of distribution,
be permitted to purchase Class A shares of the Funds through AIM Distributors
without payment of a sales charge. The persons who may purchase Class A shares
of the Funds without a sales charge are set forth in the Funds' Prospectuses. In
addition, the Funds offer programs such as Right of Accumulation and Letter of
Intent, which are described in the prospectuses, and are designed to permit
investors to aggregate purchases of different funds, or separate purchases over
time, in order to qualify for a lower sales charge rate. See "Terms and
Conditions of Purchase of the AIM Funds -- Reductions in Initial Sales Charges"
in the prospectuses.
    
 
  Class A shares that are subject to a contingent deferred sales charge and that
were purchased before June 1, 1998 are entitled to the following waivers from
the contingent deferred sales charge otherwise due upon redemption: (1) minimum
required distributions made in connection with an IRA, Keogh plan or custodial
account under Section 403(b) of the Code or other retirement plan following
attainment of age 70 1/2; (2) total or partial redemptions resulting from a
distribution following retirement in the case of a tax-qualified
employer-sponsored retirement plan; (3) when a redemption results from a
tax-free return of an excess contribution pursuant to Section 408(d)(4) or (5)
of the Code or from the death or disability of the employee; (4) redemptions
pursuant to a Fund's right to liquidate a shareholder's account involuntarily;
(5) redemptions pursuant to distributions from a tax-qualified
employer-sponsored retirement plan, which is invested in AIM Funds, which are
permitted to be made without penalty pursuant to the Code, other than tax-free
rollovers or transfers of assets, and the proceeds of which are reinvested in
AIM Funds; (6) redemptions made in connection with participant-directed
exchanges between options in an employer-sponsored benefit plan; (7) redemptions
made for the purpose of providing cash to fund a loan to a participant in a
tax-qualified retirement plan; (8) redemptions made in connection with a
distribution from any retirement plan or account that is permitted in accordance
with the provisions of Section 72(t)(2) of the Code and the regulations
promulgated thereunder; (9) redemptions made in connection with a distribution
from any retirement plan or account that involves the return of an excess
deferral amount pursuant to Section 401(k)(8) or Section 402(g)(2) of the Code;
(10) redemptions made in connection with a distribution from a qualified
profit-sharing or stock bonus plan described in Section 401(k) of the Code to a
participant or beneficiary under Section 401(k)(2)(B)(IV) of the Code upon
hardship of the covered employee (determined pursuant to Treasury Regulation
Section 1.401(k)-1(d)(2)); and (11) redemptions made by or for the benefit of
certain states, counties or cities, or any instrumentalities, departments or
authorities thereof, where such entities are prohibited or limited by applicable
law from paying a sales charge or commission.
 
   
  Class B shares purchased before June 1, 1998 are subject to the waivers from
the contingent deferred sales charge otherwise due upon redemptions, in addition
to the waivers provided for redemptions of currently issued Class B shares as
described in the Prospectus: (1) total or partial redemptions resulting from a
distribution following retirement in the case of a tax-qualified
employer-sponsored retirement; (2) minimum required distributions made in
connection with an IRA, Keogh plan or custodial account under Section 403(b) of
the Code or other retirement plan following attainment of age 70 1/2; (3)
redemptions pursuant to distributions from a tax-qualified employer-sponsored
retirement plan, which is invested in AIM Funds, which are permitted to be made
without penalty pursuant to the Code, other than tax-free rollovers or transfers
of assets, and the proceeds of which are reinvested in AIM Funds; (4)
redemptions made in connection with participant-directed exchanges between
options in an employer-sponsored benefit plan; (5) redemptions made for the
purpose of providing cash to fund a loan to a participant in a tax-qualified
retirement plan; (6) redemptions made in connection with a distribution from any
retirement plan or account that is permitted in accordance with the provisions
of Section 72(t)(2) of the Code and the regulations promulgated thereunder; (7)
redemptions made in connection with a distribution from a qualified
profit-sharing or stock bonus plan described in Section 401(k) of the Code to a
participant or beneficiary under Section 401(k)(2)(B)(IV) of the Code upon
hardship of the covered employee (determined pursuant to Treasury Regulation
Section 1.401(k)-1(d)(2)); and (8) redemptions made by or for the benefit of
certain states,
    
 
                                       37
<PAGE>   1133
 
counties or cities, or any instrumentalities, departments or authorities thereof
where such entities are prohibited or limited by applicable law from paying a
sales charge or commission.
 
   
  For purposes of a Letter of Intent entered into prior to June 1, 1998, any
registered investment advisor, trust company or bank trust department which
exercises investment discretion and which intends within thirteen months to
invest $500,000 or more can be treated as a single purchaser, provided further
that such entity places all purchases and redemption orders. Such entities
should be prepared to establish their qualifications for such treatment.
    
 
   
  Complete information concerning the method of exchanging shares of the Funds
for shares of the other AIM Funds is set forth in the prospectuses under the
heading "Exchange Privilege."
    
 
   
  Information concerning redemption of the Funds' shares is set forth in the
Prospectuses under the heading "How to Redeem Shares." In addition to the Funds'
obligation to redeem shares, AIM Distributors may also repurchase shares as an
accommodation to shareholders. To effect a repurchase, those dealers who have
executed Selected Dealer Agreements with AIM Distributors must phone orders to
the order desk of the Funds at (800) 959-4246 and guarantee delivery of all
required documents in good order. A repurchase is effected at the net asset
value per share of the applicable Fund next determined after the repurchase
order is received. Such an arrangement is subject to timely receipt by AIM Fund
Services, Inc. ("AFS") of all required documents in good order. If such
documents are not received within a reasonable time after the order is placed,
the order is subject to cancellation. While there is no charge imposed by a Fund
or by AIM Distributors (other than any applicable contingent deferred sales
charge) when shares are redeemed or repurchased, dealers may charge a fair
service fee for handling the transaction.
    
 
  The right of redemption may be suspended or the date of payment postponed when
(a) trading on the NYSE is restricted, as determined by applicable rules and
regulations of the SEC, (b) the NYSE is closed for other than customary weekend
and holiday closings, (c) the SEC has by order permitted such suspension, or (d)
an emergency as determined by the SEC exists making disposition of portfolio
securities or the valuation of the net assets of a Fund not reasonably
practicable.
 
  A Fund's net asset value is calculated by dividing the number of outstanding
shares into the net assets of the Fund. Net assets are the excess of a Fund's
assets over its liabilities. A more detailed description of how each Fund's net
asset value is calculated appears in the Prospectuses under the heading
"Determination of Net Asset Value."
 
   
                QUALIFYING FOR A REDUCED FRONT-END SALES CHARGE
    
 
  As described in the Prospectus, the front-end sales charge for Class A shares
is calculated by multiplying an investor's total investment by the applicable
sales charge rate. The applicable rate varies with the amount invested. The
Funds offer programs such as Right of Accumulation and Letter of Intent, which
are described in the Prospectus, and are designed to permit investors to
aggregate purchases of different funds, or separate purchases over time, in
order to qualify for a lower sales charge rate. See "Terms and Conditions of
Purchase of the AIM Funds -- Reductions in Initial Sales Charges" in the
Prospectus.
 
   
                     PROGRAMS AND SERVICES FOR SHAREHOLDERS
    
 
  The Funds provide certain services for shareholders and certain investment or
redemption programs. See "Exchange Privilege" and "How to Redeem Shares" in the
Prospectus. All inquiries concerning these programs should be made directly to 
A I M Fund Services, Inc. P.O. Box 4739, Houston, Texas 77210-4739, toll free at
(800) 959-4246.
 
                                       38
<PAGE>   1134
 
   
                                 DIVIDEND ORDER
    
 
  Dividends may be paid to someone other than the registered owner, or sent to
an address other than the address of record. (Please note that signature
guarantees are required to effect this option.) An investor also may direct that
his or her dividends be invested in one of the other AIM Funds and there is no
sales charge for these investments; initial investment minimums apply. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" in the
Prospectus. To effect this option, please contact your authorized dealer. For
more information concerning AIM Funds other than those in the Trust, please
obtain a current prospectus by contacting your authorized dealer, by writing to
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, or by
calling toll free (800) 959-4246.
 
                                     TAXES
 
TAXATION OF THE FUNDS
 
  Each Fund is treated as a separate corporation for federal income tax
purposes. To continue to qualify for treatment as a regulated investment company
("RIC") under the Code, each Fund must distribute to its shareholders for each
taxable year at least 90% of its investment company taxable income (consisting
generally of net investment income, net short-term capital gain and net gains
from certain foreign currency transactions) ("Distribution Requirement") and
must meet several additional requirements. With respect to each Fund, these
requirements include the following: (1) the Fund must derive at least 90% of its
gross income each taxable year from dividends, interest, payments with respect
to securities loans and gains from the sale or other disposition of securities
or foreign currencies, or other income (including gains from options, Futures or
Forward Contracts) derived with respect to its business of investing in
securities or those currencies ("Income Requirement"); and (2) the
Diversification Requirements. Each Feeder Fund, as an investor in its
corresponding Portfolio, is deemed to own a proportionate share of the
Portfolio's assets, and to earn a proportionate share of the Portfolio's income,
for purposes of determining whether the Fund satisfies the requirements
described above to qualify as a RIC.
 
  Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to
the extent it fails to distribute by the end of any calendar year substantially
all of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
 
  See the next section for a discussion of the tax consequences to each Feeder
Fund of hedging transactions engaged in, and investments in passive foreign
investment companies ("PFICs") and other foreign securities by its corresponding
Portfolio and to the Health Care Fund and Telecommunications Fund of those
transactions and investments.
 
TAXATION OF THE THEME PORTFOLIOS
 
  The Portfolios and their Relationship to the Feeder Funds. Each Portfolio is
treated as a separate partnership for federal income tax purposes and is not a
"publicly traded partnership." As a result, each Portfolio is not subject to
federal income tax; instead, each Feeder Fund, as an investor in its
corresponding Portfolio, is required to take into account in determining its
federal income tax liability its share of the Portfolio's income, gains, losses,
deductions and credits, without regard to whether it has received any cash
distributions from the Portfolio. Each Portfolio also is not subject to Delaware
income or franchise tax.
 
  Because, as noted above, each Feeder Fund is deemed to own a proportionate
share of its corresponding Portfolio's assets, and to earn a proportionate share
of its corresponding Portfolio's income, for purposes of determining whether the
Fund satisfies the requirements to qualify as a RIC, each Portfolio intends to
conduct its operations so that its corresponding Fund will be able to continue
to satisfy all those requirements.
 
  Distributions to each Feeder Fund from its corresponding Portfolio (whether
pursuant to a partial or complete withdrawal or otherwise) will not result in
the Fund's recognition of any gain or loss for federal income tax purposes,
except that (1) gain will be recognized to the extent any cash that is
distributed exceeds the Fund's basis for its interest in the Portfolio before
the distribution, (2) income or gain will be recognized if the distribution is
in liquidation of the Fund's entire interest in the Portfolio and includes a
disproportionate share of any unrealized receivables held by the Portfolio, and
(3) loss will be recognized if a liquidation distribution consists solely of
cash and/or unrealized receivables. Each Feeder Fund's basis for its interest in
its corresponding Portfolio generally will equal the amount of cash and the
basis of any property the Fund invests in the Portfolio, increased by the Fund's
share of the Portfolio's net income and gains and decreased by (a) the amount of
cash and the basis of any property the Portfolio distributes to the Fund and (b)
the Fund's share of the Portfolio's losses.
 
                                       39
<PAGE>   1135
 
   
FOREIGN TAXES
    
 
  Dividends and interest received by a Theme Portfolio, and gains realized
thereby, may be subject to income, withholding or other taxes imposed by foreign
countries and U.S. possessions ("foreign taxes") that would reduce the yield
and/or total return on its securities. Tax conventions between certain countries
and the United States may reduce or eliminate foreign taxes, however, and many
foreign countries do not impose taxes on capital gains in respect of investments
by foreign investors. If more than 50% of the value of a Fund's total assets
(taking into account, in the case of a Feeder Fund, its proportionate share of
its corresponding Portfolio's assets) at the close of its taxable year consists
of securities of foreign corporations, the Fund will be eligible to, and may,
file an election with the Internal Revenue Service that will enable its
shareholders, in effect, to receive the benefit of the foreign tax credit with
respect to any foreign taxes paid by it (taking into account, in the case of a
Feeder Fund, its proportionate share of any foreign taxes paid by its
corresponding Portfolio) (a "Fund's foreign taxes"). Pursuant to the election, a
Fund would treat those taxes as dividends paid to its shareholders and each
shareholder would be required to (1) include in gross income, and treat as paid
by him, his share of the Fund's foreign taxes, (2) treat his share of those
taxes and of any dividend paid by the Fund that represents its income from
foreign and U.S. possessions sources (taking into account, in the case of a
Feeder Fund, its proportionate share of its corresponding Portfolio's income
from those sources) as his own income from those sources and (3) either deduct
the taxes deemed paid by him in computing his taxable income or, alternatively,
use the foregoing information in calculating the foreign tax credit against his
federal income tax. Each Fund will report to its shareholders shortly after each
taxable year their respective shares of the Fund's foreign taxes and income
(taking into account, in the case of a Feeder Fund, its proportionate share of
its corresponding Portfolio's income) from sources within foreign countries and
U.S. possessions if it makes this election. Pursuant to the Taxpayer Relief Act
of 1997 ("Tax Act"), individuals who have no more than $300 ($600 for married
persons filing jointly) of creditable foreign taxes included on Form 1099 and
all of whose foreign source of income is "qualified passive income" may elect
each year to be exempt from the extremely complicated foreign tax credit
limitation and will be able to claim a foreign tax credit without having to file
the detailed Form 1116 that otherwise is required.
 
   
PASSIVE FOREIGN INVESTMENT COMPANIES
    
 
  Each Theme Portfolio may invest in the stock of PFICs. A PFIC is a foreign
corporation -- other than a "controlled foreign corporation" (i.e., a foreign
corporation in which, on any day during its taxable year, more than 50% of the
total voting power of all voting stock therein or the total value of all stock
therein is owned, directly, indirectly or constructively, by "U.S.
shareholders," defined as U.S. persons that individually own, directly,
indirectly or constructively, at least 10% of that voting power) as to which the
Theme Portfolio is a U.S. shareholder (effective with respect to each Fund for
their taxable year beginning November 1, 1998) -- that, in general, meets either
of the following tests: (1) at least 75% of its gross income is passive or (2)
an average of at least 50% of its assets produce, or are held for the production
of, passive income. Under certain circumstances, a Fund will be subject to
federal income tax on a part (or, in the case of a Feeder Fund, its
proportionate share of a part) of any "excess distribution" received by it (or,
in the case of a Feeder Fund, by its corresponding Portfolio) on the stock of a
PFIC or of any gain on the Fund's (or, in the case of a Feeder Fund, its
corresponding Portfolio's) disposition of that stock (collectively "PFIC
income"), plus interest thereon, even if the Fund distributes the PFIC income as
a taxable dividend to its shareholders. The balance of the PFIC income will be
included in the Fund's investment company taxable income and, accordingly, will
not be taxable to it to the extent it distributes that income to its
shareholders.
 
  If a Theme Portfolio invests in a PFIC and elects to treat the PFIC as a
"qualified electing fund" ("QEF"), then in lieu of the foregoing tax and
interest obligation, the Theme Portfolio (or, in the case of a Portfolio, its
corresponding Feeder Fund) would be required to include in income each year its
pro rata share (taking into account, in the case of a Feeder Fund, its
proportionate share of its corresponding Portfolio's pro rata share) of the
QEF's ordinary earnings and net capital gain (i.e., the excess of net long-term
capital gain over net short-term capital loss) -- which most likely would have
to be distributed by the Theme Portfolio (or, in the case of a Portfolio, its
corresponding Feeder Fund) to satisfy the Distribution Requirement and avoid
imposition of the Excise Tax -- even if those earnings and gain were not
received thereby from the QEF. In most instances it will be very difficult, if
not impossible, to make this election because of certain requirements thereof.
 
  A holder of stock in any PFIC may elect to include in ordinary income for each
taxable year beginning after 1997 the excess, if any, of the fair market value
of the stock over the adjusted basis therein as of the end of that year.
Pursuant to the election, a deduction (as an ordinary, not capital, loss) also
will be allowed for the excess, if any, of the holder's adjusted basis in PFIC
stock over the fair market value thereof as of the taxable year-end, but only to
the extent of any net mark-to-market gains with respect to that stock included
in income for prior taxable years. The adjusted basis in each
 
                                       40
<PAGE>   1136
 
PFIC's stock subject to the election will be adjusted to reflect the amounts of
income included and deductions taken thereunder. Regulations proposed in 1992
provided a similar election with respect to the stock of certain PFICs.
 
   
OPTIONS, FUTURES AND FOREIGN CURRENCY TRANSACTIONS
    
 
  The Theme Portfolios' use of hedging transactions, such as selling (writing)
and purchasing options and Futures and entering into Forward Contracts, involves
complex rules that will determine, for federal income tax purposes, the amount,
character and timing of recognition of the gains and losses a Theme Portfolio
realizes in connection therewith. Gains from the disposition of foreign
currencies (except certain gains that may be excluded by future regulations),
and gains from options, Futures and Forward Contracts derived by a Theme
Portfolio with respect to its business of investing in securities or foreign
currencies, will qualify as permissible income under the Income Requirement for
that Theme Portfolio (or, in the case of a Portfolio, its corresponding Feeder
Fund).
 
  Futures and Forward Contracts that are subject to section 1256 of the Code
(other than those that are part of a "mixed straddle") ("Section 1256
Contracts") and that are held by a Theme Portfolio at the end of its taxable
year generally will be deemed to have been sold at that time at market value for
federal income tax purposes. Sixty percent of any net gain or loss recognized on
these deemed sales, and 60% of any net gain or loss realized from any actual
sales of Section 1256 Contracts, will be treated as long-term capital gain or
loss, and the balance will be treated as short-term capital gain or loss. That
60% portion will qualify for the reduced maximum tax rates on noncorporate
taxpayers' net capital gain enacted by the Tax Act -- 20% (10% for taxpayers in
the 15% marginal tax bracket) for gain recognized on capital assets held for
more than 18 months -- instead of the 28% rate in effect before that
legislation, which now applies to gain recognized on capital assets held for
more than one year but not more than 18 months.
 
  Section 988 of the Code also may apply to gains and losses from transactions
in foreign currencies, foreign-currency-denominated debt securities and options,
Futures and Forward Contracts on foreign currencies ("Section 988" gains and
losses). Each Section 988 gain or loss generally is computed separately and
treated as ordinary income or loss. In the case of overlap between sections 1256
and 988, special provisions determine the character and timing of any income,
gain or loss. Each Theme Portfolio attempts to monitor section 988 transactions
to minimize any adverse tax impact.
 
  If a Theme Portfolio has an "appreciated financial position" -- generally, an
interest (including an interest through an option, Futures or Forward Contract
or short sale) with respect to any stock, debt instrument (other than "straight
debt") or partnership interest the fair market value of which exceeds its
adjusted basis -- and enters into a "constructive sale" of the same or
substantially similar property, the Theme Portfolio will be treated as having
made an actual sale thereof, with the result that gain will be recognized at
that time. A constructive sale generally consists of a short sale, an offsetting
notional principal contract or Futures or Forward Contract entered into by a
Theme Portfolio or a related person with respect to the same or substantially
similar property. In addition, if the appreciated financial position is itself a
short sale or such a contract, acquisition of the underlying property or
substantially similar property will be deemed a constructive sale.
 
TAXATION OF THE FUNDS' SHAREHOLDERS
 
  Dividends and other distributions declared by a Fund in, and payable to
shareholders of record as of a date in, October, November or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during the following January. Accordingly, those distributions will be
taxed to shareholders for the year in which that December 31 falls.
 
  If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
 
  Dividends paid by a Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership ("foreign shareholder") generally
will be subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply, however, to a dividend paid by a Fund to a foreign
shareholder that is "effectively connected with the conduct of a U.S. trade or
business," in which case the reporting and withholding requirements applicable
to domestic shareholders will apply. A distribution of net capital gain by a
Fund to a foreign shareholder generally will be subject to U.S. federal income
tax (at the rates applicable to domestic persons) only if the distribution is
"effectively connected" or the foreign shareholder is treated as a resident
alien individual for federal income tax purposes.
 
                                       41
<PAGE>   1137
 
   
  The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting the Funds, their shareholders and the Portfolios.
Investors are urged to consult their own tax advisors for more detailed
information and for information regarding any foreign, state and local taxes
applicable to distributions received from a Fund.
    
 
   
                           MISCELLANEOUS INFORMATION
    
 
   
  AIM was organized in 1976, and, together with its subsidiaries, manages or
advises approximately 90 investment company portfolios encompassing a broad
range of investment objectives. AIM is a direct, wholly owned subsidiary of
A I M Management Group Inc. ("AIM Management"), a holding company that has been
engaged in the financial services business since 1976. AIM is the sole
shareholder of the Funds' principal underwriter, AIM Distributors. AIM
Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London, EC2M 4YR, England. AMVESCAP PLC and its subsidiaries are
independent investment management groups that have a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia.
    
 
CUSTODIAN
 
  State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, Massachusetts 02110, acts as custodian of the Funds' and Theme
Portfolios' assets. State Street is authorized to establish and has established
separate accounts in foreign currencies and to cause securities of the Theme
Portfolios to be held in separate accounts outside the United States in the
custody of non-U.S. banks.
 
   
TRANSFER AGENCY AND ACCOUNTING AGENCY SERVICES
    
 
   
  The Transfer Agency and Service Agreement between the Trust and AFS, a
registered transfer agent and wholly-owned subsidiary of AIM, provides that AFS
will perform certain shareholder services for the Funds for a fee per account
serviced. The Transfer Agency and Service Agreement provides that AFS will
receive a per account fee plus out-of-pocket expenses to process orders for
purchases, redemptions and exchanges of shares; prepare and transmit payments
for dividends and distributions declared by the Funds; maintain shareholder
accounts and provide shareholders with information regarding the Funds and their
accounts. The Transfer Agency and Service Agreement became effective on
September 8, 1998. The Sub-advisor also serves as each Fund's pricing and
accounting agent. For the fiscal years ended October 31, 1995, 1996 and 1997,
the accounting services fees for the Health Care Fund, Telecommunications Fund,
Financial Services Fund, Infrastructure Fund, Resources Fund and Consumer
Products and Services Fund were $30,660, $141,582 and $153,780; $170,297,
$621,480 and $493,322; $616, $3,493 and $12,292; $5,836, $21,910 and $27,303;
$1,931, $14,761 and $34,698; and $318, $14,778 and $43,330, respectively.
    
 
INDEPENDENT ACCOUNTANTS
 
   
  The Trust's and Theme Portfolios' independent accountants are
PricewaterhouseCoopers LLP. PricewaterhouseCoopers LLP conducts annual audits of
the Portfolios' and the Funds' financial statements, assists in the preparation
of each Portfolio's and each Fund's federal and state income tax returns and
consults with the Trust and Global Investment Portfolio as to matters of
accounting, regulatory filings, and federal and state income taxation.
    
 
   
  The audited financial statements of the Trust included in this Statement of
Additional Information have been examined by PricewaterhouseCoopers LLP, as
stated in their opinion appearing herein, and are included in reliance upon such
opinion given upon the authority of that firm as experts in accounting and
auditing.
    
 
SHAREHOLDER LIABILITY
 
   
  Under Delaware law, the shareholders of the Trust enjoy the same limitations
extended to shareholders of private, for-profit corporations. There is a remote
possibility, however, that under certain circumstances shareholders of the Trust
may be held personally liable for the Trust's obligations. However, the Trust
Agreement disclaims shareholder liability for acts or obligations of the Trust
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Trust or a trustee. If
a shareholder is held personally liable for the obligations of the Trust, the
Trust Agreement provides that the shareholder shall be entitled out of the
assets belonging to the applicable Fund (or allocable to the applicable Class),
to be held harmless from and indemnified against all loss and expense arising
from such liability in accordance with the Trust's Bylaws and applicable law.
Thus, the risk of a shareholder incurring financial loss on account of such
liability is limited to circumstances in which the Trust itself would be unable
to meet its obligations and where the other party was held not to be bound by
the disclaimer.
    
 
                                       42
<PAGE>   1138
 
NAMES
 
  Prior to May 29, 1998, AIM Global Consumer Products and Services Fund operated
under the name of GT Global Consumer Products and Services Fund; AIM Global
Financial Services Fund operated under the name of GT Global Financial Services
Fund; AIM Global Health Care Fund operated under the name of GT Global Health
Care Fund; AIM Global Infrastructure Fund operated under the name of GT Global
Infrastructure Fund; AIM Global Resources Fund operated under the name of GT
Global Natural Resources Fund; and AIM Global Telecommunications Fund operated
under the name of GT Global Telecommunications Fund.
 
SPECIAL SERVICING AGREEMENT
 
   
  Subject to receipt of an exemptive order from the SEC, the Funds will be
parties to a Special Servicing Agreement ("Agreement") among the Trust on behalf
of the Funds, AIM Series Trust on behalf of its sole series, AIM Global Trends
Fund ("Global Trends Fund"), AIM, the Sub-advisor and AFS. The Agreement will
provide that, if the Trust's Board of Trustees determines that a Fund's share of
the aggregate expenses of Global Trends Fund is less than the estimated savings
to the Fund from the operation of Global Trends Fund, the Fund will bear those
expenses in proportion to the average daily value of its shares owned by Global
Trends Fund, provided that no Fund will bear such expenses in excess of the
estimated savings to it. Those savings are expected to result primarily from the
elimination of numerous separate shareholder accounts that are or would have
been invested directly in the Funds and the resulting reduction in shareholder
servicing costs. Although these cost savings are not certain, the estimated
savings to the Funds generated by the operation of Global Trends Fund are
expected to be sufficient to offset most, if not all, of the expenses incurred
by that Fund.
    
 
   
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
    
 
   
  As of August 10, 1998, the Trustees and officers of the Trust, as a group, 
owned less than 1% of the outstanding shares of any class of the Trust. 

  To the best knowledge of the Trust, the names and addresses of the holders 
of 5% or more of the outstanding shares of any class of each Fund's equity
securities as of August 10, 1998, and the percentage of the outstanding shares
held by such holders are set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                                PERCENT
                                                                                 PERCENT        OWNED OF
                                                                                 OWNED OF      RECORD AND
                FUND                          NAME AND ADDRESS OF OWNER           RECORD      BENEFICIALLY
                ----                          -------------------------          --------     ------------
<S>                                    <C>                                       <C>          <C>
Consumer Products and Services         GT New Dimension Fund                      91.69%          -0-
  Fund -- Advisor Class                Theme Fund Omnibus Account
                                       2121 N. California Blvd. Ste. 395
                                       Walnut Creek, CA 94596-7305
Consumer Products and Services --      MLPF&S for the Sole Benefit of its          5.06%          -0-
  Class A                              Customers, Security #97DD9
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
Consumer Products and Services         MLPF&S for the Sole Benefit of its          8.12%          -0-
  Fund -- Class B                      Customers, Security #97F31
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
Financial Services Fund --             GT New Dimension Fund                      96.31%          -0-
  Advisor Class                        Theme Fund Omnibus Account
                                       2121 N. California Blvd. Ste. 395
                                       Walnut Creek, CA 94596-7305
Financial Services Fund -- Class A     MLPF&S for the Sole Benefit of its         11.45%          -0-
                                       Customers, Security #97D41
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
Financial Services Fund -- Class B     MLPF&S for the Sole Benefit of its         19.47%          -0-
                                       Customers, Security #97D30
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
</TABLE>
    
 
                                       43
<PAGE>   1139
 
   
<TABLE>
<CAPTION>
                                                                                                PERCENT
                                                                                 PERCENT        OWNED OF
                                                                                 OWNED OF      RECORD AND
                FUND                          NAME AND ADDRESS OF OWNER           RECORD      BENEFICIALLY
                ----                          -------------------------          --------     ------------
<S>                                    <C>                                       <C>          <C>
Health Care Fund -- Advisor Class      GT New Dimension Fund                      88.44%          -0-
                                       Theme Fund Omnibus Account
                                       2121 N. California Blvd. Ste. 395
                                       Walnut Creek, CA 94596-7305
Health Care Fund -- Class A            MLPF&S for the Sole Benefit of its         13.75%          -0-
                                       Customers, Security #975M3
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
Health Care Fund -- Class B            MLPF&S for the Sole Benefit of its         12.94%          -0-
                                       Customers, Security #97BA1
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
Infrastructure Fund -- Advisor Class   GT New Dimension Fund                      96.84%          -0-
                                       Theme Fund Omnibus Account
                                       2121 N. California Blvd. Ste. 395
                                       Walnut Creek, CA 94596-7305
Infrastructure Fund -- Class B         MLPF&S for the Sole Benefit of its          7.69%          -0-
                                       Customers, Security #97HX6
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
Resources Fund -- Advisor Class        GT New Dimension Fund                      86.71%          -0-
                                       Theme Fund Omnibus Account
                                       2121 N. California Blvd. Ste. 395
                                       Walnut Creek, CA 94596-7305
Telecommunications Fund --             GT New Dimension Fund                      83.64%          -0-
  Advisor Class                        Theme Fund Omnibus Account
                                       2121 N. California Blvd. Ste. 395
                                       Walnut Creek, CA 94596-7305
Telecommunications Fund -- Class A     MLPF&S for the Sole Benefit of its         10.20%          -0-
                                       Customers, Security #979F7
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
Telecommunications Fund -- Class B     MLPF&S for the Sole Benefit of its         11.12%          -0-
                                       Customers, Security #97BA2
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
</TABLE>
    
 
- ---------------
 
   
* The Trust has no knowledge as to whether all or any portion of the shares
  owned of record are also owned beneficially.
    
 
                                       44
<PAGE>   1140
 
                               INVESTMENT RESULTS
 
TOTAL RETURN QUOTATIONS
 
  The standard formula for calculating total return, as described in the
Prospectus, is as follows:
 
   
                                      (n)
                                P(1+T)    = ERV
    
 
<TABLE>
    <S>    <C>  <C>  <C>
    Where  P     =   a hypothetical initial payment of $1,000.
           T     =   average annual total return (assuming the applicable maximum
                     sales load is deducted at the beginning of the 1, 5, or 10
                     year periods).
           n     =   number of years.
           ERV   =   ending redeemable value of a hypothetical $1,000 payment at
                     the end of the 1, 5, or 10 year periods (or fractional
                     portion of such period).
</TABLE>
 
  The standardized returns for the Class A and Class B shares of Health Care
Fund and Telecommunications Fund, stated as average annualized total returns for
the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                              HEALTH      HEALTH      TELECOM-      TELECOM-
                                               CARE        CARE      MUNICATIONS   MUNICATIONS
                                               FUND        FUND         FUND          FUND
PERIOD                                       (CLASS A)   (CLASS B)    (CLASS A)     (CLASS B)
- ------                                       ---------   ---------   -----------   -----------
<S>                                          <C>         <C>         <C>           <C>
Fiscal year ended October 31, 1997.........    22.25%      22.75%       12.13%        12.15%
October 31, 1992 through October 31,
  1997.....................................    15.24%        n/a        13.87%          n/a
April 1, 1993 (commencement of operations)
  through October 31, 1997.................      n/a       20.09%         n/a         12.09%
January 27, 1992 (commencement of
  operations) through October 31, 1997.....      n/a         n/a        11.48%          n/a
August 7, 1989 (commencement of operations)
  through October 31, 1997.................    15.23%        n/a          n/a           n/a
</TABLE>
    
 
  The standardized returns for the Class A and Class B shares of the Financial
Services Fund, Infrastructure Fund and Resources Fund, stated as average
annualized total returns for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                               FINANCIAL   FINANCIAL    INFRA-      INFRA-
                               SERVICES    SERVICES    STRUCTURE   STRUCTURE   RESOURCES   RESOURCES
                                 FUND        FUND        FUND        FUND        FUND        FUND
PERIOD                         (CLASS A)   (CLASS B)   (CLASS A)   (CLASS B)   (CLASS A)   (CLASS B)
- ------                         ---------   ---------   ---------   ---------   ---------   ---------
<S>                            <C>         <C>         <C>         <C>         <C>         <C>
Fiscal year ended October 31,
  1997.......................    23.72%      24.13%      4.17%       3.83%       16.81%      16.99%
May 31, 1994 (commencement of
  operations) through October
  31, 1997...................    13.70%      14.13%      8.30%       8.60%       18.64%      19.17%
</TABLE>
    
 
  The standardized returns for the Class A and Class B shares of the Consumer
Products and Services Fund, stated as average annualized total returns for the
periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                      CONSUMER PRODUCTS   CONSUMER PRODUCTS
                                                             AND                 AND
                                                        SERVICES FUND       SERVICES FUND
PERIOD                                                    (CLASS A)           (CLASS B)
- ------                                                -----------------   -----------------
<S>                                                   <C>                 <C>
Fiscal year ended October 31, 1997..................         5.28%               4.95%
December 30, 1994 (commencement of operations) to
  October 31, 1997..................................        27.70%              28.59%
</TABLE>
    
 
                                       45
<PAGE>   1141
 
  Standard total return quotes may be accompanied by total return figures
calculated by alternative methods. For example, average annual total return may
be calculated without assuming payment of the full sales load according to the
following formula:
 
   
                                      (n)
                                P(1+U)    = ERV
    
 
<TABLE>
    <S>    <C>  <C>  <C>
    Where  P     =   a hypothetical initial payment of $1,000.
           U     =   average annual total return assuming payment of only a
                     stated portion of, or none of, the applicable maximum sales
                     load at the beginning of the stated period.
           n     =   number of years.
           ERV   =   ending redeemable value of a hypothetical $1,000 payment at
                     the end of the stated period.
</TABLE>
 
  The average annual non-standardized returns for the Class A and Class B shares
of the Health Care Fund and Telecommunications Fund, stated as average
annualized total returns for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                              HEALTH      HEALTH      TELECOM-      TELECOM-
                                               CARE        CARE      MUNICATIONS   MUNICATIONS
                                               FUND        FUND         FUND          FUND
PERIOD                                       (CLASS A)   (CLASS B)    (CLASS A)     (CLASS B)
- ------                                       ---------   ---------   -----------   -----------
<S>                                          <C>         <C>         <C>           <C>
Fiscal year ended October 31, 1997.........    28.36%      27.75%       17.70%        17.15%
October 31, 1992 through October 31,
  1997.....................................    16.37%        n/a        14.99%          n/a
April 1, 1993 (commencement of operations)
  through October 31, 1997.................      n/a       20.32%         n/a         12.38%
January 27, 1992 (commencement of
  operations) through October 31, 1997.....      n/a         n/a        12.42%          n/a
August 7, 1989 (commencement of operations)
  through October 31, 1997.................    15.92%        n/a          n/a           n/a
</TABLE>
    
 
  The average annual non-standardized returns for the Class A and Class B shares
of the Financial Services Fund, Infrastructure Fund and Resources Fund, stated
as aggregate total returns for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                               FINANCIAL   FINANCIAL    INFRA-      INFRA-
                               SERVICES    SERVICES    STRUCTURE   STRUCTURE   RESOURCES   RESOURCES
                                 FUND        FUND        FUND        FUND        FUND        FUND
PERIOD                         (CLASS A)   (CLASS B)   (CLASS A)   (CLASS B)   (CLASS A)   (CLASS B)
- ------                         ---------   ---------   ---------   ---------   ---------   ---------
<S>                            <C>         <C>         <C>         <C>         <C>         <C>
Fiscal year ended October 31,
  1997.......................    29.91%      29.13%      9.38%       8.83%       22.64%      21.99%
May 31, 1994 (commencement of
  operations) through October
  31, 1997...................    15.33%      14.76%      9.85%       9.31%       20.34%      19.74%
</TABLE>
    
 
  The average annual non-standardized returns for the Class A and Class B shares
of the Consumer Products and Services Fund, stated as average annualized total
returns for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                      CONSUMER PRODUCTS   CONSUMER PRODUCTS
                                                             AND                 AND
                                                        SERVICES FUND       SERVICES FUND
PERIOD                                                    (CLASS A)           (CLASS B)
- ------                                                -----------------   -----------------
<S>                                                   <C>                 <C>
Fiscal year ended October 31, 1997..................        10.55%               9.95%
December 30, 1994 (commencement of operations) to
  October 31, 1997..................................        29.91%              29.25%
</TABLE>
    
 
                                       46
<PAGE>   1142
 
  Cumulative total return across a stated period may be calculated as follows:
 
   
                                      (n)
                                P(1+V)    = ERV
    
 
<TABLE>
    <S>    <C>  <C>  <C>
    Where  P     =   a hypothetical initial payment of $1,000.
           V     =   cumulative total return assuming payment of all of, a stated
                     portion of, or none of, the applicable maximum sales load at
                     the beginning of the stated period.
           n     =   number of years.
           ERV   =   ending redeemable value of a hypothetical $1,000 payment at
                     the end of the stated period.
</TABLE>
 
  The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Class B shares of the Health Care Fund and
Telecommunications Fund, stated as aggregate total returns for the periods
shown, were:
 
   
<TABLE>
<CAPTION>
                                              HEALTH      HEALTH      TELECOM-      TELECOM-
                                               CARE        CARE      MUNICATIONS   MUNICATIONS
                                               FUND        FUND         FUND          FUND
PERIOD                                       (CLASS A)   (CLASS B)    (CLASS A)     (CLASS B)
- ------                                       ---------   ---------   -----------   -----------
<S>                                          <C>         <C>         <C>           <C>
April 1, 1993 (commencement of operations)
  through Oct. 31, 1997....................      n/a      133.44%         n/a         70.76%
January 27, 1992 (commencement of
  operations) through Oct. 31, 1997........      n/a         n/a        96.32%          n/a
August 7, 1989 (commencement of operations)
  through October 31, 1997.................   237.37%        n/a          n/a           n/a
</TABLE>
    
 
  The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Class B shares of the Financial Services Fund,
Infrastructure Fund and Resources Fund, stated as aggregate total returns for
the period shown were:
 
   
<TABLE>
<CAPTION>
                              FINANCIAL   FINANCIAL    INFRA-      INFRA-
                              SERVICES    SERVICES    STRUCTURE   STRUCTURE   RESOURCES   RESOURCES
                                FUND        FUND        FUND        FUND        FUND        FUND
PERIOD                        (CLASS A)   (CLASS B)   (CLASS A)   (CLASS B)   (CLASS A)   (CLASS B)
- ------                        ---------   ---------   ---------   ---------   ---------   ---------
<S>                           <C>         <C>         <C>         <C>         <C>         <C>
May 31, 1994 (commencement
  of operations) through
  October 31, 1997..........    62.87%      60.13%      37.89%      35.59%      88.33%      85.14%
</TABLE>
    
 
  The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Class B shares of the Consumer Products and Services Fund,
stated as aggregate total returns for the period shown, were:
 
   
<TABLE>
<CAPTION>
                                                      CONSUMER PRODUCTS   CONSUMER PRODUCTS
                                                             AND                 AND
                                                        SERVICES FUND       SERVICES FUND
PERIOD                                                    (CLASS A)           (CLASS B)
- ------                                                -----------------   -----------------
<S>                                                   <C>                 <C>
December 30, 1994 (commencement of operations) to
  October 31, 1997..................................       110.02%            107.02%
</TABLE>
    
 
  The aggregate non-standardized returns (taking sales charges into account) for
the Class A and Class B shares of the Health Care Fund and Telecommunications
Fund, stated as aggregate total returns for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                              HEALTH      HEALTH      TELECOM-      TELECOM-
                                               CARE        CARE      MUNICATIONS   MUNICATIONS
                                               FUND        FUND         FUND          FUND
PERIOD                                       (CLASS A)   (CLASS B)    (CLASS A)     (CLASS B)
- ------                                       ---------   ---------   -----------   -----------
<S>                                          <C>         <C>         <C>           <C>
April 1, 1993 (commencement of operations)
  through October 31, 1997.................      n/a      131.44%         n/a         68.76%
January 27, 1992 (commencement of
  operations) through October 31, 1997.....      n/a         n/a        87.00%          n/a
August 7, 1989 (commencement of operations)
  through October 31, 1997.................   221.34%        n/a          n/a           n/a
</TABLE>
    
 
                                       47
<PAGE>   1143
 
  The aggregate non-standardized returns (taking sales charges into account) for
the Class A and Class B shares of the Financial Services Fund, Infrastructure
Fund and Resources Fund, stated as aggregate total returns for the periods shown
were:
 
   
<TABLE>
<CAPTION>
                               FINANCIAL   FINANCIAL    INFRA-      INFRA-
                               SERVICES    SERVICES    STRUCTURE   STRUCTURE   RESOURCES   RESOURCES
                                 FUND        FUND        FUND        FUND        FUND        FUND
           PERIOD              (CLASS A)   (CLASS B)   (CLASS A)   (CLASS B)   (CLASS A)   (CLASS B)
           ------              ---------   ---------   ---------   ---------   ---------   ---------
<S>                            <C>         <C>         <C>         <C>         <C>         <C>
May 31, 1994 (commencement of
  operations) through October
  31, 1997...................    55.13%      57.13%      31.34%      32.59%      79.38%     82.14%
</TABLE>
    
 
  The aggregate non-standardized returns (taking sales charges into account) for
the Class A and Class B shares of the Consumer Products and Services Fund,
stated as aggregate total returns for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                       CONSUMER PRODUCTS   CONSUMER PRODUCTS
                                                              AND                 AND
                                                         SERVICES FUND       SERVICES FUND
                       PERIOD                              (CLASS A)           (CLASS B)
                       ------                          -----------------   -----------------
<S>                                                    <C>                 <C>
December 30, 1994 (commencement of operations) to
  October 31, 1997...................................       100.04%              104.02%
</TABLE>
    
 
  Each Fund's investment results will vary from time to time depending upon
market conditions, the composition of each Fund's portfolio and operating
expenses of each Fund, so that current or past yield or total return should not
be considered representative of what an investment in each Fund may earn in any
future period. These factors and possible differences in the methods used in
calculating investment results should be considered when comparing each Fund's
investment results with those published for other investment companies and other
investment vehicles. Each Fund's results also should be considered relative to
the risks associated with such Fund's investment objective and policies.
 
PERFORMANCE INFORMATION
 
  Total return and yield figures for the Funds are neither fixed nor guaranteed,
and no Fund's principal is insured. Performance quotations reflect historical
information and should not be considered representative of a Fund's performance
for any period in the future. Performance is a function of a number of factors
which can be expected to fluctuate. The Funds may provide performance
information in reports, sales literature and advertisements. The Funds may also,
from time to time, quote information about the Funds published or aired by
publications or other media entities which contain articles or segments relating
to investment results or other data about one or more of the Funds. Such
publications or media entities may include the following, among others:
 
Advertising Age
Barron's
Best's Review
Broker World
Business Week
Changing Times
Christian Science Monitor
Consumer Reports
Economist
EuroMoney
FACS of the Week
Financial Planning
Financial Product News
Financial World
Forbes
Fortune
Global Finance
Hartford Courant Inc.
Institutional Investor
Insurance Forum
Insurance Week
Investor's Daily
Journal of the American
Society of CLU & ChFC
Kiplinger Letter
Money
Mutual Fund Forecaster
Mutual Fund Magazine
Nation's Business
New York Times
Pension World
Pensions & Investments
Personal Investor
Financial Services Week
Philadelphia Inquirer
Smart Money
USA Today
U.S. News & World Report
Wall Street Journal
Washington Post
CNN
CNBC
PBS
 
  The Funds and AIM Distributors may from time to time, in advertisements, sales
literature and reports furnished to present or prospective shareholders, compare
each Fund with the following, or compare each Fund's performance to performance
data of similar mutual funds as published in the following, among others:
 
Bank Rate National Monitor Index
Bear Stearns Foreign Bond Index
 
                                       48
<PAGE>   1144
 
Bond Buyer Index
CDA/Wiesenberger Investment Company Services
  (data and mutual fund rankings and comparisons)
CNBC/Financial News Composite Index
COFI
Consumer Price Index
Datastream
Donoghue's
Dow Jones Industrial Average
EAFE Index
First Boston High Yield Index
Fitch (publications)
Ibbotson Associates International Bond Index
International Bank for Reconstruction and
  Development (publications)
International Finance Corporation Emerging Markets
  Database
International Financial Statistics
Lehman Bond Indices
Lipper Analytical Data Services, Inc. (data and
  mutual fund rankings and comparisons)
Micropal, Inc. (data and mutual fund rankings
  and comparisons)
Moody's Investors Service (publications)
Morgan Stanley Capital International All Country
  (AC) World Index
Morgan Stanley Capital International World Indices
Morningstar, Inc. (data and mutual fund rankings
  and comparisons)
NASDAQ
Organization for Economic Cooperation and
  Development (publications)
Salomon Brothers Global Telecommunications Index
Salomon Brothers World Government Bond
  Index-Non-U.S.
Salomon Brothers World Government Bond Index
Standard & Poor's (publications)
Standard & Poor's 500 Composite Stock Price Index
Stangar
   
Wilshire Associates
    
World Bank (publications and reports)
The World Bank Publication of Trends in Developing
  Countries
Worldscope
 
  Each Fund may also compare its performance to rates on Certificates of Deposit
and other fixed rate investments such as the following:
 
         10-year Treasuries
         30-year Treasuries
         30-day Treasury Bills
 
  Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable but may be subject
to revision and has not been independently verified by the Funds or AIM
Distributors. Advertising for the Funds may from time to time include
discussions of general economic conditions and interest rates. Advertising for
the Funds may also include reference to the use of those Funds as part of an
individual's overall retirement investment program. From time to time, sales
literature and/or advertisements for any of the Funds may disclose (i) the
largest holdings in the Fund's portfolio, (ii) certain selling group members
and/or (iii) certain institutional shareholders.
 
  From time to time, the Funds' sales literature and/or advertisements may
discuss generic topics pertaining to the mutual fund industry. This includes,
but is not limited to, literature addressing general information about mutual
funds, variable annuities, dollar-cost averaging, stocks, bonds, money markets,
certificates of deposit, retirement, retirement plans, asset allocation,
tax-free investing, college planning, and inflation.
 
  Although performance data may be useful to prospective investors when
comparing a Fund's performance with other funds and other potential investments,
investors should note that the methods of computing performance of other
potential investments are not necessarily comparable to the methods employed by
a Fund.
 
GENERAL INFORMATION ABOUT THE THEME FUNDS AND THEME PORTFOLIOS
 
  Each Theme Portfolio may invest worldwide across industries within the
Portfolio's area of concentration without national or regional restrictions. The
ability of each Theme Portfolio to invest worldwide may allow the portfolio
managers to select industries in different economic cycles and varying stages of
development, though there is no assurance that the managers will be successful
in this selection.
 
  Each Theme Portfolio's area of concentration reflects the underlying theme of
the Portfolio. AIM Distributors believes that there are certain social,
political and economic trends that may benefit one or more industries within a
Theme Portfolio's area of concentration. Of course, there is no assurance that
any of the Funds will benefit as a result.
 
                                       49
<PAGE>   1145
 
HEALTH CARE FUND
 
  From time to time the Fund and AIM Distributors will quote information
including data regarding:
 
  - Trading volume, number of listed companies and the largest companies of the
    global health care industry
 
  - Expenditures by various countries, regions and age groups on health care
 
  - Population of countries, regions and age groups
 
  - Natality and mortality rates in various regions, countries and age groups
 
  - Life expectancy rates in various regions, countries and age groups
 
  - New health care products and products seeking approval
 
  - Health maintenance organizations (HMOs) and their enrollment growth
 
  - Studies from, but not limited to, the American Medical Association showing
    the effectiveness of using drugs to cure illness
 
  - Medical technology and devices in use or in development
 
  - Regulatory environment of health care industries
 
  - Consolidation in the health care industries
 
  The information quoted has not been independently verified by a Fund or AIM
Distributors and will be based on data provided that is believed to be reliable
and accurate from sources including the following:
 
  - Research firms such as Mehta and Isaly which publishes Pharmaceutical
    Portfolio Recommendations
 
  - OECD and its publications such as the OECD Health Data, as supplemented
    annually
 
  - Morgan Stanley Capital International stock market industry indices such as
    Health & Personal Care
 
  - The World Bank and its publications such as The World Development Report, as
    supplemented annually
 
  - IFC and publications such as the Emerging Stock Markets Factbook
 
   
INFORMATION ABOUT THE GLOBAL HEALTH CARE INDUSTRIES
    
 
   
  The Fund and the Sub-advisor believe that certain market and demographic
factors merit an investor's consideration when making a health care investment.
Worldwide standards of living and life expectancy have increased at a
substantial rate. The Sub-advisor expects this growth, which works to the
general benefit of the global health care industry, to continue at a roughly
comparable rate in the future, although no assurances can be given in this
regard. Moreover, according to the Sub-advisor, the health care industry
historically has proven to be a relatively non-cyclical industry that continues
to provide goods and services to the public in periods of economic weakness as
well as economic strength.
    
 
   
  The Sub-advisor believes that the anticipated increase in the world's elderly
population could increase demand for health care products and services. For
example, according to data compiled by the Sub-advisor, in Japan the number of
people age 65 and older is expected to grow over 100% by the year 2025; in
Germany, France and the U.S., the same age group should grow 40%. Similarly, the
U.S. Census Bureau predicts the number of Americans 85 and older to double in
the next 30 years. From time to time, the Fund and AIM Distributors will quote
information including, but not limited to, international data regarding
populations, birth rates, mortality rates, life expectancy, health care
expenditures, and gross domestic product vs. life expectancy. The information
quoted has not been independently verified by the Fund or AIM Distributors and
will be based on data that is believed to be reliable and accurate.
    
 
TELECOMMUNICATIONS FUND
 
  From time to time the Fund and AIM Distributors will quote information
including data regarding:
 
   
  - Increased usage of new technologies such as, but not limited to, cellular
    and wireless communications in emerging and established countries around the
    world
    
 
  - Supply and demand of telephone equipment and services
 
  - Regulatory environment of telecommunications industries
 
                                       50
<PAGE>   1146
 
  - Revenue, price and usage of telecommunications products and services
 
  - Privatization and/or deregulation of telecommunications companies
 
  The information quoted has not been independently verified by the Fund or AIM
Distributors and will be based on data provided that is believed to be reliable
and accurate from sources including the following:
 
  - Salomon Brothers World Equity Telecommunications Index, which includes stock
    market data about the telecommunications industry in established and
    developing markets
 
  - OECD and other publications from its subsidiaries such as the International
    Telecommunications Union
 
  - Morgan Stanley Capital International stock market industry indices such as
    Telecommunications, Broadcasting & Publishing and Data Processing &
    Reproduction
 
  - International Technology Consultants, a Washington D.C. based firm which
    publishes reports such as Eastern European & Soviet Telecom Report and Latin
    American Telecom Report
 
  - Telegeography and other publications
 
DEREGULATION IN THE UNITED STATES
 
   
  The United States has been the bellwether for deregulation of the telephone
industry. The divestiture of the Bell System from American Telephone and
Telegraph has produced competing companies in the United States. Such U.S.
market-driven competition has, for example, led to lower costs for consumers
which in turn led to greater consumer usage and to higher industrywide revenues.
The Sub-advisor expects this scenario to continue to benefit such companies in
the U.S. and to similarly to be realized by the established telecommunications
companies in established economies, although no assurances can be made in this
regard.
    
 
CONSUMER PRODUCTS AND SERVICES FUND
 
  From time to time the Fund and AIM Distributors will quote information
including data regarding:
 
  - Trading volume, number of listed companies and the largest companies located
    around the world in the consumer products and services industries
 
  - Expenditures, demand and consumption by various countries, regions, income
    classes and age groups of consumer products and services
 
  - Population of countries, regions and age groups
 
  - Life expectancy rates in various regions, countries and age groups
 
  - New consumer products and services in the development or manufacturing
    stages
 
  - Income of various regions, countries and age groups
 
  - Sales and sales growth of consumer products and services companies in their
    own country and abroad
 
  - Sales, supply and demand of consumer products and services
 
  - Parent Companies and the products and services they distribute
 
  - Regulatory environment of consumer products industries
 
  The information quoted will not be independently verified by the Fund or AIM
Distributors and will be based on data provided that is believed to be reliable
and accurate from sources including the following:
 
  - Consumer and trade groups
 
  - Fortune magazine and other periodicals
 
  - The World Bank and its publications
 
  - The International Monetary Fund (IMF) and its publications
 
  - IFC and its publications
 
                                       51
<PAGE>   1147
 
  - OECD and its publications
 
INFRASTRUCTURE FUND
 
  From time to time the Fund and AIM Distributors may quote information
including:
 
  - Supply and demand of telephone equipment and services, electricity, water,
    transportation, construction materials and other infrastructure-related
    products and services
 
  - Regulatory environment of infrastructure industries
 
  - Quantity and costs of current and projected infrastructure projects
 
  - Privatization of industries and companies
 
  - New technologies, products and services used in infrastructure industries
 
  - Infrastructure Finance Magazine and other periodicals
 
FINANCIAL SERVICES FUND
 
  From time to time the Fund and AIM Distributors may quote information
including:
 
  - Supply and demand of financial services
 
  - Regulatory environment of financial service industries
 
  - Credit ratings of U.S. and non-U.S. banks
 
  - New technologies, products and services used in the financial services
    industries
 
  - Consolidation in the financial services industries
 
RESOURCES FUND
 
  From time to time the Fund and AIM Distributors may quote information
including:
 
  - Supply, demand and prices of natural resources
 
  - Regulatory environment of natural resources
 
  - Supply, demand and prices of products manufactured from natural resources
 
  - New technologies, products and services used in the natural resources
    industries
 

                                       52
<PAGE>   1148
 
   
                                    APPENDIX
    
 
   
                          DESCRIPTION OF BOND RATINGS
    
 
  Moody's Investors Service, Inc. ("Moody's") rates the debt securities issued
by various entities from "Aaa" to "C." Investment grade ratings are the first
four categories: Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues. Aa --
Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than the Aaa securities. A -- Bonds
which are rated A possess many favorable investment attributes and are to be
considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future. Baa --
Bonds which are rated Baa are considered as medium-grade obligations, (i.e.,
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. Ba -- Bonds which are rated Ba
are judged to have speculative elements; their future cannot be considered as
well-assured. Often the protection of interest and principal payments may be
very moderate, and thereby not well safeguarded during both good and bad times
over the future. Uncertainty of position characterizes bonds in this class. B --
Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small. Caa --
Bonds which are rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.
Ca -- Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C -- Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
 
   
  Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"),
rates the securities debt of various entities in categories ranging from "AAA"
to "D" according to quality. Investment grade ratings are the first four
categories: AAA -- An obligation rated "AAA" has the highest rating assigned by
S&P. The obligor's capacity to meet its financial commitment on the obligation
is extremely strong. AA -- An obligation rated "AA" differs from the highest
rated obligations only in a small degree. The obligor's capacity to meet its
financial commitment on the obligation is very strong. A -- An obligation rated
"A" is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than obligations in higher rated
categories. BBB -- An obligation rated "BBB" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation. BB, B, CCC, CC, C -- Obligations rated "BB," "B,"
"CCC," "CC," and "C" are regarded as having significant speculative
characteristics. "BB" indicates the least degree of speculation and "C" the
highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions. BB -- An obligation rated "BB" is less
vulnerable to nonpayment than other speculative issues. However, it faces major
ongoing uncertainties or exposure to adverse business, financial, or economic
conditions which could lead to the obligor's inadequate capacity to meet its
financial commitment on the obligation. B -- An obligation rated "B" is more
vulnerable to nonpayment than obligations rated "BB," but the obligor currently
has the capacity to meet its financial commitment on the obligation. Adverse
business, financial, or economic conditions will likely impair the obligor's
capacity or willingness to meet its financial commitment on the obligation.
CCC -- An obligation rated "CCC" is currently vulnerable to nonpayment, and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.
CC -- An obligation rated "CC" is currently highly vulnerable to nonpayment.
C -- The "C" rating may be used to cover a situation where a bankruptcy petition
has been filed or similar action has been taken, but payments on this obligation
are being continued. D -- An obligation rated "D" is in payment default. The "D"
rating category is used when payments on an obligation are not made on the date
due even if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The "D" rating also
will be used upon the filing of a bankruptcy petition or the taking of a similar
action if payments on an obligation are jeopardized.
    
 
                                       53
<PAGE>   1149
  PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
 
  NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
 
                    DESCRIPTION OF COMMERCIAL PAPER RATINGS
 
  Moody's employs the designation "Prime-1" to indicate commercial paper having
a superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. Issues rated Prime-2 have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many of
the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
 
   
  S&P ratings of commercial paper are graded into several categories ranging
from "A-1" for the highest quality obligations to "D" for the lowest. Issues in
the "A" category are delineated with numbers 1, 2, and 3 to indicate the
relative degree of safety. A-1 -- This highest category indicates that the
degree of safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics will be denoted with a plus sign
(+) designation. A-2 -- Capacity for timely payments on issues with this 
designation is satisfactory; however, the relative degree of safety is not as 
high as for issues designated "A-1."
    
 
   
                               ABSENCE OF RATING
    
 
   
  Where no rating has been assigned or where a rating has been suspended or
withdrawn, it may be for reasons unrelated to the quality of the issue.
    
 
   
  Should no rating be assigned, the reason may be one of the following:
    
 
   
          1. An application for rating was not received or accepted.
    
 
   
          2. The issue or issuer belongs to a group of securities or companies
     that are not rated as a matter of policy.
    
 
   
          3. There is a lack of essential data pertaining to the issue or
     issuer.
    
 
   
          4. The issue was privately placed, in which case the rating is not
     published in Moody's publications.
    
 
   
  Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.
    
 
   
  Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the Company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the Company ranks in the
lower end of its generic rating category.
    
 
                                       54
<PAGE>   1150
 
   
                              FINANCIAL STATEMENTS
    
 
                                       FS
<PAGE>   1151

         AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
    (FORMERLY GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED)
 
                            PORTFOLIO OF INVESTMENTS
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (59.0%)
  Linens 'N Things, Inc.-/- .................................   US             86,500   $  5,211,625         2.7
    RETAILERS-APPAREL
  Fred Meyer, Inc.-/- .......................................   US            111,800      5,017,025         2.6
    RETAILERS-FOOD
  Lamar Advertising Co.-/- ..................................   US            143,100      4,936,950         2.5
    BROADCASTING & PUBLISHING
  New York Times Co. "A" ....................................   US             67,000      4,752,813         2.4
    BROADCASTING & PUBLISHING
  Brylane, Inc.-/- ..........................................   US             77,000      4,523,750         2.3
    RETAILERS-APPAREL
  Tandy Corp. ...............................................   US             90,500      4,502,375         2.3
    RETAILERS-OTHER
  Safeway, Inc.-/- ..........................................   US            115,800      4,429,350         2.3
    RETAILERS-FOOD
  Telecom Italia Mobile S.p.A. ..............................   ITLY          733,500      4,203,738         2.1
    WIRELESS COMMUNICATIONS
  Airborne Freight Corp. ....................................   US            101,200      4,010,050         2.0
    TRANSPORTATION - AIRLINES
  Outdoor Systems, Inc.-/- ..................................   US            126,000      4,000,500         2.0
    BROADCASTING & PUBLISHING
  Loblaw Cos., Ltd. .........................................   CAN           189,300      3,978,782         2.0
    RETAILERS-FOOD
  Pier 1 Imports, Inc. ......................................   US            150,400      3,966,800         2.0
    RETAILERS-OTHER
  CKE Restaurants, Inc. .....................................   US            112,000      3,878,000         2.0
    RESTAURANTS
  Sears Canada, Inc. ........................................   CAN           203,500      3,807,530         1.9
    RETAILERS-OTHER
  Dayton Hudson Corp. .......................................   US             42,000      3,667,125         1.9
    RETAILERS-APPAREL
  Pacific Sunwear of California-/- ..........................   US             80,000      3,530,000         1.8
    RETAILERS-APPAREL
  Family Dollar Stores, Inc. ................................   US            103,000      3,502,000         1.8
    RETAILERS-APPAREL
  The Neiman Marcus Group, Inc.-/- ..........................   US             88,600      3,250,513         1.7
    RETAILERS-APPAREL
  Ames Department Stores, Inc.-/- ...........................   US            132,600      3,248,700         1.7
    RETAILERS-OTHER
  Cinar Films, Inc. "B"-/- {\/} .............................   CAN           152,000      2,926,000         1.5
    BROADCASTING & PUBLISHING
  Duane Reade, Inc.-/- ......................................   US            115,700      2,747,875         1.4
    RETAILERS-OTHER
  Dress Barn, Inc.-/- .......................................   US             90,700      2,641,638         1.3
    RETAILERS-APPAREL
  Fred's, Inc. ..............................................   US            105,500      2,637,500         1.3
    RETAILERS-OTHER
  Clear Channel Communications, Inc.-/- .....................   US             25,200      2,375,100         1.2
    BROADCASTING & PUBLISHING
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-1
<PAGE>   1152
         AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
    (FORMERLY GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (Continued)
  Goody's Family Clothing, Inc.-/- ..........................   US             45,000   $  2,227,500         1.1
    RETAILERS-APPAREL
  Sonic Automotive, Inc.-/- .................................   US            125,300      2,192,750         1.1
    RETAILERS-OTHER
  Costco Companies, Inc.-/- .................................   US             39,000      2,179,125         1.1
    RETAILERS-FOOD
  Canadian Tire Corp. "A" ...................................   CAN            78,200      1,963,615         1.0
    RETAILERS-OTHER
  Cavanaughs Hospitality Corp.-/- ...........................   US            120,200      1,885,638         1.0
    LEISURE & TOURISM
  Chancellor Media Corp.-/- .................................   US             39,000      1,850,063         0.9
    BROADCASTING & PUBLISHING
  Southwest Airlines Co. ....................................   US             61,000      1,673,688         0.9
    TRANSPORTATION - AIRLINES
  Musicland Stores Corp.-/- .................................   US            127,800      1,565,550         0.8
    RETAILERS-OTHER
  Dollar Tree Stores, Inc.-/- ...............................   US             27,900      1,513,575         0.8
    RETAILERS-OTHER
  Imax Corp.-/- .............................................   CAN            50,000      1,355,179         0.7
    BROADCASTING & PUBLISHING
  99 Cents Only Stores-/- ...................................   US             35,200      1,342,000         0.7
    RETAILERS-OTHER
  Torstar Corp. "B" .........................................   CAN            39,220      1,330,468         0.7
    BROADCASTING & PUBLISHING
  General Cable PLC-/- ......................................   UK            420,000      1,278,261         0.7
    BROADCASTING & PUBLISHING
  Rite Aid Corp. ............................................   US             29,100        934,838         0.5
    RETAILERS-OTHER
  Southam, Inc. .............................................   CAN            28,000        509,198         0.3
    BROADCASTING & PUBLISHING
                                                                                        ------------
                                                                                         115,547,187
                                                                                        ------------
Consumer Non-Durables (25.5%)
  Heineken N.V. .............................................   NETH           22,500      5,220,583         2.7
    BEVERAGES - ALCOHOLIC
  Saputo Group, Inc. ........................................   CAN           197,800      5,208,904         2.7
    FOOD
  Nestle S.A. - Registered ..................................   SWTZ            2,670      5,180,145         2.6
    FOOD
  The Dial Corp. ............................................   US            191,400      4,665,375         2.4
    HOUSEHOLD PRODUCTS
  Clorox Co. ................................................   US             50,000      4,193,750         2.1
    HOUSEHOLD PRODUCTS
  Procter & Gamble Co. ......................................   US             49,500      4,068,281         2.1
    HOUSEHOLD PRODUCTS
  Ladbroke Group PLC-/- .....................................   UK            705,000      3,875,732         2.0
    RECREATION
  Coca-Cola Co. .............................................   US             51,000      3,869,625         2.0
    BEVERAGES - NON-ALCOHOLIC
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-2
<PAGE>   1153
         AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
    (FORMERLY GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Consumer Non-Durables (Continued)
  International Home Foods, Inc.-/- .........................   US            123,100   $  3,693,000         1.9
    FOOD
  Suiza Foods Corp.-/- ......................................   US             54,520      3,230,310         1.7
    FOOD
  Mail-Well, Inc.-/- ........................................   US             51,300      2,481,638         1.3
    OTHER CONSUMER GOODS
  Diageo PLC ................................................   UK            174,500      2,077,659         1.1
    BEVERAGES - ALCOHOLIC
  HON INDUSTRIES, Inc. ......................................   US             54,000      1,728,000         0.9
    OTHER CONSUMER GOODS
                                                                                        ------------
                                                                                          49,493,002
                                                                                        ------------
Finance (7.7%)
  Merita Ltd. "A" ...........................................   FIN           738,300      4,953,121         2.5
    BANKS-REGIONAL
  Fannie Mae ................................................   US             70,000      4,191,250         2.1
    OTHER FINANCIAL
  Axa - UAP .................................................   FR             18,850      2,214,326         1.1
    INSURANCE - MULTI-LINE
  H. F. Ahmanson & Co. ......................................   US             25,000      1,906,250         1.0
    BANKS-REGIONAL
  Green Tree Financial Corp. ................................   US             46,500      1,894,875         1.0
    CONSUMER FINANCE
                                                                                        ------------
                                                                                          15,159,822
                                                                                        ------------
Capital Goods (2.3%)
  Alcatel Alsthom Compagnie Generale d'Electricite ..........   FR             23,900      4,434,027         2.3
                                                                                        ------------
    TELECOM EQUIPMENT
Consumer Durables (1.5%)
  Budget Group, Inc. "A"-/- .................................   US             48,800      1,634,800         0.8
    AUTOMOBILES
  Dollar Thrifty Automotive Group, Inc.-/- ..................   US             77,000      1,453,375         0.7
    AUTOMOBILES
                                                                                        ------------
                                                                                           3,088,175
                                                                                        ------------
Technology (0.2%)
  Aspec Technology, Inc.-/- .................................   US             30,000        416,250         0.2
    COMPUTERS & PERIPHERALS
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $154,216,164) ................                            188,138,463        96.2
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-3
<PAGE>   1154
         AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
    (FORMERLY GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- -------------------------------------------------------------                           ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Dated April 30, 1998, with State Street Bank & Trust Co.,
   due May 1, 1998, for an effective yield of 5.44%,
   collateralized by $6,460,000 U.S. Treasury Bills, 6.125%
   due 8/31/98 (market value of collateral is $6,540,750,
   including accrued interest). (cost $6,409,000) ...........                           $  6,409,000         3.3
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $160,625,164)  * ....................                            194,547,463        99.5
Other Assets and Liabilities ................................                                975,779         0.5
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $195,523,242       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
          *  For Federal income tax purposes, cost is $160,852,352 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  34,939,576
                 Unrealized depreciation:            (1,244,465)
                                                  -------------
                 Net unrealized appreciation:     $  33,695,111
                                                  -------------
                                                  -------------
</TABLE>
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                         PERCENTAGE OF NET ASSETS {D}
                                        ------------------------------
                                                  SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY      & OTHER      TOTAL
- --------------------------------------  ------   -------------   -----
<S>                                     <C>      <C>             <C>
Canada (CAN/CAD) .....................   10.8                     10.8
Finland (FIN/FIM) ....................    2.5                      2.5
France (FR/FRF) ......................    3.4                      3.4
Italy (ITLY/ITL) .....................    2.1                      2.1
Netherlands (NETH/NLG) ...............    2.7                      2.7
Switzerland (SWTZ/CHF) ...............    2.6                      2.6
United Kingdom (UK/GBP) ..............    3.8                      3.8
United States (US/USD) ...............   68.3         3.8         72.1
                                        ------        ---        -----
Total  ...............................   96.2         3.8        100.0
                                        ------        ---        -----
                                        ------        ---        -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $195,523,242.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-4
<PAGE>   1155
               AIM GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
          (FORMERLY GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED)
 
                            PORTFOLIO OF INVESTMENTS
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Banks-Regional (46.7%)
  H. F. Ahmanson & Co. ......................................   US             30,000   $  2,287,500         2.0
  NationsBank Corp. .........................................   US             30,000      2,272,500         2.0
  City National Corp. .......................................   US             52,550      1,954,203         1.7
  Mellon Bank Corp. .........................................   US             26,800      1,929,600         1.7
  Royal Bank of Canada ......................................   CAN            30,000      1,791,984         1.6
  Lloyds TSB Group PLC ......................................   UK            115,086      1,723,403         1.5
  Merita Ltd. "A" ...........................................   FIN           247,000      1,657,078         1.4
  ABSA Group Ltd. ...........................................   SAFR          188,867      1,635,414         1.4
  GreenPoint Financial Corp. ................................   US             41,200      1,635,125         1.4
  First National Bank Holdings Ltd. .........................   SAFR          115,800      1,512,677         1.3
  National Australia Bank Ltd. ..............................   AUSL          106,500      1,511,425         1.3
  Bank of Nova Scotia .......................................   CAN            54,600      1,498,951         1.3
  Canadian Western Bank .....................................   CAN            84,000      1,492,341         1.3
  Bank of Ireland ...........................................   IRE            70,800      1,435,068         1.2
  BankBoston Corp. ..........................................   US             13,000      1,403,188         1.2
  Allied Irish Bank PLC{V} ..................................   IRE            98,797      1,365,480         1.2
  Nordbanken Holding AB .....................................   SWDN          182,800      1,346,724         1.2
  Anglo-Irish Bank Corp., PLC: ..............................   IRE                --             --         1.1
    Common{V} ...............................................   --            322,082        853,679          --
    Common ..................................................   --            184,026        490,461          --
  Crestar Financial Corp. ...................................   US             21,800      1,303,913         1.1
  Bank Hapoalim Ltd. ........................................   ISRL          483,000      1,297,249         1.1
  Banc One Corp. ............................................   US             21,700      1,276,231         1.1
  Commonwealth Bancorp, Inc. ................................   US             54,000      1,275,750         1.1
  Bayerische Vereinsbank ....................................   GER            16,070      1,222,717         1.1
  First Union Corp. (N.C.) ..................................   US             20,200      1,219,575         1.1
  Sovereign Bancorp, Inc. ...................................   US             63,840      1,204,980         1.0
  Norwest Corp. .............................................   US             30,000      1,190,625         1.0
  Christiania Bank Og Kreditkasse ...........................   NOR           257,900      1,186,439         1.0
  ForeningsSparbanken AB ....................................   SWDN           37,500      1,172,935         1.0
  Vermont Financial Services Corp. ..........................   US             40,000      1,170,000         1.0
  Westpac Banking Corp., Ltd. ...............................   AUSL          167,000      1,119,784         1.0
  Bank Leumi Le - Israel ....................................   ISRL          605,700      1,107,468         1.0
  St. George Bank Ltd. ......................................   AUSL          186,620      1,106,769         1.0
  Jyske Bank ................................................   DEN             9,000      1,045,930         0.9
  Demirbank T.A.S.: .........................................   TRKY               --             --         0.9
    Common ..................................................   --         37,896,000        834,547          --
    New-/- ..................................................   --         11,368,800        202,567          --
  Halifax PLC ...............................................   UK             76,800      1,025,498         0.9
  Cullen/Frost Bankers, Inc. ................................   US             17,500      1,023,750         0.9
  Akbank T.A.S. .............................................   TRKY        9,821,967        835,703         0.7
  Banco Commercial S.A.: ....................................   URGY               --             --         0.7
    Reg S GDR{c} {\/} .......................................   --             15,200        425,600          --
    144A GDR(::){\/}{.} .....................................   --             14,000        392,000          --
  BG Bank AS ................................................   DEN             9,500        555,491         0.5
  The Daishi Bank Ltd. ......................................   JPN           140,000        439,120         0.4
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-5
<PAGE>   1156
               AIM GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
          (FORMERLY GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Banks-Regional (Continued)
  Asahi Bank Ltd. ...........................................   JPN            83,000   $    319,930         0.3
  Mandamus AB Share Units-/- ................................   SWDN           75,000         67,856         0.1
                                                                                        ------------
                                                                                          53,819,228
                                                                                        ------------
Banks-Money Center (14.4%)
  BankAmerica Corp. .........................................   US             44,400      3,774,000         3.3
  HSBC Holdings PLC .........................................   HK             99,441      2,837,320         2.5
  ING Groep N.V. ............................................   NETH           29,500      1,917,880         1.7
  Credit Lyonnais CDI-/- ....................................   FR             18,900      1,871,131         1.6
  Citicorp ..................................................   US              9,450      1,422,225         1.2
  Chase Manhattan Corp. .....................................   US              9,750      1,350,984         1.2
  ABN AMRO Holdings N.V. ....................................   NETH           54,864      1,336,556         1.2
  Credit Suisse Group .......................................   SWTZ            5,610      1,234,282         1.1
  Fuji Bank Ltd. ............................................   JPN            67,000        377,258         0.3
  Sumitomo Bank .............................................   JPN            38,000        359,005         0.3
                                                                                        ------------
                                                                                          16,480,641
                                                                                        ------------
Consumer Finance (11.1%)
  The Money Store, Inc. .....................................   US            143,000      4,701,121         4.1
  Green Tree Financial Corp. ................................   US             70,000      2,852,500         2.5
  Beneficial Corp ...........................................   US             15,800      2,059,925         1.8
  Doral Financial Corp. .....................................   US             51,200      1,798,400         1.6
  Aeon Credit Service .......................................   HK          3,894,000        809,417         0.7
  Acom Co., Ltd. ............................................   JPN             9,000        475,474         0.4
                                                                                        ------------
                                                                                          12,696,837
                                                                                        ------------
Insurance - Multi-Line (9.2%)
  Travelers Group, Inc. .....................................   US             37,000      2,263,938         2.0
  Axa - UAP .................................................   FR             14,770      1,735,045         1.5
  SunAmerica, Inc. ..........................................   US             32,800      1,637,950         1.4
  Allstate Corp. ............................................   US             15,000      1,443,750         1.3
  American International Group, Inc. ........................   US              9,200      1,210,375         1.0
  Allianz AG ................................................   GER             3,788      1,165,538         1.0
  Fremont General Corp. .....................................   US             20,000      1,115,000         1.0
                                                                                        ------------
                                                                                          10,571,596
                                                                                        ------------
Other Financial (7.2%)
  Newcourt Credit Group, Inc. ...............................   CAN            63,200      3,103,196         2.7
  Providian Financial Corp. .................................   US             42,000      2,527,875         2.2
  Investors Financial Services Corp. ........................   US             25,500      1,373,813         1.2
  Heller Financial, Inc.-/- .................................   US             33,500        904,500         0.8
  Shohkoh Fund ..............................................   JPN             1,200        381,831         0.3
                                                                                        ------------
                                                                                           8,291,215
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-6
<PAGE>   1157
               AIM GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
          (FORMERLY GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Investment Management (3.0%)
  Alliance Capital Management L.P. ..........................   US             68,800   $  1,827,500         1.6
  Franklin Resources, Inc. ..................................   US             29,500      1,578,250         1.4
                                                                                        ------------
                                                                                           3,405,750
                                                                                        ------------
Securities Broker (2.5%)
  Morgan Stanley, Dean Witter & Co. .........................   US             22,200      1,751,025         1.5
  Hambrecht & Quist Group-/- ................................   US             36,000      1,203,750         1.0
  Peregrine Investment Holdings Ltd.(::) ....................   HK            532,000             --          --
                                                                                        ------------
                                                                                           2,954,775
                                                                                        ------------
Insurance-Life (1.4%)
  AEGON N.V. ................................................   NETH           12,080      1,567,122         1.4
                                                                                        ------------
Insurance - Property-Casualty (1.2%)
  Mercury General Corp. .....................................   US             22,000      1,424,500         1.2
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $86,172,363) .................                            111,211,664        96.7
                                                                                        ------------       -----
<CAPTION>
 
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- -------------------------------------------------------------                           ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Dated April 30, 1998, with State Street Bank & Trust Co.,
   due May 1, 1998, for an effective yield of 5.44%,
   collateralized by $4,995,000 U.S. Treasury Bills, 6.125%
   due 8/31/98 (market value of collateral is $5,057,438,
   including accrued interest). (cost $4,955,000) ...........                              4,955,000         4.3
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $91,127,363)  * .....................                            116,166,664       101.0
Other Assets and Liabilities ................................                             (1,111,733)       (1.0)
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $115,054,931       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (See Note 1 of Notes to Financial Statements).
        {V}  Security is denominated in GBP.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
       {\/}  U.S. currency denominated.
          *  For Federal income tax purposes, cost is $91,609,705 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  26,101,790
                 Unrealized depreciation:            (1,544,831)
                                                  -------------
                 Net unrealized appreciation:     $  24,556,959
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviation:
             GDR--Global Depositary Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-7
<PAGE>   1158
               AIM GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
          (FORMERLY GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                          PERCENTAGE OF NET
                                             ASSETS {D}
                                        ---------------------
                                                 SHORT-TERM
                                                   &
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY   OTHER  TOTAL
- --------------------------------------  ------   -----  -----
<S>                                     <C>      <C>    <C>
Australia (AUSL/AUD) .................    3.3             3.3
Canada (CAN/CAD) .....................    6.9             6.9
Denmark (DEN/DKK) ....................    1.4             1.4
Finland (FIN/FIM) ....................    1.4             1.4
France (FR/FRF) ......................    3.1             3.1
Germany (GER/DEM) ....................    2.1             2.1
Hong Kong (HK/HKD) ...................    3.2             3.2
Ireland (IRE/IEP) ....................    3.5             3.5
Israel (ISRL/ILS) ....................    2.1             2.1
Japan (JPN/JPY) ......................    2.0             2.0
Netherlands (NETH/NLG) ...............    4.3             4.3
Norway (NOR/NOK) .....................    1.0             1.0
South Africa (SAFR/ZAR) ..............    2.7             2.7
Sweden (SWDN/SEK) ....................    2.3             2.3
Switzerland (SWTZ/CHF) ...............    1.1             1.1
Turkey (TRKY/TRL) ....................    1.6             1.6
United Kingdom (UK/GBP) ..............    2.4             2.4
United States (US/USD) ...............   51.6    3.3     54.9
Uruguay (URGY/UYP) ...................    0.7             0.7
                                        ------   -----  -----
Total  ...............................   96.7    3.3    100.0
                                        ------   -----  -----
                                        ------   -----  -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $115,054,931.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                 APRIL 30, 1998
 
<TABLE>
<CAPTION>
                                           MARKET VALUE     CONTRACT    DELIVERY    UNREALIZED
CONTRACTS TO SELL:                        (U.S. DOLLARS)      PRICE       DATE     APPRECIATION
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Australian Dollars......................     2,018,779         1.48137   5/26/98   $    73,876
Australian Dollars......................       390,731         1.49191   5/26/98        11,437
Canadian Dollars........................     3,956,610         1.41430   6/24/98        38,299
Canadian Dollars........................       700,285         1.40700   6/24/98        10,447
Canadian Dollars........................       420,171         1.41500   6/24/98         3,857
Canadian Dollars........................       119,048         1.41500   6/24/98         1,093
Japanese Yen............................       642,431       122.80000   5/12/98        49,752
Japanese Yen............................       113,370       129.93000   5/12/98         2,077
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $8,552,263)...................     8,361,425                                 190,838
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS A
 PERCENTAGE OF NET ASSETS IS 7.27%.
  Total Open Forward Foreign Currency
   Contracts............................                                           $   190,838
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-8
<PAGE>   1159
                          AIM GLOBAL HEALTH CARE FUND
                     (FORMERLY GT GLOBAL HEALTH CARE FUND)
 
                            PORTFOLIO OF INVESTMENTS
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Medical Technology & Supplies (51.5%)
  Guidant Corp. .............................................   US            591,000   $ 39,523,117         7.1
  Visx, Inc.{::} -/- ........................................   US            866,200     38,221,075         6.8
  ATL Ultrasound, Inc.{::} -/- ..............................   US            745,500     36,063,563         6.4
  Physio-Control International Corp.{::} -/- ................   US          1,183,800     27,227,400         4.9
  Waters Corp.-/- ...........................................   US            381,100     20,388,850         3.6
  Dexter Corp. ..............................................   US            484,000     19,995,250         3.6
  Mentor Corp. ..............................................   US            621,900     16,907,906         3.0
  ESC Medical Systems Ltd.-/- {\/} ..........................   ISRL          393,100     12,775,750         2.3
  Sunrise Medical, Inc.-/- ..................................   US            710,000     10,516,875         1.9
  Endosonics Corp.{::} -/- ..................................   US          1,509,400      9,811,100         1.8
  Cardiac Pathways Corp.-/- .................................   US            929,300      8,828,350         1.6
  Baxter International, Inc. ................................   US            126,500      7,012,844         1.3
  Kensey Nash Corp.-/- ......................................   US            334,600      6,441,050         1.1
  Arterial Vascular Engineering, Inc.-/- ....................   US            153,000      5,412,375         1.0
  AVECOR Cardiovascular, Inc.{::} -/- .......................   US            580,000      4,060,000         0.7
  Becton, Dickinson & Co. ...................................   US             56,000      3,899,000         0.7
  CONMED Corp.-/- ...........................................   US            109,700      2,509,388         0.4
  Thoratec Laboratories Corp.-/- ............................   US            299,900      2,436,688         0.4
  Micro Therapeutics, Inc.-/- ...............................   US            200,000      2,137,500         0.4
  CardioGenesis Corp.-/- ....................................   US            310,000      1,976,250         0.3
  INAMED Corp.-/- ...........................................   US            275,000      1,925,000         0.3
  Angeion Corp.-/- ..........................................   US            670,000      1,842,500         0.3
  SonoSight, Inc.-/- ........................................   US            188,500      1,543,344         0.3
  Osteotech, Inc.-/- ........................................   US             58,000      1,279,625         0.2
  Medtronic, Inc. ...........................................   US             22,000      1,157,750         0.2
  Instrumentarium Group "A" .................................   FIN            16,000        970,481         0.2
  PolyMedica Corp.-/- .......................................   US             74,600        727,350         0.1
  Boston Scientific Corp.-/- ................................   US              9,800        708,663         0.1
  Innerdyne, Inc.-/- ........................................   US            193,000        579,000         0.1
  Conceptus, Inc.-/- ........................................   US            137,000        445,250         0.1
  Abaxis, Inc.-/- ...........................................   US            160,000        410,000         0.1
  Laserscope-/- .............................................   US            150,000        393,750         0.1
  Cardiovascular Dynamics, Inc.-/- ..........................   US             65,000        390,000         0.1
  Photoelectron Corp.-/- ....................................   US             22,800        152,475          --
  Lifecore Biomedical, Inc.-/- ..............................   US              3,000         58,875          --
                                                                                        ------------
                                                                                         288,728,394
                                                                                        ------------
Pharmaceuticals (20.0%)
  Warner-Lambert Co. ........................................   US            135,000     25,540,313         4.6
  Pfizer, Inc. ..............................................   US            155,000     17,640,938         3.2
  TheraTech, Inc.{::} -/- ...................................   US          1,935,000     15,721,875         2.8
  Zeneca Group PLC - ADR{\/} ................................   UK            324,300     14,228,663         2.5
  Bergen Brunswig Corp. "A" .................................   US            100,000      4,537,500         0.8
  NABI, Inc.-/- .............................................   US            820,000      3,228,750         0.6
  Schering-Plough Corp. .....................................   US             39,700      3,180,963         0.6
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-9
<PAGE>   1160
                          AIM GLOBAL HEALTH CARE FUND
                     (FORMERLY GT GLOBAL HEALTH CARE FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Pharmaceuticals (Continued)
  Roberts Pharmaceutical Corp.-/- ...........................   US            178,000   $  3,026,000         0.5
  Bristol Myers Squibb Co. ..................................   US             28,000      2,964,500         0.5
  American Home Products Corp. ..............................   US             28,000      2,607,500         0.5
  Abbott Laboratories .......................................   US             28,000      2,047,500         0.4
  Catalytica, Inc.-/- .......................................   US            138,866      2,013,557         0.4
  Johnson & Johnson .........................................   US             28,000      1,998,500         0.4
  SmithKline Beecham PLC - ADR{\/} ..........................   UK             29,000      1,727,313         0.3
  Glaxo Wellcome PLC - ADR{\/} ..............................   UK             29,000      1,640,313         0.3
  Merck & Co., Inc. .........................................   US             13,500      1,626,750         0.3
  Altana AG .................................................   GER            15,000      1,150,502         0.2
  Gedeon Richter-/- .........................................   HGRY            9,350      1,001,849         0.2
  Warner Chilcott Laboratories - ADR-/- {\/} ................   IRE            83,800        963,700         0.2
  Spiros Development Corporation II, Inc. - Units-/-+X+ .....   US             57,000        947,625         0.2
  Novartis AG ...............................................   SWTZ              561        927,582         0.2
  Elan Corp., PLC - ADR-/- {\/} .............................   IRE             7,000        434,875         0.1
  R.P. Scherer Corp.-/- .....................................   US              5,700        416,100         0.1
  Alpharma, Inc. "A" ........................................   US             16,700        379,925         0.1
  Life Medical Sciences, Inc.-/- ............................   US            200,000        275,000          --
  Astra AB - ADR{\/} ........................................   SWDN           12,000        246,750          --
  Watson Pharmaceuticals, Inc.-/- ...........................   US              5,700        245,100          --
  Schein Pharmaceutical, Inc.-/- ............................   US             10,000        245,000          --
  Medco Research, Inc. ......................................   US              5,700        116,138          --
  Unimed Pharmaceuticals, Inc.-/- ...........................   US              9,200         67,275          --
                                                                                        ------------
                                                                                         111,148,356
                                                                                        ------------
Biotechnology (12.4%)
  Agouron Pharmaceuticals, Inc.-/- ..........................   US            706,100     24,007,400         4.3
  Guilford Pharmaceuticals, Inc.-/- .........................   US            667,000     13,256,625         2.4
  COR Therapeutics, Inc.-/- .................................   US            550,000     10,381,250         1.9
  Amgen, Inc.-/- ............................................   US            139,800      8,335,575         1.5
  Protein Design Labs, Inc.-/- ..............................   US            260,000      8,320,000         1.5
  Genelabs Technologies, Inc.-/- ............................   US          1,090,000      3,951,250         0.7
  PathoGenesis Corp.-/- .....................................   US             16,400        649,850         0.1
  Enzon, Inc. Preferred-/- ..................................   US             16,000        217,920          --
  Human Genome Sciences, Inc.-/- ............................   US              1,000         36,375          --
                                                                                        ------------
                                                                                          69,156,245
                                                                                        ------------
Health Care Services (5.5%)
  Vencor, Inc.-/- ...........................................   US            513,000     13,915,125         2.5
  Tenet Healthcare Corp.-/- .................................   US            129,500      4,848,156         0.9
  Allegiance Corp. ..........................................   US            103,000      4,699,375         0.8
  Nationwide Health Properties, Inc. ........................   US             68,000      1,598,000         0.3
  SteriGenics International, Inc.-/- ........................   US             61,900      1,431,438         0.3
  Hanger Orthopedic Group, Inc.-/- ..........................   US             59,000      1,102,563         0.2
  Grupo Casa Autrey, S.A. de C.V. - ADR{\/} .................   MEX            79,100      1,048,075         0.2
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-10
<PAGE>   1161
                          AIM GLOBAL HEALTH CARE FUND
                     (FORMERLY GT GLOBAL HEALTH CARE FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Health Care Services (Continued)
  Parkway Holdings Ltd. .....................................   SING          300,000   $    648,751         0.1
  Health Management Associates, Inc. "A"-/- .................   US             14,000        441,000         0.1
  Quorum Health Group, Inc.-/- ..............................   US             12,500        401,563         0.1
  Quintiles Transnational Corp.-/- ..........................   US              5,000        247,500          --
  McKesson Corp. ............................................   US              2,500        176,719          --
  United Healthcare Corp. ...................................   US              2,500        175,625          --
  HEALTHSOUTH Corp.-/- ......................................   US              5,500        166,031          --
  Wellpoint Health Networks - New-/- ........................   US              1,000         72,125          --
                                                                                        ------------
                                                                                          30,972,046
                                                                                        ------------
Paper/Packaging (2.2%)
  Kimberly-Clark Corp. ......................................   US            240,618     12,211,364         2.2
                                                                                        ------------
Computers & Peripherals (0.4%)
  Hewlett-Packard Co. .......................................   US             27,000      2,033,438         0.4
                                                                                        ------------
Consumer Services (0.1%)
  Service Corporation International .........................   US             11,000        453,750         0.1
                                                                                        ------------
Personal Care/Cosmetics (0.0%)
  Gillette Co. ..............................................   US              2,000        230,875          --
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $453,759,253) ................                            514,934,468        92.1
                                                                                        ------------       -----
<CAPTION>
 
                                                                            NO. OF         VALUE         % OF NET
WARRANTS                                                       COUNTRY     WARRANTS       (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Rhone-Poulenc Warrants, expire 11/5/01 ....................   FR            190,736        920,357         0.2
    PHARMACEUTICALS
  ALZA Corp. Warrants, expire 12/31/99 ......................   US            100,000        109,375          --
    PHARMACEUTICALS
                                                                                        ------------       -----
 
TOTAL WARRANTS (cost $32,137) ...............................                              1,029,732         0.2
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-11
<PAGE>   1162
                          AIM GLOBAL HEALTH CARE FUND
                     (FORMERLY GT GLOBAL HEALTH CARE FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- -------------------------------------------------------------                           ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Dated April 30, 1998, with State Street Bank & Trust Co.,
   due May 1, 1998, for an effective yield of 5.44%,
   collateralized by $29,380,000 U.S. Treasury Bonds, 7.25%
   due 5/15/16 (market value of collateral is $34,111,844,
   including accrued interest). (cost $33,422,000) ..........                           $ 33,422,000         6.0
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $487,213,390)  * ....................                            549,386,200        98.3
Other Assets and Liabilities ................................                              9,348,090         1.7
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $558,734,290       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
       {::}  See Note 6 of Notes to Financial Statements.
        +X+  Each unit consists of one callable common share of Spiros
             Development Corporation II, Inc. and one warrant to purchase .25
             shares of Dura Pharmaceuticals, Inc.
          *  For Federal income tax purposes, cost is $489,315,001 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  90,649,808
                 Unrealized depreciation:           (30,578,609)
                                                  -------------
                 Net unrealized appreciation:     $  60,071,199
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviation:
             ADR--American Depositary Receipt
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {D}
                                        -------------------------------------------
                                                                 SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS       & OTHER     TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Finland (FIN/FIM) ....................    0.2                                   0.2
France (FR/FRF) ......................                0.2                       0.2
Germany (GER/DEM) ....................    0.2                                   0.2
Hungary (HGRY/HUF) ...................    0.2                                   0.2
Ireland (IRE/IEP) ....................    0.3                                   0.3
Israel (ISRL/ILS) ....................    2.3                                   2.3
Mexico (MEX/MXN) .....................    0.2                                   0.2
Singapore (SING/SGD) .................    0.1                                   0.1
Switzerland (SWTZ/CHF) ...............    0.2                                   0.2
United Kingdom (UK/GBP) ..............    3.1                                   3.1
United States (US/USD) ...............   85.3                        7.7       93.0
                                        ------      -----          -----      -----
Total  ...............................   92.1         0.2            7.7      100.0
                                        ------      -----          -----      -----
                                        ------      -----          -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $558,734,290.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-12
<PAGE>   1163
                 AIM GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
            (FORMERLY GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED)
 
                            PORTFOLIO OF INVESTMENTS
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Energy (36.6%)
  Enron Corp. ................................................   US             62,701   $ 3,084,102         3.4
    GAS PRODUCTION & DISTRIBUTION
  AES Corp.-/- ...............................................   US             55,264     3,049,882         3.4
    ELECTRICAL & GAS UTILITIES
  Light - Servicos de Electricidade S.A. .....................   BRZL        5,500,000     2,212,505         2.5
    ELECTRICAL & GAS UTILITIES
  EVN Energie-Versorgung Niederoesterreich AG ................   ASTRI          13,200     1,949,941         2.2
    ELECTRICAL & GAS UTILITIES
  Endesa S.A. - ADR{\/} ......................................   SPN            80,000     1,940,000         2.2
    ELECTRICAL & GAS UTILITIES
  Houston Industries, Inc. ...................................   US             59,000     1,714,688         1.9
    ELECTRICAL & GAS UTILITIES
  Viag AG ....................................................   GER             3,000     1,520,067         1.7
    ELECTRICAL & GAS UTILITIES
  Dominion Resources, Inc. ...................................   US             38,000     1,503,375         1.7
    ELECTRICAL & GAS UTILITIES
  Interstate Energy Corp. ....................................   US             46,740     1,475,231         1.6
    ELECTRICAL & GAS UTILITIES
  Pinnacle West Capital Corp. ................................   US             32,000     1,416,000         1.6
    ELECTRICAL & GAS UTILITIES
  Light - Participacoes S.A. .................................   BRZL        5,410,000     1,324,705         1.5
    ELECTRICAL & GAS UTILITIES
  VEBA AG ....................................................   GER            20,000     1,322,185         1.5
    ELECTRICAL & GAS UTILITIES
  MCN Energy Group, Inc. .....................................   US             35,000     1,321,250         1.5
    ELECTRICAL & GAS UTILITIES
  National Grid Group PLC ....................................   UK            200,000     1,290,970         1.4
    ELECTRICAL & GAS UTILITIES
  RWE AG .....................................................   GER            25,000     1,272,297         1.4
    ELECTRICAL & GAS UTILITIES
  Edison S.p.A. ..............................................   ITLY          150,000     1,248,235         1.4
    ELECTRICAL & GAS UTILITIES
  Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} .....   BRZL           24,900     1,207,650         1.3
    ELECTRICAL & GAS UTILITIES
  BSES Ltd. - 144A GDR{.} {\/} ...............................   IND            70,000     1,149,750         1.3
    ELECTRICAL & GAS UTILITIES
  EVI, Inc.-/- ...............................................   US             20,000     1,065,000         1.2
    ENERGY EQUIPMENT & SERVICES
  MetroGas S.A. - ADR{\/} ....................................   ARG            96,051       954,507         1.1
    ELECTRICAL & GAS UTILITIES
  Hub Power Co. ..............................................   PAK           700,000       713,507         0.8
    ELECTRICAL & GAS UTILITIES
                                                                                         -----------
                                                                                          32,735,847
                                                                                         -----------
Services (29.6%)
  Compagnie Generale des Eaux ................................   FR             13,982     2,600,978         2.9
    CONSUMER SERVICES
  Mannesmann AG ..............................................   GER             3,000     2,381,271         2.7
    WIRELESS COMMUNICATIONS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-13
<PAGE>   1164
                 AIM GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
            (FORMERLY GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Services (Continued)
  Telecom Italia SpA - Di Risp-/- ............................   ITLY          400,000   $ 2,109,674         2.3
    TELEPHONE NETWORKS
  Canadian National Railway Co. ..............................   CAN            30,900     2,011,083         2.2
    TRANSPORTATION - ROAD & RAIL
  Magyar Tavkozlesi Rt. - ADR-/- {\/} ........................   HGRY           66,800     1,970,600         2.2
    TELEPHONE NETWORKS
  Paging Network, Inc.-/- ....................................   US            125,000     1,757,813         2.0
    WIRELESS COMMUNICATIONS
  Portugal Telecom S.A. - ADR{\/} ............................   PORT           28,000     1,505,000         1.7
    TELEPHONE NETWORKS
  SPT Telecom-/- .............................................   CZCH           10,000     1,454,783         1.6
    TELEPHONE NETWORKS
  Tranz Rail Holdings Ltd. - ADR{\/} .........................   NZ            132,000     1,386,000         1.5
    TRANSPORTATION - ROAD & RAIL
  Alaska Air Group, Inc.-/- ..................................   US             24,000     1,347,000         1.5
    TRANSPORTATION - AIRLINES
  America West Holdings Corp. "B"-/- .........................   US             42,000     1,270,500         1.4
    TRANSPORTATION - AIRLINES
  Airborne Freight Corp. .....................................   US             32,000     1,268,000         1.4
    TRANSPORTATION - AIRLINES
  Comair Holdings, Inc. ......................................   US             46,000     1,256,375         1.4
    TRANSPORTATION - AIRLINES
  Swift Transportation Co., Inc.-/- ..........................   US             50,000     1,143,750         1.3
    TRANSPORTATION - ROAD & RAIL
  Navistar International Corp.-/- ............................   US             30,000       896,250         1.0
    TRANSPORTATION - ROAD & RAIL
  Brisa-Auto Estradas de Portugal S.A. .......................   PORT           16,000       709,274         0.8
    TRANSPORTATION - ROAD & RAIL
  Telecom Corporation of New Zealand - Installment
   Receipts-/- ...............................................   NZ            258,200       693,578         0.8
    TELEPHONE NETWORKS
  Aeroporti di Roma SpA ......................................   ITLY           48,000       674,255         0.7
    TRANSPORTATION - AIRLINES
  China Telecom (Hong Kong) Ltd.-/- ..........................   HK             80,000       151,830         0.2
    WIRELESS COMMUNICATIONS
  Illinois Central Corp. .....................................   US                611        24,287          --
    TRANSPORTATION - ROAD & RAIL
  Hellenic Telecommunications Organization S.A. ..............   GREC              100         2,864          --
    TELEPHONE NETWORKS
                                                                                         -----------
                                                                                          26,615,165
                                                                                         -----------
Materials/Basic Industry (12.9%)
  Masco Corp. ................................................   US             40,000     2,320,000         2.6
    BUILDING MATERIALS & COMPONENTS
  Lafarge S.A. ...............................................   FR             20,000     1,890,183         2.1
    CEMENT
  Giant Cement Holding, Inc.-/- ..............................   US             64,800     1,830,600         2.0
    CEMENT
  IPSCO, Inc. ................................................   CAN            56,265     1,706,014         1.9
    METALS - STEEL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-14
<PAGE>   1165
                 AIM GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
            (FORMERLY GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Materials/Basic Industry (Continued)
  Suez Cement Co. - Reg S GDR{c} {\/} ........................   EGPT           60,000   $ 1,224,000         1.4
    CEMENT
  La Cementos Nacional, C.A. - 144A GDR{.} {\/} ..............   ECDR            7,445     1,191,200         1.3
    CEMENT
  Martin Marietta Materials, Inc. ............................   US             25,000     1,173,438         1.3
    BUILDING MATERIALS & COMPONENTS
  Apasco, S.A. de C.V. .......................................   MEX            35,500       241,417         0.3
    CEMENT
                                                                                         -----------
                                                                                          11,576,852
                                                                                         -----------
Technology (6.2%)
  Cisco Systems, Inc.-/- .....................................   US             21,500     1,574,875         1.8
    NETWORKING
  Ascend Communications, Inc.-/- .............................   US             30,000     1,306,875         1.5
    NETWORKING
  Ciena Corp.-/- .............................................   US             20,000     1,115,000         1.2
    TELECOM TECHNOLOGY
  EMCORE Corp.-/- ............................................   US             58,000       833,750         0.9
    SEMICONDUCTORS
  Tadiran Telecommunications Ltd.{\/} ........................   ISRL           45,200       740,150         0.8
    TELECOM TECHNOLOGY
                                                                                         -----------
                                                                                           5,570,650
                                                                                         -----------
Capital Goods (3.3%)
  Doncasters PLC - ADR-/- {\/} ...............................   UK             49,600     1,525,200         1.7
    AEROSPACE/DEFENSE
  Gulfstream Aerospace Corp.-/- ..............................   US             35,000     1,467,813         1.6
    AEROSPACE/DEFENSE
                                                                                         -----------
                                                                                           2,993,013
                                                                                         -----------
Consumer Durables (2.9%)
  Kaufman and Broad Home Corp. ...............................   US             53,000     1,540,313         1.7
    HOUSING
  D.R. Horton, Inc. ..........................................   US             60,000     1,110,000         1.2
    HOUSING
                                                                                         -----------
                                                                                           2,650,313
                                                                                         -----------       -----
 
TOTAL EQUITY INVESTMENTS (cost $65,337,987) ..................                            82,141,840        91.5
                                                                                         -----------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-15
<PAGE>   1166
                 AIM GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
            (FORMERLY GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- --------------------------------------------------------------                           -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
  Dated April 30, 1998, with State Street Bank & Trust Co.,
   due May 1, 1998, for an effective yield of 5.44%,
   collateralized by $7,745,000 U.S. Treasury Bills, 6.125%
   due 8/31/98 (market value of collateral is $7,841,813,
   including accrued interest). (cost $7,688,000) ............                           $ 7,688,000         8.5
                                                                                         -----------       -----
 
TOTAL INVESTMENTS (cost $73,025,987)  * ......................                            89,829,840       100.0
Other Assets and Liabilities .................................                               (18,680)         --
                                                                                         -----------       -----
 
NET ASSETS ...................................................                           $89,811,160       100.0
                                                                                         -----------       -----
                                                                                         -----------       -----
</TABLE>
 
- --------------
 
       {\/}  U.S. currency denominated.
        -/-  Non-income producing security.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
          *  For Federal income tax purposes, cost is $73,025,987 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  18,343,020
                 Unrealized depreciation:            (1,539,167)
                                                  -------------
                 Net unrealized appreciation:     $  16,803,853
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviations:
             ADR--American Depositary Receipt
             GDR--Global Depositary Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-16
<PAGE>   1167
                 AIM GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
            (FORMERLY GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                                                               PERCENTAGE OF NET ASSETS {D}
                                                                          ---------------------------------------
                                                                                         SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)                                        EQUITY         & OTHER        TOTAL
- - ------------------------------------------------------------------------  -----------  ---------------  ---------
<S>                                                                       <C>          <C>              <C>
Argentina (ARG/ARS) ....................................................         1.1                          1.1
Austria (ASTRI/ATS) ....................................................         2.2                          2.2
Brazil (BRZL/BRL) ......................................................         5.3                          5.3
Canada (CAN/CAD) .......................................................         4.1                          4.1
Czech Republic (CZCH/CSK) ..............................................         1.6                          1.6
Ecuador (ECDR/ECS) .....................................................         1.3                          1.3
Egypt (EGPT) ...........................................................         1.4                          1.4
France (FR/FRF) ........................................................         5.0                          5.0
Germany (GER/DEM) ......................................................         7.3                          7.3
Hong Kong (HK/HKD) .....................................................         0.2                          0.2
Hungary (HGRY/HUF) .....................................................         2.2                          2.2
India (IND/INR) ........................................................         1.3                          1.3
Israel (ISRL/ILS) ......................................................         0.8                          0.8
Italy (ITLY/ITL) .......................................................         4.4                          4.4
Mexico (MEX/MXN) .......................................................         0.3                          0.3
New Zealand (NZ/NZD) ...................................................         2.3                          2.3
Pakistan (PAK/PKR) .....................................................         0.8                          0.8
Portugal (PORT/PTE) ....................................................         2.5                          2.5
Spain (SPN/ESP) ........................................................         2.2                          2.2
United Kingdom (UK/GBP) ................................................         3.1                          3.1
United States (US/USD) .................................................        42.1            8.5          50.6
                                                                          -----------         -----     ---------
Total  .................................................................        91.5            8.5         100.0
                                                                          -----------         -----     ---------
                                                                          -----------         -----     ---------
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $89,811,160.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                 APRIL 30, 1998
 
<TABLE>
<CAPTION>
                                          MARKET VALUE                            UNREALIZED
                                             (U.S.        CONTRACT   DELIVERY    APPRECIATION
CONTRACTS TO SELL:                          DOLLARS)       PRICE       DATE     (DEPRECIATION)
- ----------------------------------------  ------------   ----------  --------   --------------
<S>                                       <C>            <C>         <C>        <C>
Deutsche Marks..........................   3,571,432        1.79365   5/26/98      $(3,289)
French Francs...........................   1,996,672        5.99940    5/6/98        3,528
French Francs...........................     332,779        6.03550    5/6/98       (1,406)
Italian Lira............................   2,573,415     1768.80000   7/21/98       (1,050)
                                          ------------                          --------------
  Total Contracts to Sell (Receivable
   amount $8,472,081)...................   8,474,298                                (2,217)
                                          ------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 9.44%.
  Total Open Forward Foreign Currency
   Contracts............................                                           $(2,217)
                                                                                --------------
                                                                                --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-17
<PAGE>   1168
                    AIM GLOBAL RESOURCES FUND - CONSOLIDATED
           (FORMERLY GT GLOBAL NATURAL RESOURCES FUND - CONSOLIDATED)
 
                            PORTFOLIO OF INVESTMENTS
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Energy Equipment & Services (19.5%)
  Enerflex Systems Ltd. .....................................   CAN            83,600   $  2,514,374         2.5
  R&B Falcon Corp.-/- .......................................   US             76,900      2,465,606         2.4
  J. Ray McDermott S.A.-/- ..................................   US             51,400      2,280,875         2.2
  Cooper Cameron Corp.-/- ...................................   US             29,700      1,973,194         1.9
  EVI, Inc.-/- ..............................................   US             35,400      1,885,050         1.9
  Key Energy Group, Inc.-/- .................................   US             80,050      1,495,934         1.5
  Fred Olsen Energy ASA-/- ..................................   NOR            74,500      1,328,948         1.3
  Core Laboratories N.V.-/- {\/} ............................   NETH           42,500      1,205,938         1.2
  Smith International, Inc.-/- ..............................   US             18,500      1,086,875         1.1
  Bonus Resource Services Corp.-/- ..........................   CAN           282,284        977,342         1.0
  Transocean Offshore, Inc. .................................   US             15,750        880,031         0.9
  Mitcham Industries, Inc.-/- ...............................   US             54,500        636,969         0.6
  Bayard Drilling Technologies, Inc.-/- .....................   US             33,900        504,263         0.5
  Patterson Energy, Inc.-/- .................................   US             33,800        473,200         0.5
                                                                                        ------------
                                                                                          19,708,599
                                                                                        ------------
Oil (17.3%)
  Orogen Minerals Ltd. - 144A ADR{.} {\/} ...................   AUSL          111,200      2,396,149         2.4
  Total Compagnie Francaise des Petroles S.A. - ADR{\/} .....   FR             38,700      2,273,625         2.2
  Suncor Energy, Inc. .......................................   CAN            62,300      2,148,276         2.1
  Petro-Canada ..............................................   CAN           115,300      1,943,576         1.9
  Ultramar Diamond Shamrock Corp. ...........................   US             58,000      1,874,125         1.8
  Triton Energy Ltd.-/- .....................................   US             43,900      1,761,488         1.7
  ERG SpA-/- ................................................   ITLY          373,000      1,610,639         1.6
  Ente Nazionale Idrocarburi (ENI) S.p.A. - ADR{\/} .........   ITLY           20,300      1,342,338         1.3
  Canadian Fracmaster Ltd. ..................................   CAN           188,500      1,219,574         1.2
  British Petroleum Co., PLC - ADR{\/} ......................   UK             12,000      1,134,000         1.1
                                                                                        ------------
                                                                                          17,703,790
                                                                                        ------------
Chemicals (14.4%)
  NOVA Corp. ................................................   CAN           219,900      2,476,317         2.4
  Ciba Specialty Chemicals AG ...............................   SWTZ           19,360      2,342,716         2.3
  Potash Corporation of Saskatchewan, Inc.{\/} ..............   CAN            25,570      2,283,721         2.2
  Henkel KGaA Non-voting Preferred ..........................   GER            24,590      1,918,952         1.9
  Cabot Corp. ...............................................   US             45,500      1,635,156         1.6
  Crompton & Knowles Corp. ..................................   US             35,900      1,074,756         1.1
  E.I. du Pont de Nemours and Co. ...........................   US             13,900      1,012,094         1.0
  Solutia, Inc. .............................................   US             35,400      1,004,475         1.0
  Akzo Nobel N.V. ...........................................   NETH            4,690        954,441         0.9
                                                                                        ------------
                                                                                          14,702,628
                                                                                        ------------
Forest Products (13.7%)
  St Laurent Paperboard, Inc.-/- ............................   CAN           190,000      2,584,808         2.5
  Stone Container Corp.-/- ..................................   US            113,600      1,860,200         1.8
  MacMillan Bloedel Ltd. ....................................   CAN           112,442      1,600,472         1.6
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-18
<PAGE>   1169
                    AIM GLOBAL RESOURCES FUND - CONSOLIDATED
           (FORMERLY GT GLOBAL NATURAL RESOURCES FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Forest Products (Continued)
  Doman Industries Ltd. "B"-/- ..............................   CAN           246,830   $  1,234,409         1.2
  Noranda, Inc. .............................................   CAN            52,356      1,080,298         1.1
  Bowater, Inc. .............................................   US             18,900      1,057,219         1.0
  Tembec, Inc. "A"-/- .......................................   CAN           148,900        989,403         1.0
  Donohue, Inc. .............................................   CAN            41,151        935,446         0.9
  Champion International Corp. ..............................   US             17,200        925,575         0.9
  Noranda Forest, Inc. ......................................   CAN           136,459        916,281         0.9
  Alliance Forest Products, Inc.-/- .........................   CAN            36,400        767,616         0.8
                                                                                        ------------
                                                                                          13,951,727
                                                                                        ------------
Misc. Materials & Commodities (11.8%)
  American Disposal Services, Inc.-/- .......................   US             64,500      2,586,047         2.5
  USG Corp. .................................................   US             44,000      2,260,500         2.2
  Encore Wire Corp.-/- ......................................   US             56,950      2,206,813         2.2
  Valero Energy Corp. .......................................   US             65,000      2,104,375         2.1
  Medusa Corp. ..............................................   US             32,241      1,982,822         2.0
  EdperBrascan Corp. "A" ....................................   CAN            37,369        763,219         0.8
                                                                                        ------------
                                                                                          11,903,776
                                                                                        ------------
Construction (5.3%)
  Stolt Comex Seaway S.A.-/- ................................   US             79,000      2,567,500         2.5
  Coflexip - ADR{\/} ........................................   FR             27,300      1,945,125         1.9
  Global Industries Ltd.-/- .................................   US             40,850        926,784         0.9
                                                                                        ------------
                                                                                           5,439,409
                                                                                        ------------
Metals - Non-Ferrous (5.0%)
  Alumax, Inc. ..............................................   US             54,100      2,671,183         2.6
  Freeport-McMoRan Copper & Gold, Inc. "B" ..................   US             58,000      1,091,125         1.1
  Sutton Resources Ltd.-/- ..................................   CAN            69,113        536,584         0.5
  Western Copper Holdings Ltd.-/- ...........................   CAN            89,280        465,228         0.5
  Cominco Ltd. ..............................................   CAN            18,181        298,206         0.3
                                                                                        ------------
                                                                                           5,062,326
                                                                                        ------------
Gas Production & Distribution (5.0%)
  Comstock Resources, Inc.-/- ...............................   US            132,400      1,704,650         1.7
  Santa Fe Energy Resources, Inc.-/- ........................   US            163,700      1,688,156         1.7
  Poco Petroleums Ltd.-/- ...................................   CAN            72,069        821,658         0.8
  Berkley Petroleum Corp.-/- ................................   CAN            84,600        810,674         0.8
                                                                                        ------------
                                                                                           5,025,138
                                                                                        ------------
Metals - Steel (2.3%)
  IPSCO, Inc. ...............................................   CAN            78,700      2,386,266         2.3
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $89,332,125) .................                             95,883,659        94.3
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-19
<PAGE>   1170
                    AIM GLOBAL RESOURCES FUND - CONSOLIDATED
           (FORMERLY GT GLOBAL NATURAL RESOURCES FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- -------------------------------------------------------------                           ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Dated April 30, 1998, with State Street Bank & Trust Co.,
   due May 1, 1998, for an effective yield of 5.44%,
   collateralized by $5,130,000 U.S. Treasury Bills, 6.125%
   due 8/31/98 (market value of collateral is $5,194,125,
   including accrued interest). (cost $5,088,000) ...........                           $  5,088,000         5.0
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $94,420,125)  * .....................                            100,971,659        99.3
Other Assets and Liabilities ................................                                668,445         0.7
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $101,640,104       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        {.}  Security 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.
          *  For Federal income tax purposes, cost is $95,007,118 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $   8,390,497
                 Unrealized depreciation:            (2,425,956)
                                                  -------------
                 Net unrealized appreciation:     $   5,964,541
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviation:
    ADR--American Depositary Receipt
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                         PERCENTAGE OF NET ASSETS {D}
                                        ------------------------------
                                                  SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY      & OTHER      TOTAL
- --------------------------------------  ------   -------------   -----
<S>                                     <C>      <C>             <C>
Australia (AUSL/AUD) .................    2.4                      2.4
Canada (CAN/CAD) .....................   29.3                     29.3
France (FR/FRF) ......................    4.1                      4.1
Germany (GER/DEM) ....................    1.9                      1.9
Italy (ITLY/ITL) .....................    2.9                      2.9
Netherlands (NETH/NLG) ...............    2.1                      2.1
Norway (NOR/NOK) .....................    1.3                      1.3
Switzerland (SWTZ/CHF) ...............    2.3                      2.3
United Kingdom (UK/GBP) ..............    1.1                      1.1
United States (US/USD) ...............   46.9         5.7         52.6
                                        ------        ---        -----
Total  ...............................   94.3         5.7        100.0
                                        ------        ---        -----
                                        ------        ---        -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $101,640,104.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-20
<PAGE>   1171
                       AIM GLOBAL TELECOMMUNICATIONS FUND
                  (FORMERLY GT GLOBAL TELECOMMUNICATIONS FUND)
 
                            PORTFOLIO OF INVESTMENTS
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                          VALUE          % OF NET
EQUITY INVESTMENTS                                           COUNTRY      SHARES         (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
Wireless Communications (24.5%)
  Mannesmann AG ...........................................   GER           110,900   $   88,027,648         4.8
  Nextel Communications, Inc. "A"-/- ......................   US          1,695,700       48,645,394         2.7
  Millicom International Cellular S.A.-/- {\/} ............   LUX         1,217,000       47,615,125         2.6
  Grupo Iusacell S.A. "L" - ADR-/- {\/} ...................   MEX         1,663,700       32,234,188         1.8
  Paging Network, Inc.-/- .................................   US          2,165,000       30,445,313         1.7
  WinStar Communications, Inc.-/- .........................   US            667,700       25,956,838         1.4
  Vodafone Group PLC ......................................   UK          1,882,000       20,613,880         1.1
  Orange PLC-/- ...........................................   UK          2,660,800       19,099,472         1.1
  Bell Canada International, Inc.: ........................   CAN                --               --         1.1
    Common-/- .............................................   --            717,300       16,054,837          --
    Common - ADR-/- {\/} ..................................   --            132,500        2,981,250          --
  Smartone Telecommunications .............................   HK          6,729,000       17,679,317         1.0
  Clearnet Communications, Inc. "A"-/- ....................   CAN         1,138,100       15,761,614         0.9
  Western Wireless Corp. "A"-/- ...........................   US            750,300       14,630,850         0.8
  Advanced Info. Service - Foreign ........................   THAI        1,993,150       13,941,723         0.8
  Vimpel-Communications - ADR-/- {\/} .....................   RUS           250,000       13,500,000         0.7
  Champion Technology Holding Ltd.{::} ....................   HK        207,801,804       12,072,921         0.7
  Powertel, Inc.-/- .......................................   US            365,000        8,349,375         0.5
  China Telecom (Hong Kong) Ltd.-/- .......................   HK          4,360,000        8,274,740         0.5
  Microcell Telecommunications, Inc. "B"-/- {\/} ..........   CAN           596,400        4,696,650         0.3
                                                                                      --------------
                                                                                         440,581,135
                                                                                      --------------
Telecom Equipment (18.8%)
  Nokia AB "A" ............................................   FIN         1,348,320       90,456,347         5.0
  ECI Telecommunications Ltd.{\/} .........................   ISRL        2,309,500       70,439,750         3.9
  P-COM, Inc.-/- ..........................................   US          1,790,000       35,240,625         1.9
  Tekelec-/- ..............................................   US            648,900       32,607,225         1.8
  Alcatel Alsthom Compagnie Generale d'Electricite ........   FR            133,000       24,674,709         1.4
  Corning, Inc. ...........................................   US            600,000       24,000,000         1.3
  ANTEC Corp.-/- ..........................................   US          1,162,300       22,955,425         1.3
  Tellabs, Inc.-/- ........................................   US            240,000       17,010,000         0.9
  Tadiran Ltd. - ADR{\/} ..................................   ISRL          246,100        9,444,088         0.5
  Pairgain Technologies, Inc.-/- ..........................   US            428,800        7,906,000         0.4
  Netas Telekomunik-/- ....................................   TRKY       17,820,000        6,635,676         0.4
  Kantone Holding Ltd. ....................................   HK          6,256,868          306,967          --
                                                                                      --------------
                                                                                         341,676,812
                                                                                      --------------
Telephone Networks (16.6%)
  Telecom Italia S.p.A.: ..................................   ITLY               --               --         3.2
    Di Risp-/- ............................................   --          9,326,517       49,189,779          --
    Common ................................................   --          1,263,333        9,521,194          --
  SPT Telecom-/- ..........................................   CZCH          391,340       56,931,492         3.1
  WorldCom, Inc.-/- .......................................   US          1,065,000       45,562,031         2.5
  NTL, Inc.-/- {\/} .......................................   UK            700,000       27,300,000         1.5
  Carso Global Telecom "A1" ...............................   MEX         6,089,982       23,367,700         1.3
  Magyar Tavkozlesi Rt. - ADR-/- {\/} .....................   HGRY          625,450       18,450,775         1.0
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-21
<PAGE>   1172
                       AIM GLOBAL TELECOMMUNICATIONS FUND
                  (FORMERLY GT GLOBAL TELECOMMUNICATIONS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                          VALUE          % OF NET
EQUITY INVESTMENTS                                           COUNTRY      SHARES         (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
Telephone Networks (Continued)
  Telstra Corp. Ltd. - Installment Receipts ...............   AUSL        7,282,000   $   17,066,076         0.9
  Telecommunicacoes Brasileiras S.A. (Telebras) ...........   BRZL      139,700,000       13,866,157         0.8
  BCE, Inc. ...............................................   CAN           226,025        9,627,840         0.5
  Telecom Corporation of New Zealand Ltd. - Installment
   Receipts-/- ............................................   NZ          3,495,700        9,390,159         0.5
  Telefonica del Peru S.A. - ADR{\/} ......................   PERU          318,400        7,044,600         0.4
  Russian Telecommunications Development Corp.: ...........   RUS                --               --         0.3
    Non-Voting(.) -/- {\/} (::) ...........................   --            453,000        3,397,500          --
    Voting(.) -/- {\/} (::) ...............................   --            331,000        2,482,500          --
  PLD Telekon, Inc.-/- {\/} ...............................   RUS           510,000        4,143,750         0.2
  Emerging Communications, Inc.-/- ........................   US            468,100        2,984,138         0.2
  Atlantic Tele-Network, Inc.-/- ..........................   US            200,040        2,450,490         0.1
  Ionica Group PLC-/- .....................................   UK          1,456,400        2,094,481         0.1
                                                                                      --------------
                                                                                         304,870,662
                                                                                      --------------
Telephone - Regional/Local (9.5%)
  ICG Communications, Inc.-/- .............................   US          1,254,600       43,911,000         2.4
  GTE Corp. ...............................................   US            675,000       39,445,313         2.2
  Intermedia Communications of Florida, Inc.-/- ...........   US            454,800       33,193,294         1.8
  Teleport Communications Group, Inc. "A"-/- ..............   US            400,000       21,550,000         1.2
  SBC Communications ......................................   US            488,000       20,221,500         1.1
  ING Barings Russian Regional Telecommunications Basket
   Bridge Certificates-/- {=} {\/} ........................   RUS             1,749       14,161,443         0.8
                                                                                      --------------
                                                                                         172,482,550
                                                                                      --------------
Telephone - Long Distance (6.8%)
  Tel-Save Holdings, Inc.-/- ..............................   US          2,000,000       45,625,000         2.5
  Rostelecom - ADR-/- {\/} ................................   RUS         1,780,735       38,174,507         2.1
  MCI Communications Corp. ................................   US            400,000       20,125,000         1.1
  LCI International, Inc.-/- ..............................   US            500,000       19,875,000         1.1
                                                                                      --------------
                                                                                         123,799,507
                                                                                      --------------
Cable Television (4.7%)
  Cable & Wireless Communications - ADR-/- {\/} ...........   UK          1,470,413       53,118,670         2.9
  Comcast Corp. "A" .......................................   US            604,300       21,641,494         1.2
  United International Holdings, Inc. "A"-/- ..............   US            373,000        6,341,000         0.3
  Comcast UK Cable Partners Ltd. "A"-/- {\/} ..............   UK            415,000        5,317,188         0.3
                                                                                      --------------
                                                                                          86,418,352
                                                                                      --------------
Networking (3.5%)
  Cisco Systems, Inc.-/- ..................................   US            450,000       32,962,500         1.8
  Ascend Communications, Inc.-/- ..........................   US            700,000       30,493,750         1.7
                                                                                      --------------
                                                                                          63,456,250
                                                                                      --------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-22
<PAGE>   1173
                       AIM GLOBAL TELECOMMUNICATIONS FUND
                  (FORMERLY GT GLOBAL TELECOMMUNICATIONS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                          VALUE          % OF NET
EQUITY INVESTMENTS                                           COUNTRY      SHARES         (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
Telecom Technology (2.9%)
  Uniphase Corp.-/- .......................................   US            758,300   $   41,137,775         2.3
  Three-Five Systems, Inc.{::} -/- ........................   US            599,000       11,755,375         0.6
                                                                                      --------------
                                                                                          52,893,150
                                                                                      --------------
Broadcasting & Publishing (2.6%)
  Univision Communications, Inc.-/- .......................   US            463,900       17,773,169         1.0
  EchoStar Communications Corp. "A"-/- ....................   US            609,200       16,029,575         0.9
  Seat SpA-/- .............................................   ITLY       16,820,000        8,351,581         0.5
  Sistem Televisyen Malaysia Bhd. .........................   MAL         7,436,000        2,793,524         0.2
                                                                                      --------------
                                                                                          44,947,849
                                                                                      --------------
Aerospace/Defense (1.9%)
  Orbital Sciences Corp.-/- ...............................   US            785,500       34,954,750         1.9
                                                                                      --------------
Consumer Services (1.7%)
  Compagnie Generale des Eaux .............................   FR            168,500       31,344,925         1.7
                                                                                      --------------
Semiconductors (1.3%)
  VLSI Technology, Inc.-/- ................................   US            572,600       11,809,875         0.7
  DSP Communications, Inc.-/- .............................   US            624,000       10,413,000         0.6
                                                                                      --------------
                                                                                          22,222,875
                                                                                      --------------
Multi-Industry (1.1%)
  Grupo Carso, S.A. de C.V. "A1" ..........................   MEX         2,000,000       12,609,209         0.7
  Hutchison Whampoa .......................................   HK          1,302,000        8,051,875         0.4
                                                                                      --------------
                                                                                          20,661,084
                                                                                      --------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $1,173,173,527) ............                            1,740,309,901        95.9
                                                                                      --------------       -----
<CAPTION>
 
                                                                          NO. OF          VALUE          % OF NET
WARRANTS                                                     COUNTRY     WARRANTS        (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
  American Satellite Network Warrants, expire 1/1/99 (cost
   $0)(.) (::) ............................................   US             65,825               --          --
                                                                                      --------------       -----
    WIRELESS COMMUNICATIONS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-23
<PAGE>   1174
                       AIM GLOBAL TELECOMMUNICATIONS FUND
                  (FORMERLY GT GLOBAL TELECOMMUNICATIONS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                          VALUE          % OF NET
REPURCHASE AGREEMENTS                                                                    (NOTE 1)         ASSETS
- -----------------------------------------------------------                           --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
  Dated April 30, 1998, with State Street Bank & Trust Co.,
   due May 1, 1998, for an effective yield of 5.44%,
   collateralized by $61,530,000 U.S. Treasury Bonds, 7.25%
   due 5/15/16 (market value of collateral is $71,439,899,
   including accrued interest)  ...........................                           $   70,000,000         3.8
  Dated April 30, 1998, with State Street Bank & Trust Co.,
   due May 1, 1998, for an effective yield of 5.44%,
   collateralized by $950,000 U.S. Treasury Bonds, 8.125%
   due 8/15/19 (market value of collateral is $1,192,591,
   including accrued interest)  ...........................                                1,165,000         0.1
                                                                                      --------------       -----
 
TOTAL REPURCHASE AGREEMENTS (cost $71,165,000) ............                               71,165,000         3.9
                                                                                      --------------       -----
 
TOTAL INVESTMENTS (cost $1,244,338,527)  * ................                            1,811,474,901        99.8
Other Assets and Liabilities ..............................                                4,309,365         0.2
                                                                                      --------------       -----
 
NET ASSETS ................................................                           $1,815,784,266       100.0
                                                                                      --------------       -----
                                                                                      --------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        {=}  Issued by ING Barings, the value of which is linked to the
             underlying value of a basket of shares issued by Russian regional
             telephone companies.
       {::}  See Note 6 of Notes to Financial Statements.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (See Note 1 of Notes to Financial Statements).
        (.)  Restricted Securities: At April 30, 1998 the Fund owned the
             following restricted securities constituting .3% of net assets
             which may not be publicly sold without registration under the
             Securities Act of 1933 (Note 1). Additional information on the
             securities is as follows:
 
<TABLE>
<CAPTION>
                                                                                                       VALUE
                                                                                                        PER
                                                                                                       SHARE
                                                                                                       (NOTE
             DESCRIPTION                                      ACQUISITION DATE   SHARES     COST         1)
             -----------------------------------------------  -----------------  ------  -----------   ------
             <S>                                              <C>                <C>     <C>           <C>
             American Satellite Network Warrants, Expire
              1/1/99........................................      12/31/93       65,825  $        --   $--
             Russian Telecommunications Development Corp.:
               Non-voting...................................      12/22/93       453,000   4,530,000   7.50
               Voting.......................................      12/22/93       331,000   3,310,000   7.50
</TABLE>
 
          *  For Federal income tax purposes, cost is $1,244,874,015 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $ 612,812,855
                 Unrealized depreciation:           (46,211,969)
                                                  -------------
                 Net unrealized appreciation:     $ 566,600,886
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviation:
             ADR--American Depositary Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-24
<PAGE>   1175
                       AIM GLOBAL TELECOMMUNICATIONS FUND
                  (FORMERLY GT GLOBAL TELECOMMUNICATIONS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                         PERCENTAGE OF NET ASSETS
                                                    {D}
                                        ---------------------------
                                                 SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY    & OTHER     TOTAL
- --------------------------------------  ------   ----------   -----
<S>                                     <C>      <C>          <C>
Australia (AUSL/AUD) .................    0.9                   0.9
Brazil (BRZL/BRL) ....................    0.8                   0.8
Canada (CAN/CAD) .....................    2.8                   2.8
Czech Republic (CZCH/CSK) ............    3.1                   3.1
Finland (FIN/FIM) ....................    5.0                   5.0
France (FR/FRF) ......................    3.1                   3.1
Germany (GER/DEM) ....................    4.8                   4.8
Hong Kong (HK/HKD) ...................    2.6                   2.6
Hungary (HGRY/HUF) ...................    1.0                   1.0
Israel (ISRL/ILS) ....................    4.4                   4.4
Italy (ITLY/ITL) .....................    3.7                   3.7
Luxembourg (LUX/LUF) .................    2.6                   2.6
Malaysia (MAL/MYR) ...................    0.2                   0.2
Mexico (MEX/MXN) .....................    3.8                   3.8
New Zealand (NZ/NZD) .................    0.5                   0.5
Peru (PERU/PES) ......................    0.4                   0.4
Russia (RUS/SUR) .....................    4.1                   4.1
Thailand (THAI/THB) ..................    0.8                   0.8
Turkey (TRKY/TRL) ....................    0.4                   0.4
United Kingdom (UK/GBP) ..............    7.0                   7.0
United States (US/USD) ...............   43.9        4.1       48.0
                                        ------     -----      -----
Total  ...............................   95.9        4.1      100.0
                                        ------     -----      -----
                                        ------     -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $1,815,784,266.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                 APRIL 30, 1998
 
<TABLE>
<CAPTION>
                                                                                    UNREALIZED
                                           MARKET VALUE     CONTRACT    DELIVERY   APPRECIATION
CONTRACTS TO BUY:                         (U.S. DOLLARS)      PRICE       DATE    (DEPRECIATION)
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Deutsche Marks..........................    12,834,836          1.8461   5/26/98   $   376,139
Italian Liras...........................    10,859,243         1763.55   7/21/98       (27,888)
                                          --------------                          --------------
  Total Contracts to Buy (Payable amount
   $23,345,828).........................    23,694,079                                 348,251
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO BUY AS A
 PERCENTAGE OF NET ASSETS IS 1.30%.
</TABLE>
 
<TABLE>
<CAPTION>
CONTRACTS TO SELL:
- ----------------------------------------
<S>                                       <C>              <C>          <C>       <C>
British Pounds..........................      41,362,104       0.59400   7/20/98       725,396
Deutsche Marks..........................      18,520,501       1.81400   5/26/98      (224,635)
Deutsche Marks..........................      15,066,981       1.81500   5/26/98      (190,948)
Deutsche Marks..........................      12,729,534       7.79365   5/26/98       (11,724)
Finnish Markka..........................      24,746,112       5.46000   7/21/98      (203,988)
Italian Liras...........................      40,071,738    1784.71000   7/21/98      (373,412)
Italian Liras...........................       8,116,153    1774.85000   7/21/98       (30,963)
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $160,302,849).................     160,613,123                              (310,274)
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS A
 PERCENTAGE OF NET ASSETS IS 8.85%.
  Total Open Forward Foreign Currency
   Contracts, Net.......................                                           $    37,977
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-25
<PAGE>   1176
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                      AIM GLOBAL{/\}
                                       -----------------------------------------------------------------------------
                                          CONSUMER
                                        PRODUCTS AND      FINANCIAL                    INFRASTRUCTURE    RESOURCES
                                       SERVICES FUND-   SERVICES FUND-      HEALTH         FUND-           FUND-
                                        CONSOLIDATED     CONSOLIDATED        CARE       CONSOLIDATED    CONSOLIDATED
                                          (NOTE 1)         (NOTE 1)          FUND         (NOTE 1)        (NOTE 1)
                                       --------------   --------------   ------------  --------------   ------------
<S>                                    <C>              <C>              <C>           <C>              <C>
Assets:
  Investments in securities: (Note 1)
    At identified cost...............   $160,625,164     $91,127,363     $487,213,390   $73,025,987     $ 94,420,125
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
    At value.........................   $194,547,463     $116,166,664    $549,386,200   $89,829,840     $100,971,659
  U.S. currency......................            957             148              625           944              923
  Foreign currencies (cost
   $3,262,600, $6,666, $116,
   $4,084,175, $574,226, and
   $38,012,099, respectively)........      3,264,957           6,699              120     4,084,175          574,161
  Dividends and dividend withholding
   tax reclaims receivable...........        213,234         293,292          233,561       103,025           44,335
  Interest receivable................            968             749            5,050         1,162              769
  Receivable for forward foreign
   currency contracts -- closed, net
   (Note 1)..........................             --              --               --        92,468               --
  Receivable for Fund shares sold....        215,386       1,042,626        5,213,987       140,038        1,292,050
  Receivable for open forward foreign
   currency contracts, net (Note
   1)................................             --         190,838               --            --               --
  Receivable for securities sold.....        805,431       1,328,983       11,760,191        99,627        1,964,959
  Receivable from Chancellor LGT
   Asset Management, Inc. (Note 2)...             --          13,505               --        62,569           74,218
  Unamortized organizational costs
   (Note 1)..........................         17,156          13,685               --        11,172           11,117
                                       --------------   --------------   ------------  --------------   ------------
    Total assets.....................    199,065,552     119,057,189      566,599,734    94,425,020      104,934,191
                                       --------------   --------------   ------------  --------------   ------------
Liabilities:
  Payable for custodian fees.........          4,311           5,076            8,079         6,473            9,760
  Payable for Directors' and
   Trustees' fees and expenses (Note
   2)................................          7,748           1,867            1,704         2,516              652
  Payable for fund accounting fees
   (Note 2)..........................          4,281           2,494           11,428         1,971            2,068
  Payable for Fund shares
   repurchased.......................        450,326         136,340        1,204,094       222,025          394,335
  Payable for investment management
   and administration fees (Note
   2)................................        158,974         104,848          435,270       110,495          126,214
  Payable for open forward foreign
   currency contracts (Note 1).......             --              --               --         2,217               --
  Payable for printing and postage
   expenses..........................         20,439          17,511           56,469        44,305           37,005
  Payable for professional fees......         17,379          13,698           27,249        18,478           18,472
  Payable for registration and filing
   fees..............................          5,980           3,204            8,448         9,720            7,417
  Payable for securities purchased...      2,666,126       3,630,414        5,701,866     4,084,175        2,586,961
  Payable for service and
   distribution expenses (Note 2)....        118,493          69,098          270,724        54,114           60,200
  Payable for transfer agent fees
   (Note 2)..........................         55,395           9,673          133,832        50,128           42,561
  Other accrued expenses.............         32,758           7,935            6,281         7,143            8,342
                                       --------------   --------------   ------------  --------------   ------------
    Total liabilities................      3,542,210       4,002,158        7,865,444     4,613,760        3,293,987
  Minority interest (Notes 1 & 2)....            100             100               --           100              100
                                       --------------   --------------   ------------  --------------   ------------
Net assets...........................   $195,523,242     $115,054,931    $558,734,290   $89,811,160     $101,640,104
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
 
<CAPTION>
 
                                          TELECOM-
                                         MUNICATIONS
                                            FUND
                                       ---------------
<S>                                    <C>
Assets:
  Investments in securities: (Note 1)
    At identified cost...............  $ 1,244,338,527
                                       ---------------
                                       ---------------
    At value.........................  $ 1,811,474,901
  U.S. currency......................          481,143
  Foreign currencies (cost
   $3,262,600, $6,666, $116,
   $4,084,175, $574,226, and
   $38,012,099, respectively)........       37,989,074
  Dividends and dividend withholding
   tax reclaims receivable...........        1,461,730
  Interest receivable................           10,754
  Receivable for forward foreign
   currency contracts -- closed, net
   (Note 1)..........................          169,870
  Receivable for Fund shares sold....        3,519,217
  Receivable for open forward foreign
   currency contracts, net (Note
   1)................................           37,977
  Receivable for securities sold.....       38,128,097
  Receivable from Chancellor LGT
   Asset Management, Inc. (Note 2)...               --
  Unamortized organizational costs
   (Note 1)..........................               --
                                       ---------------
    Total assets.....................    1,893,272,763
                                       ---------------
Liabilities:
  Payable for custodian fees.........          196,883
  Payable for Directors' and
   Trustees' fees and expenses (Note
   2)................................            3,634
  Payable for fund accounting fees
   (Note 2)..........................           39,086
  Payable for Fund shares
   repurchased.......................        6,626,277
  Payable for investment management
   and administration fees (Note
   2)................................        1,400,357
  Payable for open forward foreign
   currency contracts (Note 1).......               --
  Payable for printing and postage
   expenses..........................          126,767
  Payable for professional fees......           39,759
  Payable for registration and filing
   fees..............................           24,933
  Payable for securities purchased...       67,011,318
  Payable for service and
   distribution expenses (Note 2)....        1,091,628
  Payable for transfer agent fees
   (Note 2)..........................          894,937
  Other accrued expenses.............           32,918
                                       ---------------
    Total liabilities................       77,488,497
  Minority interest (Notes 1 & 2)....               --
                                       ---------------
Net assets...........................  $ 1,815,784,266
                                       ---------------
                                       ---------------
</TABLE>
 
- ----------------
 {/\} See Notes 1 and 7 of Notes to Financial Statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-26
<PAGE>   1177
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                              STATEMENT OF ASSETS
                            AND LIABILITIES  (cont'd)
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                      AIM GLOBAL{/\}
                                       -----------------------------------------------------------------------------
                                          CONSUMER
                                        PRODUCTS AND      FINANCIAL                    INFRASTRUCTURE    RESOURCES
                                       SERVICES FUND-   SERVICES FUND-      HEALTH         FUND-           FUND-
                                        CONSOLIDATED     CONSOLIDATED        CARE       CONSOLIDATED    CONSOLIDATED
Class A:                                  (NOTE 1)         (NOTE 1)          FUND         (NOTE 1)        (NOTE 1)
                                       --------------   --------------   ------------  --------------   ------------
<S>                                    <C>              <C>              <C>           <C>              <C>
  Net assets.........................   $ 70,546,554     $38,146,311     $427,300,000   $33,286,992     $ 42,092,882
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
  Shares outstanding.................      2,824,537       1,891,058       19,783,338     2,026,023        2,704,501
  Net asset value and redemption
   price per share...................   $      24.98     $     20.17     $      21.60   $     16.43     $      15.56
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
  Maximum offering price per share
   (100/95.25 of Class A net asset
   value) *..........................   $      26.23     $     21.18     $      22.68   $     17.25     $      16.34
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
Class B:+
  Net assets.........................   $106,835,715     $64,747,167     $121,735,496   $47,177,150     $ 52,210,289
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
  Shares outstanding.................      4,357,974       3,268,753        5,848,019     2,929,766        3,411,115
  Net asset value and offering price
   per share.........................   $      24.51     $     19.81     $      20.82   $     16.10     $      15.31
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
Advisor Class:
  Net assets.........................   $ 18,140,973     $12,161,453     $  9,698,794   $ 9,347,018     $  7,336,933
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
  Shares outstanding.................        713,803         595,404          440,494       559,425          467,314
  Net asset value, offering price per
   share, and redemption price per
   share.............................   $      25.41     $     20.43     $      22.02   $     16.71     $      15.70
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
Net assets consist of:
  Paid in capital (Note 4)...........   $151,024,282     $88,920,854     $487,685,110   $62,623,203     $103,332,054
  Undistributed/Accumulated net
   investment income (loss)..........     (1,114,025)          8,925       (3,241,309)      126,439         (795,676)
  Accumulated net realized gain
   (loss) on investments and foreign
   currency transactions.............     11,687,365         889,661       12,117,688    10,339,065       (7,454,066)
  Net unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies........................          3,321         196,190               (9)      (81,400)           6,258
  Net unrealized appreciation of
   investments.......................     33,922,299      25,039,301       62,172,810    16,803,853        6,551,534
                                       --------------   --------------   ------------  --------------   ------------
Total -- representing net assets
 applicable to capital shares
 outstanding.........................   $195,523,242     $115,054,931    $558,734,290   $89,811,160     $101,640,104
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
 
<CAPTION>
 
                                          TELECOM-
                                         MUNICATIONS
Class A:                                    FUND
                                       ---------------
<S>                                    <C>
  Net assets.........................  $   969,856,693
                                       ---------------
                                       ---------------
  Shares outstanding.................       48,380,775
  Net asset value and redemption
   price per share...................  $         20.05
                                       ---------------
                                       ---------------
  Maximum offering price per share
   (100/95.25 of Class A net asset
   value) *..........................  $         21.05
                                       ---------------
                                       ---------------
Class B:+
  Net assets.........................  $   837,576,106
                                       ---------------
                                       ---------------
  Shares outstanding.................       43,066,637
  Net asset value and offering price
   per share.........................  $         19.45
                                       ---------------
                                       ---------------
Advisor Class:
  Net assets.........................  $     8,351,467
                                       ---------------
                                       ---------------
  Shares outstanding.................          409,477
  Net asset value, offering price per
   share, and redemption price per
   share.............................  $         20.40
                                       ---------------
                                       ---------------
Net assets consist of:
  Paid in capital (Note 4)...........  $ 1,192,624,877
  Undistributed/Accumulated net
   investment income (loss)..........      (11,031,674)
  Accumulated net realized gain
   (loss) on investments and foreign
   currency transactions.............       67,631,904
  Net unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies........................         (577,215)
  Net unrealized appreciation of
   investments.......................      567,136,374
                                       ---------------
Total -- representing net assets
 applicable to capital shares
 outstanding.........................  $ 1,815,784,266
                                       ---------------
                                       ---------------
<FN>
- ----------------
    * On sales of $50,000 or more, the offering price is reduced.
    + Redemption price per share is equal to the net asset value per share less
      any applicable contingent deferred sales charge.
 {/\} See Notes 1 and 7 of Notes to Financial Statements.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-27
<PAGE>   1178
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                            STATEMENT OF OPERATIONS
 
                  Six months ended April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                  AIM GLOBAL{/\}
                                                     -------------------------------------------------------------------------
                                                      CONSUMER
                                                      PRODUCTS
                                                         AND       FINANCIAL
                                                      SERVICES     SERVICES     HEALTH    INFRASTRUCTURE  RESOURCES  TELECOM-
                                                        FUND-        FUND-       CARE        FUND-        FUND-     MUNICATIONS
                                                     CONSOLIDATED CONSOLIDATED   FUND     CONSOLIDATED CONSOLIDATED    FUND
                                                     -----------  -----------  ---------  -----------  -----------  ----------
<S>                                                  <C>          <C>          <C>        <C>          <C>          <C>
Investment income:
  Dividend income (net of foreign withholding tax
   of $58,439, $89,413, $2,069, $67,669, $37,565,
   and $182,685, respectively).....................   $ 631,492    $ 930,225   $ 738,020   $ 903,398    $ 335,385   $3,963,693
  Interest income..................................     173,161      113,943   1,275,652     227,045      142,904    2,012,264
  Securities lending income........................      17,942       34,910      55,507      18,515       11,469      609,824
                                                     -----------  -----------  ---------  -----------  -----------  ----------
    Total investment income........................     822,595    1,079,078   2,069,179   1,148,958      489,758    6,585,781
                                                     -----------  -----------  ---------  -----------  -----------  ----------
Expenses:
  Investment management and administration fees
   (Note 2)........................................     873,213      470,304   2,709,564     447,907      566,986    7,889,067
  Amortization of organization costs (Note 1)......       5,108        6,259          --       5,108        5,108           --
  Custodian Fees...................................      19,189       14,299       7,625      19,729       19,910      318,017
  Directors' and Trustees' fees and expenses (Note
   2)..............................................      11,510        8,964       6,074       6,878        7,240       11,100
  Fund accounting fees (Note 2)....................      22,980       12,779      73,483      12,109       15,269      221,052
  Printing and postage expenses....................      20,996        8,869     100,150      16,470       16,652      332,859
  Professional fees................................      52,434       54,449      62,182      43,983       41,087      155,725
  Registration and filing fees.....................      36,924       44,693      36,200      43,598       50,331       52,671
  Service and distribution expenses: (Note 2)
    Class A........................................     166,991       82,697   1,060,797      86,552      120,076    2,209,459
    Class B........................................     493,846      273,191     631,046     252,743      303,610    3,905,123
  Transfer agent fees (Note 2).....................     244,554      112,625     650,700     171,226      217,743    2,523,864
  Other expenses...................................       7,413        5,886      11,305       3,195       28,231       43,951
                                                     -----------  -----------  ---------  -----------  -----------  ----------
    Total expenses before reductions...............   1,955,158    1,095,015   5,349,126   1,109,498    1,392,243   17,662,888
                                                     -----------  -----------  ---------  -----------  -----------  ----------
      Expenses reimbursed by Chancellor LGT Asset
       Management, Inc. (Note 2)...................          --      (13,505)         --     (82,569)     (74,218)          --
      Expense reductions (Notes 5).................     (18,538)     (11,357)    (38,638)     (4,410)     (32,591)     (39,899)
                                                     -----------  -----------  ---------  -----------  -----------  ----------
    Total net expenses.............................   1,936,620    1,070,153   5,310,488   1,022,519    1,285,434   17,622,989
                                                     -----------  -----------  ---------  -----------  -----------  ----------
Net investment income (loss).......................  (1,114,025)       8,925   (3,241,309)    126,439    (795,676)  (11,037,208)
                                                     -----------  -----------  ---------  -----------  -----------  ----------
Net realized and unrealized gain (loss) on
  investments and foreign currencies: (Note 1)
  Net realized gain (loss) on investments..........  12,037,902    1,624,816   14,637,996 10,174,908   (6,823,307)  59,731,742
  Net realized gain (loss) on foreign currency
   transactions....................................     (59,417)    (171,425)   (374,206)    200,616      (45,557)   8,663,014
                                                     -----------  -----------  ---------  -----------  -----------  ----------
    Net realized gain (loss) during the period.....  11,978,485    1,453,391   14,263,790 10,375,524   (6,868,864)  68,394,756
                                                     -----------  -----------  ---------  -----------  -----------  ----------
  Net change in unrealized appreciation
   (depreciation) on translation of assets and
   liabilities in foreign currencies...............      (1,738)     130,285     257,003     (36,699)     115,162    2,170,571
  Net change in unrealized appreciation
   (depreciation) of investments...................  25,373,856   17,197,803   (1,277,554) (1,970,941) (27,822,535) 241,184,397
                                                     -----------  -----------  ---------  -----------  -----------  ----------
    Net unrealized appreciation (depreciation)
     during the period.............................  25,372,118   17,328,088   (1,020,551) (2,007,640) (27,707,373) 243,354,968
                                                     -----------  -----------  ---------  -----------  -----------  ----------
Net realized and unrealized gain (loss) on
 investments and foreign currencies................  37,350,603   18,781,479   13,243,239  8,367,884   (34,576,237) 311,749,724
                                                     -----------  -----------  ---------  -----------  -----------  ----------
Net increase (decrease) in net assets resulting
 from operations...................................  3$6,236,578  1$8,790,404  $10,001,930  $8,494,323 ($35,371,913) $300,712,516
                                                     -----------  -----------  ---------  -----------  -----------  ----------
                                                     -----------  -----------  ---------  -----------  -----------  ----------
<FN>
- ----------------
 {/\} See Notes 1 and 7 of Notes to Financial Statements.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-28
<PAGE>   1179
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                      STATEMENTS OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         AIM GLOBAL{/\}
                                          -----------------------------------------------------------------------------
                                             CONSUMER PRODUCTS
                                                AND SERVICES           FINANCIAL SERVICES            HEALTH CARE
                                             FUND-CONSOLIDATED         FUND-CONSOLIDATED                FUND
                                          ------------------------  ------------------------  -------------------------
                                          SIX MONTHS                SIX MONTHS                SIX MONTHS
                                             ENDED                     ENDED                     ENDED
                                           APRIL 30,   YEAR ENDED    APRIL 30,   YEAR ENDED    APRIL 30,    YEAR ENDED
                                             1998      OCTOBER 31,     1998      OCTOBER 31,     1998      OCTOBER 31,
                                          (UNAUDITED)     1997      (UNAUDITED)     1997      (UNAUDITED)      1997
                                          -----------  -----------  -----------  -----------  -----------  ------------
<S>                                       <C>          <C>          <C>          <C>          <C>          <C>
Increase (decrease) in net assets
Operations:
  Net investment income (loss)..........  ($1,114,025) $(1,662,851)  $   8,925   $   (31,012) $(3,241,309) $ (6,665,748)
  Net realized gain (loss) on
   investments and foreign currency
   transactions.........................  11,978,485    16,167,449   1,453,391     2,628,562   14,263,790   153,599,307
  Net change in unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies...........................      (1,738)        5,172     130,285        58,275      257,003      (569,426)
  Net change in unrealized appreciation
   (depreciation) of investments........  25,373,856      (714,518) 17,197,803     6,449,986   (1,277,554)    1,308,779
                                          -----------  -----------  -----------  -----------  -----------  ------------
    Net increase (decrease) in net
     assets resulting from operations...  36,236,578    13,795,252  18,790,404     9,105,811   10,001,930   147,672,912
                                          -----------  -----------  -----------  -----------  -----------  ------------
Class A:
Distributions to shareholders: (Note 1)
  From net realized gain on
   investments..........................  (5,574,484)   (3,424,902) (1,110,662)     (580,522) (111,031,908)  (34,613,411)
Class B:
Distributions to shareholders: (Note 1)
  From net realized gain on
   investments..........................  (8,128,583)   (4,055,905) (1,697,929)     (823,692) (34,132,136)   (8,701,491)
Advisor Class:
Distributions to shareholders: (Note 1)
  From net realized gain on
   investments..........................    (962,619)     (308,573)   (225,074)       (5,018)  (1,791,803)      (57,488)
                                          -----------  -----------  -----------  -----------  -----------  ------------
    Total distributions.................  (14,665,686)  (7,789,380) (3,033,665)   (1,409,232) (146,955,847)  (43,372,390)
                                          -----------  -----------  -----------  -----------  -----------  ------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and
   reinvested...........................  67,898,330   136,239,369  78,300,144   130,520,030  466,202,619  1,007,452,632
  Decrease from capital shares
   repurchased..........................  (56,608,293) (151,833,735) (59,963,586) (74,514,633) (396,856,529) (1,062,045,275)
                                          -----------  -----------  -----------  -----------  -----------  ------------
    Net increase (decrease) from capital
     share transactions.................  11,290,037   (15,594,366) 18,336,558    56,005,397   69,346,090   (54,592,643)
                                          -----------  -----------  -----------  -----------  -----------  ------------
Total increase (decrease) in net
 assets.................................  32,860,929    (9,588,494) 34,093,297    63,701,976  (67,607,827)   49,707,879
Net assets:
  Beginning of period...................  162,662,313  172,250,807  80,961,634    17,259,658  626,342,117   576,634,238
                                          -----------  -----------  -----------  -----------  -----------  ------------
  End of period *.......................  1$95,523,242 $162,662,313 1$15,054,931 $80,961,634  $558,734,290 $626,342,117
                                          -----------  -----------  -----------  -----------  -----------  ------------
                                          -----------  -----------  -----------  -----------  -----------  ------------
 * Includes undistributed/accumulated
   net investment income (loss).........  ($1,114,025) $        --   $   8,925   $        --  $(3,241,309) $         --
                                          -----------  -----------  -----------  -----------  -----------  ------------
                                          -----------  -----------  -----------  -----------  -----------  ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-29
<PAGE>   1180
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                  STATEMENTS OF CHANGES IN NET ASSETS (cont'd)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
 
                                                                         AIM GLOBAL{/\}
                                          -----------------------------------------------------------------------------
                                              INFRASTRUCTURE              RESOURCES              TELECOMMUNICATIONS
                                             FUND-CONSOLIDATED        FUND-CONSOLIDATED                 FUND
                                          -----------------------  ------------------------  --------------------------
                                          SIX MONTHS               SIX MONTHS                 SIX MONTHS
                                             ENDED     YEAR ENDED     ENDED                     ENDED
                                           APRIL 30,    OCTOBER     APRIL 30,   YEAR ENDED    APRIL 30,     YEAR ENDED
                                             1998         31,         1998      OCTOBER 31,      1998      OCTOBER 31,
                                          (UNAUDITED)     1997     (UNAUDITED)     1997      (UNAUDITED)       1997
                                          -----------  ----------  -----------  -----------  ------------  ------------
<S>                                       <C>          <C>         <C>          <C>          <C>           <C>
Increase (decrease) in net assets
Operations:
  Net investment income (loss)..........   $ 126,439   $ (405,469) $  (795,676) $(2,255,658) $(11,037,208) $(23,856,621)
  Net realized gain (loss) on
   investments and foreign currency
   transactions.........................  10,375,524      778,612   (6,868,864)   7,540,578    68,394,756   120,426,746
  Net change in unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies...........................     (36,699)    (116,926)     115,162     (125,779)    2,170,571    (7,132,389)
  Net change in unrealized appreciation
   (depreciation) of investments........  (1,970,941)   8,647,635  (27,822,535)  18,607,939   241,184,397   217,773,979
                                          -----------  ----------  -----------  -----------  ------------  ------------
    Net increase (decrease) in net
     assets resulting from operations...   8,494,323    8,903,852  (35,371,913)  23,767,080   300,712,516   307,211,715
                                          -----------  ----------  -----------  -----------  ------------  ------------
Class A:
Distributions to shareholders: (Note 1)
  From net realized gain on
   investments..........................    (275,162)  (1,943,050)  (2,006,260)  (1,915,988)  (59,979,475)  (95,676,425)
Class B:
Distributions to shareholders: (Note 1)
  From net realized gain on
   investments..........................    (454,424)  (2,733,339)  (2,974,905)  (2,369,395)  (54,057,207)  (83,596,023)
Advisor Class:
Distributions to shareholders: (Note 1)
  From net realized gain on
   investments..........................     (39,877)     (17,129)    (210,222)    (134,145)     (238,558)     (176,806)
                                          -----------  ----------  -----------  -----------  ------------  ------------
    Total distributions.................    (769,463)  (4,693,518)  (5,191,387)  (4,419,528) (114,275,240) (179,449,254)
                                          -----------  ----------  -----------  -----------  ------------  ------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and
   reinvested...........................  13,758,704   44,324,471  133,328,246  377,334,346   991,606,632  1,783,734,946
  Decrease from capital shares
   repurchased..........................  (29,691,463) (42,934,337) (162,798,415) (336,987,548) (1,083,378,701) (2,403,405,013)
                                          -----------  ----------  -----------  -----------  ------------  ------------
    Net increase (decrease) from capital
     share transactions.................  (15,932,759)  1,390,134  (29,470,169)  40,346,798   (91,772,069) (619,670,067)
                                          -----------  ----------  -----------  -----------  ------------  ------------
Total increase (decrease) in net
 assets.................................  (8,207,899)   5,600,468  (70,033,469)  59,694,350    94,665,207  (491,907,606)
Net assets:
  Beginning of period...................  98,019,059   92,418,591  171,673,573  111,979,223  1,721,119,059 2,213,026,665
                                          -----------  ----------  -----------  -----------  ------------  ------------
  End of period *.......................  8$9,811,160  $98,019,059 $101,640,104 $171,673,573 $1,815,784,266 $1,721,119,059
                                          -----------  ----------  -----------  -----------  ------------  ------------
                                          -----------  ----------  -----------  -----------  ------------  ------------
 * Includes undistributed/accumulated
   net investment income (loss).........   $ 126,439   $       --  $  (795,676) $        --  $(11,031,674) $      5,534
                                          -----------  ----------  -----------  -----------  ------------  ------------
                                          -----------  ----------  -----------  -----------  ------------  ------------
</TABLE>
 
- ----------------
 
{/\} See Notes 1 and 7 of Notes to Financial Statements.
 
                                      FS-30
<PAGE>   1181
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                     CONSUMER PRODUCTS AND SERVICES FUND
                                          ---------------------------------------------------------
                                                                   CLASS A
                                          ---------------------------------------------------------
                                           SIX MONTHS                            DECEMBER 30, 1994
                                              ENDED            YEAR ENDED         (COMMENCEMENT OF
                                            APRIL 30,         OCTOBER 31,          OPERATIONS) TO
                                              1998       ----------------------     OCTOBER 31,
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)        1995 (D)
                                          -------------  ----------  ----------  ------------------
<S>                                       <C>            <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   22.19    $   20.98   $   14.59       $   11.43
                                          -------------  ----------  ----------     ----------
Income from investment operations:
  Net investment income (loss)..........        (0.12)       (0.15)      (0.22)           0.02*
  Net realized and unrealized gain on
   investments..........................         4.80         2.27        7.13            3.14
                                          -------------  ----------  ----------     ----------
    Net increase from investment
     operations.........................         4.68         2.12        6.91            3.16
                                          -------------  ----------  ----------     ----------
Distributions to shareholders:
  From net realized gain on
   investments..........................        (1.89)       (0.91)      (0.52)             --
                                          -------------  ----------  ----------     ----------
    Total distributions.................        (1.89)       (0.91)      (0.52)             --
                                          -------------  ----------  ----------     ----------
Net asset value, end of period..........    $   24.98    $   22.19   $   20.98       $   14.59
                                          -------------  ----------  ----------     ----------
                                          -------------  ----------  ----------     ----------
 
Total investment return (c).............        22.48%(b)     10.55%     48.82%          27.65 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  70,547    $  62,637   $  76,900       $   4,082
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......        (1.00)%(a)     (0.72)%     (1.14)%          0.20 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (1.02)%(a)     (0.87)%     (1.24)%        (11.11)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.92%(a)      1.84%      2.24%           2.32 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         1.94%(a)      1.99%      2.34%          13.63 % (a)
Portfolio turnover rate++...............          169%(a)       392%       169%            240 % (a)
Average commission rate per share paid
 on portfolio transactions++............    $  0.0423    $  0.0319   $  0.0545             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., net
     investment income per share would have been reduced by $1.12, $1.04
     and $0.61 for Class A, Class B and Advisor Class, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-31
<PAGE>   1182
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                     CONSUMER PRODUCTS AND SERVICES FUND
                                          ---------------------------------------------------------
                                                                   CLASS B
                                          ---------------------------------------------------------
                                           SIX MONTHS                            DECEMBER 30, 1994
                                              ENDED            YEAR ENDED         (COMMENCEMENT OF
                                            APRIL 30,         OCTOBER 31,           OPERATIONS)
                                              1998       ----------------------     OCTOBER 31,
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)        1995 (D)
                                          -------------  ----------  ----------  ------------------
<S>                                       <C>            <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   21.86    $   20.79   $   14.53       $   11.43
                                          -------------  ----------  ----------     ----------
Income from investment operations:
  Net investment income (loss)..........        (0.17)       (0.24)      (0.31)          (0.04) *
  Net realized and unrealized gain on
   investments..........................         4.71         2.22        7.09            3.14
                                          -------------  ----------  ----------     ----------
    Net increase from investment
     operations.........................         4.54         1.98        6.78            3.10
                                          -------------  ----------  ----------     ----------
Distributions to shareholders:
  From net realized gain on
   investments..........................        (1.89)       (0.91)      (0.52)             --
                                          -------------  ----------  ----------     ----------
    Total distributions.................        (1.89)       (0.91)      (0.52)             --
                                          -------------  ----------  ----------     ----------
Net asset value, end of period..........    $   24.51    $   21.86   $   20.79       $   14.53
                                          -------------  ----------  ----------     ----------
                                          -------------  ----------  ----------     ----------
 
Total investment return (c).............        22.21%(b)      9.95%     48.11%          27.12 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $ 106,836    $  93,978   $  87,904       $   2,959
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......        (1.50)%(a)     (1.22)%     (1.64)%         (0.30)% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (1.52)%(a)     (1.37)%     (1.74)%        (11.61)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         2.42%(a)      2.34%      2.74%           2.82 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.44%(a)      2.49%      2.84%          14.13 % (a)
Portfolio turnover rate++...............          169%(a)       392%       169%            240 % (a)
Average commission rate per share paid
 on portfolio transactions++............    $  0.0423    $  0.0319   $  0.0545             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., net
     investment income per share would have been reduced by $1.12, $1.04
     and $0.61 for Class A, Class B and Advisor Class, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-32
<PAGE>   1183
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                     CONSUMER PRODUCTS AND SERVICES FUND
                                          ---------------------------------------------------------
                                                               ADVISOR CLASS+
                                          ---------------------------------------------------------
                                           SIX MONTHS
                                              ENDED            YEAR ENDED           JUNE 1, 1995
                                            APRIL 30,         OCTOBER 31,                TO
                                              1998       ----------------------     OCTOBER 31,
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)        1995 (D)
                                          -------------  ----------  ----------  ------------------
<S>                                       <C>            <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   22.50    $   21.15   $   14.64       $   11.84
                                          -------------  ----------  ----------     ----------
Income from investment operations:
  Net investment income (loss)..........        (0.06)       (0.04)      (0.13)           0.04*
  Net realized and unrealized gain on
   investments..........................         4.86         2.30        7.16            2.76
                                          -------------  ----------  ----------     ----------
    Net increase from investment
     operations.........................         4.80         2.26        7.03            2.80
                                          -------------  ----------  ----------     ----------
Distributions to shareholders:
  From net realized gain on
   investments..........................        (1.89)       (0.91)      (0.52)             --
                                          -------------  ----------  ----------     ----------
    Total distributions.................        (1.89)       (0.91)      (0.52)             --
                                          -------------  ----------  ----------     ----------
Net asset value, end of period..........    $   25.41    $   22.50   $   21.15       $   14.64
                                          -------------  ----------  ----------     ----------
                                          -------------  ----------  ----------     ----------
 
Total investment return (c).............        22.77%(b)     11.15%     49.50%          23.65 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  18,141    $   6,047   $   7,446       $     164
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......        (0.50)%(a)     (0.22)%     (0.64)%          0.70 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (0.52)%(a)     (0.37)%     (0.74)%        (10.61)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.42%(a)      1.34%      1.74%           1.82 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         1.44%(a)      1.49%      1.84%          13.13 % (a)
Portfolio turnover rate++...............          169%(a)       392%       169%            240 % (a)
Average commission rate per share paid
 on portfolio transactions++............    $  0.0423    $  0.0319   $  0.0545             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., net
     investment income per share would have been reduced by $1.12, $1.04
     and $0.61 for Class A, Class B and Advisor Class, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-33
<PAGE>   1184
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
 
<TABLE>
<CAPTION>
                                                                 FINANCIAL SERVICES FUND
                                          ----------------------------------------------------------------------
                                                                         CLASS A
                                          ----------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED                                              MAY 31, 1994
                                            APRIL 30,          YEAR ENDED OCTOBER 31,          (COMMENCEMENT OF
                                              1998       -----------------------------------    OPERATIONS) TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)    1995 (D)     OCTOBER 31, 1994
                                          -------------  ----------  ----------  -----------  ------------------
<S>                                       <C>            <C>         <C>         <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   17.22    $   14.20   $   11.92    $   11.62       $   11.43
                                          -------------  ----------  ----------  -----------       --------
Income from investment operations:
  Net investment income (loss)..........         0.02         0.04        0.05*        0.17* *          0.02* * *
  Net realized and unrealized gain on
   investments..........................         3.54         3.97        2.36         0.13            0.17
                                          -------------  ----------  ----------  -----------       --------
    Net increase from investment
     operations.........................         3.56         4.01        2.41         0.30            0.19
                                          -------------  ----------  ----------  -----------       --------
Distributions to shareholders:
  From net investment income............           --           --       (0.12)          --              --
  From net realized gain on
   investments..........................        (0.61)       (0.99)      (0.01)          --              --
                                          -------------  ----------  ----------  -----------       --------
    Total distributions.................        (0.61)       (0.99)      (0.13)          --              --
                                          -------------  ----------  ----------  -----------       --------
Net asset value, end of period..........    $   20.17    $   17.22   $   14.20    $   11.92       $   11.62
                                          -------------  ----------  ----------  -----------       --------
                                          -------------  ----------  ----------  -----------       --------
 
Total investment return (c).............        21.29%(b)     29.91%     20.21%        2.58%           1.66 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  38,146    $  29,639   $   7,302    $   5,687       $   3,175
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         0.25%(a)      0.23%      0.41%        1.46%           0.66 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         0.20%(a)      0.16%     (0.66)%      (5.34)%         (7.26)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.98%(a)      2.29%      2.32%        2.34%           2.40 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.03%(a)      2.36%      3.39%        9.14%          10.32 % (a)
Portfolio turnover rate++...............          106%(a)        91%       103%         170%             53 % (a)
Average commission rate per share paid
 on portfolio transactions++............    $  0.0015    $  0.0014   $  0.0080          N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.13 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.59, $0.59
     and $0.30 for Class A, Class B and Advisor Class, respectively.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.23 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-34
<PAGE>   1185
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
 
<TABLE>
<CAPTION>
                                                                 FINANCIAL SERVICES FUND
                                          ---------------------------------------------------------------------
                                                                         CLASS B
                                          ---------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED                                             MAY 31, 1994
                                            APRIL 30,          YEAR ENDED OCTOBER 31,         (COMMENCEMENT OF
                                              1998       -----------------------------------   OPERATIONS) TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)    1995 (D)    OCTOBER 31, 1994
                                          -------------  ----------  ----------  -----------  -----------------
<S>                                       <C>            <C>         <C>         <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   16.97    $   14.06   $   11.83    $   11.60       $   11.43
                                          -------------  ----------  ----------  -----------  -----------------
Income from investment operations:
  Net investment income (loss)..........        (0.02)       (0.04)      (0.01) *       0.11* *          0.00* * *
  Net realized and unrealized gain on
   investments..........................         3.47         3.94        2.34         0.12            0.17
                                          -------------  ----------  ----------  -----------  -----------------
    Net increase from investment
     operations.........................         3.45         3.90        2.33         0.23            0.17
                                          -------------  ----------  ----------  -----------  -----------------
Distributions to shareholders:
  From net investment income............           --           --       (0.09)          --              --
  From net realized gain on
   investments..........................        (0.61)       (0.99)      (0.01)          --              --
                                          -------------  ----------  ----------  -----------  -----------------
    Total distributions.................        (0.61)       (0.99)      (0.10)          --              --
                                          -------------  ----------  ----------  -----------  -----------------
Net asset value, end of period..........    $   19.81    $   16.97   $   14.06    $   11.83       $   11.60
                                          -------------  ----------  ----------  -----------  -----------------
                                          -------------  ----------  ----------  -----------  -----------------
 
Total investment return (c).............        21.02%(b)     29.13%     19.81%        1.98%           1.49% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  64,747    $  47,585   $   9,886    $   4,548       $   2,235
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......        (0.25)%(a)     (0.27)%     (0.09)%       0.96%          0.16% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (0.30)%(a)     (0.34)%     (1.16)%      (5.84)%         (7.76)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         2.48%(a)      2.79%      2.82%        2.84%           2.90% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.53%(a)      2.86%      3.89%        9.64%          10.82% (a)
Portfolio turnover rate++...............          106%(a)        91%       103%         170%             53% (a)
Average commission rate per share paid
 on portfolio transactions++............    $  0.0015    $  0.0014   $  0.0080          N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.13 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.59, $0.59
     and $0.30 for Class A, Class B and Advisor Class, respectively.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.23 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-35
<PAGE>   1186
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
 
<TABLE>
<CAPTION>
                                                           FINANCIAL SERVICES FUND
                                          ---------------------------------------------------------
                                                               ADVISOR CLASS+
                                          ---------------------------------------------------------
                                           SIX MONTHS
                                              ENDED      YEAR ENDED OCTOBER 31,     JUNE 1, 1995
                                            APRIL 30,                                    TO
                                              1998       ----------------------     OCTOBER 31,
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)        1995 (D)
                                          -------------  ----------  ----------  ------------------
<S>                                       <C>            <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   17.40    $   14.26   $   11.95       $   11.09
                                          -------------  ----------  ----------       --------
Income from investment operations:
  Net investment income (loss)..........         0.07         0.12        0.12*           0.09* *
  Net realized and unrealized gain on
   investments..........................         3.57         4.01        2.36            0.77
                                          -------------  ----------  ----------       --------
    Net increase from investment
     operations.........................         3.64         4.13        2.48            0.86
                                          -------------  ----------  ----------       --------
Distributions to shareholders:
  From net investment income............           --           --       (0.16)             --
  From net realized gain on
   investments..........................        (0.61)       (0.99)      (0.01)             --
                                          -------------  ----------  ----------       --------
    Total distributions.................        (0.61)       (0.99)      (0.17)             --
                                          -------------  ----------  ----------       --------
Net asset value, end of period..........    $   20.43    $   17.40   $   14.26       $   11.95
                                          -------------  ----------  ----------       --------
                                          -------------  ----------  ----------       --------
 
Total investment return (c).............        21.55%(b)     30.52%     20.87%           7.75 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  12,161    $   3,738   $      72       $      31
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         0.75%(a)      0.73%      0.91%           1.96 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         0.70%(a)      0.66%     (0.16)%         (4.84)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.48%(a)      1.79%      1.82%           1.84 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         1.53%(a)      1.86%      2.89%           8.64 % (a)
Portfolio turnover rate++...............          106%(a)        91%       103%            170 %
Average commission rate per share paid
 on portfolio transactions++............    $  0.0015    $  0.0014   $  0.0080             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.13 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.59, $0.59
     and $0.30 for Class A, Class B and Advisor Class, respectively.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.23 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-36
<PAGE>   1187
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
 
<TABLE>
<CAPTION>
                                                                      HEALTH CARE FUND
                                          -------------------------------------------------------------------------
                                                                          CLASS A+
                                          -------------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED
                                            APRIL 30,                      YEAR ENDED OCTOBER 31,
                                              1998       ----------------------------------------------------------
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)      1995      1994 (D)    1993 (D)
                                          -------------  ----------  ----------  ----------  ----------  ----------
<S>                                       <C>            <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   27.98    $   23.60   $   21.84   $   19.60   $   17.86   $   17.44
                                          -------------  ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment loss...................        (0.11)       (0.25)      (0.17)      (0.15)      (0.22)      (0.15)
  Net realized and unrealized gain on
   investments..........................         0.44         6.48        4.79        3.73        2.02        0.57
                                          -------------  ----------  ----------  ----------  ----------  ----------
    Net increase from investment
     operations.........................         0.33         6.23        4.62        3.58        1.80        0.42
                                          -------------  ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net realized gain on
   investments..........................        (6.71)       (1.85)      (2.86)      (1.34)         --          --
  In excess of net realized gain on
   investments..........................           --           --          --          --       (0.06)         --
                                          -------------  ----------  ----------  ----------  ----------  ----------
    Total distributions.................        (6.71)       (1.85)      (2.86)      (1.34)      (0.06)         --
                                          -------------  ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........    $   21.60    $   27.98   $   23.60   $   21.84   $   19.60   $   17.86
                                          -------------  ----------  ----------  ----------  ----------  ----------
                                          -------------  ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............         2.15%(b)     28.36%     23.14%      19.79%      10.11%        2.4%
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $ 427,300    $ 472,083   $ 467,861   $ 426,380   $ 438,940   $ 461,113
Ratio of net investment loss to average
 net assets:
  With expense reductions (Notes 1 &
   5)...................................        (1.06)%(a)     (1.00)%     (0.71)%     (0.72)%     (1.23)%      (0.9)%
  Without expense reductions............        (1.07)%(a)     (1.03)%     (0.75)%     (0.78)%       N/A       N/A
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         1.80%(a)      1.77%      1.80%       1.85%       1.98%        2.0%
  Without expense reductions............         1.81%(a)      1.80%      1.84%       1.91%        N/A         N/A
Portfolio turnover rate++++.............          156%(a)       149%       157%         99%         64%         61%
Average commission rate per share paid
 on portfolio transactions++++..........    $  0.0561    $  0.0490   $  0.0548         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  All capital shares issued and outstanding as of March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-37
<PAGE>   1188
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
 
<TABLE>
<CAPTION>
                                                                          HEALTH CARE FUND
                                          --------------------------------------------------------------------------------
                                                                             CLASS B++
                                          --------------------------------------------------------------------------------
                                           SIX MONTHS
                                             ENDED                                                        APRIL 1, 1993
                                           APRIL 30,                YEAR ENDED OCTOBER 31,                      TO
                                              1998      ----------------------------------------------     OCTOBER 31,
                                          (UNAUDITED)    1997 (D)    1996 (D)      1995      1994 (D)        1993 (D)
                                          ------------  ----------  ----------  ----------  ----------  ------------------
<S>                                       <C>           <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $   27.27    $   23.15   $   21.56   $   19.46   $   17.80       $   15.59
                                          ------------  ----------  ----------  ----------  ----------       --------
Income from investment operations:
  Net investment loss...................       (0.16)       (0.37)      (0.27)      (0.25)      (0.32)          (0.14)
  Net realized and unrealized gain on
   investments..........................        0.42         6.34        4.72        3.69        2.02            2.35
                                          ------------  ----------  ----------  ----------  ----------       --------
    Net increase from investment
     operations.........................        0.26         5.97        4.45        3.44        1.70            2.21
                                          ------------  ----------  ----------  ----------  ----------       --------
Distributions to shareholders:
  From net realized gain on
   investments..........................       (6.71)       (1.85)      (2.86)      (1.34)         --              --
  In excess of net realized gain on
   investments..........................          --           --          --          --       (0.04)             --
                                          ------------  ----------  ----------  ----------  ----------       --------
    Total distributions.................       (6.71)       (1.85)      (2.86)      (1.34)      (0.04)             --
                                          ------------  ----------  ----------  ----------  ----------       --------
Net asset value, end of period..........   $   20.82    $   27.27   $   23.15   $   21.56   $   19.46       $   17.80
                                          ------------  ----------  ----------  ----------  ----------       --------
                                          ------------  ----------  ----------  ----------  ----------       --------
 
Total investment return (c).............        1.89 %(b)     27.75%     22.59%     19.17%       9.55%           14.2 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $ 121,735    $ 147,440   $ 107,622   $  70,740   $  39,100       $   8,604
Ratio of net investment loss to average
 net assets:
  With expense reductions (Notes 1 &
   5)...................................       (1.56)%(a)     (1.50)%     (1.21)%     (1.22)%     (1.73)%          (1.4)% (a)
  Without expense reductions............       (1.57)%(a)     (1.53)%     (1.25)%     (1.28)%       N/A           N/A
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................        2.30 %(a)      2.27%      2.30%      2.35%       2.48%           2.50 % (a)
  Without expense reductions............        2.31 %(a)      2.30%      2.34%      2.41%        N/A             N/A
Portfolio turnover rate++++.............         156 %(a)       149%       157%        99%         64%             61 %
Average commission rate per share paid
 on portfolio transactions++++..........   $  0.0561    $  0.0490   $  0.0548         N/A         N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  All capital shares issued and outstanding as of March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-38
<PAGE>   1189
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
 
<TABLE>
<CAPTION>
                                                             HEALTH CARE FUND
                                          -------------------------------------------------------
                                                             ADVISOR CLASS+++
                                          -------------------------------------------------------
                                           SIX MONTHS
                                              ENDED            YEAR ENDED
                                            APRIL 30,         OCTOBER 31,          JUNE 1, 1995
                                              1998       ----------------------         TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)   OCTOBER 31, 1995
                                          -------------  ----------  ----------  ----------------
<S>                                       <C>            <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   28.34    $   23.77   $   21.88      $   18.66
                                          -------------  ----------  ----------      --------
Income from investment operations:
  Net investment loss...................        (0.05)       (0.12)      (0.05)         (0.02)
  Net realized and unrealized gain on
   investments..........................         0.44         6.54        4.80           3.24
                                          -------------  ----------  ----------      --------
    Net increase from investment
     operations.........................         0.39         6.42        4.75           3.22
                                          -------------  ----------  ----------      --------
Distributions to shareholders:
  From net realized gain on
   investments..........................        (6.71)       (1.85)      (2.86)            --
  In excess of net realized gain on
   investments..........................           --           --          --             --
                                          -------------  ----------  ----------      --------
    Total distributions.................        (6.71)       (1.85)      (2.86)            --
                                          -------------  ----------  ----------      --------
Net asset value, end of period..........    $   22.02    $   28.34   $   23.77      $   21.88
                                          -------------  ----------  ----------      --------
                                          -------------  ----------  ----------      --------
 
Total investment return (c).............         2.37%(b)     29.00%     23.82%         17.10 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $   9,699    $   6,819   $   1,152      $     539
Ratio of net investment loss to average
 net assets:
  With expense reductions (Notes 1 &
   5)...................................        (0.56)%(a)     (0.50)%     (0.21)%        (0.22)% (a)
  Without expense reductions............        (0.57)%(a)     (0.53)%     (0.25)%        (0.28)% (a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         1.30%(a)      1.27%      1.30%          1.35 % (a)
  Without expense reductions............         1.31%(a)      1.30%      1.34%          1.41 % (a)
Portfolio turnover rate++++.............          156%(a)       149%       157%            99 % (a)
Average commission rate per share paid
 on portfolio transactions++++..........    $  0.0561    $  0.0490   $  0.0548            N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  All capital shares issued and outstanding as of March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-39
<PAGE>   1190
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                  INFRASTRUCTURE FUND
                                          --------------------------------------------------------------------
                                                                        CLASS A
                                          --------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED                                            MAY 31, 1994
                                            APRIL 30,          YEAR ENDED OCTOBER 31,        (COMMENCEMENT OF
                                              1998       ----------------------------------   OPERATIONS) TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)      1995     OCTOBER 31, 1994
                                          -------------  ----------  ----------  ----------  -----------------
<S>                                       <C>            <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   15.01    $   14.42   $   12.11   $   12.47       $   11.43
                                          -------------  ----------  ----------  ----------  -----------------
Income from investment operations:
  Net investment income (loss)..........         0.03*       (0.01)      (0.03)      (0.03) **          0.01* * *
  Net realized and unrealized gain
   (loss) on investments................         1.50         1.32        2.34       (0.33)           1.03
                                          -------------  ----------  ----------  ----------  -----------------
    Net increase (decrease) from
     investment operations..............         1.53         1.31        2.31       (0.36)           1.04
                                          -------------  ----------  ----------  ----------  -----------------
Distributions to shareholders:
  From net realized gain on
   investments..........................        (0.11)       (0.72)         --          --              --
                                          -------------  ----------  ----------  ----------  -----------------
    Total distributions.................        (0.11)       (0.72)         --          --              --
                                          -------------  ----------  ----------  ----------  -----------------
Net asset value, end of period..........    $   16.43    $   15.01   $   14.42   $   12.11       $   12.47
                                          -------------  ----------  ----------  ----------  -----------------
                                          -------------  ----------  ----------  ----------  -----------------
 
Total investment return (c).............        10.29%(b)      9.38%     19.08%      (2.89)%          9.10% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  33,287    $  38,281   $  38,397   $  36,241       $  23,615
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         0.51%(a)     (0.09)%     (0.19)%     (0.32)%          0.41% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         0.32%(a)     (0.17)%     (0.30)%     (0.58)%         (0.47)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.99%(a)      2.00%      2.14%       2.36%           2.40% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.18%(a)      2.08%      2.25%       2.62%           3.28% (a)
Portfolio turnover rate++...............           95%(a)        41%        41%         45%             18%
Average commission rate per share paid
 on portfolio transactions..............    $  0.0148    $  0.0046   $  0.0109         N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.01 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.03 for Class
     A shares, $0.03 for Class B shares, and $0.02 for Advisor Class
     shares.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.02 for Class
     A and Class B from May 31, 1994 to October 31, 1994.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-40
<PAGE>   1191
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                  INFRASTRUCTURE FUND
                                          --------------------------------------------------------------------
                                                                        CLASS B
                                          --------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED                                            MAY 31, 1994
                                            APRIL 30,          YEAR ENDED OCTOBER 31,        (COMMENCEMENT OF
                                              1998       ----------------------------------   OPERATIONS) TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)      1995     OCTOBER 31, 1994
                                          -------------  ----------  ----------  ----------  -----------------
<S>                                       <C>            <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   14.75    $   14.24   $   12.03   $   12.45       $   11.43
                                          -------------  ----------  ----------  ----------  -----------------
Income from investment operations:
  Net investment income (loss)..........           --*       (0.09)      (0.09)      (0.09) **         (0.01) * * *
  Net realized and unrealized gain
   (loss) on investments................         1.46         1.32        2.30       (0.33)           1.03
                                          -------------  ----------  ----------  ----------  -----------------
    Net increase (decrease) from
     investment operations..............         1.46         1.23        2.21       (0.42)           1.02
                                          -------------  ----------  ----------  ----------  -----------------
Distributions to shareholders:
  From net realized gain on
   investments..........................        (0.11)       (0.72)         --          --              --
                                          -------------  ----------  ----------  ----------  -----------------
    Total distributions.................        (0.11)       (0.72)         --          --              --
                                          -------------  ----------  ----------  ----------  -----------------
Net asset value, end of period..........    $   16.10    $   14.75   $   14.24   $   12.03       $   12.45
                                          -------------  ----------  ----------  ----------  -----------------
                                          -------------  ----------  ----------  ----------  -----------------
 
Total investment return (c).............         9.99%(b)      8.83%     18.37%      (3.37)%          8.92% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  47,177    $  57,199   $  53,678   $  50,181       $  30,954
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         0.01%(a)     (0.59)%     (0.69)%     (0.82)%         (0.09)% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (0.18)%(a)     (0.67)%     (0.80)%     (1.08)%         (0.97)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         2.49%(a)      2.50%      2.64%       2.86%           2.90% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.68%(a)      2.58%      2.75%       3.12%           3.78% (a)
Portfolio turnover rate++...............           95%(a)        41%        41%         45%             18%
Average commission rate per share paid
 on portfolio transactions..............    $  0.0148    $  0.0046   $  0.0109         N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.01 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.03 for Class
     A shares, $0.03 for Class B shares, and $0.02 for Advisor Class
     shares.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.02 for Class
     A and Class B from May 31, 1994 to October 31, 1994.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-41
<PAGE>   1192
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)

- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                            INFRASTRUCTURE FUND
                                          -------------------------------------------------------
                                                              ADVISOR CLASS+
                                          -------------------------------------------------------
                                           SIX MONTHS
                                              ENDED      YEAR ENDED OCTOBER 31,
                                            APRIL 30,                              JUNE 1, 1995
                                              1998       ----------------------         TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)   OCTOBER 31, 1995
                                          -------------  ----------  ----------  ----------------
<S>                                       <C>            <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   15.23    $   14.52   $   12.14      $   12.00
                                          -------------  ----------  ----------      --------
Income from investment operations:
  Net investment income (loss)..........         0.08*        0.05        0.04           0.02* *
  Net realized and unrealized gain
   (loss) on investments................         1.51         1.38        2.34           0.12
                                          -------------  ----------  ----------      --------
    Net increase (decrease) from
     investment operations..............         1.59         1.43        2.38           0.14
                                          -------------  ----------  ----------      --------
Distributions to shareholders:
  From net realized gain on
   investments..........................        (0.11)       (0.72)         --             --
                                          -------------  ----------  ----------      --------
    Total distributions.................        (0.11)       (0.72)         --             --
                                          -------------  ----------  ----------      --------
Net asset value, end of period..........    $   16.71    $   15.23   $   14.52      $   12.14
                                          -------------  ----------  ----------      --------
                                          -------------  ----------  ----------      --------
 
Total investment return (c).............        10.53%(b)     10.10%     19.60%          1.17 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $   9,347    $   2,539   $     344      $     216
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.01%(a)      0.41%      0.31%          0.18 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         0.82%(a)      0.33%      0.20%         (0.08)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.49%(a)      1.50%      1.64%          1.86 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         1.68%(a)      1.58%      1.75%          2.12 % (a)
Portfolio turnover rate++...............           95%(a)        41%        41%            45 %
Average commission rate per share paid
 on portfolio transactions..............    $  0.0148    $  0.0046   $  0.0109            N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.01 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.03 for Class
     A shares, $0.03 for Class B shares, and $0.02 for Advisor Class
     shares.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.02 for Class
     A and Class B from May 31, 1994 to October 31, 1994.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-42
<PAGE>   1193
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                     RESOURCES FUND
                                          --------------------------------------------------------------------
                                                                        CLASS A
                                          --------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED                                            MAY 31, 1994
                                            APRIL 30,          YEAR ENDED OCTOBER 31,        (COMMENCEMENT OF
                                              1998       ----------------------------------   OPERATIONS) TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)      1995     OCTOBER 31, 1994
                                          -------------  ----------  ----------  ----------  -----------------
<S>                                       <C>            <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   20.65    $   17.43   $   11.44   $   12.41       $   11.43
                                          -------------  ----------  ----------  ----------  -----------------
Income from investment operations:
  Net investment income (loss)..........        (0.10) *     (0.25)      (0.24)       0.04* *          0.06* * *
  Net realized and unrealized gain
   (loss) on investments................        (4.31)        4.08        6.28       (0.98)           0.92
                                          -------------  ----------  ----------  ----------  -----------------
    Net increase (decrease) from
     investment operations..............        (4.41)        3.83        6.04       (0.94)           0.98
                                          -------------  ----------  ----------  ----------  -----------------
Distributions to shareholders:
  From net investment income............           --           --       (0.04)      (0.03)             --
  From net realized gain on
   investments..........................        (0.68)       (0.61)      (0.01)         --              --
                                          -------------  ----------  ----------  ----------  -----------------
    Total distributions.................        (0.68)       (0.61)      (0.05)      (0.03)             --
                                          -------------  ----------  ----------  ----------  -----------------
Net asset value, end of period..........    $   15.56    $   20.65   $   17.43   $   11.44       $   12.41
                                          -------------  ----------  ----------  ----------  -----------------
                                          -------------  ----------  ----------  ----------  -----------------
 
Total investment return (c).............       (21.88)%(b)     22.64%     53.04%     (7.58)%          8.57% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  42,093    $  69,975   $  48,729   $  12,598       $  14,797
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......        (1.14)%(a)     (1.41)%     (1.55)%      0.41%          2.63% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (1.32)%(a)     (1.51)%     (1.65)%     (0.69)%          0.65% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.99%(a)      2.03%      2.20%       2.37%           2.40% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.17%(a)      2.13%      2.30%       3.47%           4.38% (a)
Portfolio turnover rate++...............          197%(a)       321%        94%         87%            137%
Average commission rate per share paid
 on portfolio transactions++............    $  0.0245    $  0.0112   $  0.0243         N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.01 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income (loss) per share would have been reduced (increased)
     by $0.14, $0.13, and $0.12 for Class A, Class B, and Advisor Class,
     respectively.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.04 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-43
<PAGE>   1194
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                     RESOURCES FUND
                                          --------------------------------------------------------------------
                                                                        CLASS B
                                          --------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED                                            MAY 31, 1994
                                            APRIL 30,          YEAR ENDED OCTOBER 31,        (COMMENCEMENT OF
                                              1998       ----------------------------------   OPERATIONS) TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)      1995     OCTOBER 31, 1994
                                          -------------  ----------  ----------  ----------  -----------------
<S>                                       <C>            <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   20.37    $   17.29   $   11.36   $   12.38       $   11.43
                                          -------------  ----------  ----------  ----------  -----------------
Income from investment operations:
  Net investment income (loss)..........        (0.14) *     (0.33)      (0.31)      (0.02) **          0.03* * *
  Net realized and unrealized gain
   (loss) on investments................        (4.24)        4.02        6.25       (0.98)           0.92
                                          -------------  ----------  ----------  ----------  -----------------
    Net increase (decrease) from
     investment operations..............        (4.38)        3.69        5.94       (1.00)           0.95
                                          -------------  ----------  ----------  ----------  -----------------
Distributions to shareholders:
  From net investment income............           --           --          --       (0.02)             --
  From net realized gain on
   investments..........................        (0.68)       (0.61)      (0.01)         --              --
                                          -------------  ----------  ----------  ----------  -----------------
    Total distributions.................        (0.68)       (0.61)      (0.01)      (0.02)             --
                                          -------------  ----------  ----------  ----------  -----------------
Net asset value, end of period..........    $   15.31    $   20.37   $   17.29   $   11.36       $   12.38
                                          -------------  ----------  ----------  ----------  -----------------
                                          -------------  ----------  ----------  ----------  -----------------
 
Total investment return (c).............       (22.03)%(b)     21.99%     52.39%     (8.05)%          8.31% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  52,210    $  86,812   $  57,749   $  13,978       $  13,404
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......        (1.64)%(a)     (1.91)%     (2.05)%     (0.09)%          2.13% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (1.82)%(a)     (2.01)%     (2.15)%     (1.19)%          0.15% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         2.49%(a)      2.53%      2.70%       2.87%           2.90% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.67%(a)      2.63%      2.80%       3.97%           4.88% (a)
Portfolio turnover rate++...............          197%(a)       321%        94%         87%            137%
Average commission rate per share paid
 on portfolio transactions++............    $  0.0245    $  0.0112   $  0.0243         N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.01 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income (loss) per share would have been reduced (increased)
     by $0.14, $0.13, and $0.12 for Class A, Class B, and Advisor Class,
     respectively.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.04 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-44
<PAGE>   1195
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                              RESOURCES FUND
                                          -------------------------------------------------------
                                                              ADVISOR CLASS+
                                          -------------------------------------------------------
                                           SIX MONTHS
                                              ENDED      YEAR ENDED OCTOBER 31,
                                            APRIL 30,                              JUNE 1, 1995
                                              1998       ----------------------         TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)   OCTOBER 31, 1995
                                          -------------  ----------  ----------  ----------------
<S>                                       <C>            <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   20.80    $   17.47   $   11.47      $   11.45
                                          -------------  ----------  ----------      --------
Income from investment operations:
  Net investment income (loss)..........        (0.06) *     (0.14)      (0.17)          0.11* *
  Net realized and unrealized gain
   (loss) on investments................        (4.36)        4.08        6.28          (0.09)
                                          -------------  ----------  ----------      --------
    Net increase (decrease) from
     investment operations..............        (4.42)        3.94        6.11           0.02
                                          -------------  ----------  ----------      --------
Distributions to shareholders:
  From net investment income............           --           --       (0.10)            --
  From net realized gain on
   investments..........................        (0.68)       (0.61)      (0.01)            --
                                          -------------  ----------  ----------      --------
    Total distributions.................        (0.68)       (0.61)      (0.11)            --
                                          -------------  ----------  ----------      --------
Net asset value, end of period..........    $   15.70    $   20.80   $   17.47      $   11.47
                                          -------------  ----------  ----------      --------
                                          -------------  ----------  ----------      --------
 
Total investment return (c).............       (21.76)%(b)     23.23%     53.76%         0.17 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $   7,337    $  14,886   $   5,502      $      95
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......        (0.64)%(a)     (0.91)%     (1.05)%         0.91 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (0.82)%(a)     (1.01)%     (1.15)%        (0.19)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.49%(a)      1.53%      1.70%          1.87 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         1.67%(a)      1.63%      1.80%          2.97 % (a)
Portfolio turnover rate++...............          197%(a)       321%        94%            87 %
Average commission rate per share paid
 on portfolio transactions++............    $  0.0245    $  0.0112   $  0.0243            N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.01 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income (loss) per share would have been reduced (increased)
     by $0.14, $0.13, and $0.12 for Class A, Class B, and Advisor Class,
     respectively.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.04 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-45
<PAGE>   1196
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                   TELECOMMUNICATIONS FUND
                                          -------------------------------------------------------------------------
                                                                          CLASS A+
                                          -------------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED
                                            APRIL 30,                      YEAR ENDED OCTOBER 31,
                                              1998       ----------------------------------------------------------
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)      1995      1994 (D)      1993
                                          -------------  ----------  ----------  ----------  ----------  ----------
<S>                                       <C>            <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   18.04    $   16.69   $   16.42   $   17.80   $   16.92   $   11.16
                                          -------------  ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income (loss)..........        (0.09)       (0.17)      (0.13)      (0.09)      (0.01)       0.08
  Net realized and unrealized gain
   (loss) on investments................         3.30         2.93        1.22       (0.43)       1.17        5.83
                                          -------------  ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............         3.21         2.76        1.09       (0.52)       1.16        5.91
                                          -------------  ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............           --           --          --          --       (0.01)      (0.15)
  From net realized gain on
   investments..........................        (1.20)       (1.41)      (0.82)      (0.86)      (0.27)         --
                                          -------------  ----------  ----------  ----------  ----------  ----------
    Total distributions.................        (1.20)       (1.41)      (0.82)      (0.86)      (0.28)      (0.15)
                                          -------------  ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........    $   20.05    $   18.04   $   16.69   $   16.42   $   17.80   $   16.92
                                          -------------  ----------  ----------  ----------  ----------  ----------
                                          -------------  ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............        19.19%(b)     17.70%      7.00%      (2.88)%      7.02%      53.60%
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $ 969,857    $ 910,801   $1,204,428  $1,353,722  $1,644,402  $1,223,340
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions (Notes 1 &
   5)...................................        (1.08)%(a)     (1.01)%     (0.84)%     (0.49)%     (0.02)%      0.80%
  Without expense reductions............        (1.09)%(a)     (1.06)%     (0.89)%     (0.55)%       N/A       N/A
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         1.87%(a)      1.79%      1.74%       1.77%       1.80%        2.0%
  Without expense reductions............         1.88%(a)      1.84%      1.79%       1.83%        N/A         N/A
Portfolio turnover rate++++.............           56%(a)        35%        37%         62%         57%         41%
Average commission rate per share paid
 on portfolio transactions++++..........    $  0.0045    $  0.0085   $  0.0165         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charge.
 (d) These selected per share data were calculated based upon the average
     shares outstanding during the period.
  +  All capital shares issued and outstanding March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-46
<PAGE>   1197
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                     TELECOMMUNICATIONS FUND
                                          -----------------------------------------------------------------------------
                                                                            CLASS B++
                                          -----------------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED                                                      APRIL 1, 1993
                                            APRIL 30,                YEAR ENDED OCTOBER 31,                    TO
                                              1998       ----------------------------------------------   OCTOBER 31,
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)      1995      1994 (D)        1993
                                          -------------  ----------  ----------  ----------  ----------  --------------
<S>                                       <C>            <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   17.58    $   16.37   $   16.20   $   17.66   $   16.87     $   12.68
                                          -------------  ----------  ----------  ----------  ----------  --------------
Income from investment operations:
  Net investment income (loss)..........        (0.13)       (0.25)      (0.23)      (0.17)      (0.10)         0.01
  Net realized and unrealized gain
   (loss) on investments................         3.20         2.87        1.22       (0.43)       1.17          4.18
                                          -------------  ----------  ----------  ----------  ----------  --------------
    Net increase (decrease) from
     investment operations..............         3.07         2.62        0.99       (0.60)       1.07          4.19
                                          -------------  ----------  ----------  ----------  ----------  --------------
Distributions to shareholders:
  From net investment income............           --           --          --          --       (0.01)           --
  From net realized gain on
   investments..........................        (1.20)       (1.41)      (0.82)      (0.86)      (0.27)           --
                                          -------------  ----------  ----------  ----------  ----------  --------------
    Total distributions.................        (1.20)       (1.41)      (0.82)      (0.86)      (0.28)           --
                                          -------------  ----------  ----------  ----------  ----------  --------------
Net asset value, end of period..........    $   19.45    $   17.58   $   16.37   $   16.20   $   17.66     $   16.87
                                          -------------  ----------  ----------  ----------  ----------  --------------
                                          -------------  ----------  ----------  ----------  ----------  --------------
 
Total investment return (c).............        18.88%(b)     17.15%      6.46%      (3.37)%      6.50%         33.0 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $ 837,576    $ 805,535   $1,007,654  $1,111,520  $1,184,081    $ 455,335
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions (Notes 1 &
   5)...................................        (1.58)%(a)     (1.51)%     (1.34)%     (0.99)%     (0.52)%         0.3 %(a)
  Without expense reductions............        (1.59)%(a)     (1.56)%     (1.39)%     (1.05)%       N/A         N/A
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         2.37%(a)      2.29%      2.24%       2.27%       2.30%         2.50 %(a)
  Without expense reductions............         2.38%(a)      2.34%      2.29%       2.33%        N/A           N/A
Portfolio turnover rate++++.............           56%(a)        35%        37%         62%         57%           41 %
Average commission rate per share paid
 on portfolio transactions++++..........    $  0.0045    $  0.0085   $  0.0165         N/A         N/A           N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charge.
 (d) These selected per share data were calculated based upon the average
     shares outstanding during the period.
  +  All capital shares issued and outstanding March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-47
<PAGE>   1198
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                          TELECOMMUNICATIONS FUND
                                          -------------------------------------------------------
                                                             ADVISOR CLASS+++
                                          -------------------------------------------------------
                                           SIX MONTHS
                                              ENDED      YEAR ENDED OCTOBER 31,
                                            APRIL 30,                              JUNE 1, 1995
                                              1998       ----------------------         TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)   OCTOBER 31, 1995
                                          -------------  ----------  ----------  ----------------
<S>                                       <C>            <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   18.28    $   16.81   $   16.46      $   15.24
                                          -------------  ----------  ----------      --------
Income from investment operations:
  Net investment income (loss)..........        (0.04)       (0.09)      (0.05)            --
  Net realized and unrealized gain
   (loss) on investments................         3.36         2.97        1.22           1.22
                                          -------------  ----------  ----------      --------
    Net increase (decrease) from
     investment operations..............         3.32         2.88        1.17           1.22
                                          -------------  ----------  ----------      --------
Distributions to shareholders:
  From net investment income............           --           --          --             --
  From net realized gain on
   investments..........................        (1.20)       (1.41)      (0.82)            --
                                          -------------  ----------  ----------      --------
    Total distributions.................        (1.20)       (1.41)      (0.82)            --
                                          -------------  ----------  ----------      --------
Net asset value, end of period..........    $   20.40    $   18.28   $   16.81      $   16.46
                                          -------------  ----------  ----------      --------
                                          -------------  ----------  ----------      --------
 
Total investment return (c).............        19.56%(b)     18.33%      7.49%          7.94 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $   8,351    $   4,783   $     945      $     681
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions (Notes 1 &
   5)...................................        (0.58)%(a)     (0.51)%     (0.34)%         0.01 % (a)
  Without expense reductions............        (0.59)%(a)     (0.56)%     (0.39)%         0.07 % (a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         1.37%(a)      1.29%      1.24%          1.27 % (a)
  Without expense reductions............         1.38%(a)      1.34%      1.29%          1.33 % (a)
Portfolio turnover rate++++.............           56%(a)        35%        37%            62 %
Average commission rate per share paid
 on portfolio transactions++++..........    $  0.0045    $  0.0085   $  0.0165            N/A
</TABLE>
 
- - ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charge.
 (d) These selected per share data were calculated based upon the average
     shares outstanding during the period.
  +  All capital shares issued and outstanding March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-48
<PAGE>   1199
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
The following Notes to Financial Statements are for the period ending April 30,
1998, and unless otherwise indicated reflect facts as of that date. Please see
"Note 7 -- Subsequent Events" for a discussion of certain changes which took
place after April 30, 1998.
 
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 7)
GT Global Consumer Products and Services Fund, GT Global Financial Services
Fund, GT Global Health Care Fund, GT Global Infrastructure Fund, GT Global
Natural Resources Fund and GT Global Telecommunications Fund ("Funds") are
separate series of G.T. Investment Funds, Inc. ("Company"). Effective June 1,
1998, the Company was renamed AIM Investment Funds, Inc. and these six separate
series were renamed as follows: AIM Global Consumer Products and Services Fund,
AIM Global Financial Services Fund, AIM Global Health Care Fund, AIM Global
Infrastructure Fund, AIM Global Resources Fund and AIM Global Telecommunications
Fund, respectively. Collectively, these Funds are now known as the "AIM Global
Theme Funds." The Company is organized as a Maryland corporation and is
registered under the Investment Company Act of 1940, as amended ("1940 Act"), as
an open-end management investment company. The Company has thirteen series of
shares in operation, each series corresponding to a distinct portfolio of
investments.
 
The GT Global Consumer Products and Services Fund, GT Global Financial Services
Fund, GT Global Infrastructure Fund, and GT Global Natural Resources Fund each
invests substantially all of its investable assets in Global Consumer Products
and Services Portfolio, Global Financial Services Portfolio, Global
Infrastructure Portfolio, and Global Natural Resources Portfolio ("Portfolios"),
respectively. Each Portfolio is organized as a subtrust of a New York common law
trust ("Trust") and is registered under the 1940 Act as an open-end management
investment company.
 
The Portfolios have investment objectives, policies, and limitations
substantially identical to those of their corresponding Funds. Therefore, the
financial statements of the aformentioned Funds and their respective Portfolios
have been presented on a consolidated basis, and represent all activities of
both the respective Funds and Portfolios. Through April 30, 1998, all of the
shares of beneficial interest of each Portfolio were owned by either its
respective Fund or Chancellor LGT Asset Management, Inc. (the "Manager"), which
has a nominal ($100) investment in each Portfolio.
 
The Funds offer Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges except that Class A and Class B
each has exclusive voting rights with respect to its distribution plan.
Investment income, realized and unrealized capital gains and losses, and the
common expenses of each Fund are allocated on a pro rata basis to each class
based on the relative net assets of each class to the total net assets of the
Fund. Each class of shares differs in its respective service and distribution
expenses, and may differ in its transfer agent, registration, and certain other
class-specific fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
 
(A) PORTFOLIO VALUATION
The Funds calculate the net asset value of and complete orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by the Manager to be the
primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments are valued at
amortized cost adjusted for foreign exchange translation and market fluctuation,
if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors or the Trust's Board of Trustees.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors or
the Trusts's Board of Trustees.
 
                                      FS-49
<PAGE>   1200
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of each Fund and Portfolio are maintained in U.S.
dollars. The market values of foreign securities, currency holdings, and other
assets and liabilities are recorded in the books and records of the Funds or
Portfolios (the phrase "Fund or Portfolio" hereinafter includes the GT Global
Health Care Fund, The GT Global Telecommunications Fund, and the four
Portfolios) after translation to U.S. dollars based on the exchange rates on
that day. The cost of each security is determined using historical exchange
rates. Income and withholding taxes are translated at prevailing exchange rates
when earned or incurred.
 
A Fund or Portfolio does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from 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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's or Portfolio's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains or losses arise
from changes in the value of assets and liabilities other than investments in
securities at year end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by a Fund or Portfolio, it is
the Fund's or Portfolio's policy to always receive, as collateral, United States
government securities or other high quality debt securities of which the value,
including accrued interest, is at least equal to the amount to be repaid to the
Fund or Portfolio under each agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund or Portfolio as an unrealized gain or loss.
When the Forward Contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference between the value at the time it was opened
and the value at the time it was closed. Forward Contracts involve market risk
in excess of the amount shown in the Fund's or Portfolio's "Statement of Assets
and Liabilities". A Fund or Portfolio could be exposed to risk if a counterparty
is unable to meet the terms of the contract or if the value of the currency
changes unfavorably. A Fund or Portfolio may enter into Forward Contracts in
connection with planned purchases or sales of securities, or to hedge against
adverse fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When a Fund or Portfolio writes a call or put option, an amount equal to the
premium received is included in the Fund's or Portfolio's "Statement of Assets
and Liabilities" as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market value
of the option. The current market value of an option listed on an exchange is
valued at its last bid price, or, in the case of an over-the-counter option, is
valued at the average of the last bid prices obtained from brokers, unless a
quotation from only one broker is available, in which case only that broker's
price will be used. If an option expires on its stipulated expiration date or if
the Fund or Portfolio enters into a closing purchase transaction, a gain or loss
is realized without regard to any unrealized gain or loss on the underlying
security and the liability related to such option is extinguished. If a written
call option is exercised, a gain or loss is realized from the sale of the
underlying security and the proceeds of the sale are increased by the premium
originally received. If a written put option is exercised, the cost of the
underlying security purchased would be decreased by the premium originally
received. The Fund or Portfolio can write options only on a covered basis,
which, for a call, requires that the Fund or Portfolio hold the underlying
security and, for a put, requires the Fund or Portfolio to set aside cash, U.S.
government securities or other liquid securities in an amount not less than the
exercise price, or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund or Portfolio may use options to manage its
exposure to the stock market and to fluctuations in currency values or interest
rates.
 
The premium paid by the Fund or Portfolio for the purchase of a call or put
option is included in the Fund's or Portfolio's "Statement of Assets and
Liabilities" as an investment and subsequently "marked-to-market" to reflect the
current market value of the option. If an option which the Fund or Portfolio has
purchased expires on the stipulated expiration date, the Fund or Portfolio
realizes a loss in the amount of the cost of the option. If the Fund or
Portfolio enters into a closing sale transaction, the Fund or Portfolio realizes
a gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund or Portfolio
exercises a call option, the cost of the securities acquired by exercising the
call is increased by the premium paid to buy the call. If the Fund or Portfolio
exercises a put option, it realizes a gain or loss from the sale of the
underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund or Portfolio may forego
the opportunity of profit if the market value of the underlying security or
index increases and the option is exercised. The risk in writing a put option is
that the Fund or Portfolio may incur a loss if the market value of the
underlying security or index decreases and the option is exercised. In addition,
there is the risk the Fund or Portfolio may not be able to enter into a closing
transaction because of an illiquid secondary market.
 
                                      FS-50
<PAGE>   1201
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract a
Fund or Portfolio is required to pledge to the broker an amount of cash or
securities equal to the minimum "initial margin" requirements of the exchange on
which the contract is traded. Pursuant to the contract, the Fund or Portfolio
agrees to receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known as
"variation margin" and are recorded by the Fund or Portfolio as unrealized gains
or losses. When the contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed. The potential risk
to the Fund or Portfolio is that the change in value of the underlying
securities may not correlate to the change in value of the contracts. A Fund or
Portfolio may use futures contracts to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out-basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. A Fund or Portfolio may
trade securities on other than normal settlement terms. This may increase the
risk if the other party to the transaction fails to deliver and causes the Fund
or Portfolio to subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At April 30, 1998, stocks with an aggregate value listed below were on loan to
brokers. The loans were secured by cash collateral received by the Funds or
Portfolios:
 
<TABLE>
<CAPTION>
                                                   APRIL 30, 1998             PERIOD ENDED
                                          --------------------------------   APRIL 30, 1998
                                          AGGREGATE VALUE        CASH        --------------
                                              ON LOAN         COLLATERAL     FEES RECEIVED
                                          ---------------   --------------   --------------
<S>                                       <C>               <C>              <C>
Global Consumer Products and Services
 Portfolio..............................   $ 13,868,204      $  14,143,909      $ 17,942
Global Financial Services Portfolio.....      5,524,535          5,830,915        34,910
GT Global Health Care Fund..............     42,191,546         43,020,709        55,507
Global Infrastructure Portfolio.........      2,588,399          2,614,825        18,515
Global Natural Resources Portfolio......      4,703,950          4,758,300        11,469
GT Global Telecommunications Fund.......    252,579,366        258,744,228       609,824
</TABLE>
 
For international securities, cash collateral is received by a Fund or Portfolio
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by a Fund or Portfolio against loaned securities in the
amount at least equal to 102% of the market value of the loaned securities at
the inception of each loan. This collateral must be maintained at not less than
100% of the market value of the loaned securities during the period of the loan.
The cash collateral is invested in a securities lending trust which consists of
a portfolio of high quality short duration securities whose average effective
duration is restricted to 120 days or less.
 
(I) TAXES
It is the intended policy of the Funds and Portfolios to meet the requirements
for qualification as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended ("Code"). It is also the intention of the Funds to make
distributions sufficient to avoid imposition of any excise tax under Section
4982 of the Code. Therefore, no provision has been made for Federal taxes on
income, capital gains, unrealized appreciation of securities held, or exise tax
on income and capital gains.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by each Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 Funds or Portfolios and timing
differences.
 
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the GT Global Consumer Products and Services Fund, GT
Global Financial Services Fund, GT Global Infrastructure Fund, and GT Global
Natural Resources Fund in connection with their organizations, their initial
registration with the Securities and Exchange Commission and with various states
and the initial public offering of its shares aggregated $51,500, $63,100,
$51,500, and $51,500, respectively. These expenses are being amortized on a
straightline basis over a five-year period.
 
(L) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's or Portfolio's investment in emerging
market countries may involve greater risks than investments in more developed
markets and the price of such investments may be volatile. These risks of
investing in foreign and
 
                                      FS-51
<PAGE>   1202
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
emerging markets may include foreign currency exchange rate fluctuations,
perceived credit risk, adverse political and economic developments and possible
adverse foreign government intervention.
 
In addition, each Fund or Portfolio may focus its investments in certain related
consumer products and services, financial services, health care, infrastructure,
natural resources, or telecommunications industries, subjecting the Fund or
Portfolio to greater risk than a fund that is more diversified.
 
(M) INDEXED SECURITIES
A Fund or Portfolio may invest in indexed securities whose value is linked
either directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
 
(N) RESTRICTED SECURITIES
A Fund or Portfolio is permitted to invest in privately placed restricted
securities. These securities may be resold in transactions exempt from
registration or to the public if the securities are registered. Disposal of
these securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) are shown at the end of the Fund's
or Portfolio's Portfolio of Investments.
 
(O) LINE OF CREDIT
Each of the Funds, along with certain other funds ("GT Funds") advised and/or
administered by the Manager, has a line of credit with each of BankBoston and
State Street Bank & Trust Company. The arrangements with the banks allow the GT
Funds to borrow an aggregate maximum amount of $250,000,000. Each of these funds
is limited to borrowing up to 33 1/3% of the value of each Fund's total assets.
On April 30, 1998, there were no outstanding loans.
 
For the period ended April 30, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for GT Global Consumer Products Fund, GT Global Financial Services Fund, GT
Global Health Care Fund, GT Global Natural Resources Fund and GT Global
Telecommunications Fund was $1,170,000, $1,290,000, $746,750, $2,468,082, and
$7,805,222 respectively, with a weighted average interest rate of 6.31%, 6.19%,
6.45%, 6.29%, and 6.22%, respectively. Interest expense for the GT Global
Consumer Products Fund, GT Global Financial Services Fund, GT Global Health Care
Fund, GT Global Natural Resources Fund and GT Global Telecommunications Fund for
the period ended April 30, 1998 was $7,383, $2,214, $536, $21,125 and $24,291,
respectively, and is included in "Other Expenses" on the Statement of
Operations.
 
2. RELATED PARTIES (SEE ALSO NOTE 7)
For the period ended April 30, 1998, Chancellor LGT Asset Management, Inc. was
the Funds' and Portfolios' investment manager and administrator. GT Global
Consumer Products and Services Fund, GT Global Financial Services Fund, GT
Global Infrastructure Fund, and GT Global Natural Resources Fund each pays the
Manager administration fees at the annualized rate of 0.25% of such Fund's
average daily net assets. Each of the Portfolios pays investment management and
administration fees to the Manager at the annualized rate of 0.725% on the first
$500 million of average daily net assets of the Portfolio; 0.70% on the next
$500 million; 0.675% on the next $500 million; and 0.65% on amounts thereafter.
GT Global Health Care Fund and GT Global Telecommunications Fund each pays
investment management and administration fees to the Manager at the annualized
rate of 0.975% on the first $500 million of average daily net assets of the
Fund; 0.95% on the next $500 million; 0.925% on the next $500 million and 0.90%
on amounts thereafter. These fees are computed daily and paid monthly.
 
For the period ended April 30, 1998, GT Global, Inc. ("GT Global"), an affiliate
of the Manager, serves as the Funds' distributor. The Funds offer Class A, Class
B, and Advisor Class shares for purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Funds' current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the period ended April 30, 1998, GT Global retained the
following sales charges: $10,253 for the GT Global Consumer Products and
Services Fund, $7,958 for the GT Global Financial Services Fund, $13,964 for the
GT Global Health Care Fund, $3,173 for the GT Global Infrastructure Fund,
$12,051 for the GT Global Natural Resources Fund, and $38,922 for the GT Global
Telecommunications Fund. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Funds' current prospectus. GT Global collected CDSCs for the
period ended April 30, 1998, as follows: $207 for the GT Global Health Care
Fund, $1,704 for the GT Global Natural Resources Fund, and $28,868 for the GT
Global Telecommunications Fund. GT Global also makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class A
shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global, from its own resources, pays commissions to dealers through
which the sales are made. Certain redemptions of Class B shares made within six
years of purchase are subject to CDSCs, in accordance with the Funds' current
prospectus. For the period ended April 30, 1998, GT Global collected CDSCs in
the amount of: $219,642 for the GT Global Consumer Products and Services Fund,
$114,176 for the GT Global Financial Services Fund, $297,817 for the GT Global
Health Care Fund, $227,499 for the GT Global Infrastructure Fund, $205,833 for
the GT Global Natural Resources Fund, and $1,825,382 for the GT Global
Telecommunications Fund. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
 
Pursuant to the then effective separate distribution plans adopted under 1940
Act Rule 12b-1 by the Company's Board of Directors with
 
                                      FS-52
<PAGE>   1203
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
respect to the Funds' Class A shares ("Class A Plan") and Class B shares ("Class
B Plan"), a Fund reimbursed GT Global for a portion of its shareholder servicing
and distributions expenses. Under that Class A Plan, a Fund was permitted to pay
GT Global a service fee at the annualized rate of up to 0.25% of the average
daily net assets of the Fund's Class A shares for GT Global's expenditures
incurred in servicing and maintaining shareholder accounts, and was permitted to
pay GT Global a distribution fee at the annualized rate of up to 0.50% of the
average daily net assets of the Fund's Class A shares, less any amounts paid by
the Fund as the aforementioned service fee, for GT Global's expenditures
incurred in providing services as distributor. All expenses for which GT Global
was reimbursed under the Class A Plan would have been incurred within one year
of such reimbursement.
 
For the period ended April 30, 1998, pursuant to that Class B Plan, a Fund was
permitted to pay GT Global a service fee at the annualized rate of up to 0.25%
of the average daily net assets of the Fund's Class B shares for GT Global's
expenditures incurred in servicing and maintaining shareholder accounts, and was
permitted to pay GT Global a distribution fee at the annualized rate of up to
0.75% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually were permitted to be
carried forward for reimbursement in subsequent years as long as that Plan
continued in effect.
 
The Manager and GT Global voluntarily undertook to limit each Fund's expenses
(exclusive of brokerage commissions, taxes, interest, and extraordinary expense)
to the maximum annual rate of 2.00%, 2.50%, and 1.50% of the average daily net
assets of the Fund's Class A, Class B, and Advisor Class shares, respectively.
If necessary, this limitation will be effected by waivers by the Manager of
investment management fees, waivers by GT Global of payments under the Class A
Plan and/or Class B Plan and/or reimbursements by the Manager or GT Global of
portions of the Fund's other operating expenses.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Funds. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Funds for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
The Manager is the pricing and accounting agent for the Funds and Portfolios.
The monthly fee for these services to the Manager is a percentage, not to exceed
0.03% annually, of a Fund or Portfolio's average daily net assets. The annual
fee rate is derived by applying 0.03% to the first $5 billion of assets of all
registered mutual funds advised by the Manager and 0.02% to the assets in excess
of $5 billion and allocating the result according to each Fund's average daily
net assets.
 
The Company pays each Director who is not an employee, officer or director of
the Manager, or any other affiliated company $5,000 per year plus $300 for each
meeting of the board or any committee thereof attended by the Director. Each
Portfolio pays each of its Trustees who is not an employee, officer, or director
of the Manager, GT Global or GT Services $500 per year plus $150 for each
meeting of the board or any committee thereof attended by the Trustee.
 
3. PURCHASES AND SALES OF SECURITIES
The following summarizes purchases and sales of investment securities, other
than short-term investments, by each Fund or Portfolio for the period ended
April 30, 1998:
 
                       PURCHASES AND SALES OF SECURITIES
 
<TABLE>
<CAPTION>
                                                                                            PURCHASES
                                                                                  ------------------------------
PORTFOLIO                                                                         U.S. GOVERNMENT   OTHER ISSUES
- --------------------------------------------------------------------------------  ---------------   ------------
<S>                                                                               <C>               <C>
Global Consumer Products and Services Portfolio.................................   $  4,199,510     $155,523,280
Global Financial Services Portfolio.............................................             --       63,728,759
GT Global Health Care Fund......................................................             --      399,958,793
Global Infrastructure Portfolio.................................................             --       39,969,524
Global Natural Resources Portfolio..............................................             --      110,713,591
GT Global Telecommunications Fund...............................................             --      448,227,983
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                              SALES
                                                                                  ------------------------------
PORTFOLIO                                                                         U.S. GOVERNMENT   OTHER ISSUES
- --------------------------------------------------------------------------------  ---------------   ------------
<S>                                                                               <C>               <C>
Global Consumer Products and Services Portfolio.................................   $         --     $141,592,098
Global Financial Services Portfolio.............................................             --       48,272,178
GT Global Health Care Fund......................................................             --      444,982,304
Global Infrastructure Portfolio.................................................             --       60,993,159
Global Natural Resources Portfolio..............................................             --      151,337,444
GT Global Telecommunications Fund...............................................             --      610,121,125
</TABLE>
 
                                      FS-53
<PAGE>   1204
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
4. CAPITAL SHARES
At April 30, 1998, there were 6,000,000,000 shares of the Company's common stock
authorized, at $0.0001 par value. Of this amount, 400,000,000 were classified as
shares of the GT Global Telecommunications Fund; 400,000,000 were classified as
shares of GT Global Government Income Fund; 200,000,000 were classified as
shares of GT Global Health Care Fund; 200,000,000 were classified as shares of
GT Global Strategic Income Fund; 200,000,000 were classified as shares of GT
Global Developing Markets Fund; 200,000,000 were classified as shares of GT
Global Currency Fund (inactive); 200,000,000 were classified as shares of GT
Global Growth & Income Fund; 200,000,000 were classified as shares of GT Global
Small Companies Fund (inactive); 200,000,000 were classified as shares of GT
Global Latin America Growth Fund; 200,000,000 were classified as shares of GT
Global Emerging Markets Fund; 200,000,000 were classified as shares of GT Global
High Income Fund; 200,000,000 were classified as shares of GT Global Financial
Services Fund; 200,000,000 were classified as shares of GT Global Natural
Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; 200,000,000 were classified as shares of GT Global Consumer
Products and Services Fund. The shares of each of the foregoing series of the
Company were divided equally into two classes, designated Class A and Class B
common stock. With respect to the issuance of Advisor Class shares, 100,000,000
shares were classified as shares of each of the fifteen series of the Company
and designated as Advisor Class common stock. 1,100,000,000 shares remain
unclassified. Transactions in capital shares of the Fund were as follows:
 
                           CAPITAL SHARE TRANSACTIONS
 
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED
                                                          APRIL 30, 1998                 YEAR ENDED
                                                           (UNAUDITED)                OCTOBER 31, 1997
                                                    --------------------------  ----------------------------
CLASS A                                               SHARES        AMOUNT        SHARES         AMOUNT
- --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    1,112,259  $  25,614,280    3,438,964  $    69,880,587
Shares issued in connection with reinvestment of
  distributions...................................      232,566      5,000,187      143,274        2,884,089
                                                    -----------  -------------  -----------  ---------------
                                                      1,344,825     30,614,467    3,582,238       72,764,676
Shares repurchased................................   (1,343,578)   (30,694,267)  (4,424,828)     (88,957,730)
                                                    -----------  -------------  -----------  ---------------
Net increase (decrease)...........................        1,247  $     (79,800)    (842,590) $   (16,193,054)
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
 
<CAPTION>
 
CLASS B
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................      723,496  $  16,399,597    2,703,434  $    53,329,784
Shares issued in connection with reinvestment of
  distributions...................................      327,557      6,925,053      168,859        3,364,713
                                                    -----------  -------------  -----------  ---------------
                                                      1,051,053     23,324,650    2,872,293       56,694,497
Shares repurchased................................     (991,653)   (22,264,517)  (2,802,820)     (55,171,454)
                                                    -----------  -------------  -----------  ---------------
Net increase......................................       59,400  $   1,060,133       69,473  $     1,523,043
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
<CAPTION>
 
ADVISOR CLASS
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................      566,015  $  12,996,998      287,832  $     6,471,623
Shares issued in connection with reinvestment of
  distributions...................................       44,078        962,215       15,186          308,573
                                                    -----------  -------------  -----------  ---------------
                                                        610,093     13,959,213      303,018        6,780,196
Shares repurchased................................     (165,014)    (3,649,509)    (386,341)      (7,704,551)
                                                    -----------  -------------  -----------  ---------------
Net increase (decrease)...........................      445,079  $  10,309,704      (83,323) $      (924,355)
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
</TABLE>
 
                                      FS-54
<PAGE>   1205
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
GT GLOBAL FINANCIAL SERVICES FUND
<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED
                                                          APRIL 30, 1998                 YEAR ENDED
                                                           (UNAUDITED)                OCTOBER 31, 1997
                                                    --------------------------  ----------------------------
CLASS A                                               SHARES        AMOUNT        SHARES         AMOUNT
- --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    2,072,253  $  37,752,666    3,783,353  $    60,418,186
Shares issued in connection with reinvestment of
  distributions...................................       54,738        960,105       35,121          488,531
                                                    -----------  -------------  -----------  ---------------
                                                      2,126,991     38,712,771    3,818,474       60,906,717
Shares repurchased................................   (1,956,651)   (35,515,655)  (2,611,893)     (41,931,634)
                                                    -----------  -------------  -----------  ---------------
Net increase......................................      170,340  $   3,197,116    1,206,581  $    18,975,083
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
 
<CAPTION>
 
CLASS B
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    1,623,641  $  28,918,053    4,102,099  $    64,968,183
Shares issued in connection with reinvestment of
  distributions...................................       76,614      1,322,358       44,922          618,563
                                                    -----------  -------------  -----------  ---------------
                                                      1,700,255     30,240,411    4,147,021       65,586,746
Shares repurchased................................   (1,235,482)   (21,955,270)  (2,045,933)     (32,384,709)
                                                    -----------  -------------  -----------  ---------------
Net increase......................................      464,773  $   8,285,141    2,101,088  $    33,202,037
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
<CAPTION>
 
ADVISOR CLASS
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................      511,558  $   9,122,009      220,956  $     4,021,549
Shares issued in connection with reinvestment of
  distributions...................................       12,688        224,953          359            5,018
                                                    -----------  -------------  -----------  ---------------
                                                        524,246      9,346,962      221,315        4,026,567
Shares repurchased................................     (143,620)    (2,492,661)     (11,568)        (198,290)
                                                    -----------  -------------  -----------  ---------------
Net increase......................................      380,626  $   6,854,301      209,747  $     3,828,277
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
</TABLE>
 
GT GLOBAL HEALTH CARE FUND
<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED
                                                          APRIL 30, 1998                 YEAR ENDED
                                                           (UNAUDITED)                OCTOBER 31, 1997
                                                    --------------------------  ----------------------------
CLASS A                                               SHARES        AMOUNT        SHARES         AMOUNT
- --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................   12,159,063  $ 262,335,545   31,631,342  $   772,292,073
Shares issued in connection with reinvestment of
  distributions...................................    4,211,990     87,483,074    1,208,813       27,043,227
                                                    -----------  -------------  -----------  ---------------
                                                     16,371,053    349,818,619   32,840,155      799,335,300
Shares repurchased................................  (13,457,648)  (291,455,802) (35,792,763)    (876,621,319)
                                                    -----------  -------------  -----------  ---------------
Net increase (decrease)...........................    2,913,405  $  58,362,817   (2,952,608) $   (77,286,019)
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
 
<CAPTION>
 
CLASS B
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    2,458,046  $  52,390,051    6,206,431  $   152,327,079
Shares issued in connection with reinvestment of
  distributions...................................    1,393,867     27,960,984      321,688        7,045,104
                                                    -----------  -------------  -----------  ---------------
                                                      3,851,913     80,351,035    6,528,119      159,372,183
Shares repurchased................................   (3,410,161)   (73,670,320)  (5,770,947)    (142,017,878)
                                                    -----------  -------------  -----------  ---------------
Net increase......................................      441,752  $   6,680,715      757,172  $    17,354,305
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
<CAPTION>
 
ADVISOR CLASS
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    1,545,283  $  34,253,905    1,865,809  $    48,687,774
Shares issued in connection with reinvestment of
  distributions...................................       84,156      1,779,060        2,543           57,375
                                                    -----------  -------------  -----------  ---------------
                                                      1,629,439     36,032,965    1,868,352       48,745,149
Shares repurchased................................   (1,429,554)   (31,730,407)  (1,676,189)     (43,406,078)
                                                    -----------  -------------  -----------  ---------------
Net increase......................................      199,885  $   4,302,558      192,163  $     5,339,071
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
</TABLE>
 
                                      FS-55
<PAGE>   1206
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
GT GLOBAL INFRASTRUCTURE FUND
<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED
                                                          APRIL 30, 1998                 YEAR ENDED
                                                           (UNAUDITED)                OCTOBER 31, 1997
                                                    --------------------------  ----------------------------
CLASS A                                               SHARES        AMOUNT        SHARES         AMOUNT
- --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................      104,931  $   1,616,314    1,282,535  $    19,272,428
Shares issued in connection with reinvestment of
  distributions...................................       16,842        254,490      123,795        1,776,449
                                                    -----------  -------------  -----------  ---------------
                                                        121,773      1,870,804    1,406,330       21,048,877
Shares repurchased................................     (646,612)    (9,883,646)  (1,518,962)     (23,157,570)
                                                    -----------  -------------  -----------  ---------------
Net decrease......................................     (524,839) $  (8,012,842)    (112,632) $    (2,108,693)
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
 
<CAPTION>
 
CLASS B
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................      349,600  $   5,216,141    1,233,796  $    18,394,879
Shares issued in connection with reinvestment of
  distributions...................................       24,609        365,217      164,966        2,337,575
                                                    -----------  -------------  -----------  ---------------
                                                        374,209      5,581,358    1,398,762       20,732,454
Shares repurchased................................   (1,323,411)   (19,560,006)  (1,288,192)     (19,574,097)
                                                    -----------  -------------  -----------  ---------------
Net increase (decrease)...........................     (949,202) $ (13,978,648)     110,570  $     1,158,357
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
<CAPTION>
 
ADVISOR CLASS
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................      406,514  $   6,266,773      154,643  $     2,526,548
Shares issued in connection with reinvestment of
  distributions...................................        2,592         39,769        1,147           16,592
                                                    -----------  -------------  -----------  ---------------
                                                        409,106      6,306,542      155,790        2,543,140
Shares repurchased................................      (16,383)      (247,811)     (12,773)        (202,670)
                                                    -----------  -------------  -----------  ---------------
Net increase......................................      392,723  $   6,058,731      143,017  $     2,340,470
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
</TABLE>
 
GT GLOBAL NATURAL RESOURCES FUND
<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED
                                                          APRIL 30, 1998                 YEAR ENDED
                                                           (UNAUDITED)                OCTOBER 31, 1997
                                                    --------------------------  ----------------------------
CLASS A                                               SHARES        AMOUNT        SHARES         AMOUNT
- --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    5,934,812  $  94,206,870   14,008,426  $   250,536,207
Shares issued in connection with reinvestment of
  distributions...................................      107,234      1,988,098       97,424        1,671,792
                                                    -----------  -------------  -----------  ---------------
                                                      6,042,046     96,194,968   14,105,850      252,207,999
Shares repurchased................................   (6,725,769)  (107,268,558) (13,512,928)    (239,425,288)
                                                    -----------  -------------  -----------  ---------------
Net increase (decrease)...........................     (683,723) $ (11,073,590)     592,922  $    12,782,711
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
 
<CAPTION>
 
CLASS B
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    1,115,632  $  18,339,082    5,227,207  $    91,103,073
Shares issued in connection with reinvestment of
  distributions...................................      132,618      2,421,604      120,229        2,044,194
                                                    -----------  -------------  -----------  ---------------
                                                      1,248,250     20,760,686    5,347,436       93,147,267
Shares repurchased................................   (2,099,147)   (33,861,073)  (4,425,914)     (75,084,090)
                                                    -----------  -------------  -----------  ---------------
Net increase (decrease)...........................     (850,897) $ (13,100,387)     921,522  $    18,063,177
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
<CAPTION>
 
ADVISOR CLASS
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................      964,441  $  16,163,437    1,573,656  $    31,848,691
Shares issued in connection with reinvestment of
  distributions...................................       11,197        209,155        7,576          130,389
                                                    -----------  -------------  -----------  ---------------
                                                        975,638     16,372,592    1,581,232       31,979,080
Shares repurchased................................   (1,223,931)   (21,668,784)  (1,180,622)     (22,478,170)
                                                    -----------  -------------  -----------  ---------------
Net increase (decrease)...........................     (248,293) $  (5,296,192)     400,610  $     9,500,910
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
</TABLE>
 
                                      FS-56
<PAGE>   1207
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
GT GLOBAL TELECOMMUNICATIONS FUND
<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED
                                                          APRIL 30, 1998                 YEAR ENDED
                                                           (UNAUDITED)                OCTOBER 31, 1997
                                                    --------------------------  ----------------------------
CLASS A                                               SHARES        AMOUNT        SHARES         AMOUNT
- --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................   42,237,756  $ 761,922,475   86,491,272  $ 1,449,735,933
Shares issued in connection with reinvestment of
  distributions...................................    3,004,037     49,839,444    4,872,560       77,134,577
                                                    -----------  -------------  -----------  ---------------
                                                     45,241,793    811,761,919   91,363,832    1,526,870,510
Shares repurchased................................  (47,343,286)  (854,782,831) (113,032,156)  (1,893,258,359)
                                                    -----------  -------------  -----------  ---------------
Net decrease......................................   (2,101,493) $ (43,020,912) (21,668,324) $  (366,387,849)
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
 
<CAPTION>
 
CLASS B
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    5,605,682  $  97,608,327    9,249,969  $   152,245,081
Shares issued in connection with reinvestment of
  distributions...................................    2,786,130     44,943,239    4,413,826       68,371,781
                                                    -----------  -------------  -----------  ---------------
                                                      8,391,812    142,551,566   13,663,795      220,616,862
Shares repurchased................................  (11,156,504)  (193,567,924) (29,383,147)    (477,593,385)
                                                    -----------  -------------  -----------  ---------------
Net decrease......................................   (2,764,692) $ (51,016,358) (15,719,352) $  (256,976,523)
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
<CAPTION>
 
ADVISOR CLASS
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    2,089,008  $  37,055,709    2,029,510  $    36,070,768
Shares issued in connection with reinvestment of
  distributions...................................       14,099        237,438       11,071          176,806
                                                    -----------  -------------  -----------  ---------------
                                                      2,103,107     37,293,147    2,040,581       36,247,574
Shares repurchased................................   (1,955,252)   (35,027,946)  (1,835,151)     (32,553,269)
                                                    -----------  -------------  -----------  ---------------
Net increase......................................      147,855  $   2,265,201      205,430  $     3,694,305
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
</TABLE>
 
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who then paid a
portion of a Fund's or Portfolio's expenses. For the period ended April 30,
1998, the Funds' or Portfolios' expenses were reduced by the following amounts
under these arrangements:
 
<TABLE>
<CAPTION>
                                            EXPENSE
                                           REDUCTION
                                          ------------
<S>                                       <C>
Global Consumer Products and Services
 Portfolio..............................   $   18,538
Global Financial Services Portfolio.....       11,357
GT Global Health Care Fund..............       38,638
Global Infrastructure Portfolio.........        4,410
Global Natural Resources Portfolio......       32,591
GT Global Telecommunications Fund.......       39,899
</TABLE>
 
                                      FS-57
<PAGE>   1208
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
6. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
Investments of 5% or more of an issuer's outstanding voting securities by a Fund
or Portfolio are defined in the Investment Company Act of 1940 as an affiliated
company. Investments in affiliated companies by GT Global Health Care Fund and
GT Global Telecommunications Fund at April 30, 1998 amounted to $131,105,013 and
$23,828,296, respectively, at value.
 
Transactions with affiliated companies are as follows:
 
GT GLOBAL CONSUMER PRODUCTS PORTFOLIO:
 
<TABLE>
<CAPTION>
                                                                                      NET REALIZED     DIVIDEND
                                                    PURCHASES COST  SALES PROCEEDS     GAIN (LOSS)      INCOME
                                                    --------------  ---------------  ---------------  -----------
<S>                                                 <C>             <C>              <C>              <C>
O & Y Properties, Inc. Sp Wts.....................  $    1,996,065  $     2,376,836  $       380,771   $      --
</TABLE>
 
GT GLOBAL HEALTH CARE FUND:
 
<TABLE>
<CAPTION>
                                                                                      NET REALIZED     DIVIDEND
                                                    PURCHASES COST  SALES PROCEEDS     GAIN (LOSS)      INCOME
                                                    --------------  ---------------  ---------------  -----------
<S>                                                 <C>             <C>              <C>              <C>
ATL Ultrasound, Inc...............................  $      606,750  $     1,099,963  $       371,288   $      --
AVECOR Cardiovascular, Inc........................         250,716          749,318         (458,188)         --
Endosonics Corp...................................              --          337,211         (127,186)         --
Physio Control Holding Corp.......................       3,336,633        1,489,734          551,699          --
TheraTech, Inc....................................              --        1,941,548       (1,140,909)         --
Visx, Inc.........................................       1,134,100        9,215,798        2,010,019          --
</TABLE>
 
GT GLOBAL TELECOMMUNICATIONS FUND:
 
<TABLE>
<CAPTION>
                                                                                      NET REALIZED     DIVIDEND
                                                    PURCHASES COST  SALES PROCEEDS     GAIN (LOSS)      INCOME
                                                    --------------  ---------------  ---------------  -----------
<S>                                                 <C>             <C>              <C>              <C>
Champion Technology Holding Ltd...................  $    3,431,305  $            --  $            --   $  55,129
Echostar Communications Corp. "A".................              --               --               --          --
Millicom International Cellular S.A...............       5,887,008               --               --          --
Orbital Sciences Corp.............................              --       33,829,243       16,094,363          --
Three-Five Systems, Inc...........................              --               --               --          --
</TABLE>
 
7. SUBSEQUENT EVENTS
On May 29, 1998, Liechtenstein Global Trust ("LGT"), the former indirect parent
organization of Chancellor LGT Asset Management, Inc. ("Chancellor LGT"),
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included Chancellor LGT and
certain other affiliates. As a result of this transaction, Chancellor LGT was
renamed INVESCO (NY), Inc. and is now an indirect wholly-owned subsidiary of
AMVESCAP PLC. In connection with this transaction, A I M Advisors, Inc. ("AIM"),
an indirect wholly-owned subsidiary of AMVESCAP PLC, became the investment
adviser and administrator of the Funds and INVESCO (NY), Inc. became the
sub-adviser and sub-administrator of the Funds. In addition, A I M Distributors,
Inc. replaced GT Global, Inc. as the Funds' principal underwriter, and the Funds
became subject to compensation-type Rule 12b-1 plans of distribution, which
replaced the Funds' former reimbursement-type Rule 12b-1 plans of distribution.
All of the changes became effective as of the close of business on May 29, 1998.
 
                                      F58
<PAGE>   1209

                             GT GLOBAL THEME FUNDS
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
ANNUAL REPORT
To the Shareholders and Board of Directors of
G.T. Investment Funds, Inc.:
 
We have audited the accompanying statements of assets and liabilities of GT
Global Consumer Products & Services Fund - Consolidated, GT Global Financial
Services Fund - Consolidated, GT Global Health Care Fund, GT Global
Infrastructure Fund - Consolidated, GT Global Natural Resources Fund -
Consolidated, and GT Global Telecommunications Fund, six series of G.T.
Investment Funds, Inc., including the portfolios of investments, as of October
31, 1997, the related statements of operations for the year then ended, and the
related statements of changes in net assets and financial highlights for each of
the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial positions of
the aforementioned series of G.T. Investments Funds, Inc. as of October 31,
1997, the results of their operations, changes in their net assets and their
financial highlights for each of the periods indicated therein, in conformity
with generally accepted accounting principles.
 

                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
DECEMBER 15, 1997
 
                                       FS-59
<PAGE>   1210
          GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (56.3%)
  CVS Corp. .................................................   US             97,900   $  6,002,494         3.7
    RETAILERS-OTHER
  Airborne Freight Corp. ....................................   US             80,600      5,108,025         3.1
    TRANSPORTATION - AIRLINES
  Brylane, Inc.-/- ..........................................   US            115,000      4,995,313         3.1
    RETAILERS-APPAREL
  New York Times Co. "A" ....................................   US             90,000      4,927,500         3.0
    BROADCASTING & PUBLISHING
  Jones Apparel Group, Inc.-/- ..............................   US             89,200      4,538,050         2.8
    RETAILERS-APPAREL
  Pacific Sunwear of California-/- ..........................   US            150,000      4,143,750         2.5
    RETAILERS-APPAREL
  Loblaw Cos., Ltd. .........................................   CAN           251,800      3,663,000         2.2
    RETAILERS-FOOD
  Nordstrom, Inc. ...........................................   US             56,000      3,430,000         2.1
    RETAILERS-APPAREL
  Yogen Fruz World-Wide, Inc.-/- ............................   CAN           583,900      3,314,789         2.0
    RETAILERS-FOOD
  Central Newspapers, Inc. "A" ..............................   US             50,000      3,284,375         2.0
    BROADCASTING & PUBLISHING
  Cinar Films, Inc. "B"{\/} .................................   CAN            76,000      2,954,500         1.8
    LEISURE & TOURISM
  Chapters, Inc.: ...........................................   CAN                --             --         1.8
    RETAILERS-OTHER
    Common-/- ...............................................   --             83,500      1,747,978          --
    Special Warrants(::) -/- ................................   --             66,200      1,204,960          --
  Sears Canada, Inc. ........................................   CAN           170,500      2,825,131         1.7
    RETAILERS-OTHER
  Gap, Inc. .................................................   US             50,000      2,659,375         1.6
    RETAILERS-APPAREL
  Outdoor Systems, Inc.-/- ..................................   US             84,000      2,583,000         1.6
    BUSINESS & PUBLIC SERVICES
  Universal Outdoor Holdings, Inc.-/- .......................   US             60,000      2,535,000         1.6
    BUSINESS & PUBLIC SERVICES
  Avis Rent A Car, Inc. .....................................   US             90,000      2,469,375         1.5
    TRANSPORTATION - ROAD & RAIL
  Consolidated Stores Corp.-/- ..............................   US             61,300      2,444,338         1.5
    RETAILERS-OTHER
  Family Dollar Stores, Inc. ................................   US            103,000      2,420,500         1.5
    RETAILERS-APPAREL
  Bed Bath & Beyond-/- ......................................   US             76,000      2,413,000         1.5
    RETAILERS-OTHER
  Stage Stores, Inc.-/- .....................................   US             65,000      2,372,500         1.5
    RETAILERS-APPAREL
  Transat A.T., Inc.-/- .....................................   CAN           270,200      2,320,054         1.4
    TRANSPORTATION - AIRLINES
  Dress Barn, Inc.-/- .......................................   US             90,700      2,301,513         1.4
    RETAILERS-APPAREL
  Abercrombie & Fitch Co.-/- ................................   US             80,000      2,080,000         1.3
    RETAILERS-APPAREL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-60
<PAGE>   1211
          GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (Continued)
  Ames Department Stores, Inc.-/- ...........................   US            132,600   $  2,063,588         1.3
    RETAILERS-OTHER
  Valassis Communications, Inc.-/- ..........................   US             60,000      1,770,000         1.1
    BROADCASTING & PUBLISHING
  Air Canada ................................................   CAN           150,000      1,495,529         0.9
    TRANSPORTATION - AIRLINES
  The Bombay Co., Inc. ......................................   US            244,100      1,479,856         0.9
    RETAILERS-OTHER
  Budget Group, Inc. "A"-/- .................................   US             41,800      1,463,000         0.9
    TRANSPORTATION - ROAD & RAIL
  Tuesday Morning Corp.-/- ..................................   US             50,050      1,213,713         0.7
    RETAILERS-APPAREL
  Ryanair Holdings PLC - ADR-/- {\/} ........................   IRE            42,500      1,062,500         0.7
    TRANSPORTATION - AIRLINES
  Star Choice Communications, Inc.-/- .......................   CAN           293,500        916,406         0.6
    BROADCASTING & PUBLISHING
  Hospitality Worldwide Services-/- .........................   US             66,000        767,250         0.5
    LEISURE & TOURISM
  Dayton Hudson Corp. .......................................   US             10,000        628,125         0.4
    RETAILERS-APPAREL
  N2K, Inc.-/- ..............................................   US              8,300        218,394         0.1
    LEISURE & TOURISM
  Hudson's Bay Co. ..........................................   CAN               300          6,866          --
    RETAILERS-APPAREL
                                                                                        ------------
                                                                                          91,823,747
                                                                                        ------------
Consumer Non-Durables (14.8%)
  Morningstar Group, Inc.-/- ................................   US            151,200      6,463,796         4.0
    FOOD
  Tabacalera S.A. "A" .......................................   SPN            74,000      5,332,967         3.3
    TOBACCO
  Interstate Bakeries Corp. .................................   US             70,600      4,509,575         2.8
    FOOD
  Foodmaker, Inc.-/- ........................................   US            208,400      3,425,575         2.1
    FOOD
  General Cigar Holdings, Inc.-/- ...........................   US             62,800      1,817,275         1.1
    TOBACCO
  Saputo Group, Inc.-/- .....................................   CAN           114,400      1,753,506         1.1
    FOOD
  American Italian Pasta Co. "A"-/- .........................   US             30,000        630,000         0.4
    FOOD
                                                                                        ------------
                                                                                          23,932,694
                                                                                        ------------
Finance (6.5%)
  BankAmerica Corp. .........................................   US             71,000      5,076,500         3.1
    BANKS-MONEY CENTER
  Merita Ltd. "A" ...........................................   FIN           738,300      3,608,281         2.2
    BANKS-MONEY CENTER
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-61
<PAGE>   1212
          GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Finance (Continued)
  O&Y Properties Corp. Special Warrants(::) -/- {::} ........   CAN           342,400   $  1,943,798         1.2
    REAL ESTATE
                                                                                        ------------
                                                                                          10,628,579
                                                                                        ------------
Technology (2.6%)
  CHS Electronics, Inc.-/- ..................................   US            164,500      4,019,969         2.5
    COMPUTERS & PERIPHERALS
  Concord Communications, Inc.-/- ...........................   US              7,100        126,025         0.1
    SOFTWARE
                                                                                        ------------
                                                                                           4,145,994
                                                                                        ------------
Capital Goods (1.3%)
  HON INDUSTRIES, Inc. ......................................   US             40,000      2,065,000         1.3
    OFFICE EQUIPMENT
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $124,047,571) ................                            132,596,014        81.5
                                                                                        ------------       -----
<CAPTION>
 
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- -------------------------------------------------------------                           ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Dated October 31, 1997, with State Street Bank & Trust Co.,
   due November 3, 1997, for an effective yield of 5.57%,
   collateralized by $4,435,000 U.S. Treasury Bond, 8.875%
   due 8/15/17 (market value of collateral is $5,818,438,
   including accrued interest).
   (cost $5,697,881)  .......................................                              5,697,881         3.5
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $129,745,452)  * ....................                            138,293,895        85.0
Other Assets and Liabilities ................................                             24,368,418        15.0
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $162,662,313       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- - --------------
 
        -/-  Non-income producing security.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (see Note 1 of Notes to Financial Statements).
       {\/}  U.S. currency denominated.
       {::}  Security was an affiliate at October 31, 1997 (see Note 6 of Notes
             to Financial Statements).
          *  For Federal income tax purposes, cost is $129,972,640 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  11,067,741
                 Unrealized depreciation:            (2,746,486)
                                                  -------------
                 Net unrealized appreciation:     $   8,321,255
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviation:
             ADR--American Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-62
<PAGE>   1213
          GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                         PERCENTAGE OF NET ASSETS
                                                    {D}
                                        ---------------------------
                                                 SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY    & OTHER     TOTAL
- --------------------------------------  ------   ----------   -----
<S>                                     <C>      <C>          <C>
Canada (CAN/CAD) .....................   14.7                  14.7
Finland (FIN/FIM) ....................    2.2                   2.2
Ireland (IRE/IEP) ....................    0.7                   0.7
Spain (SPN/ESP) ......................    3.3                   3.3
United States (US/USD) ...............   60.6       18.5       79.1
                                        ------     -----      -----
Total  ...............................   81.5       18.5      100.0
                                        ------     -----      -----
                                        ------     -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $162,662,313.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-63
<PAGE>   1214
                GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Banks - Regional (50.6%)
  Sparbanken Sverige AB "A" ..................................   SWDN           68,000   $ 1,543,927         1.9
  City National Corp. ........................................   US             50,550     1,525,978         1.9
  Lloyds TSB Group PLC .......................................   UK            113,600     1,419,524         1.8
  Royal Bank of Canada .......................................   CAN            26,000     1,390,221         1.7
  NationsBank Corp. ..........................................   US             20,000     1,197,500         1.5
  Mellon Bank Corp. ..........................................   US             21,800     1,124,063         1.4
  Bank of Montreal ...........................................   CAN            25,800     1,114,058         1.4
  Demirbank T.A.S. ...........................................   TRKY       37,896,000     1,084,691         1.3
  National Bank of Canada ....................................   CAN            75,600     1,080,996         1.3
  Hamilton Bancorp, Inc.-/- ..................................   US             35,000     1,067,500         1.3
  Crestar Financial Corp. ....................................   US             20,800       984,100         1.2
  GreenPoint Financial Corp. .................................   US             15,100       972,063         1.2
  Norbanken AB ...............................................   SWDN           30,400       954,136         1.2
  Christiania Bank Og Kreditkasse ............................   NOR           232,900       933,534         1.2
  Bayerische Vereinsbank .....................................   GER            16,070       931,864         1.2
  Bank Leumi Le - Israel .....................................   ISRL          605,700       930,012         1.1
  Jyske Bank .................................................   DEN             9,000       927,029         1.1
  Bank Hapoalim Ltd. .........................................   ISRL          383,000       906,460         1.1
  Bank of Ireland ............................................   IRE            70,800       895,906         1.1
  First Union Corp. (N.C.) ...................................   US             18,200       892,938         1.1
  H. F. Ahmanson & Co. .......................................   US             15,000       885,000         1.1
  Halifax PLC-/- .............................................   UK             76,800       869,507         1.1
  Nedcor Ltd. ................................................   SAFR           41,123       863,498         1.1
  Zagrebacka Banka - 144A GDR{.} {\/} ........................   CRT            27,000       860,625         1.1
  Sovereign Bancorp, Inc. ....................................   US             48,200       855,550         1.1
  First American Corp. .......................................   US             18,000       855,000         1.1
  Allied Irish Bank PLC{V} ...................................   IRE            97,644       826,256         1.0
  ABSA Group Ltd. ............................................   SAFR          138,867       822,809         1.0
  Anglo-Irish Bank Corp., PLC: ...............................   IRE                --            --         1.0
    Common{V} ................................................   --            315,036       515,196          --
    Common ...................................................   --            180,000       297,565          --
  Compagnie Financiere de Paribas S.A. .......................   FR             11,100       806,457         1.0
  First National Bank Holdings Ltd. ..........................   SAFR          105,800       799,549         1.0
  Yapi ve Kredi Bankasi A.S. .................................   TRKY       26,000,000       793,807         1.0
  Commercial International Bank - GDR{\/} ....................   EGPT           36,265       788,764         1.0
  National Australia Bank Ltd. ...............................   AUSL           56,500       772,531         1.0
  Ergo Bank S.A. .............................................   GREC           12,960       772,510         1.0
  Westpac Banking Corp., Ltd. ................................   AUSL          132,000       768,337         0.9
  Australia & New Zealand Banking Group Ltd. .................   AUSL          110,000       767,100         0.9
  Banco Totta & Acores S.A. "B" ..............................   PORT           39,300       760,068         0.9
  Wielkopolski Bank Kredytowy S.A. ...........................   POL           138,000       753,448         0.9
  Cullen/Frost Bankers, Inc. .................................   US             14,500       732,250         0.9
  Akbank T.A.S. ..............................................   TRKY        9,821,967       669,363         0.8
  Banco Commercial S.A. - 144A GDR{.} {\/} ...................   URGY           22,000       638,000         0.8
  BG Bank AS .................................................   DEN             9,500       610,308         0.8
  Banco Bradesco S.A. Preferred ..............................   BRZL       79,500,000       591,346         0.7
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-64
<PAGE>   1215
                GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Banks - Regional (Continued)
  Security Bank Corp.-/- .....................................   PHIL          688,900   $   363,095         0.4
                                                                                         -----------
                                                                                          40,914,439
                                                                                         -----------
Banks - Money Center (18.4%)
  BankAmerica Corp. ..........................................   US             43,400     3,103,091         3.8
  Citicorp ...................................................   US             15,050     1,882,191         2.3
  Chase Manhattan Corp. ......................................   US             14,750     1,701,781         2.1
  Merita Ltd. "A" ............................................   FIN           297,000     1,451,523         1.8
  HSBC Holdings PLC ..........................................   HK             55,800     1,263,260         1.6
  Barclays PLC ...............................................   UK             39,375       986,026         1.2
  Schweizerischer Bankverein (Swiss Bank Corp.)-/- ...........   SWTZ            3,330       895,532         1.1
  Unidanmark AS "A" ..........................................   DEN            13,200       891,009         1.1
  ABN AMRO Holdings N.V. .....................................   NETH           42,864       863,463         1.1
  Bank of Tokyo - Mitsubishi .................................   JPN            41,750       544,867         0.7
  Sumitomo Bank ..............................................   JPN            37,000       393,682         0.5
  Industrial Bank of Japan ...................................   JPN            26,000       257,190         0.3
  Fuji Bank Ltd. .............................................   JPN            29,000       250,707         0.3
  Sanwa Bank .................................................   JPN            24,000       241,397         0.3
  Dai-Ichi Kangyo Bank Ltd. ..................................   JPN            15,000       127,182         0.2
                                                                                         -----------
                                                                                          14,852,901
                                                                                         -----------
Insurance - Multi-Line (10.9%)
  Conseco, Inc. ..............................................   US             51,600     2,251,050         2.8
  Fremont General Corp. ......................................   US             30,000     1,398,750         1.7
  Allstate Corp. .............................................   US             15,000     1,244,063         1.5
  SunAmerica, Inc. ...........................................   US             29,800     1,070,938         1.3
  Axa Group ..................................................   FR             14,770     1,011,872         1.2
  Royal & Sun Alliance Insurance Group PLC ...................   UK             98,700       946,110         1.2
  American International Group, Inc. .........................   US              9,200       938,975         1.2
                                                                                         -----------
                                                                                           8,861,758
                                                                                         -----------
Consumer Finance (5.8%)
  The Money Store, Inc. ......................................   US             39,500     1,120,813         1.4
  Green Tree Financial Corp. .................................   US             24,600     1,036,275         1.3
  Doral Financial Corp. ......................................   US             45,200     1,000,050         1.2
  Aeon Credit Service ........................................   HK          2,964,000       747,710         0.9
  Acom Co., Ltd. .............................................   JPN             9,000       493,766         0.6
  Bankard, Inc.-/- ...........................................   PHIL        5,307,000       362,872         0.4
                                                                                         -----------
                                                                                           4,761,486
                                                                                         -----------
Other Financial (4.1%)
  Newcourt Credit Group, Inc. ................................   CAN            25,200       871,771         1.1
  Banco LatinoAmericano de Exportaciones S.A. (Bladex)
   "E"{\/} ...................................................   PAN            20,000       795,000         1.0
  Investors Financial Services Corp. .........................   US             16,500       726,000         0.9
  MoneyGram Payment Systems, Inc.-/- .........................   US             42,000       580,125         0.7
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-65
<PAGE>   1216
                GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Other Financial (Continued)
  Shohkoh Fund ...............................................   JPN             1,200   $   349,127         0.4
                                                                                         -----------
                                                                                           3,322,023
                                                                                         -----------
Securities Broker (2.8%)
  Hambrecht & Quist Group-/- .................................   US             30,000       945,000         1.2
  Morgan Stanley, Dean Witter, Discover and Co. ..............   US             13,200       652,575         0.8
  Peregrine Investment Holdings Ltd. .........................   HK            532,000       523,053         0.6
  Nomura Securities Co., Ltd. ................................   JPN            10,000       116,376         0.1
  Daiwa Securities Co., Ltd. .................................   JPN            14,000        84,722         0.1
                                                                                         -----------
                                                                                           2,321,726
                                                                                         -----------
Investment Management (2.4%)
  Alliance Capital Management L.P. ...........................   US             32,400     1,111,725         1.4
  Franklin Resources, Inc. ...................................   US              8,750       786,406         1.0
                                                                                         -----------
                                                                                           1,898,131
                                                                                         -----------       -----
 
TOTAL EQUITY INVESTMENTS (cost $69,090,966) ..................                            76,932,464        95.0
                                                                                         -----------       -----
<CAPTION>
 
                                                                                            VALUE        % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- --------------------------------------------------------------                           -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
  Dated October 31, 1997, with State Street Bank & Trust Co.,
   due November 3, 1997, for an effective yield of 5.57%,
   collateralized by $2,110,000 U.S. Treasury Bond, 8.875% due
   8/15/17 (market value of collateral is $2,768,185,
   including accrued interest). (cost $2,708,419)  ...........                             2,708,419         3.4
                                                                                         -----------       -----
 
TOTAL INVESTMENTS (cost $71,799,385)  * ......................                            79,640,883        98.4
Other Assets and Liabilities .................................                             1,320,751         1.6
                                                                                         -----------       -----
 
NET ASSETS ...................................................                           $80,961,634       100.0
                                                                                         -----------       -----
                                                                                         -----------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        {.}  Security 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.
        {V}  Security is denominated in GBP.
          *  For Federal income tax purposes, cost is $72,281,726 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  10,637,773
                 Unrealized depreciation:            (3,278,616)
                                                  -------------
                 Net unrealized appreciation:     $   7,359,157
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviation:
             GDR--Global Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-66
<PAGE>   1217
                GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                           PERCENTAGE OF NET ASSETS {D}
                                        -----------------------------------
                                                  SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY      & OTHER        TOTAL
- --------------------------------------  ------   -------------   ----------
<S>                                     <C>      <C>             <C>
Australia (AUSL/AUD) .................    2.8                           2.8
Brazil (BRZL/BRL) ....................    0.7                           0.7
Canada (CAN/CAD) .....................    5.5                           5.5
Croatia (CRT/HRK) ....................    1.1                           1.1
Denmark (DEN/DKK) ....................    3.0                           3.0
Egypt (EGPT/EGP) .....................    1.0                           1.0
Finland (FIN/FIM) ....................    1.8                           1.8
France (FR/FRF) ......................    2.2                           2.2
Germany (GER/DEM) ....................    1.2                           1.2
Greece (GREC/GRD) ....................    1.0                           1.0
Hong Kong (HK/HKD) ...................    3.1                           3.1
Ireland (IRE/IEP) ....................    3.1                           3.1
Israel (ISRL/ILS) ....................    2.2                           2.2
Japan (JPN/JPY) ......................    3.5                           3.5
Netherlands (NETH/NLG) ...............    1.1                           1.1
Norway (NOR/NOK) .....................    1.2                           1.2
Panama (PAN/PND) .....................    1.0                           1.0
Philippines (PHIL/PHP) ...............    0.8                           0.8
Poland (POL/PLZ) .....................    0.9                           0.9
Portugal (PORT/PTE) ..................    0.9                           0.9
South Africa (SAFR/ZAR) ..............    3.1                           3.1
Sweden (SWDN/SEK) ....................    3.1                           3.1
Switzerland (SWTZ/CHF) ...............    1.1                           1.1
Turkey (TRKY/TRL) ....................    3.1                           3.1
United Kingdom (UK/GBP) ..............    5.3                           5.3
United States (US/USD) ...............   40.4         5.0              45.4
Uruguay (URGY/UYP) ...................    0.8                           0.8
                                        ------        ---        ----------
Total  ...............................   95.0         5.0             100.0
                                        ------        ---        ----------
                                        ------        ---        ----------
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $80,961,634.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACT OUTSTANDING
                                OCTOBER 31, 1997
 
<TABLE>
<CAPTION>
                                           MARKET VALUE     CONTRACT    DELIVERY    UNREALIZED
CONTRACT TO SELL:                         (U.S. DOLLARS)      PRICE       DATE     APPRECIATION
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Japanese Yen............................     1,182,045       114.50000  11/12/97   $    59,877
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $1,241,922)...................     1,182,045                                  59,877
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS A
 PERCENTAGE OF NET ASSETS IS 1.46%.
  Total Open Forward Foreign Currency
   Contracts............................                                           $    59,877
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-67
<PAGE>   1218
                           GT GLOBAL HEALTH CARE FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Medical Technology & Supplies (37.8%)
  ATL Ultrasound, Inc.{::} -/- ..............................   US            755,500   $ 32,486,500         5.2
  Visx, Inc.{::} -/- ........................................   US          1,147,700     26,253,638         4.2
  Endosonics Corp.{::} -/- ..................................   US          1,546,000     17,779,000         2.8
  Physio-Control International Corp.{::} -/- ................   US          1,050,500     16,742,344         2.7
  Sunrise Medical, Inc.{::} -/- .............................   US          1,011,700     15,618,119         2.5
  Waters Corp.-/- ...........................................   US            345,000     15,158,438         2.4
  Dexter Corp. ..............................................   US            339,000     13,305,750         2.1
  TECNOL Medical Products, Inc.-/- ..........................   US            572,900     12,317,350         2.0
  Circon Corp.{::} -/- ......................................   US            686,486     10,812,155         1.7
  Cardiac Pathways Corp.{::} -/- ............................   US          1,002,400      9,522,800         1.5
  Lifecore Biomedical, Inc.-/- ..............................   US            361,900      7,509,425         1.2
  AVECOR Cardiovascular, Inc.{::} -/- .......................   US            658,700      6,751,675         1.1
  Mentor Corp. ..............................................   US            175,800      6,405,713         1.0
  CONMED Corp.-/- ...........................................   US            308,400      6,322,200         1.0
  Angeion Corp.-/- ..........................................   US          1,325,000      5,217,188         0.8
  Kensey Nash Corp.-/- ......................................   US            322,600      4,919,650         0.8
  Photoelectron Corp.-/- ....................................   US            338,300      3,721,300         0.6
  Cardiovascular Dynamics, Inc.{::} -/- .....................   US            515,675      3,480,806         0.6
  Innerdyne, Inc.-/- ........................................   US            824,600      2,886,100         0.5
  CardioGenesis Corp.-/- ....................................   US            307,000      2,763,000         0.4
  Laser Industries Ltd.-/- ..................................   US            130,500      2,593,688         0.4
  INAMED Corp.{::} -/- ......................................   US            628,900      2,515,600         0.4
  Heartstream, Inc.-/- ......................................   US            206,800      2,145,550         0.3
  Laserscope-/- .............................................   US            330,800      1,943,450         0.3
  ThermoTrex Corp.-/- .......................................   US             73,000      1,679,000         0.3
  Micro Therapeutics, Inc.-/- ...............................   US            290,000      1,558,750         0.2
  Abaxis, Inc.-/- ...........................................   US            462,400      1,445,000         0.2
  Lumisys, Inc.-/- ..........................................   US            211,400      1,294,825         0.2
  Interpore International-/- ................................   US             92,900        870,938         0.1
  Sulzer Medica AG - Registered-/- ..........................   SWTZ            3,130        849,571         0.1
  ESC Medical Systems Ltd.-/- {\/} ..........................   ISRL           19,200        753,600         0.1
  Thoratec Laboratories Corp.-/- ............................   US             60,000        412,500         0.1
  ATS Medical, Inc.-/- ......................................   US             31,250        195,313          --
  Conceptus, Inc.-/- ........................................   US             18,000        130,500          --
                                                                                        ------------
                                                                                         238,361,436
                                                                                        ------------
Biotechnology (26.6%)
  Protein Design Labs, Inc.{::} -/- .........................   US          1,017,600     50,752,795         8.1
  Amgen, Inc.-/- ............................................   US            539,000     26,545,750         4.2
  Guilford Pharmaceuticals, Inc.-/- .........................   US            896,600     21,854,625         3.5
  Cell Therapeutics, Inc.{::} -/- ...........................   US          1,141,000     18,256,000         2.9
  Regeneron Pharmaceuticals, Inc.{::} -/- ...................   US          1,414,900     14,768,019         2.4
  Human Genome Sciences, Inc.-/- ............................   US            260,900     10,696,900         1.7
  Genelabs Technologies, Inc.-/- ............................   US          1,642,800      6,365,850         1.0
  Interferon Sciences, Inc.-/- ..............................   US            552,500      5,110,625         0.8
  NABI, Inc.-/- .............................................   US            592,500      2,814,375         0.5
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-68
<PAGE>   1219
                           GT GLOBAL HEALTH CARE FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Biotechnology (Continued)
  PathoGenesis Corp.-/- .....................................   US             61,400   $  2,210,400         0.4
  Agouron Pharmaceuticals, Inc.-/- ..........................   US             46,400      2,117,000         0.3
  CytoTherapeutics, Inc.-/- .................................   US            396,900      2,083,725         0.3
  Pharmacyclics, Inc.-/- ....................................   US             75,000      1,912,500         0.3
  Coulter Pharmaceutical, Inc.-/- ...........................   US             73,700      1,059,438         0.2
  Enzon, Inc. Preferred-/- (.) ..............................   US             16,000        222,460          --
  Targeted Genetics Corp.-/- ................................   US             40,000        160,000          --
                                                                                        ------------
                                                                                         166,930,462
                                                                                        ------------
Pharmaceuticals (17.7%)
  TheraTech, Inc.{::} -/- ...................................   US          2,150,000     22,575,000         3.6
  American Home Products Corp. ..............................   US            145,600     10,792,600         1.7
  Perrigo Co.-/- ............................................   US            648,600      9,972,225         1.6
  Spiros Development Corp.(::) (.) -/- ......................   US            100,000      9,161,246         1.5
  Rhone-Poulenc "A" .........................................   FR            190,736      8,319,910         1.3
  Depotech Corp.-/- .........................................   US            549,300      7,621,538         1.2
  Magainin Pharmaceuticals, Inc.-/- .........................   US            895,100      7,608,350         1.2
  Bergen Brunswig Corp. "A" .................................   US            150,000      6,009,375         1.0
  Catalytica, Inc.-/- .......................................   US            437,866      5,473,325         0.9
  SEQUUS Pharmaceuticals, Inc.-/- ...........................   US            597,800      5,380,200         0.9
  IVAX Corp.-/- .............................................   US            700,000      5,293,750         0.8
  Altana AG .................................................   GER            50,000      3,632,937         0.6
  Life Medical Sciences, Inc.{::} -/- .......................   US            768,600      3,074,400         0.5
  Warner Chilcott Laboratories - ADR{\/} ....................   IRE           117,000      1,652,625         0.3
  Unimed Pharmaceuticals, Inc.-/- ...........................   US            147,200      1,048,800         0.2
  Intercardia, Inc.-/- ......................................   US             41,200        999,100         0.2
  Alpharma, Inc. "A" ........................................   US             21,700        478,756         0.1
  Aradigm Corp.-/- ..........................................   US             28,000        322,000         0.1
                                                                                        ------------
                                                                                         109,416,137
                                                                                        ------------
Health Care Services (5.2%)
  Vencor, Inc.-/- ...........................................   US            801,400     21,637,800         3.5
  Allegiance Corp. ..........................................   US            120,000      3,330,000         0.5
  Grupo Casa Autrey, S.A. de C.V. - ADR{\/} .................   MEX           135,100      2,313,588         0.4
  Parkway Holdings Ltd. .....................................   SING          900,000      2,277,177         0.4
  SteriGenics International, Inc.-/- ........................   US             61,900      1,392,750         0.2
  Cohr, Inc.-/- .............................................   US            129,100      1,355,550         0.2
                                                                                        ------------
                                                                                          32,306,865
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $484,175,220) ................                            547,014,900        87.3
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-69
<PAGE>   1220
                           GT GLOBAL HEALTH CARE FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                            NO. OF         VALUE         % OF NET
WARRANTS                                                       COUNTRY     WARRANTS       (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Rhone-Poulenc Warrants, expire 11/5/01 ....................   FR            190,736   $    603,731         0.1
    PHARMACEUTICALS
  ALZA Corp. Warrants, expire 12/31/99 ......................   US            100,000         18,750          --
    PHARMACEUTICALS
                                                                                        ------------       -----
 
TOTAL WARRANTS (cost $32,137) ...............................                                622,481         0.1
                                                                                        ------------       -----
<CAPTION>
 
                                                                            NO. OF
RIGHTS                                                                      RIGHTS
- -------------------------------------------------------------             -----------
<S>                                                            <C>        <C>           <C>            <C>
  Alpharma, Inc. Rights, expire 11/25/97 (cost $0) ..........   US              3,616         20,340          --
                                                                                        ------------       -----
    PHARMACEUTICALS
<CAPTION>
 
REPURCHASE AGREEMENT
- -------------------------------------------------------------
<S>                                                            <C>        <C>           <C>            <C>
  Dated October 31, 1997, with State Street Bank & Trust Co.,
   due November 3, 1997, for an effective yield of 5.57%,
   collateralized by $56,460,000 U.S. Treasury Bond, 8.875%
   due 8/15/17 (market value of collateral is $74,071,916,
   including accrued interest).
   (cost $72,617,234)  ......................................                             72,617,234        11.6
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $556,824,591)  * ....................                            620,274,955        99.0
Other Assets and Liabilities ................................                              6,067,162         1.0
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $626,342,117       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {::}  Security was an affiliate at October 31, 1997 (see Note 6 of Notes
             to Financial Statements).
       {\/}  U.S. currency denominated.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (see Note 1 of Notes to Financial Statements).
        (.)  Restricted securities: At October 31, 1997 the Fund owned the
             following restricted securities constituting less than 1.5% of net
             assets which may not be publicly sold without registration under
             the Securities Act of 1933 (Note 1). Additional information on the
             securities is as follows:
 
<TABLE>
<CAPTION>
                                                                                                       VALUE
                                                                                                        PER
                                                                                                       SHARE
                                                                                                       (NOTE
             DESCRIPTION                                      ACQUISITION DATE   SHARES     COST         1)
             -----------------------------------------------  -----------------  ------  -----------   ------
             <S>                                              <C>                <C>     <C>           <C>
             Enzon, Inc. Preferred..........................       3/22/90       16,000  $   400,000   $13.90
             Spiros Development Corp........................       1/3/96        100,000   3,000,000   91.61
</TABLE>
 
          *  For Federal income tax purposes, cost is $558,926,202 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  88,802,844
                 Unrealized depreciation:           (27,454,091)
                                                  -------------
                 Net unrealized appreciation:     $  61,348,753
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviation:
             ADR--American Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-70
<PAGE>   1221
                           GT GLOBAL HEALTH CARE FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                            PERCENTAGE OF NET ASSETS {D}
                                        -------------------------------------
                                                 FIXED INCOME,   SHORT-TERM
                                                   RIGHTS &        &
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS      OTHER  TOTAL
- --------------------------------------  ------   -------------   -----  -----
<S>                                     <C>      <C>             <C>    <C>
France (FR/FRF) ......................    1.3         0.1                 1.4
Germany (GER/DEM) ....................    0.6                             0.6
Ireland (IRE/IEP) ....................    0.3                             0.3
Israel (ISRL/ILS) ....................    0.1                             0.1
Mexico (MEX/MXN) .....................    0.4                             0.4
Singapore (SING/SGD) .................    0.4                             0.4
Switzerland (SWTZ/CHF) ...............    0.1                             0.1
United States (US/USD) ...............   84.1                    12.6    96.7
                                        ------        ---        -----  -----
Total  ...............................   87.3         0.1        12.6   100.0
                                        ------        ---        -----  -----
                                        ------        ---        -----  -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $626,342,117.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-71
<PAGE>   1222
                  GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Energy (31.2%)
  Hub Power Co.-/- ...........................................   PAK         2,400,000   $ 3,206,835         3.3
    ELECTRICAL & GAS UTILITIES
  Enron Global Power & Pipelines L.L.C. ......................   US             90,000     3,099,375         3.2
    ELECTRICAL & GAS UTILITIES
  Endesa S.A. - ADR{\/} ......................................   SPN           160,000     2,980,000         3.0
    ELECTRICAL & GAS UTILITIES
  Shaw Group, Inc.-/- ........................................   US            140,300     2,928,763         3.0
    ENERGY EQUIPMENT & SERVICES
  IES Industries, Inc. .......................................   US             81,000     2,612,250         2.7
    ELECTRICAL & GAS UTILITIES
  Light - Participacoes S.A. .................................   BRZL        9,910,000     2,535,033         2.6
    ELECTRICAL & GAS UTILITIES
  Edison S.p.A. ..............................................   ITLY          450,000     2,370,058         2.4
    ELECTRICAL & GAS UTILITIES
  Light - Servicos de Electricidade S.A. .....................   BRZL        7,000,000     2,324,020         2.4
    ELECTRICAL & GAS UTILITIES
  EVN Energie-Versorgung Niederoesterreich AG ................   ASTRI          16,800     1,948,628         2.0
    ELECTRICAL & GAS UTILITIES
  Giant Industries, Inc. .....................................   US            102,600     1,840,388         1.9
    OIL
  AES Corp.-/- ...............................................   US             45,264     1,793,586         1.8
    ELECTRICAL & GAS UTILITIES
  BSES Ltd. - 144A GDR{.} {\/} ...............................   IND            70,000     1,085,000         1.1
    ELECTRICAL & GAS UTILITIES
  Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} .....   BRZL           24,900       996,000         1.0
    ELECTRICAL & GAS UTILITIES
  MetroGas S.A. - ADR{\/} ....................................   ARG           111,051       805,120         0.8
    ELECTRICAL & GAS UTILITIES
                                                                                         -----------
                                                                                          30,525,056
                                                                                         -----------
Services (23.1%)
  Canadian National Railway Co. ..............................   CAN            60,900     3,284,415         3.3
    TRANSPORTATION - ROAD & RAIL
  Aeroporti di Roma SpA-/- ...................................   ITLY          286,600     2,606,270         2.7
    TRANSPORTATION - AIRLINES
  Hellenic Telecommunications Organization S.A. ..............   GREC          118,250     2,469,600         2.5
    TELEPHONE NETWORKS
  Telecom Italia SpA - Di Risp-/- ............................   ITLY          600,000     2,415,946         2.5
    TELEPHONE NETWORKS
  SPT Telecom-/- .............................................   CZCH           19,000     2,187,547         2.2
    TELEPHONE NETWORKS
  Tranz Rail Holdings Ltd. - ADR{\/} .........................   NZ            132,000     1,782,000         1.8
    TRANSPORTATION - ROAD & RAIL
  Portugal Telecom S.A. - ADR{\/} ............................   PORT           43,000     1,773,750         1.8
    TELEPHONE NETWORKS
  Paging Network, Inc.-/- ....................................   US            125,000     1,546,875         1.6
    WIRELESS COMMUNICATIONS
  Centennial Cellular Corp. "A"-/- ...........................   US             50,000     1,000,000         1.0
    WIRELESS COMMUNICATIONS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-72
<PAGE>   1223
                  GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Services (Continued)
  DDI Corp. ..................................................   JPN               295   $   985,786         1.0
    WIRELESS COMMUNICATIONS
  Telefonica del Peru S.A. - ADR{\/} .........................   PERU           40,900       807,775         0.8
    TELEPHONE NETWORKS
  Compania Anonima Nacional Telefonos de Venezuela (CANTV) -
   ADR{\/} ...................................................   VENZ           16,000       700,000         0.7
    TELEPHONE NETWORKS
  Pakistan Telecommunications Co., Ltd.: .....................   PAK                --            --         0.6
    TELEPHONE NETWORKS
    GDR{\/} ..................................................   --              4,892       396,252          --
    "A" ......................................................   --            280,000       235,741          --
  Philippine Long Distance Telephone Co. - ADR{\/} ...........   PHIL           20,000       485,000         0.5
    TELEPHONE NETWORKS
  China Telecom (Hong Kong) Ltd.-/- ..........................   HK             80,000       127,814         0.1
    WIRELESS COMMUNICATIONS
                                                                                         -----------
                                                                                          22,804,771
                                                                                         -----------
Materials/Basic Industry (20.8%)
  Giant Cement Holding, Inc.-/- ..............................   US            179,800     4,360,150         4.4
    CEMENT
  La Cementos Nacional, C.A. - 144A GDR{.} {\/} ..............   ECDR           15,060     3,162,600         3.2
    CEMENT
  Northwest Pipe Co.-/- ......................................   US            127,500     3,091,875         3.2
    METALS - STEEL
  IPSCO, Inc. ................................................   CAN            67,600     2,926,199         3.0
    METALS - STEEL
  Hylsamex, S.A. de C.V. - 144A ADR{.} {\/} ..................   MEX            75,000     2,896,875         3.0
    METALS - STEEL
  NS Group, Inc.-/- ..........................................   US             98,100     2,624,175         2.7
    METALS - STEEL
  Suez Cement Co. - Reg S GDR{c} {\/} ........................   EGPT           60,000     1,245,000         1.3
    CEMENT
                                                                                         -----------
                                                                                          20,306,874
                                                                                         -----------
Capital Goods (9.3%)
  Doncasters PLC - ADR-/- {\/} ...............................   UK            139,600     3,760,474         3.8
    AEROSPACE/DEFENSE
  Caterpillar, Inc. ..........................................   US             60,000     3,075,000         3.1
    MACHINERY & ENGINEERING
  KCI Konecranes International ...............................   FIN            42,660     1,664,636         1.7
    MACHINERY & ENGINEERING
  United Engineers Ltd. ......................................   MAL           270,000       640,733         0.7
    CONSTRUCTION
                                                                                         -----------
                                                                                           9,140,843
                                                                                         -----------
Technology (7.8%)
  Tadiran Telecommunications Ltd.{\/} ........................   ISRL          130,000     2,941,250         3.0
    TELECOM TECHNOLOGY
  Emcore Corp.-/- ............................................   US            123,000     2,367,750         2.4
    SEMICONDUCTORS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-73
<PAGE>   1224
                  GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Technology (Continued)
  Cisco Systems, Inc.-/- .....................................   US             21,000   $ 1,722,656         1.8
    NETWORKING
  Asia Pacific Wire & Cable Corporation Ltd.-/- {\/} .........   SING           59,400       549,450         0.6
    TELECOM TECHNOLOGY
                                                                                         -----------
                                                                                           7,581,106
                                                                                         -----------
Multi-Industry/Miscellaneous (4.7%)
  Mannesmann AG ..............................................   GER             7,500     3,166,135         3.2
    MULTI-INDUSTRY
  E.R.G. Ltd. ................................................   AUSL        1,689,040     1,436,723         1.5
    MULTI-INDUSTRY
                                                                                         -----------
                                                                                           4,602,858
                                                                                         -----------       -----
 
TOTAL EQUITY INVESTMENTS (cost $76,186,714) ..................                            94,961,508        96.9
                                                                                         -----------       -----
<CAPTION>
 
                                                                                            VALUE        % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- --------------------------------------------------------------                           -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
  Dated October 31, 1997, with State Street Bank & Trust Co.,
   due November 3, 1997, for an effective yield of 5.57%,
   collateralized by $1,680,000 U.S. Treasury Bond, 8.875% due
   8/15/17 (market value of collateral is $2,204,053,
   including accrued interest). (cost $2,156,334)  ...........                             2,156,334         2.2
                                                                                         -----------       -----
 
TOTAL INVESTMENTS (cost $78,343,048)  * ......................                            97,117,842        99.1
Other Assets and Liabilities .................................                               901,217         0.9
                                                                                         -----------       -----
 
NET ASSETS ...................................................                           $98,019,059       100.0
                                                                                         -----------       -----
                                                                                         -----------       -----
</TABLE>
 
- --------------
 
       {\/}  U.S. currency denominated.
        -/-  Non-income producing security.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
          *  For Federal income tax purposes, cost is $78,343,048 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  23,477,043
                 Unrealized depreciation:            (4,702,249)
                                                  -------------
                 Net unrealized appreciation:     $  18,774,794
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviations:
             ADR--American Depository Receipt
             GDR--Global Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-74
<PAGE>   1225
                  GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                         PERCENTAGE OF NET ASSETS
                                                    {D}
                                        ---------------------------
                                                 SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY    & OTHER     TOTAL
- --------------------------------------  ------   ----------   -----
<S>                                     <C>      <C>          <C>
Argentina (ARG/ARS) ..................    0.8                   0.8
Australia (AUSL/AUD) .................    1.5                   1.5
Austria (ASTRI/ATS) ..................    2.0                   2.0
Brazil (BRZL/BRL) ....................    6.0                   6.0
Canada (CAN/CAD) .....................    6.3                   6.3
Czech Republic (CZCH/CSK) ............    2.2                   2.2
Ecuador (ECDR/ECS) ...................    3.2                   3.2
Egypt (EGPT/EGP) .....................    1.3                   1.3
Finland (FIN/FIM) ....................    1.7                   1.7
Germany (GER/DEM) ....................    3.2                   3.2
Greece (GREC/GRD) ....................    2.5                   2.5
Hong Kong (HK/HKD) ...................    0.1                   0.1
India (IND/INR) ......................    1.1                   1.1
Israel (ISRL/ILS) ....................    3.0                   3.0
Italy (ITLY/ITL) .....................    7.6                   7.6
Japan (JPN/JPY) ......................    1.0                   1.0
Malaysia (MAL/MYR) ...................    0.7                   0.7
Mexico (MEX/MXN) .....................    3.0                   3.0
New Zealand (NZ/NZD) .................    1.8                   1.8
Pakistan (PAK/PKR) ...................    3.9                   3.9
Peru (PERU/PES) ......................    0.8                   0.8
Philippines (PHIL/PHP) ...............    0.5                   0.5
Portugal (PORT/PTE) ..................    1.8                   1.8
Singapore (SING/SGD) .................    0.6                   0.6
Spain (SPN/ESP) ......................    3.0                   3.0
United Kingdom (UK/GBP) ..............    3.8                   3.8
United States & Other (US/USD) .......   32.8        3.1       35.9
Venezuela (VENZ/VEB) .................    0.7                   0.7
                                        ------       ---      -----
Total  ...............................   96.9        3.1      100.0
                                        ------       ---      -----
                                        ------       ---      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $98,019,059.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                OCTOBER 31, 1997
 
<TABLE>
<CAPTION>
                                                                                    UNREALIZED
                                           MARKET VALUE     CONTRACT    DELIVERY   APPRECIATION
CONTRACTS TO SELL:                        (U.S. DOLLARS)      PRICE       DATE    (DEPRECIATION)
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Deutsche Marks..........................     1,509,823         1.80100  11/28/97   $   (66,180)
Japanese Yen............................       404,821       114.50000  11/12/97        20,506
Japanese Yen............................       368,245       120.70000  01/07/98        (4,948)
Japanese Yen............................        84,327       118.82300  02/04/98          (168)
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $2,316,426)...................     2,367,216                                 (50,790)
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS A
 PERCENTAGE OF NET ASSETS IS 2.42%.
  Total Open Forward Foreign Currency
   Contracts............................                                           $   (50,790)
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-75
<PAGE>   1226
                GT GLOBAL NATURAL RESOURCES FUND - CONSOLIDATED
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Energy Equipment & Services (53.2%)
  Schlumberger Ltd. .........................................   US             60,800   $  5,320,000         3.1
  Cliffs Drilling Co.-/- ....................................   US             73,100      5,313,456         3.1
  EVI, Inc.-/- ..............................................   US             81,000      5,199,188         3.0
  Varco International, Inc.-/- ..............................   US             85,000      5,179,688         3.0
  Cooper Cameron Corp.-/- ...................................   US             71,500      5,165,875         3.0
  Precision Drilling Corp.-/- ...............................   CAN           162,300      4,980,581         2.9
  Nabors Industries, Inc.-/- ................................   US            120,200      4,943,225         2.9
  Patterson Energy, Inc.-/- .................................   US             86,800      4,860,800         2.8
  UTI Energy Corp.-/- .......................................   US            107,700      4,806,113         2.8
  Key Energy Group, Inc.-/- .................................   US            147,600      4,630,950         2.7
  Pool Energy Services Co.-/- ...............................   US            133,600      4,534,050         2.6
  Diamond Offshore Drilling, Inc. ...........................   US             72,000      4,482,000         2.6
  Helmerich & Payne, Inc. ...................................   US             51,300      4,139,269         2.4
  BJ Services Co.-/- ........................................   US             43,600      3,695,100         2.1
  Santa Fe International Corp.-/- ...........................   US             71,700      3,526,744         2.1
  Falcon Drilling Co., Inc.-/- ..............................   US             96,900      3,524,738         2.0
  Smith International, Inc.-/- ..............................   US             41,900      3,194,875         1.9
  Bonus Resource Services Corp.-/- ..........................   CAN           482,284      2,361,453         1.4
  Veritas DGC, Inc.-/- ......................................   US             56,400      2,308,875         1.3
  Noble Drilling Corp.-/- ...................................   US             64,300      2,286,669         1.3
  Fred Olsen Energy ASA-/- ..................................   NOR            74,500      2,053,003         1.2
  Computalog Ltd.-/- ........................................   CAN            58,800      1,189,185         0.7
  Rowan Cos., Inc.-/- .......................................   US             30,000      1,166,250         0.7
  Enerflex Systems Ltd. .....................................   CAN            38,000      1,078,626         0.6
  Hanover Compressor Co.-/- .................................   US             42,100        910,413         0.5
  Dril-Quip, Inc.-/- ........................................   US             22,700        814,363         0.5
                                                                                        ------------
                                                                                          91,665,489
                                                                                        ------------
Metals - Steel (13.5%)
  IPSCO, Inc. ...............................................   CAN           111,700      4,835,155         2.8
  Tubos de Acero de Mexico S.A. - ADR{\/} -/- ...............   MEX           227,800      4,598,713         2.7
  Prudential Steel Ltd. .....................................   CAN           102,200      4,278,882         2.5
  NS Group, Inc.-/- .........................................   US            130,300      3,485,525         2.0
  Oregon Steel Mills, Inc. ..................................   US            146,800      3,091,975         1.8
  Maverick Tube Corp.-/- ....................................   US             81,600      2,876,400         1.7
                                                                                        ------------
                                                                                          23,166,650
                                                                                        ------------
Construction (10.8%)
  National-Oilwell, Inc.-/- .................................   US             71,501      5,474,292         3.2
  Global Industries Ltd.-/- .................................   US            248,800      5,007,100         2.9
  Cal Dive International, Inc.-/- ...........................   US             80,000      2,500,000         1.5
  Halter Marine Group, Inc.-/- ..............................   US             43,600      2,280,825         1.3
  Coflexip - ADR{\/} ........................................   FR             34,300      1,886,500         1.1
  Bouygues Offshore S.A. - ADR{\/} ..........................   FR             31,900        773,575         0.4
  TransCoastal Marine Services, Inc.-/- .....................   US             19,200        477,600         0.3
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-76
<PAGE>   1227
                GT GLOBAL NATURAL RESOURCES FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Construction (Continued)
  UNIFAB International, Inc.-/- .............................   US              4,200   $    134,400         0.1
                                                                                        ------------
                                                                                          18,534,292
                                                                                        ------------
Oil (10.0%)
  Giant Industries, Inc. ....................................   US            201,100      3,607,231         2.1
  Orogen Minerals Ltd. - 144A ADR{.} {\/} ...................   AUSL          111,200      3,030,200         1.8
  Canadian Fracmaster Ltd.-/- ...............................   CAN           261,500      2,597,928         1.5
  Ranger Oil Ltd. ...........................................   CAN           280,900      2,431,862         1.4
  Black Sea Energy Ltd.-/- ..................................   CAN         1,139,600      2,345,189         1.4
  ERG SpA-/- ................................................   ITLY          373,000      1,535,837         0.9
  Petroleo Brasileiro S.A. (Petrobras) Preferred ............   BRZL        7,900,000      1,469,067         0.9
                                                                                        ------------
                                                                                          17,017,314
                                                                                        ------------
Chemicals (2.5%)
  Ciba Specialty Chemicals AG-/- ............................   SWTZ           43,360      4,258,571         2.5
                                                                                        ------------
Paper/Packaging (2.4%)
  Fort James Corp. ..........................................   US             66,962      2,657,554         1.5
  Jefferson Smurfit Corp.-/- ................................   US            100,400      1,506,000         0.9
                                                                                        ------------
                                                                                           4,163,554
                                                                                        ------------
Gas Production & Distribution (2.4%)
  Comstock Resources, Inc.-/- ...............................   US            232,400      3,892,700         2.3
  Berkley Petroleum Corp.-/- ................................   CAN            20,400        233,792         0.1
                                                                                        ------------
                                                                                           4,126,492
                                                                                        ------------
Industrial Components (2.2%)
  Encore Wire Corp.-/- ......................................   US            132,950      3,755,838         2.2
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-77
<PAGE>   1228
                GT GLOBAL NATURAL RESOURCES FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Consumer Services (2.0%)
  American Disposal Services, Inc.-/- .......................   US             95,500   $  3,366,375         2.0
                                                                                        ------------
Forest Products (0.7%)
  The TimberWest Timber Trust Special Warrants(.) (::) ......   CAN           422,700      1,124,840         0.7
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $136,805,346) ................                            171,179,415        99.7
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $136,805,346)  * ....................                            171,179,415        99.7
Other Assets and Liabilities ................................                                494,158         0.3
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $171,673,573       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        {.}  Security 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.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (see Note 1 of Notes to Financial Statements).
        (.)  Restricted securities: At October 31, 1997 the Fund owned the
             following restricted security constituting 0.7% of net assets which
             may not be publicly sold without registration under the Securities
             Act of 1933 (Note 1). Additional information on the security is as
             follows:
 
<TABLE>
<CAPTION>
                                                                                                       VALUE
                                                                                                        PER
                                                                                                       SHARE
                                                                                                       (NOTE
             DESCRIPTION                                      ACQUISITION DATE   SHARES     COST         1)
             -----------------------------------------------  -----------------  ------  -----------   ------
             <S>                                              <C>                <C>     <C>           <C>
             The TimberWest Timber Trust Special Warrants...       8/7/97        422,700 $ 1,142,844   $2.66
</TABLE>
 
          *  For Federal income tax purposes, cost is $137,392,339 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  37,982,563
                 Unrealized depreciation:            (4,195,487)
                                                  -------------
                 Net unrealized appreciation:     $  33,787,076
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviation:
    ADR--American Depository Receipt
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                         PERCENTAGE OF NET ASSETS
                                                    {D}
                                        ---------------------------
                                                 SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY    & OTHER     TOTAL
- - --------------------------------------  ------   ----------   -----
<S>                                     <C>      <C>          <C>
Australia (AUSL/AUD) .................    1.8                   1.8
Brazil (BRZL/BRL) ....................    0.9                   0.9
Canada (CAN/CAD) .....................   16.0                  16.0
France (FR/FRF) ......................    1.5                   1.5
Italy (ITLY/ITL) .....................    0.9                   0.9
Mexico (MEX/MXN) .....................    2.7                   2.7
Norway (NOR/NOK) .....................    1.2                   1.2
Switzerland (SWTZ/CHF) ...............    2.5                   2.5
United States (US/USD) ...............   72.2        0.3       72.5
                                        ------     -----      -----
Total  ...............................   99.7        0.3      100.0
                                        ------     -----      -----
                                        ------     -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $171,673,573.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-78
<PAGE>   1229
                       GT GLOBAL TELECOMMUNICATIONS FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                          VALUE          % OF NET
EQUITY INVESTMENTS                                           COUNTRY      SHARES         (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
Telecom Equipment (28.0%)
  Nokia AB "A" ............................................   FIN         1,059,160   $   92,479,819         5.4
  ECI Telecommunications Ltd.{\/} .........................   ISRL        2,609,500       72,087,438         4.2
  Newbridge Networks Corp.-/- .............................   CAN         1,332,300       71,049,067         4.1
  Telefonaktiebolaget LM Ericsson: ........................   SWDN               --               --         3.1
    "B" Free-/- ...........................................   --            871,200       38,397,307          --
    ADR{\/} ...............................................   --            350,480       15,508,740          --
  DSC Communications Corp.-/- .............................   US          1,220,100       29,739,938         1.7
  Corning, Inc. ...........................................   US            600,000       27,075,000         1.6
  P-COM, Inc.-/- ..........................................   US          1,200,000       24,150,000         1.4
  ANTEC Corp.-/- ..........................................   US          1,162,300       18,306,225         1.1
  Tekelec-/- ..............................................   US            428,900       17,960,188         1.0
  Tellabs, Inc.-/- ........................................   US            240,000       12,960,000         0.8
  Pairgain Technologies, Inc.-/- ..........................   US            428,800       12,113,600         0.7
  Tadiran Ltd. - ADR{\/} ..................................   ISRL          246,100        9,290,275         0.5
  Geotek Communications, Inc.-/- ..........................   US          2,471,100        8,957,738         0.5
  Champion Technology Holding Ltd. ........................   HK         67,154,902        8,166,314         0.5
  Teledata Communications Ltd.-/- {\/} ....................   ISRL          198,000        6,138,000         0.4
  Allen Telecom, Inc.-/- ..................................   US            300,000        5,662,500         0.3
  Netas Telekomunik-/- ....................................   TRKY       17,820,000        5,343,474         0.3
  Ascend Communications, Inc.-/- ..........................   US            160,000        4,330,000         0.3
  Himachal Futuristic Communications Ltd. - 144A GDR{.} -/-
   {\/} (.) (::) ..........................................   IND         1,248,000        2,184,000         0.1
  Sapura Telecommunications Bhd. ..........................   MAL         1,155,000          680,024          --
  Kantone Holding Ltd.-/- .................................   HK          6,256,868          639,447          --
                                                                                      --------------
                                                                                         483,219,094
                                                                                      --------------
Telephone Networks (22.4%)
  Telecom Italia S.p.A.: ..................................   ITLY               --               --         3.8
    Di Risp-/- ............................................   --         13,989,767       56,330,863          --
    Common ................................................   --          1,263,334        7,901,199          --
  Telecomunicacoes Brasileiras S.A. (Telebras) -
   ADR{\/} ................................................   BRZL          632,500       64,198,750         3.7
  WorldCom, Inc. ..........................................   US          1,644,290       55,289,251         3.2
  SPT Telecom-/- ..........................................   CZCH          391,340       45,056,567         2.6
  Cable & Wireless Communications - ADR-/- {\/} ...........   UK          1,670,250       30,377,672         1.8
  Hellenic Telecommunications Organization S.A. ...........   GREC        1,286,000       26,857,552         1.6
  NTL, Inc.-/- {\/} .......................................   UK            855,833       23,214,470         1.4
  Carso Global Telecom "A1" ...............................   MEX         7,036,683       23,090,433         1.3
  France Telecom S.A.: ....................................   FR                 --               --         0.9
    ADR-/- {\/} ...........................................   --            320,000       12,120,000          --
    Common-/- .............................................   --             85,500        3,237,187          --
  Ionica Group PLC-/- .....................................   UK          1,456,400        7,523,838         0.4
  Atlantic Tele-Network, Inc.-/- ..........................   US            500,100        6,313,763         0.4
  Telefonica del Peru S.A. - ADR{\/} ......................   PERU          318,400        6,288,400         0.4
  Russian Telecommunications Development Corp.: ...........   RUS                --               --         0.3
    Non-Voting(.) -/- {\/} (::) ...........................   --            453,000        3,397,500          --
    Voting(.) -/- {\/} (::) ...............................   --            331,000        2,482,500          --
  Compania Anonima Nacional Telefonos de Venezuela (CANTV)
   - ADR{\/} ..............................................   VENZ           96,000        4,200,000         0.2
  PLD Telekon, Inc.-/- {\/} (.) ...........................   RUS           510,000        4,016,250         0.2
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-79
<PAGE>   1230
                       GT GLOBAL TELECOMMUNICATIONS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                          VALUE          % OF NET
EQUITY INVESTMENTS                                           COUNTRY      SHARES         (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
Telephone Networks (Continued)
  TelecomAsia Corp. - Foreign-/- ..........................   THAI        6,622,652   $    2,965,367         0.2
                                                                                      --------------
                                                                                         384,861,562
                                                                                      --------------
Wireless Communications (17.3%)
  Nextel Communications, Inc. "A"-/- ......................   US          2,745,700       72,074,625         4.2
  Millicom International Cellular S.A.{::} -/- {\/} .......   LUX         1,057,000       44,394,000         2.6
  DDI Corp. ...............................................   JPN             9,320       31,144,140         1.8
  Grupo Iusacell S.A. "L" - ADR-/- {\/} ...................   MEX         1,672,100       30,097,800         1.8
  Paging Network, Inc.-/- .................................   US          2,165,000       26,791,875         1.6
  Clearnet Communications, Inc. "A"-/- ....................   CAN         1,138,100       17,848,432         1.0
  WinStar Communications, Inc.-/- .........................   US            667,700       15,273,638         0.9
  Western Wireless Corp. "A"-/- ...........................   US            750,300       13,411,613         0.8
  Telecom Italia Mobile S.p.A. - Di Risp ..................   ITLY        5,425,700       11,086,917         0.6
  Advanced Info. Service - Foreign ........................   THAI        1,993,150       10,709,463         0.6
  Vimpel-Communications - ADR-/- {\/} .....................   RUS           250,000        8,187,500         0.5
  Powertel, Inc.-/- .......................................   US            365,000        6,638,438         0.4
  Microcell Telecommunications, Inc. "B"-/- {\/} ..........   CAN           596,400        5,330,325         0.3
  China Telecom (Hong Kong) Ltd.-/- .......................   HK          1,452,000        2,319,819         0.1
  SK Telecom Co., Ltd. - ADR{\/} ..........................   KOR           289,900        1,594,450         0.1
                                                                                      --------------
                                                                                         296,903,035
                                                                                      --------------
Telephone - Long Distance (5.7%)
  Tel-Save Holdings, Inc.-/- ..............................   US          2,000,000       43,000,000         2.5
  Call-Net Enterprises, Inc.: .............................   CAN                --               --         2.2
    "B"-/- ................................................   --          1,036,700       20,966,470          --
    "A"-/- ................................................   --            519,400       10,688,760          --
    "B" - 144A{.} -/- .....................................   --            379,400        7,673,077          --
  Bell Canada International, Inc.: ........................   CAN                --               --         0.8
    Common-/- .............................................   --            717,300       12,165,392          --
    Common-/- {\/} ........................................   --            132,500        2,235,938          --
  RSL Communications Ltd. "A"-/- ..........................   US            136,000        3,196,000         0.2
                                                                                      --------------
                                                                                          99,925,637
                                                                                      --------------
Telephone - Regional/Local (5.6%)
  ICG Communications, Inc.-/- .............................   US          1,504,600       34,605,800         2.0
  Intermedia Communications of Florida, Inc.-/- ...........   US            613,900       27,855,713         1.6
  Teleport Communications Group, Inc. "A"-/- ..............   US            364,000       17,608,500         1.0
  ING Barings Russian Regional Telecommunications Basket
   Bridge Certificates-/- {\/} {=} ........................   RUS             1,749       14,383,024         0.8
  Brooks Fiber Properties, Inc.-/- ........................   US             41,400        2,302,875         0.1
  NEXTLINK Communications, Inc. "A"-/- ....................   US             78,000        1,764,750         0.1
                                                                                      --------------
                                                                                          98,520,662
                                                                                      --------------
Multi-Industry (4.7%)
  Mannesmann AG ...........................................   GER           140,900       59,481,125         3.5
  Grupo Carso, S.A. de C.V. "A1" ..........................   MEX         3,300,000       20,985,629         1.2
                                                                                      --------------
                                                                                          80,466,754
                                                                                      --------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-80
<PAGE>   1231
                       GT GLOBAL TELECOMMUNICATIONS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                          VALUE          % OF NET
EQUITY INVESTMENTS                                           COUNTRY      SHARES         (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
Aerospace/Defense (2.6%)
  Orbital Sciences Corp.{::} -/- ..........................   US          1,838,500   $   44,813,438         2.6
                                                                                      --------------
Telecom Technology (2.5%)
  Uniphase Corp.-/- .......................................   US            449,900       30,199,538         1.8
  Three-Five Systems, Inc.{::} -/- ........................   US            599,000       12,429,250         0.7
                                                                                      --------------
                                                                                          42,628,788
                                                                                      --------------
Cable Television (1.6%)
  Comcast Corp. "A" .......................................   US            604,300       16,618,250         1.0
  Comcast UK Cable Partners Ltd. "A"-/- ...................   UK            415,000        4,707,656         0.3
  United International Holdings, Inc. "A"-/- ..............   US            373,000        4,615,875         0.3
                                                                                      --------------
                                                                                          25,941,781
                                                                                      --------------
Broadcasting & Publishing (1.4%)
  EchoStar Communications Corp. "A"{::} ...................   US            609,200       11,574,800         0.7
  Sistem Televisyen Malaysia Bhd. .........................   MAL         7,436,000        7,549,919         0.4
  Seat SpA-/- .............................................   ITLY       16,820,000        4,413,481         0.3
                                                                                      --------------
                                                                                          23,538,200
                                                                                      --------------
Semiconductors (0.8%)
  DSP Communications, Inc.-/- .............................   US            624,000       11,544,000         0.7
  General Semiconductor, Inc.-/- ..........................   US            175,000        1,990,625         0.1
                                                                                      --------------
                                                                                          13,534,625
                                                                                      --------------
Retailers - Other (0.3%)
  Asia Food & Properties Ltd.-/- {\/} .....................   SING       14,192,000        4,328,560         0.3
  Gran Cadena de Almacenes Colombianos S.A. ...............   COL            66,560           82,032          --
                                                                                      --------------
                                                                                           4,410,592
                                                                                      --------------
Networking (0.2%)
  3Com Corp.-/- ...........................................   US             80,100        3,319,144         0.2
                                                                                      --------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $1,274,850,186) ............                            1,602,083,312        93.1
                                                                                      --------------       -----
<CAPTION>
 
                                                                         PRINCIPAL        VALUE          % OF NET
FIXED INCOME INVESTMENTS                                     CURRENCY     AMOUNT         (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
Structured Note (2.2%)
  Russia (2.2%)
    Credit Suisse Financial Products Russian Equity Linked
     Note, 3.3% due 4/29/98 (This is an equity linked note.
     The value of this note is linked to the underlying
     value of Rostelecom.)-/- (.) .........................   USD        38,000,000       37,012,000         2.2
                                                                                      --------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $38,000,000) .........                               37,012,000         2.2
                                                                                      --------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-81
<PAGE>   1232
                       GT GLOBAL TELECOMMUNICATIONS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                          NO. OF          VALUE          % OF NET
WARRANTS                                                     COUNTRY     WARRANTS        (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
  Asia Food & Properties Ltd. Warrants, expire
   7/12/02{\/} ............................................   SING        1,064,400   $      191,592          --
    FOOD
  American Satellite Network Warrants, expire 1/1/99(::)
   (.) ....................................................   US             65,825               --          --
    WIRELESS COMMUNICATIONS
                                                                                      --------------       -----
 
TOTAL WARRANTS (cost $484,741) ............................                                  191,592          --
                                                                                      --------------       -----
<CAPTION>
 
                                                                                          VALUE          % OF NET
REPURCHASE AGREEMENT                                                                     (NOTE 1)         ASSETS
- -----------------------------------------------------------                           --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
  Dated October 31, 1997, with State Street Bank & Trust
   Co., due November 3, 1997, for an effective yield of
   5.57%, collateralized by $35,290,000 U.S. Treasury Bond,
   8.875% due 8/15/17 (market value of collateral is
   $46,298,227, including accrued interest).
   (cost $45,388,021)  ....................................                               45,388,021         2.6
                                                                                      --------------       -----
 
TOTAL INVESTMENTS (cost $1,358,722,948)  * ................                            1,684,674,925        97.9
Other Assets and Liabilities ..............................                               36,444,134         2.1
                                                                                      --------------       -----
 
NET ASSETS ................................................                           $1,721,119,059       100.0
                                                                                      --------------       -----
                                                                                      --------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {::}  Security was an affiliate at October 31, 1997 (see Note 6 of Notes
             to Financial Statements).
       {\/}  U.S. currency denominated.
        {.}  Security 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.
        {=}  Issued by ING Barings, the value of which is linked to the
             underlying value of a basket of shares issued by Russian regional
             telephone companies.
        (.)  Restricted securities: At October 31, 1997 the Fund owned the
             following restricted securities constituting 2.8% of net assets
             which may not be publicly sold without registration under the
             Securities Act of 1933 (Note 1). Additional information on the
             securities is as follows:
 
<TABLE>
<CAPTION>
                                                                                                       VALUE
                                                                                                        PER
                                                                                                       SHARE
                                                                                                       (NOTE
             DESCRIPTION                                      ACQUISITION DATE   SHARES     COST         1)
             -----------------------------------------------  -----------------  ------  -----------   ------
             <S>                                              <C>                <C>     <C>           <C>
             American Satellite Network Warrants, expire
              1/1/99........................................      12/31/93       65,825  $        --   $--
             Credit Suisse Financial Products Russian Equity
              Linked Note, 3.3% due 4/29/98.................       4/29/97       38,000,000  38,000,000 0.97
             Himachal Futuristic Communications Ltd. - 144A
              GDR...........................................       8/1/95        1,248,000   9,604,650 1.75
             PLD Telekon, Inc...............................       8/30/96       510,000   3,498,750   7.88
             Russian Telecommunications Development Corp.:
               Non-voting...................................      12/22/93       453,000   4,530,000   7.50
               Voting.......................................      12/22/93       331,000   3,310,000   7.50
</TABLE>
 
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (See Note 1 of Notes to Financial Statements).
          *  For Federal income tax purposes, cost is $1,359,258,436 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $ 519,851,820
                 Unrealized depreciation:          (194,435,331)
                                                  -------------
                 Net unrealized appreciation:     $ 325,416,489
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviations:
             ADR--American Depository Receipt
             GDR--Global Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-82
<PAGE>   1233
                       GT GLOBAL TELECOMMUNICATIONS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {D}
                                        -------------------------------------------
                                                 FIXED INCOME,
                                                   RIGHTS &      SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS       & OTHER     TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Brazil (BRZL/BRL) ....................    3.7                                   3.7
Canada (CAN/CAD) .....................    8.4                                   8.4
Czech Republic (CZCH/CSK) ............    2.6                                   2.6
Finland (FIN/FIM) ....................    5.4                                   5.4
France (FR/FRF) ......................    0.9                                   0.9
Germany (GER/DEM) ....................    3.5                                   3.5
Greece (GREC/GRD) ....................    1.6                                   1.6
Hong Kong (HK/HKD) ...................    0.6                                   0.6
India (IND/INR) ......................    0.1                                   0.1
Israel (ISRL/ILS) ....................    5.1                                   5.1
Italy (ITLY/ITL) .....................    4.7                                   4.7
Japan (JPN/JPY) ......................    1.8                                   1.8
Korea (KOR/KRW) ......................    0.1                                   0.1
Luxembourg (LUX/LUF) .................    2.6                                   2.6
Malaysia (MAL/MYR) ...................    0.4                                   0.4
Mexico (MEX/MXN) .....................    4.3                                   4.3
Peru (PERU/PES) ......................    0.4                                   0.4
Russia (RUS/SUR) .....................    1.8         2.2                       4.0
Singapore (SING/SGD) .................    0.3                                   0.3
Sweden (SWDN/SEK) ....................    3.1                                   3.1
Thailand (THAI/THB) ..................    0.8                                   0.8
Turkey (TRKY/TRL) ....................    0.3                                   0.3
United Kingdom (UK/GBP) ..............    3.9                                   3.9
United States (US/USD) ...............   36.5                        4.7       41.2
Venezuela (VENZ/VEB) .................    0.2                                   0.2
                                        ------      -----          -----      -----
Total  ...............................   93.1         2.2            4.7      100.0
                                        ------      -----          -----      -----
                                        ------      -----          -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $1,721,119,059.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-83
<PAGE>   1234
                       GT GLOBAL TELECOMMUNICATIONS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                OCTOBER 31, 1997
<TABLE>
<CAPTION>
                                                                                    UNREALIZED
                                           MARKET VALUE     CONTRACT    DELIVERY   APPRECIATION
CONTRACTS TO BUY:                         (U.S. DOLLARS)      PRICE       DATE    (DEPRECIATION)
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Japanese Yen............................      13,280,549     118.50000  11/12/97   $  (201,730)
Japanese Yen............................         673,732     118.60000  11/12/97        (9,657)
                                          --------------                          --------------
  Total Contracts to Buy (Payable amount
   $14,165,668).........................      13,954,281                              (211,387)
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO BUY AS
 PERCENTAGE OF NET ASSETS IS 0.81%.
 
<CAPTION>
 
CONTRACTS TO SELL:
- ----------------------------------------
<S>                                       <C>              <C>          <C>       <C>
British Pounds..........................      41,535,139       0.60190   1/20/98    (1,170,888)
Deutsche Marks..........................      15,664,388       1.80000  11/21/97      (664,388)
Deutsche Marks..........................       7,948,226       1.72400  11/21/97        (1,591)
Finnish Markka..........................      38,825,761       5.28300   1/21/98      (968,483)
Italian Liras...........................      50,091,184    1730.40000   1/21/98      (969,594)
Japanese Yen............................      23,255,611     113.59900  11/12/97     1,371,807
Japanese Yen............................      17,298,836     114.50000  11/12/97       876,273
Swedish Kronor..........................      51,700,408       7.61030   1/21/98      (979,674)
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $243,813,015).................     246,319,553                            (2,506,538)
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 14.31%.
  Total Open Forward Foreign Currency
   Contracts, Net.......................                                           $(2,717,925)
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-84
<PAGE>   1235
                             GT GLOBAL THEME FUNDS
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                                October 31, 1997
<TABLE>
<S>                                    <C>              <C>              <C>           <C>              <C>
- --------------------------------------------------------------------------------
 
<CAPTION>
                                                                         GT GLOBAL
                                       -----------------------------------------------------------------------------
                                          CONSUMER                                                        NATURAL
                                        PRODUCTS AND      FINANCIAL                    INFRASTRUCTURE    RESOURCES
                                       SERVICES FUND-   SERVICES FUND-      HEALTH         FUND-           FUND-
                                        CONSOLIDATED     CONSOLIDATED        CARE       CONSOLIDATED    CONSOLIDATED
                                          (NOTE 1)         (NOTE 1)          FUND         (NOTE 1)        (NOTE 1)
                                       --------------   --------------   ------------  --------------   ------------
<S>                                    <C>              <C>              <C>           <C>              <C>
Assets:
  Investments in securities: (Note 1)
    At identified cost...............   $124,047,571     $69,090,966     $484,207,357   $76,186,714     $136,805,346
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
    At value.........................   $132,596,014     $76,932,464     $547,657,721   $94,961,508     $171,179,415
    Repurchase Agreement, at value
     and cost (Note 1)...............      5,697,881       2,708,419       72,617,234     2,156,334               --
  U.S. currency......................            303              --              390           128              705
  Foreign currencies (cost $249,434,
   $290,416, $32,405,
   $252,788, $2,016,446, and
   $938,200, respectively)...........        247,103         290,889           32,773       257,815        2,016,446
  Dividends and dividend withholding
   tax reclaims receivable...........         29,063          50,112           10,585        25,624           15,438
  Interest receivable................             --              --               --            --               --
  Receivable for forward foreign
   currency contracts -- closed, net
   (Note 1)..........................             --              --               --         5,096               --
  Receivable for Fund shares sold....        585,508       1,011,553       13,993,515       141,205        5,010,514
  Receivable for open forward foreign
   currency contracts (Note 1).......             --          59,877               --            --               --
  Receivable for securities sold.....     25,634,646       1,515,031        6,745,139     1,309,852        6,715,639
  Unamortized organizational costs
   (Note 1)..........................         22,264          19,944               --        16,280           16,225
  Miscellaneous receivable...........         91,501           4,131           36,371            --           33,585
                                       --------------   --------------   ------------  --------------   ------------
    Total assets.....................    164,904,283      82,592,420      641,093,728    98,873,842      184,987,967
                                       --------------   --------------   ------------  --------------   ------------
Liabilities:
  Payable for custodian fees.........            769          10,403            7,317         1,332            8,200
  Payable for Directors' and
   Trustees' fees and expenses
   (Note 2)..........................          4,859           4,446            9,136         7,921            5,237
  Payable for forward foreign
   currency contracts -- closed, net
   (Note 1)..........................             --              --               --            --               --
  Payable for fund accounting fees
   (Note 2)..........................          4,352           1,845           14,194         2,367            3,914
  Payable for Fund shares
   repurchased.......................        261,522         142,435          882,049       496,631        4,099,045
  Payable for investment management
   and administration fees (Note
   2)................................        139,166         180,741          536,273        89,949          147,355
  Payable for loan outstanding (Note
   1)................................             --              --               --            --        4,670,000
  Payable for open forward foreign
   currency contracts, net (Note
   1)................................             --              --               --        50,790               --
  Payable for printing and postage
   expenses..........................         33,464          23,148           73,457        51,926           45,104
  Payable for professional fees......         23,989          25,345           39,780        30,852           35,756
  Payable for registration and filing
   fees..............................          4,130           2,371           15,839         2,078           12,139
  Payable for securities purchased...      1,563,285       1,154,504       12,706,263            --        4,125,569
  Payable for service and
   distribution expenses (Note 2)....        114,540          57,009          346,611        74,426          113,980
  Payable for transfer agent fees
   (Note 2)..........................         55,435          20,911          111,824        38,302           39,544
  Other accrued expenses.............         36,359           7,528            8,868         8,109            8,451
                                       --------------   --------------   ------------  --------------   ------------
    Total liabilities................      2,241,870       1,630,686       14,751,611       854,683       13,314,294
  Minority interest (Notes 1 & 2)....            100             100               --           100              100
                                       --------------   --------------   ------------  --------------   ------------
Net assets...........................   $162,662,313     $80,961,634     $626,342,117   $98,019,059     $171,673,573
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
 
<CAPTION>
 
                                          TELECOM-
                                         MUNICATIONS
                                            FUND
                                       ---------------
<S>                                    <C>
Assets:
  Investments in securities: (Note 1)
    At identified cost...............  $ 1,313,334,927
                                       ---------------
                                       ---------------
    At value.........................  $ 1,639,286,904
    Repurchase Agreement, at value
     and cost (Note 1)...............       45,388,021
  U.S. currency......................        1,822,076
  Foreign currencies (cost $249,434,
   $290,416, $32,405,
   $252,788, $2,016,446, and
   $938,200, respectively)...........          944,514
  Dividends and dividend withholding
   tax reclaims receivable...........          403,424
  Interest receivable................          639,026
  Receivable for forward foreign
   currency contracts -- closed, net
   (Note 1)..........................               --
  Receivable for Fund shares sold....       15,407,247
  Receivable for open forward foreign
   currency contracts (Note 1).......               --
  Receivable for securities sold.....       28,894,370
  Unamortized organizational costs
   (Note 1)..........................               --
  Miscellaneous receivable...........           76,388
                                       ---------------
    Total assets.....................    1,732,861,970
                                       ---------------
Liabilities:
  Payable for custodian fees.........           84,942
  Payable for Directors' and
   Trustees' fees and expenses
   (Note 2)..........................           19,588
  Payable for forward foreign
   currency contracts -- closed, net
   (Note 1)..........................          518,821
  Payable for fund accounting fees
   (Note 2)..........................           42,359
  Payable for Fund shares
   repurchased.......................        3,902,530
  Payable for investment management
   and administration fees (Note
   2)................................        1,545,877
  Payable for loan outstanding (Note
   1)................................               --
  Payable for open forward foreign
   currency contracts, net (Note
   1)................................        2,717,925
  Payable for printing and postage
   expenses..........................          143,320
  Payable for professional fees......           42,564
  Payable for registration and filing
   fees..............................           21,199
  Payable for securities purchased...          824,693
  Payable for service and
   distribution expenses (Note 2)....        1,246,800
  Payable for transfer agent fees
   (Note 2)..........................          578,391
  Other accrued expenses.............           53,902
                                       ---------------
    Total liabilities................       11,742,911
  Minority interest (Notes 1 & 2)....               --
                                       ---------------
Net assets...........................  $ 1,721,119,059
                                       ---------------
                                       ---------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-85
<PAGE>   1236
                             GT GLOBAL THEME FUNDS
 
                              STATEMENT OF ASSETS
                            AND LIABILITIES  (cont'd)
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         GT GLOBAL
                                       -----------------------------------------------------------------------------
                                          CONSUMER                                                        NATURAL
                                        PRODUCTS AND      FINANCIAL                    INFRASTRUCTURE    RESOURCES
                                       SERVICES FUND-   SERVICES FUND-      HEALTH         FUND-           FUND-
                                        CONSOLIDATED     CONSOLIDATED        CARE       CONSOLIDATED    CONSOLIDATED
                                          (NOTE 1)         (NOTE 1)          FUND         (NOTE 1)        (NOTE 1)
                                       --------------   --------------   ------------  --------------   ------------
<S>                                    <C>              <C>              <C>           <C>              <C>
Class A:
  Net assets.........................   $ 62,637,424     $29,639,233     $472,082,753   $38,281,107     $ 69,975,533
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
  Shares outstanding.................      2,823,290       1,720,718       16,869,933     2,550,862        3,388,224
  Net asset value and redemption
   price per share...................   $      22.19     $     17.22     $      27.98   $     15.01     $      20.65
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
  Maximum offering price per share
   (100/95.25 of Class A net asset
   value) *..........................   $      23.30     $     18.08     $      29.38   $     15.76     $      21.68
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
Class B:+
  Net assets.........................   $ 93,978,324     $47,584,875     $147,440,444   $57,199,440     $ 86,812,455
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
  Shares outstanding.................      4,298,574       2,803,980        5,406,267     3,878,968        4,262,012
  Net asset value and offering price
   per share.........................   $      21.86     $     16.97     $      27.27   $     14.75     $      20.37
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
Advisor Class:
  Net assets.........................   $  6,046,565     $ 3,737,526     $  6,818,920   $ 2,538,512     $ 14,885,585
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
  Shares outstanding.................        268,724         214,778          240,609       166,702          715,607
  Net asset value, offering price per
   share, and redemption price per
   share.............................   $      22.50     $     17.40     $      28.34   $     15.23     $      20.80
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
Net assets consist of:
  Paid in capital (Note 4)...........   $139,734,245     $70,584,296     $418,339,020   $78,555,962     $132,802,223
  Undistributed net investment
   income............................             --              --               --            --               --
  Accumulated net realized gain on
   investments and foreign currency
   transactions......................     14,374,566       2,469,935      144,809,745       733,004        4,606,185
  Net unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies........................          5,059          65,905         (257,012)      (44,701)        (108,904)
  Net unrealized appreciation of
   investments.......................      8,548,443       7,841,498       63,450,364    18,774,794       34,374,069
                                       --------------   --------------   ------------  --------------   ------------
Total -- representing net assets
 applicable to capital shares
 outstanding.........................   $162,662,313     $80,961,634     $626,342,117   $98,019,059     $171,673,573
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
 
<CAPTION>
 
                                          TELECOM-
                                         MUNICATIONS
                                            FUND
                                       ---------------
<S>                                    <C>
Class A:
  Net assets.........................  $   910,801,431
                                       ---------------
                                       ---------------
  Shares outstanding.................       50,482,268
  Net asset value and redemption
   price per share...................  $         18.04
                                       ---------------
                                       ---------------
  Maximum offering price per share
   (100/95.25 of Class A net asset
   value) *..........................  $         18.94
                                       ---------------
                                       ---------------
Class B:+
  Net assets.........................  $   805,535,052
                                       ---------------
                                       ---------------
  Shares outstanding.................       45,831,329
  Net asset value and offering price
   per share.........................  $         17.58
                                       ---------------
                                       ---------------
Advisor Class:
  Net assets.........................  $     4,782,576
                                       ---------------
                                       ---------------
  Shares outstanding.................          261,622
  Net asset value, offering price per
   share, and redemption price per
   share.............................  $         18.28
                                       ---------------
                                       ---------------
Net assets consist of:
  Paid in capital (Note 4)...........  $ 1,284,396,946
  Undistributed net investment
   income............................            5,534
  Accumulated net realized gain on
   investments and foreign currency
   transactions......................      113,512,388
  Net unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies........................       (2,747,786)
  Net unrealized appreciation of
   investments.......................      325,951,977
                                       ---------------
Total -- representing net assets
 applicable to capital shares
 outstanding.........................  $ 1,721,119,059
                                       ---------------
                                       ---------------
<FN>
- ----------------
    * On sales of $50,000 or more, the offering price is reduced.
    + Redemption price per share is equal to the net asset value per share less
      any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-86
<PAGE>   1237
                             GT GLOBAL THEME FUNDS
 
                            STATEMENT OF OPERATIONS
 
                          Year ended October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                          GT GLOBAL
                                        -----------------------------------------------------------------------------
                                           CONSUMER                                                        NATURAL
                                         PRODUCTS AND      FINANCIAL         HEALTH     INFRASTRUCTURE    RESOURCES
                                        SERVICES FUND-   SERVICES FUND-       CARE          FUND-           FUND-
                                         CONSOLIDATED     CONSOLIDATED        FUND       CONSOLIDATED    CONSOLIDATED
                                        --------------   --------------   ------------  --------------   ------------
<S>                                     <C>              <C>              <C>           <C>              <C>
Investment income:
  Dividend income (net of foreign
   withholding tax of $116,237,
   $77,681, $47,010, $134,900,
   $37,547, and $1,130,922,
   respectively)......................   $ 1,313,121       $  984,532     $  1,039,797    $1,596,063     $   449,578
  Interest income.....................       547,671          222,469        3,553,024       438,660         389,867
  Other income........................            --               --           10,693            --              --
                                        --------------   --------------   ------------  --------------   ------------
    Total investment income...........     1,860,792        1,207,001        4,603,514     2,034,723         839,445
                                        --------------   --------------   ------------  --------------   ------------
Expenses:
  Investment management and
   administration fees (Note 2).......     1,624,151          466,730        5,820,067     1,038,752       1,317,793
  Amortization of organization costs
   (Note 1)...........................        10,300           12,622               --        10,300          10,300
  Custodian fees (Note 1).............        37,548           43,877           41,984        32,117          46,437
  Directors' and Trustees' fees and
   expenses (Note 2)..................        10,068           15,695           13,505        16,060          16,464
  Fund accounting fees (Note 2).......        43,330           12,292          153,780        27,303          34,698
  Professional fees...................        62,925           77,090           73,277        74,770          86,956
  Printing and postage expenses.......        53,290           27,560          239,520        49,065          54,239
  Registration and filing fees........        75,895           50,741           80,092        54,967          80,810
  Service and distribution expenses:
   (Note 2)
    Class A...........................       351,953           97,454        2,327,631       218,486         291,788
    Class B...........................       941,035          280,650        1,316,284       621,768         733,200
  Transfer agent fees (Note 2)........       547,348          177,473        1,346,860       364,416         478,946
  Other expenses......................        10,567            7,531           34,305        17,058          81,546
                                        --------------   --------------   ------------  --------------   ------------
    Total expenses before
     reductions.......................     3,768,410        1,269,715       11,447,305     2,525,062       3,233,177
                                        --------------   --------------   ------------  --------------   ------------
    Expense reductions (Notes 1 &
     5)...............................      (244,767)         (31,702)        (178,043)      (84,870)       (138,074)
                                        --------------   --------------   ------------  --------------   ------------
  Total net expenses..................     3,523,643        1,238,013       11,269,262     2,440,192       3,095,103
                                        --------------   --------------   ------------  --------------   ------------
Net investment loss...................    (1,662,851)         (31,012)      (6,665,748)     (405,469)     (2,255,658)
                                        --------------   --------------   ------------  --------------   ------------
Net realized and unrealized gain on
  investments and foreign currencies:
  (Note 1)
  Net realized gain on investments....    16,725,116        2,648,364      153,144,761       380,153       7,635,020
  Net realized gain (loss) on foreign
   currency transactions..............      (557,667)         (19,802)         454,546       398,459         (94,442)
                                        --------------   --------------   ------------  --------------   ------------
    Net realized gain during the
     year.............................    16,167,449        2,628,562      153,599,307       778,612       7,540,578
                                        --------------   --------------   ------------  --------------   ------------
  Net change in unrealized
   appreciation (depreciation) on
   translation of assets and
   liabilities in foreign
   currencies.........................         5,172           58,275         (569,426)     (116,926)       (125,779)
  Net change in unrealized
   appreciation (depreciation) of
   investments........................      (714,518)       6,449,986        1,308,779     8,647,635      18,607,939
                                        --------------   --------------   ------------  --------------   ------------
    Net unrealized appreciation
     (depreciation) during the period
     .................................      (709,346)       6,508,261          739,353     8,530,709      18,482,160
                                        --------------   --------------   ------------  --------------   ------------
Net realized and unrealized gain on
 investments and foreign currencies...    15,458,103        9,136,823      154,338,660     9,309,321      26,022,738
                                        --------------   --------------   ------------  --------------   ------------
Net increase in net assets resulting
 from operations......................   $13,795,252       $9,105,811     $147,672,912    $8,903,852     $23,767,080
                                        --------------   --------------   ------------  --------------   ------------
                                        --------------   --------------   ------------  --------------   ------------
 
<CAPTION>
 
                                          TELECOM-
                                         MUNICATIONS
                                            FUND
                                        -------------
<S>                                     <C>
Investment income:
  Dividend income (net of foreign
   withholding tax of $116,237,
   $77,681, $47,010, $134,900,
   $37,547, and $1,130,922,
   respectively)......................  $  12,312,099
  Interest income.....................      2,451,921
  Other income........................        100,726
                                        -------------
    Total investment income...........     14,864,746
                                        -------------
Expenses:
  Investment management and
   administration fees (Note 2).......     17,999,111
  Amortization of organization costs
   (Note 1)...........................             --
  Custodian fees (Note 1).............        744,400
  Directors' and Trustees' fees and
   expenses (Note 2)..................         27,375
  Fund accounting fees (Note 2).......        493,322
  Professional fees...................         89,205
  Printing and postage expenses.......        421,575
  Registration and filing fees........        110,230
  Service and distribution expenses:
   (Note 2)
    Class A...........................      5,105,842
    Class B...........................      8,933,516
  Transfer agent fees (Note 2)........      5,229,276
  Other expenses......................        619,413
                                        -------------
    Total expenses before
     reductions.......................     39,773,265
                                        -------------
    Expense reductions (Notes 1 &
     5)...............................     (1,051,898)
                                        -------------
  Total net expenses..................     38,721,367
                                        -------------
Net investment loss...................    (23,856,621)
                                        -------------
Net realized and unrealized gain on
  investments and foreign currencies:
  (Note 1)
  Net realized gain on investments....    101,709,075
  Net realized gain (loss) on foreign
   currency transactions..............     18,717,671
                                        -------------
    Net realized gain during the
     year.............................    120,426,746
                                        -------------
  Net change in unrealized
   appreciation (depreciation) on
   translation of assets and
   liabilities in foreign
   currencies.........................     (7,132,389)
  Net change in unrealized
   appreciation (depreciation) of
   investments........................    217,773,979
                                        -------------
    Net unrealized appreciation
     (depreciation) during the period
     .................................    210,641,590
                                        -------------
Net realized and unrealized gain on
 investments and foreign currencies...    331,068,336
                                        -------------
Net increase in net assets resulting
 from operations......................  $ 307,211,715
                                        -------------
                                        -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-87
<PAGE>   1238
                             GT GLOBAL THEME FUNDS
 
                      STATEMENTS OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                  GT GLOBAL
                                -----------------------------------------------------------------------------
                                 CONSUMER PRODUCTS AND      FINANCIAL SERVICES
                                        SERVICES             FUND-CONSOLIDATED            HEALTH CARE
                                   FUND-CONSOLIDATED      -----------------------             FUND
                                ------------------------               YEAR ENDED  --------------------------
                                YEAR ENDED   YEAR ENDED   YEAR ENDED    OCTOBER     YEAR ENDED    YEAR ENDED
                                OCTOBER 31,  OCTOBER 31,  OCTOBER 31,     31,      OCTOBER 31,   OCTOBER 31,
                                   1997         1996         1997         1996         1997          1996
                                -----------  -----------  -----------  ----------  ------------  ------------
<S>                             <C>          <C>          <C>          <C>         <C>           <C>
Increase (decrease) in net
assets
Operations:
  Net investment income
   (loss).....................  $(1,662,851) $  (806,945) $   (31,012) $   18,823  $ (6,665,748) $ (4,508,835)
  Net realized gain on
   investments and foreign
   currency transactions......   16,167,449    8,472,742    2,628,562   1,764,380   153,599,307   176,889,538
  Net change in unrealized
   appreciation (depreciation)
   on translation of assets
   and liabilities in foreign
   currencies.................        5,172       (7,034)      58,275      (6,352)     (569,426)     (547,070)
  Net change in unrealized
   appreciation (depreciation)
   of investments.............     (714,518)   8,880,649    6,449,986     615,083     1,308,779   (53,392,951)
                                -----------  -----------  -----------  ----------  ------------  ------------
    Net increase in net assets
     resulting from
     operations...............   13,795,252   16,539,412    9,105,811   2,391,934   147,672,912   118,440,682
                                -----------  -----------  -----------  ----------  ------------  ------------
Class A:
Distributions to shareholders:
 (Note 1)
  From net investment
   income.....................           --           --           --     (56,390)           --            --
  From net realized gain on
   investments................   (3,424,902)    (217,050)    (580,522)     (8,739)  (34,613,411)  (54,405,334)
Class B:
Distributions to shareholders:
 (Note 1)
  From net investment
   income.....................           --           --           --     (37,999)           --            --
  From net realized gain on
   investments................   (4,055,905)    (180,431)    (823,692)     (7,991)   (8,701,491)   (9,956,648)
Advisor Class:
Distributions to shareholders:
 (Note 1)
  From net investment
   income.....................           --           --           --        (377)           --            --
  From net realized gain on
   investments................     (308,573)      (5,969)      (5,018)        (43)      (57,488)      (69,184)
                                -----------  -----------  -----------  ----------  ------------  ------------
    Total distributions.......   (7,789,380)    (403,450)  (1,409,232)   (111,539)  (43,372,390)  (64,431,166)
                                -----------  -----------  -----------  ----------  ------------  ------------
Capital share transactions:
(Note 4)
  Increase from capital shares
   sold and reinvested........  136,239,369  241,650,741  130,520,030  19,900,814  1,007,452,632 2,138,295,778
  Decrease from capital shares
   repurchased................  (151,833,735) (92,740,871) (74,514,633) (15,187,336) (1,062,045,275) (2,113,330,083)
                                -----------  -----------  -----------  ----------  ------------  ------------
    Net increase (decrease)
     from capital share
     transactions.............  (15,594,366) 148,909,870   56,005,397   4,713,478   (54,592,643)   24,965,695
                                -----------  -----------  -----------  ----------  ------------  ------------
Total increase (decrease) in
 net assets...................   (9,588,494) 165,045,832   63,701,976   6,993,873    49,707,879    78,975,211
Net assets:
  Beginning of year...........  172,250,807    7,204,975   17,259,658  10,265,785   576,634,238   497,659,027
                                -----------  -----------  -----------  ----------  ------------  ------------
  End of year *...............  $162,662,313 $172,250,807 $80,961,634  $17,259,658 $626,342,117  $576,634,238
                                -----------  -----------  -----------  ----------  ------------  ------------
                                -----------  -----------  -----------  ----------  ------------  ------------
 * Includes accumulated net
   investment income/(loss)...  $        --  $        --  $        --  $       --  $         --  $         --
                                -----------  -----------  -----------  ----------  ------------  ------------
                                -----------  -----------  -----------  ----------  ------------  ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-88
<PAGE>   1239
                             GT GLOBAL THEME FUNDS
 
                  STATEMENTS OF CHANGES IN NET ASSETS (cont'd)
 
<TABLE>
<CAPTION>
                                                                 GT GLOBAL
                                ----------------------------------------------------------------------------
                                    INFRASTRUCTURE
                                  FUND-CONSOLIDATED        NATURAL RESOURCES          TELECOMMUNICATIONS
                                ----------------------     FUND-CONSOLIDATED                 FUND
                                YEAR ENDED  YEAR ENDED  ------------------------  --------------------------
                                 OCTOBER     OCTOBER    YEAR ENDED   YEAR ENDED    YEAR ENDED    YEAR ENDED
                                   31,         31,      OCTOBER 31,  OCTOBER 31,  OCTOBER 31,   OCTOBER 31,
                                   1997        1996        1997         1996          1997          1996
                                ----------  ----------  -----------  -----------  ------------  ------------
<S>                             <C>          <C>          <C>          <C>         <C>           <C>
Increase (decrease) in net
assets
Operations:
  Net investment income
   (loss).....................  $ (405,469) $ (421,987) $(2,255,658) $(1,055,526) $(23,856,621) $(26,498,477)
  Net realized gain on
   investments and foreign
   currency transactions......     778,612   5,308,138    7,540,578    7,316,705   120,426,746   230,489,793
  Net change in unrealized
   appreciation (depreciation)
   on translation of assets
   and liabilities in foreign
   currencies.................    (116,926)    (86,155)    (125,779)      65,378    (7,132,389)  (21,852,465)
  Net change in unrealized
   appreciation (depreciation)
   of investments.............   8,647,635   9,582,726   18,607,939   14,910,009   217,773,979    (5,766,662)
                                ----------  ----------  -----------  -----------  ------------  ------------
    Net increase in net assets
     resulting from
     operations...............   8,903,852  14,382,722   23,767,080   21,236,566   307,211,715   176,372,189
                                ----------  ----------  -----------  -----------  ------------  ------------
Class A:
Distributions to shareholders:
 (Note 1)
  From net investment
   income.....................          --          --           --      (46,497)           --            --
  From net realized gain on
   investments................  (1,943,050)         --   (1,915,988)      (9,643)  (95,676,425)  (64,901,484)
Class B:
Distributions to shareholders:
 (Note 1)
  From net investment
   income.....................          --          --           --           --            --            --
  From net realized gain on
   investments................  (2,733,339)         --   (2,369,395)     (10,136)  (83,596,023)  (54,643,650)
Advisor Class:
Distributions to shareholders:
 (Note 1)
  From net investment
   income.....................          --          --           --         (853)           --            --
  From net realized gain on
   investments................     (17,129)         --     (134,145)         (69)     (176,806)      (33,321)
                                ----------  ----------  -----------  -----------  ------------  ------------
    Total distributions.......  (4,693,518)         --   (4,419,528)     (67,198) (179,449,254) (119,578,455)
                                ----------  ----------  -----------  -----------  ------------  ------------
Capital share transactions:
(Note 4)
  Increase from capital shares
   sold and reinvested........  44,324,471  42,853,853  377,334,346  219,606,793  1,783,734,946 3,156,330,159
  Decrease from capital shares
   repurchased................  (42,934,337) (51,456,466) (336,987,548) (155,468,156) (2,403,405,013) (3,466,020,319)
                                ----------  ----------  -----------  -----------  ------------  ------------
    Net increase (decrease)
     from capital share
     transactions.............   1,390,134  (8,602,613)  40,346,798   64,138,637  (619,670,067) (309,690,160)
                                ----------  ----------  -----------  -----------  ------------  ------------
Total increase (decrease) in
 net assets...................   5,600,468   5,780,109   59,694,350   85,308,005  (491,907,606) (252,896,426)
Net assets:
  Beginning of year...........  92,418,591  86,638,482  111,979,223   26,671,218  2,213,026,665 2,465,923,091
                                ----------  ----------  -----------  -----------  ------------  ------------
  End of year *...............  $98,019,059 $92,418,591 $171,673,573 $111,979,223 $1,721,119,059 $2,213,026,665
                                ----------  ----------  -----------  -----------  ------------  ------------
                                ----------  ----------  -----------  -----------  ------------  ------------
 * Includes accumulated net
   investment income/(loss)...  $       --  $       --  $        --  $        --  $      5,534  $      5,534
                                ----------  ----------  -----------  -----------  ------------  ------------
                                ----------  ----------  -----------  -----------  ------------  ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-89
<PAGE>   1240
                             GT GLOBAL THEME FUNDS
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
 
<TABLE>
<S>                                       <C>         <C>         <C>
statements.
<CAPTION>
<S>                                       <C>         <C>         <C>
<CAPTION>
                                             CONSUMER PRODUCTS AND SERVICES FUND
                                          ------------------------------------------
                                                           CLASS A
                                          ------------------------------------------
                                                                  DECEMBER 30, 1994
                                          YEAR ENDED OCTOBER 31,   (COMMENCEMENT OF
                                                                    OPERATIONS) TO
                                          ----------------------     OCTOBER 31,
                                           1997 (D)    1996 (D)        1995 (D)
                                          ----------  ----------  ------------------
<S>                                       <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   20.98   $   14.59       $   11.43
                                          ----------  ----------       --------
Income from investment operations:
  Net investment income (loss)..........      (0.15)      (0.22)           0.02*
  Net realized and unrealized gain on
   investments..........................       2.27        7.13            3.14
                                          ----------  ----------       --------
    Net increase from investment
     operations.........................       2.12        6.91            3.16
                                          ----------  ----------       --------
Distributions to shareholders:
  From net realized gain on
   investments..........................      (0.91)      (0.52)             --
                                          ----------  ----------       --------
    Total distributions.................      (0.91)      (0.52)             --
                                          ----------  ----------       --------
Net asset value, end of period..........  $   22.19   $   20.98       $   14.59
                                          ----------  ----------       --------
                                          ----------  ----------       --------
 
Total investment return (c).............      10.55%      48.82%          27.65 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  62,637   $  76,900       $   4,082
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      (0.72)%     (1.14)%          0.20 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      (0.87)%     (1.24)%        (11.11)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       1.84%       2.24%           2.32 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       1.99%       2.34%          13.63 % (a)
Portfolio turnover rate++...............        392%        169%            240 % (a)
Average commission rate per share paid
 on portfolio transactions++............  $  0.0319   $  0.0545             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., net
     investment income per share would have been reduced by $1.12, $1.04
     and $0.61 for Class A, Class B and Advisor Class, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-90
<PAGE>   1241
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                 CONSUMER PRODUCTS AND SERVICES FUND
                                          ---------------------------------------------------------------------------------
                                                           CLASS B
                                          ------------------------------------------             ADVISOR CLASS+
                                                                                      -------------------------------------
                                                                  DECEMBER 30, 1994
                                          YEAR ENDED OCTOBER 31,   (COMMENCEMENT OF   YEAR ENDED OCTOBER 31,  JUNE 1, 1995
                                                                    OPERATIONS) TO                                 TO
                                          ----------------------     OCTOBER 31,      ----------------------   OCTOBER 31,
                                           1997 (D)    1996 (D)        1995 (D)        1997 (D)    1996 (D)     1995 (D)
                                          ----------  ----------  ------------------  ----------  ----------  -------------
<S>                                       <C>         <C>         <C>                 <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   20.79   $   14.53       $   11.43       $   21.15   $   14.64     $   11.84
                                          ----------  ----------       --------       ----------  ----------  -------------
Income from investment operations:
  Net investment income (loss)..........      (0.24)      (0.31)          (0.04) *        (0.04)      (0.13)         0.04*
  Net realized and unrealized gain on
   investments..........................       2.22        7.09            3.14            2.30        7.16          2.76
                                          ----------  ----------       --------       ----------  ----------  -------------
    Net increase from investment
     operations.........................       1.98        6.78            3.10            2.26        7.03          2.80
                                          ----------  ----------       --------       ----------  ----------  -------------
Distributions to shareholders:
  From net realized gain on
   investments..........................      (0.91)      (0.52)             --           (0.91)      (0.52)           --
                                          ----------  ----------       --------       ----------  ----------  -------------
    Total distributions.................      (0.91)      (0.52)             --           (0.91)      (0.52)           --
                                          ----------  ----------       --------       ----------  ----------  -------------
Net asset value, end of period..........  $   21.86   $   20.79       $   14.53       $   22.50   $   21.15     $   14.64
                                          ----------  ----------       --------       ----------  ----------  -------------
                                          ----------  ----------       --------       ----------  ----------  -------------
 
Total investment return (c).............       9.95%      48.11%          27.12 % (b)     11.15%      49.50%        23.65%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  93,978   $  87,904       $   2,959       $   6,047   $   7,446     $     164
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      (1.22)%     (1.64)%         (0.30)% (a)     (0.22)%     (0.64)%        0.70%(a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      (1.37)%     (1.74)%        (11.61)% (a)     (0.37)%     (0.74)%      (10.61)%(a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       2.34%       2.74%           2.82 % (a)      1.34%       1.74%         1.82%(a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       2.49%       2.84%          14.13 % (a)      1.49%       1.84%        13.13%(a)
Portfolio turnover rate++...............        392%        169%            240 % (a)       392%        169%          240%(a)
Average commission rate per share paid
 on portfolio transactions++............  $  0.0319   $  0.0545             N/A       $  0.0319   $  0.0545           N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., net
     investment income per share would have been reduced by $1.12, $1.04
     and $0.61 for Class A, Class B and Advisor Class, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-91
<PAGE>   1242
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
 
<TABLE>
<S>                                       <C>         <C>         <C>          <C>
derived from information provided in the financial statements.
<CAPTION>
<S>                                       <C>         <C>         <C>          <C>
<CAPTION>
                                                          FINANCIAL SERVICES FUND
                                          -------------------------------------------------------
                                                                  CLASS A
                                          -------------------------------------------------------
                                                                                  MAY 31, 1994
                                                YEAR ENDED OCTOBER 31,          (COMMENCEMENT OF
                                          -----------------------------------    OPERATIONS) TO
                                           1997 (D)    1996 (D)    1995 (D)     OCTOBER 31, 1994
                                          ----------  ----------  -----------  ------------------
<S>                                       <C>         <C>         <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   14.20   $   11.92    $   11.62       $   11.43
                                          ----------  ----------  -----------       --------
Income from investment operations:
  Net investment income (loss)..........       0.04        0.05*        0.17* *          0.02* * *
  Net realized and unrealized gain on
   investments..........................       3.97        2.36         0.13            0.17
                                          ----------  ----------  -----------       --------
    Net increase from investment
     operations.........................       4.01        2.41         0.30            0.19
                                          ----------  ----------  -----------       --------
Distributions to shareholders:
  From net investment income............         --       (0.12)          --              --
  From net realized gain on
   investments..........................      (0.99)      (0.01)          --              --
                                          ----------  ----------  -----------       --------
    Total distributions.................      (0.99)      (0.13)          --              --
                                          ----------  ----------  -----------       --------
Net asset value, end of period..........  $   17.22   $   14.20    $   11.92       $   11.62
                                          ----------  ----------  -----------       --------
                                          ----------  ----------  -----------       --------
 
Total investment return (c).............      29.91%      20.21%        2.58%           1.66 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  29,639   $   7,302    $   5,687       $   3,175
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       0.23%       0.41%        1.46%           0.66 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       0.16%      (0.66)%      (5.34)%         (7.26)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       2.29%       2.32%        2.34%           2.40 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       2.36%       3.39%        9.14%          10.32 % (a)
Portfolio turnover rate++...............         91%        103%         170%             53 % (a)
Average commission rate per share paid
 on portfolio transactions++............  $  0.0014   $  0.0080          N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.13 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.59, $0.59
     and $0.30 for Class A, Class B and Advisor Class, respectively.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.23 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-92
<PAGE>   1243
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
<TABLE>
<CAPTION>
                                                                      FINANCIAL SERVICES FUND
                                          -------------------------------------------------------------------------------
                                                                                                       ADVISOR CLASS+
                                                                  CLASS B                          ----------------------
                                          -------------------------------------------------------
                                                                                  MAY 31, 1994     YEAR ENDED OCTOBER 31,
                                                YEAR ENDED OCTOBER 31,          (COMMENCEMENT OF
                                          -----------------------------------    OPERATIONS) TO    ----------------------
                                           1997 (D)    1996 (D)    1995 (D)     OCTOBER 31, 1994    1997 (D)    1996 (D)
                                          ----------  ----------  -----------  ------------------  ----------  ----------
<S>                                       <C>         <C>         <C>          <C>                 <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   14.06   $   11.83    $   11.60       $   11.43       $   14.26   $   11.95
                                          ----------  ----------  -----------       --------       ----------  ----------
Income from investment operations:
  Net investment income (loss)..........      (0.04)      (0.01) *       0.11* *          0.00 * *      0.12        0.12*
  Net realized and unrealized gain on
   investments..........................       3.94        2.34         0.12            0.17            4.01        2.36
                                          ----------  ----------  -----------       --------       ----------  ----------
    Net increase from investment
     operations.........................       3.90        2.33         0.23            0.17            4.13        2.48
                                          ----------  ----------  -----------       --------       ----------  ----------
Distributions to shareholders:
  From net investment income............         --       (0.09)          --              --              --       (0.16)
  From net realized gain on
   investments..........................      (0.99)      (0.01)          --              --           (0.99)      (0.01)
                                          ----------  ----------  -----------       --------       ----------  ----------
    Total distributions.................      (0.99)      (0.10)          --              --           (0.99)      (0.17)
                                          ----------  ----------  -----------       --------       ----------  ----------
Net asset value, end of period..........  $   16.97   $   14.06    $   11.83       $   11.60       $   17.40   $   14.26
                                          ----------  ----------  -----------       --------       ----------  ----------
                                          ----------  ----------  -----------       --------       ----------  ----------
 
Total investment return (c).............      29.13%      19.81%        1.98%           1.49 % (b)     30.52%      20.87%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  47,585   $   9,886    $   4,548       $   2,235       $   3,738   $      72
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      (0.27)%     (0.09)%       0.96%           0.16 % (a)      0.73%       0.91%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      (0.34)%     (1.16)%      (5.84)%         (7.76)% (a)      0.66%(a)     (0.16)%
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       2.79%       2.82%        2.84%           2.90 % (a)      1.79%       1.82%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       2.86%       3.89%        9.64%          10.82 % (a)      1.86%       2.89%
Portfolio turnover rate++...............         91%        103%         170%             53 % (a)        91%        103%
Average commission rate per share paid
 on portfolio transactions++............  $  0.0014   $  0.0080          N/A             N/A       $  0.0014   $  0.0080
 
<CAPTION>
 
                                          JUNE 1, 1995
                                               TO
                                           OCTOBER 31,
                                            1995 (D)
                                          -------------
<S>                                       <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   11.09
                                          -------------
Income from investment operations:
  Net investment income (loss)..........         0.09* *
  Net realized and unrealized gain on
   investments..........................         0.77
                                          -------------
    Net increase from investment
     operations.........................         0.86
                                          -------------
Distributions to shareholders:
  From net investment income............           --
  From net realized gain on
   investments..........................           --
                                          -------------
    Total distributions.................           --
                                          -------------
Net asset value, end of period..........    $   11.95
                                          -------------
                                          -------------
Total investment return (c).............         7.75%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $      31
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.96%(a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (4.84)%(a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.84%(a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         8.64%(a)
Portfolio turnover rate++...............          170%
Average commission rate per share paid
 on portfolio transactions++............          N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.13 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.59, $0.59
     and $0.30 for Class A, Class B and Advisor Class, respectively.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.23 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-93
<PAGE>   1244
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
<TABLE>
<CAPTION>
 
                                                               HEALTH CARE FUND
                                          ----------------------------------------------------------
                                                                   CLASS A+
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)    1996 (D)      1995      1994 (D)    1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   23.60   $   21.84   $   19.60   $   17.86   $   17.44
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment loss...................      (0.25)      (0.17)      (0.15)      (0.22)      (0.15)
  Net realized and unrealized gain on
   investments..........................       6.48        4.79        3.73        2.02        0.57
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       6.23        4.62        3.58        1.80        0.42
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net realized gain on
   investments..........................      (1.85)      (2.86)      (1.34)         --          --
  In excess of net realized gain on
   investments..........................         --          --          --       (0.06)         --
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (1.85)      (2.86)      (1.34)      (0.06)         --
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $   27.98   $   23.60   $   21.84   $   19.60   $   17.86
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............      28.36%      23.14%      19.79%      10.11%        2.4%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 472,083   $ 467,861   $ 426,380   $ 438,940   $ 461,113
Ratio of net investment loss to average
 net assets:
  With expense reductions (Notes 1 &
   5)...................................      (1.00)%     (0.71)%     (0.72)%     (1.23)%      (0.9)%
  Without expense reductions............      (1.03)%     (0.75)%     (0.78)%       N/A         N/A
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................       1.77%       1.80%       1.85%       1.98%        2.0%
  Without expense reductions............       1.80%       1.84%       1.91%        N/A         N/A
Portfolio turnover rate++++.............        149%        157%         99%         64%         61%
Average commission rate per share paid
 on portfolio transactions++++..........  $  0.0490   $  0.0548         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charge.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  All capital shares issued and outstanding as of March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-94
<PAGE>   1245
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
<TABLE>
<CAPTION>
                                                                            HEALTH CARE FUND
                                          -------------------------------------------------------------------------------------
                                                                                                            ADVISOR CLASS+++
                                                                    CLASS B++                            ----------------------
                                          -------------------------------------------------------------
                                                                                          APRIL 1, 1993  YEAR ENDED OCTOBER 31,
                                                      YEAR ENDED OCTOBER 31,                   TO
                                          ----------------------------------------------   OCTOBER 31,   ----------------------
                                           1997 (D)    1996 (D)      1995      1994 (D)     1993 (D)      1997 (D)    1996 (D)
                                          ----------  ----------  ----------  ----------  -------------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>            <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   23.15   $   21.56   $   19.46   $   17.80     $   15.59    $   23.77   $   21.88
                                          ----------  ----------  ----------  ----------  -------------  ----------  ----------
Income from investment operations:
  Net investment loss...................      (0.37)      (0.27)      (0.25)      (0.32)        (0.14)       (0.12)      (0.05)
  Net realized and unrealized gain on
   investments..........................       6.34        4.72        3.69        2.02          2.35         6.54        4.80
                                          ----------  ----------  ----------  ----------  -------------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       5.97        4.45        3.44        1.70          2.21         6.42        4.75
                                          ----------  ----------  ----------  ----------  -------------  ----------  ----------
Distributions to shareholders:
  From net realized gain on
   investments..........................      (1.85)      (2.86)      (1.34)         --            --        (1.85)      (2.86)
  In excess of net realized gain on
   investments..........................         --          --          --       (0.04)           --           --          --
                                          ----------  ----------  ----------  ----------  -------------  ----------  ----------
    Total distributions.................      (1.85)      (2.86)      (1.34)      (0.04)           --        (1.85)      (2.86)
                                          ----------  ----------  ----------  ----------  -------------  ----------  ----------
Net asset value, end of period..........  $   27.27   $   23.15   $   21.56   $   19.46     $   17.80    $   28.34   $   23.77
                                          ----------  ----------  ----------  ----------  -------------  ----------  ----------
                                          ----------  ----------  ----------  ----------  -------------  ----------  ----------
 
Total investment return (c).............      27.75%      22.59%      19.17%       9.55%         14.2%(b)     29.00%     23.82%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 147,440   $ 107,622   $  70,740   $  39,100     $   8,604    $   6,819   $   1,152
Ratio of net investment loss to average
 net assets:
  With expense reductions (Notes 1 &
   5)...................................      (1.50)%     (1.21)%     (1.22)%     (1.73)%        (1.4)%(a)     (0.50)%     (0.21)%
  Without expense reductions............      (1.53)%     (1.25)%     (1.28)%       N/A           N/A        (0.53)%     (0.25)%
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................       2.27%       2.30%       2.35%       2.48%         2.50%(a)      1.27%      1.30%
  Without expense reductions............       2.30%       2.34%       2.41%        N/A           N/A         1.30%       1.34%
Portfolio turnover rate++++.............        149%        157%         99%         64%           61%         149%        157%
Average commission rate per share paid
 on portfolio transactions++++..........  $  0.0490   $  0.0548         N/A         N/A           N/A    $  0.0490   $  0.0548
 
<CAPTION>
 
                                          JUNE 1, 1995
                                               TO
                                           OCTOBER 31,
                                              1995
                                          -------------
<S>                                       <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   18.66
                                          -------------
Income from investment operations:
  Net investment loss...................        (0.02)
  Net realized and unrealized gain on
   investments..........................         3.24
                                          -------------
    Net increase (decrease) from
     investment operations..............         3.22
                                          -------------
Distributions to shareholders:
  From net realized gain on
   investments..........................           --
  In excess of net realized gain on
   investments..........................           --
                                          -------------
    Total distributions.................           --
                                          -------------
Net asset value, end of period..........    $   21.88
                                          -------------
                                          -------------
Total investment return (c).............        17.10%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $     539
Ratio of net investment loss to average
 net assets:
  With expense reductions (Notes 1 &
   5)...................................        (0.22)%(a)
  Without expense reductions............        (0.28)%(a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         1.35%(a)
  Without expense reductions............         1.41%(a)
Portfolio turnover rate++++.............           99%
Average commission rate per share paid
 on portfolio transactions++++..........          N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charge.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  All capital shares issued and outstanding as of March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-95
<PAGE>   1246
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
 
<TABLE>
<S>                                       <C>         <C>         <C>         <C>
statements.
<CAPTION>
<S>                                       <C>         <C>         <C>         <C>
<CAPTION>
                                                           INFRASTRUCTURE FUND
                                          -----------------------------------------------------
                                                                 CLASS A
                                          -----------------------------------------------------
                                                                                MAY 31, 1994
                                                YEAR ENDED OCTOBER 31,        (COMMENCEMENT OF
                                          ----------------------------------   OPERATIONS) TO
                                           1997 (D)    1996 (D)      1995     OCTOBER 31, 1994
                                          ----------  ----------  ----------  -----------------
<S>                                       <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   14.42   $   12.11   $   12.47       $   11.43
                                          ----------  ----------  ----------  -----------------
Income from investment operations:
  Net investment income (loss)..........      (0.01)      (0.03)      (0.03) *          0.01* *
  Net realized and unrealized gain
   (loss) on investments................       1.32        2.34       (0.33)           1.03
                                          ----------  ----------  ----------  -----------------
    Net increase (decrease) from
     investment operations..............       1.31        2.31       (0.36)           1.04
                                          ----------  ----------  ----------  -----------------
Distributions to shareholders:
  From net realized gain on
   investments..........................      (0.72)         --          --              --
                                          ----------  ----------  ----------  -----------------
    Total distributions.................      (0.72)         --          --              --
                                          ----------  ----------  ----------  -----------------
Net asset value, end of period..........  $   15.01   $   14.42   $   12.11       $   12.47
                                          ----------  ----------  ----------  -----------------
                                          ----------  ----------  ----------  -----------------
 
Total investment return (c).............       9.38%      19.08%      (2.89)%          9.10% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  38,281   $  38,397   $  36,241       $  23,615
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      (0.09)%     (0.19)%     (0.32)%          0.41% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      (0.17)%     (0.30)%     (0.58)%         (0.47)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       2.00%       2.14%       2.36%           2.40% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       2.08%       2.25%       2.62%           3.28% (a)
Portfolio turnover rate++...............         41%         41%         45%             18%
Average commission rate per share paid
 on portfolio transactions++............  $  0.0046   $  0.0109         N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not Annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.03 for Class
     A shares, $0.03 for Class B shares, and $0.02 for Advisor Class
     shares.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.02 for Class
     A and Class B from May 31, 1994 to October 31, 1994.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-96
<PAGE>   1247
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
                                                                       INFRASTRUCTURE FUND
                                          -----------------------------------------------------------------------------
                                                                                                     ADVISOR CLASS+
                                                                 CLASS B                         ----------------------
                                          -----------------------------------------------------
                                                                                MAY 31, 1994     YEAR ENDED OCTOBER 31,
                                                YEAR ENDED OCTOBER 31,        (COMMENCEMENT OF
                                          ----------------------------------   OPERATIONS) TO    ----------------------
                                           1997 (D)    1996 (D)      1995     OCTOBER 31, 1994    1997 (D)    1996 (D)
                                          ----------  ----------  ----------  -----------------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>                <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   14.24   $   12.03   $   12.45       $   11.43      $   14.52   $   12.14
                                          ----------  ----------  ----------  -----------------  ----------  ----------
Income from investment operations:
  Net investment income (loss)..........      (0.09)      (0.09)      (0.09) *         (0.01) * *      0.05       0.04
  Net realized and unrealized gain
   (loss) on investments................       1.32        2.30       (0.33)           1.03           1.38        2.34
                                          ----------  ----------  ----------  -----------------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       1.23        2.21       (0.42)           1.02           1.43        2.38
                                          ----------  ----------  ----------  -----------------  ----------  ----------
Distributions to shareholders:
  From net realized gain on
   investments..........................      (0.72)         --          --              --          (0.72)         --
                                          ----------  ----------  ----------  -----------------  ----------  ----------
    Total distributions.................      (0.72)         --          --              --          (0.72)         --
                                          ----------  ----------  ----------  -----------------  ----------  ----------
Net asset value, end of period..........  $   14.75   $   14.24   $   12.03       $   12.45      $   15.23   $   14.52
                                          ----------  ----------  ----------  -----------------  ----------  ----------
                                          ----------  ----------  ----------  -----------------  ----------  ----------
 
Total investment return (c).............       8.83%      18.37%      (3.37)%          8.92% (b)     10.10%      19.60%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  57,199   $  53,678   $  50,181       $  30,954      $   2,539   $     344
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      (0.59)%     (0.69)%     (0.82)%         (0.09)% (a)      0.41%      0.31%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      (0.67)%     (0.80)%     (1.08)%         (0.97)% (a)      0.33%      0.20%
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       2.50%       2.64%       2.86%           2.90% (a)      1.50%       1.64%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       2.58%       2.75%       3.12%           3.78% (a)      1.58%       1.75%
Portfolio turnover rate++...............         41%         41%         45%             18%            41%         41%
Average commission rate per share paid
 on portfolio transactions++............  $  0.0046   $  0.0109         N/A             N/A      $  0.0046   $  0.0109
 
<CAPTION>
 
                                          JUNE 1, 1995
                                               TO
                                           OCTOBER 31,
                                              1995
                                          -------------
<S>                                       <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   12.00
                                          -------------
Income from investment operations:
  Net investment income (loss)..........         0.02*
  Net realized and unrealized gain
   (loss) on investments................         0.12
                                          -------------
    Net increase (decrease) from
     investment operations..............         0.14
                                          -------------
Distributions to shareholders:
  From net realized gain on
   investments..........................           --
                                          -------------
    Total distributions.................           --
                                          -------------
Net asset value, end of period..........    $   12.14
                                          -------------
                                          -------------
Total investment return (c).............         1.17%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $     216
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         0.18%(a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (0.08)%(a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.86%(a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.12%(a)
Portfolio turnover rate++...............           45%
Average commission rate per share paid
 on portfolio transactions++............          N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not Annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.03 for Class
     A shares, $0.03 for Class B shares, and $0.02 for Advisor Class
     shares.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.02 for Class
     A and Class B from May 31, 1994 to October 31, 1994.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-97
<PAGE>   1248
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
 
<TABLE>
<S>                                       <C>         <C>         <C>         <C>
statements.
<CAPTION>
<S>                                       <C>         <C>         <C>         <C>
<CAPTION>
                                                         NATURAL RESOURCES FUND
                                          -----------------------------------------------------
                                                                 CLASS A
                                          -----------------------------------------------------
                                                                                MAY 31, 1994
                                                YEAR ENDED OCTOBER 31,        (COMMENCEMENT OF
                                          ----------------------------------   OPERATIONS) TO
                                           1997 (D)    1996 (D)      1995     OCTOBER 31, 1994
                                          ----------  ----------  ----------  -----------------
<S>                                       <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   17.43   $   11.44   $   12.41       $   11.43
                                          ----------  ----------  ----------  -----------------
Income from investment operations:
  Net investment income (loss)..........      (0.25)      (0.24)       0.04*           0.06* *
  Net realized and unrealized gain
   (loss) on investments................       4.08        6.28       (0.98)           0.92
                                          ----------  ----------  ----------  -----------------
    Net increase (decrease) from
     investment operations..............       3.83        6.04       (0.94)           0.98
                                          ----------  ----------  ----------  -----------------
Distributions to shareholders:
  From net investment income............         --       (0.04)      (0.03)             --
  From net realized gain on
   investments..........................      (0.61)      (0.01)         --              --
                                          ----------  ----------  ----------  -----------------
    Total distributions.................      (0.61)      (0.05)      (0.03)             --
                                          ----------  ----------  ----------  -----------------
Net asset value, end of period..........  $   20.65   $   17.43   $   11.44       $   12.41
                                          ----------  ----------  ----------  -----------------
                                          ----------  ----------  ----------  -----------------
 
Total investment return (c).............      22.64%      53.04%      (7.58)%          8.57% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  69,975   $  48,729   $  12,598       $  14,797
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      (1.41)%     (1.55)%      0.41%           2.63% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      (1.51)%     (1.65)%     (0.69)%          0.65% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       2.03%       2.20%       2.37%           2.40% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       2.13%       2.30%       3.47%           4.38% (a)
Portfolio turnover rate++...............        321%         94%         87%            137%
Average commission rate per share paid
 on portfolio transactions++............  $  0.0112   $  0.0243         N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income (loss) per share would have been reduced (increased)
     by $0.14, $0.13, and $0.12 for Class A, Class B, and Advisor Class,
     respectively.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.04 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-98
<PAGE>   1249
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
                                                                     NATURAL RESOURCES FUND
                                          -----------------------------------------------------------------------------
                                                                                                     ADVISOR CLASS+
                                                                 CLASS B                         ----------------------
                                          -----------------------------------------------------
                                                                                MAY 31, 1994     YEAR ENDED OCTOBER 31,
                                                YEAR ENDED OCTOBER 31,        (COMMENCEMENT OF
                                          ----------------------------------   OPERATIONS) TO    ----------------------
                                           1997 (D)    1996 (D)      1995     OCTOBER 31, 1994    1997 (D)    1996 (D)
                                          ----------  ----------  ----------  -----------------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>                <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   17.29   $   11.36   $   12.38       $   11.43      $   17.47   $   11.47
                                          ----------  ----------  ----------  -----------------  ----------  ----------
Income from investment operations:
  Net investment income (loss)..........      (0.33)      (0.31)      (0.02) *          0.03* *      (0.14)      (0.17)
  Net realized and unrealized gain
   (loss) on investments................       4.02        6.25       (0.98)           0.92           4.08        6.28
                                          ----------  ----------  ----------  -----------------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       3.69        5.94       (1.00)           0.95           3.94        6.11
                                          ----------  ----------  ----------  -----------------  ----------  ----------
Distributions to shareholders:
  From net investment income............         --          --       (0.02)             --             --       (0.10)
  From net realized gain on
   investments..........................      (0.61)      (0.01)         --              --          (0.61)      (0.01)
                                          ----------  ----------  ----------  -----------------  ----------  ----------
    Total distributions.................      (0.61)      (0.01)      (0.02)             --          (0.61)      (0.11)
                                          ----------  ----------  ----------  -----------------  ----------  ----------
Net asset value, end of period..........  $   20.37   $   17.29   $   11.36       $   12.38      $   20.80   $   17.47
                                          ----------  ----------  ----------  -----------------  ----------  ----------
                                          ----------  ----------  ----------  -----------------  ----------  ----------
 
Total investment return (c).............      21.99%      52.39%      (8.05)%          8.31% (b)     23.23%      53.76%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  86,812   $  57,749   $  13,978       $  13,404      $  14,886   $   5,502
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      (1.91)%     (2.05)%     (0.09)%          2.13% (a)     (0.91)%     (1.05)%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      (2.01)%     (2.15)%     (1.19)%          0.15% (a)     (1.01)%     (1.15)%
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       2.53%       2.70%       2.87%           2.90% (a)      1.53%       1.70%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       2.63%       2.80%       3.97%           4.88% (a)      1.63%       1.80%
Portfolio turnover rate++...............        321%         94%         87%            137%           321%         94%
Average commission rate per share paid
 on portfolio transactions++............  $  0.0112   $  0.0243         N/A             N/A      $  0.0112   $  0.0243
 
<CAPTION>
 
                                          JUNE 1, 1995
                                               TO
                                           OCTOBER 31,
                                              1995
                                          -------------
<S>                                       <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   11.45
                                          -------------
Income from investment operations:
  Net investment income (loss)..........         0.11*
  Net realized and unrealized gain
   (loss) on investments................        (0.09)
                                          -------------
    Net increase (decrease) from
     investment operations..............         0.02
                                          -------------
Distributions to shareholders:
  From net investment income............           --
  From net realized gain on
   investments..........................           --
                                          -------------
    Total distributions.................           --
                                          -------------
Net asset value, end of period..........    $   11.47
                                          -------------
                                          -------------
Total investment return (c).............         0.17%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $      95
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         0.91%(a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (0.19)%(a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.87%(a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.97%(a)
Portfolio turnover rate++...............           87%
Average commission rate per share paid
 on portfolio transactions++............          N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income (loss) per share would have been reduced (increased)
     by $0.14, $0.13, and $0.12 for Class A, Class B, and Advisor Class,
     respectively.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.04 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-99
<PAGE>   1250
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
 
<TABLE>
<S>                                       <C>         <C>         <C>         <C>         <C>
statements.
<CAPTION>
<S>                                       <C>         <C>         <C>         <C>         <C>
<CAPTION>
 
                                                           TELECOMMUNICATIONS FUND
                                          ----------------------------------------------------------
                                                                   CLASS A+
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)    1996 (D)      1995      1994 (D)      1993
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   16.69   $   16.42   $   17.80   $   16.92   $   11.16
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income (loss)..........      (0.17)      (0.13)      (0.09)      (0.01)       0.08
  Net realized and unrealized gain
   (loss) on investments................       2.93        1.22       (0.43)       1.17        5.83
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       2.76        1.09       (0.52)       1.16        5.91
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............         --          --          --       (0.01)      (0.15)
  From net realized gain on
   investments..........................      (1.41)      (0.82)      (0.86)      (0.27)         --
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (1.41)      (0.82)      (0.86)      (0.28)      (0.15)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $   18.04   $   16.69   $   16.42   $   17.80   $   16.92
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............      17.70%       7.00%      (2.88)%      7.02%      53.60%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 910,801   $1,204,428  $1,353,722  $1,644,402  $1,223,340
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions (Notes 1 &
   5)...................................      (1.01)%     (0.84)%     (0.49)%     (0.02)%      0.80%
  Without expense reductions............      (1.06)%     (0.89)%     (0.55)%       N/A         N/A
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................       1.79%       1.74%       1.77%       1.80%        2.0%
  Without expense reductions............       1.84%       1.79%       1.83%        N/A         N/A
Portfolio turnover rate++++.............         35%         37%         62%         57%         41%
Average commission rate per share paid
 on portfolio transactions++++..........  $  0.0085   $  0.0165         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not Annualized.
 (c) Total investment return does not include sales charge.
 (d) These selected per share data were calculated based upon the average
     shares outstanding during the period.
  +  All capital shares issued and outstanding March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as whole without distinguishing between the classes
     of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-100
<PAGE>   1251
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
                                                                        TELECOMMUNICATIONS FUND
                                          -----------------------------------------------------------------------------------
                                                                   CLASS B++                              ADVISOR CLASS+++
                                          -----------------------------------------------------------  ----------------------
                                                                                           APRIL 1,
                                                                                             1993      YEAR ENDED OCTOBER 31,
                                                      YEAR ENDED OCTOBER 31,                  TO
                                          ----------------------------------------------  OCTOBER 31,  ----------------------
                                           1997 (D)    1996 (D)      1995      1994 (D)      1993       1997 (D)    1996 (D)
                                          ----------  ----------  ----------  ----------  -----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>          <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   16.37   $   16.20   $   17.66   $   16.87    $   12.68   $   16.81   $   16.46
                                          ----------  ----------  ----------  ----------  -----------  ----------  ----------
Income from investment operations:
  Net investment income (loss)..........      (0.25)      (0.23)      (0.17)      (0.10)        0.01       (0.09)      (0.05)
  Net realized and unrealized gain
   (loss) on investments................       2.87        1.22       (0.43)       1.17         4.18        2.97        1.22
                                          ----------  ----------  ----------  ----------  -----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       2.62        0.99       (0.60)       1.07         4.19        2.88        1.17
                                          ----------  ----------  ----------  ----------  -----------  ----------  ----------
Distributions to shareholders:
  From net investment income............         --          --          --       (0.01)          --          --          --
  From net realized gain on
   investments..........................      (1.41)      (0.82)      (0.86)      (0.27)          --       (1.41)      (0.82)
                                          ----------  ----------  ----------  ----------  -----------  ----------  ----------
    Total distributions.................      (1.41)      (0.82)      (0.86)      (0.28)          --       (1.41)      (0.82)
                                          ----------  ----------  ----------  ----------  -----------  ----------  ----------
Net asset value, end of period..........  $   17.58   $   16.37   $   16.20   $   17.66    $   16.87   $   18.28   $   16.81
                                          ----------  ----------  ----------  ----------  -----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  -----------  ----------  ----------
 
Total investment return (c).............      17.15%       6.46%      (3.37)%      6.50%        33.0%(b)     18.33%      7.49%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 805,535   $1,007,654  $1,111,520  $1,184,081   $ 455,335   $   4,783   $     945
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions (Notes 1 &
   5)...................................      (1.51)%     (1.34)%     (0.99)%     (0.52)%        0.3%(a)     (0.51)%     (0.34)%
  Without expense reductions............      (1.56)%     (1.39)%     (1.05)%       N/A          N/A       (0.56)%     (0.39)%
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................       2.29%       2.24%       2.27%       2.30%         2.5%(a)      1.29%      1.24%
  Without expense reductions............       2.34%       2.29%       2.33%        N/A          N/A        1.34%       1.29%
Portfolio turnover rate++++.............         35%         37%         62%         57%          41%         35%         37%
Average commission rate per share paid
 on portfolio transactions++++..........  $  0.0085   $  0.0165         N/A         N/A          N/A   $  0.0085   $  0.0165
 
<CAPTION>
 
                                          JUNE 1, 1995
                                               TO
                                           OCTOBER 31,
                                              1995
                                          -------------
<S>                                       <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   15.24
                                          -------------
Income from investment operations:
  Net investment income (loss)..........           --
  Net realized and unrealized gain
   (loss) on investments................         1.22
                                          -------------
    Net increase (decrease) from
     investment operations..............         1.22
                                          -------------
Distributions to shareholders:
  From net investment income............           --
  From net realized gain on
   investments..........................           --
                                          -------------
    Total distributions.................           --
                                          -------------
Net asset value, end of period..........    $   16.46
                                          -------------
                                          -------------
Total investment return (c).............         7.94%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $     681
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions (Notes 1 &
   5)...................................         0.01%(a)
  Without expense reductions............         0.07%(a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         1.27%(a)
  Without expense reductions............         1.33%(a)
Portfolio turnover rate++++.............           62%
Average commission rate per share paid
 on portfolio transactions++++..........          N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not Annualized.
 (c) Total investment return does not include sales charge.
 (d) These selected per share data were calculated based upon the average
     shares outstanding during the period.
  +  All capital shares issued and outstanding March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as whole without distinguishing between the classes
     of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-101
<PAGE>   1252
                             GT GLOBAL THEME FUNDS
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Consumer Products and Services Fund, GT Global Financial Services
Fund, GT Global Health Care Fund, GT Global Infrastructure Fund, GT Global
Natural Resources Fund and GT Global Telecommunications Fund ("Funds") are
separate series of G.T. Investment Funds, Inc. ("Company"). Collectively, these
Funds are known as the "GT Global Theme Funds". The Company is organized as a
Maryland corporation and is registered under the Investment Company Act of 1940,
as amended ("1940 Act"), as an open-end management investment company. The
Company has thirteen series of shares in operation, each series corresponding to
a distinct portfolio of investments.
 
The GT Global Consumer Products and Services Fund, GT Global Financial Services
Fund, GT Global Infrastructure Fund, and GT Global Natural Resources Fund each
invests substantially all of its investable assets in Global Consumer Products
and Services Portfolio, Global Financial Services Portfolio, Global
Infrastructure Portfolio, and Global Natural Resources Portfolio ("Portfolios"),
respectively. Each Portfolio is organized as a subtrust of a New York common law
trust ("Trust") and is registered under the 1940 Act as an open-end management
investment company.
 
The Portfolios have investment objectives, policies, and limitations
substantially identical to those of their corresponding Funds. Therefore, the
financial statements of the aforementioned Funds and their respective Portfolios
have been presented on a consolidated basis, and represent all activities of
both the respective Funds and Portfolios. Through October 31, 1997, all of the
shares of beneficial interest of each Portfolio were owned by either its
respective Fund or Chancellor LGT Asset Management, Inc. (the "Manager"), which
has a nominal ($100) investment in each Portfolio.
 
The Funds offer Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges except that Class A and Class B
each has exclusive voting rights with respect to its distribution plan.
Investment income, realized and unrealized capital gains and losses, and the
common expenses of each Fund are allocated on a pro rata basis to each class
based on the relative net assets of each class to the total net assets of the
Fund. Each class of shares differs in its respective service and distribution
expenses, and may differ in its transfer agent, registration, and certain other
class-specific fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds and Portfolios in the preparation
of the financial statements.
 
(A) PORTFOLIO VALUATION
The Funds calculate the net asset value of and complete orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by the Manager to be the
primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments are valued at
amortized cost adjusted for foreign exchange translation and market fluctuation,
if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors or the Trusts' Board of Trustees.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors or
the Trusts' Board of Trustees.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of each Fund and Portfolio are maintained in U.S.
dollars. The market values of foreign securities, currency holdings, and other
assets and liabilities are recorded in the books and records of the Funds or
Portfolios (the phrase "Fund or Portfolio" hereinafter includes the GT Global
Health Care Fund, the GT Global Telecommunications Fund, and the four
Portfolios) after translation to U.S. dollars based on the exchange rates on
that day. The cost of each security is determined using historical exchange
rates. Income and withholding taxes are translated at prevailing exchange rates
when earned or incurred.
 
                                      FS-102
<PAGE>   1253
                             GT GLOBAL THEME FUNDS
 
A Fund or Portfolio does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from 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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's or Portfolio's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains or losses arise
from changes in the value of assets and liabilities other than investments in
securities at year end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by a Fund or Portfolio, it is
the Fund's or Portfolio's policy to always receive, as collateral, United States
government securities or other high quality debt securities of which the value,
including accrued interest, is at least equal to the amount to be repaid to the
Fund or Portfolio under each agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund or Portfolio as an unrealized gain or loss.
When the Forward Contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference between the value at the time it was opened
and the value at the time it was closed. Forward Contracts involve market risk
in excess of the amount shown in the Fund's or Portfolio's "Statement of Assets
and Liabilities". A Fund or Portfolio could be exposed to risk if a counterparty
is unable to meet the terms of the contract or if the value of the currency
changes unfavorably. A Fund or Portfolio may enter into Forward Contracts in
connection with planned purchases or sales of securities, or to hedge against
adverse fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When a Fund or Portfolio writes a call or put option, an amount equal to the
premium received is included in the Fund's or Portfolio's "Statement of Assets
and Liabilities" as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market value
of the option. The current market value of an option listed on a traded exchange
is valued at its last bid price, or, in the case of an over-the-counter option,
is valued at the average of the last bid prices obtained from brokers, unless a
quotation from only one broker is available, in which case only that broker's
price will be used. If an option expires on its stipulated expiration date or if
the Fund or Portfolio enters into a closing purchase transaction, a gain or loss
is realized without regard to any unrealized gain or loss on the underlying
security and the liability related to such option is extinguished. If a written
call option is exercised, a gain or loss is realized from the sale of the
underlying security and the proceeds of the sale are increased by the premium
originally received. If a written put option is exercised, the cost of the
underlying security purchased would be decreased by the premium originally
received. The Fund or Portfolio can write options only on a covered basis,
which, for a call, requires that the Fund or Portfolio hold the underlying
security and, for a put, requires the Fund or Portfolio to set aside cash, U.S.
government securities or other liquid securities in an amount not less than the
exercise price, or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund or Portfolio may use options to manage its
exposure to the stock market and to fluctuations in currency values or interest
rates.
 
The premium paid by the Fund or Portfolio for the purchase of a call or put
option is included in the Fund's or Portfolio's "Statement of Assets and
Liabilities" as an investment and subsequently "marked-to-market" to reflect the
current market value of the option. If an option which the Fund or Portfolio has
purchased expires on the stipulated expiration date, the Fund or Portfolio
realizes a loss in the amount of the cost of the option. If the Fund or
Portfolio enters into a closing sale transaction, the Fund or Portfolio realizes
a gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund or Portfolio
exercises a call option, the cost of the securities acquired by exercising the
call is increased by the premium paid to buy the call. If the Fund or Portfolio
exercises a put option, it realizes a gain or loss from the sale of the
underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund or Portfolio may forego
the opportunity of profit if the market value of the underlying security or
index increases and the option is exercised. The risk in writing a put option is
that the Fund or Portfolio may incur a loss if the market value of the
underlying security or index decreases and the option is exercised. In addition,
there is the risk the Fund or Portfolio may not be able to enter into a closing
transaction because of an illiquid secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract a
Fund or Portfolio is required to pledge to the broker an amount of cash or
securities equal to the minimum "initial margin" requirements of the exchange on
which the contract is traded. Pursuant to the contract, the Fund or Portfolio
agrees to receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known as
"variation margin" and are recorded by the Fund or Portfolio as unrealized gains
or losses. When the contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference
 
                                      FS-103
<PAGE>   1254
                             GT GLOBAL THEME FUNDS
 
between the value of the contract at the time it was opened and the value at the
time it was closed. The potential risk to the Fund or Portfolio is that the
change in value of the underlying securities may not correlate to the change in
value of the contracts. A Fund or Portfolio may use futures contracts to manage
its exposure to the stock market and to fluctuations in currency values or
interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out-basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. A Fund or Portfolio may
trade securities on other than normal settlement terms. This may increase the
risk if the other party to the transaction fails to deliver and causes the Fund
or Portfolio to subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1997, stocks with an aggregate value listed below were on loan to
brokers. The loans were secured by cash collateral received by the Funds or
Portfolios:
 
<TABLE>
<CAPTION>
                                                                               YEAR ENDED
                                                  OCTOBER 31, 1997            OCTOBER 31,
                                          --------------------------------        1997
                                          AGGREGATE VALUE        CASH        --------------
                                              ON LOAN         COLLATERAL     FEES RECEIVED
                                          ---------------   --------------   --------------
<S>                                       <C>               <C>              <C>
Global Consumer Products and Services
 Portfolio..............................   $  4,385,800      $   4,476,600      $121,197
Global Financial Services Portfolio.....      1,715,052          1,813,650        18,080
GT Global Health Care Fund..............     33,287,031         33,773,900        96,689
Global Infrastructure Portfolio.........      3,149,538          3,301,300        84,150
Global Natural Resources Portfolio......     12,448,138         12,910,000        66,945
GT Global Telecommunications Fund.......    132,935,037        137,795,261       888,654
</TABLE>
 
For international securities, cash collateral is received by a Fund or Portfolio
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by a Fund or Portfolio against loaned securities in the
amount at least equal to 102% of the market value of the loaned securities at
the inception of each loan. This collateral must be maintained at not less than
100% of the market value of the loaned securities during the period of the loan.
Fees received from securities loaned were used to reduce the Funds' or
Portfolios' custodian and other administrative expenses.
 
(I) TAXES
It is the intended policy of the Funds and Portfolios to meet the requirements
for qualification as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended ("Code"). It is also the intention of the Funds to make
distributions sufficient to avoid imposition of any excise tax under Section
4982 of the Code. Therefore, no provision has been made for Federal taxes on
income, capital gains, unrealized appreciation of securities held, or excise tax
on income and capital gains.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by each Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 Funds or Portfolios and timing
differences.
 
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the GT Global Consumer Products and Services Fund, GT
Global Financial Services Fund, GT Global Infrastructure Fund, and GT Global
Natural Resources Fund in connection with their organizations, their initial
registration with the Securities and Exchange Commission and with various states
and the initial public offering of its shares aggregated $51,500, $63,100,
$51,500, and $51,500, respectively. These expenses are being amortized on a
straightline basis over a five-year period.
 
(L) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's or Portfolio's investments in
emerging market countries may involve greater risks than investments in more
developed markets and the price of such investments may be volatile. These risks
of investing in foreign and emerging markets may include foreign currency
exchange rate fluctuations, perceived credit risk, adverse political and
economic developments and possible adverse foreign government intervention.
 
In addition, each Fund or Portfolio may focus its investments in certain related
consumer products and services, financial services, health care, infrastructure,
natural resources, or telecommunications industries, subjecting the Fund or
Portfolio to greater risk than a fund that is more diversified.
 
(M) INDEXED SECURITIES
A Fund or Portfolio may invest in indexed securities whose value is linked
either directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
 
                                      FS-104
<PAGE>   1255
                             GT GLOBAL THEME FUNDS
 
(N) RESTRICTED SECURITIES
A Fund or Portfolio is permitted to invest in privately placed restricted
securities. These securities may be resold in transactions exempt from
registration or to the public if the securities are registered. Disposal of
these securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) are shown at the end of the Fund's
or Portfolio's Portfolio of Investments.
 
(O) LINE OF CREDIT
Each of the Funds, along with certain other funds ("GT Funds") advised and/or
administered by the Manager, has a line of credit with each of BankBoston and
State Street Bank & Trust Company. The arrangements with the banks allow the GT
Funds to borrow an aggregate maximum amount of $200,000,000. Each Fund is
limited to borrowing up to 33 1/3% of the value of each Fund's total assets. On
October 31, 1997, GT Global Natural Resources Fund had $4,670,000 in loans
outstanding.
 
For the year ended October 31, 1997, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for GT Global Consumer Products Fund, GT Global Health Care Fund, GT Global
Natural Resources Fund and GT Global Telecommunications Fund was $2,217,765,
$4,916,667, $4,008,879 and $26,570,611, respectively, with a weighted average
interest rate of 6.14%, 6.61%, 6.32% and 6.32%, respectively. Interest expense
for the GT Global Consumer Products Fund, GT Global Health Care Fund, GT Global
Natural Resources Fund and GT Global Telecommunications Fund for the year ended
October 31, 1997 was $6,616, $21,656, $64,318 and $527,303, respectively.
Interest expense is included in "Other Expenses" on the Statement of Operations.
 
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc. is the Funds' and Portfolios' investment
manager and administrator. GT Global Consumer Products and Services Fund, GT
Global Financial Services Fund, GT Global Infrastructure Fund, and GT Global
Natural Resources Fund each pays the Manager administration fees at the
annualized rate of 0.25% of such Fund's average daily net assets. Each of the
Portfolios pays investment management and administration fees to the Manager at
the annualized rate of 0.725% on the first $500 million of average daily net
assets of the Portfolio; 0.70% on the next $500 million; 0.675% on the next $500
million; and 0.65% on amounts thereafter. GT Global Health Care Fund and GT
Global Telecommunications Fund each pays investment management and
administration fees to the Manager at the annualized rate of 0.975% on the first
$500 million of average daily net assets of the Fund; 0.95% on the next $500
million; 0.925% on the next $500 million and 0.90% on amounts thereafter. These
fees are computed daily and paid monthly.
 
GT Global, Inc. ("GT Global"), an affiliate of the Manager, serves as the Funds'
distributor. The Funds offer Class A, Class B, and Advisor Class shares for
purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Funds' current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the year ended October 31, 1997, GT Global retained the
following sales charges: $85,990 for the GT Global Consumer Products and
Services Fund, $22,263 for the GT Global Financial Services Fund, $54,971 for
the GT Global Health Care Fund, $24,983 for the GT Global Infrastructure Fund,
$63,915 for the GT Global Natural Resources Fund, and $131,495 for the GT Global
Telecommunications Fund. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Funds' current prospectus. GT Global collected CDSCs for the
year ended October 31, 1997, as follows: $5,032 for the GT Global Consumer
Products and Services Fund, $0 for the GT Global Financial Services Fund,
$15,375 for the GT Global Health Care Fund, $115 for the GT Global
Infrastructure Fund, $12,885 for the GT Global Natural Resources Fund, and
$11,930 for the GT Global Telecommunications Fund. GT Global also makes ongoing
shareholder servicing and trail commission payments to dealers whose clients
hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global, from its own resources, pays commissions to dealers through
which the sales are made. Certain redemptions of Class B shares made within six
years of purchase are subject to CDSCs, in accordance with the Funds' current
prospectus. For the year ended October 31, 1997, GT Global collected CDSCs in
the amount of: $503,378 for the GT Global Consumer Products and Services Fund,
$81,031 for the GT Global Financial Services Fund, $530,383 for the GT Global
Health Care Fund, $261,504 for the GT Global Infrastructure Fund, $404,993 for
the GT Global Natural Resources Fund, and $7,104,939 for the GT Global
Telecommunications Fund. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
 
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Funds' Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which a Fund
reimburses GT Global for a portion of its shareholder servicing and
distributions expenses. Under the Class A Plan, a Fund may pay GT Global a
service fee at the annualized rate of up to 0.25% of the average daily net
assets of the Fund's Class A shares for GT Global's expenditures incurred in
servicing and maintaining shareholder accounts, and may pay GT Global a
distribution fee at the annualized rate of up to 0.50% of the average daily net
assets of the Fund's Class A shares, less any amounts paid by the Fund as the
aforementioned service fee, for GT Global's expenditures incurred in providing
services as distributor. All expenses for which GT Global is reimbursed under
the Class A Plan will have been incurred within one year of such reimbursement.
 
Pursuant to the Class B Plan, a Fund may pay GT Global a service fee at the
annualized rate of up to 0.25% of the average daily net assets
 
                                      FS-105
<PAGE>   1256
                             GT GLOBAL THEME FUNDS
 
of the Fund's Class B shares for GT Global's expenditures incurred in servicing
and maintaining shareholder accounts, and may pay GT Global a distribution fee
at the annualized rate of up to 0.75% of the average daily net assets of the
Fund's Class B shares for GT Global's expenditures incurred in providing
services as distributor. Expenses incurred under the Class B Plan in excess of
1.00% annually may be carried forward for reimbursement in subsequent years as
long as that Plan continues in effect.
 
The Manager and GT Global voluntarily have undertaken to limit each Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expense) to the maximum annual rate of 2.40%, 2.90%, and 1.90% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management fees, waivers by GT Global of payments under
the Class A Plan and/or Class B Plan and/or reimbursements by the Manager or GT
Global of portions of the Fund's other operating expenses.
 
Effective November 1, 1997, the Manager and GT Global have undertaken to limit
each Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expenses) to the annual rate of 2.00%, 2.50%, and 1.50% of the
average daily net assets of the Fund's Class A, Class B and Advisor Class
shares, respectively. This undertaking may be changed or eliminated in the
future.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Funds. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Funds for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the Funds and Portfolios.
The monthly fee for these services to the Manager is a percentage, not to exceed
0.03% annually, of a Fund or Portfolio's average daily net assets. The annual
fee rate is derived by applying 0.03% to the first $5 billion of assets of all
registered mutual funds advised by the Manager and 0.02% to the assets in excess
of $5 billion and allocating the result according to each Fund's average daily
net assets.
 
The Company pays each Director who is not an employee, officer or director of
the Manager, or any other affiliated company $5,000 per year plus $300 for each
meeting of the board or any committee thereof attended by the Director. Each
Portfolio pays each of its Trustees who is not an employee, officer, or director
of the Manager, GT Global or GT Services $500 per year plus $150 for each
meeting of the board or any committee thereof attended by the Trustee.
 
3. PURCHASES AND SALES OF SECURITIES
The following summarizes purchases and sales of investment securities, other
than short-term investments, by each Fund or Portfolio for the year ended
October 31, 1997:
 
                       PURCHASES AND SALES OF SECURITIES
<TABLE>
<CAPTION>
PORTFOLIO                                                                                                 PURCHASES
- ----------------------------------------------------------------------------------------------------  -----------------
<S>                                                                                                   <C>
Global Consumer Products and Services Portfolio.....................................................  $     612,647,861
Global Financial Services Portfolio.................................................................         92,386,002
GT Global Health Care Fund..........................................................................        787,196,366
Global Infrastructure Portfolio.....................................................................         39,949,012
Global Natural Resources Portfolio..................................................................        443,019,604
GT Global Telecommunications Fund...................................................................        645,313,904
 
<CAPTION>
PORTFOLIO                                                                                                    SALES
 
- ----------------------------------------------------------------------------------------------------  -------------------
 
<S>                                                                                                   <C>
Global Consumer Products and Services Portfolio.....................................................  $       664,389,208
 
Global Financial Services Portfolio.................................................................           40,245,074
 
GT Global Health Care Fund..........................................................................          891,939,099
 
Global Infrastructure Portfolio.....................................................................           39,409,094
 
Global Natural Resources Portfolio..................................................................          403,198,520
 
GT Global Telecommunications Fund...................................................................        1,492,219,852
 
</TABLE>
 
4. CAPITAL SHARES
At October 31, 1997, there were 6,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 400,000,000 were
classified as shares of the GT Global Telecommunications Fund; 400,000,000 were
classified as shares of GT Global Government Income Fund; 200,000,000 were
classified as shares of GT Global Developing Markets Fund; 200,000,000 were
classified as shares of GT Global Health Care Fund; 200,000,000 were classified
as shares of GT Global Strategic Income Fund; 200,000,000 were classified as
shares of GT Global Currency Fund (inactive); 200,000,000 were classified as
shares of GT Global Growth & Income Fund; 200,000,000 were classified as shares
of GT Global Small Companies Fund (inactive); 200,000,000 were classified as
shares of GT Global Latin America Growth Fund; 200,000,000 were classified as
shares of GT Global Emerging Markets Fund; 200,000,000 were classified as shares
of GT Global High Income Fund; 200,000,000 were classified as shares of GT
Global Financial Services Fund; 200,000,000 were classified as shares of GT
Global Natural Resources Fund; 200,000,000 were classified as shares of GT
Global Infrastructure Fund; 200,000,000 were classified as shares of GT Global
Consumer Products and Services Fund. The shares of each of the foregoing series
of the Company were divided equally into two classes, designated Class A and
Class B common stock. With respect to the issuance of Advisor Class shares,
100,000,000 shares were classified as shares of each of the fifteen series of
the Company and designated as Advisor Class common stock. 1,100,000,000 shares
remain unclassified. Transactions in capital shares of the Fund were as follows:
 
                                      FS-106
<PAGE>   1257
                             GT GLOBAL THEME FUNDS
 
                           CAPITAL SHARE TRANSACTIONS
 
GT GLOBAL CONSUMER PRODUCTS & SERVICES FUND
 
<TABLE>
<CAPTION>
                                                  YEAR ENDED                  YEAR ENDED
                                               OCTOBER 31, 1997            OCTOBER 31, 1996
                                          --------------------------  --------------------------
CLASS A                                     SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    3,438,964  $  69,880,587    6,142,401  $ 118,779,939
Shares issued in connection with
  reinvestment of distributions.........      143,274      2,884,089       13,656        202,166
                                          -----------  -------------  -----------  -------------
                                            3,582,238     72,764,676    6,156,057    118,982,105
Shares repurchased......................   (4,424,828)   (88,957,730)  (2,769,898)   (54,486,898)
                                          -----------  -------------  -----------  -------------
Net increase (decrease).................     (842,590) $ (16,193,054)   3,386,159  $  64,495,207
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
CLASS B
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    2,703,434  $  53,329,784    5,689,956  $ 110,105,123
Shares issued in connection with
  reinvestment of distributions.........      168,859      3,364,713       10,957        161,052
                                          -----------  -------------  -----------  -------------
                                            2,872,293     56,694,497    5,700,913    110,266,175
Shares repurchased......................   (2,802,820)   (55,171,454)  (1,675,446)   (32,960,366)
                                          -----------  -------------  -----------  -------------
Net increase............................       69,473  $   1,523,043    4,025,467  $  77,305,809
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
ADVISOR CLASS
- - ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................      287,832  $   6,471,623      589,226  $  12,396,492
Shares issued in connection with
  reinvestment of distributions.........       15,186        308,573          402          5,969
                                          -----------  -------------  -----------  -------------
                                              303,018      6,780,196      589,628     12,402,461
Shares repurchased......................     (386,341)    (7,704,551)    (248,775)    (5,293,607)
                                          -----------  -------------  -----------  -------------
Net increase (decrease).................      (83,323) $    (924,355)     340,853  $   7,108,854
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
GT GLOBAL FINANCIAL SERVICES FUND
 
<TABLE>
<CAPTION>
                                                  YEAR ENDED                  YEAR ENDED
                                               OCTOBER 31, 1997            OCTOBER 31, 1996
                                          --------------------------  --------------------------
CLASS A                                     SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    3,783,353  $  60,418,186      900,372  $  11,973,497
Shares issued in connection with
  reinvestment of distributions.........       35,121        488,531        3,997         50,562
                                          -----------  -------------  -----------  -------------
                                            3,818,474     60,906,717      904,369     12,024,059
Shares repurchased......................   (2,611,893)   (41,931,634)    (867,261)   (11,494,650)
                                          -----------  -------------  -----------  -------------
Net increase............................    1,206,581  $  18,975,083       37,108  $     529,409
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
CLASS B
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    4,102,099  $  64,968,183      596,980  $   7,792,181
Shares issued in connection with
  reinvestment of distributions.........       44,922        618,563        2,898         36,456
                                          -----------  -------------  -----------  -------------
                                            4,147,021     65,586,746      599,878      7,828,637
Shares repurchased......................   (2,045,933)   (32,384,709)    (281,339)    (3,677,982)
                                          -----------  -------------  -----------  -------------
Net increase............................    2,101,088  $  33,202,037      318,539  $   4,150,655
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................      220,956  $   4,021,549        3,500  $      47,698
Shares issued in connection with
  reinvestment of distributions.........          359          5,018           35            420
                                          -----------  -------------  -----------  -------------
                                              221,315      4,026,567        3,535         48,118
Shares repurchased......................      (11,568)      (198,290)      (1,103)       (14,704)
                                          -----------  -------------  -----------  -------------
Net increase............................      209,747  $   3,828,277        2,432  $      33,414
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
                                      FS-107
<PAGE>   1258
                             GT GLOBAL THEME FUNDS
 
GT GLOBAL HEALTH CARE FUND
 
<TABLE>
<CAPTION>
                                                  YEAR ENDED                  YEAR ENDED
                                               OCTOBER 31, 1997            OCTOBER 31, 1996
                                          --------------------------  --------------------------
CLASS A                                     SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................   31,631,342  $ 772,292,073   84,410,204  $1,903,687,570
Shares issued in connection with
  reinvestment of distributions.........    1,208,813     27,043,227    2,009,491     41,475,881
                                          -----------  -------------  -----------  -------------
                                           32,840,155    799,335,300   86,419,695  1,945,163,451
Shares repurchased......................  (35,792,763)  (876,621,319) (86,124,175) (1,957,478,015)
                                          -----------  -------------  -----------  -------------
Net increase (decrease).................   (2,952,608) $ (77,286,019)     295,520  $ (12,314,564)
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
CLASS B
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    6,206,431  $ 152,327,079    6,741,207  $ 157,453,975
Shares issued in connection with
  reinvestment of distributions.........      321,688      7,045,104      411,416      8,363,880
                                          -----------  -------------  -----------  -------------
                                            6,528,119    159,372,183    7,152,623    165,817,855
Shares repurchased......................   (5,770,947)  (142,017,878)  (5,784,194)  (129,761,569)
                                          -----------  -------------  -----------  -------------
Net increase............................      757,172  $  17,354,305    1,368,429  $  36,056,286
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    1,865,809  $  48,687,774    1,142,479  $  27,246,793
Shares issued in connection with
  reinvestment of distributions.........        2,543         57,375        3,280         67,679
                                          -----------  -------------  -----------  -------------
                                            1,868,352     48,745,149    1,145,759     27,314,472
Shares repurchased......................   (1,676,189)   (43,406,078)  (1,121,971)   (26,090,499)
                                          -----------  -------------  -----------  -------------
Net increase............................      192,163  $   5,339,071       23,788  $   1,223,973
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
GT GLOBAL INFRASTRUCTURE FUND
 
<TABLE>
<CAPTION>
                                                  YEAR ENDED                  YEAR ENDED
                                               OCTOBER 31, 1997            OCTOBER 31, 1996
                                          --------------------------  --------------------------
CLASS A                                     SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
Shares sold.............................    1,282,535  $  19,272,428    2,175,475  $  30,275,819
<S>                                       <C>          <C>            <C>          <C>
Shares issued in connection with
  reinvestment of distributions.........      123,795      1,776,449           --             --
                                          -----------  -------------  -----------  -------------
                                            1,406,330     21,048,877    2,175,475     30,275,819
Shares repurchased......................   (1,518,962)   (23,157,570)  (2,503,715)   (33,964,432)
                                          -----------  -------------  -----------  -------------
Net decrease............................     (112,632) $  (2,108,693)    (328,240) $  (3,688,613)
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
CLASS B
- - ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    1,233,796  $  18,394,879      903,064  $  12,423,925
Shares issued in connection with
  reinvestment of distributions.........      164,966      2,337,575           --             --
                                          -----------  -------------  -----------  -------------
                                            1,398,762     20,732,454      903,064     12,423,925
Shares repurchased......................   (1,288,192)   (19,574,097)  (1,306,101)   (17,421,173)
                                          -----------  -------------  -----------  -------------
Net increase (decrease).................      110,570  $   1,158,357     (403,037) $  (4,997,248)
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................      154,643  $   2,526,548       11,122  $     154,109
Shares issued in connection with
  reinvestment of distributions.........        1,147         16,592           --             --
                                          -----------  -------------  -----------  -------------
                                              155,790      2,543,140       11,122        154,109
Shares repurchased......................      (12,773)      (202,670)      (5,256)       (70,861)
                                          -----------  -------------  -----------  -------------
Net increase............................      143,017  $   2,340,470        5,866  $      83,248
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
                                      FS-108
<PAGE>   1259
                             GT GLOBAL THEME FUNDS
 
GT GLOBAL NATURAL RESOURCES FUND
 
<TABLE>
<CAPTION>
                                                  YEAR ENDED                  YEAR ENDED
                                               OCTOBER 31, 1997            OCTOBER 31, 1996
                                          --------------------------  --------------------------
CLASS A                                     SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................   14,008,426  $ 250,536,207    9,220,103  $ 142,385,816
Shares issued in connection with
  reinvestment of distributions.........       97,424      1,671,792        3,977         47,892
                                          -----------  -------------  -----------  -------------
                                           14,105,850    252,207,999    9,224,080    142,433,708
Shares repurchased......................  (13,512,928)  (239,425,288)  (7,529,884)  (116,812,100)
                                          -----------  -------------  -----------  -------------
Net increase............................      592,922  $  12,782,711    1,694,196  $  25,621,608
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
CLASS B
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    5,227,207  $  91,103,073    4,288,540  $  66,460,658
Shares issued in connection with
  reinvestment of distributions.........      120,229      2,044,194          709          8,495
                                          -----------  -------------  -----------  -------------
                                            5,347,436     93,147,267    4,289,249     66,469,153
Shares repurchased......................   (4,425,914)   (75,084,090)  (2,178,862)   (33,276,553)
                                          -----------  -------------  -----------  -------------
Net increase............................      921,522  $  18,063,177    2,110,387  $  33,192,600
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    1,573,656  $  31,848,691      663,037  $  10,703,010
Shares issued in connection with
  reinvestment of distributions.........        7,576        130,389           77            922
                                          -----------  -------------  -----------  -------------
                                            1,581,232     31,979,080      663,114     10,703,932
Shares repurchased......................   (1,180,622)   (22,478,170)    (356,384)    (5,379,503)
                                          -----------  -------------  -----------  -------------
Net increase............................      400,610  $   9,500,910      306,730  $   5,324,429
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
GT GLOBAL TELECOMMUNICATIONS FUND
 
<TABLE>
<CAPTION>
                                                   YEAR ENDED                     YEAR ENDED
                                                OCTOBER 31, 1997               OCTOBER 31, 1996
                                          -----------------------------  -----------------------------
CLASS A                                      SHARES         AMOUNT          SHARES         AMOUNT
- ----------------------------------------  ------------  ---------------  ------------  ---------------
<S>                                       <C>           <C>              <C>           <C>
Shares sold.............................    86,491,272  $ 1,449,735,933   161,134,594  $ 2,777,197,821
Shares issued in connection with
  reinvestment of distributions.........     4,872,560       77,134,577     3,376,395       52,886,360
                                          ------------  ---------------  ------------  ---------------
                                            91,363,832    1,526,870,510   164,510,989    2,830,084,181
Shares repurchased......................  (113,032,156)  (1,893,258,359) (174,818,005)  (3,017,740,549)
                                          ------------  ---------------  ------------  ---------------
Net decrease............................   (21,668,324) $  (366,387,849)  (10,307,016) $  (187,656,368)
                                          ------------  ---------------  ------------  ---------------
                                          ------------  ---------------  ------------  ---------------
</TABLE>
 
<TABLE>
<CAPTION>
CLASS B
- ----------------------------------------
<S>                                       <C>           <C>              <C>           <C>
Shares sold.............................     9,249,969  $   152,245,081    15,365,874  $   260,167,785
Shares issued in connection with
  reinvestment of distributions.........     4,413,826       68,371,781     2,882,770       44,452,585
                                          ------------  ---------------  ------------  ---------------
                                            13,663,795      220,616,862    18,248,644      304,620,370
Shares repurchased......................   (29,383,147)    (477,593,385)  (25,319,583)    (426,829,324)
                                          ------------  ---------------  ------------  ---------------
Net decrease............................   (15,719,352) $  (256,976,523)   (7,070,939) $  (122,208,954)
                                          ------------  ---------------  ------------  ---------------
                                          ------------  ---------------  ------------  ---------------
</TABLE>
 
<TABLE>
<CAPTION>
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>           <C>              <C>           <C>
Shares sold.............................     2,029,510  $    36,070,768     1,229,487  $    21,592,338
Shares issued in connection with
  reinvestment of distributions.........        11,071          176,806         2,119           33,270
                                          ------------  ---------------  ------------  ---------------
                                             2,040,581       36,247,574     1,231,606       21,625,608
Shares repurchased......................    (1,835,151)     (32,553,269)   (1,216,785)     (21,450,446)
                                          ------------  ---------------  ------------  ---------------
Net increase............................       205,430  $     3,694,305        14,821  $       175,162
                                          ------------  ---------------  ------------  ---------------
                                          ------------  ---------------  ------------  ---------------
</TABLE>
 
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of a Fund's or Portfolio's expenses. For the year ended October 31, 1997, the
Funds' or Portfolios' expenses were reduced by the following amounts under these
arrangements:
 
<TABLE>
<CAPTION>
                                                                                                                            EXPENSE
                                                                                                                           REDUCTION
                                                                                                                           ---------
<S>                                                                                                                        <C>
Global Consumer Products and Services Portfolio..........................................................................  $ 123,570
Global Financial Services Portfolio......................................................................................     13,622
GT Global Health Care Fund...............................................................................................     81,354
Global Infrastructure Portfolio..........................................................................................        720
Global Natural Resources Portfolio.......................................................................................     71,129
GT Global Telecommunications Fund........................................................................................    163,244
</TABLE>
 
                                      FS-109
<PAGE>   1260
                             GT GLOBAL THEME FUNDS
 
6. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
Investments of 5% or more of an issuer's outstanding voting securities by a Fund
or Portfolio are defined in the Investment Company Act of 1940 as an affiliated
company. Investments in affiliated companies by Global Consumer Products
Portfolio, GT Global Health Care Fund, and GT Global Telecommunications Fund at
October 31, 1997 amounted to $1,943,798, $251,388,855, and $113,211,488,
respectively, at value.
 
Transactions during the period with companies that are or were affiliates are as
follows:
 
GLOBAL CONSUMER PRODUCTS PORTFOLIO
 
<TABLE>
<CAPTION>
                                                                          SALES        NET REALIZED      DIVIDEND
                                                    PURCHASES COST      PROCEEDS        GAIN (LOSS)       INCOME
                                                    ---------------  ---------------  ---------------  ------------
<S>                                                 <C>              <C>              <C>              <C>
O & Y Properties Inc. Sp Wts......................  $     1,996,065  $            --  $            --  $         --
</TABLE>
 
GT GLOBAL HEALTH CARE FUND
 
<TABLE>
<CAPTION>
                                                       PURCHASES          SALES        NET REALIZED      DIVIDEND
                                                         COST           PROCEEDS        GAIN (LOSS)       INCOME
                                                    ---------------  ---------------  ---------------  ------------
<S>                                                 <C>              <C>              <C>              <C>
ATL Ultrasound, Inc...............................  $    22,092,644  $     7,075,476  $     1,636,015  $         --
AVECOR Cardiovascular, Inc........................        1,034,472               --               --            --
Cardiac Pathways Corp.............................        8,400,212               --               --            --
Cardiovascular Dynamics Inc.......................        3,500,454               --               --            --
Catalytica, Inc...................................       10,691,833       16,327,767        8,539,392            --
Cell Therapeutics Inc.............................       12,018,948               --               --            --
Circon Corp.......................................               --        2,739,253          568,655            --
Depotech Corp.....................................       12,202,500        5,683,922          896,972            --
Endosonics Corp...................................       20,775,778        4,411,500         (979,619)           --
INAMED Corp.......................................        3,033,798           90,000         (108,753)           --
Interferon........................................        5,870,743        3,085,840          839,277
Kensey Nash Corp..................................        5,159,335        1,561,197        1,266,168            --
Life Medical Sciences, Inc........................        2,096,223          442,500         (352,500)           --
Micro Therapeutics, Inc...........................        1,800,000           66,248            6,248            --
Photoelectron Corp................................        2,822,805               --               --            --
Physio-Control International Corp.................       16,172,912        1,542,063           65,018            --
Protein Design Labs, Inc..........................       12,029,386       22,123,118           40,261            --
Regeneron Pharmaceuticals, Inc....................       15,114,745        2,161,577          277,371            --
Sunrise Medical, Inc..............................        3,237,927               --               --            --
TheraTech, Inc....................................        7,797,057               --               --            --
Visx, Inc.........................................       12,660,684        8,329,268         (295,181)           --
</TABLE>
 
GT GLOBAL TELECOMMUNICATIONS FUND
 
<TABLE>
<CAPTION>
                                                                          SALES         NET REALIZED      DIVIDEND
                                                    PURCHASES COST      PROCEEDS        GAIN (LOSS)        INCOME
                                                    ---------------  ---------------  ----------------  ------------
<S>                                                 <C>              <C>              <C>               <C>
ANTEC Corp........................................  $            --  $     8,346,027  $    (10,335,549) $         --
Atlantic Tele-Network, Inc........................               --        1,368,992           (86,633)           --
DSP Communications, Inc...........................       22,490,263       10,010,074       (10,387,819)           --
Echostar Communications Corp. "A".................               --               --                --            --
Gandalf Technologies, Inc.........................               --        4,316,779       (27,050,916)           --
Grupo Mexicano de Video - 144A ADR................               --               --                --            --
Himachal Futuristic Communications Ltd. - 144A
  GDR.............................................               --        1,643,750        (7,656,250)           --
Intermedia Communications of Florida, Inc.........          508,750               --                --            --
International Engineering PLC - Foreign...........               --        3,181,312       (15,784,033)      305,427
Millicom International Cellular S.A...............               --               --                --            --
Orbital Sciences Corp.............................          430,000        6,351,505         1,003,380            --
PT Kabelindo Murni - Foreign......................               --        1,394,687        (5,501,277)           --
Spectrian Corp....................................               --       10,450,207        (9,831,404)           --
Tekelec...........................................          292,878       43,271,004        31,126,430            --
Tele 2000 S.A.....................................               --       10,524,931        (2,848,177)           --
Three-Five Systems, Inc...........................               --        1,862,340        (1,738,353)           --
</TABLE>
 
                                      FS-110
<PAGE>   1261
                             GT GLOBAL THEME FUNDS
 
FEDERAL TAX INFORMATION (UNAUDITED): Listed below is the amount of income
received by the Funds from sources within foreign countries and possessions of
the United States and the amount of taxes paid by the Funds to such countries
for the fiscal year ended October 31, 1997:
 
<TABLE>
<CAPTION>
                                                   FOREIGN                    FOREIGN
                                          -------------------------   -----------------------
FUND                                      SOURCE INCOME   PER SHARE    TAXES PAID   PER SHARE
- ----------------------------------------  -------------   ---------   ------------  ---------
<S>                                       <C>             <C>         <C>           <C>
GT Global Consumer Products and Services
  Fund..................................          --            --             --         --
GT Global Financial Services Fund.......     $699,745      $0.1412    $    77,681    $0.0157
GT Global Health Care Fund..............          --            --             --         --
GT Global Infrastructure Fund...........          --            --             --         --
GT Global Natural Resources Fund........          --            --             --         --
GT Global Telecommunications Fund.......          --            --             --         --
</TABLE>
 
Pursuant to Section 852 of the Internal Revenue Code, the Funds designate the
following amounts as capital gain dividends for the fiscal year ended October
31, 1997:
 
<TABLE>
<CAPTION>
                                          CAPITAL GAIN
FUND                                        DIVIDEND
- ----------------------------------------  ------------
<S>                                       <C>
GT Global Consumer Products and Services
  Fund..................................  $    330,657
GT Global Financial Services Fund.......       740,650
GT Global Health Care Fund..............            --
GT Global Infrastructure Fund...........     3,083,268
GT Global Natural Resources Fund........     2,673,826
GT Global Telecommunications Fund.......   166,632,944
</TABLE>
 
Pursuant to Section 854 of the Internal Revenue Code, the Funds designate the
following percentage amounts of ordinary income dividends paid (including
short-term capital gain distributions, if any) by the Funds as income qualifying
for the dividends received deduction for corporations for the fiscal year ended
October 31, 1997:
 
<TABLE>
<CAPTION>
FUND
- ----------------------------------------
<S>                                       <C>
GT Global Consumer Products and Services
  Fund..................................      2.57%
GT Global Financial Services Fund.......     13.12%
GT Global Health Care Fund..............         --
GT Global Infrastructure Fund...........         --
GT Global Natural Resources Fund........      2.48%
GT Global Telecommunications Fund.......         --
</TABLE>
 
                                      FS-111
<PAGE>   1262
 
                                                                    STATEMENT OF
                                                          ADDITIONAL INFORMATION
 
   
                         CLASS A AND CLASS B SHARES OF
    
 
   
                       AIM GLOBAL GOVERNMENT INCOME FUND
    
   
                           AIM STRATEGIC INCOME FUND
    
   
                         AIM EMERGING MARKETS DEBT FUND
    
                        AIM GLOBAL GROWTH & INCOME FUND
 
   
                             (SERIES PORTFOLIOS OF
    
   
                             AIM INVESTMENT FUNDS)
    
 
                               11 GREENWAY PLAZA
                                   SUITE 100
                           HOUSTON, TEXAS 77046-1173
                                 (713) 626-1919
 
                             ---------------------
 
        THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND
           IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS OF THE
   
            ABOVE-NAMED FUNDS, A COPY OF WHICH MAY BE OBTAINED FREE
    
                OF CHARGE FROM AUTHORIZED DEALERS OR BY WRITING
                           A I M DISTRIBUTORS, INC.,
                    P.O. BOX 4739, HOUSTON, TEXAS 77210-4739
                          OR BY CALLING (800) 347-4246
 
                             ---------------------
 
          STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 8, 1998
   
RELATING TO THE AIM GLOBAL GOVERNMENT INCOME FUND PROSPECTUS, THE AIM STRATEGIC
 INCOME FUND PROSPECTUS, THE AIM EMERGING MARKETS DEBT FUND PROSPECTUS, AND THE
    AIM GLOBAL GROWTH & INCOME FUND PROSPECTUS EACH DATED SEPTEMBER 8, 1998
    
<PAGE>   1263
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                                              PAGE NO.
                                                              --------
<S>                                                           <C>
INTRODUCTION................................................      4
GENERAL INFORMATION ABOUT THE FUNDS.........................      4
  The Trust and Its Shares..................................      4
INVESTMENT OBJECTIVES AND POLICIES..........................      5
  Investment Objectives.....................................      5
  Investment in Emerging Markets............................      5
  Selection of Debt Investments.............................      5
  Selection of Equity Investments...........................      6
  Investments in Other Investment Companies.................      6
  Depositary Receipts.......................................      6
  Samurai and Yankee Bonds..................................      7
  Warrants or Rights........................................      7
  Lending of Portfolio Securities...........................      7
  Commercial Bank Obligations...............................      7
  Repurchase Agreements.....................................      8
  Borrowing, Reverse Repurchase Agreements and "Roll"
     Transactions...........................................      8
  Short Sales...............................................      9
OPTIONS, FUTURES AND CURRENCY STRATEGIES....................     10
  Special Risks of Options, Futures and Currency
     Strategies.............................................     10
  Writing Call Options......................................     10
  Writing Put Options.......................................     11
  Purchasing Put Options....................................     12
  Purchasing Call Options...................................     12
  Index Options.............................................     13
  Interest Rate, Currency and Stock Index Futures
     Contracts..............................................     14
  Options on Futures Contracts..............................     16
  Limitations on Use of Futures, Options on Futures and
     Certain Options on Currencies..........................     17
  Forward Contracts.........................................     17
  Foreign Currency Strategies -- Special Considerations.....     18
  Cover.....................................................     18
  Interest Rate and Currency Swaps..........................     19
RISK FACTORS................................................     19
  Illiquid Securities.......................................     19
  Foreign Securities........................................     20
INVESTMENT LIMITATIONS......................................     23
  Government Income Fund....................................     23
  Strategic Income Fund.....................................     24
  Emerging Markets Debt Fund and the Portfolio..............     25
  Growth & Income Fund......................................     27
EXECUTION OF PORTFOLIO TRANSACTIONS.........................     28
  Portfolio Trading and Turnover............................     29
MANAGEMENT..................................................     30
  Trustees and Executive Officers...........................     30
  Investment Management and Administration Services.........     32
  Expenses of the Funds and the Portfolio...................     33
THE DISTRIBUTION PLANS......................................     34
  The Class A Plan..........................................     34
  The Class B Plan..........................................     34
  Both Plans................................................     34
THE DISTRIBUTOR.............................................     37
NET ASSET VALUE DETERMINATION...............................     38
</TABLE>
    
 
                                        2
<PAGE>   1264
 
   
<TABLE>
<CAPTION>
                                                              PAGE NO.
                                                              --------
<S>                                                           <C>
HOW TO PURCHASE AND REDEEM SHARES...........................     38
QUALIFYING FOR A REDUCED FRONT-END SALES CHARGE.............     40
PROGRAMS AND SERVICES FOR SHAREHOLDERS......................     40
DIVIDEND ORDER..............................................     40
TAXES.......................................................     40
  Taxation of the Funds.....................................     40
  Taxation of the Portfolio -- General......................     40
  Taxation of Certain Investment Activities.................     41
  Taxation of the Funds' Shareholders.......................     43
MISCELLANEOUS INFORMATION...................................     43
  Custodian.................................................     43
  Transfer Agency and Accounting Agency Services............     44
  Independent Accountants...................................     44
  Shareholder Liability.....................................     44
  Names.....................................................     44
  Control Persons and Principal Holders of Securities.......     45
INVESTMENT RESULTS..........................................     46
  Standardized Returns -- Total Return Quotations...........     46
  Non-Standardized Returns..................................     46
  Yield Quotations..........................................     48
  Performance Information...................................     48
APPENDIX....................................................     50
  Description of Bond Ratings...............................     50
  Description of Commercial Paper Ratings...................     51
  Absence of Rating.........................................     51
FINANCIAL STATEMENTS........................................     FS
</TABLE>
    
 
                                        3
<PAGE>   1265
 
                                  INTRODUCTION
 
   
  This Statement of Additional Information relates to the Class A and Class B
shares of AIM Global Government Income Fund ("Government Income Fund"), AIM
Strategic Income Fund ("Strategic Income Fund"), AIM Emerging Markets Debt Fund
(formerly known as AIM Global High Income Fund) ("Emerging Markets Debt Fund"),
and AIM Global Growth & Income Fund ("Growth & Income Fund") (each, a "Fund,"
and collectively, the "Funds"). Each Fund is a non-diversified series of AIM
Investment Funds (the "Trust"), a registered open-end management investment
company organized as a Delaware business trust.
    
 
   
  A I M Advisors, Inc. ("AIM") serves as the investment manager of and
administrator for, and INVESCO (NY), Inc. (the "Sub-advisor") serves as the
investment sub-advisor and sub-administrator for the Government Income Fund, the
Strategic Income Fund, the Growth & Income Fund and the Emerging Markets Debt
Portfolio (formerly known as the Global High Income Portfolio) (the
"Portfolio"). AIM and the Sub-advisor also serve as the administrator and
sub-administrator, respectively, of the Emerging Markets Debt Fund.
    
 
   
  The Trust is a series mutual fund. The rules and regulations of the Securities
and Exchange Commission (the "SEC") require all mutual funds to furnish
prospective investors certain information concerning the activities of the fund
being considered for investment. This information for Government Income Fund is
included in a Prospectus dated September 8, 1998, for Strategic Income Fund is
included in a separate Prospectus dated September 8, 1998, for Emerging Markets
Debt Fund is included in a separate Prospectus dated September 8, 1998, and for
Growth & Income Fund is included in a separate Prospectus dated September 8,
1998. Additional copies of the Prospectuses and this Statement of Additional
Information may be obtained without charge by writing the principal distributor
of the Funds' shares, A I M Distributors, Inc. ("AIM Distributors"), P.O. Box
4739, Houston, TX 77210-4739 or by calling (800) 347-4246. Investors must
receive a Prospectus before they invest.
    
 
  This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Funds. Some of the
information required to be in this Statement of Additional Information is also
included in the Prospectus, and, in order to avoid repetition, reference will be
made to sections of the Prospectus. Additionally, the Prospectus and this
Statement of Additional Information omit certain information contained in the
Registration Statement filed with the SEC. Copies of the Registration Statement,
including items omitted from the Prospectus and this Statement of Additional
Information, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
 
                      GENERAL INFORMATION ABOUT THE FUNDS
 
THE TRUST AND ITS SHARES
 
   
  The Trust previously operated under the name G.T. Investment Funds, Inc.,
which was organized as a Maryland corporation on October 29, 1987. The Trust was
reorganized on September 8, 1998 as a Delaware business trust, and is registered
with the SEC as a diversified open-end series management investment company. The
Trust currently consists of the following portfolios: AIM Global Financial
Services Fund, AIM Global Infrastructure Fund, AIM Global Resources Fund, AIM
Global Consumer Products and Services Fund, AIM Global Health Care Fund, AIM
Global Telecommunications Fund, AIM Global Government Income Fund, AIM Emerging
Markets Debt Fund, AIM Strategic Income Fund, AIM Global Growth and Income Fund,
AIM Emerging Markets Fund, AIM Developing Markets Fund, and AIM Latin American
Growth Fund. Each of these funds has three separate classes: Class A, Class B
and Advisor Class shares. All historical financial and other information
contained in this Statement of Additional Information for periods prior to
September 8, 1998, is that of the series of G.T. Investment Funds, Inc. (renamed
AIM Investment Funds, Inc.).
    
 
  This Statement of Additional Information relates solely to the Class A and
Class B shares of the Funds.
 
  The term "majority of the outstanding shares" of the Trust, of a particular
Fund or of a particular class of a Fund means, respectively, the vote of the
lesser of (a) 67% or more of the shares of the Trust, such Fund or such class
present at a meeting of the Trust's shareholders, if the holders of more than
50% of the outstanding shares of the Trust, such Fund or such class are present
or represented by proxy, or (b) more than 50% of the outstanding shares of the
Trust, such Fund or such class.
 
  Class A, and Class B and Advisor Class shares of each Fund have equal rights
and privileges. Each share of a particular class is entitled to one vote, to
participate equally in dividends and distributions declared by the Trust's Board
of Trustees with respect to the class of such Fund and, upon liquidation of the
Fund, to participate proportionately in the net assets of the Fund allocable to
such class remaining after satisfaction of outstanding liabilities of the Fund
allocable to such class. Fund shares are fully paid, non-assessable and fully
transferable when issued and have no preemptive rights and have such
 
                                        4
<PAGE>   1266
 
conversion and exchange rights as set forth in the Prospectus and this Statement
of Additional Information. Fractional shares have proportionately the same
rights, including voting rights, as are provided for a full share.
 
   
  Shareholders of the Funds do not have cumulative voting rights, and therefore
the holders of more than 50% of the outstanding shares of all Funds voting
together for election of trustees may elect all of the members of the Board of
Trustees of the Trust. In such event, the remaining holders cannot elect any
trustees of the Trust.
    
 
                       INVESTMENT OBJECTIVES AND POLICIES
 
INVESTMENT OBJECTIVES
 
   
  The Government Income Fund primarily seeks high current income and secondarily
seeks capital appreciation and protection of principal through active management
of the maturity structure and currency exposure of its portfolio. The Strategic
Income Fund and the Emerging Markets Debt Fund primarily seek high current
income and secondarily seek capital appreciation. The Emerging Markets Debt Fund
seeks to achieve its investment objectives by investing all of its investable
assets in the Portfolio, which is a non-diversified open-end management
investment company with investment objectives identical to those of the Fund.
Whenever the phrase "all of the Emerging Markets Debt Fund's investable assets"
is used herein and in the Prospectus, it means that the only investment
securities held by the Emerging Markets Debt Fund will be its interest in the
Portfolio. The Emerging Markets Debt Fund may withdraw its investment in the
Portfolio at any time, if the Board of Trustees of the Trust determines that it
is in the best interests of the Fund and its shareholders to do so. Upon any
such withdrawal, the Emerging Markets Debt Fund's assets would be invested in
accordance with the investment policies of the Portfolio described below and in
the Prospectus. The investment objective of the Growth & Income Fund is
long-term capital appreciation together with current income. The Growth & Income
Fund seeks its objective by investing in a global portfolio of both equity
securities and debt obligations allocated among diverse international markets.
    
 
INVESTMENT IN EMERGING MARKETS
 
  The Portfolio seeks its objectives by investing, under normal circumstances,
at least 65% of its total assets in debt securities of issuers in emerging
markets. The Strategic Income Fund may invest up to 50% of its assets in debt
securities of issuers in emerging markets. The Strategic Income Fund and the
Portfolio do not consider the following countries to be emerging markets:
Australia, Austria, Belgium, Canada, Denmark, France, Germany, Ireland, Italy,
Japan, the Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland, United
Kingdom, and United States.
 
   
  In addition to the factors set forth in the Prospectus, the Sub-advisor will
also consider, when determining what countries constitute emerging markets,
data, analysis, and classification of countries published or disseminated by the
International Bank for Reconstruction and Development (commonly known as the
World Bank) and the International Finance Corporation.
    
 
SELECTION OF DEBT INVESTMENTS
 
   
  In determining the appropriate distribution of investments among various
countries and geographic regions for the Government Income Fund, the Strategic
Income Fund, the Growth & Income Fund, and the Portfolio, the Sub-advisor
ordinarily considers the following factors: prospects for relative economic
growth among the different countries in which the Government Income Fund, the
Strategic Income Fund, the Growth & Income Fund, and the Portfolio may invest;
expected levels of inflation; government policies influencing business
conditions; the outlook for currency relationships; and the range of the
individual investment opportunities available to international investors.
    
 
  The Government Income Fund, the Strategic Income Fund and the Portfolio may
invest in the following types of money market instruments (i.e., debt
instruments with less than 12 months remaining until maturity) denominated in
U.S. dollars or other currencies: (a) obligations issued or guaranteed by the
U.S. or foreign governments, their agencies, instrumentalities or
municipalities; (b) obligations of international organizations designed or
supported by multiple foreign governmental entities to promote economic
reconstruction or development; (c) finance company obligations, corporate
commercial paper and other short-term commercial obligations: (d) bank
obligations (including certificates of deposit, time deposits, demand deposits
and bankers' acceptances), subject to the restriction that the Government Income
Fund, the Strategic Income Fund and the Portfolio may not invest more than 25%
of their respective total assets in bank securities; (e) repurchase agreements
with respect to the foregoing; and (f) other substantially similar short-term
debt securities with comparable characteristics. Money market instruments in
which the Growth & Income Fund may invest include U.S. government securities,
high-grade commercial paper, bank certificates of deposit, bankers' acceptances
and
 
                                        5
<PAGE>   1267
 
   
repurchase agreements related to any of the foregoing. "High-grade commercial
paper" refers to commercial paper rated A-1 by Standard & Poor's, a division of
The McGraw-Hill Companies, Inc. ("S&P"), or P-1 by Moody's Investors Service,
Inc. ("Moody's") or, if not rated, determined by the Sub-advisor to be of
comparable quality.
    
 
SELECTION OF EQUITY INVESTMENTS
 
   
  With respect to Growth & Income Fund, for investment purposes, an issuer is
typically considered as located in a particular country if it (a) is
incorporated under the laws of or has its principal office in that country, or
(b) it normally derives 50% or more of its total revenue from business in that
country. However, these are not absolute requirements, and certain companies
incorporated in a particular country and considered by the Sub-advisor to be
located in that country may have substantial off-shore operations or
subsidiaries and/or export sales exceeding in size the assets or sales in that
country.
    
 
INVESTMENTS IN OTHER INVESTMENT COMPANIES
 
   
  With respect to certain countries, investments by the Government Income Fund,
the Strategic Income Fund, the Growth & Income Fund and the Portfolio presently
may be made only by acquiring shares of other investment companies (including
investment vehicles or companies advised by the Sub-advisor or its affiliates
("Affiliated Funds")) with local governmental approval to invest in those
countries. At such time as direct investment in these countries is allowed, the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund and
the Portfolio anticipate investing directly in these markets. The Government
Income Fund, the Strategic Income Fund, the Growth & Income Fund and the
Portfolio may also invest in the securities of closed-end investment companies
within the limits of the Investment Company Act of 1940, as amended ("1940
Act"). These limitations currently provide that, in part, a Fund or the
Portfolio may purchase shares of another investment company unless (a) such a
purchase would cause the Government Income Fund, the Strategic Income Fund, the
Growth & Income Fund or the Portfolio to own in the aggregate more than 3% of
the total outstanding voting securities of the investment company or (b) such a
purchase would cause the Government Income Fund, the Strategic Income Fund, the
Growth & Income Fund or the Portfolio to have more than 5% of its total assets
invested in the investment company or more than 10% of its aggregate assets
invested in an aggregate of all such investment companies. The foregoing
limitations do not apply to the investment by the Emerging Markets Debt Fund in
the Portfolio. Investment in investment companies may involve the payment of
substantial premiums above the value of such companies' portfolio securities.
The Government Income Fund, the Strategic Income Fund, the Growth & Income Fund
and the Portfolio do not intend to invest in such investment companies unless,
in the judgment of the Sub-advisor, the potential benefits of such investments
justify the payment of any applicable premiums. The return on such securities
will be reduced by operating expenses of such companies including payments to
the investment managers of those investment companies. With respect to
investments in Affiliated Funds, the Sub-advisor waives its advisory fee to the
extent that such fees are based on assets of a Fund invested in Affiliated
Funds.
    
 
DEPOSITARY RECEIPTS
 
  The Growth & Income Fund may hold equity securities of foreign issuers in the
form of American Depositary Receipts ("ADRs"), American Depositary Shares
("ADSs"), Global Depositary Receipts ("GDRs") and European Depositary Receipts
("EDRs"), or other securities convertible into securities of eligible issuers.
These securities may not necessarily be denominated in the same currency as the
securities for which they may be exchanged. ADRs and ADSs typically are issued
by an American bank or trust company and evidence ownership of underlying
securities issued by a foreign corporation. EDRs, which are sometimes referred
to as Continental Depositary Receipts ("CDRs"), are issued in Europe typically
by foreign banks and trust companies and evidence ownership of either foreign or
domestic securities. GDRs are similar to EDRs and are designed for use in
several international financial markets. Generally, ADRs and ADSs in registered
form are designed for use in United States securities markets and EDRs in bearer
form are designed for use in European securities markets. For purposes of the
Fund's investment policies, the Fund's investments in ADRs, ADSs, GDRs and EDRs
will be deemed to be investments in the equity securities representing
securities of foreign issuers into which they may be converted.
 
  ADR facilities may be established as either "unsponsored" or "sponsored."
While ADRs issued under these two types of facilities are in some respects
similar, there are distinctions between them relating to the rights and
obligations of ADR holders and the practices of market participants. A
depository may establish an unsponsored facility without participation by (or
even necessarily the acquiescence of) the issuer of the deposited securities,
although typically the depository requests a letter of non-objection from such
issuer prior to the establishment of the facility. Holders of unsponsored ADRs
generally bear all the costs of such facilities. The depository usually charges
fees upon the deposit and withdrawal of the deposited securities, the conversion
of dividends into U.S. dollars, the disposition of non-cash distributions, and
the
 
                                        6
<PAGE>   1268
 
performance of other services. The depository of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited securities or to pass-through voting
rights to ADR holders in respect of the deposited securities. Sponsored ADR
facilities are created in generally the same manner as unsponsored facilities,
except that the issuer of the deposited securities enters into a deposit
agreement with the depository. The deposit agreement sets out the rights and
responsibilities of the issuer, the depository and the ADR holders. With
sponsored facilities, the issuer of the deposited securities generally will bear
some of the costs relating to the facility (such as dividend payment fees of the
depository), although ADR holders continue to bear certain other costs (such as
deposit and withdrawal fees). Under the terms of most sponsored arrangements,
depositories agree to distribute notices of shareholder meetings and voting
instructions, and to provide shareholder communications and other information to
the ADR holders at the request of the issuer of the deposited securities. The
Fund may invest in both sponsored and unsponsored ADRs.
 
SAMURAI AND YANKEE BONDS
 
  The Government Income Fund, the Strategic Income Fund and the Portfolio may
invest in yen-denominated bonds sold in Japan by non-Japanese issuers ("Samurai
bonds"), and may invest in dollar-denominated bonds sold in the United States by
non-U.S. issuers ("Yankee bonds"). It is the policy of the Government Income
Fund, the Strategic Income Fund and the Portfolio to invest in Samurai or Yankee
bond issues only after taking into account considerations of quality and
liquidity, as well as yield.
 
WARRANTS OR RIGHTS
 
   
  Warrants or rights may be acquired by the Government Income Fund, the
Strategic Income Fund, the Growth & Income Fund or the Portfolio in connection
with other securities or separately and provide a Fund or the Portfolio with the
right to purchase at a later date other securities of the issuer. Warrants are
securities permitting, but not obligating, their holder to subscribe for other
securities or commodities. Warrants do not carry with them the right to
dividends or voting rights with respect to the securities that they entitle
their holder to purchase, and they do not represent any rights in the assets of
the issuer. As a result, warrants may be considered more speculative than
certain other types of investments. In addition, the value of a warrant does not
necessarily change with the value of the underlying securities and a warrant
ceases to have value if it is not exercised prior to its expiration date.
    
 
LENDING OF PORTFOLIO SECURITIES
 
   
  For the purpose of realizing additional income, the Government Income Fund,
the Strategic Income Fund, the Growth & Income Fund or the Portfolio may make
secured loans of portfolio securities amounting to not more than 30% of its
total assets. Securities loans are made to broker/dealers or institutional
investors pursuant to agreements requiring that the loans continuously be
secured by collateral at least equal at all times to the value of the securities
lent plus any accrued interest, "marked to market" on a daily basis. The
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund and
the Portfolio may pay reasonable administrative and custodial fees in connection
with loans of its securities. While the securities loan is outstanding, the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund and
the Portfolio will continue to receive the equivalent of the interest or
dividends paid by the issuer on the securities, as well as interest on the
investment of the collateral or a fee from the borrower. The Government Income
Fund, the Strategic Income Fund, the Growth & Income Fund and the Portfolio each
will have a right to call each loan and obtain the securities within the stated
settlement period. The Government Income Fund, the Strategic Income Fund, the
Growth & Income Fund and the Portfolio will not have the right to vote equity
securities while they are lent, but each may call in a loan in anticipation of
any important vote. Loans will be made only to firms deemed by the Sub-advisor
to be of good standing and will not be made unless, in the judgment of the
Sub-advisor, the consideration to be earned from such loans would justify the
risk.
    
 
COMMERCIAL BANK OBLIGATIONS
 
  For the purposes of the Strategic Income Fund's, the Growth & Income Fund's
and the Portfolio's investment policies with respect to bank obligations,
obligations of foreign branches of U.S. banks and of foreign banks are
obligations of the issuing bank and may be general obligations of the parent
bank. Such obligations, however, may be limited by the terms of a specific
obligation and by government regulation. As with investment in non-U.S.
securities in general, investments in the obligations of foreign branches of
U.S. banks and of foreign banks may subject the Strategic Income Fund, the
Growth & Income Fund and the Portfolio to investment risks that are different in
some respects from those of investments in obligations of domestic issuers.
Although the Strategic Income Fund, the Growth & Income Fund and the Portfolio
typically will acquire obligations issued and supported by the credit of U.S. or
foreign banks having total assets at the time
 
                                        7
<PAGE>   1269
 
of purchase in excess of $1 billion, this $1 billion figure is not an investment
policy or restriction of the Strategic Income Fund, the Growth & Income Fund or
the Portfolio. For the purposes of calculation with respect to the $1 billion
figure, the assets of a bank will be deemed to include the assets of its U.S.
and non-U.S. branches.
 
REPURCHASE AGREEMENTS
 
   
  A repurchase agreement is a transaction in which the Government Income Fund,
the Strategic Income Fund, the Growth & Income Fund or the Portfolio buys a
security from a bank or recognized securities dealer and simultaneously commits
to resell that security to the bank or dealer at an agreed upon price, date and
market rate of interest unrelated to the coupon rate or maturity of the
purchased security. Although repurchase agreements carry certain risks not
associated with direct investments in securities, including possible decline in
the market value of the underlying securities and delays and costs to the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund or
Portfolio if the other party to the repurchase agreement becomes bankrupt, the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund and
the Portfolio intend to enter into repurchase agreements only with banks and
broker/dealers believed by the Sub-advisor to present minimal credit risks in
accordance with guidelines approved by the Trust's or the Portfolio's Board of
Trustees. The Sub-advisor reviews and monitors the creditworthiness of such
institutions under the Board's general supervision.
    
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio will invest only in repurchase agreements collateralized
at all times in an amount at least equal to the repurchase price plus accrued
interest. To the extent that the proceeds from any sale of such collateral upon
a default in the obligation to repurchase were less than the repurchase price,
the Government Income Fund, the Strategic Income Fund, the Growth & Income Fund
or the Portfolio would suffer a loss. If the financial institution which is
party to the repurchase agreement petitions for bankruptcy or otherwise becomes
subject to bankruptcy or other liquidation proceedings there may be restrictions
on the Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund's or the Portfolio's ability to sell the collateral and the Government
Income Fund, the Strategic Income Fund, the Growth & Income Fund or the
Portfolio could suffer a loss. However, with respect to financial institutions
whose bankruptcy or liquidation proceedings are subject to the U.S. Bankruptcy
Code, the Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio intend to comply with provisions under such Code that
would allow the immediate resale of such collateral. The Government Income Fund
and the Growth & Income Fund will not enter into a repurchase agreement with a
maturity of more than seven days if, as a result, more than 10% of the value of
each Fund's total assets would be invested in such repurchase agreements and
other illiquid investments and securities for which no readily available market
exists. There is no limitation on the amount of the Growth & Income Fund's
assets that may be subject to repurchase agreements at any time.
 
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
 
   
  The Government Income Fund's, the Strategic Income Fund's, the Growth & Income
Fund's and the Portfolio's borrowings will not exceed 30% of the Fund's or the
Portfolio's respective total assets, i.e., the Government Income Fund, the
Strategic Income Fund, the Growth & Income Fund's or the Portfolio's respective
total assets at all times will equal at least 300% of the amount of outstanding
borrowings. If market fluctuations in the value of the Government Income Fund's,
the Strategic Income Fund's, the Growth & Income Fund's or the Portfolio's
holdings or other factors cause the ratio of the Government Income Fund's, the
Strategic Income Fund's, the Growth & Income Fund's or the Portfolio's total
assets to outstanding borrowings to fall below 300%, within three days
(excluding Sundays and holidays) of such event the respective Fund or the
Portfolio may be required to sell portfolio securities to restore the 300% asset
coverage, even though from an investment standpoint such sales might be
disadvantageous. The Government Income Fund, the Strategic Income Fund, the
Growth & Income Fund and the Portfolio each may borrow up to 5% of its
respective total assets for temporary or emergency purposes other than to meet
redemptions. Any borrowing by the Government Income Fund, the Strategic Income
Fund the Growth & Income Fund or the Portfolio may cause greater fluctuation in
the value of its shares than would be the case if the Fund or the Portfolio did
not borrow.
    
 
  The Government Income Fund's, the Strategic Income Fund's, the Growth & Income
Fund's and the Portfolio's fundamental investment limitations permit them to
borrow money for leveraging purposes. The Government Income Fund and the Growth
& Income Fund, however, currently are prohibited, pursuant to a non-fundamental
investment policy, from borrowing money in order to purchase securities.
Nevertheless, this policy may be changed in the future by a vote of a majority
of the Trust's Board of Trustees. The Strategic Income Fund and the Portfolio
may borrow for leveraging purposes. If the Strategic Income Fund or the
Portfolio employs leverage, it would be subject to certain additional risks. Use
of leverage creates an opportunity for greater growth of capital but would
exaggerate any increases or decreases in the Strategic Income Fund's or the
Portfolio's net asset value. When the income and gains on securities purchased
with the
 
                                        8
<PAGE>   1270
 
proceeds of borrowings exceed the costs of such borrowings, the Government
Income Fund's, the Strategic Income Fund's, the Growth & Income Fund's or the
Portfolio's earnings or net asset value will increase faster than otherwise
would be the case; conversely, if such income and gains fail to exceed such
costs, the Fund's or the Portfolio's earnings or net asset value would decline
faster than would otherwise be the case.
 
   
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio may enter into reverse repurchase agreements. A reverse
repurchase agreement is a borrowing transaction in which the Government Income
Fund, the Strategic Income Fund, the Growth & Income Fund or the Portfolio
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash, and agrees to repurchase the security in the
future at an agreed upon price, which includes an interest component. The
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund and
the Portfolio also may engage in "roll" borrowing transactions which involve the
Government Income Fund's, the Strategic Income Fund's, the Growth & Income
Fund's or the Portfolio's sale of Government National Mortgage Association
certificates or other securities together with a commitment (for which the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund or
the Portfolio may receive a fee) to purchase similar, but not identical,
securities at a future date. The Government Income Fund, the Strategic Income
Fund, the Growth & Income Fund and the Portfolio will segregate with a
custodian, liquid assets in an amount sufficient to cover its obligations under
"roll" transactions and reverse repurchase agreements with broker/dealers. No
segregation is required for reverse repurchase agreements with banks.
    
 
SHORT SALES
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio may make short sales of securities, although they have no
current intention of doing so. A short sale is a transaction in which a Fund or
the Portfolio sells a security in anticipation that the market price of that
security will decline. The Government Income Fund, the Strategic Income Fund,
the Growth & Income Fund and the Portfolio may make short sales as a form of
hedging to offset potential declines in long positions in securities it owns, or
anticipates acquiring, and in order to maintain portfolio flexibility. The
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund and
the Portfolio only may make short sales "against the box." In this type of short
sale, at the time of the sale, the Fund or the Portfolio owns the security it
has sold short or has the immediate and unconditional right to acquire the
identical security at no additional cost.
 
  In a short sale, the seller does not immediately deliver the securities sold
and does not receive the proceeds from the sale. To make delivery to the
purchaser, the executing broker borrows the securities being sold short on
behalf of the seller. The seller is said to have a short position in the
securities sold until it delivers the securities sold, at which time it receives
the proceeds of the sale. To secure its obligation to deliver securities sold
short, the Government Income Fund, the Strategic Income Fund, the Growth &
Income Fund or the Portfolio will deposit in a separate account with its
custodian an equal amount of the securities sold short or securities convertible
into or exchangeable for such securities at no cost. The Government Income Fund,
the Strategic Income Fund, the Growth & Income Fund or the Portfolio could close
out a short position by purchasing and delivering an equal amount of the
securities sold short, rather than by delivering securities already held by the
Fund or the Portfolio, because the Fund or the Portfolio might want to continue
to receive interest and dividend payments on securities in its portfolio that
are convertible into the securities sold short.
 
   
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio might make a short sale "against the box" in order to
hedge against market risks when the Sub-advisor believes that the price of a
security may decline, causing a decline in the value of a security owned by the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund or
the Portfolio or a security convertible into or exchangeable for such security.
In such case, any future losses in the Government Income Fund's, the Strategic
Income Fund's, the Growth & Income Fund's or the Portfolio's long position
should be reduced by a gain in the short position. Conversely, any gain in the
long position should be reduced by a loss in the short position. The extent to
which such gains or losses in the long position are reduced will depend upon the
amount of the securities sold short relative to the amount of the securities the
Fund or the Portfolio owns, either directly or indirectly, and, in the case
where a Fund or the Portfolio owns convertible securities, changes in the
investment values or conversion premiums of such securities. There will be
certain additional transaction costs associated with short sales "against the
box," but a Fund or the Portfolio will endeavor to offset these costs with
income from the investment of the cash proceeds of short sales.
    
 
                                        9
<PAGE>   1271
 
                    OPTIONS, FUTURES AND CURRENCY STRATEGIES
 
SPECIAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES
 
  The use of options, futures contracts and forward currency contracts ("Forward
Contracts") involves special considerations and risks, as described below. Risks
pertaining to particular instruments are described in the sections that follow.
 
   
          (1) Successful use of most of these instruments depends upon the
     Sub-advisor's ability to predict movements of the overall securities and
     currency markets, which requires different skills than predicting changes
     in the prices of individual securities. While the Sub-advisor is
     experienced in the use of these instruments, there can be no assurance that
     any particular strategy adopted will succeed.
    
 
          (2) There might be imperfect correlation, or even no correlation,
     between price movements of an instrument and price movements of the
     investments being hedged. For example, if the value of an instrument used
     in a short hedge increased by less than the decline in value of the hedged
     investment, the hedge would not be fully successful. Such a lack of
     correlation might occur due to factors unrelated to the value of the
     investments being hedged, such as speculative or other pressures on the
     markets in which the hedging instrument is traded. The effectiveness of
     hedges using hedging instruments on indices will depend on the degree of
     correlation between price movements in the index and price movements in the
     investments being hedged.
 
   
          (3) Hedging strategies, if successful, can reduce risk of loss by
     wholly or partially offsetting the negative effect of unfavorable price
     movements in the investments being hedged. However, hedging strategies can
     also reduce opportunity for gain by offsetting the positive effect of
     favorable price movements in the hedged investments. For example, if the
     Government Income Fund, the Strategic Income Fund, the Growth & Income Fund
     or the Portfolio entered into a short hedge because the Sub-advisor
     projected a decline in the price of a security in the Fund's or the
     Portfolio's portfolio, and the price of that security increased instead,
     the gain from that increase might be wholly or partially offset by a
     decline in the price of the hedging instrument. Moreover, if the price of
     the hedging instrument declined by more than the increase in the price of
     the security, the Government Income Fund, the Strategic Income Fund, the
     Growth & Income Fund or the Portfolio could suffer a loss. In either such
     case, the Government Income Fund, the Strategic Income Fund, the Growth &
     Income Fund or the Portfolio would have been in a better position had it
     not hedged at all.
    
 
          (4) As described below, the Government Income Fund, the Strategic
     Income Fund, the Growth & Income Fund or the Portfolio might be required to
     maintain assets as "cover," maintain segregated accounts or make margin
     payments when it takes positions in instruments involving obligations to
     third parties (i.e., instruments other than purchased options). If a Fund
     or the Portfolio were unable to close out its positions in such
     instruments, it might be required to continue to maintain such assets or
     accounts or make such payments until the position expired or matured. The
     requirements might impair the Fund's ability or the Portfolio's ability to
     sell a portfolio security or make an investment at a time when it would
     otherwise be favorable to do so, or require that the Fund or the Portfolio
     sell a portfolio security at a disadvantageous time. The Fund's or the
     Portfolio's ability to close out a position in an instrument prior to
     expiration or maturity depends on the existence of a liquid secondary
     market or, in the absence of such a market, the ability and willingness of
     the other party to the transaction ("contra party") to enter into a
     transaction closing out the position. Therefore, there is no assurance that
     any position can be closed out at a time and price that is favorable to the
     Fund or the Portfolio.
 
WRITING CALL OPTIONS
 
   
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio may write (sell) call options on securities, indices and
currencies. Call options generally will be written on securities and currencies
that, in the opinion of the Sub-advisor are not expected to make any major price
moves in the near future but that, over the long term, are deemed to be
attractive investments for the Government Income Fund, the Strategic Income
Fund, the Growth & Income Fund and the Portfolio.
    
 
  A call option gives the holder (buyer) the right to purchase a security or
currency at a specified price (the exercise price) at any time until (American
Style) or on (European Style) a certain date (the expiration date). So long as
the obligation of the writer of a call option continues, he may be assigned an
exercise notice, requiring him to deliver the underlying security or currency
against payment of the exercise price. This obligation terminates upon the
expiration of the call option, or such earlier time at which the writer effects
a closing purchase transaction by purchasing an option identical to that
previously sold.
 
                                       10
<PAGE>   1272
 
  Portfolio securities or currencies on which call options may be written will
be purchased solely on the basis of investment considerations consistent with a
Fund's or the Portfolio's investment objectives. When writing a call option, the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund or
the Portfolio, in return for the premium, gives up the opportunity for profit
from a price increase in the underlying security or currency above the exercise
price, and retains the risk of loss should the price of the security or currency
decline. Unlike one who owns securities or currencies not subject to an option,
a Fund or the Portfolio has no control over when it may be required to sell the
underlying securities or currencies, since most options may be exercised at any
time prior to the option's expiration. If a call option that a Fund or the
Portfolio has written expires, the Fund or the Portfolio will realize a gain in
the amount of the premium; however, such gain may be offset by a decline in the
market value of the underlying security or currency during the option period. If
the call option is exercised, the Fund or the Portfolio will realize a gain or
loss from the sale of the underlying security or currency, which will be
increased or offset by the premium received. The Government Income Fund, the
Strategic Income Fund, the Growth & Income Fund and the Portfolio do not
consider a security or currency covered by a call option to be "pledged" as that
term is used in the Government Income Fund's, the Strategic Income Fund's, the
Growth & Income Fund's and the Portfolio's fundamental investment policies that
limit the pledging or mortgaging of their assets.
 
  Writing call options can serve as a limited short hedge because declines in
the value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
appreciates to a price higher than the exercise price of the call option, it can
be expected that the option will be exercised and a Fund or the Portfolio will
be obligated to sell the security or currency at less than its market value.
 
   
  The premium that the Government Income Fund, the Strategic Income Fund, the
Growth & Income Fund or the Portfolio receives for writing a call option is
deemed to constitute the market value of an option. The premium a Fund or the
Portfolio will receive from writing a call option will reflect, among other
things, the current market price of the underlying investment, the relationship
of the exercise price to such market price, the historical price volatility of
the underlying investment, and the length of the option period. In determining
whether a particular call option should be written, the Sub-advisor will
consider the reasonableness of the anticipated premium and the likelihood that a
liquid secondary market will exist for those options.
    
 
  Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security or currency from
being called, or to permit the sale of the underlying security or currency.
Furthermore, effecting a closing transaction will permit the Government Income
Fund, the Strategic Income Fund, the Growth & Income Fund or the Portfolio to
write another call option on the underlying security or currency with either a
different exercise price, expiration date or both.
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio will pay transaction costs in connection with the writing
of options and in entering into closing purchase contracts. Transaction costs
relating to options activity normally are higher than those applicable to
purchases and sales of portfolio securities.
 
  The exercise price of the options may be below, equal to or above the current
market values of the underlying securities or currencies at the time the options
are written. From time to time, a Fund or the Portfolio may purchase an
underlying security or currency for delivery in accordance with the exercise of
an option, rather than delivering such security or currency from its portfolio.
In such cases, additional costs will be incurred.
 
  A Fund or the Portfolio will realize a profit or loss from a closing purchase
transaction if the cost of the transaction is less or more, respectively, than
the premium received from writing the option. Because increases in the market
price of a call option generally will reflect increases in the market price of
the underlying security or currency, any loss resulting from the repurchase of a
call option is likely to be offset in whole or in part by appreciation of the
underlying security or currency owned by a Fund or the Portfolio.
 
WRITING PUT OPTIONS
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio may write put options on securities, indices and
currencies. A put option gives the purchaser of the option the right to sell,
and the writer (seller) the obligation to buy, the underlying security or
currency at the exercise price at anytime until (American Style) or on (European
Style) the expiration date. The operation of put options in other respects,
including their related risks and rewards, is substantially identical to that of
call options.
 
   
  A Fund or the Portfolio generally would write put options in circumstances
where the Sub-advisor wishes to purchase the underlying security or currency for
the Fund's or the Portfolio's portfolio at a price lower than the current market
price of the security or currency. In such event, the Fund or the Portfolio
would write a put option at an exercise price
    
 
                                       11
<PAGE>   1273
 
that, reduced by the premium received on the option, reflects the lower price it
is willing to pay. Since the Fund or the Portfolio also would receive interest
on debt securities or currencies maintained to cover the exercise price of the
option, this technique could be used to enhance current return during periods of
market uncertainty. The risk in such a transaction would be that the market
price of the underlying security or currency would decline below the exercise
price less the premium received.
 
  Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
depreciates to a price lower than the exercise price of the put option, it can
be expected that the put option will be exercised and a Fund or the Portfolio
will be obligated to purchase the security or currency at greater than its
market value.
 
PURCHASING PUT OPTIONS
 
   
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio may purchase put options on securities, indices and
currencies. As the holder of a put option, the Government Income Fund, the
Strategic Income Fund, the Growth & Income Fund or the Portfolio would have the
right to sell the underlying security or currency at the exercise price at any
time until (American Style) or on (European Style) the expiration date. The
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund or
the Portfolio may enter into closing sale transactions with respect to such
options, exercise them or permit them to expire.
    
 
  A Fund or the Portfolio may purchase a put option on an underlying security or
currency ("protective put") owned by the Fund or the Portfolio as a hedging
technique in order to protect against an anticipated decline in the value of the
security or currency. Such hedge protection is provided only during the life of
the put option when the Fund or the Portfolio, as the holder of the put option,
is able to sell the underlying security or currency at the put exercise price
regardless of any decline in the underlying security's market price or
currency's exchange value. The premium paid for the put option and any
transaction costs would reduce any profit otherwise available for distribution
when the security or currency eventually is sold.
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio also may purchase put options at a time when that Fund or
the Portfolio does not own the underlying security or currency. By purchasing
put options on a security or currency it does not own, a Fund or the Portfolio
seeks to benefit from a decline in the market price of the underlying security
or currency. If the put option is not sold when it has remaining value, and if
the market price of the underlying security or currency remains equal to or
greater than the exercise price during the life of the put option, the Fund or
the Portfolio will lose its entire investment in the put option. In order for
the purchase of a put option to be profitable, the market price of the
underlying security or currency must decline sufficiently below the exercise
price to cover the premium and transaction costs, unless the put option is sold
in a closing sale transaction.
 
PURCHASING CALL OPTIONS
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund or the Portfolio may purchase call options on securities, indices and
currencies. As the holder of a call option, a Fund or the Portfolio would have
the right to purchase the underlying security or currency at the exercise price
at any time until (American Style) or on (European Style) the expiration date. A
Fund or the Portfolio may enter into closing sale transactions with respect to
such options, exercise them or permit them to expire.
 
  Call options may be purchased by a Fund or the Portfolio for the purpose of
acquiring the underlying security or currency for its portfolio. Utilized in
this fashion, the purchase of call options would enable the Fund or the
Portfolio to acquire the security or currency at the exercise price of the call
option plus the premium paid. At times, the net cost of acquiring the security
or currency in this manner may be less than the cost of acquiring the security
or currency directly. This technique also may be useful to a Fund or the
Portfolio in purchasing a large block of securities that would be more difficult
to acquire by direct market purchases. So long as it holds such a call option,
rather than the underlying security or currency itself, a Fund or the Portfolio
is partially protected from any unexpected decline in the market price of the
underlying security or currency and, in such event, could allow the call option
to expire, incurring a loss only to the extent of the premium paid for the
option.
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio also may purchase call options on underlying securities
or currencies it owns to avoid realizing losses that would result in a reduction
of a Fund's or the Portfolio's current return. For example, where a Fund or the
Portfolio has written a call option on an underlying security or currency having
a current market value below the price at which it purchased the security or
currency, an increase in the market price could result in the exercise of the
call option written by the Fund or the Portfolio and the realization of a loss
on the underlying security or currency. Accordingly, the Fund or the Portfolio
                                       12
<PAGE>   1274
 
could purchase a call option on the same underlying security or currency, which
could be exercised to fulfill the Fund's or the Portfolio's delivery obligations
under its written call (if it is exercised). This strategy could allow the Fund
or the Portfolio to avoid selling the portfolio security or currency at a time
when it has an unrealized loss; however, the Fund or the Portfolio would have to
pay a premium to purchase the call option plus transaction costs.
 
  Aggregate premiums paid for put and call options will not exceed 5% of the
Government Income Fund's, the Strategic Income Fund's, the Growth & Income
Fund's or the Portfolio's total assets at the time of purchase.
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund or the Portfolio may attempt to accomplish objectives similar to those
involved in using Forward Contracts by purchasing put or call options on
currencies. A put option gives a Fund or the Portfolio as purchaser the right
(but not the obligation) to sell a specified amount of currency at the exercise
price at any time until (American Style) or on (European Style) the expiration
of the option. A call option gives a Fund or the Portfolio as purchaser the
right (but not the obligation) to purchase a specified amount of currency at the
exercise price at any time until (American Style) or on (European Style) the
expiration of the option. A Fund or the Portfolio might purchase a currency put
option, for example, to protect itself against a decline in the dollar value of
a currency in which it holds or anticipates holding securities. If the
currency's value should decline against the dollar, the loss in currency value
should be offset, in whole or in part, by an increase in the value of the put.
If the value of the currency instead should rise against the dollar, any gain to
the Fund or the Portfolio would be reduced by the premium it had paid for the
put option. A currency call option might be purchased, for example, in
anticipation of, or to protect against, a rise in the value against the dollar
of a currency in which the Fund or the Portfolio anticipates purchasing
securities.
 
  Options may be either listed on an exchange or traded in over-the-counter
("OTC") markets. Listed options are third-party contracts (i.e., performance of
the obligations of the purchaser and seller is guaranteed by the exchange or
clearing corporation), and have standardized strike prices and expiration dates.
OTC options are two-party contracts with negotiated strike prices and expiration
dates. The Funds and the Portfolio will not purchase an OTC option unless the
Fund or the Portfolio believes that daily valuations for such options are
readily obtainable. OTC options differ from exchange-traded options in that OTC
options are transacted with dealers directly and not through a clearing
corporation (which guarantees performance). Consequently, there is a risk of
non-performance by the dealer. Since no exchange is involved, OTC options are
valued on the basis of the average of the last bid prices obtained from dealers,
unless a quotation from only one dealer is available, in which case only that
dealer's price will be used. In the case of OTC options, there can be no
assurance that a liquid secondary market will exist for any particular option at
any specific time.
 
  The staff of the SEC considers purchased OTC options to be illiquid
securities. A Fund or the Portfolio may also sell OTC options and, in connection
therewith, segregate assets or cover its obligations with respect to OTC options
written by the Fund or the Portfolio. The assets used as cover for OTC options
written by a Fund or the Portfolio will be considered illiquid unless the OTC
options are sold to qualified dealers who agree that the Fund or the Portfolio
may repurchase any OTC option it writes at a maximum price to be calculated by a
formula set forth in the option agreement. The cover for an OTC option written
subject to this procedure would be considered illiquid only to the extent that
the maximum repurchase price under the formula exceeds the intrinsic value of
the option.
 
  A Fund's or the Portfolio's ability to establish and close out positions in
exchange-listed options depends on the existence of a liquid market. Each Fund
and the Portfolio intends to purchase or write only those exchange-traded
options for which there appears to be a liquid secondary market. However, there
can be no assurance that such a market will exist at any particular time.
Closing transactions can be made for OTC options only by negotiating directly
with the contra party or by a transaction in the secondary market if any such
market exists. Although each Fund and the Portfolio will enter into OTC options
only with contra parties that are expected to be capable of entering into
closing transactions with the Fund or the Portfolio, there is no assurance that
the Fund or the Portfolio will in fact be able to close out an OTC option
position at a favorable price prior to expiration. In the extent of insolvency
of the contra party, the Fund or the Portfolio might be unable to close out an
OTC option position at any time prior to its expiration.
 
INDEX OPTIONS
 
  Puts and calls on indices are similar to puts and calls on securities or
futures contracts except that all settlements are in cash and gain or loss
depends on changes in the index in question (and thus on price movements in the
securities market or a particular market sector generally) rather than on price
movements in individual securities or futures contracts. When a Fund or the
Portfolio writes a call on an index, it receives a premium and agrees that,
prior to the expiration date, the purchaser of the call, upon exercise of the
call, will receive from the Fund or the Portfolio an amount of cash if the
closing level of the index upon which the call is based is greater than the
exercise price of the call. The amount of cash is equal to the difference
between the closing price of the index and the exercise price of the call times
a specified multiple
 
                                       13
<PAGE>   1275
 
(the "multiplier"), which determines the total dollar value for each point of
such difference. When a Fund or the Portfolio buys a call on an index, it pays a
premium and has the same rights as to such call as are indicated above. When a
Fund or the Portfolio buys a put on an index, it pays a premium and has the
right, prior to the expiration date, to require the seller of the put, upon the
Fund's or the Portfolio's exercise of the put, to deliver to the Fund or the
Portfolio an amount of cash if the closing level of the index upon which the put
is based is less than the exercise price of the put, which amount of cash is
determined by the multiplier, as described above for calls. When a Fund or the
Portfolio writes a put on an index, it receives a premium and the purchaser has
the right, prior to the expiration date, to require the Fund or the Portfolio to
deliver to it an amount of cash equal to the difference between the closing
level of the index and the exercise price times the multiplier, if the closing
level is less than the exercise price.
 
  The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Fund or the
Portfolio writes a call on an index it cannot provide in advance for its
potential settlement obligations by acquiring and holding the underlying
securities. A Fund or the Portfolio can offset some of the risk of writing a
call index option position by holding a diversified portfolio of securities
similar to those on which the underlying index is based. However, a Fund or the
Portfolio cannot, as a practical matter, acquire and hold a portfolio containing
exactly the same securities as underlie the index and, as a result, bears a risk
that the value of the securities held will vary from the value of the index.
 
  Even if a Fund or the Portfolio could assemble a securities portfolio that
exactly reproduced the composition of the underlying index, it still would not
be fully covered from a risk standpoint because of the "timing risk" inherent in
writing index options. When an index option is exercised, the amount of cash
that the holder is entitled to receive is determined by the difference between
the exercise price and the closing index level on the date when the option is
exercised. As with other kinds of options, the Fund or the Portfolio, as the
call writer, will not know that it has been assigned until the next business day
at the earliest. The time lag between exercise and notice of assignment poses no
risk for the writer of a covered call on a specific underlying security, such as
common stock, because there the writer's obligation is to deliver the underlying
security, not to pay its value as of a fixed time in the past. So long as the
writer already owns the underlying security, it can satisfy its settlement
obligations by simply delivering it, and the risk that its value may have
declined since the exercise date is borne by the exercising holder. In contrast,
even if the writer of an index call holds securities that exactly match the
composition of the underlying index, it will not be able to satisfy its
assignment obligations by delivering those securities against payment of the
exercise price. Instead, it will be required to pay cash in an amount based on
the closing index value on the exercise date; and by the time it learns that it
has been assigned, the index may have declined, with a corresponding decline in
the value of its securities portfolio. This "timing risk" is an inherent
limitation on the ability of index call writers to cover their risk exposure by
holding securities positions.
 
  If a Fund or the Portfolio purchases an index option and exercises it before
the closing index value for that day is available, it runs the risk that the
level of the underlying index may subsequently change. If such a change causes
the exercised option to fall out-of-the-money, the Fund or the Portfolio will be
required to pay the difference between the closing index value and the exercise
price of the option (times the applicable multiplier) to the assigned writer.
 
INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES CONTRACTS
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund or the Portfolio may enter into interest rate or currency futures contracts
("Futures" or "Futures Contracts") as a hedge against changes in prevailing
levels of interest rates or currency exchange rates in order to establish more
definitely the effective return on securities or currencies held or intended to
be acquired by the Fund or the Portfolio. The Government Income Fund's, the
Strategic Income Fund's, the Growth & Income Fund's or the Portfolio's hedging
may include sales of Futures as an offset against the effect of expected
increases in interest rates or decreases in currency exchange rates, and
purchases of Futures as an offset against the effect of expected declines in
interest rates or increases in currency exchange rates. The Growth & Income Fund
may also enter into stock index Futures Contracts as a hedge against changes in
stock prices and the Government Income Fund, the Strategic Income Fund and the
Portfolio may enter into Futures Contracts on indices of debt securities.
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio only will enter into Futures Contracts that are traded on
futures exchanges and are standardized as to maturity date and underlying
financial instrument. Futures exchanges and trading thereon in the United States
are regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC"). Futures are exchanged in London at the London International
Financial Futures Exchange.
 
                                       14
<PAGE>   1276
 
  Although techniques other than sales and purchases of Futures Contracts could
be used to reduce a Fund's or the Portfolio's exposure to interest rate and
currency exchange rate fluctuations, a Fund or the Portfolio may be able to
hedge exposure more effectively and at a lower cost through using Futures
Contracts.
 
  A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument (debt
security or currency) for a specified price at a designated date, time and
place. An index Futures Contract provides for the delivery, at a designated
date, time and place, of an amount of cash equal to a specified dollar amount
times the difference between the index value at the close of trading on the
contract and the price at which the Futures Contract is originally struck; no
physical delivery of the securities comprising the index is made. Brokerage fees
are incurred when a Futures Contract is bought or sold, and margin deposits must
be maintained at all times the Futures Contract is outstanding.
 
  Although Futures Contracts typically require future delivery of and payment
for financial instruments or currencies, Futures Contracts usually are closed
out before the delivery date. Closing out an open Futures Contract sale or
purchase is effected by entering into an offsetting Futures Contract purchase or
sale, respectively, for the same aggregate amount of the identical financial
instrument or currency and the same delivery date. If the offsetting purchase
price is less than the original sale price, the Government Income Fund, the
Strategic Income Fund, the Growth & Income Fund or the Portfolio realizes a
gain; if it is more, the Government Income Fund, the Strategic Income Fund, the
Growth & Income Fund or the Portfolio realizes a loss. Conversely, if the
offsetting sale price is more than the original purchase price, the Government
Income Fund, the Strategic Income Fund, the Growth & Income Fund or the
Portfolio realizes a gain; if it is less, the Government Income Fund, the
Strategic Income Fund, the Growth & Income Fund or the Portfolio realizes a
loss. The transaction costs also must be included in these calculations. There
can be no assurance, however, that a Fund or the Portfolio will be able to enter
into an offsetting transaction with respect to a particular Futures Contract at
a particular time. If a Fund or the Portfolio is not able to enter into an
offsetting transaction, the Fund or the Portfolio will continue to be required
to maintain the margin deposits on the Futures Contract.
 
  As an example of an offsetting transaction, the contractual obligations
arising from the sale of one Futures Contract of September Deutschemarks on an
exchange may be fulfilled at any time before delivery under the Futures Contract
is required (i.e., on a specified date in September, the "delivery month") by
the purchase of another Futures Contract of September Deutschemarks on the same
exchange. In such instance, the difference between the price at which the
Futures Contract was sold and the price paid for the offsetting purchase, after
allowance for transaction costs, represents the profit or loss to the Government
Income Fund, the Strategic Income Fund, the Growth & Income Fund or the
Portfolio.
 
  The Government Income Fund's, the Strategic Income Fund's, the Growth & Income
Fund's and the Portfolio's Futures transactions will be entered into for hedging
purposes only; that is, Futures Contracts will be sold to protect against a
decline in the price of securities or currencies that the Fund or the Portfolio
owns, or Futures Contracts will be purchased to protect the Fund or the
Portfolio against an increase in the price of securities or currencies it has
committed to purchase or expects to purchase.
 
  "Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by the Government Income Fund, the Strategic Income Fund, the Growth &
Income Fund or the Portfolio in order to initiate Futures trading and to
maintain the Fund's or the Portfolio's open positions in Futures Contracts. A
margin deposit made when the Futures Contract is entered into ("initial margin")
is intended to assure a Fund's or the Portfolio's performance under the Futures
Contract. The margin required for a particular Futures Contract is set by the
exchange on which the Futures Contract is traded, and may be modified
significantly from time to time by the exchange during the term of the Futures
Contract.
 
  Subsequent payments, called "variation margin," to and from the futures
commission merchant through which the Fund or the Portfolio entered into the
Futures Contract will be made on a daily basis as the price of the underlying
security, currency or index fluctuates making the Futures Contract more or less
valuable, a process known as marking-to-market.
 
  Risks of Using Futures Contracts. The prices of Futures Contracts are volatile
and are influenced, among other things, by actual and anticipated changes in
interest and currency rates, which in turn are affected by fiscal and monetary
policies and national and international political and economic events.
 
  There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities or currencies in a Fund's or the
Portfolio's portfolio being hedged. The degree of imperfection of correlation
depends upon circumstances such as: variations in speculative market demand for
Futures and for securities or currencies, including technical influences in
Futures trading; and differences between the financial instruments being hedged
and the instruments underlying the standard Futures Contracts available for
trading. A decision of whether, when, and how to hedge involves skill and
judgment, and even a well-conceived hedge may be unsuccessful to some degree
because of unexpected market behavior or interest or currency rate trends.
 
                                       15
<PAGE>   1277
 
  Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
 
  Most U.S. Futures exchanges limit the amount of fluctuation permitted in
Futures Contract and option on Futures Contract prices during a single trading
day. The daily limit establishes the maximum amount that the price of a Futures
Contract or option may vary either up or down from the previous day's settlement
price at the end of a trading session. Once the daily limit has been reached in
a particular type of Futures Contract or option, no trades may be made on that
day at a price beyond that limit. The daily limit governs only price movement
during a particular trading day and therefore does not limit potential losses,
because the limit may prevent the liquidation of unfavorable positions. Futures
Contract and option prices occasionally have moved to the daily limit for
several consecutive trading days with little or no trading, thereby preventing
prompt liquidation of positions and subjecting some traders to substantial
losses.
 
  If a Fund or the Portfolio were unable to liquidate a Futures or option on
Futures position due to the absence of a liquid secondary market or the
imposition of price limits, it could incur substantial losses. The Fund or the
Portfolio would continue to be subject to market risk with respect to the
position. In addition, except in the case of purchased options, the Fund or the
Portfolio would continue to be required to make daily variation margin payments
and might be required to maintain the position being hedged by the Future or
option or to maintain cash or securities in a segregated account.
 
  Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit requirements in the Futures market are less
onerous than margin requirements in the securities markets, there might be
increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
 
OPTIONS ON FUTURES CONTRACTS
 
  Options on Futures Contracts are similar to options on securities or
currencies except that options on Futures Contracts give the purchaser the
right, in return for the premium paid, to assume a position in a Futures
Contract (a long position if the option is a call and a short position if the
option is a put) at a specified exercise price at any time during the period of
the option. Upon exercise of the option, the delivery of the Futures position by
the writer of the option to the holder of the option will be accompanied by
delivery of the accumulated balance in the writer's Futures margin account,
which represents the amount by which the market price of the Futures Contract,
at exercise, exceeds (in the case of a call) or is less than (in the case of a
put) the exercise price of the option on the Futures Contract. If an option is
exercised on the last trading day prior to the expiration date of the option,
the settlement will be made entirely in cash equal to the difference between the
exercise price of the option and the closing level of the securities, currencies
or index upon which the Futures Contract is based on the expiration date.
Purchasers of options who fail to exercise their options prior to the exercise
date suffer a loss of the premium paid.
 
  The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities, foreign currencies or indices.
 
  If a Fund or the Portfolio writes an option on a Futures Contract, it will be
required to deposit initial and variation margin pursuant to requirements
similar to those applicable to Futures Contracts. Premiums received from the
writing of an option on a Futures Contract are included in the initial margin
deposit.
 
  A Fund or the Portfolio may seek to close out an option position by selling an
option covering the same Futures Contract and having the same exercise price and
expiration date. The ability to establish and close out positions on such
options is subject to the maintenance of a liquid secondary market.
 
                                       16
<PAGE>   1278
 
LIMITATIONS ON USE OF FUTURES, OPTIONS ON FUTURES AND CERTAIN OPTIONS ON
CURRENCIES
 
  To the extent that a Fund or the Portfolio enters into Futures Contracts,
options on Futures Contracts and options on foreign currencies traded on a
CFTC-regulated exchange, in each case other than for bona fide hedging purposes
(as defined by the CFTC), the aggregate initial margin and premiums required to
establish those positions (excluding the amount by which options are
"in-the-money") will not exceed 5% of the liquidation value of a Fund's or the
Portfolio's portfolio, after taking into account unrealized profits and
unrealized losses on any contracts the Fund or the Portfolio has entered into.
In general, a call option on a Futures Contract is "in-the-money" if the value
of the underlying Futures Contract exceeds the strike, i.e., exercise, price of
the call; a put option on a Futures Contract is "in-the-money" if the value of
the underlying Futures Contract is exceeded by the strike price of the put. This
guideline may be modified by the Trust's or the Portfolio's Board of Trustees,
as applicable, without a shareholder vote. This limitation does not limit the
percentage of a Fund's or the Portfolio's assets at risk to 5%.
 
FORWARD CONTRACTS
 
  A Forward Contract is an obligation, generally arranged with a commercial bank
or other currency dealer, to purchase or sell a currency against another
currency at a future date and price as agreed upon by the parties. The
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund and
the Portfolio either may accept or make delivery of the currency at the maturity
of the Forward Contract. A Fund or the Portfolio may also, if its contra party
agrees, prior to maturity, enter into a closing transaction involving the
purchase or sale of an offsetting contract.
 
  A Fund or the Portfolio engages in forward currency transactions in
anticipation of, or to protect itself against, fluctuations in exchange rates. A
Fund or the Portfolio might sell a particular foreign currency forward, for
example, when it holds bonds denominated in a foreign currency but anticipates,
and seeks to be protected against, a decline in the currency against the U.S.
dollar. Similarly, a Fund or the Portfolio might sell the U.S. dollar forward
when it holds bonds denominated in U.S. dollars but anticipates, and seeks to be
protected against, a decline in the U.S. dollar relative to other currencies.
Further, the Funds or the Portfolio might purchase a currency forward to "lock
in" the price of securities denominated in that currency that it anticipates
purchasing.
 
  Forward Contracts are traded in the interbank market conducted directly
between currency traders (usually large commercial banks) and their customers. A
Forward Contract generally has no deposit requirement, and no commissions are
charged at any stage for trades. The Government Income Fund, the Strategic
Income Fund, the Growth & Income Fund or the Portfolio will enter into such
Forward Contracts with major U.S. or foreign banks and securities or currency
dealers in accordance with guidelines approved by the Trust's or the Portfolio's
Board of Trustees, as applicable.
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund or the Portfolio may enter into Forward Contracts either with respect to
specific transactions or with respect to the overall investment of the Fund or
the Portfolio. The precise matching of the Forward Contract amounts and the
value of specific securities generally will not be possible because the future
value of such securities in foreign currencies will change as a consequence of
market movements in the value of those securities between the date the Forward
Contract is entered into and the date it matures. Accordingly, it may be
necessary for the Fund or the Portfolio to purchase additional foreign currency
on the spot (i.e., cash) market (and bear the expense of such purchase) if the
market value of the security is less than the amount of foreign currency the
Fund or the Portfolio is obligated to deliver and if a decision is made to sell
the security and make delivery of the foreign currency. Conversely, it may be
necessary to sell on the spot market some of the foreign currency the Fund or
the Portfolio is obligated to deliver. The projection of short-term currency
market movements is extremely difficult, and the successful execution of a
short-term hedging strategy is highly uncertain. Forward Contracts involve the
risk that anticipated currency movements will not be predicted accurately,
causing the Fund or the Portfolio to sustain losses on these contracts and
transaction costs.
 
  At or before the maturity of a Forward Contract requiring the Fund or the
Portfolio to sell a currency, the Fund or the Portfolio either may sell a
portfolio security and use the sale proceeds to make delivery of the currency or
retain the security and offset its contractual obligation to deliver the
currency by purchasing a second contract pursuant to which the Fund or the
Portfolio will obtain, on the same maturity date, the same amount of the
currency that it is obligated to deliver. Similarly, the Fund or the Portfolio
may close out a Forward Contract requiring it to purchase a specified currency
by entering into a second contract, if its contra party agrees, entitling it to
sell the same amount of the same currency on the maturity date of the first
contract. The Fund or the Portfolio would realize a gain or loss as a result of
entering into such an offsetting Forward Contract under either circumstance to
the extent the exchange rate or rates between the currencies involved moved
between the execution dates of the first contract and the offsetting contract.
 
  The cost to a Fund or the Portfolio of engaging in Forward Contracts varies
with factors such as the currencies involved, the length of the contract period
and the market conditions then prevailing. Because Forward Contracts usually are
 
                                       17
<PAGE>   1279
 
entered into on a principal basis, no fees or commissions are involved. The use
of Forward Contracts does not eliminate fluctuations in the prices of the
underlying securities the Fund or the Portfolio owns or intends to acquire, but
it does establish a rate of exchange in advance. In addition, while Forward
Contracts limit the risk of loss due to a decline in the value of the hedged
currencies, they also limit any potential gain that might result should the
value of the currencies increase.
 
FOREIGN CURRENCY STRATEGIES -- SPECIAL CONSIDERATIONS
 
  A Fund or the Portfolio may use options on foreign currencies, Futures on
foreign currencies, options on Futures on foreign currencies and Forward
Contracts to hedge against movements in the values of the foreign currencies in
which the Fund's or the Portfolio's securities are denominated. Such currency
hedges can protect against price movements in a security that a Fund or the
Portfolio owns or intends to acquire that are attributable to changes in the
value of the currency in which it is denominated. Such hedges do not, however,
protect against price movements in the securities that are attributable to other
causes.
 
   
  A Fund or the Portfolio might seek to hedge against changes in the value of a
particular currency when no Futures Contract, Forward Contract or option
involving that currency is available or one of such contracts is more expensive
than certain other contracts. In such cases, the Fund or the Portfolio may hedge
against price movements in that currency by entering into a contract on another
currency or basket of currencies, the values of which the Sub-advisor believes
will have a positive correlation to the value of the currency being hedged. The
risk that movements in the price of the contract will not correlate perfectly
with movements in the price of the currency being hedged is magnified when this
strategy is used.
    
 
  The value of Futures Contracts, options on Futures Contracts, Forward
Contracts and options on foreign currencies depends on the value of the
underlying currency relative to the U.S. dollar. Because foreign currency
transactions occurring in the interbank market might involve substantially
larger amounts than those involved in the use of Futures Contracts, Forward
Contracts or options, a Fund or the Portfolio could be disadvantaged by dealing
in the odd lot market (generally consisting of transactions of less than $1
million) for the underlying foreign currencies at prices that are less favorable
than for round lots.
 
  There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirements that quotations available through
dealers or other market sources be firm or revised on a timely basis. Quotation
information generally is representative of very large transactions in the
interbank market and thus might not reflect odd-lot transactions where rates
might be less favorable. The interbank market in foreign currencies is a global,
round-the-clock market. To the extent the U.S. options or Futures markets are
closed while the markets for the underlying currencies remain open, significant
price and rate movements might take place in the underlying markets that cannot
be reflected in the markets for the Futures contracts or options until they
reopen.
 
  Settlement of Futures Contracts, Forward Contracts and options involving
foreign currencies might be required to take place within the country issuing
the underlying currency. Thus, a Fund or the Portfolio might be required to
accept or make delivery of the underlying foreign currency in accordance with
any U.S. or foreign regulations regarding the maintenance of foreign banking
arrangements by U.S. residents and might be required to pay any fees, taxes and
charges associated with such delivery assessed in the issuing country.
 
COVER
 
  Transactions using Forward Contracts, Futures Contracts and options (other
than options purchased by a Fund or the Portfolio) expose the Fund or the
Portfolio to an obligation to another party. A Fund or the Portfolio will not
enter into any such transactions unless it owns either (1) an offsetting
("covered") position in securities, currencies, or other options, Forward
Contracts or Futures Contracts, or (2) cash, receivables and short-term debt
securities with a value sufficient at all times to cover its potential
obligations not covered as provided in (1) above. Each Fund and the Portfolio
will comply with SEC guidelines regarding cover for these instruments and, if
the guidelines so require, set aside cash or liquid securities.
 
  Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Forward Contract, Futures Contract or option is
open, unless they are replaced with other appropriate assets. If a large portion
of a Fund's or the Portfolio's assets are used for cover or segregated accounts,
it could affect portfolio management or the Fund's or the Portfolio's ability to
meet redemption requests or other current obligations.
 
                                       18
<PAGE>   1280
 
INTEREST RATE AND CURRENCY SWAPS
 
   
  The Strategic Income Fund and the Portfolio usually will enter into interest
rate swaps on a net basis, that is, the two payment streams are netted out in a
cash settlement on the payment date or dates specified in the instrument, with
the Strategic Income Fund or the Portfolio receiving or paying, as the case may
be, only the net amount of the two payments. The net amount of the excess, if
any, of each of the Strategic Income Fund's and the Portfolio's obligations over
its entitlements with respect to each swap will be accrued on a daily basis and
an amount of cash or liquid securities having an aggregate net asset value at
least equal to the accrued excess will be maintained in an account by a
custodian that satisfies the requirements of the 1940 Act. The Strategic Income
Fund and the Portfolio will also establish and maintain such segregated accounts
with respect to its total obligations under any swaps that are not entered into
on a net basis and with respect to any caps or floors that are written by that
Fund or the Portfolio. The Sub-advisor, the Strategic Income Fund and the
Portfolio believe that swaps, caps and floors do not constitute senior
securities under the 1940 Act and, accordingly, will not treat them as being
subject to the Fund's and the Portfolio's borrowing restrictions. The Strategic
Income Fund and the Portfolio will not enter into any swap, cap, floor, collar
or other derivative transaction unless, at the time of entering into the
transaction, the unsecured long-term debt rating of the counterparty combined
with any credit enhancements is rated at least A by Moody's or S&P, or has an
equivalent rating from a nationally recognized statistical rating organization
or is determined to be of equivalent credit quality by the Sub-advisor. If a
counterparty defaults, the Strategic Income Fund or the Portfolio may have
contractual remedies pursuant to the agreements related to the transactions. The
swap market has grown substantially in recent years, with a large number of
banks and investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the swap market has
become relatively liquid. Caps, floors and collars are more recent innovations
for which standardized documentation has not yet been fully developed and, for
that reason, they are less liquid than swaps.
    
 
                                  RISK FACTORS
 
ILLIQUID SECURITIES
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio each may invest up to 15% of net assets in illiquid
securities. Securities may be considered illiquid if a Fund or the Portfolio
cannot reasonably expect within seven days to receive approximately the amount
at which the Fund or the Portfolio values such securities. The sale of illiquid
securities, if they can be sold at all, generally will require more time and
result in higher brokerage charges or dealer discounts and other selling
expenses than will the sale of liquid securities, such as securities eligible
for trading on U.S. securities exchanges or in the over-the-counter markets.
Moreover, restricted securities, which may be illiquid for purposes of this
limitation often sell, if at all, at a price lower than similar securities that
are not subject to restrictions on resale.
 
  Illiquid securities include those that are subject to restrictions contained
in the securities laws of other countries. However, securities that are freely
marketable in the country where they are principally traded, but would not be
freely marketable in the United States, will not be considered illiquid. Where
registration is required, each Fund and the Portfolio may be obligated to pay
all or part of the registration expenses and a considerable period may elapse
between the time of the decision to sell and the time a Fund or the Portfolio
may be permitted to sell a security under an effective registration statement.
If, during such a period, adverse market conditions were to develop, a Fund or
the Portfolio might obtain a less favorable price than prevailed when it decided
to sell.
 
  Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the Securities Act of 1933, as amended ("1933 Act"), including
private placements, repurchase agreements, commercial paper, foreign securities
and corporate bonds and notes. These instruments are often restricted securities
because the securities are sold in transactions not requiring registration.
Institutional investors generally will not seek to sell these instruments to the
general public, but instead will often depend either on an efficient
institutional market in which such unregistered securities can be readily resold
or on an issuer's ability to honor a demand for repayment. Therefore, the fact
that there are contractual or legal restrictions on resale to the general public
or certain institutions is not dispositive of the liquidity of such investments.
 
  Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of unregistered securities of domestic and foreign
issuers, such as the PORTAL System sponsored by the National Association of
Securities Dealers, Inc. An insufficient number of qualified institutional
buyers interested in
 
                                       19
<PAGE>   1281
 
purchasing Rule 144A-eligible restricted securities held by a Fund or the
Portfolio, however, could affect adversely the marketability of such portfolio
securities and a Fund or the Portfolio might be unable to dispose of such
securities promptly or at favorable prices.
 
   
  With respect to liquidity determinations generally, the Trust's or the
Portfolio's Board of Trustees has the ultimate responsibility for determining
whether specific securities, including restricted securities eligible for resale
to qualified institutional buyers pursuant to Rule 144A under the 1933 Act, are
liquid or illiquid. The Board has delegated the function of making day-to-day
determinations of liquidity to the Sub-advisor in accordance with procedures
approved by the Board. The Sub-advisor takes into account a number of factors in
reaching liquidity decisions, including: (i) the frequency of trading in the
security; (ii) the number of dealers that make quotes for the security; (iii)
the number of dealers that have undertaken to make a market in the security;
(iv) the number of other potential purchasers; and (v) the nature of the
security and how trading is effected (e.g., the time needed to sell the
security, how offers are solicited and the mechanics of transfer). The
Sub-advisor will monitor the liquidity of securities held by each Fund and the
Portfolio and report periodically on such decisions to the Trust's or the
Portfolio's Board of Trustees. Moreover, as noted in the Prospectus, certain
securities, such as those subject to registration restrictions of more than
seven days, will generally be treated as illiquid. If the liquidity percentage
restriction of a Fund or the Portfolio is satisfied at the time of investment, a
later increase in the percentage of illiquid securities held by a Fund or the
Portfolio resulting from a change in market value or assets will not constitute
a violation of that restriction. If as a result of a change in market value or
assets, the percentage of illiquid securities held by the Fund or Portfolio
increases above the applicable limit, the Sub-advisor will take appropriate
steps to bring the aggregate amount of illiquid assets back within the
prescribed limitations as soon as reasonably practicable, taking into account
the effect of any disposition on the Fund or the Portfolio.
    
 
FOREIGN SECURITIES
 
  Political, Social and Economic Risks. Investing in securities of non-U.S.
companies may entail additional risks due to the potential political, social and
economic instability of certain countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility of currencies into U.S. dollars and on repatriation
of capital invested. In the event of such expropriation, nationalization or
other confiscation by any country, either a Fund or the Portfolio could lose its
entire investment in any such country.
 
  Religious, Political and Ethnic Instability. Certain countries in which a Fund
or the Portfolio may invest may have groups that advocate radical religious or
revolutionary philosophies or support ethnic independence. Any disturbance on
the part of such individuals could carry the potential for widespread
destruction or confiscation of property owned by individuals and entities
foreign to such country and could cause the loss of a Fund's or the Portfolio's
investment in those countries. Instability may also result from, among other
things: (i) authoritarian governments or military involvement in political and
economic decision-making, including changes in government through
extra-constitutional means; (ii) popular unrest associated with demands for
improved political, economic and social conditions; and (iii) hostile relations
with neighboring or other countries. Such political, social and economic
instability could disrupt the principal financial markets in which a Fund or the
Portfolio invests and adversely affect the value of the Fund's or the
Portfolio's assets.
 
  Foreign Investment Restrictions. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as the Government Income Fund,
the Strategic Income Fund, the Growth & Income Fund or the Portfolio. These
restrictions or controls may at times limit or preclude investment in certain
securities and may increase the cost and expenses of a Fund or the Portfolio.
For example, certain countries require prior governmental approval before
investments by foreign persons may be made, or may limit the amount of
investment by foreign persons in a particular company, or limit the investment
by foreign persons to only a specific class of securities of a company that may
have less advantageous terms than securities of the company available for
purchase by nationals. Moreover, the national policies of certain countries may
restrict investment opportunities in issuers or industries deemed sensitive to
national interests. In addition, some countries require governmental approval
for the repatriation of investment income, capital or the proceeds of securities
sales by foreign investors. In addition, if there is a deterioration in a
country's balance of payments or for other reasons, a country may impose
restrictions on foreign capital remittances abroad. The Government Income Fund,
the Strategic Income Fund, the Growth & Income Fund or the Portfolio could be
adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation, as well as by the application to it of
other restrictions on investments.
 
  Non-Uniform Corporate Disclosure Standards and Governmental
Regulation. Foreign companies are subject to accounting, auditing and financial
standards and requirements that differ, in some cases significantly, from those
applicable to U.S. companies. In particular, the assets, liabilities and profits
appearing on the financial statements of such a company may not reflect its
financial position or results of operations in the way they would be reflected
had such
 
                                       20
<PAGE>   1282
 
   
financial statements been prepared in accordance with U.S. generally accepted
accounting principles. Most of the foreign securities held by the Government
Income Fund, the Strategic Income Fund, the Growth & Income Fund or the
Portfolio will not be registered with the SEC or regulators of any foreign
country, nor will the issuers thereof be subject to the SEC's reporting
requirements. Thus, there will be less available information concerning most
foreign issuers of securities held by the Government Income Fund, the Strategic
Income Fund, the Growth & Income Fund and the Portfolio than is available
concerning U.S. issuers. In instances where the financial statements of an
issuer are not deemed to reflect accurately the financial situation of the
issuer, the Sub-advisor will take appropriate steps to evaluate the proposed
investment, which may include on-site inspection of the issuer, interviews with
its management and consultations with accountants, bankers and other
specialists. There is substantially less publicly available information about
foreign companies than there are reports and ratings published about U.S.
companies and the U.S. Government. In addition, where public information is
available, it may be less reliable than such information regarding U.S. issuers.
Issuers of securities in foreign jurisdictions are generally not subject to the
same degree of regulation as are U.S. issuers with respect to such matters as
restrictions on market manipulation, insider trading rules, shareholder proxy
requirements and timely disclosure of information.
    
 
  Currency Fluctuations. Because the Funds and the Portfolio, under normal
circumstances, will invest substantial portions of their total assets in the
securities of foreign issuers which are denominated in foreign currencies, the
strength or weakness of the U.S. dollar against such foreign currencies will
account for part of each Fund's and the Portfolio's investment performance. A
decline in the value of any particular currency against the U.S. dollar will
cause a decline in the U.S. dollar value of each Fund's and the Portfolio's
holdings of securities and cash denominated in such currency and, therefore,
will cause an overall decline in their respective net asset values and any net
investment income and capital gains derived from such securities to be
distributed in U.S. dollars to shareholders of the Funds. Moreover, if the value
of the foreign currencies in which a Fund or the Portfolio receives its income
declines relative to the U.S. dollar between the receipt of the income and the
making of Fund distributions, the Fund or the Portfolio may be required to
liquidate securities in order to make distributions if the Fund or the Portfolio
has insufficient cash in U.S. dollars to meet distribution requirements.
 
  The rate of exchange between the U.S. dollar and other currencies is
determined by several factors including the supply and demand for particular
currencies, central bank efforts to support particular currencies, the relative
movement of interest rates and the pace of business activity in the other
countries, and the United States, and other economic and financial conditions
affecting the world economy.
 
  Although the Funds and the Portfolio value their assets daily in terms of U.S.
dollars, they do not intend to convert holdings of foreign currencies into U.S.
dollars on a daily basis. The Funds and the Portfolio will do so from time to
time, and investors should be aware of the costs of currency conversion.
Although foreign exchange dealers do not charge a fee for conversion, they do
realize a profit based on the difference ("spread") between the prices at which
they are buying and selling various currencies. Thus, a dealer may offer to sell
a foreign currency to a Fund at one rate, while offering a lesser rate of
exchange should the Fund desire to sell that currency to the dealer.
 
   
  Adverse Market Characteristics. Securities of many foreign issuers may be less
liquid and their prices more volatile than securities of comparable U.S.
issuers. In addition, foreign securities markets and brokers generally are
subject to less governmental supervision and regulation than in the U.S., and
foreign securities transactions usually are subject to fixed commissions, which
generally are higher than negotiated commissions on U.S. transactions. In
addition, foreign securities transactions may be subject to difficulties
associated with the settlement of such transactions. Delays in settlement could
result in temporary periods when assets of a Fund or the Portfolio are
uninvested and no return is earned thereon. The inability of a Fund or the
Portfolio to make intended security purchases due to settlement problems could
cause it to miss attractive opportunities. Inability to dispose of a portfolio
security due to settlement problems either could result in losses to a Fund or
the Portfolio due to subsequent declines in value of the portfolio security or,
if the Fund or the Portfolio has entered into a contract to sell the security,
could result in possible liability to the purchaser. The Sub-advisor will
consider such difficulties when determining the allocation of each Fund's or the
Portfolio's assets, although the Sub-advisor does not believe that such
difficulties will have a material adverse effect on the Funds' or the
Portfolio's portfolio trading activities.
    
 
  The Funds and the Portfolio may use foreign custodians, which may involve
risks in addition to those related to the use of U.S. custodians. Such risks
include uncertainties relating to: (i) determining and monitoring the financial
strength, reputation and standing of the foreign custodian; (ii) maintaining
appropriate safeguards to protect the Funds' and the Portfolio's investments and
(iii) possible difficulties in obtaining and enforcing judgments against such
custodians.
 
  Withholding Taxes. Each Fund's and the Portfolio's net investment income from
foreign issuers may be subject to withholding taxes by the foreign issuer's
country, thereby reducing the Fund's and the Portfolio's income or delaying the
receipt of income where those taxes may be recaptured. See "Taxes."
 
                                       21
<PAGE>   1283
 
  Concentration. To the extent a Fund invests a significant portion of its
assets in securities of issuers located in a particular country or region of the
world, such Portfolio may be subject to greater risks and may experience greater
volatility than a fund that is more broadly diversified geographically.
 
   
  Special Considerations Affecting Western European Countries. The countries
that are members of the European Economic Community ("Common Market")
(Australia, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, Netherlands, Portugal, Spain, Sweden and the United Kingdom)
eliminated certain import tariffs and quotas and other trade barriers with
respect to one another over the past several years. The Sub-advisor believes
that this deregulation should improve the prospects for economic growth in many
Western European countries. Among other things, the deregulation could enable
companies domiciled in one country to avail themselves of lower labor costs
existing in other countries. In addition, this deregulation could benefit
companies domiciled in one country by opening additional markets for their goods
and services in other countries. Since, however, it is not clear what the exact
form or effect of these Common Market reforms will be on business in Western
Europe, it is impossible to predict the long-term impact of the implementation
of these programs on the securities owned by a Fund.
    
 
  Special Considerations Affecting Russia and Eastern European
Countries. Investing in Russia and Eastern European countries involves a high
degree of risk and special considerations not typically associated with
investing in the United States securities markets, and should be considered
highly speculative. Such risks include: (1) delays in settling portfolio
transactions and risk of loss arising out of the system of share registration
and custody; (2) the risk that it may be impossible or more difficult than in
other countries to obtain and/or enforce a judgement; (3) pervasiveness of
corruption and crime in the economic system; (4) currency exchange rate
volatility and the lack of available currency hedging instruments; (5) higher
rates of inflation (including the risk of social unrest associated with periods
of hyper-inflation) and high unemployment; (6) controls on foreign investment
and local practices disfavoring foreign investors and limitations on
repatriation of invested capital, profits and dividends, and on a fund's ability
to exchange local currencies for U.S. dollars; (7) political instability and
social unrest and violence; (8) the risk that the governments of Russia and
Eastern European countries may decide not to continue to support the economic
reform programs implemented recently and could follow radically different
political and/or economic policies to the detriment of investors, including
non-market-oriented policies such as the support of certain industries at the
expense of other sectors or investors, or a return to the centrally planned
economy that existed when such countries had a communist form of government; (9)
the financial condition of companies in these countries, including large amounts
of inter-company debt which may create a payments crisis on a national scale;
(10) dependency on exports and the corresponding importance of international
trade; (11) the risk that the tax system in these countries will not be reformed
to prevent inconsistent, retroactive and/or exorbitant taxation; and (12) the
underdeveloped nature of the securities markets.
 
  Special Considerations Affecting Japan. Japan's economic growth has declined
significantly since 1990. The general government position has deteriorated as a
result of weakening economic growth and stimulative measures taken to support
economic activity and to restore financial stability. Although the decline in
interest rates and fiscal stimulation packages have helped to contain
recessionary forces, uncertainties remain. Japan is also heavily dependent upon
international trade, so its economy is especially sensitive to trade barriers
and disputes. Japan has had difficult relations with its trading partners,
particularly the United States, where the trade imbalance is the greatest. It is
possible that trade sanctions and other protectionist measures could impact
Japan adversely in both the short and the long term.
 
  The common stocks of many Japanese companies trade at high price-earnings
ratios. Differences in accounting methods make it difficult to compare the
earnings of Japanese companies with those of companies in other countries,
especially in the U.S. In general, however, reported net income in Japan is
understated relative to U.S. accounting standards and this is one reason why
price-earnings ratios of the stocks of Japanese companies have tended
historically to be higher than those for U.S. stocks. In addition, Japanese
companies have tended to have higher growth rates than U.S. companies and
Japanese interest rates have generally been lower than in the U.S., both of
which factors tend to result in lower discount rates and higher price-earnings
ratios in Japan than in the U.S.
 
  The Japanese securities markets are less regulated than those in the United
States. Evidence has emerged from time to time of distortion of market prices to
serve political or other purposes. Shareholders' rights are not always equally
enforced. In addition, Japan's banking industry is undergoing problems related
to bad loans and declining values in real estate.
 
  Special Considerations Affecting Pacific Region Countries. Certain of the
risks associated with international investments are heightened for investments
in Pacific region countries. For example, some of the currencies of Pacific
region countries have experienced steady devaluations relative to the U.S.
dollar, and major adjustments have been made periodically in certain of such
currencies. Certain countries, such as India, face serious exchange constraints.
Jurisdictional disputes also exist between South Korea and North Korea. In
addition, the Funds may invest in Hong Kong, which reverted
 
                                       22
<PAGE>   1284
 
to Chinese Administration on July 1, 1997. Investments in Hong Kong may be
subject to expropriation, national, nationalization or confiscation, in which
case a Fund could lose its entire investment in Hong Kong. In addition, the
reversion of Hong Kong also presents a risk that the Hong Kong dollar will be
devalued and a risk of possible loss of investor confidence in Hong Kong's
currency, stock market and assets.
 
  Special Considerations Affecting Latin American Countries. Most Latin American
countries have experienced substantial, and in some periods extremely high,
rates of inflation for many years. Inflation and rapid fluctuations in inflation
rates have had and may continue to have very negative effects on the economies
and securities markets of certain Latin American countries. Certain Latin
American countries are also among the largest debtors to commercial banks and
foreign governments. At times certain Latin American countries have declared
moratoria on the payment of principal and/ or interest on external debt. In
addition, certain Latin American securities markets have experienced high
volatility in recent years.
 
  Latin American countries may also close certain sectors of their economies to
equity investments by foreigners. Further due to the absence of securities
markets and publicly owned corporations and due to restrictions on direct
investment by foreign entities, investments may only be made in certain Latin
American countries solely or primarily through governmentally approved
investment vehicles or companies.
 
  Certain Latin American countries may have managed currencies that are
maintained at artificial levels to the U.S. dollar rather than at levels
determined by the market. This type of system can lead to sudden and large
adjustments in the currency which, in turn, can have a disruptive and negative
effect on foreign investors. For example, in late 1994, the value of the Mexican
peso lost more than one-third of its value relative to the U.S. dollar.
 
  Special Considerations Affecting Emerging Markets. The Strategic Income Fund,
the Growth & Income Fund and the Portfolio may invest in debt securities in
emerging markets. Investing in securities in emerging countries may entail
greater risks than investing in debt securities in developed countries.
Similarly, for Growth & Income Fund, investing in the equity securities of
companies in emerging markets entails additional risks. These risks affecting
debt and equity investments in emerging markets include (i) less social,
political and economic stability; (ii) the small current size of the markets for
such securities and the currently low or nonexistent volume of trading, which
result in a lack of liquidity and in greater price volatility; (iii) certain
national policies which may restrict the Funds' and the Portfolio's investment
opportunities, including restrictions on investment in issuers or industries
deemed sensitive to national interests; (iv) foreign taxation; and (v) the
absence of developed structures governing private or foreign investment or
allowing for judicial redress for injury to private property.
 
  Settlement mechanisms in emerging securities markets may be less efficient and
reliable than in more developed markets. In such emerging securities markets
there may be share registration and delivery delays or failures.
 
  Many emerging market countries have experienced substantial, and in some
periods extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates and corresponding currency devaluations have had
and may continue to have negative effects on the economies and securities
markets of certain emerging market countries.
 
                             INVESTMENT LIMITATIONS
 
   
  Each Fund and the Portfolio has adopted the following investment limitations
as fundamental policies which may not be changed without approval by a majority
of the outstanding shares of the Fund or Portfolio, as applicable. Whenever the
Emerging Markets Debt Fund is requested to vote on a change in the investment
limitations of the Portfolio, the Fund will hold a meeting of its shareholders
and will cast its votes as instructed by its shareholders.
    
 
   
GOVERNMENT INCOME FUND
    
 
  The Government Income Fund may not:
 
          (1) Purchase any security if, as a result of that purchase, 25% or
     more of the Fund's total assets would be invested in securities of issuers
     having their principal business activities in the same industry, except
     that this limitation does not apply to securities issued or guaranteed by
     the U.S. government, its agencies or instrumentalities;
 
          (2) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-based securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that the Fund may exercise rights under agreements relating to
     such securities, including the right to enforce security interests and to
     hold real estate acquired by reason of such enforcement until that real
     estate can be liquidated in an orderly manner;
 
                                       23
<PAGE>   1285
 
          (3) Engage in the business of underwriting securities of other
     issuers, except to the extent that the Fund might be considered an
     underwriter under the federal securities laws in connection with its
     disposition of portfolio securities;
 
          (4) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan;
 
          (5) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of the Fund's total assets
     (including the amount borrowed but reduced by any liabilities not
     constituting borrowings) at the time of the borrowing, except that the Fund
     may borrow up to an additional 5% of its total assets (not including the
     amount borrowed) for temporary or emergency purposes; or
 
          (6) Purchase or sell physical commodities, but the Fund may purchase,
     sell or enter into financial options and futures, forward and spot currency
     contracts, swap transactions and other financial contracts or derivative
     instruments.
 
  Notwithstanding any other investment policy of the Fund, the Fund may invest
all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
 
  For purposes of the Fund's concentration policy contained in limitation (1)
above, the Fund intends to comply with the SEC staff positions that securities
issued or guaranteed as to principal and interest by any single foreign
government or any supranational organizations in the aggregate are considered to
be securities of issuers in the same industry.
 
  The following investment policies of the Government Income Fund are not
fundamental policies and may be changed by vote of the Trust's Board of Trustees
without shareholder approval. The Fund may not:
 
          (1) Borrow money to purchase securities or borrow money except for
     temporary or emergency purposes. While borrowings exceed 5% of the Fund's
     total assets, the Fund will not make any additional investments;
 
          (2) Invest in securities of an issuer if the investment would cause
     the Fund to own more than 10% of any class of securities of any one issuer;
 
          (3) Purchase securities on margin, provided that the Fund may obtain
     short-term credits as may be necessary for the clearance of purchases and
     sales of securities, and further provided that the Fund may make margin
     deposits in connection with its use of financial options and futures,
     forward and spot currency contracts, swap transactions and other financial
     contracts or derivative instruments;
 
          (4) Enter into a futures contract, if, as a result thereof, more than
     5% of the Fund's total assets (taken at market value at the time of
     entering into the contract) would be committed to margin on such futures
     contracts;
 
          (5) Purchase securities for which there is no readily available
     market, or enter into repurchase agreements or purchase time deposits
     maturing in more than seven days, or purchase OTC options or hold assets
     set aside to cover OTC options written by the Fund, if immediately after
     and as a result, the value of such securities would exceed, in the
     aggregate, 15% of the Fund's net assets; or
 
          (6) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities.
 
STRATEGIC INCOME FUND
 
  The Strategic Income Fund may not:
 
          (1) Purchase any security if, as a result of that purchase, 25% or
     more of the Fund's total assets would be invested in securities of issuers
     having their principal business activities in the same industry, except
     that this limitation does not apply to securities issued or guaranteed by
     the U.S. government, its agencies or instrumentalities;
 
          (2) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-based securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that the Fund may exercise rights under agreements relating to
 
                                       24
<PAGE>   1286
 
     such securities, including the right to enforce security interests and to
     hold real estate acquired by reason of such enforcement until that real
     estate can be liquidated in an orderly manner;
 
          (3) Engage in the business of underwriting securities of other
     issuers, except to the extent that the Fund might be considered an
     underwriter under the federal securities laws in connection with its
     disposition of portfolio securities;
 
          (4) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan;
 
          (5) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of the Fund's total assets
     (including the amount borrowed but reduced by any liabilities not
     constituting borrowings) at the time of the borrowing, except that the Fund
     may borrow up to an additional 5% of its total assets (not including the
     amount borrowed) for temporary or emergency purposes; or
 
          (6) Purchase or sell physical commodities, but the Fund may purchase,
     sell or enter into financial options and futures, forward and spot currency
     contracts, swap transactions and other financial contracts or derivative
     instruments.
 
  Notwithstanding any other investment policy of the Fund, the Fund may invest
all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
 
  For purposes of the Fund's concentration policy contained in limitation (1)
above, the Fund intends to comply with the SEC staff positions that securities
issued or guaranteed as to principal and interest by any single foreign
government or any supranational organizations in the aggregate are considered to
be securities of issuers in the same industry.
 
  The following investment policies of the Strategic Income Fund are not
fundamental policies and may be changed by vote of the Trust's Board of Trustees
without shareholder approval. The Fund may not:
 
          (1) Invest more than 15% of its total assets in illiquid securities;
 
          (2) Borrow money to purchase securities and will not invest in
     securities of an issuer if the investment would cause the Fund to own more
     than 10% of any class of securities of any one issuer (provided, however,
     that the Fund may invest all of its investable assets in an open-end
     management investment company with substantially the same investment
     objectives, policies, and limitations as the Fund.);
 
          (3) Invest more than 10% of its total assets in shares of other
     investment companies and invest more than 5% of its total assets in any one
     investment company or acquire more than 3% of the outstanding voting
     securities of any one investment company (provided, however, that the Fund
     may invest all of its investable assets in an open-end management
     investment company with substantially the same investment objectives,
     policies, and limitations as the Fund);
 
          (4) Purchase securities on margin, provided that the Fund may obtain
     short-term credits as may be necessary for the clearance of purchases and
     sales of securities, and further provided that the Fund may make margin
     deposits in connection with its use of financial options and futures,
     forward and spot currency contracts, swap transactions and other financial
     contracts or derivative instruments;
 
          (5) Enter into a futures contract, if, as a result thereof, more than
     5% of the Fund's total assets (taken at market value at the time of
     entering into the contract) would be committed to margin on such futures
     contracts; or
 
          (6) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities.
 
   
EMERGING MARKETS DEBT FUND AND THE PORTFOLIO
    
 
   
  The Emerging Markets Debt Fund and the Portfolio each may not:
    
 
          (1) Purchase any security if, as a result of that purchase, 25% or
     more of the Fund's total assets would be invested in securities of issuers
     having their principal business activities in the same industry, except
     that this limitation does not apply to securities issued or guaranteed by
     the U.S. government, its agencies or instrumentalities;
 
                                       25
<PAGE>   1287
 
          (2) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-based securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that the Fund may exercise rights under agreements relating to
     such securities, including the right to enforce security interests and to
     hold real estate acquired by reason of such enforcement until that real
     estate can be liquidated in an orderly manner;
 
          (3) Purchase or sell physical commodities, but the Fund may purchase,
     sell or enter into financial options and futures, forward and spot currency
     contracts, swap transactions and other financial contracts or derivative
     instruments;
 
          (4) Engage in the business of underwriting securities of other
     issuers, except to the extent that the Fund might be considered an
     underwriter under the federal securities laws in connection with its
     disposition of portfolio securities;
 
          (5) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan; or
 
          (6) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of the Fund's total assets
     (including the amount borrowed but reduced by any liabilities not
     constituting borrowings) at the time of the borrowing, except that the Fund
     may borrow up to an additional 5% of its total assets (not including the
     amount borrowed) for temporary or emergency purposes.
 
  For purposes of the Fund's and the Portfolio's concentration policy contained
in limitation (1) above, they intend to comply with the SEC staff positions that
securities issued or guaranteed as to principal and interest by any single
foreign government or any supranational organizations in the aggregate are
considered to be securities of issuers in the same industry.
 
   
  The following investment policies of the Emerging Markets Debt Fund and the
Portfolio are not fundamental policies and may be changed by vote of the Trust's
Board of Trustees or the Portfolio's Board of Trustees without shareholder
approval. The Fund and the Portfolio each may not:
    
 
          (1) Invest in securities of an issuer if the investment would cause
     the Fund or the Portfolio to own more than 10% of any class of securities
     of any one issuer (provided, however, that the Fund may invest all of its
     investable assets in an open-end management investment company with
     substantially the same investment objectives as the Fund);
 
          (2) Invest in companies for the purpose of exercising control or
     management (provided, however, that the Fund may invest all of its
     investable assets in an open-end management investment company with
     substantially the same investment objectives as the Fund);
 
          (3) Enter into a futures contract, an option on a futures contract or
     an option on foreign currency traded on a CFTC-regulated exchange, in each
     case other than for bona fide hedging purposes (as defined by the CFTC), if
     the aggregate initial margin and premiums required to establish all of
     those positions (excluding the amount by which options are "in-the-money")
     exceeds 5% of the liquidation value of the Fund's or the Portfolio's
     portfolio, after taking into account unrealized profits and unrealized
     losses on any contracts the Fund or the Portfolio has entered into;
 
          (4) Invest more than 10% of its total assets in shares of other
     investment companies and invest more than 5% of its total assets in any one
     investment company or acquire more than 3% of the outstanding voting
     securities of any one investment company (provided, however, that the Fund
     may invest all of its investable assets in an open-end management
     investment company with substantially the same investment objectives as the
     Fund);
 
          (5) Purchase securities on margin, provided that the Fund may obtain
     short-term credits as may be necessary for the clearance of purchases and
     sales of securities, and further provided that the Fund may make margin
     deposits in connection with its use of financial options and futures,
     forward and spot currency contracts, swap transactions and other financial
     contracts or derivative instruments; or
 
          (6) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities.
 
                                       26
<PAGE>   1288
 
GROWTH & INCOME FUND
 
  Growth & Income Fund may not:
 
          (1) Purchase any security if, as a result of that purchase, 25% or
     more of the Fund's total assets would be invested in securities of issuers
     having their principal business activities in the same industry, except
     that this limitation does not apply to securities issued or guaranteed by
     the U.S. government, its agencies or instrumentalities;
 
          (2) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-based securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that the Fund may exercise rights under agreements relating to
     such securities, including the right to enforce security interests and to
     hold real estate acquired by reason of such enforcement until that real
     estate can be liquidated in an orderly manner;
 
          (3) Engage in the business of underwriting securities of other
     issuers, except to the extent that the Fund might be considered an
     underwriter under the federal securities laws in connection with its
     disposition of portfolio securities;
 
          (4) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan;
 
   
          (5) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of the Fund's total assets
     (including the amount borrowed but reduced by any liabilities not
     constituting borrowings) at the time of the borrowing, except that the Fund
     may borrow up to an additional 5% of its total assets (not including the
     amount borrowed) for temporary or emergency purposes; or
    
 
          (6) Purchase or sell physical commodities, but the Fund may purchase,
     sell or enter into financial operations and futures, forward and spot
     currency contracts, swap transactions and other financial contracts or
     derivative instruments.
 
  Notwithstanding any other investment policy of the Fund, the Fund may invest
all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
 
  For purposes of the Fund's concentration policy contained in limitation (1)
above, the Fund intends to comply with the SEC staff position that securities
issued or guaranteed as to principal and interest by any single foreign
government or any supranational organizations in the aggregate are considered to
be securities of issuers in the same industry.
 
  The following operating policies of the Growth & Income Fund are not
fundamental policies and may be changed by vote of the Trust without shareholder
approval. The Fund may not:
 
          (1) Invest in securities of an issuer if the investment would cause
     the Fund to own more than 10% of any class of securities of any one issuer;
 
          (2) Sell securities short, except to the extent that the Fund
     contemporaneously owns or has the right to acquire at no additional cost
     securities identical to those sold short;
 
          (3) Enter into a futures contract, an option on a futures contract, or
     an option on foreign currency traded on a CFTC-regulated exchange, in each
     case other than for bona fide hedging purposes (as defined by the CFTC), if
     the aggregate initial margin and premiums required to establish all of
     those positions (excluding the amount by which options are "in-the-money")
     exceeds 5% of the liquidation value of the Fund's portfolio, after taking
     into account unrealized profits and unrealized losses on any contracts the
     Fund has entered into;
 
          (4) Borrow money except for temporary or emergency purposes (other
     than to meet redemptions). While borrowings exceed 5% of the Fund's total
     assets, the Fund will not make any additional investments;
 
          (5) Purchase securities on margin, provided that the Fund may obtain
     short-term credits as may be necessary for the clearance of purchases and
     sales of securities, and further provided that the Fund may make margin
     deposits in connection with its use of financial options and futures,
     forward and spot currency contracts, swap transactions and other financial
     contracts or derivative instruments;
 
                                       27
<PAGE>   1289
 
          (6) Purchase securities for which there is no readily available
     market, or enter into repurchase agreements or purchase time deposits
     maturing in more than seven days, or purchase OTC options or hold assets
     set aside to cover OTC options written by the Fund, if immediately after
     and as a result, the value of such securities would exceed, in the
     aggregate, 15% of the Fund's net assets; or
 
          (7) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities.
 
  Investors should refer to each Fund's Prospectus for further information about
each Fund's respective investment objectives, which may not be changed without
the approval of shareholders and the Portfolio's investment objectives, which
may be changed without the approval of investors in the Portfolio, and other
investment policies and techniques, which may be changed without shareholder
approval.
 
                      EXECUTION OF PORTFOLIO TRANSACTIONS
 
   
  Subject to policies established by the Trust's and the Portfolio's Board of
Trustees, the Sub-advisor is responsible for the execution of the Government
Income Fund's, the Strategic Income Fund's, the Growth & Income Fund's and the
Portfolio's portfolio transactions and the selection of broker/dealers that
execute such transactions on behalf of these Funds and the Portfolio. In
executing transactions, the Sub-advisor seeks the best net results for the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund and
the Portfolio, taking into account such factors as the price (including the
applicable brokerage commission or dealer spread), size of the order, difficulty
of execution and operational facilities of the firm involved. Although the
Sub-advisor generally seeks reasonably competitive commission rates and spreads,
payment of the lowest commission or spread is not necessarily consistent with
the best net results. While the Funds and the Portfolio may engage in soft
dollar arrangements for research services, as described below, neither the Funds
nor the Portfolio has any obligation to deal with any broker/dealer or group of
broker/dealers in the execution of portfolio transactions.
    
 
  Debt securities generally are traded on a "net" basis with a dealer acting as
principal for its own account without a stated commission, although the price of
the security usually includes a profit to the dealer. U.S. and foreign
government securities and money market instruments generally are traded in the
OTC markets. In underwritten offerings, securities usually are purchased at a
fixed price which includes an amount of compensation to the underwriter. On
occasion, securities may be purchased directly from an issuer, in which case no
commissions or discounts are paid. Broker/dealers may receive commissions on
futures, currency and options transactions.
 
   
  Consistent with the interests of the Funds and the Portfolio, the Sub-advisor
may select brokers to execute the Funds' and the Portfolio's portfolio
transactions on the basis of the research and brokerage services they provide to
the Sub-advisor for its use in managing the Funds and the Portfolio and its
other advisory accounts. Such services may include furnishing analyses, reports
and information concerning issuers, industries, securities, geographic regions,
economic factors and trends, portfolio strategy, and performance of accounts;
and effecting securities transactions and performing functions incidental
thereto (such as clearance and settlement). Research and brokerage services
received from such brokers are in addition to, and not in lieu of, the services
required to be performed by the Sub-advisor under investment management and
administration contracts. A commission paid to such brokers may be higher than
that which another qualified broker would have charged for effecting the same
transaction, provided that the Sub-advisor determines in good faith that such
commission is reasonable in terms either of that particular transaction or the
overall responsibility of the Sub-advisor to the Funds and the Portfolio and its
other clients and that the total commissions paid by the Funds and the Portfolio
will be reasonable in relation to the benefits received by the Funds and the
Portfolio over the long term. Research services may also be received from
dealers who execute Fund transactions in OTC markets.
    
 
   
  The Sub-advisor may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by the Funds or the Portfolio toward payment of the Funds'
or the Portfolio's expenses, such as transfer agent and custodian fees.
    
 
   
  Investment decisions for each Fund and the Portfolio and for other investment
accounts managed by the Sub-advisor are made independently of each other in
light of differing conditions. However, the same investment decision
occasionally may be made for two or more of such accounts, including one or both
Funds and the Portfolio. In such cases, simultaneous transactions may occur.
Purchases or sales are then allocated as to price or amount in a manner deemed
fair and equitable to all accounts involved. While in some cases this practice
could have a detrimental effect upon the price or value of the security as far
as the Funds and the Portfolio are concerned, in other cases the Sub-advisor
believes that coordination and the ability to participate in volume transactions
will be beneficial to the Funds and the Portfolio.
    
 
                                       28
<PAGE>   1290
 
   
  Under a policy adopted by the Trust's and the Portfolio's Board of Trustees,
and subject to the policy of obtaining the best net results, the Sub-advisor may
consider a broker/dealer's sale of the shares of the Funds and the other funds
for which AIM or the Sub-advisor serves as investment manager in selecting
brokers and dealers for the execution of portfolio transactions. This policy
does not imply a commitment to execute portfolio transactions through all
broker/dealers that sell shares of the Funds and such other funds.
    
 
  Each Fund and the Portfolio contemplates purchasing most foreign equity
securities in over-the-counter markets or stock exchanges located in the
countries in which the respective principal offices of the issuers of the
various securities are located, if that is the best available market. The fixed
commissions paid in connection with most such foreign stock transactions
generally are higher than negotiated commissions on United States transactions.
There generally is less government supervision and regulation of foreign stock
exchanges and brokers than in the United States. Foreign security settlements
may in some instances be subject to delays and related administrative
uncertainties.
 
  Foreign equity securities may be held by a Fund and the Portfolio in the form
of American Depository Receipts ("ADRs"), American Depository Shares ("ADSs"),
Continental Depository Receipts ("CDRs") or European Depository Receipts
("EDRs") or securities convertible into foreign equity securities. ADRs, ADSs,
CDRs and EDRs may be listed on stock exchanges, or traded in the OTC markets in
the United States or Europe, as the case may be. ADRs, like other securities
traded in the United States, will be subject to negotiated commission rates. The
foreign and domestic debt securities and money market instruments in which the
Funds and the Portfolio may invest generally are traded in the OTC markets.
 
   
  The Funds may engage in certain principal and agency transactions with banks
and their affiliates that own 5% or more of the outstanding voting securities of
a Fund, provided the conditions of an exemptive order received by the Funds from
the SEC are met. In addition, a Fund may purchase or sell a security from or to
another AIM Fund provided the Funds follow procedures adopted by the Boards of
Directors/Trustees of the various AIM Funds, including the Trust. These inter-
fund transactions do not generate brokerage commissions but may result in
custodial fees or taxes or other related expenses.
    
 
   
  The Funds and the Portfolio contemplate that, consistent with the policy of
obtaining the best net results, brokerage transactions may be conducted through
certain companies that are affiliates of AIM and the Sub-advisor. The Trust's
Board of Trustees has adopted procedures in conformity with Rule 17e-1 under the
1940 Act to ensure that all brokerage commissions paid to such affiliates are
reasonable and fair in the context of the market in which they are operating.
Any such transactions will be effected and related compensation paid only in
accordance with applicable SEC regulations. For the fiscal years ended October
31, 1997, 1996 and 1995, the Portfolio paid aggregate brokerage commissions of
$0, $86,600 and $0, respectively. For the fiscal years ended October 31, 1997,
1996 and 1995, the Government Income Fund paid aggregate brokerage commissions
of $4,987, $24,663 and $0, respectively. For the fiscal years ended October 31,
1997, 1996 and 1995, the Strategic Income Fund paid aggregate brokerage
commissions of $6,177, $85,404 and $0, respectively. For the fiscal years ended
October 31, 1997, 1996, and 1995, the Growth & Income Fund paid aggregate
brokerage commissions of $463,307, $257,953 and $318,958, respectively. For the
fiscal years ended October 31, 1996 and 1997, the Growth & Income Fund paid to
LGT Bank in Liechtenstein, AG, which was an "affiliated" broker, aggregate
brokerage commissions of $16,898 and $12,262, respectively, for transactions
involving purchases and sales of portfolio securities which represented 6.55%
and 2.65%, respectively, of the total brokerage commissions paid by the Fund and
5.69% and 2.94%, respectively, of the aggregate dollar amount of transactions
involving payment of commissions by the Fund.
    
 
PORTFOLIO TRADING AND TURNOVER
 
   
  Each Fund and the Portfolio engages in portfolio trading when the Sub-advisor
concludes that the sale of a security owned by a Fund and the Portfolio and/or
the purchase of another security of better value can enhance principal and/or
increase income. A security may be sold to avoid any prospective decline in
market value, or a security may be purchased in anticipation of a market rise.
Consistent with each Fund's and the Portfolio's investment objectives, a
security also may be sold and a comparable security purchased coincidentally in
order to take advantage of what is believed to be a disparity in the normal
yield and price relationship between the two securities. Although the Funds and
the Portfolio generally do not intend to trade for short-term profits, the
securities in each Fund's and the Portfolio's portfolio will be sold whenever
the Sub-advisor believes it is appropriate to do so, without regard to the
length of time a particular security may have been held. Portfolio turnover is
calculated by dividing the lesser of sales or purchases of portfolio securities
by each Fund's or the Portfolio's average month-end portfolio value, excluding
short-term investments. Higher portfolio turnover involves correspondingly
greater brokerage commissions and other transaction costs that a Fund or the
Portfolio will bear directly, and could result in the realization of net capital
gains that would be taxable when distributed to shareholders. The
    
 
                                       29
<PAGE>   1291
 
portfolio turnover rates for the Government Income Fund, Strategic Income Fund,
Growth & Income Fund and the Portfolio the last two fiscal years were as
follows:
 
   
<TABLE>
<CAPTION>
                                                               YEAR ENDED      YEAR ENDED
                                                              OCT. 31, 1997   OCT. 31, 1996
                                                              -------------   -------------
<S>                                                           <C>             <C>
Government Income Fund......................................       241%            268%
Strategic Income Fund.......................................       149%            177%
Emerging Markets Debt Portfolio.............................       214%            290%
Growth & Income Fund........................................        50%             39%
</TABLE>
    
 
   
                                   MANAGEMENT
    
 
TRUSTEES AND EXECUTIVE OFFICERS
 
  The Trust's and the Portfolio's Trustees and Executive Officers are listed
below. Unless otherwise indicated, the address of each Executive Officer is 11
Greenway Plaza, Suite 100, Houston, Texas 77046.
 
   
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
   NAME, ADDRESS AND AGE      POSITIONS HELD WITH REGISTRANT     PRINCIPAL OCCUPATION WITH REGISTRANT
- ---------------------------------------------------------------------------------------------------------
<S>                           <C>                             <C>
 ROBERT H. GRAHAM (51)        Trustee, Chairman of the Board  Director, President and Chief Executive
                              and President                   Officer, A I M Management Group Inc.;
                                                              Director and President, A I M Advisors,
                                                              Inc.; Director and Senior Vice President,
                                                              A I M Capital Management, Inc., A I M
                                                              Distributors, Inc., A I M Fund Services,
                                                              Inc. and Fund Management Company; and
                                                              Director, AMVESCAP PLC.
- ---------------------------------------------------------------------------------------------------------
 C. DEREK ANDERSON (57)       Trustee                         President, Plantagenet Capital Management,
 220 Sansome Street                                           LLC (an investment partnership); Chief
 Suite 400                                                    Executive Officer, Plantagenet Holdings,
 San Francisco, CA 94104                                      Ltd. (an investment banking firm);
                                                              Director, Anderson Capital Management, Inc.
                                                              since 1988; Director, PremiumWear, Inc.
                                                              (formerly Munsingwear, Inc.) (a casual
                                                              apparel company); Director, "R" Homes, Inc.
                                                              and various other companies; and Trustee,
                                                              each of the other investment companies
                                                              registered under the 1940 Act that is sub-
                                                              advised or sub-administered by the
                                                              Sub-advisor.
- ---------------------------------------------------------------------------------------------------------
 FRANK S. BAYLEY (59)         Trustee                         Partner, law firm of Baker & McKenzie;
 Two Embarcadero Center                                       Director and Chairman, C.D. Stimson Company
 Suite 2400                                                   (a private investment company); and
 San Francisco, CA 94111                                      Trustee, each of the other investment
                                                              companies registered under the 1940 Act
                                                              that is sub-advised or sub-administered by
                                                              the Sub-advisor.
- ---------------------------------------------------------------------------------------------------------
 ARTHUR C. PATTERSON (54)     Trustee                         Managing Partner, Accel Partners (a venture
 428 University Avenue                                        capital firm); Director, Viasoft and
 Palo Alto, CA 94301                                          PageMart, Inc. (both public software
                                                              companies) and several other privately held
                                                              software and communications companies; and
                                                              Trustee, each of the other investment
                                                              companies registered under the 1940 Act
                                                              that is sub-advised or sub-administered by
                                                              the Sub-advisor.
- ---------------------------------------------------------------------------------------------------------
 RUTH H. QUIGLEY (63)         Trustee                         Private investor; President, Quigley
 1055 California Street                                       Friedlander & Co., Inc. (a financial
 San Francisco, CA 94108                                      advisory services firm) from 1984 to 1986;
                                                              and Trustee, each of the other investment
                                                              companies registered under the 1940 Act
                                                              that is sub-advised or sub-administered by
                                                              the Sub-advisor.
- ---------------------------------------------------------------------------------------------------------
</TABLE>
    
 
                                       30
<PAGE>   1292
 
   
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
   NAME, ADDRESS AND AGE      POSITIONS HELD WITH REGISTRANT     PRINCIPAL OCCUPATION WITH REGISTRANT
- ---------------------------------------------------------------------------------------------------------
<S>                           <C>                             <C>
 +JOHN J. ARTHUR (53)         Vice President                  Director, Senior Vice President and
                                                              Treasurer, A I M Advisors, Inc.; Vice
                                                              President and Treasurer, A I M Management
                                                              Group Inc., A I M Capital Management, Inc.,
                                                              A I M Distributors, Inc., A I M Fund
                                                              Services, Inc. and Fund Management Company.
- ---------------------------------------------------------------------------------------------------------
 KENNETH W. CHANCEY (53)      Vice President and Principal    Senior Vice President -- Mutual Fund
 50 California Street         Accounting Officer              Accounting, the Sub-advisor since 1997;
 San Francisco, CA 94111                                      Vice President -- Mutual Fund Accounting,
                                                              the Sub-advisor from 1992 to 1997.
- ---------------------------------------------------------------------------------------------------------
 MELVILLE B. COX (54)         Vice President                  Vice President and Chief Compliance
                                                              Officer, A I M Advisors, Inc., A I M
                                                              Capital Management, Inc., A I M
                                                              Distributors, Inc., A I M Fund Services,
                                                              Inc. and Fund Management Company.
- ---------------------------------------------------------------------------------------------------------
 GARY T. CRUM (50)            Vice President                  Director and President, A I M Capital
                                                              Management, Inc.; Director and Senior Vice
                                                              President, A I M Management Group Inc. and
                                                              A I M Advisors, Inc.; and Director, A I M
                                                              Distributors, Inc. and AMVESCAP PLC.
- ---------------------------------------------------------------------------------------------------------
 HELGE K. LEE (52)            Vice President and Secretary    Chief Legal and Compliance Officer -- North
 50 California Street                                         America, the Sub-advisor since October
 San Francisco, CA 94111                                      1997; Secretary and Chief Legal and
                                                              Compliance Officer, INVESCO (NY) Asset
                                                              Management, Inc., INVESCO (NY), Inc., GT
                                                              Global Investor Services, Inc. and G.T.
                                                              Insurance since August 1997; Secretary and
                                                              Chief Legal and Compliance Officer, GT
                                                              Global from August 1997 to April 1998;
                                                              Executive Vice President of the Asset
                                                              Management Division of Liechtenstein Global
                                                              Trust AG, from October 1996 to May 1998;
                                                              Senior Vice President, General Counsel and
                                                              Secretary of INVESCO (NY) Asset Management,
                                                              Inc., INVESCO (NY), Inc., GT Global, GT
                                                              Global Investor Services, Inc. and G.T.
                                                              Insurance from May 1994 to October 1996;
                                                              and Senior Vice President, General Counsel
                                                              and Secretary of Strong/ Corneliuson
                                                              Management, Inc. and Secretary of each of
                                                              the Strong Funds from October 1991 to May
                                                              1994.
- ---------------------------------------------------------------------------------------------------------
 +CAROL F. RELIHAN (43)       Vice President                  Director, Senior Vice President, General
                                                              Counsel and Secretary, A I M Advisors,
                                                              Inc.; Vice President, General Counsel and
                                                              Secretary, A I M Management Group Inc.;
                                                              Director, Vice President and General
                                                              Counsel, Fund Management Company; Vice
                                                              President and General Counsel, A I M Fund
                                                              Services, Inc.; and Vice President, A I M
                                                              Capital Management, Inc. and A I M
                                                              Distributors, Inc.
- ---------------------------------------------------------------------------------------------------------
 DANA R. SUTTON (39)          Vice President and Assistant    Vice President and Fund Controller, A I M
                              Treasurer                       Advisors, Inc.; and Assistant Vice
                                                              President and Assistant Treasurer, Fund
                                                              Management Company.
- ---------------------------------------------------------------------------------------------------------
</TABLE>
    
 
- ---------------
 
+ Mr. Arthur and Ms. Relihan are married to each other.
 
   
  The Board of Trustees has a Nominating and Audit Committee, composed of Miss
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Trust and its
funds and recommending firms to serve as independent auditors of the Trust. All
of the Trust's Trustees also serve as directors or trustees of some or all of
the other investment companies managed, administered or advised by AIM. All of
the Trust's executive officers hold similar offices with some or all of the
other investment companies managed, administered or advised by AIM. Each Trustee
who is not a trustee, officer or employee of the Sub-advisor or any affiliated
company is paid
    
 
                                       31
<PAGE>   1293
 
   
aggregate fees of $5,000 a year, plus $300 per Fund for each meeting of the
Board attended, and reimbursed travel and other expenses incurred in connection
with attendance at such meetings. Other Trustees and Officers receive no
compensation or expense reimbursement from the Trust. For the fiscal year ended
October 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley, who
are not trustees, officers, or employees of the Sub-advisor or any affiliated
company, received total compensation of $38,650, $38,650, $27,850 and $38,650,
respectively, from the Trust for their services as Trustees. For the fiscal year
ended October 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss
Quigley, who are not trustees, officers or employees of the Sub-advisor or any
other affiliated company, received total compensation of $117,304, $114,386,
$88,350 and $111,688, respectively, from the investment companies managed or
administered by AIM and sub-advised or sub-advised by the Sub-advisor for which
he or she serves as a Trustee. Fees and expenses disbursed to the Trustees
contained no accrued or payable pension or retirement benefits. As of June 26,
1998, the Officers and Trustees and their families as a group owned in the
aggregate beneficially or of record less than 1% of the outstanding shares of
the Funds or of all the Trust's series in the aggregate.
    
 
   
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES
    
 
   
  AIM serves as the Government Income Fund's, the Strategic Income Fund's and
the Growth & Income Fund's investment manager and administrator under an
investment management and administration contract between the Trust and AIM
("Trust Management Contract"). The Sub-advisor serves as the Portfolio's
sub-advisor and sub-administrator under a sub-advisory and sub-administration
Agreement between AIM and the Sub-advisor ("Portfolio Management Sub-Contract,"
and together with the Portfolio Management Contract, the "Portfolio Management
Contracts"). AIM serves as the Portfolio's investment manager and administrator
under an Investment Management and Administration Contract between the Portfolio
and AIM ("Portfolio Management Contract") (collectively, "Management
Contracts"). The Sub-advisor serves as sub-administrator to each Feeder Fund
under a sub-administration contract between AIM and the Sub-advisor
("Administration Sub-Contract," and together with the Administration Contract,
the "Administration Contracts"). AIM serves as the Emerging Markets Debt Fund's
administrator under an Administration Contract ("Administration Contract")
between the Trust and AIM. The Sub-advisor serves as the sub-advisor and
sub-administrator to the Government Income Fund, the Strategic Income Fund and
the Growth & Income Fund under a sub-advisory and sub-administration contract
between AIM and the Sub-advisor ("Sub-Management Contract," and together with
the Management Contract, the "Management Contracts"). The Administration
Contracts will not be deemed advisory contracts, as defined under the 1940 Act.
As investment managers and administrators, AIM and the Sub-advisor make all
investment decisions for the Government Income Fund, the Strategic Income Fund,
the Growth & Income Fund and the Portfolio and as administrators, AIM and the
Sub-advisor administer each Fund's and the Portfolio's affairs. Among other
things, AIM and the Sub-advisor furnish the services and pay the compensation
and travel expenses of persons who perform the executive, administrative,
clerical and bookkeeping functions of the Trust, the Funds, and the Portfolio
and provide suitable office space, necessary small office equipment and
utilities.
    
 
   
  The Management Contracts may be renewed for one-year terms, provided that any
such renewal has been specifically approved at least annually by: (i) the
Trust's or the Portfolio's Board of Trustees, as applicable, or by the vote of a
majority of the Fund's or the Portfolio's outstanding voting securities (as
defined in the 1940 Act), and (ii) a majority of Trustees who are not parties to
the Management Contracts or the Administration Contracts or "interested persons"
of any such party (as defined in the 1940 Act), cast in person at a meeting
called for the specific purpose of voting on such approval. The Management
Contracts provide that with respect to the Government Income Fund, the Strategic
Income Fund, the Growth & Income Fund and the Portfolio, and the Administration
Contracts provide that with respect to the Emerging Markets Debt Fund, either
the Trust, the Portfolio or each of AIM or the Sub-advisor may terminate the
Contracts without penalty upon sixty days' written notice to the other party.
The Management Contracts and the Administration Contracts terminate
automatically in the event of their assignment (as defined in the 1940 Act).
    
 
   
  In each of the last three fiscal years the Government Income Fund paid
investment management and administration fees to the Sub-advisor in the
following amounts:
    
 
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,                                        AMOUNT PAID
- ----------------------                                        -----------
<S>                                                           <C>
1997........................................................  $2,403,043
1996........................................................   3,672,503
1995........................................................   4,946,971
</TABLE>
 
                                       32
<PAGE>   1294
 
   
  In each of the last three fiscal years the Strategic Income Fund paid
investment management and administration fees to the Sub-advisor in the
following amounts:
    
 
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,                                        AMOUNT PAID
- ----------------------                                        -----------
<S>                                                           <C>
1997........................................................  $3,474,804
1996........................................................   3,807,689
1995........................................................   4,293,053
</TABLE>
 
   
  In each of the last three fiscal years the Growth & Income Fund paid
investment management and administration fees to the Sub-advisor in the
following amounts:
    
 
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,                                        AMOUNT PAID
- ----------------------                                        -----------
<S>                                                           <C>
1997........................................................  $6,900,695
1996........................................................   6,282,438
1995........................................................   6,301,399
</TABLE>
 
   
  In each of the last three fiscal years the Emerging Markets Debt Portfolio
paid investment management and administration fees to the Sub-advisor in the
following amounts:
    
 
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,                                        AMOUNT PAID
- ----------------------                                        -----------
<S>                                                           <C>
1997........................................................  $2,971,167
1996........................................................   3,014,924
1995........................................................   2,411,786
</TABLE>
 
   
  In each of the last three fiscal years the Emerging Markets Debt Fund paid
administration fees to the Sub-advisor in the following amounts:
    
 
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,                                        AMOUNT PAID
- ----------------------                                        -----------
<S>                                                           <C>
1997........................................................  $1,136,471
1996........................................................   1,015,220
1995........................................................     860,884
</TABLE>
 
   
EXPENSES OF THE FUNDS AND THE PORTFOLIO
    
 
   
  Each Fund and the Portfolio pays all expenses not assumed by AIM, the
Sub-advisor, AIM Distributors and other agents. These expenses include, in
addition to the advisory, distribution, transfer agency, pricing and accounting
agent and brokerage fees discussed above, legal and audit expenses, custodian
fees, trustees' fees, organizational fees, fidelity bond and other insurance
premiums, taxes, extraordinary expenses and the expenses of reports and
prospectuses sent to existing investors. The allocation of general Trust
expenses and expenses shared by the Funds and other funds organized as series of
the Trust are allocated on a basis deemed fair and equitable, which may be based
on the relative net assets of the Funds or the nature of the services performed
and relative applicability to each Fund. Expenditures, including costs incurred
in connection with the purchase or sale of portfolio securities, which are
capitalized in accordance with generally accepted accounting principles
applicable to investment companies, are accounted for as capital items and not
as expenses. The ratio of each Fund's and the Portfolio's expenses to its
relative net assets can be expected to be higher than the expense ratios of
funds investing solely in domestic securities, since the cost of maintaining the
custody of foreign securities and the rate of investment management fees paid by
each Fund and the Portfolio generally are higher than the comparable expenses of
such other funds.
    
 
                                       33
<PAGE>   1295
 
                             THE DISTRIBUTION PLANS
 
THE CLASS A PLAN
 
  The Trust has adopted a Master Distribution Plan pursuant to Rule 12b-1 under
the 1940 Act relating to the Class A shares of the Funds (the "Class A Plan").
The Class A Plan provides that the Class A shares pay 0.35% per annum of their
average daily net assets as compensation to AIM Distributors for the purpose of
financing any activity which is primarily intended to result in the sale of
Class A shares. Of such amounts, each Fund pays a service fee of 0.25% of the
average daily net assets attributable to Class A shares to selected dealers and
other institutions which furnish continuing personal shareholder services to
their customers who purchase and own Class A shares. Activities appropriate for
financing under the Class A Plan include, but are not limited to, the following:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders; overhead; preparation and distribution of
advertising material and sales literature; expenses of organizing and conducting
sales seminars; supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements; and costs of administering the Class A Plan.
 
THE CLASS B PLAN
 
  The Trust has also adopted a Master Distribution Plan pursuant to Rule 12b-1
under the 1940 Act relating to Class B shares of the Funds (the "Class B Plan",
and collectively with the Class A Plan, the "Plans"). Under the Class B Plan,
each Fund pays compensation to AIM Distributors at an annual rate of 1.00% of
the average daily net assets attributable to Class B shares. Of such amount,
each Fund pays a service fee of 0.25% of the average daily net assets
attributable to Class B shares to selected dealers and other institutions which
furnish continuing personal shareholder services to their customers who purchase
and own Class B shares. Amounts paid in accordance with the Class B Plan may be
used to finance any activity primarily intended to result in the sale of Class B
shares, including but not limited to printing of prospectuses and statements of
additional information and reports for other than existing shareholders;
overhead; preparation and distribution of advertising material and sales
literature; expenses of organizing and conducting sales seminars; supplemental
payments to dealers and other institutions such as asset-based sales charges or
as payments of service fees under shareholder service arrangements; and costs of
administering the Class B Plan. AIM Distributors may transfer and sell its
rights to payments under the Class B Plan in order to finance distribution
expenditures in respect of Class B shares.
 
BOTH PLANS
 
  Pursuant to an incentive program, AIM Distributors may enter into agreements
("Shareholder Service Agreements") with investment dealers selected from time to
time by AIM Distributors for the provision of distribution assistance in
connection with the sale of the Funds' shares to such dealers' customers, and
for the provision of continuing personal shareholder services to customers who
may from time to time directly or beneficially own shares of the Funds. The
distribution assistance and continuing personal shareholder services to be
rendered by dealers under the Shareholder Service Agreements may include, but
shall not be limited to, the following: distributing sales literature; answering
routine customer inquiries concerning the Funds; assisting customers in changing
dividend options, account designations and addresses, and in enrolling in any of
the several special investment plans offered in connection with the purchase of
the Funds' shares; assisting in the establishment and maintenance of customer
accounts and records and in the processing of purchase and redemption
transactions; investing dividends and any capital gains distributions
automatically in the Funds' shares; and providing such other information and
services as the Funds or the customer may reasonably request.
 
  Under the Plans, in addition to the Shareholder Service Agreements authorizing
payments to selected dealers, banks may enter into Shareholder Service
Agreements authorizing payments under the Plans to be made to banks which
provide services to their customers who have purchased shares. Services provided
pursuant to Shareholder Service Agreements with banks may include some or all of
the following: answering shareholder inquiries regarding the Funds; performing
sub-accounting; establishing and maintaining shareholder accounts and records;
processing customer purchase and redemption transactions; providing periodic
statements showing a shareholder's account balance and the integration of such
statements with those of other transactions and balances in the shareholder's
other accounts serviced by the bank; forwarding applicable prospectuses, proxy
statements, reports and notices to bank clients who hold Fund shares; and such
other administrative services as the Funds reasonably may request, to the extent
permitted by applicable statute, rule or regulation. Similar agreements may be
permitted under the Plans for institutions which provide recordkeeping for and
administrative services to 401(k) plans.
 
  Financial intermediaries and any other person entitled to receive compensation
for selling Fund shares may receive different compensation for selling shares of
one particular class over another.
                                       34
<PAGE>   1296
 
  Under a Shareholder Service Agreement, each Fund agrees to pay periodically
fees to selected dealers and other institutions who render the foregoing
services to their customers. The fees payable under a Shareholder Service
Agreement generally will be calculated at the end of each payment period for
each business day of the Funds during such period at the annual rate of 0.25% of
the average daily net asset value of the Funds' shares purchased or acquired
through exchange. Fees calculated in this manner shall be paid only to those
selected dealers or other institutions who are dealers or institutions of record
at the close of business on the last business day of the applicable payment
period for the account in which such Fund's shares are held.
 
  Payments pursuant to the Plans are subject to any applicable limitations
imposed by rules of the National Association of Securities Dealers, Inc.
("NASD"). The Plans conform to rules of the NASD by limiting payments made to
dealers and other financial institutions who provide continuing personal
shareholder services to their customers who purchase and own shares of the Funds
to no more than 0.25% per annum of the average daily net assets of the Funds
attributable to the customers of such dealers or financial institutions, and by
imposing a cap on the total sales charges, including asset based sales charges,
that may be paid by the Funds and their respective classes.
 
  AIM Distributors does not act as principal, but rather as agent for the Funds,
in making dealer incentive and shareholder servicing payments under the Plans.
These payments are an obligation of the Funds and not of AIM Distributors.
 
   
  Prior to June 1, 1998, the Trust had adopted a different Rule 12b-1 plan, that
operated as a "reimbursement-type" plan (the "Prior Plan"). The information
provided below relates to payments made under the Prior Plan, which provided for
payments to GT Global Inc., the distributor of the Funds at the time the Prior
Plan was in effect.
    
 
   
  For the fiscal year ended October 31, 1997, each Fund paid the following
amounts under the Prior Plan:
    
 
   
<TABLE>
<CAPTION>
                                                                            % OF CLASS
                                                                           AVERAGE DAILY
                                                                            NET ASSETS
                                                                         -----------------
                                               CLASS A     CLASS B       CLASS A   CLASS B
                                               --------   ----------     -------   -------
<S>                                            <C>        <C>            <C>       <C>
Government Income Fund.......................  $672,237   $1,392,803      0.35%     1.00%
Strategic Income Fund........................  $560,886   $3,185,408      0.35%     1.00%
Emerging Markets Debt Fund(1)................  $605,133   $2,653,191      0.35%     1.00%
Growth & Income Fund.........................  $994,519   $4,233,024      0.35%     1.00%
</TABLE>
    
 
- ---------------
 
   
(1) Formerly known as the AIM High Income Fund.
    
 
   
  Actual fees by category paid by each Fund with regard to the Class A shares
during the year ended October 31, 1997 follows:
    
 
   
<TABLE>
<CAPTION>
                                                                       EMERGING
                                       GOVERNMENT     STRATEGIC        MARKETS         GROWTH &
                                       INCOME FUND   INCOME FUND      DEBT FUND       INCOME FUND
                                       -----------   -----------   ----------------   -----------
<S>                                    <C>           <C>           <C>                <C>
CLASS A
  Compensation to Underwriters to
     partially offset other marketing
     expenses........................   $192,068      $160,253         $172,895        $284,148
  Compensation to Dealers including
     finder's fees...................   $480,169      $400,633         $432,238        $710,371
</TABLE>
    
 
                                       35
<PAGE>   1297
 
   
  Actual fees by category paid by each Fund with regard to the Class B Shares
during the year ended October 31, 1997 as follows:
    
 
   
<TABLE>
<CAPTION>
                                       GOVERNMENT     STRATEGIC    EMERGING MARKETS    GROWTH &
                                       INCOME FUND   INCOME FUND      DEBT FUND       INCOME FUND
                                       -----------   -----------   ----------------   -----------
<S>                                    <C>           <C>           <C>                <C>
CLASS B
  Compensation to Underwriters to
     partially offset upfront dealer
     commissions and other marketing
     costs...........................  $1,044,602    $2,389,056       $1,989,893      $3,174,768
  Compensation to Dealers............  $  348,201    $  796,352       $  663,298      $1,058,256
</TABLE>
    
 
   
  The Plans require AIM Distributors to provide the Board of Trustees at least
quarterly with a written report of the amounts expended pursuant to the Plans
and the purposes for which such expenditures were made. The Board of Trustees
reviews these reports in connection with their decisions with respect to the
Plans.
    
 
  As required by Rule 12b-1, the Plans and related forms of Shareholder Service
Agreements were approved by the Board of Trustees, including a majority of the
Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Trust and who have no direct or indirect financial interest in the operation of
the Plans or in any agreements related to the Plans ("Qualified Trustees"). In
approving the Plans in accordance with the requirements of Rule 12b-1, the
Trustees considered various factors and determined that there is a reasonable
likelihood that the Plans would benefit each class of each Fund and their
respective shareholders.
 
  The Plans do not obligate the Funds to reimburse AIM Distributors for the
actual expenses AIM Distributors may incur in fulfilling its obligations under
the Plans. Thus, even if AIM Distributors' actual expenses exceed the fee
payable to AIM Distributors thereunder at any given time, the Funds will not be
obligated to pay more than that fee. If AIM Distributors' expenses are less than
the fee it receives, AIM Distributors will retain the full amount of the fee.
 
   
  Unless terminated earlier in accordance with their terms, the Plans continue
in effect until May 29, 1999 and each year thereafter, as long as such
continuance is specifically approved at least annually by the Board of Trustees,
including a majority of the Qualified Trustees.
    
 
   
  The Plans may be terminated by the vote of a majority of the Qualified
Trustees, or, with respect to a particular class, by the vote of a majority of
the outstanding voting securities of that class.
    
 
  Any change in the Plans that would increase materially the distribution
expenses paid by the applicable class requires shareholder approval; otherwise,
it may be amended by the Trustees, including a majority of the Qualified
Trustees, by votes cast in person at a meeting called for the purpose of voting
upon such amendment. As long as the Plans are in effect, the selection or
nomination of the Qualified Trustees is committed to the discretion of the
Qualified Trustees. In the event the Class A Plan is amended in a manner which
the Board of Trustees determines would materially increase the charges paid
under the Class A Plan, the Class B shares of the Funds will no longer convert
into Class A shares of the same Funds unless the Class B shares, voting
separately, approve such amendment. If the Class B shareholders do not approve
such amendment, the Board of Trustees will (i) create a new class of shares of
the Funds which is identical in all material respects to the Class A shares as
they existed prior to the implementation of the amendment and (ii) ensure that
the existing Class B shares of the Funds will be exchanged or converted into
such new class of shares no later than the date the Class B shares were
scheduled to convert into Class A shares.
 
   
  The principal differences between the Class A Plan, on the one hand, and the
Class B Plan, on the other hand, are: (i) the Class A Plan allows payment to AIM
Distributors or to dealers or financial institutions of up to 0.35% of average
daily net assets of the Class A shares of each Fund, as compared to 1.00% of
such assets of each Fund's Class B shares; (ii) the Class B Plan obligates the
Class B shares to continue to make payments to AIM Distributors following
termination of the Class B shares Distribution Agreement with respect to Class B
shares sold by or attributable to the distribution efforts of AIM Distributors
or its predecessor GT Global, Inc. unless there has been a complete termination
of the Class B Plan (as defined in such Plan) and (iii) the Class B Plan
expressly authorizes AIM Distributors to assign, transfer or pledge its rights
to payments pursuant to the Class B Plan.
    
 
                                       36
<PAGE>   1298
 
                                THE DISTRIBUTOR
 
   
  Information concerning AIM Distributors and the continuous offering of the
Funds' shares is set forth in the Prospectus under the headings "How to Purchase
Shares" and "Terms and Conditions of Purchase of the AIM Funds." Master
Distribution Agreements with AIM Distributors relating to the Class A and Class
B shares of the Funds were approved by the Board of Directors on Trustees May 7,
1998. Both such Master Distribution Agreements are hereinafter collectively
referred to as the "Distribution Agreements."
    
 
  The Distribution Agreements provide that AIM Distributors will bear the
expenses of printing from the final proof and distributing the Funds'
prospectuses and statements of additional information relating to public
offerings made by AIM Distributors pursuant to the Distribution Agreements
(other than those prospectuses and statements of additional information
distributed to existing shareholders of the Fund), and any promotional or sales
literature used by AIM Distributors or furnished by AIM Distributors to dealers
in connection with the public offering of the Fund's shares, including expenses
of advertising in connection with such public offerings. AIM Distributors has
not undertaken to sell any specified number of shares of any classes of the
Funds.
 
  AIM Distributors expects to pay sales commissions from its own resources to
dealers and institutions who sell Class B shares of the Funds at the time of
such sales. Payments with respect to Class B shares will equal 4.0% of the
purchase price of the Class B shares sold by the dealer or institution, and will
consist of a sales commission equal to 3.75% of the purchase price of the Class
B shares sold plus an advance of the first year service fee of 0.25% with
respect to such shares. The portion of the payments to AIM Distributors under
the Class B Plan which constitutes an asset-based sales charge (0.75%) is
intended in part to permit AIM Distributors to recoup a portion of such sales
commissions plus financing costs. AIM Distributors anticipates that it will
require a number of years to recoup from Class B Plan payments the sales
commissions paid to dealers and institutions in connection with sales of Class B
shares. In the future, if multiple distributors serve a Fund, each such
distributor (or its assignee or transferee) would receive a share of the
payments under the Class B Plan based on the portion of the Fund's Class B
shares sold by or attributable to the distribution efforts of that distributor.
 
   
  The Trust (on behalf of any class of any Fund) or AIM Distributors may
terminate the Distribution Agreements on sixty (60) days' written notice without
penalty. The Distribution Agreements will terminate automatically in the event
of their assignment. In the event the Class B shares Distribution Agreement is
terminated, AIM Distributors would continue to receive payments of asset based
distribution fees in respect of the outstanding Class B shares attributable to
the distribution efforts of AIM Distributors and its predecessor; provided,
however, that a complete termination of the Class B Plan (as defined in such
Plan) would terminate all payments by the Fund of asset based distribution fees
and service fees to AIM Distributors. Termination of the Class B Plan or
Distribution Agreement does not affect the obligation of Class B shareholders to
pay contingent deferred sales charges.
    
 
   
  The following chart reflects the total sales charges paid in connection with
the sale of Class A shares of each Fund and the amount retained by GT Global,
Inc., the Trust's distributor prior to June 1, 1998, for the fiscal year ended
October 31, 1997.
    
 
   
<TABLE>
<CAPTION>
                                                                      1997
                                                              --------------------
                                                               SALES       AMOUNT
                                                              CHARGES     RETAINED
                                                              --------    --------
<S>                                                           <C>         <C>
Government Income Fund......................................  $ 67,477    $10,240
Strategic Income Fund.......................................  $111,949    $29,451
Emerging Markets Debt Fund..................................  $199,201    $65,982
Growth & Income Fund........................................  $208,844    $52,850
</TABLE>
    
 
   
  The following chart reflects the contingent deferred sales charges paid by
Class A and Class B shareholders for the fiscal year ended October 31, 1997, for
Class A and Class B shares:
    
 
   
<TABLE>
<CAPTION>
                                                       1997         1996         1995
                                                    ----------   ----------   ----------
<S>                                                 <C>          <C>          <C>
Government Income Fund............................  $1,123,616   $1,467,051   $1,596,085
Strategic Income Fund.............................  $1,750,253   $1,925,586   $1,337,974
Emerging Markets Debt Fund........................  $1,617,145   $1,739,271   $2,443,970
Growth & Income Fund..............................  $1,199,637   $1,485,113   $1,552,827
</TABLE>
    
 
                                       37
<PAGE>   1299
 
   
                         NET ASSET VALUE DETERMINATION
    
 
   
  The net asset value per share of each Fund or Portfolio is normally determined
daily as of the close of trading of the New York Stock Exchange ("NYSE")
(generally 4:00 p.m. Eastern time) on each business day of the Fund or
Portfolio. In the event the NYSE closes early (i.e., before 4:00 p.m. Eastern
time) on a particular day, the net asset value of a Fund or Portfolio is
determined as of the close of the NYSE on such day. Net asset value per share is
determined by dividing the value of the equity securities, cash and other assets
(including interest accrued but not collected) attributable to a particular
class, less all its liabilities (including accrued expenses and dividends
payable) attributable to that class, by the total number of shares outstanding
of that class. Determination of each Fund's or Portfolio's net asset value per
share is made in accordance with generally accepted accounting principles.
    
 
  Each equity security held is valued at its last sales price on the exchange
where the security is principally traded or, lacking any sales on a particular
day, the security is valued at the mean between the closing bid and asked prices
on that day. Each security traded in the over-the-counter market (but not
including securities reported on the NASDAQ National Market System) is valued at
the mean between the last bid and asked prices based upon quotes furnished by
market makers for such securities. Each security reported on the NASDAQ National
Market System is valued at the last sales price on the valuation date or absent
a last sales price, at the mean between the closing bid and asked prices on that
day. Debt securities 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 institution-size trading in similar groups of
securities, developments related to special securities, yield, quality, coupon
rate, maturity, type of issue, individual trading characteristics and other
market data. Securities for which market quotations are not readily available or
are questionable are valued at fair market value as determined in good faith by
or under the supervision of the Trust's officers in a manner specifically
authorized by the Board of Trustees. Short-term obligations having 60 days or
less to maturity are valued on the basis of amortized cost. For purposes of
determining net asset value per share, futures and options contracts generally
will be valued 15 minutes after the close of trading of the NYSE.
 
   
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of each Fund's or Portfolio's shares are
determined at such times. Foreign currency exchange rates are also generally
determined prior to the close of the NYSE. Occasionally, events affecting the
values of such securities and such exchange rates may occur between the times at
which such values are determined and the close of the NYSE which will not be
reflected in the computation of a Fund's or Portfolio'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 Trustees of the Funds
and the Portfolio.
    
 
                       HOW TO PURCHASE AND REDEEM SHARES
 
  A complete description of the manner in which shares of the Funds may be
purchased appears in the Funds' Prospectuses under the headings "How to Purchase
Shares," "Terms and Conditions of Purchases of the AIM Funds" and "Special
Plans."
 
   
  The sales charge normally deducted on purchases of Class A shares is used to
compensate AIM Distributors and participating dealers for their expenses
incurred in connection with the distribution of the Funds' Class A shares. Since
there is little expense associated with unsolicited orders placed directly with
AIM Distributors by persons who, because of their relationship with the Funds or
with AIM and its affiliates, are familiar with the Funds, or whose programs for
purchase involve little expense (e.g., because of the size of the transaction
and shareholder records required), AIM Distributors believes that it is
appropriate and in the Funds' best interests that such persons, and certain
other persons whose purchases result in relatively low expenses of distribution,
be permitted to purchase Class A shares of the Funds through AIM Distributors
without payment of a sales charge. The persons who may purchase Class A shares
of the Funds without a sales charge are set forth in the Funds' Prospectuses. In
addition, the Funds offer programs such as Right of Accumulation and Letter of
Intent, which are described in the prospectuses, and are designed to permit
investors to aggregate purchases of different funds, or separate purchases over
time, in order to qualify for a lower sales charge rate. See "Terms and
Conditions of Purchase of the AIM Funds -- Reductions in Initial Sales Charges"
in the prospectuses.
    
 
   
  Class A shares that are subject to a contingent deferred sales charge and that
were purchased before June 1, 1998 are entitled to the following waivers from
the contingent deferred sales charge otherwise due upon redemption: (1) minimum
required distributions made in connection with an IRA, Keogh Plan or custodial
account under Section 403(b) of the Code or other retirement plan following
attainment of age 70 1/2; (2) total or partial redemptions resulting from a
distribution following retirement in the case of a tax-qualified
employer-sponsored retirement plan; (3) when a redemption results
    
 
                                       38
<PAGE>   1300
 
from a tax-free return of an excess contribution pursuant to Section 408(d)(4)
or (5) of the Code or from the death or disability of the employee; (4)
redemptions pursuant to a Fund's right to liquidate a shareholder's account
involuntarily; (5) redemptions pursuant to distributions from a tax-qualified
employer-sponsored retirement plan, which is invested in AIM Funds, which are
permitted to be made without penalty pursuant to the Code, other than tax-free
rollovers or transfers of assets, and the proceeds of which are reinvested in
AIM Funds; (6) redemptions made in connection with participant-directed
exchanges between options in an employer-sponsored benefit plan; (7) redemptions
made for the purpose of providing cash to fund a loan to a participant in a
tax-qualified retirement plan; (8) redemptions made in connection with a
distribution from any retirement plan or account that is permitted in accordance
with the provisions of Section 72(t)(2) of the Code and the regulations
promulgated thereunder; (9) redemptions made in connection with a distribution
from any retirement plan or account that involves the return of an excess
deferral amount pursuant to Section 401(k)(8) or Section 402(g)(2) of the Code;
(10) redemptions made in connection with a distribution from a qualified
profit-sharing or stock bonus plan described in Section 401(k) of the Code to a
participant or beneficiary under Section 401(k)(2)(B)(IV) of the Code upon
hardship of the covered employee (determined pursuant to Treasury Regulation
Section 1.401(k)-1(d)(2)); and (11) redemptions made by or for the benefit of
certain states, counties or cities, or any instrumentalities, departments or
authorities thereof where such entities are prohibited or limited by applicable
law from paying a sales charge or commission.
 
   
  Class B shares purchased before June 1, 1998 are subject to the following
waivers from the contingent deferred sales charge otherwise due upon redemption,
in addition to the waivers provided for redemptions of currently issued Class B
shares as described in the Prospectus: (1) total or partial redemptions
resulting from a distribution following retirement in the case of a
tax-qualified employer-sponsored retirement; (2) minimum required distributions
made in connection with an IRA, Keogh Plan or custodial account under Section
403(b) of the Code or other retirement plan following attainment of age 70 1/2;
(3) redemptions pursuant to distributions from a tax-qualified
employer-sponsored retirement plan, which is invested in AIM Funds, which are
permitted to be made without penalty pursuant to the Code, other than tax-free
rollovers or transfers of assets, and the proceeds of which are reinvested in
AIM Funds; (4) redemptions made in connection with participant-directed
exchanges between options in an employer-sponsored benefit plan; (5) redemptions
made for the purpose of providing cash to fund a loan to a participant in a
tax-qualified retirement plan; (6) redemptions made in connection with a
distribution from any retirement plan or account that is permitted in accordance
with the provisions of Section 72(t)(2) of the Code and the regulations
promulgated thereunder; (7) redemptions made in connection with a distribution
from a qualified profit-sharing or stock bonus plan described in Section 401(k)
of the Code to a participant or beneficiary under Section 401(k)(2)(B)(IV) of
the Code upon hardship of the covered employee (determined pursuant to Treasury
Regulation Section 1.401(k)-1(d)(2)); and (8) redemptions made by or for the
benefit of certain states, counties or cities, or any instrumentalities,
departments or authorities thereof where such entities are prohibited or limited
by applicable law from paying a sales charge or commission.
    
 
   
  For purposes of a Letter of Intent entered into prior to June 1, 1998, any
registered investment advisor, trust company or bank trust department which
exercises investment discretion and which intends within thirteen months to
invest $500,000 or more can be treated as a single purchaser, provided further
that such entity places all purchases and redemption orders. Such entities
should be prepared to establish their qualifications for such treatment.
    
 
   
  Complete information concerning the method of exchanging shares of the Funds
for shares of the other AIM Funds is set forth in the prospectuses under the
heading "Exchange Privilege."
    
 
   
  Information concerning redemption of the Funds' shares is set forth in the
Prospectuses under the heading "How to Redeem Shares." In addition to the Funds'
obligation to redeem shares, AIM Distributors may also repurchase shares as an
accommodation to shareholders. To effect a repurchase, those dealers who have
executed Selected Dealer Agreements with AIM Distributors must phone orders to
the order desk of the Funds at (800) 959-4246 and guarantee delivery of all
required documents in good order. A repurchase is effected at the net asset
value per share of the applicable Fund next determined after the repurchase
order is received. Such an arrangement is subject to timely receipt by A I M
Fund Services, Inc., ("AFS"), the Funds' transfer agent, of all required
documents in good order. If such documents are not received within a reasonable
time after the order is placed, the order is subject to cancellation. While
there is no charge imposed by a Fund or by AIM Distributors (other than any
applicable contingent deferred sales charge) when shares are redeemed or
repurchased, dealers may charge a fair service fee for handling the transaction.
    
 
  The right of redemption may be suspended or the date of payment postponed when
(a) trading on the NYSE is restricted, as determined by applicable rules and
regulations of the SEC, (b) the NYSE is closed for other than customary weekend
and holiday closings, (c) the SEC has by order permitted such suspension, or (d)
an emergency as determined by the SEC exists making disposition of portfolio
securities or the valuation of the net assets of a Fund not reasonably
practicable.
 
                                       39
<PAGE>   1301
 
   
                QUALIFYING FOR A REDUCED FRONT-END SALES CHARGE
    
 
   
  As described in each prospectus, the front-end sales charge for Class A shares
is calculated by multiplying an investor's total investment by the applicable
sales charge rate. The applicable rate varies with the amount invested. The
Funds offer programs such as Right of Accumulation and Letter of Intent, which
are described in the prospectus, and are designed to permit investors to
aggregate purchases of different funds, or separate purchases over time, in
order to qualify for a lower sales charge rate. See "Terms and Conditions of
Purchase of the AIM Funds -- Reductions in Initial Sales Charges" in the
Prospectus.
    
 
   
                     PROGRAMS AND SERVICES FOR SHAREHOLDERS
    
 
   
  The Funds provide certain services for shareholders and certain investment or
redemption programs. See "Exchange Privilege" and "How to Redeem Shares" in the
Prospectus. All inquiries concerning these programs should be made directly to
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, toll free
at (800) 959-4246.
    
 
   
                                 DIVIDEND ORDER
    
 
   
  Dividends may be paid to someone other than the registered owner, or sent to
an address other than the address of record. (Please note that signature
guarantees are required to effect this option.) An investor also may direct that
his or her dividends be invested in one of the AIM Funds and there is no sales
charge for these investments; initial investment minimums apply. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" in the Prospectus.
To effect this option, please contact your authorized dealer. For more
information concerning AIM Funds other than the Funds, please obtain a current
prospectus by contacting your authorized dealer, by writing to A I M Fund
Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, or by calling toll
free (800) 959-4246.
    
 
                                     TAXES
 
TAXATION OF THE FUNDS
 
   
  Each Fund is treated as a separate corporation for federal income tax
purposes. To continue to qualify for treatment as a regulated investment company
("RIC") under the Code, each Fund must distribute to its shareholders for each
taxable year at least 90% of its investment company taxable income (consisting
generally of net investment income, net short-term capital gain and net gains
from certain foreign currency transactions) ("Distribution Requirement") and
must meet several additional requirements. With respect to each Fund, these
requirements include the following: (1) the Fund must derive at least 90% of its
gross income each taxable year from dividends, interest, payments with respect
to securities loans and gains from the sale or other disposition of securities
or foreign currencies, or other income (including gains from options, Futures or
Forward Contracts) derived with respect to its business of investing in
securities or those currencies ("Income Requirement"); (2) at the close of each
quarter of the Fund's taxable year, at least 50% of the value of its total
assets must be represented by cash and cash items, U.S. government securities,
securities of other RICs and other securities, with these other securities
limited, in respect of any one issuer, to an amount that does not exceed 5% of
the value of the Fund's total assets and that does not represent more than 10%
of the issuer's outstanding voting securities; and (3) at the close of each
quarter of the Fund's taxable year, not more than 25% of the value of its total
assets may be invested in securities (other than U.S. government securities or
the securities of other RICs) of any one issuer. The Emerging Markets Debt Fund,
as an investor in the Portfolio, is deemed to own a proportionate share of the
Portfolio's assets, and to earn a proportionate share of the Portfolio's income,
for purposes of determining whether that Fund satisfies the requirements
described above to qualify as a RIC.
    
 
  Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to
the extent it fails to distribute by the end of any calendar year substantially
all of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
 
   
  See "Taxation of Certain Investment Activities" below for a discussion of the
tax consequences to the Emerging Markets Debt Fund of hedging transactions
engaged in, and investments in passive foreign investment companies ("PFICs")
and other foreign securities by, the Portfolio.
    
 
TAXATION OF THE PORTFOLIO -- GENERAL
 
   
  The Portfolio is treated as a partnership for federal income tax purposes and
is not a "publicly traded partnership." As a result, the Portfolio is not
subject to federal income tax; instead, the Emerging Markets Debt Fund, as an
investor in the
    
 
                                       40
<PAGE>   1302
 
Portfolio, is required to take into account in determining its federal income
tax liability its share of the Portfolio's income, gains, losses, deductions and
credits, without regard to whether it has received any cash distributions from
the Portfolio. The Portfolio also is not subject to Delaware income or franchise
tax.
 
   
  Because, as noted above, the Emerging Markets Debt Fund is deemed to own a
proportionate share of the Portfolio's assets, and to earn a proportionate share
of the Portfolio's income, for purposes of determining whether that Fund
satisfies the requirements to qualify as a RIC, the Portfolio intends to conduct
its operations so that the Emerging Markets Debt Fund will be able to continue
to satisfy all those requirements.
    
 
   
  Distributions to the Emerging Markets Debt Fund from the Portfolio (whether
pursuant to a partial or complete withdrawal or otherwise) will not result in
that Fund's recognition of any gain or loss for federal income tax purposes,
except that (1) gain will be recognized to the extent any cash that is
distributed exceeds that Fund's basis for its interest in the Portfolio before
the distribution, (2) income or gain will be recognized if the distribution is
in liquidation of that Fund's entire interest in the Portfolio and includes a
disproportionate share of any unrealized receivables held by the Portfolio, and
(3) loss will be recognized if a liquidation distribution consists solely of
cash and/or unrealized receivables. The Emerging Markets Debt Fund's basis for
its interest in the Portfolio generally will equal the amount of cash and the
basis of any property that Fund invests in the Portfolio, increased by that
Fund's share of the Portfolio's net income and gains and decreased by (a) the
amount of cash and the basis of any property the Portfolio distributes to that
Fund and (b) that Fund's share of the Portfolio's losses.
    
 
TAXATION OF CERTAIN INVESTMENT ACTIVITIES
 
  For purposes of the following discussion, "Investor Funds" means the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund and
the Portfolio.
 
   
  Foreign Taxes. Interest and dividends received by an Investor Fund, and gains
realized thereby, may be subject to income, withholding or other taxes imposed
by foreign countries and U.S. possessions ("foreign taxes") that would reduce
the yield and/or total return on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate foreign taxes, however,
and many foreign countries do not impose taxes on capital gains in respect of
investments by foreign investors. If more than 50% of the value of an Investor
Fund's total assets (taking into account, in the case of the Emerging Markets
Debt Fund, its proportionate share of the Portfolio's assets) at the close of
its taxable year consists of securities of foreign corporations, the Fund will
be eligible to, and may, file an election with the Internal Revenue Service that
will enable its shareholders, in effect, to receive the benefit of the foreign
tax credit with respect to any foreign taxes paid by it (taking into account, in
the case of the Emerging Markets Debt Fund, its proportionate share of any
foreign taxes paid by the Portfolio) (a "Fund's foreign taxes"). Pursuant to the
election, an Investor Fund would treat those taxes as dividends paid to its
shareholders and each shareholder would be required to (1) include in gross
income, and treat as paid by him, his proportionate share of the Fund's foreign
taxes, (2) treat his share of those taxes and of any dividend paid by the Fund
that represents its income from foreign and U.S. possessions sources (taking
into account, in the case of the Emerging Markets Debt Fund, its proportionate
share of the Portfolio's income from those sources) as his own income from those
sources and (3) either deduct the taxes deemed paid by him in computing his
taxable income or, alternatively, use the foregoing information in calculating
the foreign tax credit against his federal income tax. Each Investor Fund will
report to its shareholders shortly after each taxable year their respective
shares of the Fund's foreign taxes and income (taking into account, in the case
of the Emerging Markets Debt Fund, its proportionate share of the Portfolio's
income) from sources within foreign countries and U.S. possessions if it makes
this election. Pursuant to the Taxpayer Relief Act of 1997 ("Tax Act"),
individuals who have no more than $300 ($600 for married persons filing jointly)
of creditable foreign taxes included on Form 1099 and all of whose foreign
source income is "qualified passive income" may elect each year to be exempt
from the extremely complicated foreign tax credit limitation and will be able to
claim a foreign tax credit without having to file the detailed Form 1116 that
otherwise is required.
    
 
   
  Passive Foreign Investment Companies. Each Investor Fund may invest in the
stock of PFICs. A PFIC is a foreign corporation -- other than a "controlled
foreign corporation" (i.e., a foreign corporation in which, on any day during
its taxable year, more than 50% of the total voting power of all voting stock
therein or the total value of all stock therein is owned, directly, indirectly
or constructively, by "U.S. shareholders," defined as U.S. persons that
individually own, directly, indirectly or constructively, at least 10% of that
voting power) as to which the Investor Fund is a U.S. shareholder (effective
with respect to each Investor Fund for its taxable year beginning November 1,
1998) -- that, in general, meets either of the following tests: (1) at least 75%
of its gross income is passive or (2) an average of at least 50% of its assets
produce, or are held for the production of, passive income. Under certain
circumstances, an Investor Fund will be subject to federal income tax on a part
(or, in the case of the Emerging Markets Debt Fund, its proportionate share of a
part) of any "excess distribution" received by it (or, in the case of the
Emerging Markets Debt Fund, by the Portfolio) on the stock of a PFIC or of any
gain on the Fund's (or, in the case of the Emerging Markets Debt Fund, the
    
 
                                       41
<PAGE>   1303
 
Portfolio's) disposition of that stock (collectively "PFIC income"), plus
interest thereon, even if the Fund distributes the PFIC income as a taxable
dividend to its shareholders. The balance of the PFIC income will be included in
the Fund's investment company taxable income and, accordingly, will not be
taxable to it to the extent it distributes that income to its shareholders.
 
   
  If an Investor Fund invests in a PFIC and elects to treat the PFIC as a
"qualified electing fund" ("QEF"), then in lieu of the foregoing tax and
interest obligation, the Investor Fund (or, in the case of the Portfolio, the
Emerging Markets Debt Fund) would be required to include in income each year its
pro rata share (taking into account, in the case of the Emerging Markets Debt
Fund, its proportionate share of the Portfolio's pro rata share) of the QEF's
ordinary earnings and net capital gain (i.e., the excess of net long-term
capital gain over net short-term capital loss) -- which most likely would have
to be distributed by the Investor Fund (or, in the case of the Portfolio, the
Emerging Markets Debt Fund) to satisfy the Distribution Requirement and avoid
imposition of the Excise Tax -- even if those earnings and gain were not
received thereby from the QEF. In most instances it will be very difficult, if
not impossible, to make this election because of certain requirements thereof.
    
 
  Effective for its taxable year beginning November 1, 1998, each Investor Fund
may elect to "mark to market" its stock in any PFIC. "Marking-to-market," in
this context, means including in ordinary income each taxable year the excess,
if any, of the fair market value of the stock over an Investor Fund's adjusted
basis therein as of the end of that year. Pursuant to the election, an Investor
Fund also will be allowed to deduct (as an ordinary, not capital, loss) the
excess, if any, of its adjusted basis in PFIC stock over the fair market value
thereof as of the taxable year-end, but only to the extent of any net
mark-to-market gains with respect to that stock included in income by the Fund
for prior taxable years. An Investor Fund's adjusted basis in each PFIC's stock
subject to the election will be adjusted to reflect the amounts of income
included and deductions taken thereunder. Regulations proposed in 1992 provided
a similar election with respect to the stock of certain PFICs.
 
   
  Options, Futures and Foreign Currency Transactions. The Investors Funds' use
of hedging transactions, such as selling (writing) and purchasing options and
Futures Contracts and entering into Forward Contracts, involves complex rules
that will determine, for federal income tax purposes, the amount, character and
timing of recognition of the gains and losses an Investor Fund realizes in
connection therewith. Gains from the disposition of foreign currencies (except
certain gains that may be excluded by future regulations), and gains from
options, Futures and Forward Contracts derived by an Investor Fund with respect
to its business of investing in securities or foreign currencies, will qualify
as permissible income under the Income Requirement for that Investor Fund (or,
in the case of the Portfolio, the Emerging Markets Debt Fund).
    
 
  Futures and Forward Contracts that are subject to Section 1256 of the Code
(other than those that are part of a "mixed straddle") ("Section 1256
Contracts") and that are held by an Investor Fund at the end of its taxable year
generally will be deemed to have been sold at that time at market value for
federal income tax purposes. Sixty percent of any net gain or loss recognized on
these deemed sales, and 60% of any net gain or loss realized from any actual
sales of Section 1256 Contracts, will be treated as long-term capital gain or
loss, and the balance will be treated as short-term capital gain or loss. That
60% portion will qualify for the reduced maximum tax rates on noncorporate
taxpayers' net capital gain enacted by the Tax Act -- 20% (10% for taxpayers in
the 15% marginal tax bracket) for gain recognized on capital assets held for
more than 18 months -- instead of the 28% rate in effect before that
legislation, which now applies to gain recognized on capital assets held for
more than one year but not more than 18 months.
 
  Section 988 of the Code also may apply to gains and losses from transactions
in foreign currencies, foreign-currency-denominated debt securities and options,
Futures and Forward Contracts on foreign currencies ("Section 988" gains and
losses). Each Section 988 gain or loss generally is computed separately and
treated as ordinary income or loss. In the case of overlap between sections 1256
and 988, special provisions determine the character and timing of any income,
gain or loss. Each Investor Fund attempts to monitor section 988 transactions to
minimize any adverse tax impact.
 
  If an Investor Fund has an "appreciated financial position" -- generally, an
interest (including an interest through an option, Futures or Forward Contract
or short sale) with respect to any stock, debt instrument (other than "straight
debt") or partnership interest the fair market value of which exceeds its
adjusted basis -- and enters into a "constructive sale" of the same or
substantially similar property, the Fund will be treated as having made an
actual sale thereof, with the result that gain will be recognized at that time.
A constructive sale generally consists of a short sale, an offsetting notional
principal contract or Futures or Forward Contract entered into by an Investor
Fund or a related person with respect to the same or substantially similar
property. In addition, if the appreciated financial position is itself a short
sale or such a contract, acquisition of the underlying property or substantially
similar property will be deemed a constructive sale.
 
   
  The Strategic Income Fund and the Portfolio each may acquire zero coupon or
other securities issued with original issue discount ("OID"). As a holder of
those securities, that Fund and the Portfolio (and, through it, the Emerging
Markets
    
 
                                       42
<PAGE>   1304
 
   
Debt Fund) each must include in its income the portion of the OID that accrues
on the securities during the taxable year, even if no corresponding payment on
them is received during the year. Similarly, the Strategic Income Fund and the
Portfolio each must include in its gross income securities it receives as
"interest" on payment-in-kind securities. Because each Fund annually must
distribute substantially all of its investment company taxable income, including
any OID and other non-cash income, to satisfy the Distribution Requirement and
avoid imposition of the Excise Tax, the Strategic Income Fund or the Emerging
Markets Debt Fund, or both, may be required in a particular year to distribute
as a dividend an amount that is greater than the total amount of cash it
actually receives (or, in the case of the Emerging Markets Debt Fund, its share
of the total amount of cash the Portfolio actually receives). Those
distributions will be made from the Fund's (or, in the case of the Emerging
Markets Debt Fund, its, or its share of the Portfolio's) cash assets or, if
necessary, from the proceeds of sales of portfolio securities. Such Fund may
(directly or through the Portfolio) realize capital gains or losses from those
sales, which would increase or decrease its investment company taxable income
and/or net capital gain.
    
 
TAXATION OF THE FUNDS' SHAREHOLDERS
 
  Dividends and other distributions declared by a Fund in, and payable to
shareholders of record as of a date in, October, November or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during the following January. Accordingly, those distributions will be
taxed to shareholders for the year in which that December 31 falls.
 
  A portion of the dividends from the Growth & Income Fund's investment company
taxable income (whether paid in cash or reinvested in additional shares) may be
eligible for the dividends-received deduction allowed to corporations. The
eligible portion may not exceed the aggregate dividends received by that Fund
from U.S. corporations. However, dividends received by a corporate shareholder
and deducted by it pursuant to the dividends-received deduction are subject
indirectly to the federal alternative minimum tax. The Funds other than the
Growth & Income Fund are not expected to pay dividends eligible for that
deduction.
 
  If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
 
  Dividends paid by a Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership ("foreign shareholder") generally
will be subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply, however, to a dividend paid by a Fund to a foreign
shareholder that is "effectively connected with the conduct of a U.S. trade or
business," in which case the reporting and withholding requirements applicable
to domestic shareholders will apply. A distribution of net capital gain by a
Fund to a foreign shareholder generally will be subject to U.S. federal income
tax (at the rates applicable to domestic persons) only if the distribution is
"effectively connected" or the foreign shareholder is treated as a resident
alien individual for federal income tax purposes.
 
   
  The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting the Funds, their shareholders and the Portfolio.
Investors are urged to consult their own tax advisors for more detailed
information and for information regarding any foreign, state and local taxes
applicable to distributions received from a Fund.
    
 
   
                           MISCELLANEOUS INFORMATION
    
 
   
  AIM was organized in 1976, and, together with its subsidiaries, manages or
advises approximately 90 investment company portfolios encompassing a broad
range of investment objectives. AIM is a direct, wholly owned subsidiary of
A I M Management Group Inc. ("AIM Management"), a holding company that has been
engaged in the financial services business since 1976. AIM is the sole
shareholder of the Funds' principal underwriter, AIM Distributors. AIM
Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London, EC2M 4YR, England. AMVESCAP PLC and its subsidiaries are
independent investment management groups that have a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia.
    
 
CUSTODIAN
 
  State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, MA 02110, acts as custodian of each Fund's and the Portfolio's assets.
State Street is authorized to establish and has established separate accounts in
 
                                       43
<PAGE>   1305
 
foreign currencies and to cause securities of the Funds and the Portfolio to be
held in separate accounts outside the United States in the custody of non-U.S.
banks.
 
   
TRANSFER AGENCY AND ACCOUNTING AGENCY SERVICES
    
 
   
  The Transfer Agency and Service Agreement between the Trust and AFS, a
registered transfer agent and wholly-owned subsidiary of AIM, provides that AFS
will perform certain shareholder services for the Funds for a fee per account
serviced. The Transfer Agency and Service Agreement provides that AFS will
receive a per account fee plus out-of-pocket expenses to process orders for
purchases, redemptions and exchanges or shares; prepare and transmit payments
for dividends and distributions declared by the Funds; maintain shareholder
accounts and provide shareholders with information regarding the Funds and their
accounts. The Transfer Agency and Service Agreement became effective on
September 8, 1998. The Sub-advisor also serves as each Fund's pricing and
accounting agent. As of October 31, 1997, October 31, 1996 and October 31, 1995,
the Fund paid accounting services fees to the Sub-advisor of Government Income
Fund, Strategic Income Fund, Emerging Markets Debt Fund and Growth & Income Fund
$85,149, $127,205, $40,218 and $183,323; $123,309, $131,517, $34,980 and
$162,035; and $116,607, $101,697, $22,563 and $40,735, respectively.
    
 
INDEPENDENT ACCOUNTANTS
 
   
  The Funds' and the Portfolio's independent accountants are
PricewaterhouseCoopers LLP. PricewaterhouseCoopers LLP conducts audits of each
Fund's and the Portfolio's financial statements, assists in the preparation of
the Funds' and the Portfolio's federal and state income tax returns and consults
with the Trust, the Funds and the Portfolio as to matters of accounting,
regulatory filings, and federal and state income taxation.
    
 
   
  The audited financial statements of the Funds and the Portfolio included in
this Statement of Additional Information have been examined by
PricewaterhouseCoopers LLP, as stated in their opinion appearing herein and are
included in reliance upon such opinion given upon the authority of that firm as
experts in accounting and auditing.
    
 
SHAREHOLDER LIABILITY
 
   
  Under Delaware law, the shareholders of the Trust enjoy the same limitations
extended to shareholders of private, for-profit corporations. There is a remote
possibility, however, that under certain circumstances shareholders of the Trust
may be held personally liable for the Trust's obligations. However, the Trust
Agreement disclaims shareholder liability for acts or obligations of the Trust
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Trust or a trustee. If
a shareholder is held personally liable for the obligations of the Trust, the
Trust Agreement provides that the shareholder shall be entitled out of the
assets belonging to the applicable Fund (or allocable to the applicable Class),
to be held harmless from and indemnified against all loss and expense arising
from such liability in accordance with the Trust's Bylaws and applicable law.
Thus, the risk of a shareholder incurring financial loss on account of such
liability is limited to circumstances in which the Trust itself would be unable
to meet its obligations and where the other party was held not to be bound by
the disclaimer.
    
 
NAMES
 
   
  Prior to May 29, 1998, AIM Emerging Markets Debt Fund, formerly AIM Global
High Income Fund, operated under the name of GT Global High Income Fund; AIM
Strategic Income Fund operated under the name of GT Global Strategic Income
Fund; AIM Global Government Income Fund operated under the name of GT Global
Government Income Fund; and AIM Global Growth & Income Fund operated under the
name of GT Global Growth & Income Fund.
    
 
                                       44
<PAGE>   1306
 
   
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
    
 
   
  As of August 10, 1998, the Trustees and officers of the Trust, as a group,
owned less than 1% of the outstanding shares of any class of the Trust. To the
best knowledge of the Trust, the names and addresses of the holders of 5% or
more of the outstanding shares of any class of each Fund's equity securities as
of August 10, 1998, and the percentage of the outstanding shares held by such
holders are set forth below.
    
 
   
<TABLE>
<CAPTION>
                                                                                      PERCENT
                                                                         PERCENT      OWNED OF
                                                                         OWNED OF    RECORD AND
FUND                                    NAME AND ADDRESS OF OWNER        RECORD*    BENEFICIALLY
- ----                                    -------------------------        --------   ------------
<S>                                 <C>                                  <C>        <C>
Government Income Fund -- Advisor   NFSC FEBO #179-514144                  10.09%       -0-
  Class                             FMT CO Cust IRA
                                    FBO Thomas Stanley Lipscomb
                                    Cook-Fort Worth Children's Med C
                                    801 7th Ave.
                                    Fort Worth, TX 76104-2733
Government Income Fund -- Class A   MLPF&S for the Sole Benefit of Its      9.16%       -0-
                                    Customers, Security #
                                    Attn: Fund Administration
                                    4800 Deer Lake Drive East, 2nd
                                    Floor
                                    Jacksonville, FL 32246-6484
Government Income Fund -- Class B   MLPF&S for the Sole Benefit of Its    12.171%       -0-
                                    Customers, Security #97AM9
                                    Attn: Fund Administration
                                    4800 Deer Lake Drive East, 2nd
                                    Floor
                                    Jacksonville, FL 32246-6484
Strategic Income Fund -- Advisor    FTC & Co.                               9.67%       -0-
  Class                             Attn: Datalynx #089
                                    P.O. Box 173736
                                    Denver, CO 80217-3736
Strategic Income Fund -- Class A    MLPF&S for the Sole Benefit of Its      6.37%       -0-
                                    Customers, Security #974T1
                                    Attn: Fund Administration
                                    4800 Deer Lake Drive East, 2nd
                                    Floor
                                    Jacksonville, FL 32246-6484
Emerging Markets Debt               Charles Schwab & Co., Inc.             19.58%       -0-
  Fund -- Advisor Class             For the Exclusive Benefit of our
                                    Customers
                                    Reinvest Account
                                    101 Montgomery St.
                                    San Francisco, California
                                    94104-4122
                                    Attn: Mutual Funds
                                    Wells Fargo Bank NA TTEE FBO            25.5%       -0-
                                    LGT Asset Management AC 5000201000
                                    Serp Prft Shr Pln ###-##-####
                                    26610 West Agoura Road
                                    P.O. Box 9800 MAC 9139-027
                                    Calabasas, CA 91372-0800
Emerging Markets Debt               MLPF&S for the Sole Benefit of Its     10.74%       -0-
  Fund -- Class B                   Customers, Security #97AMB
                                    Attn: Fund Administration
                                    4800 Deer Lake Drive East, 2nd
                                    Floor
                                    Jacksonville, FL 32246-6484
Growth & Income Fund -- Advisor     Wells Fargo Bank NA TTEE FBO           28.32%       -0-
  Class                             LGT Asset Management AC 5000201000
                                    Serp Prft Shr Pln ###-##-####
                                    P O Box 9800 MAC 9137-027
                                    Calabasas, CA 91372-0800
</TABLE>
    
 
   
* The Trust has no knowledge as to whether all or any portion of the shares
  owned of record are also owned beneficially.
    
 
                                       45
<PAGE>   1307
 
                               INVESTMENT RESULTS
 
   
STANDARDIZED RETURNS -- TOTAL RETURN QUOTATIONS
    
 
  The standard formula for calculating total return, as described in the
Prospectus, is as follows:
 
   
                                 P(1+T)(n)=ERV
    
 
<TABLE>
<S>    <C>  <C>  <C>
Where  P    =    a hypothetical initial payment of $1,000.
       T    =    average annual total return (assuming the applicable maximum
                 sales load is deducted at the beginning of the 1, 5, or 10
                 year periods).
       n    =    number of years.
       ERV  =    ending redeemable value of a hypothetical $1,000 payment at
                 the end of the 1, 5, or 10 year periods (or fractional
                 portion of such period).
</TABLE>
 
   
  The standardized returns for the Class A and Class B shares of the Strategic
Income Fund, Government Income Fund, Emerging Markets Debt Fund and Growth &
Income Fund, stated as average annualized total returns for the periods shown,
were:
    
 
   
<TABLE>
<CAPTION>
                                                                                 EMERGING    EMERGING
                               STRATEGIC   STRATEGIC   GOVERNMENT   GOVERNMENT    MARKETS     MARKETS
                                INCOME      INCOME       INCOME       INCOME       DEBT        DEBT
                                 FUND        FUND         FUND         FUND        FUND        FUND
           PERIOD              (CLASS A)   (CLASS B)   (CLASS A)    (CLASS B)    (CLASS A)   (CLASS B)
           ------              ---------   ---------   ----------   ----------   ---------   ---------
<S>                            <C>         <C>         <C>          <C>          <C>         <C>
Fiscal year ended Oct. 31,
  1997.......................     4.18%       3.70%      (0.25)%      (0.93)%       9.03%       8.77%
Oct. 31, 1992 through Oct.
  31, 1997...................    10.14%      10.25%       5.34%        5.36%       15.93%      16.09%
Oct. 22, 1992 (commencement
  of operations) through Oct.
  31, 1997...................      n/a       10.11%        n/a        5.41%        15.85%      16.12%
March 29, 1988 (commencement
  of operations) through Oct.
  31, 1997...................     9.01%        n/a        6.52%         n/a          n/a         n/a
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                                              GROWTH AND    GROWTH AND
                                                              INCOME FUND   INCOME FUND
                           PERIOD                              (CLASS A)     (CLASS B)
                           ------                             -----------   -----------
<S>                                                           <C>           <C>
Fiscal year ended Oct. 31, 1997.............................     12.52%        13.28%
Oct. 31, 1992 through Oct. 31, 1997.........................     12.48%        12.85%
Oct. 22, 1992 (commencement of operations) through Oct. 31,
  1997......................................................       n/a         12.86%
Sept. 25, 1990 (commencement of operations) through Oct. 31,
  1997......................................................     11.82%          n/a
</TABLE>
    
 
NON-STANDARDIZED RETURNS
 
  Standard total return quotes may be accompanied by total return figures
calculated by alternative methods. For example, average annual total return may
be calculated without assuming payment of the full sales load according to the
following formula:
 
   
                                 P(1+U)(n)=ERV
    
 
<TABLE>
<S>    <C>  <C>  <C>
Where  P    =    a hypothetical initial payment of $1,000.
       U    =    average annual total return assuming payment of only a
                 stated portion of, or none of, the applicable maximum sales
                 load at the beginning of the stated period.
       n    =    number of years.
       ERV  =    ending redeemable value of a hypothetical $1,000 payment at
                 the end of the stated period.
</TABLE>
 
                                       46
<PAGE>   1308
 
   
  The average annual non-standardized returns for the Class A and Class B shares
of the Strategic Income Fund, Government Income Fund, Emerging Markets Debt Fund
and Growth & Income Fund, stated as average annualized total returns for the
periods shown, were:
    
 
   
<TABLE>
<CAPTION>
                                                                                EMERGING    EMERGING
                              STRATEGIC   STRATEGIC   GOVERNMENT   GOVERNMENT    MARKETS     MARKETS
                               INCOME      INCOME       INCOME       INCOME       DEBT        DEBT
                                FUND        FUND         FUND         FUND        FUND        FUND
PERIOD                        (CLASS A)   (CLASS B)   (CLASS A)    (CLASS B)    (CLASS A)   (CLASS B)
- ------                        ---------   ---------   ----------   ----------   ---------   ---------
<S>                           <C>         <C>         <C>          <C>          <C>         <C>
Fiscal year ended Oct. 31,
  1997......................     9.40%       8.70%       4.78%        4.00%       14.46%      13.77%
Oct. 31, 1992 through Oct.
  31, 1997..................    11.21%      10.52%       6.37%        5.64%       17.07%      16.31%
Oct. 22, 1992 (commencement
  of operations) through
  Oct. 31, 1997.............      n/a       10.25%        n/a         5.55%       16.98%      16.22%
March 29, 1988 (commencement
  of operations) through
  Oct. 31, 1997.............     9.56%        n/a        7.07%         n/a          n/a         n/a
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                                              GROWTH AND    GROWTH AND
                                                              INCOME FUND   INCOME FUND
PERIOD                                                         (CLASS A)     (CLASS B)
- ------                                                        -----------   -----------
<S>                                                           <C>           <C>
Fiscal year ended Oct. 31, 1997.............................     19.01%        18.28%
Oct. 31, 1992 through Oct. 31, 1997.........................     13.77%        13.10%
Oct. 22, 1992 (commencement of operations) through Oct. 31,
  1997......................................................       n/a         12.99%
Sept. 25, 1990 (commencement of operations) through Oct. 31,
  1997......................................................     12.72%          n/a
</TABLE>
    
 
  Cumulative total return across a stated period may be calculated as follows:
 
   
                                 P(1+V)(n)=ERV
    
 
<TABLE>
<S>    <C>  <C>  <C>
Where  P    =    a hypothetical initial payment of $1,000.
       V    =    cumulative total return assuming payment of all of, a stated
                 portion of, or none of, the applicable maximum sales load at
                 the beginning of the stated period.
       n    =    number of years.
       ERV  =    ending redeemable value of a hypothetical $1,000 payment at
                 the end of the stated period.
</TABLE>
 
   
  The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Class B shares of the Strategic Income Fund, Government
Income Fund, Emerging Markets Debt Fund and Growth & Income Fund, stated as
aggregate total returns for the periods shown, were:
    
 
   
<TABLE>
<CAPTION>
                                                                                 EMERGING    EMERGING
                               STRATEGIC   STRATEGIC   GOVERNMENT   GOVERNMENT    MARKETS     MARKETS
                                INCOME      INCOME       INCOME       INCOME       DEBT        DEBT
                                 FUND        FUND         FUND         FUND        FUND        FUND
PERIOD                         (CLASS A)   (CLASS B)   (CLASS A)    (CLASS B)    (CLASS A)   (CLASS B)
- ------                         ---------   ---------   ----------   ----------   ---------   ---------
<S>                            <C>         <C>         <C>          <C>          <C>         <C>
Oct. 22, 1992 (commencement
  of operations) through Oct.
  31, 1997...................      n/a       63.28%        n/a        31.19%      119.88%     112.86%
March 29, 1988 (commencement
  of operations) through Oct.
  31, 1997...................   140.06%        n/a       92.49%         n/a          n/a         n/a
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                                              GROWTH AND    GROWTH AND
                                                              INCOME FUND   INCOME FUND
PERIOD                                                         (CLASS A)     (CLASS B)
- ------                                                        -----------   -----------
<S>                                                           <C>           <C>
Oct. 22, 1992 (commencement of operations) through Oct. 31,
  1997......................................................       n/a         84.69%
Sept. 25, 1990 (commencement of operations) through Oct. 31,
  1997......................................................    133.95%          n/a
</TABLE>
    
 
                                       47
<PAGE>   1309
 
   
  The aggregate non-standardized returns (taking sales charges into account) for
the Class A and Class B shares of the Strategic Income Fund, Government Income
Fund, Emerging Markets Debt Fund and Growth & Income Fund, stated as aggregate
total returns for the periods shown, were:
    
 
   
<TABLE>
<CAPTION>
                                                                                 EMERGING    EMERGING
                               STRATEGIC   STRATEGIC   GOVERNMENT   GOVERNMENT    MARKETS     MARKETS
                                INCOME      INCOME       INCOME       INCOME       DEBT        DEBT
                                 FUND        FUND         FUND         FUND        FUND        FUND
PERIOD                         (CLASS A)   (CLASS B)   (CLASS A)    (CLASS B)    (CLASS A)   (CLASS B)
- ------                         ---------   ---------   ----------   ----------   ---------   ---------
<S>                            <C>         <C>         <C>          <C>          <C>         <C>
Oct. 22, 1992 (commencement
  of operations) through Oct.
  31, 1997...................      n/a       62.28%        n/a        30.32%      109.44%     111.86%
March 29, 1988 (commencement
  of operations) through Oct.
  31, 1997...................   128.66%        n/a       83.35%         n/a          n/a         n/a
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                                              GROWTH AND    GROWTH AND
                                                              INCOME FUND   INCOME FUND
PERIOD                                                         (CLASS A)     (CLASS B)
- ------                                                        -----------   -----------
<S>                                                           <C>           <C>
Oct. 22, 1992 (commencement of operations) through Oct. 31,
  1997......................................................       n/a         83.69%
Sept. 25, 1990 (commencement of operations) through Oct. 31,
  1997......................................................    120.95%          n/a
</TABLE>
    
 
   
YIELD QUOTATIONS
    
 
  The standard formula for calculating yield for each Fund, as described in the
Prospectus, is as follows:
 
                      YIELD = 2[((a-b)/(c x d) + 1)(6)-1]
 
<TABLE>
<S>    <C>  <C>  <C>
Where  a    =    dividends and interest earned during a stated 30-day period.
                 For purposes of this calculation, dividends are accrued
                 rather than recorded on the ex-dividend date. Interest
                 earned under this formula must generally be calculated based
                 on the yield to maturity of each obligation (or, if more
                 appropriate, based on yield to call date).
       b    =    expenses accrued during period (net of reimbursement).
       c    =    the average daily number of shares outstanding during the
                 period.
       d    =    the maximum offering price per share on the last day of the
                 period.
</TABLE>
 
   
  The Yields of the Class A shares of the Strategic Income Fund, Government
Income Fund and the Emerging Markets Debt Fund for the one-month period ended
October 31, 1996 were 6.58%, 6.23% and 7.29%, respectively. The current yields
of the Class B shares of Strategic Income Fund, Government Income Fund and
Emerging Markets Debt Fund for the one-month period ended October 31, 1996 were
6.23%, 5.87% and 7.00%, respectively.
    
 
PERFORMANCE INFORMATION
 
  Total return and yield figures for the Funds are neither fixed nor guaranteed,
and no Fund's principal is insured. Performance quotations reflect historical
information and should not be considered representative of a Fund's performance
for any period in the future. Performance is a function of a number of factors
which can be expected to fluctuate. The Funds may provide performance
information in reports, sales literature and advertisements. The Funds may also,
from time to time, quote information about the Funds published or aired by
publications or other media entities which contain articles or segments relating
to investment results or other data about one or more of the Funds. Such
publications or media entities may include the following, among others:
 
     Advertising Age
     Barron's
     Best's Review
     Broker World
     Business Week
     Changing Times
     Christian Science Monitor
     Consumer Reports
     Economist
     EuroMoney
     FACS of the Week
     Financial Planning
     Financial Product News
     Financial World
     Forbes
     Fortune
     Global Finance
     Hartford Courant Inc.
     Institutional Investor
     Insurance Forum
     Insurance Week
     Investor's Daily
     Journal of the American
       Society of CLU & ChFC
 
                                       48
<PAGE>   1310
 
     Kiplinger Letter
     Money
     Mutual Fund Forecaster
     Mutual Fund Magazine
     Nation's Business
     New York Times
     Pension World
     Pensions & Investments
     Personal Investor
     Financial Services Week
     Philadelphia Inquirer
     Smart Money
     USA Today
     U.S. News & World Report
     Wall Street Journal
     Washington Post
     CNN
     CNBC
     PBS
 
  The Funds and AIM Distributors may from time to time, in advertisements, sales
literature and reports furnished to present or prospective shareholders, compare
each Fund with the following, or compare each Fund's performance to performance
data of similar mutual funds as published in the following, among others:
 
     Bank Rate National Monitor Index
     Bear Stearns Foreign Bond Index
     Bond Buyer Index
     CDA/Wiesenberger Investment Company Services
       (data and mutual fund rankings and
       comparisons)
     CNBC/Financial News Composite Index
     COFI
     Consumer Price Index
     Datastream
     Donoghue's
     Dow Jones Industrial Average
     EAFE Index
     First Boston High Yield Index
     Fitch (publications)
     Ibbotson Associates International Bond Index
     International Bank for Reconstruction and
       Development (publications)
     International Finance Corporation Emerging
       Markets Database
     International Financial Statistics
     Lehman Bond Indices
     Lipper Analytical Data Services, Inc. (data and
       mutual fund rankings and comparisons)
     Micropal, Inc. (data and mutual fund rankings
       and comparisons)
     Moody's Investors Service (publications)
     Morgan Stanley Capital International All Country
       (AC) World Index
     Morgan Stanley Capital International World
       Indices
     Morningstar, Inc. (data and mutual fund rankings
       and comparisons)
     NASDAQ
     Organization for Economic Cooperation and
     Development (publications)
     Salomon Brothers Global Telecommunications
       Index
     Salomon Brothers World Government Bond
       Index-Non-U.S.
     Salomon Brothers World Government Bond Index
     Standard & Poor's (publications)
     Standard & Poor's 500 Composite Stock Price
       Index
     Stangar
     Wilshire Associates
     World Bank (publications and reports)
     The World Bank Publication of Trends in
       Developing Countries
     Worldscope
 
  Each Fund may also compare its performance to rates on Certificates of Deposit
and other fixed rate investments such as the following:
 
       10-year Treasuries
        30-year Treasuries
        30-day Treasury Bills
 
  Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable but may be subject
to revision and has not been independently verified by the Funds or AIM
Distributors. Advertising for the Funds may from time to time include
discussions of general economic conditions and interest rates. Advertising for
the Funds may also include reference to the use of those Funds as part of an
individual's overall retirement investment program. From time to time, sales
literature and/or advertisements for any of the Funds may disclose (i) the
largest holdings in the Fund's portfolio, (ii) certain selling group members
and/or (iii) certain institutional shareholders.
 
  From time to time, the Funds' sales literature and/or advertisements may
discuss generic topics pertaining to the mutual fund industry. This includes,
but is not limited to, literature addressing general information about mutual
funds, variable annuities, dollar-cost averaging, stocks, bonds, money markets,
certificates of deposit, retirement, retirement plans, asset allocation,
tax-free investing, college planning, and inflation.
 
  Although performance data may be useful to prospective investors when
comparing a Fund's performance with other funds and other potential investments,
investors should note that the methods of computing performance of other
potential investments are not necessarily comparable to the methods employed by
a Fund.
 
                                       49
<PAGE>   1311
 
   
                                    APPENDIX
    
   
    
 
                          DESCRIPTION OF BOND RATINGS
 
   
  Moody's Investors Service, Inc. ("Moody's") rates the debt securities issued
by various entities from "Aaa" to "C". Investment grade ratings are the first
four categories: Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. Ba -- Bonds which are rated Ba
are judged to have speculative elements; their future cannot be considered as
well-assured. Often the protection of interest and principal payments may be
very moderate, and thereby not well safeguarded during both good and bad times
over the future. Uncertainty of position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest. Ca -- Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings. C -- Bonds which are rated C are the lowest rated class of
bonds, and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
    
 
   
  Standard & Poor's, a division of The McGraw-Hill Companies, Inc., ("S&P")
rates the securities debt of various entities in categories ranging from "AAA"
to "D" according to quality. Investment grade ratings are the first four
categories:
    
 
  AAA -- An obligation rated "AAA" has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong. AA -- An obligation rated "AA" differs from the highest rated
obligations only in a small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong. A -- An obligation rated "A" is
somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions than obligations in higher rated categories. BBB -- An
obligation rated "BBB" exhibits adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the
obligation. BB, B, CCC, CC, C -- Obligations rated "BB," "B," "CCC," "CC," and
"C" are regarded as having significant speculative characteristics. "BB"
indicates the least degree of speculation and "C" the highest. While such
obligations will likely have some quality and protective characteristics, these
may be outweighed by large uncertainties or major exposures to adverse
conditions. BB -- An obligation rated "BB" is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could lead
to the obligor's inadequate capacity to meet its financial commitment on the
obligation. B -- An obligation rated "B" is more vulnerable to nonpayment than
obligations rated "BB," but the obligor currently has the capacity to meet its
financial commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation. CCC -- An obligation rated "CCC" is
currently vulnerable to nonpayment, and is dependent upon favorable business,
financial, and economic conditions for the obligor to meet its financial
commitment on the obligation. In the event of adverse business, financial, or
economic conditions, the obligor is not likely to have the capacity to meet its
financial commitment on the obligation. CC -- An obligation rated "CC" is
currently highly vulnerable to nonpayment. C -- The "C" rating may be used to
cover a situation where a bankruptcy petition has been filed or similar action
has been taken, but payments on this obligation are being continued. D -- An
obligation rated "D" is in payment default. The "D" rating category is used when
payments on an obligation are not made on the date due even if the applicable
grace period has not expired, unless S&P believes that such payments will be
made during such grace period. The "D" rating also will be used upon the filing
of a bankruptcy petition or the taking of a similar action if payments on an
obligation are jeopardized.
 
                                       50
<PAGE>   1312
 
  PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
 
  NR: Indicates that no rating has been requested, that there is insufficient
information on which to base a rating, or that S&P does not rate a particular
type of obligation as a matter of policy.
 
DESCRIPTION OF COMMERCIAL PAPER RATINGS
 
  Moody's employs the designation "Prime-1" to indicate commercial paper having
a superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. Issues rated Prime-2 have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many of
the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
 
   
  S&P ratings of commercial paper are graded into several categories ranging
from "A-1" for the highest quality obligations to "D" for the lowest. Issues in
the "A" category are delineated with numbers 1, 2, and 3 to indicate the
relative degree of safety. A-1 -- This highest category indicates that the
degree of safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics will be denoted with a plus sign
(+) designation. A-2 -- Capacity for timely payments on issues with this
designation is satisfactory; however, the relative degree of safety is not as
high as for issues designated "A-1."
    
 
   
ABSENCE OF RATING
    
 
   
  Where no rating has been assigned or where a rating has been suspended or
withdrawn, it may be for reasons unrelated to the quality of the issue.
    
 
   
  Should no rating be assigned, the reason may be one of the following:
    
 
   
          1. An application for rating was not received or accepted.
    
 
   
          2. The issue or issuer belongs to a group of securities or companies
     that are not rated as a matter of policy.
    
 
   
          3. There is a lack of essential data pertaining to the issue or
     issuer.
    
 
   
          4. The issue was privately placed, in which case the rating is not
     published in Moody's publications.
    
 
   
  Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.
    
 
   
  Note: Moody's applies numerical modifiers, 1, 2, and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the Company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the Company ranks in the
lower end of its generic rating category.
    
 
                                       51
<PAGE>   1313
 
                              FINANCIAL STATEMENTS
 
                                       FS
<PAGE>   1314
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                            PORTFOLIO OF INVESTMENTS
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                          COUNTRY        SHARES         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Finance (32.7%)
  Schweizerischer Bankverein (Swiss Bank Corp.) ..........   SWTZ              74,750   $ 25,964,898         3.1
    BANKS-MONEY CENTER
  AEGON N.V. .............................................   NETH             187,875     24,372,772         2.9
    INSURANCE-LIFE
  Credit Suisse Group ....................................   SWTZ             108,300     23,827,589         2.8
    BANKS-MONEY CENTER
  Royal & Sun Alliance Insurance Group PLC ...............   UK             2,081,400     23,250,421         2.7
    INSURANCE - MULTI-LINE
  ABN AMRO Holding N.V. ..................................   NETH             891,296     21,713,093         2.5
    BANKS-MONEY CENTER
  Union Bank of Switzerland - Bearer .....................   SWTZ              11,752     18,929,817         2.2
    BANKS-MONEY CENTER
  ING Groep N.V. .........................................   NETH             264,262     17,180,432         2.0
    BANKS-MONEY CENTER
  First Tennessee National Corp. .........................   US               490,800     16,901,925         2.0
    BANKS-REGIONAL
  Fortis Amev N.V. .......................................   NETH             244,011     14,281,095         1.7
    OTHER FINANCIAL
  American General Corp. .................................   US               170,000     11,326,250         1.3
    INSURANCE-LIFE
  Lloyds TSB Group PLC ...................................   UK               688,428     10,309,152         1.2
    BANKS-REGIONAL
  National Westminster Bank PLC ..........................   UK               471,800      9,443,890         1.1
    BANKS-MONEY CENTER
  General Accident PLC ...................................   UK               400,000      9,404,682         1.1
    INSURANCE - PROPERTY-CASUALTY
  IKB Deutsche Industriebank AG ..........................   GER              394,000      8,620,123         1.0
    BANKS-REGIONAL
  Generale de Banque S.A.: ...............................   BEL                   --             --         1.0
    BANKS-MONEY CENTER
    Common ...............................................   --                14,762      8,534,275          --
    Strip VVPR-/- ........................................   --                 1,342            254          --
  Kredietbank N.V. .......................................   BEL               12,980      7,328,524         0.9
    BANKS-REGIONAL
  Commercial Union PLC ...................................   UK               361,550      6,765,459         0.8
    INSURANCE - MULTI-LINE
  Commonwealth Bank of Australia .........................   AUSL             526,000      6,304,056         0.7
    BANKS-SUPER REGIONAL
  M & G Group PLC ........................................   UK               155,000      4,762,751         0.6
    INVESTMENT MANAGEMENT
  General Property Trust .................................   AUSL           1,444,125      2,679,354         0.3
    REAL ESTATE
  Reinsurance Australia Corporation Ltd. .................   AUSL             846,250      2,357,887         0.3
    INSURANCE - MULTI-LINE
  Infrastructure Trust of Australia Group ................   AUSL           2,724,750      2,341,430         0.3
    OTHER FINANCIAL
  National Australia Bank Ltd. ...........................   AUSL             120,725      1,713,303         0.2
    BANKS-REGIONAL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-1
<PAGE>   1315
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                          COUNTRY        SHARES         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Finance (Continued)
  Realty Development Corp. "A" ...........................   HK                 5,000   $     11,168          --
    REAL ESTATE
                                                                                        ------------
                                                                                         278,324,600
                                                                                        ------------
Consumer Non-Durables (15.3%)
  Cadbury Schweppes PLC ..................................   UK             1,381,800     20,149,324         2.4
    BEVERAGES - NON-ALCOHOLIC
  Diageo PLC .............................................   UK             1,684,559     20,056,957         2.4
    BEVERAGES - ALCOHOLIC
  Reckitt & Colman PLC ...................................   UK               983,093     19,809,817         2.3
    HOUSEHOLD PRODUCTS
  Avon Products, Inc. ....................................   US               182,000     14,958,125         1.8
    PERSONAL CARE/COSMETICS
  Pernod Ricard ..........................................   FR               158,720     10,959,867         1.3
    BEVERAGES - ALCOHOLIC
  Philip Morris Cos., Inc. ...............................   US               255,000      9,514,688         1.1
    TOBACCO
  Kellogg Co. ............................................   US               219,513      9,054,911         1.1
    FOOD
  Clorox Co. .............................................   US               105,960      8,887,395         1.0
    HOUSEHOLD PRODUCTS
  Anheuser-Busch Cos., Inc. ..............................   US               188,371      8,629,746         1.0
    BEVERAGES - ALCOHOLIC
  Brown-Forman Corp. "B" .................................   US                93,600      5,300,100         0.6
    BEVERAGES - ALCOHOLIC
  Universal Corp. ........................................   US                62,075      2,323,933         0.3
    TOBACCO
                                                                                        ------------
                                                                                         129,644,863
                                                                                        ------------
Energy (12.5%)
  Royal Dutch Petroleum Co. ..............................   NETH             371,840     20,528,897         2.4
    OIL
  Exxon Corp. ............................................   US               182,600     13,318,388         1.6
    OIL
  VEBA AG ................................................   GER              170,200     11,251,795         1.3
    ELECTRICAL & GAS UTILITIES
  Mobil Corp. ............................................   US               127,600     10,080,400         1.2
    OIL
  Electrabel S.A. ........................................   BEL               34,760      9,241,630         1.1
    ELECTRICAL & GAS UTILITIES
  Shell Transport & Trading Co., PLC .....................   UK             1,121,700      8,347,099         1.0
    OIL
  PG&E Corp. .............................................   US               220,000      7,122,500         0.8
    ELECTRICAL & GAS UTILITIES
  Reunies Electrobel & Tractebel S.A. ....................   BEL               57,935      6,933,773         0.8
    ELECTRICAL & GAS UTILITIES
  Elf Aquitaine ..........................................   FR                52,475      6,888,981         0.8
    OIL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-2
<PAGE>   1316
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                          COUNTRY        SHARES         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Energy (Continued)
  RWE AG .................................................   GER              134,620   $  6,851,062         0.8
    ELECTRICAL & GAS UTILITIES
  Groupe Bruxelles Lambert S.A. ..........................   BEL               31,025      6,201,140         0.7
    OIL
                                                                                        ------------
                                                                                         106,765,665
                                                                                        ------------
Services (9.6%)
  Telecom Corporation of New Zealand Limited: ............   NZ                    --             --         1.7
    TELEPHONE NETWORKS
    Common ...............................................   --             2,614,200     12,405,045          --
    ADR{\/} ..............................................   --                38,000      1,455,875          --
  McGraw-Hill, Inc. ......................................   US               162,000     12,544,875         1.5
    BROADCASTING & PUBLISHING
  EMI Group PLC ..........................................   UK               887,600      9,017,007         1.1
    LEISURE & TOURISM
  Reuters Group PLC ......................................   UK               823,020      8,918,344         1.0
    BROADCASTING & PUBLISHING
  Elsevier N.V. ..........................................   NETH             557,255      8,415,665         1.0
    BROADCASTING & PUBLISHING
  Woolworths Ltd. ........................................   AUSL           2,021,925      6,949,915         0.8
    RETAILERS-OTHER
  Royal PTT Nederland N.V. ...............................   NETH             112,735      5,827,656         0.7
    TELEPHONE NETWORKS
  PMP Communications Ltd. ................................   AUSL           2,556,250      4,543,039         0.5
    BROADCASTING & PUBLISHING
  Qantas Airways Ltd. ....................................   AUSL           2,781,250      4,236,785         0.5
    TRANSPORTATION - AIRLINES
  Dun & Bradstreet Corp. .................................   US               109,800      3,897,893         0.5
    BROADCASTING & PUBLISHING
  Telstra Corp. Ltd. - Installment Receipts ..............   AUSL           1,262,200      2,958,089         0.3
    TELEPHONE NETWORKS
                                                                                        ------------
                                                                                          81,170,188
                                                                                        ------------
Health Care (4.5%)
  Bristol Myers Squibb Co. ...............................   US               277,400     29,369,725         3.5
    PHARMACEUTICALS
  Bayer AG ...............................................   GER              191,600      8,522,676         1.0
    PHARMACEUTICALS
                                                                                        ------------
                                                                                          37,892,401
                                                                                        ------------
Materials/Basic Industry (2.8%)
  BASF AG ................................................   GER              194,000      8,640,245         1.0
    CHEMICALS
  Akzo Nobel N.V. ........................................   NETH              41,450      8,435,309         1.0
    CHEMICALS
  Solvay S.A. "A" ........................................   BEL               58,770      4,426,864         0.5
    CHEMICALS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-3
<PAGE>   1317
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                          COUNTRY        SHARES         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Materials/Basic Industry (Continued)
  Aberfoyle Ltd. .........................................   AUSL           1,116,300   $  2,180,132         0.3
    METALS - NON-FERROUS
                                                                                        ------------
                                                                                          23,682,550
                                                                                        ------------
Capital Goods (0.9%)
  Lockheed Martin Corp. ..................................   US                69,545      7,745,574         0.9
                                                                                        ------------
    AEROSPACE/DEFENSE
Multi-Industry/Miscellaneous (0.4%)
  ICI Australia Ltd. .....................................   AUSL             497,800      3,658,721         0.4
    MULTI-INDUSTRY
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $376,302,771) .............                               668,884,562        78.7
                                                                                        ------------       -----
<CAPTION>
 
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (19.4%)
  Canada (1.1%)
    Canadian Government, 8.75% due 12/1/05 ...............   CAD           10,620,000      8,989,525         1.1
  Denmark (0.6%)
    Kingdom of Denmark, 7% due 11/15/07 ..................   DKK           31,100,000      5,133,173         0.6
  Germany (2.4%)
    Deutschland Republic:
      6.25% due 1/4/24 ...................................   DEM           25,150,000     15,429,960         1.8
      6.25% due 4/26/06 ..................................   DEM            8,110,000      4,906,234         0.6
  Italy (1.2%)
    Italian Buoni Poliennali del Tesoro (BTPS), 6% due
     2/15/00 .............................................   ITL       18,365,000,000     10,621,560         1.2
  New Zealand (0.3%)
    New Zealand Government, 8% due 4/15/04 ...............   NZD            4,440,000      2,564,101         0.3
  United Kingdom (2.5%)
    United Kingdom Government Bond, 8% due 6/7/21 ........   GBP            9,800,000     21,017,559         2.5
  United States (11.3%)
    United States Treasury:
      6.5% due 8/15/05 ...................................   USD           52,130,000     54,437,159         6.4
      6% due 2/15/26 .....................................   USD           33,430,000     33,356,220         3.9
      5.625% due 2/28/01 .................................   USD            8,100,000      8,101,582         1.0
                                                                                        ------------
Total Government & Government Agency Obligations
 (cost $160,419,537) .....................................                               164,557,073
                                                                                        ------------
Corporate Bonds (1.6%)
  Germany (0.7%)
    Commerzbank AG, Convertible Bond, 8.4% due
     12/31/00+ ...........................................   DEM            3,274,000      5,935,722         0.7
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-4
<PAGE>   1318
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Corporate Bonds (Continued)
  United Kingdom (0.9%)
    Daily Mail & General Trust, Convertible Bond, 5.75%
     due 9/26/03 .........................................   GBP            3,405,000   $  7,544,523         0.9
                                                                                        ------------
Total Corporate Bonds (cost $8,756,515) ..................                                13,480,245
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $169,176,052) .......                               178,037,318        21.0
                                                                                        ------------       -----
 
<CAPTION>
 
                                                                           NO. OF          VALUE         % OF NET
WARRANTS                                                    COUNTRY       WARRANTS        (NOTE 1)        ASSETS
- - ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Societe Generale Banque put warrants due 11/15/99
   Tractebel (cost $0) ...................................   BEL               11,587          9,715          --
                                                                                        ------------       -----
    BANKS-MONEY CENTER
 
TOTAL INVESTMENTS (cost $545,478,823)  * .................                               846,931,595        99.7
Other Assets and Liabilities .............................                                 2,557,073         0.3
                                                                                        ------------       -----
 
NET ASSETS ...............................................                              $849,488,668       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
          *  For Federal income tax purposes, cost is $546,893,380 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $ 306,724,441
                 Unrealized depreciation:            (6,686,226)
                                                  -------------
                 Net unrealized appreciation:     $ 300,038,215
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviation:
    ADR--American Depositary Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-5
<PAGE>   1319
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {d}
                                        -------------------------------------------
                                                 FIXED INCOME
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY    & WARRANTS       OTHER      TOTAL
- - --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Australia (AUSL/AUD) .................    4.6                                   4.6
Belgium (BEL/BEF) ....................    5.0                                   5.0
Canada (CAN/CAD) .....................                1.1                       1.1
Denmark (DEN/DKK) ....................                0.6                       0.6
France (FR/FRF) ......................    2.1                                   2.1
Germany (GER/DEM) ....................    5.1         3.1                       8.2
Italy (ITLY/ITL) .....................                1.2                       1.2
Netherlands (NETH/NLG) ...............   14.2                                  14.2
New Zealand (NZ/NZD) .................    1.7         0.3                       2.0
Switzerland (SWTZ/CHF) ...............    8.1                                   8.1
United Kingdom (UK/GBP) ..............   17.7         3.4                      21.1
United States (US/USD) ...............   20.2        11.3            0.3       31.8
                                        ------      -----            ---      -----
Total  ...............................   78.7        21.0            0.3      100.0
                                        ------      -----            ---      -----
                                        ------      -----            ---      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $849,488,668.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-6
<PAGE>   1320
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                               <C>          <C>
Assets:
  Investments in securities, at value (cost $545,478,823) (Note 1)...........................  $846,931,595
  U.S. currency.................................................................  $       109
  Foreign currencies (cost $23,545,587).........................................   23,550,489    23,550,598
                                                                                  -----------
  Receivable for securities sold.............................................................    21,471,592
  Interest receivable........................................................................     2,781,260
  Dividends and dividend withholding tax reclaims receivable.................................     2,210,071
  Receivable for Fund shares sold............................................................     2,063,804
                                                                                               ------------
    Total assets.............................................................................   899,008,920
                                                                                               ------------
Liabilities:
  Payable for loan outstanding (Note 1)......................................................    31,902,000
  Payable for securities purchased...........................................................    14,891,346
  Payable for Fund shares repurchased........................................................     1,223,889
  Payable for investment management and administration fees (Note 2).........................       684,243
  Payable for service and distribution expenses (Note 2).....................................       512,776
  Payable for transfer agent fees (Note 2)...................................................        94,567
  Payable for custodian fees.................................................................        77,850
  Payable for printing and postage expenses..................................................        66,438
  Payable for professional fees..............................................................        23,257
  Payable for fund accounting fees (Note 2)..................................................        15,341
  Payable for registration and filing fees...................................................        10,508
  Payable for Directors' fees and expenses (Note 2)..........................................         2,022
  Other accrued expenses.....................................................................        16,015
                                                                                               ------------
    Total liabilities........................................................................    49,520,252
                                                                                               ------------
Net assets...................................................................................  $849,488,668
                                                                                               ------------
                                                                                               ------------
Class A:
Net asset value and redemption price per share ($324,300,291 DIVIDED BY 34,750,950 shares
 outstanding)................................................................................  $       9.33
                                                                                               ------------
                                                                                               ------------
Maximum offering price per share (100/95.25 of $9.33) *......................................  $       9.80
                                                                                               ------------
                                                                                               ------------
Class B:+
Net asset value and offering price per share ($517,679,095 DIVIDED BY 55,515,498 shares
 outstanding)................................................................................  $       9.32
                                                                                               ------------
                                                                                               ------------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($7,509,282 DIVIDED
 BY 805,076 shares outstanding)..............................................................  $       9.33
                                                                                               ------------
                                                                                               ------------
Net assets consist of:
  Paid in capital (Note 4)...................................................................  $514,353,897
  Distributions in excess of net investment income...........................................    (4,773,683)
  Accumulated net realized gain on investments and foreign currency transactions.............    38,431,162
  Net unrealized appreciation on translation of assets and liabilities in foreign
   currencies................................................................................        24,520
  Net unrealized appreciation of investments.................................................   301,452,772
                                                                                               ------------
Total -- representing net assets applicable to capital shares outstanding....................  $849,488,668
                                                                                               ------------
                                                                                               ------------
<FN>
- --------------
   * On sales of $50,000 or more, the offering price is reduced.
   + Redemption price per share is equal to the net asset value per share less
     any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-7
<PAGE>   1321
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                            STATEMENT OF OPERATIONS
 
                  Six months ended April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                               <C>          <C>
Investment income: (Note 1)
  Dividend income (net of foreign withholding tax of $607,655)...............................  $  6,272,680
  Interest income............................................................................     5,991,094
  Securities lending income..................................................................       371,976
                                                                                               ------------
    Total investment income..................................................................    12,635,750
                                                                                               ------------
Expenses:
  Investment management and administration fees (Note 2).....................................     3,831,231
  Service and distribution expenses: (Note 2)
    Class A.....................................................................  $   533,841
    Class B.....................................................................    2,412,218     2,946,059
                                                                                  -----------
  Transfer agent fees (Note 2)...............................................................       656,600
  Custodian fees.............................................................................       253,400
  Printing and postage expenses..............................................................       109,505
  Fund accounting fees (Note 2)..............................................................       101,780
  Professional fees..........................................................................        92,400
  Registration and filing fees...............................................................        25,227
  Directors' fees and expenses (Note 2)......................................................         9,110
  Other expenses (Note 1)....................................................................       126,324
                                                                                               ------------
    Total expenses before reductions.........................................................     8,151,636
                                                                                               ------------
      Expense reductions (Note 5)............................................................        (7,140)
                                                                                               ------------
    Total net expenses.......................................................................     8,144,496
                                                                                               ------------
Net investment income........................................................................     4,491,254
                                                                                               ------------
Net realized and unrealized gain (loss) on investments and foreign currencies:
  (Note 1)
  Net realized gain on investments..............................................   42,712,911
  Net realized loss on foreign currency transactions............................   (4,570,498)
                                                                                  -----------
    Net realized gain during the period......................................................    38,142,413
  Net change in unrealized appreciation on translation of assets and liabilities
   in foreign currencies........................................................    2,429,401
  Net change in unrealized appreciation of investments..........................   81,947,814
                                                                                  -----------
    Net unrealized appreciation during the period............................................    84,377,215
                                                                                               ------------
Net realized and unrealized gain on investments and foreign currencies.......................   122,519,628
                                                                                               ------------
Net increase in net assets resulting from operations.........................................  $127,010,882
                                                                                               ------------
                                                                                               ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-8
<PAGE>   1322
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                       STATEMENT OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                            SIX MONTHS ENDED
                                                                                             APRIL 30, 1998       YEAR ENDED
                                                                                              (UNAUDITED)      OCTOBER 31, 1997
                                                                                            ----------------   ----------------
<S>                                                                                         <C>                <C>
Increase in net assets
Operations:
  Net investment income...................................................................   $   4,491,254      $    16,790,846
  Net realized gain on investments and foreign currency transactions......................      38,142,413           24,005,528
  Net change in unrealized appreciation (depreciation) on translation of assets and
   liabilities in foreign currencies......................................................       2,429,401           (4,059,448)
  Net change in unrealized appreciation of investments....................................      81,947,814           84,674,909
                                                                                            ----------------   ----------------
    Net increase in net assets resulting from operations..................................     127,010,882          121,411,835
                                                                                            ----------------   ----------------
Class A:
Distributions to shareholders: (Note 1)
  From net investment income..............................................................      (1,971,816)          (7,733,156)
  From net realized gain on investments...................................................      (5,352,371)            (757,327)
  In excess of net investment income......................................................      (2,095,813)                  --
Class B:
Distributions to shareholders: (Note 1)
  From net investment income..............................................................      (2,483,340)          (9,266,887)
  From net realized gain on investments...................................................      (8,530,046)            (907,529)
  In excess of net investment income......................................................      (2,639,502)                  --
Advisor Class:
Distributions to shareholders: (Note 1)
  From net investment income..............................................................         (36,098)            (125,777)
  From net realized gain on investments...................................................         (62,701)             (12,318)
  In excess of net investment income......................................................         (38,368)                  --
                                                                                            ----------------   ----------------
    Total distributions...................................................................     (23,210,055)         (18,802,994)
                                                                                            ----------------   ----------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and reinvested........................................     299,960,697          426,976,337
  Decrease from capital shares repurchased................................................    (306,750,679)        (450,361,754)
                                                                                            ----------------   ----------------
    Net decrease from capital share transactions..........................................      (6,789,982)         (23,385,417)
                                                                                            ----------------   ----------------
Total increase in net assets..............................................................      97,010,845           79,223,424
Net assets:
  Beginning of period.....................................................................     752,477,823          673,254,399
                                                                                            ----------------   ----------------
  End of period...........................................................................   $ 849,488,668*     $   752,477,823*
                                                                                            ----------------   ----------------
                                                                                            ----------------   ----------------
 * Includes distributions in excess of net investment income of...........................   $  (4,773,683)     $            --
                                                                                            ----------------   ----------------
                                                                                            ----------------   ----------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-9
<PAGE>   1323
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                           CLASS A
                                          -------------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED
                                            APRIL 30,                      YEAR ENDED OCTOBER 31,
                                              1998       ----------------------------------------------------------
                                          (UNAUDITED) (d)  1997 (d)     1996        1995        1994      1993 (d)
                                          -------------  ----------  ----------  ----------  ----------  ----------
<S>                                       <C>            <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $    8.21    $    7.11   $    6.35   $    6.21   $    6.29   $    5.28
                                          -------------  ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................         0.07         0.21        0.22        0.24        0.22        0.24*
  Net realized and unrealized gain
   (loss) on investments................         1.32         1.12        0.82        0.13       (0.03)       1.05
                                          -------------  ----------  ----------  ----------  ----------  ----------
    Net increase from investment
     operations.........................         1.39         1.33        1.04        0.37        0.19        1.29
                                          -------------  ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............        (0.07)       (0.21)      (0.24)      (0.22)      (0.21)      (0.24)
  From net realized gain on
   investments..........................        (0.15)       (0.02)      (0.04)      (0.01)      (0.06)         --
  In excess of net investment income....        (0.05)          --          --          --          --          --
  From sources other than net investment
   income...............................           --           --          --          --          --       (0.04)
                                          -------------  ----------  ----------  ----------  ----------  ----------
    Total distributions.................        (0.27)       (0.23)      (0.28)      (0.23)      (0.27)      (0.28)
                                          -------------  ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........    $    9.33    $    8.21   $    7.11   $    6.35   $    6.21   $    6.29
                                          -------------  ----------  ----------  ----------  ----------  ----------
                                          -------------  ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............        17.41%(b)     19.01%     16.80%       6.27%       3.14%       25.1%
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $ 324,300    $ 292,528   $ 286,203   $ 284,069   $ 317,847   $ 251,428
Ratio of net investment income to
 average net assets.....................         1.52%(a)      2.74%      3.17%       3.85%       3.30%        3.3%*
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         1.66%(a)      1.50%      1.59%       1.70%       1.67%        1.8%*
  Without expense reductions............         1.66%(a)      1.64%      1.66%       1.74%        N/A         N/A
Portfolio turnover rate++...............           63%(a)        50%        39%         83%        117%         24%
Average commission rate per share paid
 on portfolio transactions++............    $  0.0131    $  0.0151   $  0.0139         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.005 for the year ended October 31, 1993.
     Without such reimbursement, the expense ratio would have been 1.9% and
     the ratio of net investment income to average net assets would have
     been 3.2%.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     class of shares issued.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-10
<PAGE>   1324
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                           CLASS B
                                          -------------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED
                                            APRIL 30,                      YEAR ENDED OCTOBER 31,
                                              1998       ----------------------------------------------------------
                                          (UNAUDITED) (d)  1997 (d)     1996        1995        1994      1993 (d)
                                          -------------  ----------  ----------  ----------  ----------  ----------
<S>                                       <C>            <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $    8.21    $    7.11   $    6.35   $    6.21   $    6.29   $    5.28
                                          -------------  ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................         0.04         0.16        0.17        0.20        0.18        0.20
  Net realized and unrealized gain
   (loss) on investments................         1.31         1.13        0.82        0.13       (0.03)       1.05
                                          -------------  ----------  ----------  ----------  ----------  ----------
    Net increase from investment
     operations.........................         1.35         1.29        0.99        0.33        0.15        1.25
                                          -------------  ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............        (0.04)       (0.17)      (0.20)      (0.18)      (0.17)      (0.20)
  From net realized gain on
   investments..........................        (0.15)       (0.02)      (0.03)      (0.01)      (0.06)         --
  In excess of net investment income....        (0.05)          --          --          --          --          --
  From sources other than net investment
   income...............................           --           --          --          --          --       (0.04)
                                          -------------  ----------  ----------  ----------  ----------  ----------
    Total distributions.................        (0.24)       (0.19)      (0.23)      (0.19)      (0.23)      (0.24)
                                          -------------  ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........    $    9.32    $    8.21   $    7.11   $    6.35   $    6.21   $    6.29
                                          -------------  ----------  ----------  ----------  ----------  ----------
                                          -------------  ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............        16.97%(b)     18.28%     16.06%       5.57%       2.48%       24.3%
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $ 517,679    $ 456,893   $ 383,966   $ 356,796   $ 359,242   $ 150,768
Ratio of net investment income to
 average net assets.....................         0.87%(a)      2.09%      2.52%       3.20%       2.65%        2.6%
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         2.31%(a)      2.15%      2.24%       2.35%       2.32%        2.5%
  Without expense reductions............         2.31%(a)      2.29%      2.31%       2.39%        N/A         N/A
Portfolio turnover rate++...............           63%(a)        50%        39%         83%        117%         24%
Average commission rate per share paid
 on portfolio transactions++............    $  0.0131    $  0.0151   $  0.0139         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.005 for the year ended October 31, 1993.
     Without such reimbursement, the expense ratio would have been 1.9% and
     the ratio of net investment income to average net assets would have
     been 3.2%.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     class of shares issued.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-11
<PAGE>   1325
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                             ADVISOR CLASS+
                                          ----------------------------------------------------
                                            SIX MONTHS      YEAR ENDED OCTOBER    JUNE 1, 1995
                                               ENDED                31,                TO
                                          APRIL 30, 1998    -------------------   OCTOBER 31,
                                          (UNAUDITED) (d)   1997 (d)     1996         1995
                                          ---------------   --------   --------   ------------
<S>                                       <C>               <C>        <C>        <C>
Per Share Operating Performance:
Net asset value, beginning of period....     $  8.20        $  7.10    $  6.35      $ 6.24
                                          ---------------   --------   --------   ------------
Income from investment operations:
  Net investment income.................        0.08           0.23       0.23        0.11
  Net realized and unrealized gain
   (loss) on investments................        1.33           1.13       0.82        0.13
                                          ---------------   --------   --------   ------------
    Net increase from investment
     operations.........................        1.41           1.36       1.05        0.24
                                          ---------------   --------   --------   ------------
Distributions to shareholders:
  From net investment income............       (0.08)         (0.24)     (0.26)      (0.13)
  From net realized gain on
   investments..........................       (0.15)         (0.02)     (0.04)         --
  In excess of net investment income....       (0.05)            --         --          --
  From sources other than net investment
   income...............................          --             --         --          --
                                          ---------------   --------   --------   ------------
    Total distributions.................       (0.28)         (0.26)     (0.30)      (0.13)
                                          ---------------   --------   --------   ------------
Net asset value, end of period..........     $  9.33        $  8.20    $  7.10      $ 6.35
                                          ---------------   --------   --------   ------------
                                          ---------------   --------   --------   ------------
 
Total investment return (c).............       17.59% (b)     19.23%     17.19%       3.83% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....     $ 7,509        $ 3,057    $ 3,085      $  944
Ratio of net investment income to
 average net assets.....................        1.87% (a)      3.09%      3.52%       4.20% (a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................        1.31% (a)      1.15%      1.24%       1.35% (a)
  Without expense reductions............        1.31% (a)      1.29%      1.31%       1.39% (a)
Portfolio turnover rate++...............          63% (a)        50%        39%         83%
Average commission rate per share paid
 on portfolio transactions++............     $0.0131        $0.0151    $0.0139         N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.005 for the year ended October 31, 1993.
     Without such reimbursement, the expense ratio would have been 1.9% and
     the ratio of net investment income to average net assets would have
     been 3.2%.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     class of shares issued.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-12
<PAGE>   1326
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
The following Notes to Financial Statements are for the period ending April 30,
1998, and unless otherwise indicated reflect facts as of that date. Please see
"Note 6 -- Subsequent Events" for a discussion of certain changes which took
place after April 30, 1998.
 
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 6)
GT Global Growth & Income Fund ("Fund") is a separate series of GT Investment
Funds, Inc. ("Company"). Effective June 1, 1998, the Company was renamed AIM
Investment Funds, Inc. and the Fund was renamed AIM Global Growth & Income Fund.
The Company is organized as a Maryland corporation and is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as a non-diversified,
open-end management investment company. The Company has thirteen series of
shares in operation, each series corresponding to a distinct portfolio of
investments.
 
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective service and distribution expenses, and
may differ in its transfer agent, registration, and certain other class-specific
fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
 
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. ("the Manager") to be the primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Fund deems it appropriate, prices obtained for the day of valuation from a bond
pricing service will be used. Short-term investments are valued at amortized
cost adjusted for foreign exchange translation and market fluctuations, if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, and other assets and
liabilities are recorded in the books and records of the Fund after translation
to U.S. dollars based on the exchange rates on that day. The cost of each
security is determined using historical exchange rates. Income and withholding
taxes are translated at prevailing exchange rates when earned or incurred.
 
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from 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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which
 
                                      FS-13
<PAGE>   1327
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
the value, including accrued interest, is at least equal to the amount to be
repaid to the Fund under each agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. Forward Contracts involve market risk in excess of the
amounts shown in the Fund's "Statement of Assets and Liabilities." The Fund
could be exposed to risk if a counter party is unable to meet the terms of the
contract or if the value of the currency changes unfavorably. The Fund may enter
into Forward Contracts in connection with planned purchases or sales of
securities, or to hedge against adverse fluctuations in exchange rates between
currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on an exchange is valued at its last bid price,
or, in the case of an over-the-counter option, is valued at the average of the
last bid prices obtained from brokers. If an option expires on its stipulated
expiration date or if the Fund enters into a closing purchase transaction, a
gain or loss is realized without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is extinguished.
If a written call option is exercised, a gain or loss is realized from the sale
of the underlying security and the proceeds of the sale are increased by the
premium originally received. If a written put option is exercised, the cost of
the underlying security purchased would be decreased by the premium originally
received. The Fund can write options only on a covered basis, which, for a call,
requires that the Fund hold the underlying security and, for a put, requires the
Fund to set aside cash, U.S. government securities, or other liquid securities
in an amount not less than the exercise price or otherwise provide adequate
cover at all times while the put option is outstanding. The Fund may use options
to manage its exposure to the stock or bond market and to fluctuations in
currency values or interest rates.
 
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock or bond
market and to fluctuations in currency values or interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund may trade
securities on other than normal settlement terms. This may increase the risk if
the other to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At April 30, 1998, stocks with an aggregate value of approximately $97,486,245
were on loan to brokers. The loans were secured by cash collateral of
$101,528,232. For international securities, cash collateral is received by the
Fund against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not
 
                                      FS-14
<PAGE>   1328
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
less than 103% of the market value of the loaned securities during the period of
the loan. For domestic securities, cash collateral is received by the Fund
against loaned securities in an amount at least equal to 102% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 100% of the market value of the loaned
securities during the period of the loan. The cash collateral is invested in a
securities lending trust which consists of a portfolio of high quality short
duration securities whose average effective duration is restricted to 120 days
or less. For the six months ended April 30, 1998, the Fund received $371,976 of
income from securities lending.
 
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 and timing differences.
 
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investment of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the price of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
 
(L) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
 
(M) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
 
(N) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised and/or
administered by the Manager, has a line of credit with each of BankBoston and
State Street Bank & Trust Company. The arrangements with the banks allow the
Fund and the GT Funds to borrow an aggregate maximum amount of $250,000,000. The
Fund is limited to borrowing up to 33 1/3% of the value of each Fund's total
assets. On April 30, 1998, the Fund had $31,902,000 in loans outstanding.
 
For the six months ended April 30, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $10,098,097, with a weighted average interest rate of 6.42%.
Interest expense for the Fund for the six months ended April 30, 1998, was
$111,735, and is included in "Other Expenses" on the Statement of Operations.
 
2. RELATED PARTIES (SEE ALSO NOTE 6)
For the period ended April 30, 1998, Chancellor LGT Asset Management, Inc., was
the Fund's investment manager and administrator. The Fund pays investment
management and administration fees to the Manager at the annualized rate of
0.975% on the first $500 million of average daily net assets of the Fund; 0.95%
on the next $500 million; 0.925% on the next $500 million and 0.90% on amounts
thereafter. These fees are computed daily and paid monthly.
 
For the period ended April 30, 1998, GT Global, Inc. ("GT Global"), an affiliate
of the Manager, serves as the Fund's distributor. The Fund offers Class A, Class
B, and Advisor Class shares for purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the six months ended April 30, 1998, GT Global retained
$26,174 of such sales charges. Purchases of Class A shares exceeding $500,000
may be subject to a contingent deferred sales charge ("CDSC") upon redemption,
in accordance with the Fund's current prospectus. GT Global collected CDSCs in
the amount of $1,692 for the period ended April 30, 1998. GT Global also makes
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the period ended April 30, 1998, GT Global collected CDSCs in
the amount of $627,678. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
 
                                      FS-15
<PAGE>   1329
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
Pursuant to the then effective separate distribution plans adopted under 1940
Act Rule 12b-1 by the Company's Board of Directors with respect to the Fund's
Class A shares ("Class A Plan") and Class B shares ("Class B Plan"), the Fund
reimbursed GT Global for a portion of its shareholder servicing and distribution
expenses. Under that Class A Plan, the Fund was permitted to pay GT Global a
service fee at the annualized rate of up to 0.25% of the average daily net
assets of the Fund's Class A shares for GT Global's expenditures incurred in
servicing and maintaining shareholder accounts, and was permitted to pay GT
Global a distribution fee at the annualized rate of up to 0.35% of the average
daily net assets of the Fund's Class A shares, less any amounts paid by the Fund
as the aforementioned service fee, for GT Global's expenditures incurred in
providing services as distributor. All expenses for which GT Global was
reimbursed under the Class A Plan would have been incurred within one year of
such reimbursement.
 
For the period ended April 30, 1998, pursuant to that Class B Plan, the Fund was
permitted to pay GT Global a service fee at the annualized rate of up to 0.25%
of the average daily net assets of the Fund's Class B shares for GT Global's
expenditures incurred in servicing and maintaining shareholder accounts, and was
permitted to pay GT Global a distribution fee at the annualized rate of up to
0.75% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually were permitted to be
carried forward for reimbursement in subsequent years as long as that Plan
continued in effect.
 
The Manager and GT Global voluntarily undertook to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 1.75%, 2.40%, and 1.40% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.
 
3. PURCHASES AND SALES OF SECURITIES
For the six months ended April 30, 1998, purchases and sales of investment
securities by the Fund, other than short-term investments and U.S. government
obligations, aggregated $164,691,801 and $228,001,192, respectively. Purchases
and sales of U.S. government obligations were $79,532,513 and $36,789,426,
respectively, for the six months ended April 30, 1998.
 
4. CAPITAL SHARES
At April 30, 1998, there were 6,000,000,000 shares of the Company's common stock
authorized, at $0.0001 par value. Of this amount, 200,000,000 were classified as
shares of the Fund; 400,000,000 were classified as shares of GT Global
Government Income Fund; 200,000,000 were classified as shares of GT Global
Developing Markets Fund; 200,000,000 were classified as shares of GT Global
Health Care Fund; 200,000,000 were classified as shares of GT Global Strategic
Income Fund; 200,000,000 were classified as shares of GT Global Currency Fund
(inactive); 200,000,000 were classified as shares of GT Global Latin America
Growth Fund; 200,000,000 were classified as shares of GT Global Small Companies
Fund (inactive); 400,000,000 were classified as shares of GT Global
Telecommunications Fund; 200,000,000 were classified as shares of GT Global
Emerging Markets Fund; 200,000,000 were classified as shares of GT Global
Financial Services Fund; 200,000,000 were classified as shares of GT Global
Natural Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; 200,000,000 were classified as shares of GT Global High
Income Fund; and 200,000,000 were classified as shares of GT Global Consumer
Products and Services Fund. The shares of each of the foregoing series of the
Company were divided equally into two classes, designated Class A and Class B
common stock. With respect to the issuance of Advisor Class shares, 100,000,000
shares were classified as shares of each of the fifteen series of the Company
and designated as Advisor Class common stock. 1,100,000,000 shares remain
unclassified. Transactions in capital shares of the Fund were as follows:
 
                                      FS-16
<PAGE>   1330
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                           CAPITAL SHARE TRANSACTIONS
 
<TABLE>
<CAPTION>
                                                   SIX MONTHS ENDED
                                                    APRIL 30, 1998                         YEAR ENDED
                                                      (UNAUDITED)                       OCTOBER 31, 1997
                                          -----------------------------------  -----------------------------------
CLASS A                                       SHARES             AMOUNT            SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       23,620,178  $      204,075,876       37,585,791  $      289,617,397
Shares issued in connection with
  reinvestment of distributions.........          962,992           8,160,319          935,467           7,161,559
                                          ---------------  ------------------  ---------------  ------------------
                                               24,583,170         212,236,195       38,521,258         296,778,956
Shares repurchased......................      (25,453,190)       (220,702,455)     (43,156,190)       (332,338,391)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................         (870,020) $       (8,466,260)      (4,634,932) $      (35,559,435)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
<TABLE>
<CAPTION>
                                                   SIX MONTHS ENDED
                                                    APRIL 30, 1998                         YEAR ENDED
                                                      (UNAUDITED)                       OCTOBER 31, 1997
                                          -----------------------------------  -----------------------------------
CLASS B                                       SHARES             AMOUNT            SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................        6,646,214  $       57,732,080       12,634,686  $       97,336,518
Shares issued in connection with
  reinvestment of distributions.........        1,363,410          11,516,364        1,087,287           8,343,350
                                          ---------------  ------------------  ---------------  ------------------
                                                8,009,624          69,248,444       13,721,973         105,679,868
Shares repurchased......................       (8,146,059)        (71,078,253)     (12,063,889)        (93,059,122)
                                          ---------------  ------------------  ---------------  ------------------
Net increase (decrease).................         (136,435) $       (1,829,809)       1,658,084  $       12,620,746
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
<TABLE>
<CAPTION>
                                                   SIX MONTHS ENDED
                                                    APRIL 30, 1998                         YEAR ENDED
                                                      (UNAUDITED)                       OCTOBER 31, 1997
                                          -----------------------------------  -----------------------------------
ADVISOR CLASS                                 SHARES             AMOUNT            SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................        2,118,403  $       18,340,399        3,177,501  $       24,442,634
Shares issued in connection with
  reinvestment of distributions.........           15,791             135,659            9,792              74,879
                                          ---------------  ------------------  ---------------  ------------------
                                                2,134,194          18,476,058        3,187,293          24,517,513
Shares repurchased......................       (1,701,823)        (14,969,971)      (3,248,879)        (24,964,241)
                                          ---------------  ------------------  ---------------  ------------------
Net increase (decrease).................          432,371  $        3,506,087          (61,586) $         (446,728)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
5. EXPENSE REDUCTIONS
The Manager directed certain portfolio trades to brokers who paid a portion of
the Fund's expenses. For the six months ended April 30, 1998, the Fund's
expenses were reduced by $7,140 under these arrangements.
 
6. SUBSEQUENT EVENTS
On May 29, 1998, Liechtenstein Global Trust ("LGT"), the former indirect parent
organization of Chancellor LGT Asset Management, Inc. ("Chancellor LGT"),
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included Chancellor LGT and
certain other affiliates. As a result of this transaction, Chancellor LGT was
renamed INVESCO (NY), Inc. and is now an indirect wholly-owned subsidiary of
AMVESCAP PLC. In connection with this transaction, A I M Advisors, Inc. ("AIM"),
an indirect wholly-owned subsidiary of AMVESCAP PLC, became the investment
adviser and administrator of the Fund and INVESCO (NY), Inc. became the
sub-adviser and sub-administrator of the Fund. In addition, A I M Distributors,
Inc. replaced GT Global, Inc. as the Fund's principal underwriter, and the Fund
became subject to compensation-type Rule 12b-1 plans of distribution, which
replaced the Fund's former reimbursement-type Rule 12b-1 plans of distribution.
All of the changes became effective as of the close of business on May 29, 1998.
 
                                      FS-17
<PAGE>   1331

                         GT GLOBAL GROWTH & INCOME FUND
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
ANNUAL REPORT
To the Shareholders of GT Global Growth & Income Fund and Board of Directors of
G.T. Investment Funds, Inc.:
 
We have audited the accompanying statement of assets and liabilities of GT
Global Growth & Income Fund, one of the funds organized as a series of G.T.
Investment Funds, Inc., including the portfolio of investments, as of October
31, 1997, the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global Growth & Income Fund as of October 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.



                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
DECEMBER 15, 1997
 
                                       FS-18
<PAGE>   1332
                         GT GLOBAL GROWTH & INCOME FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                          COUNTRY        SHARES         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Finance (28.4%)
  Schweizerischer Bankverein (Swiss Bank Corp.) ..........   SWTZ              74,750   $ 20,102,411         2.7
    BANKS-MONEY CENTER
  Royal & Sun Alliance Insurance Group PLC ...............   UK             2,081,400     19,951,696         2.6
    INSURANCE - MULTI-LINE
  CS Holding AG - Registered .............................   SWTZ             108,300     15,258,696         2.0
    BANKS-MONEY CENTER
  AEGON N.V. .............................................   NETH             187,875     14,809,312         2.0
    INSURANCE-LIFE
  First Tennessee National Corp. .........................   US               245,400     14,141,175         1.9
    BANKS-REGIONAL
  Union Bank of Switzerland - Bearer .....................   SWTZ              11,752     13,531,589         1.8
    BANKS-MONEY CENTER
  ABN AMRO Holding N.V. ..................................   NETH             667,296     13,442,181         1.8
    BANKS-MONEY CENTER
  ING Groep N.V. .........................................   NETH             264,262     11,096,009         1.5
    OTHER FINANCIAL
  Deutsche Bank AG .......................................   GER              134,150      8,774,787         1.2
    BANKS-MONEY CENTER
  American General Corp. .................................   US               170,000      8,670,000         1.1
    INSURANCE-LIFE
  IKB Deutsche Industriebank AG ..........................   GER              394,000      8,339,229         1.1
    BANKS-REGIONAL
  General Accident PLC ...................................   UK               400,000      6,806,441         0.9
    INSURANCE - PROPERTY-CASUALTY
  National Westminster Bank PLC ..........................   UK               471,800      6,781,828         0.9
    BANKS-MONEY CENTER
  Fortis Amev N.V. .......................................   NETH             164,542      6,468,086         0.9
    OTHER FINANCIAL
  Lloyds TSB Group PLC ...................................   UK               513,428      6,415,697         0.8
    BANKS-REGIONAL
  Commonwealth Bank of Australia .........................   AUSL             546,000      6,275,641         0.8
    BANKS-SUPER REGIONAL
  Generale de Banque S.A.: ...............................   BEL                   --             --         0.8
    BANKS-MONEY CENTER
    Common ...............................................   --                14,762      6,038,244          --
    Strip VVPR-/- ........................................   --                 1,342            567          --
  Kredietbank N.V. .......................................   BEL               12,980      5,446,409         0.7
    BANKS-REGIONAL
  Commercial Union PLC ...................................   UK               361,550      5,093,962         0.7
    INSURANCE - MULTI-LINE
  Mercury Asset Management Group PLC .....................   UK               196,698      4,272,457         0.6
    INVESTMENT MANAGEMENT
  M & G Group PLC ........................................   UK               155,000      3,139,257         0.4
    INVESTMENT MANAGEMENT
  General Property Trust .................................   AUSL           1,500,000      2,688,928         0.4
    REAL ESTATE
  Reinsurance Australia Corporation Ltd. .................   AUSL             880,000      2,276,555         0.3
    INSURANCE - MULTI-LINE
  Infrastructure Trust of Australia Group ................   AUSL           2,830,000      2,188,401         0.3
    OTHER FINANCIAL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-19
<PAGE>   1333
                         GT GLOBAL GROWTH & INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                          COUNTRY        SHARES         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Finance (Continued)
  National Australia Bank Ltd. ...........................   AUSL             125,000   $  1,709,139         0.2
    BANKS-REGIONAL
  Realty Development Corp., Ltd. "A" .....................   HK                 5,000         14,230          --
    REAL ESTATE
                                                                                        ------------
                                                                                         213,732,927
                                                                                        ------------
Energy (14.2%)
  Royal Dutch Petroleum Co. ..............................   NETH             371,840     19,674,378         2.6
    OIL
  Elektrowatt "B" AG .....................................   SWTZ              49,068     18,821,083         2.5
    ELECTRICAL & GAS UTILITIES
  Exxon Corp. ............................................   US               182,600     11,218,488         1.5
    OIL
  Mobil Corp. ............................................   US               127,600      9,290,875         1.2
    OIL
  Shell Transport & Trading Co., PLC .....................   UK             1,121,700      7,953,685         1.1
    OIL
  Electrabel S.A. ........................................   BEL               34,760      7,801,667         1.0
    ELECTRICAL & GAS UTILITIES
  Elf Aquitaine ..........................................   FR                52,475      6,498,283         0.9
    OIL
  RWE AG .................................................   GER              134,620      5,839,128         0.8
    ELECTRICAL & GAS UTILITIES
  PG&E Corp. .............................................   US               220,000      5,623,750         0.7
    ELECTRICAL & GAS UTILITIES
  Reunies Electrobel & Tractebel S.A. ....................   BEL               57,935      4,935,325         0.7
    ELECTRICAL & GAS UTILITIES
  Groupe Bruxelles Lambert S.A. ..........................   BEL               31,025      4,805,337         0.6
    OIL
  Santos Ltd. ............................................   AUSL             907,472      4,172,138         0.6
    OIL
                                                                                        ------------
                                                                                         106,634,137
                                                                                        ------------
Consumer Non-Durables (7.8%)
  Avon Products, Inc. ....................................   US               182,000     11,921,000         1.6
    PERSONAL CARE/COSMETICS
  Universal Corp. ........................................   US               280,500     10,501,219         1.4
    TOBACCO
  Philip Morris Cos., Inc. ...............................   US               255,000     10,104,375         1.3
    TOBACCO
  Guinness PLC ...........................................   UK               871,500      7,791,169         1.0
    BEVERAGES - ALCOHOLIC
  Pernod Ricard ..........................................   FR               158,720      7,358,318         1.0
    BEVERAGES - ALCOHOLIC
  Cadbury Schweppes PLC ..................................   UK               670,000      6,742,704         0.9
    BEVERAGES - NON-ALCOHOLIC
  Brown-Forman Corp. "B" .................................   US                93,600      4,603,950         0.6
    BEVERAGES - ALCOHOLIC
                                                                                        ------------
                                                                                          59,022,735
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-20
<PAGE>   1334
                         GT GLOBAL GROWTH & INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                          COUNTRY        SHARES         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Services (7.7%)
  Telecom Corporation of New Zealand Limited: ............   NZ                    --             --         1.9
    TELEPHONE NETWORKS
    Common ...............................................   --             2,614,200   $ 12,660,904          --
    ADR{\/} ..............................................   --                38,000      1,479,625          --
  McGraw-Hill, Inc. ......................................   US               162,000     10,590,750         1.4
    BROADCASTING & PUBLISHING
  Woolworths Ltd. ........................................   AUSL           2,100,000      6,776,098         0.9
    RETAILERS-OTHER
  PMP Communications Ltd. ................................   AUSL           2,656,500      5,509,086         0.7
    BROADCASTING & PUBLISHING
  Qantas Airways Ltd. ....................................   AUSL           2,890,000      5,180,668         0.7
    TRANSPORTATION - AIRLINES
  Royal PTT Nederland N.V. ...............................   NETH             112,735      4,309,602         0.6
    TELEPHONE NETWORKS
  Cognizant Corp. ........................................   US               109,800      4,302,788         0.6
    CONSUMER SERVICES
  Dun & Bradstreet Corp. .................................   US               109,800      3,136,163         0.4
    BROADCASTING & PUBLISHING
  EMI Group PLC ..........................................   UK               381,600      3,088,259         0.4
    LEISURE & TOURISM
  ACNielsen Corp.-/- .....................................   US                36,600        837,218         0.1
    CONSUMER SERVICES
                                                                                        ------------
                                                                                          57,871,161
                                                                                        ------------
Materials/Basic Industry (4.7%)
  Akzo Nobel N.V. ........................................   NETH              58,950     10,389,900         1.4
    CHEMICALS
  BASF AG ................................................   GER              234,000      7,937,953         1.1
    CHEMICALS
  Solvay S.A. "A" ........................................   BEL              117,540      7,083,515         0.9
    CHEMICALS
  Monsanto Co. ...........................................   US               160,500      6,861,375         0.9
    CHEMICALS
  Aberfoyle Ltd. .........................................   AUSL           1,160,000      2,324,077         0.3
    METALS - NON-FERROUS
  Solutia, Inc. ..........................................   US                32,100        710,213         0.1
    CHEMICALS
                                                                                        ------------
                                                                                          35,307,033
                                                                                        ------------
Health Care (4.4%)
  Bristol Myers Squibb Co. ...............................   US               277,400     24,341,850         3.2
    PHARMACEUTICALS
  Bayer AG ...............................................   GER              258,600      9,072,369         1.2
    PHARMACEUTICALS
                                                                                        ------------
                                                                                          33,414,219
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-21
<PAGE>   1335
                         GT GLOBAL GROWTH & INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                          COUNTRY        SHARES         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Capital Goods (2.7%)
  General Electric PLC ...................................   UK             1,473,000   $  9,406,990         1.2
    AEROSPACE/DEFENSE
  Lockheed Martin Corp. ..................................   US                69,545      6,611,122         0.9
    AEROSPACE/DEFENSE
  BICC PLC ...............................................   UK             1,559,172      4,354,279         0.6
    INDUSTRIAL COMPONENTS
                                                                                        ------------
                                                                                          20,372,391
                                                                                        ------------
Consumer Durables (1.4%)
  GKN PLC ................................................   UK               460,400     10,324,636         1.4
                                                                                        ------------
    AUTO PARTS
Multi-Industry/Miscellaneous (1.3%)
  VEBA AG ................................................   GER              170,200      9,484,616         1.3
    CONGLOMERATE
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $338,444,171) .............                               546,163,855        72.6
                                                                                        ------------       -----
<CAPTION>
 
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (20.6%)
  Australia (0.7%)
    Australian Government, 8.75% due 8/15/08 .............   AUD            5,774,000      4,934,994         0.7
  Canada (1.2%)
    Canadian Government, 8.75% due 12/1/05 ...............   CAD           10,620,000      9,179,080         1.2
  Denmark (0.7%)
    Kingdom of Denmark, 7% due 11/15/07 ..................   DKK           31,100,000      5,034,931         0.7
  Germany (3.8%)
    Deutschland Republic:
      6.75% due 4/22/03 ..................................   DEM           23,000,000     14,318,817         1.9
      6.25% due 1/4/24 ...................................   DEM            4,300,000      2,508,188         0.3
    Treuhandanstalt:
      6.625% due 7/9/03 ..................................   DEM           12,060,000      7,473,074         1.0
      6.375% due 7/1/99 ..................................   DEM            7,000,000      4,192,288         0.6
  Italy (1.8%)
    Italian Buoni Poliennali del Tesoro (BTPS):
      6% due 2/15/00 .....................................   ITL       18,365,000,000     10,984,835         1.5
      10.5% due 9/01/05 ..................................   ITL        2,725,000,000      2,039,827         0.3
  New Zealand (0.4%)
    New Zealand Government, 8% due 4/15/04 ...............   NZD            4,440,000      2,955,320         0.4
  Sweden (0.6%)
    Swedish Government, 8% due 8/15/07 ...................   SEK           30,000,000      4,469,072         0.6
  United Kingdom (4.0%)
    United Kingdom Treasury:
      8% due 6/10/03 .....................................   GBP           14,000,000     24,942,355         3.3
      7.5% due 12/7/06 ...................................   GBP            3,116,000      5,556,353         0.7
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-22
<PAGE>   1336
                         GT GLOBAL GROWTH & INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (Continued)
  United States (7.4%)
    United States Treasury Bonds:
      6% due 2/15/26 .....................................   USD           24,060,000   $ 23,404,459         3.1
      6.25% due 8/15/23 ..................................   USD            9,075,000      9,101,587         1.2
    United States Treasury Notes:
      7.5% due 2/15/05 ...................................   USD           15,460,000     16,928,096         2.2
      6.5% due 8/15/05 ...................................   USD            2,580,000      2,676,397         0.3
    Federal National Mortgage Association, 6.375% due
     8/15/07 .............................................   AUD            5,940,000      4,241,014         0.6
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $151,129,623) ...........................................                               154,940,687
                                                                                        ------------
Corporate Bonds (5.5%)
  Germany (2.5%)
    Siemens Capital Corp., 8% due 6/24/02+/+ .............   USD            4,710,000      7,985,805         1.1
    Commerzbank AG, Convertible Bond, 9.45% due
     12/31/00+ ...........................................   DEM            4,173,000      6,630,339         0.9
    Deutsche Bank AG, 9.00% due 12/31/02+/+ ..............   DEM            5,625,000      3,892,976         0.5
  United Kingdom (3.0%)
    Daily Mail & General Trust, Convertible Bond, 5.75%
     due 9/26/03 .........................................   GBP            3,405,000      7,795,748         1.0
    Land Securities PLC, Convertible Bond, 9.375% due
     7/31/04 .............................................   GBP            3,485,000      7,679,334         1.0
    MBNA Chester Asset Receivable #3, 6.6% due
     11/17/03+ ...........................................   GBP            4,500,000      7,568,182         1.0
                                                                                        ------------
Total Corporate Bonds (cost $33,669,644) .................                                41,552,384
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $184,799,267) .......                               196,493,071        26.1
                                                                                        ------------       -----
 
<CAPTION>
 
                                                                           NO. OF          VALUE         % OF NET
WARRANTS                                                    COUNTRY       WARRANTS        (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Societe Generale Banque put warrants due 11/15/99
   Tractebel (cost $0) ...................................   BEL               11,587         84,839          --
                                                                                        ------------       -----
    BANKS-MONEY CENTER
<CAPTION>
 
                                                                           NO. OF          VALUE         % OF NET
RIGHTS                                                      COUNTRY        RIGHTS         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Infrastructure Trust of Australia Group Rights, expire
   12/1/97 (cost $0) .....................................   AUSL             943,333          6,632          --
                                                                                        ------------       -----
    OTHER FINANCIAL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-23
<PAGE>   1337
                         GT GLOBAL GROWTH & INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- ----------------------------------------------------------                              ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Dated October 31, 1997, with State Street Bank & Trust
   Co., due November 3, 1997, for an effective yield of
   5.57%, collateralized by $1,935,000 U.S. Treasury
   Bonds, 8.875% due 8/15/17 (market value of collateral
   is $2,538,597, including accrued interest). (cost
   $2,485,384) ...........................................                              $  2,485,383         0.3
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $525,728,822)  * .................                               745,233,780        99.0
Other Assets and Liabilities .............................                                 7,244,043         1.0
                                                                                        ------------       -----
 
NET ASSETS ...............................................                              $752,477,823       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
        +/+  Issued with detachable warrants or value recovery rights. The
             current market value of each warrant or right is zero.
          *  For Federal income tax purposes, cost is $527,143,379 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $ 232,777,964
                 Unrealized depreciation:           (14,687,563)
                                                  -------------
                 Net unrealized appreciation:     $ 218,090,401
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviation:
    ADR--American Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-24
<PAGE>   1338
                         GT GLOBAL GROWTH & INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {D}
                                        -------------------------------------------
                                                 FIXED INCOME,
                                                   RIGHTS &      SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS       & OTHER     TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Australia (AUSL/AUD) .................    5.2         0.7                       5.9
Belgium (BEL/BEF) ....................    4.7                                   4.7
Canada (CAN/CAD) .....................                1.2                       1.2
Denmark (DEN/DKK) ....................                0.7                       0.7
France (FR/FRF) ......................    1.9                                   1.9
Germany (GER/DEM) ....................    6.7         6.3                      13.0
Italy (ITLY/ITL) .....................                1.8                       1.8
Netherlands (NETH/NLG) ...............   10.8                                  10.8
New Zealand (NZ/NZD) .................    1.9         0.4                       2.3
Sweden (SWDN/SEK) ....................                0.6                       0.6
Switzerland (SWTZ/CHF) ...............    9.0                                   9.0
United Kingdom (UK/GBP) ..............   13.5         7.0                      20.5
United States & Other (US/USD) .......   18.9         7.4            1.3       27.6
                                        ------      -----            ---      -----
Total  ...............................   72.6        26.1            1.3      100.0
                                        ------      -----            ---      -----
                                        ------      -----            ---      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $752,477,823.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                OCTOBER 31, 1997
 
<TABLE>
<CAPTION>
                                          MARKET VALUE                        UNREALIZED
                                             (U.S.       CONTRACT  DELIVERY  APPRECIATION
CONTRACTS TO SELL:                          DOLLARS)      PRICE      DATE    (DEPRECIATION)
- ----------------------------------------  ------------   --------  --------  -------------
<S>                                       <C>            <C>       <C>       <C>
Deutsche Marks..........................    26,803,508    1.80000  11/21/97   $(1,136,841)
French Francs...........................     2,481,413    6.14000  11/21/97      (152,423)
French Francs...........................     1,238,580    5.72800  02/06/98           945
Netherland Guilders.....................    10,870,680    2.08800  11/14/97      (765,316)
Swiss Francs............................    12,639,800    1.44000  12/19/97      (417,578)
                                          ------------                       -------------
  Total Contracts to Sell (Receivable
   amount $51,562,768)..................    54,033,981                         (2,471,213)
                                          ------------                       -------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 7.18%.
  Total Open Forward Foreign Currency
   Contracts............................                                      $(2,471,213)
                                                                             -------------
                                                                             -------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-25
<PAGE>   1339
                         GT GLOBAL GROWTH & INCOME FUND
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                                   <C>        <C>
Assets:
  Investments in securities, at value (cost $525,728,822) (Note 1).............................  $745,233,780
  U.S. currency.....................................................................  $     710
  Foreign currencies (cost $66,141).................................................     65,897       66,607
                                                                                      ---------
  Receivable for Fund shares sold..............................................................    6,808,910
  Interest and interest withholding tax reclaims receivable....................................    4,291,268
  Dividends and dividend withholding tax reclaims receivable...................................    1,596,979
                                                                                                 -----------
    Total assets...............................................................................  757,997,544
                                                                                                 -----------
Liabilities:
  Payable for open forward foreign currency contracts (Note 1).................................    2,471,213
  Payable for Fund shares repurchased (Note 2).................................................    1,507,330
  Payable for investment management and administration fees (Note 2)...........................      631,265
  Payable for service and distribution expenses (Note 2).......................................      484,947
  Payable for printing and postage expenses....................................................      124,328
  Payable for forward foreign currency contracts -- closed (Note 1)............................       97,836
  Payable for transfer agent fees (Note 2).....................................................       94,599
  Payable for custodian fees (Note 1)..........................................................       37,200
  Payable for professional fees................................................................       33,142
  Payable for fund accounting fees (Note 2)....................................................       16,751
  Payable for registration and filing fees.....................................................        9,540
  Payable for Directors' fees and expenses (Note 2)............................................        7,754
  Other accrued expenses.......................................................................        3,816
                                                                                                 -----------
    Total liabilities..........................................................................    5,519,721
                                                                                                 -----------
Net assets.....................................................................................  $752,477,823
                                                                                                 -----------
                                                                                                 -----------
Class A:
Net asset value and redemption price per share ($292,527,640 DIVIDED BY 35,620,970 shares
 outstanding)..................................................................................  $      8.21
                                                                                                 -----------
                                                                                                 -----------
Maximum offering price per share (100/95.25 of $8.21) *........................................  $      8.62
                                                                                                 -----------
                                                                                                 -----------
Class B:+
Net asset value and offering price per share ($456,893,047 DIVIDED BY 55,651,933 shares
 outstanding)..................................................................................  $      8.21
                                                                                                 -----------
                                                                                                 -----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($3,057,136 DIVIDED
 BY 372,705 shares outstanding)................................................................  $      8.20
                                                                                                 -----------
                                                                                                 -----------
Net assets consist of:
  Paid in capital (Note 4).....................................................................  $521,143,879
  Accumulated net realized gain on investments and foreign currency transactions...............   14,233,867
  Net unrealized depreciation on translation of assets and liabilities in foreign currencies...   (2,404,881)
  Net unrealized appreciation of investments...................................................  219,504,958
                                                                                                 -----------
Total -- representing net assets applicable to capital shares outstanding......................  $752,477,823
                                                                                                 -----------
                                                                                                 -----------
<FN>
- --------------
   * On sales of $50,000 or more, the offering price is reduced.
   + Redemption price per share is equal to the net asset value per share less
     any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-26
<PAGE>   1340
                         GT GLOBAL GROWTH & INCOME FUND
 
                            STATEMENT OF OPERATIONS
 
                          Year ended October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                               <C>         <C>
Investment income: (Note 1)
  Dividend income (net of foreign withholding tax of $1,854,546)............................  $16,116,249
  Interest income (net of foreign withholding tax of $3,879)................................   14,091,494
  Other income..............................................................................       43,134
                                                                                              -----------
    Total investment income.................................................................   30,250,877
                                                                                              -----------
Expenses:
  Investment management and administration fees (Note 2)....................................    6,900,695
  Service and distribution expenses: (Note 2)
    Class A.....................................................................  $  994,519
    Class B.....................................................................   4,233,024    5,227,543
                                                                                  ----------
  Transfer agent fees (Note 2)..............................................................    1,258,598
  Custodian fees (Note 1)...................................................................      472,449
  Printing and postage expenses.............................................................      230,825
  Fund accounting fees (Note 2).............................................................      183,323
  Registration and filing fees..............................................................       70,955
  Audit fees................................................................................       54,630
  Legal fees................................................................................       25,414
  Directors' fees and expenses (Note 2).....................................................       14,779
  Other expenses (Note 1)...................................................................       30,664
                                                                                              -----------
    Total expenses before reductions........................................................   14,469,875
                                                                                              -----------
      Expense reductions (Notes 1 & 5)......................................................   (1,009,844)
                                                                                              -----------
    Total net expenses......................................................................   13,460,031
                                                                                              -----------
Net investment income.......................................................................   16,790,846
                                                                                              -----------
Net realized and unrealized gain on investments and foreign currencies: (Note 1)
  Net realized gain on investments..............................................  11,255,273
  Net realized gain on foreign currency transactions............................  12,750,255
                                                                                  ----------
    Net realized gain during the year.......................................................   24,005,528
  Net change in unrealized depreciation on translation of assets and liabilities
   in foreign currencies........................................................  (4,059,448)
  Net change in unrealized appreciation of investments..........................  84,674,909
                                                                                  ----------
    Net unrealized appreciation during the year.............................................   80,615,461
                                                                                              -----------
Net realized and unrealized gain on investments and foreign currencies......................  104,620,989
                                                                                              -----------
Net increase in net assets resulting from operations........................................  $121,411,835
                                                                                              -----------
                                                                                              -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-27
<PAGE>   1341
                         GT GLOBAL GROWTH & INCOME FUND
 
                       STATEMENT OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                YEAR ENDED    YEAR ENDED
                                                                               OCTOBER 31,   OCTOBER 31,
                                                                                   1997          1996
                                                                               ------------  ------------
<S>                                                                            <C>           <C>
Increase in net assets
Operations:
  Net investment income......................................................  $ 16,790,846  $ 18,175,444
  Net realized gain on investments and foreign currency transactions.........    24,005,528    15,732,409
  Net change in unrealized appreciation (depreciation) on translation of
   assets and liabilities in foreign currencies..............................    (4,059,448)    1,957,055
  Net change in unrealized appreciation of investments.......................    84,674,909    62,236,320
                                                                               ------------  ------------
    Net increase in net assets resulting from operations.....................   121,411,835    98,101,228
                                                                               ------------  ------------
Class A:
Distributions to shareholders: (Note 1)
  From net investment income.................................................    (7,733,156)   (9,963,848)
  From net realized gain on investments......................................      (757,327)   (1,766,763)
Class B:
Distributions to shareholders: (Note 1)
  From net investment income.................................................    (9,266,887)  (10,894,963)
  From net realized gain on investments......................................      (907,529)   (2,225,842)
Advisor Class:
Distributions to shareholders: (Note 1)
  From net investment income.................................................      (125,777)      (65,132)
  From net realized gain on investments......................................       (12,318)       (5,890)
                                                                               ------------  ------------
    Total distributions......................................................   (18,802,994)  (24,922,438)
                                                                               ------------  ------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and reinvested...........................   426,976,337   237,835,679
  Decrease from capital shares repurchased...................................  (450,361,754) (279,569,655)
                                                                               ------------  ------------
    Net decrease from capital share transactions.............................   (23,385,417)  (41,733,976)
                                                                               ------------  ------------
Total increase in net assets.................................................    79,223,424    31,444,814
Net assets:
  Beginning of year..........................................................   673,254,399   641,809,585
                                                                               ------------  ------------
  End of year................................................................  $752,477,823* $673,254,399*
                                                                               ------------  ------------
                                                                               ------------  ------------
 * Includes undistributed net investment income of...........................  $         --  $    755,291
                                                                               ------------  ------------
                                                                               ------------  ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-28
<PAGE>   1342
                         GT GLOBAL GROWTH & INCOME FUND
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS A
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)      1996        1995        1994      1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $    7.11   $    6.35   $    6.21   $    6.29   $    5.28
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................       0.21        0.22        0.24        0.22        0.24*
  Net realized and unrealized gain
   (loss) on investments................       1.12        0.82        0.13       (0.03)       1.05
                                          ----------  ----------  ----------  ----------  ----------
    Net increase from investment
     operations.........................       1.33        1.04        0.37        0.19        1.29
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............      (0.21)      (0.24)      (0.22)      (0.21)      (0.24)
  From net realized gain on
   investments..........................      (0.02)      (0.04)      (0.01)      (0.06)         --
  From sources other than net investment
   income...............................         --          --          --          --       (0.04)
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (0.23)      (0.28)      (0.23)      (0.27)      (0.28)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $    8.21   $    7.11   $    6.35   $    6.21   $    6.29
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............      19.01%      16.80%       6.27%       3.14%       25.1%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 292,528   $ 286,203   $ 284,069   $ 317,847   $ 251,428
Ratio of net investment income to
 average net assets.....................       2.74%       3.17%       3.85%       3.30%        3.3%*
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................       1.50%       1.59%       1.70%       1.67%        1.8%*
  Without expense reductions............       1.64%       1.66%       1.74%        N/A         N/A
Portfolio turnover rate++...............         50%         39%         83%        117%         24%
Average commission rate per share paid
 on portfolio transactions++............  $  0.0151   $  0.0139         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     class of shares issued.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.005 for the year ended October 31, 1993.
     Without such reimbursement, the expense ratio would have been 1.9% and
     the ratio of net investment income to average net assets would have
     been 3.2%.
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the year.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-29
<PAGE>   1343
                         GT GLOBAL GROWTH & INCOME FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
                                                                   CLASS B
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)      1996        1995        1994      1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $    7.11   $    6.35   $    6.21   $    6.29   $    5.28
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................       0.16        0.17        0.20        0.18        0.20
  Net realized and unrealized gain
   (loss) on investments................       1.13        0.82        0.13       (0.03)       1.05
                                          ----------  ----------  ----------  ----------  ----------
    Net increase from investment
     operations.........................       1.29        0.99        0.33        0.15        1.25
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............      (0.17)      (0.20)      (0.18)      (0.17)      (0.20)
  From net realized gain on
   investments..........................      (0.02)      (0.03)      (0.01)      (0.06)         --
  From sources other than net investment
   income...............................         --          --          --          --       (0.04)
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (0.19)      (0.23)      (0.19)      (0.23)      (0.24)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $    8.21   $    7.11   $    6.35   $    6.21   $    6.29
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............      18.28%      16.06%       5.57%       2.48%       24.3%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 456,893   $ 383,966   $ 356,796   $ 359,242   $ 150,768
Ratio of net investment income to
 average net assets.....................       2.09%       2.52%       3.20%       2.65%        2.6%
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................       2.15%       2.24%       2.35%       2.32%        2.5%
  Without expense reductions............       2.29%       2.31%       2.39%        N/A         N/A
Portfolio turnover rate++...............         50%         39%         83%        117%         24%
Average commission rate per share paid
 on portfolio transactions++............  $  0.0151   $  0.0139         N/A         N/A         N/A
 
<CAPTION>
                                                       ADVISOR CLASS+
                                          ----------------------------------------
                                             YEAR                    JUNE 1, 1995
                                             ENDED      YEAR ENDED        TO
                                          OCTOBER 31,   OCTOBER 31,   OCTOBER 31,
                                           1997 (D)        1996          1995
                                          -----------   -----------  -------------
<S>                                       <C>           <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $  7.10       $    6.35     $    6.24
                                          -----------   -----------  -------------
Income from investment operations:
  Net investment income.................      0.23            0.23          0.11
  Net realized and unrealized gain
   (loss) on investments................      1.13            0.82          0.13
                                          -----------   -----------  -------------
    Net increase from investment
     operations.........................      1.36            1.05          0.24
                                          -----------   -----------  -------------
Distributions to shareholders:
  From net investment income............     (0.24)          (0.26)        (0.13)
  From net realized gain on
   investments..........................     (0.02)          (0.04)           --
  From sources other than net investment
   income...............................        --              --            --
                                          -----------   -----------  -------------
    Total distributions.................     (0.26)          (0.30)        (0.13)
                                          -----------   -----------  -------------
Net asset value, end of period..........   $  8.20       $    7.10     $    6.35
                                          -----------   -----------  -------------
                                          -----------   -----------  -------------
Total investment return (c).............     19.23%          17.19%         3.83%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $ 3,057       $   3,085     $     944
Ratio of net investment income to
 average net assets.....................      3.09%           3.52%         4.20%(a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................      1.15%           1.24%         1.35%(a)
  Without expense reductions............      1.29%           1.31%         1.39%(a)
Portfolio turnover rate++...............        50%             39%           83%
Average commission rate per share paid
 on portfolio transactions++............   $0.0151       $  0.0139           N/A
</TABLE>
 
- ----------------
 
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     class of shares issued.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.005 for the year ended October 31, 1993.
     Without such reimbursement, the expense ratio would have been 1.9% and
     the ratio of net investment income to average net assets would have
     been 3.2%.
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the year.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-30
<PAGE>   1344
                         GT GLOBAL GROWTH & INCOME FUND
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Growth & Income Fund ("Fund") is a separate series of G.T. Investment
Funds, Inc. ("Company"). The Company is organized as a Maryland corporation and
is registered under the Investment Company Act of 1940, as amended ("1940 Act"),
as a non-diversified, open-end management investment company. The Company has
thirteen series of shares in operation, each series corresponding to a distinct
portfolio of investments.
 
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective service and distribution expenses, and
may differ in its transfer agent, registration, and certain other class-specific
fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
 
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by, Chancellor LGT Asset
Management, Inc. ("the Manager") to be the primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Fund deems it appropriate, prices obtained for the day of valuation from a bond
pricing service will be used. Short-term investments are valued at amortized
cost adjusted for foreign exchange translation and market fluctuations, if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, and other assets and
liabilities are recorded in the books and records of the Fund after translation
to U.S. dollars based on the exchange rates on that day. The cost of each
security is determined using historical exchange rates. Income and withholding
taxes are translated at prevailing exchange rates when earned or incurred.
 
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from 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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which the value, including accrued
interest, is at least equal to the amount to be repaid to the Fund under each
agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract
 
                                      FS-31
<PAGE>   1345
                         GT GLOBAL GROWTH & INCOME FUND
 
fluctuates with changes in currency exchange rates. The Forward Contract is
marked-to-market daily and the change in market value is recorded by the Fund as
an unrealized gain or loss. When the Forward Contract is closed, the Fund
records a realized gain or loss equal to the difference between the value at the
time it was opened and the value at the time it was closed. Forward Contracts
involve market risk in excess of the amounts shown in the Fund's "Statement of
Assets and Liabilities." The Fund could be exposed to risk if a counter party is
unable to meet the terms of the contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities, or to hedge against adverse
fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on a traded exchange is valued at its last bid
price, or, in the case of an over-the-counter option, is valued at the average
of the last bid prices obtained from brokers. If an option expires on its
stipulated expiration date or if the Fund enters into a closing purchase
transaction, a gain or loss is realized without regard to any unrealized gain or
loss on the underlying security, and the liability related to such option is
extinguished. If a written call option is exercised, a gain or loss is realized
from the sale of the underlying security and the proceeds of the sale are
increased by the premium originally received. If a written put option is
exercised, the cost of the underlying security purchased would be decreased by
the premium originally received. The Fund can write options only on a covered
basis, which, for a call, requires that the Fund hold the underlying security
and, for a put, requires the Fund to set aside cash, U.S. government securities,
or other liquid, high grade debt securities in an amount not less than the
exercise price or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund may use options to manage its exposure to the
stock or bond market and to fluctuations in currency values or interest rates.
 
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock or bond
market and to fluctuations in currency values or interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund may trade
securities on other than normal settlement terms. This may increase the risk if
the other to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1997, stocks with an aggregate value of approximately $51,986,675
were on loan to brokers. The loans were secured by cash collateral of
$54,846,747. For international securities, cash collateral is received by the
Fund against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by the Fund against loaned securities in an amount at
least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. For
the year ended October 31, 1997, the Fund
 
                                      FS-32
<PAGE>   1346
                         GT GLOBAL GROWTH & INCOME FUND
 
received $976,164 of income from securities lending which was used to offset the
Fund's custody and administrative expenses.
 
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 and timing differences.
 
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investment of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the price of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
 
(L) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
 
(M) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
 
(N) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised or administered by
the Manager, has a line of credit with each of BankBoston and State Street Bank
& Trust Company. The arrangements with the banks allow the Fund and the GT Funds
to borrow an aggregate maximum amount of $200,000,000. The Fund is limited to
borrowing up to 33 1/3% of the value of each Fund's total assets. On October 31,
1997, the Fund had no loan outstanding.
 
For the year ended October 31, 1997, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $2,560,909, with a weighted average interest rate of 6.41%.
Interest expense for the Fund for the year ended October 31, 1997 was $5,014,
included in "Other Expenses" on the Statement of Operations.
 
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc., is the Funds' investment manager and
administrator. The Fund pays investment management and administration fees to
the Manager at the annualized rate of 0.975% on the first $500 million of
average daily net assets of the Fund; 0.95% on the next $500 million; 0.925% on
the next $500 million and 0.90% on amounts thereafter. These fees are computed
daily and paid monthly.
 
GT Global , Inc. ("GT Global"), an affiliate of the Manager, serves as the
Fund's distributor. The Fund offers Class A, Class B, and Advisor Class shares
for purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the year ended October 31, 1997, GT Global retained $52,850
of such sales charges. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Fund's current prospectus. GT Global collected CDSCs in the
amount of $32 for the year ended October 31, 1997. GT Global also makes ongoing
shareholder servicing and trail commission payments to dealers whose clients
hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the year ended October 31, 1997 GT Global collected CDSCs in the
amount of $1,199,605. In addition, GT Global makes ongoing shareholder servicing
and trail commission payments to dealers whose clients hold Class B shares.
 
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.35% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global is reimbursed under the Class A Plan will have
been incurred within one year of such reimbursement.
 
                                      FS-33
<PAGE>   1347
                         GT GLOBAL GROWTH & INCOME FUND
 
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
 
The Manager and GT Global voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 1.85%, 2.50%, and 1.50% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.
 
Effective November 1, 1997, the Manager and GT Global have undertaken to limit
each Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expenses) to the annual rate of 1.75%, 2.40% and 1.40% of the
average daily net assets of the Fund's Class A, Class B and Advisor Class
shares, respectively. This undertaking may be changed or eliminated in the
future.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.
 
3. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1997, purchases and sales of investment
securities by the Fund, other than short-term investments and U.S. government
obligations, aggregated $322,737,917 and $326,736,141, respectively. Purchases
and sales of U.S. government obligations were $32,891,598 and $17,886,577,
respectively, for the year ended October 31, 1997.
 
4. CAPITAL SHARES
At October 31, 1997, there were 6,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 200,000,000 were
classified as shares of the Fund; 400,000,000 were classified as shares of GT
Global Government Income Fund; 200,000,000 were classified as shares of GT
Global Developing Markets Fund; 200,000,000 were classified as shares of GT
Global Health Care Fund; 200,000,000 were classified as shares of GT Global
Strategic Income Fund; 200,000,000 were classified as shares of GT Global
Currency Fund (inactive); 200,000,000 were classified as shares of GT Latin
America Growth Fund; 200,000,000 were classified as shares of GT Global Small
Companies Fund (inactive); 400,000,000 were classified as shares of GT Global
Telecommunications Fund; 200,000,000 were classified as shares of GT Global
Emerging Markets Fund; 200,000,000 were classified as shares of GT Global
Financial Services Fund; 200,000,000 were classified as shares of GT Global
Natural Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; 200,000,000 were classified as shares of GT Global High
Income Fund; and 200,000,000 were classified as shares of GT Global Consumer
Products and Services Fund. The shares of each of the foregoing series of the
Company were divided equally into two classes, designated Class A and Class B
common stock. With respect to the issuance of Advisor Class shares, 100,000,000
shares were classified as shares of each of the fifteen series of the Company
and designated as Advisor Class common stock. 1,100,000,000 shares remain
unclassified. Transactions in capital shares of the Fund were as follows:
 
                                      FS-34
<PAGE>   1348
                         GT GLOBAL GROWTH & INCOME FUND
 
                           CAPITAL SHARE TRANSACTIONS
 
<TABLE>
<CAPTION>
 
                                                                        YEAR ENDED                 YEAR ENDED
                                                                     OCTOBER 31, 1997           OCTOBER 31, 1996
                                                                 -------------------------  -------------------------
CLASS A                                                            SHARES        AMOUNT       SHARES        AMOUNT
- ---------------------------------------------------------------  -----------  ------------  -----------  ------------
<S>                                                              <C>          <C>           <C>          <C>
Shares sold....................................................   37,585,791  $289,617,397   21,196,018  $143,350,526
Shares issued in connection with reinvestment of
  distributions................................................      935,467     7,161,559    1,500,319     9,894,388
                                                                 -----------  ------------  -----------  ------------
                                                                  38,521,258   296,778,956   22,696,337   153,244,914
Shares repurchased.............................................  (43,156,190) (332,338,391) (27,157,086) (182,477,096)
                                                                 -----------  ------------  -----------  ------------
Net decrease...................................................   (4,634,932) $(35,559,435)  (4,460,749) $(29,232,182)
                                                                 -----------  ------------  -----------  ------------
                                                                 -----------  ------------  -----------  ------------
 
                                                                        YEAR ENDED                 YEAR ENDED
                                                                     OCTOBER 31, 1997           OCTOBER 31, 1996
                                                                 -------------------------  -------------------------
CLASS B                                                            SHARES        AMOUNT       SHARES        AMOUNT
- ---------------------------------------------------------------  -----------  ------------  -----------  ------------
Shares sold....................................................   12,634,686  $ 97,336,518    9,561,545  $ 63,970,280
Shares issued in connection with reinvestment of
  distributions................................................    1,087,287     8,343,350    1,656,409    10,934,244
                                                                 -----------  ------------  -----------  ------------
                                                                  13,721,973   105,679,868   11,217,954    74,904,524
Shares repurchased.............................................  (12,063,889)  (93,059,122) (13,373,837)  (89,395,191)
                                                                 -----------  ------------  -----------  ------------
Net increase (decrease)........................................    1,658,084  $ 12,620,746   (2,155,883) $(14,490,667)
                                                                 -----------  ------------  -----------  ------------
                                                                 -----------  ------------  -----------  ------------
 
                                                                        YEAR ENDED                 YEAR ENDED
                                                                     OCTOBER 31, 1997           OCTOBER 31, 1996
                                                                 -------------------------  -------------------------
ADVISOR CLASS                                                      SHARES        AMOUNT       SHARES        AMOUNT
- ---------------------------------------------------------------  -----------  ------------  -----------  ------------
Shares sold....................................................    3,177,501  $ 24,442,634    1,416,928  $  9,616,882
Shares issued in connection with reinvestment of
  distributions................................................        9,792        74,879       10,469        69,359
                                                                 -----------  ------------  -----------  ------------
                                                                   3,187,293    24,517,513    1,427,397     9,686,241
Shares repurchased.............................................   (3,248,879)  (24,964,241)  (1,141,817)   (7,697,368)
                                                                 -----------  ------------  -----------  ------------
Net increase (decrease)........................................      (61,586) $   (446,728)     285,580  $  1,988,873
                                                                 -----------  ------------  -----------  ------------
                                                                 -----------  ------------  -----------  ------------
</TABLE>
 
5. EXPENSE REDUCTIONS
The Manager directed certain portfolio trades to brokers who paid a portion of
the Fund's expenses. For the period ended October 31, 1997, the Fund's expenses
were reduced by $33,680 under these arrangements.
 
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$1,489,466 as a capital gain dividend for the fiscal year ended October 31,
1997.
 
Pursuant to Section 854 of the Internal Revenue Code, the Fund designates 76% of
the ordinary income dividends paid (including short-term capital gain
distributions, if any) as income qualifying for the corporate dividends received
deduction for the fiscal year ended October 31, 1997.
 
                                      FS-35
<PAGE>   1349
                          AIM GLOBAL HIGH INCOME FUND
                     (FORMERLY GT GLOBAL HIGH INCOME FUND)
                           AIM STRATEGIC INCOME FUND
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
 
                                   REPORT OF
                            INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
To the Board of Directors of AIM Investment Funds, Inc. and the Shareholders of
AIM Global High Income Fund (formerly GT Global High Income Fund) and AIM
Strategic Income Fund (formerly GT Global Strategic Income Fund):
 
We have audited the accompanying statement of assets and liabilities of AIM
Global High Income Fund-Consolidated and AIM Strategic Income Fund, including
the portfolios of investments, as of April 30, 1998, the related statement of
operations for the six months then ended, the statements of changes in net
assets for the six months then ended and for the year ended October 31, 1997,
and the financial highlights for the periods indicated herein. These financial
statements and the financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1998 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of AIM
Global High Income Fund-Consolidated and AIM Strategic Income Fund as of April
30, 1998, the results of their operations for the six months then ended, the
changes in their net assets for the six months then ended and for the year ended
October 31, 1997, and the financial highlights for the periods indicated herein,
in conformity with generally accepted accounting principles.



                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
JUNE 15, 1998
 
                                       FS-36
<PAGE>   1350
                       AIM GLOBAL GOVERNMENT INCOME FUND
                  (FORMERLY GT GLOBAL GOVERNMENT INCOME FUND)
 
                            PORTFOLIO OF INVESTMENTS
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (74.6%)
  Australia (1.9%)
    Commonwealth of Australia, 7.5% due 9/15/09 ..........   AUD            6,100,000   $  4,517,717         1.9
  Canada (2.4%)
    Canadian Government, 8% due 6/1/27 ...................   CAD            5,920,000      5,509,240         2.4
  Denmark (4.2%)
    Kingdom of Denmark, 7% due 11/10/24 ..................   DKK           56,700,000      9,736,506         4.2
  Germany (9.2%)
    Deutschland Republic:
      6% due 1/5/06 ......................................   DEM           22,050,000     13,124,298         5.6
      6.25% due 1/4/24 ...................................   DEM            9,500,000      5,828,414         2.5
      7.5% due 11/11/04 ..................................   DEM            4,100,000      2,620,435         1.1
  Italy (8.4%)
    Italian Buoni Poliennali del Tesoro (BTPS):
      8.5% due 1/1/04 ....................................   ITL       14,480,000,000      9,573,466         4.1
      7.25% due 11/1/26 ..................................   ITL       13,200,000,000      9,093,963         3.9
      9% due 11/1/23 .....................................   ITL        1,230,000,000      1,007,229         0.4
  South Africa (7.9%)
    Republic of South Africa, 12.5% due 1/15/02 ..........   ZAR           54,500,000     10,766,244         4.6
    Lesotho Highlands Water Authority, 12.5% due
     4/15/02 .............................................   ZAR           38,800,000      7,630,219         3.3
  Spain (1.8%)
    Spanish Government, 7.35% due 3/31/07 ................   ESP          550,000,000      4,179,545         1.8
  Sweden (3.6%)
    Swedish Government, 8% due 8/15/07 ...................   SEK           54,800,000      8,435,397         3.6
  United Kingdom (10.6%)
    United Kingdom Treasury:
      9.5% due 4/18/05 ...................................   GBP            6,730,000     13,505,017         5.8
      6.75% due 11/26/04 .................................   GBP            6,390,000     11,173,150         4.8
  United States (23.3%)
    United States Treasury:
      6.625% due 5/15/07 .................................   USD           20,800,000     22,059,981         9.5
      8% due 11/15/21 ....................................   USD           17,000,000     21,146,407         9.1
      6.125% due 11/15/27 ................................   USD            5,800,000      5,939,563         2.6
    Federal National Mortgage Association, 6.375% due
     8/15/07 .............................................   AUD            7,300,000      4,850,335         2.1
  Uruguay (1.3%)
    Republic of Uruguay, 7.875% due 7/15/27 - 144A{.} ....   USD            3,000,000      3,060,000         1.3
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $169,806,388) ...........................................                               173,757,126
                                                                                        ------------
Corporate Bonds (15.8%)
  Germany (0.9%)
    Kredit Fuer Wiederaufbau International Finance, 7.25%
     due 7/16/07 .........................................   AUD            3,100,000      2,161,887         0.9
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-37
<PAGE>   1351
                       AIM GLOBAL GOVERNMENT INCOME FUND
                  (FORMERLY GT GLOBAL GOVERNMENT INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Corporate Bonds (Continued)
  South Africa (5.3%)
    Eskom, 11% due 6/1/08 ................................   ZAR           68,500,000   $ 12,029,725         5.2
    Development Bank of South Africa, due 12/31/27{=} ....   ZAR           39,300,000        238,211         0.1
  Tunisia (2.0%)
    Banque Centrais de Tunisie, 8.25% due 9/19/27 ........   USD            4,750,000      4,552,695         2.0
  United Kingdom (6.6%)
    SBC Jersey, 8.75% due 6/20/05 ........................   GBP            8,200,000     15,293,137         6.6
  United States (1.0%)
    Ford Motor Credit Co., 14% due 11/13/02 ..............   ZAR            8,000,000      1,608,946         0.7
    Walt Disney Co., 14% due 10/24/02 ....................   ZAR            3,300,000        666,205         0.3
                                                                                        ------------
Total Corporate Bonds (cost $36,208,675) .................                                36,550,806
                                                                                        ------------
Mortgage Backed (14.1%)
  Denmark (6.5%)
    Realkredit Bank, 7% due 10/1/29 ......................   DKK          103,408,000     15,225,198         6.5
  United States (7.6%)
    Government National Mortgage Association:
      Pool #462363, 7% due 11/15/27 ......................   USD            8,572,002      8,675,132         3.7
      Pool #780515, 9.5% due 12/15/21 ....................   USD            4,240,952      4,616,014         2.0
    Federal Home Loan Mortgage Association Pool #E62449,
     8.5% due 3/1/10 .....................................   USD            2,188,891      2,304,664         1.0
    Salomon Brothers Mortgage Securities VII Series 1997 -
     HUD1 Class AWAC, 6.0867% due 12/25/30 ...............   USD            2,158,243      2,177,127         0.9
                                                                                        ------------
Total Mortgage Backed (cost $32,531,938) .................                                32,998,135
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $238,547,001) .......                               243,306,067       104.5
                                                                                        ------------       -----
<CAPTION>
 
                                                                         UNDERLYING        VALUE         % OF NET
OPTIONS                                                     CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Deutsche Marks Put Option: .............................   USD                   --             --          --
    CURRENCY OPTIONS
    Strike 1.82, expires 5/12/98 .........................                  2,550,000          3,680          --
    Strike 1.84, expires 5/7/98 ..........................                  4,500,000            441          --
                                                                                        ------------       -----
 
TOTAL OPTIONS (cost $26,535) .............................                                     4,121          --
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-38
<PAGE>   1352
                       AIM GLOBAL GOVERNMENT INCOME FUND
                  (FORMERLY GT GLOBAL GOVERNMENT INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
SHORT-TERM INVESTMENTS                                      CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (4.7%)
  Mexico (4.7%)
    Mexican Cetes: .......................................   MXN                   --             --         4.7
      due 5/7/98 current yield 17.62% ....................                 25,000,000   $  2,941,293          --
      due 6/11/98 current yield 17.95% ...................                 22,039,910      2,547,366          --
      due 11/19/98 current yield 19.52% ..................                 23,844,450      2,533,958          --
      due 5/28/98 current yield 17.76% ...................                 20,900,000      2,433,110          --
      due 12/17/98 current yield 19.77% ..................                  4,800,000        502,362          --
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $11,178,125) ............................................                                10,958,089
                                                                                        ------------       -----
 
TOTAL SHORT-TERM INVESTMENTS (cost $11,178,125) ..........                                10,958,089         4.7
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $249,751,661)  * .................                               254,268,277       109.2
Other Assets and Liabilities .............................                               (21,527,345)       (9.2)
                                                                                        ------------       -----
 
NET ASSETS ...............................................                              $232,740,932       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- -------------
 
        {.}  Security 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.
        {=}  Zero coupon bond.
          *  For Federal income tax purposes, cost is $250,105,125 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $   7,238,966
                 Unrealized depreciation:            (3,075,814)
                                                  -------------
                 Net unrealized appreciation:     $   4,163,152
                                                  -------------
                                                  -------------
</TABLE>
 
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-39
<PAGE>   1353
                       AIM GLOBAL GOVERNMENT INCOME FUND
                  (FORMERLY GT GLOBAL GOVERNMENT INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- -------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                 APRIL 30, 1998
<TABLE>
<CAPTION>
                                                                                     UNREALIZED
                                           MARKET VALUE      CONTRACT    DELIVERY   APPRECIATION
CONTRACTS TO BUY:                         (U.S. DOLLARS)      PRICE        DATE    (DEPRECIATION)
- ----------------------------------------  --------------   ------------  --------  --------------
<S>                                       <C>              <C>           <C>       <C>
Australian Dollars......................      12,589,578        1.53713   8/4/98    $    33,674
Australian Dollars......................       3,786,006        1.49887   8/4/98        (86,249)
Danish Kroner...........................       5,036,480        6.76600   8/4/98        (32,172)
Deutsche Marks..........................      12,092,282        1.78974   6/4/98         36,255
Deutsche Marks..........................       5,102,183        1.78923   8/4/98         13,847
Swedish Kronor..........................       5,350,910        7.97865   8/4/98        177,804
                                          --------------                           --------------
  Total Contracts to Buy (Payable amount
   $43,814,280).........................      43,957,439                                143,159
                                          --------------                           --------------
THE VALUE OF CONTRACTS TO BUY AS
 PERCENTAGE OF NET ASSETS IS 18.89%.
 
<CAPTION>
 
CONTRACTS TO SELL:
- ---------------------------------------
<S>                                       <C>              <C>           <C>       <C>
Australian Dollars......................      18,551,692        1.45560   8/4/98        986,590
Australian Dollars......................       6,564,845        1.48227   8/4/98        224,732
Australian Dollars......................       2,127,834        1.48862   8/4/98         63,460
British Pounds..........................      11,894,754        0.59966   8/4/98        115,301
Canadian Dollars........................       5,421,805        1.42760   8/4/98         (2,921)
Danish Kroner...........................       8,517,863        6.88800   8/4/98        (97,421)
Danish Kroner...........................       2,294,095        7.00000   8/4/98        (62,524)
Danish Kroner...........................       1,962,046        6.89100   8/4/98        (23,285)
Danish Kroner...........................       1,786,842        6.66600   8/4/98        (19,924)
Deutsche Marks..........................       6,078,770        1.80780   8/4/98        (78,770)
Deutsche Marks..........................       5,051,802        1.81740   8/4/98        (91,802)
Deutsche Marks..........................       4,954,746        1.80800   8/4/98        (64,746)
Deutsche Marks..........................       4,050,720        1.80700   8/4/98        (50,720)
Deutsche Marks..........................       1,849,388        1.83600   8/4/98        (52,002)
Deutsche Marks..........................         213,134        1.81100   8/4/98         (3,134)
Italian Liras...........................       1,980,375     1800.00000   8/4/98        (35,931)
Spanish Pesetas.........................         303,227      153.32000   8/4/98         (3,201)
Swedish Kronor..........................       7,778,540        8.03548   8/4/98       (311,655)
                                          --------------                           --------------
  Total Contracts to Sell (Receivable
   amount $91,874,525)..................      91,382,478                                492,047
                                          --------------                           --------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 39.26%.
  Total Open Forward Foreign Currency
   Contracts, Net.......................                                            $   635,206
                                                                                   --------------
                                                                                   --------------
</TABLE>
 
- ---------------
See Note 1 of Notes to the Financial Statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-40
<PAGE>   1354
                  AIM GLOBAL HIGH INCOME FUND -- CONSOLIDATED
             (FORMERLY GT GLOBAL HIGH INCOME FUND -- CONSOLIDATED)
 
                            PORTFOLIO OF INVESTMENTS
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (76.0%)
  Algeria (3.0%)
    Algeria Tranche 1 Loan Assignment, 6.625% due
     9/4/06+ .............................................   USD            9,250,000   $  7,261,250         2.1
    Algeria Tranche 3 Loan Assignment, 1.75% due
     3/4/10+ .............................................   JPY          700,000,000      3,293,402         0.9
  Argentina (12.9%)
    Republic of Argentina:
      Global Bond, 9.75% due 9/19/27 .....................   USD           26,462,000     25,515,984         7.2
      Global Bond, 11.375% due 1/30/17 ...................   USD           11,836,000     13,093,575         3.7
      Par Bond Series L, 5.75% (6% at 4/99) due
       3/31/23++ .........................................   USD            5,100,000      3,885,563         1.1
      Discount Bond, 6.625% due 3/31/23+ .................   USD            3,500,000      3,016,563         0.9
  Brazil (15.2%)
    Republic of Brazil:
      C Bond, 5%, (8% at 4/00) due 4/15/14 (Effective rate
       at year end is 8%, including "payment-in-kind"
       bonds.)[.] ++ .....................................   USD           54,633,129     45,277,203        12.8
      Par Z-L Bond, 5.50%, (5.75% at 4/99) due
       4/15/24++ .........................................   USD            6,359,000      4,749,378         1.3
    Debt Conversion Bond Series L, 6.6875% due
     4/15/12+ ............................................   USD            4,814,000      3,827,130         1.1
  Bulgaria (5.1%)
    Republic of Bulgaria:
      Front Loaded Interest Reduction Bond Series A, 2.25%
       (2.5% at 8/98) due 7/28/12++ ......................   USD           18,357,000     12,413,921         3.5
      Interest Arrears Bond, 6.625% due 7/28/11 -
       Euro+ .............................................   USD            7,000,000      5,534,375         1.6
  Croatia (1.8%)
    Croatian Government Series A, 6.625% due 7/31/10+ ....   USD            7,200,000      6,466,500         1.8
  Ecuador (2.6%)
    Ecuador, Past Due Interest Bond, 6.625% due
     2/27/15+ ............................................   USD           14,606,019      9,384,367         2.6
  Ivory Coast (1.0%)
    Ivory Coast Past Due Interest Bond, 1.9% due
     3/29/18 .............................................   FRF           55,000,000      3,683,444         1.0
  Jordan (1.0%)
    Kingdom of Jordan, 5% (5.5% at 12/98) due
     12/23/23++ ..........................................   USD            4,750,000      3,467,500         1.0
  Korea (4.1%)
    Republic of Korea, 8.875% due 4/15/08 ................   USD           12,600,000     12,424,230         3.5
    Korea Electric Power, 7% due 2/1/27 ..................   USD            2,510,000      2,154,200         0.6
  Mexico (3.2%)
    United Mexican States:
      Global Bond, 11.375% due 9/15/16{./} ...............   USD            5,859,000      6,885,790         1.9
      Global Bond, 11.5 due 5/15/26 ......................   USD            3,826,000      4,619,895         1.3
  Panama (1.7%)
    Republic of Panama:
      Interest Reduction Bond, 3.75% (4% at 7/98) due
       7/17/14++ .........................................   USD            4,704,000      3,695,580         1.0
      8.875% due 9/30/27 .................................   USD            2,689,000      2,633,876         0.7
  Peru (1.6%)
    Republic of Peru, Past Due Interest Bond, 4% (4.5% at
     7/98) due 3/7/17++ ..................................   USD            8,107,000      5,527,961         1.6
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-41
<PAGE>   1355
                  AIM GLOBAL HIGH INCOME FUND -- CONSOLIDATED
             (FORMERLY GT GLOBAL HIGH INCOME FUND -- CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (Continued)
  Philippines (1.6%)
    Republic of Philippines, 8.875% due 4/15/08 -
     144A{.} .............................................   USD            3,650,000   $  3,610,215         1.0
    Bangko Sentral Pilipinas, 8.6% due 6/15/27 ...........   USD            2,416,000      2,202,099         0.6
  Russia (16.6%)
    Bank for Foreign Economic Affairs (Vnesheconombank)
     Principal Loans, 6.72% due 12/15/20+ ................   USD           59,184,372     37,578,135        10.6
    Bank for Foreign Economic Affairs (Vnesheconombank)
     Interest Notes, 6.72% due 12/15/15+ .................   USD           29,559,031     21,319,451         6.0
  Venezuela (4.6%)
    Republic of Venezuela, 9.25% due 9/15/27{./} .........   USD           18,355,000     16,257,941         4.6
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $252,885,532) ...........................................                               269,779,528
                                                                                        ------------
Corporate Bonds (18.5%)
  Argentina (1.2%)
    Mastellone Hermanos S.A., 11.75% due 4/1/08 -
     144A{.} .............................................   USD            1,943,000      2,006,148         0.6
    Telefonica de Argentina, 9.125% due 5/7/08 -
     144A{.} .............................................   USD            1,983,000      1,992,241         0.6
  Brazil (3.8%)
    Banco Do Brasil (Cayman), 9.375% due 6/15/07 .........   USD            5,816,000      5,728,760         1.6
    Banco Hipotecario Espana, 10% due 4/17/03 -
     144A{.} .............................................   USD            3,679,000      3,720,389         1.1
    Comtel Brasileira Ltd. "A", 10.75% due 9/26/04 -
     144A{.} .............................................   USD            2,328,000      2,386,200         0.7
    RBS Participacoes S.A., 11% due 4/1/07 - 144A{.} .....   USD            1,378,000      1,384,890         0.4
  China (0.7%)
    Greater Beijing First, 9.5% due 6/15/07 - 144A{.} ....   USD            3,210,000      2,557,889         0.7
  Hong Kong (1.1%)
    GS Superhighway Holdings, 9.875% due 8/15/04 -
     144A{.} .............................................   USD            2,434,000      2,056,730         0.6
    Road King Infrastructure, 9.5% due 7/15/07 -
     144A{.} .............................................   USD            2,100,000      1,715,280         0.5
  Indonesia (0.3%)
    Polysindo International Finance, 8.750% due
     4/22/99(::) .........................................   IDR       27,500,000,000      1,037,736         0.3
  Jamaica (1.0%)
    Mechala Group Jamaica:
      12.75% due 12/30/99 - Series B .....................   USD            2,846,000      2,618,320         0.7
      12.75% due 12/30/99 - Reg S{c} .....................   USD            1,288,000      1,184,960         0.3
  Korea (2.5%)
    Pohang Iron & Steel Co., Ltd.:
      8.26% due 2/19/99 ..................................   USD            5,000,000      4,961,455         1.4
      2% due 10/9/00 .....................................   JPY          224,000,000      1,506,764         0.4
    L.G.-Caltex Oil Corp., 12.75% due 3/31/01 -
     144A{.} .............................................   USD            2,112,000      2,148,960         0.6
    Korea Development Bank, 4.35% due 5/25/99 ............   JPY           60,300,000        432,960         0.1
  Malaysia (1.9%)
    Petroliam Nasional Bhd.:
      7.125% due 8/15/05 - 144A{.} .......................   USD            3,547,000      3,143,529         0.9
      7.625% due 10/15/26 - 144A{.} ......................   USD            1,469,000      1,283,172         0.4
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-42
<PAGE>   1356
                  AIM GLOBAL HIGH INCOME FUND -- CONSOLIDATED
             (FORMERLY GT GLOBAL HIGH INCOME FUND -- CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Corporate Bonds (Continued)
    Tenaga Nasional Bhd., 7.875% due 6/15/04 - 144A{.} ...   USD            2,416,000      2,281,078         0.6
  Mexico (3.5%)
    Petroleos Mexicanos:
      9.25% due 3/30/18 - 144A{.} ........................   USD            8,697,000   $  8,501,318         2.4
      9.5% due 9/15/27 - 144A{.} .........................   USD            3,968,000      3,977,920         1.1
  Russia (1.9%)
    Mosenergo Finance BV, 8.375% due 10/9/02 - 144A{.} ...   USD            4,200,000      3,717,000         1.1
    Lukinter Finance BV Convertible, 3.5% due 5/6/02 -
     144A{.} .............................................   USD            2,283,000      2,751,015         0.8
  Singapore (0.6%)
    Krung Thai Bank (Singapore), 6.73% due 9/30/04 .......   USD            2,500,000      2,131,250         0.6
                                                                                        ------------
Total Corporate Bonds (cost $74,463,170) .................                                65,225,964
                                                                                        ------------
Structured Notes (1.4%)
  Korea (1.4%)
    Fixed Rate Trust Certificate 13.55% due 2/15/02[::]
      (Issued by a newly created Delaware Business Trust,
       collateralized by triple A paper. This trust
       certificate has a credit risk component linked to
       the value of a referenced security: Korean
       Development Bank 1.875% 2002.)
       (cost $5,050,000)  ................................   USD            5,050,000      5,024,750         1.4
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $332,398,702) .......                               340,030,242        95.9
                                                                                        ------------       -----
<CAPTION>
 
                                                                         PRINCIPAL         VALUE         % OF NET
SHORT-TERM INVESTMENTS                                      CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Structured Notes (3.7%)
  Indonesia (1.1%)
    Indonesia Credit Linked Unsecured Note due 5/27/98
      (Issued by Salomon Smith Barney Holdings, Inc. This
       note has a credit risk component linked to the
       value of referenced securities issued by the Bank
       of Indonesia and the Republic of Indonesia.)  .....   USD            3,985,151      3,938,126         1.1
  Korea (2.6%)
    Korean Credit Linked Unsecured Note due 4/27/99[::]
      (Issued by Salomon Smith Barney Holdings, Inc. This
       note has a currency and credit risk component
       linked to the value of referenced securities issued
       by the Korean Development Bank.)  .................   USD           10,937,647      9,375,751         2.6
                                                                                        ------------
Total Structured Notes (cost $13,133,663) ................                                13,313,877
                                                                                        ------------       -----
 
TOTAL SHORT-TERM INVESTMENTS (cost $13,133,663) ..........                                13,313,877         3.7
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-43
<PAGE>   1357
                  AIM GLOBAL HIGH INCOME FUND -- CONSOLIDATED
             (FORMERLY GT GLOBAL HIGH INCOME FUND -- CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- ----------------------------------------------------------                              ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Dated April 30, 1998, with State Street Bank & Trust
   Co., due May 1, 1998, for an effective yield of 5.44%
   collateralized by $7,815,000 U.S. Treasury Bills,
   6.125% due 8/31/98 (market value of collateral is
   $7,912,688, including accrued interest). (cost
   $7,757,000)  ..........................................                              $  7,757,000         2.2
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $353,289,365)  * .................                               361,101,119       101.8
Other Assets and Liabilities .............................                                (6,411,126)       (1.8)
                                                                                        ------------       -----
 
NET ASSETS ...............................................                              $354,689,993       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- -------------
 
        {.}  Security 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.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (See Note 1 of Notes to Financial Statements).
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
         ++  The coupon rate shown on step-up coupon bond represents the rate at
             period end.
        [.]  Bond pays stated or additional interest with "payment-in-kind"
             (PIK) bonds.
       {./}  All or part of the Fund's holdings in this security is segregated
             as collateral for derivative instruments. (See Note 1 of Notes to
             Financial Statements.)
       [::]  Certain events may cause the contract to terminate prior to date
             shown.
          *  For Federal income tax purposes, cost is $353,438,753 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  19,507,848
                 Unrealized depreciation:           (11,845,482)
                                                  -------------
                 Net unrealized appreciation:     $   7,662,366
                                                  -------------
                                                  -------------
</TABLE>
 
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
 
                                 SWAP CONTRACT
                                 APRIL 30, 1998
 
<TABLE>
<CAPTION>
                                           TERMINATION                      NOTIONAL
DESCRIPTION                                    DATE         CURRENCY         AMOUNT          VALUE
- ----------------------------------------  --------------  -------------  ---------------  -----------
<S>                                       <C>             <C>            <C>              <C>
Mexico Credit Default Swap with
 semiannual payments (fixed rate payment
 1.72%).................................   3/31/2000[::]          USD    $    12,330,000  $   (58,987)
  Contract counterparty is J.P. Morgan
   Securities, Inc. The contract value
   is related to the credit quality of a
   referenced security: United Mexican
   States 11.5% Global Bond due May 15,
   2026.
</TABLE>
 
- -------------
 
       [::]  Certain events may cause the contract to terminate prior to date
             shown.
 
- -------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                 APRIL 30, 1998
 
<TABLE>
<CAPTION>
                                                                                    UNREALIZED
                                           MARKET VALUE     CONTRACT    DELIVERY   APPRECIATION
CONTRACTS TO SELL:                        (U.S. DOLLARS)      PRICE       DATE    (DEPRECIATION)
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
French Francs...........................     3,932,754         6.05000  10/15/98     $(62,400)
Japanese Yen............................     1,464,502       122.90000   7/31/98       91,202
Japanese Yen............................       440,309       121.90000   7/31/98       31,257
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $5,897,624)...................     5,837,565                                 60,059
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 1.65%.
  Total Open Forward Foreign Currency
   Contracts............................                                             $ 60,059
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ---------------
See Note 1 of Notes to the Financial Statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-44
<PAGE>   1358
                           AIM STRATEGIC INCOME FUND
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
 
                            PORTFOLIO OF INVESTMENTS
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (65.4%)
  Algeria (1.3%)
    Algeria Tranche 1 Loan Assignment, 6.625% due
     9/4/06+ .............................................   USD            5,500,000   $  4,317,500         1.1
    Algeria Tranche 3 Loan Assignment, 1.75% due
     3/4/10+ .............................................   JPY          150,000,000        705,729         0.2
  Argentina (4.3%)
    Republic of Argentina:
      Global Bond, 11.375% due 1/30/17 ...................   USD            7,575,000      8,379,844         2.2
      Global Bond, 9.75% due 9/19/27 .....................   USD            5,192,000      5,006,386         1.3
      Par Bond Series L, 5.75% (6% at 4/99) due
       3/31/23++ .........................................   USD            2,500,000      1,904,688         0.5
      Discount Bond, 6.625% due 3/31/23+ .................   USD            1,445,000      1,245,409         0.3
  Australia (2.4%)
    Commonwealth of Australia, 7.5% due 9/15/09 ..........   AUD           12,290,000      9,102,089         2.4
  Brazil (6.1%)
    Republic of Brazil:
      C Bond, 5% (8% at 4/00) due 4/15/14 (Effective rate
       at year end is 8%, including "payment-in-kind"
       bonds.)[.] ++ .....................................   USD           22,694,868     18,808,372         4.9
      Par Z-L Bond, 5.5% (5.75% at 4/99) due 4/15/24++ ...   USD            3,861,000      2,883,684         0.7
      Debt Conversion Bond Series L, 6.6875% due
       4/15/12+ ..........................................   USD            2,562,000      2,036,790         0.5
  Bulgaria (1.6%)
    Republic of Bulgaria:
      Front Loaded Interest Reduction Bond Series A, 2.25%
       (2.5% at 7/98)due 7/28/12++ .......................   USD            7,396,000      5,001,545         1.3
      Interest Arrears Bond, 6.625% due 7/28/11+ .........   USD            1,586,000      1,253,931         0.3
  Canada (1.0%)
    Canadian Government, 8% due 6/1/27 ...................   CAD            4,230,000      3,936,501         1.0
  Croatia (0.9%)
    Croatian Government Series A, 6.625% due 7/31/10+ ....   USD            3,700,000      3,323,063         0.9
  Denmark (1.7%)
    Kingdom of Denmark, 7% due 11/10/24 ..................   DKK           39,300,000      6,748,583         1.7
  Ecuador (0.8%)
    Ecuador, Past Due Interest Bond, 6.625% due
     2/27/15+ ............................................   USD            4,733,298      3,041,144         0.8
  Germany (7.5%)
    Deutschland Republic:
      6% due 1/5/06 ......................................   DEM           35,500,000     21,120,150         5.5
      6.25% due 1/4/24 ...................................   DEM           12,700,000      7,791,669         2.0
  Italy (2.5%)
    Italian Government, 7.25% due 11/1/26 ................   ITL       11,000,000,000      7,578,302         2.0
    Italian Buoni Poliennali Del Tesoro (BTPS), 8.5% due
     1/1/04 ..............................................   ITL        2,730,000,000      1,804,942         0.5
  Ivory Coast (0.2%)
    Ivory Coast Past Due Interest Bond, 1.9% due
     3/29/18 .............................................   FRF           12,000,000        803,661         0.2
  Jordan (0.6%)
    Kingdom of Jordan, 5% (5.5% at 12/98) due
     12/23/23++ ..........................................   USD            3,250,000      2,372,500         0.6
  Korea (1.8%)
    Republic of Korea, 8.875% due 4/15/08 ................   USD            4,570,000      4,506,249         1.2
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-45
<PAGE>   1359
                           AIM STRATEGIC INCOME FUND
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (Continued)
    Korea Electric Power, 7% due 2/1/27 ..................   USD            2,540,000   $  2,179,947         0.6
  Netherlands (0.8%)
    Netherlands Government Bond, 5.5% due 1/15/28 ........   NLG            6,000,000      2,934,641         0.8
  New Zealand (1.8%)
    New Zealand Government, 8% due 4/15/04 ...............   NZD           12,000,000      6,930,003         1.8
  Panama (0.9%)
    Republic of Panama:
      Interest Reduction Bond, 3.75% (4% at 7/98) due
       7/17/14++ .........................................   USD            2,917,000      2,291,668         0.6
      8.875% due 9/30/27 .................................   USD            1,373,000      1,344,854         0.3
  Peru (0.8%)
    Republic of Peru, Past Due Interest Bond, 4% (4.5% at
     7/98) due 3/7/17++ ..................................   USD            4,776,000      3,256,635         0.8
  Philippines (0.5%)
    Republic of Philippines, 8.875% due 4/15/08 -
     144A{.} .............................................   USD            1,330,000      1,315,503         0.3
    Bangko Sentral Pilipinas, 8.6% due 6/15/27 ...........   USD              933,000        850,397         0.2
  Russia (5.5%)
    Bank for Foreign Economic Affairs (Venesheconombank)
     Principal Loans, 6.72%due 12/15/20+ .................   USD           23,161,492     14,707,547         3.8
    Bank for Foreign Economic Affairs (Venesheconombank)
     Interest Notes, 6.72% due 12/15/15+ .................   USD            8,905,352      6,422,985         1.7
  South Africa (2.6%)
    Republic of South Africa, 12.5% due 1/15/02 ..........   ZAR           51,800,000     10,232,871         2.6
  Sweden (0.7%)
    Swedish Government, 8% due 8/15/07 ...................   SEK           19,000,000      2,924,681         0.7
  United Kingdom (7.6%)
    United Kingdom Conversion, 9.5% due 4/18/05 ..........   GBP            7,400,000     14,849,498         3.8
    United Kingdom Treasury, 7.5% due 12/7/06 ............   GBP            8,000,000     14,820,241         3.8
  United States (9.9%)
    United States Treasury:
      6.875% due 8/15/25{./} .............................   USD           14,500,000     16,127,851         4.2
      6.50% due 10/15/06{./} .............................   USD           13,170,000     13,808,179         3.6
      6.625% due 5/15/07 .................................   USD            3,900,000      4,136,895         1.1
    Federal National Mortgage Association, 7.25% due
     6/20/02 .............................................   NZD            7,000,000      3,804,876         1.0
  Venezuela (1.6%)
    Republic of Venezuela, 9.25% due 9/15/27 .............   USD            6,989,000      6,190,507         1.6
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $246,787,697) ...........................................                               252,802,510
                                                                                        ------------
Corporate Bonds (18.7%)
  Argentina (0.2%)
    Mastellone Hermanos S.A., 11.75% due 4/1/08 -
     144A{.} .............................................   USD              745,000        769,213         0.2
  Brazil (0.9%)
    Banco Hipotecario Espana, 10% due 4/17/03 -
     144A{.} .............................................   USD            1,675,000      1,693,844         0.4
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-46
<PAGE>   1360
                           AIM STRATEGIC INCOME FUND
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Corporate Bonds (Continued)
    Comtel Brasileira Ltd. "A", 10.75% due 9/26/04 -
     144A{.} .............................................   USD            1,171,000      1,200,275         0.3
    RBS Participacoes S.A., 11% due 4/1/07 - 144A{.} .....   USD              813,000   $    817,065         0.2
  Canada (0.2%)
    Trench Electric & Trench, Inc., 10.25% due 12/15/07 -
     144A{.} .............................................   USD              875,000        881,563         0.2
  China (0.4%)
    Greater Beijing First, 9.5% due 6/15/07 - 144A{.} ....   USD            1,720,000      1,370,582         0.4
  Hong Kong (0.5%)
    GS Superhighway Holdings, 9.875% due 8/15/04 -
     144A{.} .............................................   USD            1,210,000      1,022,450         0.3
    Road King Infrastructure, 9.5% due 7/15/07 -
     144A{.} .............................................   USD            1,100,000        898,480         0.2
  Jamaica (0.2%)
    Mechala Group Jamaica, 12.75% due 12/30/99 - Reg
     S{c} ................................................   USD              719,000        661,480         0.2
  Korea (0.6%)
    L.G.-Caltex Oil Corp., 12.75% due 3/31/01 -
     144A{.} .............................................   USD              902,000        917,785         0.3
    Pohang Iron & Steel, 2% due 10/9/00 ..................   JPY          119,000,000        800,469         0.2
    Korea Development Bank, 4.35% due 5/25/99 ............   JPY           32,000,000        229,763         0.1
  Malaysia (0.7%)
    Petroliam Nasional Bhd.:
      7.125% due 8/15/05 - 144A{.} .......................   USD            1,908,000      1,690,965         0.4
      7.875% due 6/15/04 - 144A{.} .......................   USD              933,000        880,897         0.2
    Petroliam Nasional Bhd., 7.625% due 10/15/26 -
     144A{.} .............................................   USD              575,000        502,263         0.1
  Mexico (2.8%)
    Petroleos Mexicanos:
      9.25% due 3/30/18 - 144A{.} ........................   USD            8,010,000      7,829,775         2.0
      9.5% due 9/15/27 - 144A{.} .........................   USD            2,028,000      2,033,070         0.5
    Monterrey Power, S.A. de C.V., 9.625% due 11/15/09 -
     144A{.} .............................................   USD            1,245,000      1,257,450         0.3
  Russia (0.7%)
    Lukinter Finance BV Convertible, 3.5% due 5/6/02 -
     144A{.} .............................................   USD            1,526,000      1,838,830         0.5
    Mosenergo Finance BV, 8.375% due 10/9/02 - 144A{.} ...   USD            1,040,000        920,400         0.2
  Singapore (0.2%)
    Krung Thai Bank (Singapore), 6.73% due 9/30/04 .......   USD            1,000,000        852,500         0.2
  United States (11.3%)
    Chase Manhattan Corp., 6.25% due 1/15/06 .............   USD            2,835,000      2,800,674         0.7
    General Motors Acceptance Corp., 6.625% due
     10/15/05 ............................................   USD            2,700,000      2,743,411         0.7
    Engle Homes, Inc., 9.25% due 2/1/08 ..................   USD            2,350,000      2,376,320         0.6
    Unisys Corp., 7.875% due 4/1/08 ......................   USD            2,350,000      2,355,875         0.6
    United Stationers Supply, 8.375% due 4/15/08 -
     144A{.} .............................................   USD            2,000,000      2,015,000         0.5
    Globalstar LP Capital, 11.375% due 2/15/04 ...........   USD            1,900,000      1,957,000         0.5
    Lenfest Communications, 8.25% due 2/15/08 -
     144A{.} .............................................   USD            1,850,000      1,884,040         0.5
    Hollywood Casino Corp., 12.75% due 11/1/03 ...........   USD            1,700,000      1,878,500         0.5
    Eagle Family Foods, 8.75% due 1/15/08 - 144A{.} ......   USD            1,875,000      1,856,250         0.5
    Riddell Sports, Inc., 10.5% due 7/15/07 ..............   USD            1,700,000      1,768,000         0.5
    Accuride Corp., 9.25% due 2/1/08 - 144A{.} ...........   USD            1,725,000      1,725,000         0.5
    Graham Packaging/GPC Capital, 8.75% due 1/15/08 -
     144A{.} .............................................   USD            1,725,000      1,725,000         0.5
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-47
<PAGE>   1361
                           AIM STRATEGIC INCOME FUND
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Corporate Bonds (Continued)
    Smithfield Foods, Inc., 7.625% due 2/15/08 -
     144A{.} .............................................   USD            1,725,000      1,712,063         0.5
    Trump Atlantic Association Funding, Inc., 11.25% due
     5/1/06 ..............................................   USD            1,700,000   $  1,702,125         0.4
    ACME Metal, Inc., 10.875% due 12/15/07 - 144A{.} .....   USD            1,500,000      1,517,580         0.4
    Lin Television Corp., 8.375% due 3/1/08 - 144A{.} ....   USD            1,500,000      1,492,668         0.4
    Drypers Corp. Series B, 10.25% due 6/15/07 ...........   USD            1,300,000      1,339,000         0.4
    Chancellor Media Corp., 8.125% due 12/15/07 -
     144A{.} .............................................   USD            1,300,000      1,303,250         0.4
    BTI Telecommunications Corp., 10.5% due 9/15/07 -
     144A{.} .............................................   USD              885,000        931,463         0.3
    Penn National Gaming, Inc., 10.625% due 12/15/04 -
     144A{.} .............................................   USD              875,000        918,750         0.2
    Norampac, Inc., 9.5% due 2/1/08 - 144A{.} ............   USD              885,000        915,975         0.2
    Hard Rock Hotel, Inc., 9.25% due 4/1/05 - 144A{.} ....   USD              880,000        900,350         0.2
    Revlon Consumer Products, 8.625% due 2/2/08 -
     144A{.} .............................................   USD              885,000        887,213         0.2
    Duane Reade, Inc., 9.25% due 2/15/08 .................   USD              885,000        884,706         0.2
    Allbritton Communication, 8.875% due 2/1/08 -
     144A{.} .............................................   USD              885,000        880,575         0.2
    Anker Coal Group, Inc., 9.75% due 10/1/07 -
     144A{.} .............................................   USD              875,000        855,313         0.2
    Syratech Corp., 11% due 4/15/07 ......................   USD              880,000        756,800         0.2
    Delco Remy International, Inc., 8.625% due
     12/15/07 ............................................   USD              650,000        659,484         0.2
    Pillowtex Corp., 9% due 12/15/07 - 144A{.} ...........   USD              435,000        453,488         0.1
                                                                                        ------------
Total Corporate Bonds (cost $72,365,567) .................                                72,264,992
                                                                                        ------------
Mortgage Backed (10.4%)
  Denmark (1.1%)
    Realkredit Danmark, 6% due 10/1/26 ...................   DKK           29,317,000      4,210,612         1.1
  United States (9.3%)
    Government National Mortgage Association:
      TBA Pass Thru Pool, 6.5% due 5/15/28{*} ............   USD           14,000,000     13,877,500         3.6
      TBA Pass Thru Pool, 6% due 5/15/28{*} ..............   USD           14,000,000     13,562,500         3.5
    Federal National Mortgage Association Pool #313439, 7%
     due 3/1/04 ..........................................   USD            8,313,847      8,451,549         2.2
                                                                                        ------------
Total Mortgage Backed (cost $39,883,101) .................                                40,102,161
                                                                                        ------------
Structured Notes (0.5%)
  Korea (0.5%)
    Fixed Rate Trust Certificate 13.55% due 2/15/02[::]
      (Issued by a newly created Delaware Business Trust,
       collateralized by triple A paper. This trust
       certificate has a credit risk component linked to
       the value of a referenced security: Korean
       Development Bank 1.875% 2002.)
       (cost $1,930,000)  ................................   USD            1,930,000      1,920,350         0.5
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $360,966,365) .......                               367,090,013        95.0
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-48
<PAGE>   1362
                           AIM STRATEGIC INCOME FUND
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         UNDERLYING        VALUE         % OF NET
OPTIONS                                                     CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Deutsche Marks Put Option: .............................   USD                   --             --          --
    CURRENCY OPTIONS
    Strike 1.82, expires 5/12/98 .........................                  2,320,000          3,348          --
    Strike 1.84, expires 5/7/98 ..........................                  4,100,000            402          --
                                                                                        ------------       -----
 
TOTAL OPTIONS (cost $24,164) .............................                                     3,750          --
                                                                                        ------------       -----
<CAPTION>
 
                                                                         PRINCIPAL         VALUE         % OF NET
SHORT-TERM INVESTMENTS                                      CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Commercial Paper - Discounted (7.2%)
  United States (7.2%)
    Ford Motor Credit Corp., effective yield 5.69%, due
     5/20/98{./} .........................................   USD           14,000,000   $ 13,959,361         3.6
    General Electric Co., effective yield 5.69%, due
     5/20/98{./} .........................................   USD           14,000,000     13,959,361         3.6
                                                                                        ------------
Total Commercial Paper - Discounted (cost $27,918,722) ...                                27,918,722
                                                                                        ------------
Government & Government Agency Obligations (1.5%)
  Mexico (1.5%)
    Mexican Cetes: .......................................   MXN                   --             --         1.5
      current yield 19.77% due 12/17/98 ..................                 29,250,000      3,061,270          --
      current yield 19.52% due 11/19/98 ..................                 23,350,000      2,481,413          --
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $5,517,534) .............................................                                 5,542,683
                                                                                        ------------
Structured Notes (1.3%)
  Indonesia (0.4%)
    Indonesia Credit Linked Unsecured Note due 5/27/98
      (Issued by Salomon Smith Barney Holdings, Inc. This
       note has a credit risk component linked to the
       value of referenced securities issued by the Bank
       of Indonesia and the Republic of
       Indonesia.)  ......................................   USD            1,600,000      1,581,120         0.4
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-49
<PAGE>   1363
                           AIM STRATEGIC INCOME FUND
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
SHORT-TERM INVESTMENTS                                      CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Structured Notes (Continued)
  Korea (0.9%)
    Korean Credit Linked Unsecured Note due 4/27/99[::]
      (Issued by Salomon Smith Barney Holdings, Inc. This
       note has a currency and credit risk component
       linked to the value of referenced securities issued
       by the Korean Development Bank.)  .................   USD            4,055,000      3,475,946         0.9
                                                                                        ------------
Total Structured Notes (cost $4,989,984) .................                                 5,057,066
                                                                                        ------------       -----
 
TOTAL SHORT-TERM INVESTMENTS (cost $38,426,240) ..........                                38,518,471        10.0
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $399,416,769)  * .................                               405,612,234       105.0
Other Assets and Liabilities .............................                               (19,242,576)       (5.0)
                                                                                        ------------       -----
 
NET ASSETS ...............................................                              $386,369,658       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- -------------
 
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
         ++  The coupon rate shown on step-up coupon bond represents the rate at
             period end.
        [.]  Bond pays stated or additional interest with "payment-in-kind"
             (PIK) bonds.
       {./}  All or part of the Fund's holdings in this security is segregated
             as collateral for derivative instruments. (See Note 1 of Notes to
             the Financial Statements.)
        {*}  Purchased on a forward commitment basis.
       [::]  Certain events may cause the contract to terminate prior to date
             shown.
          *  For Federal income tax purposes, cost is $400,141,188 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  11,468,208
                 Unrealized depreciation:            (5,997,162)
                                                  -------------
                 Net unrealized appreciation:     $   5,471,046
                                                  -------------
                                                  -------------
</TABLE>
 
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-50
<PAGE>   1364
                           AIM STRATEGIC INCOME FUND
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
                                 SWAP CONTRACT
                                 APRIL 30, 1998
 
<TABLE>
<CAPTION>
                                           TERMINATION                      NOTIONAL
DESCRIPTION                                    DATE         CURRENCY         AMOUNT         VALUE
- ----------------------------------------  --------------  -------------  --------------  -----------
<S>                                       <C>             <C>            <C>             <C>
Mexico Credit Default Swap with
 semiannual payments (fixed rate payment
 1.72%).................................   3/31/2000[::]          USD    $    4,730,000  $   (22,628)
  Contract counterparty is J.P. Morgan
   Securities, Inc. The contract value
   is related to the credit quality of a
   referenced security: United Mexican
   States 11.5% Global Bond due May 15,
   2026.
</TABLE>
 
- -------------
 
       [::]  Certain events may cause the contract to terminate prior to date
             shown.
 
- -------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                 APRIL 30, 1998
<TABLE>
<CAPTION>
                                                                                    UNREALIZED
                                           MARKET VALUE     CONTRACT    DELIVERY   APPRECIATION
CONTRACTS TO BUY:                         (U.S. DOLLARS)      PRICE       DATE    (DEPRECIATION)
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Australian Dollars......................     2,139,576         1.59713    8/4/98     $  5,723
Canadian Dollars........................     5,121,354         1.41700    5/4/98      (45,901)
Canadian Dollars........................     2,222,844         1.43000    5/4/98          466
Deutsche Marks..........................    10,808,436         1.78974    8/4/98       32,406
Deutsche Marks..........................       965,153         1.78923    8/4/98        2,619
                                          --------------                          --------------
  Total Contracts to Buy (Payable amount
   $21,262,050).........................    21,257,363                                 (4,687)
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO BUY AS
 PERCENTAGE OF NET ASSETS IS 5.50%.
 
<CAPTION>
 
CONTRACTS TO SELL:
- ---------------------------------------
<S>                                       <C>              <C>          <C>       <C>
Australian Dollars......................     9,132,337         1.45560    8/4/98      485,663
Australian Dollars......................     1,696,005         1.48862    8/4/98       50,581
British Pounds..........................    10,672,577         0.59956    8/4/98      103,454
Canadian Dollars........................     5,245,856         1.45170    5/4/98      (79,499)
Canadian Dollars........................     2,098,342         1.43700    5/4/98      (10,660)
Canadian Dollars........................     2,227,314         1.42760    8/4/98       (1,200)
Danish Kroner...........................     1,679,928         7.00000    8/4/98      (45,785)
Deutsche Marks..........................    11,068,307         1.80715    8/4/98     (139,497)
Deutsche Marks..........................     3,306,482         1.83600    8/4/98      (92,974)
French Francs...........................       858,055         6.05000  10/15/98      (13,615)
Japanese Yen............................       779,174       122.90000   7/31/98       48,523
Japanese Yen............................       233,666       121.89988   7/31/98       16,588
New Zealand Dollars.....................    10,961,561         1.81159    8/4/98      (31,961)
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $60,249,222)..................    59,959,604                                289,618
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 15.52%.
  Total Open Forward Foreign Currency
   Contracts, Net.......................                                             $284,931
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ---------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-51
<PAGE>   1365
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                              STATEMENTS OF ASSETS
                                 AND LIABILITIES
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                              AIM
                                          -------------------------------------------
                                             GLOBAL
                                           GOVERNMENT     GLOBAL HIGH
                                             INCOME      INCOME FUND-     STRATEGIC
                                              FUND       CONSOLIDATED      INCOME
                                           (UNAUDITED)     (NOTE 1)         FUND
                                          -------------  -------------  -------------
<S>                                       <C>            <C>            <C>
Assets:
  Investments in securities, at value
   (cost $249,751,661; $353,289,365; and
   $399,416,769, respectively) (Note
   1)...................................  $ 254,268,277  $361,101,119   $ 405,612,234
  U.S. currency.........................            387           598         812,050
  Foreign currencies....................      4,288,644         4,140       4,446,776
  Interest receivable...................      6,347,624     5,445,023       6,216,285
  Receivable for forward foreign
   currency contracts -- closed (Note
   1)...................................        211,857            --         597,961
  Receivable for Fund shares sold.......      1,302,028     2,282,498       1,032,304
  Receivable for open forward foreign
   currency contracts, net (Note 1).....        635,206        60,059         284,931
  Receivable for securities sold........      3,909,049    33,894,448      23,058,652
                                          -------------  -------------  -------------
    Total assets........................    270,963,072   402,787,885     442,061,193
                                          -------------  -------------  -------------
Liabilities:
  Payable for custodian fees............         49,193        30,200          81,705
  Payable for Directors' and Trustees'
   fees and expenses (Note 2)...........          2,577         3,975             302
  Payable for fund accounting fees (Note
   2)...................................          5,186         7,573           8,223
  Payable for Fund shares repurchased
   (Note 2).............................      4,399,466     1,541,198       2,846,926
  Payable for investment management and
   administration fees (Note 2).........        147,478       273,226         259,083
  Payable for loan outstanding (Note
   1)...................................     21,178,000            --       1,000,000
  Payable for printing and postage
   expenses.............................         97,549        68,350          81,902
  Payable for professional fees.........         25,749        42,925          24,286
  Payable for registration and filing
   fees.................................         13,802        10,318           4,916
  Payable for securities purchased......     11,988,950    45,736,627      50,989,400
  Payable for service and distribution
   expenses (Note 2)....................        126,880       222,467         251,157
  Payable for transfer agent fees (Note
   2)...................................        143,845        72,177         108,413
  Swap contracts outstanding............             --        58,987          22,628
  Other accrued expenses................         43,465        29,769          12,594
                                          -------------  -------------  -------------
    Total liabilities...................     38,222,140    48,097,792      55,691,535
    Minority interest (Notes 1 & 2).....             --           100              --
                                          -------------  -------------  -------------
Net assets..............................  $ 232,740,932  $354,689,993   $ 386,369,658
                                          -------------  -------------  -------------
                                          -------------  -------------  -------------
Class A:
  Net asset value and redemption price
   per share ($130,245,759 DIVIDED BY
   14,942,768; $130,645,479 DIVIDED BY
   9,958,093; and $131,367,400 DIVIDED
   BY 10,690,444 shares outstanding,
   respectively)........................  $        8.72  $      13.12   $       12.29
                                          -------------  -------------  -------------
                                          -------------  -------------  -------------
  Maximum offering price per share
   (100/95.25 of $8.72; 100/95.25 of
   $13.12; and 100/95.25 of $12.29,
   respectively) *......................  $        9.15  $      13.77   $       12.90
                                          -------------  -------------  -------------
                                          -------------  -------------  -------------
Class B:+
  Net asset value and offering price per
   share ($102,299,230 DIVIDED BY
   11,735,659; $221,039,186 DIVIDED BY
   16,866,817; and $254,225,104 DIVIDED
   BY 20,671,013 shares outstanding,
   respectively)........................  $        8.72  $      13.10   $       12.30
                                          -------------  -------------  -------------
                                          -------------  -------------  -------------
Advisor Class:
  Net asset value, offering, and
   redemption price per share ($195,943
   DIVIDED BY 22,401; $3,005,328 DIVIDED
   BY 230,053; and $777,154 DIVIDED BY
   63,127 shares outstanding,
   respectively)........................  $        8.75  $      13.06   $       12.31
                                          -------------  -------------  -------------
                                          -------------  -------------  -------------
Net assets consist of:
  Paid in capital (Note 4)..............  $ 372,865,738  $337,218,506   $ 441,635,549
  Undistributed/Accumulated net
   investment income....................      1,018,033     1,361,701         165,400
  Accumulated net realized gain (loss)
   on investments.......................   (146,316,185)    8,330,019     (61,899,072)
  Net unrealized appreciation on
   translation of assets and
   liabilities..........................        656,730        27,000         294,944
  Net unrealized appreciation of
   investments..........................      4,516,616     7,752,767       6,172,837
                                          -------------  -------------  -------------
Total -- representing net assets
 applicable to capital shares
 outstanding............................  $ 232,740,932  $354,689,993   $ 386,369,658
                                          -------------  -------------  -------------
                                          -------------  -------------  -------------
<FN>
- ---------------
    * On sales of $50,000 or more, the offering price is reduced.
    + Redemption price per share is equal to the net asset value per share less
      any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-52
<PAGE>   1366
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                            STATEMENTS OF OPERATIONS
 
                        Six months ended April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                         AIM
                                                                       ---------------------------------------
                                                                         GLOBAL
                                                                       GOVERNMENT   GLOBAL HIGH
                                                                         INCOME     INCOME FUND-    STRATEGIC
                                                                          FUND      CONSOLIDATED     INCOME
                                                                       (UNAUDITED)    (NOTE 1)        FUND
                                                                       -----------  ------------   -----------
<S>                                                                    <C>          <C>            <C>
Investment income: (Note 1)
  Interest income....................................................  $10,992,699  $ 24,460,748   $19,799,049
  Securities lending income..........................................      313,851       662,637       677,327
                                                                       -----------  ------------   -----------
    Total investment income..........................................   11,306,550    25,123,385    20,476,376
                                                                       -----------  ------------   -----------
Expenses:
  Investment management and administration fees (Note 2).............      961,579     1,764,370     1,460,302
  Amortization of organization costs (Note 1)........................           --           692            --
  Custodian Fees.....................................................       99,007        54,900       126,700
  Directors' and Trustees' fees and expenses (Note 2)................        4,525         9,326         6,430
  Fund accounting fees (Note 2)......................................       34,976        46,902        53,088
  Interest expense...................................................      425,956        17,282        11,355
  Printing and postage expenses......................................       33,485        66,985        72,401
  Professional fees..................................................       58,096        68,554        77,300
  Registration and filing fees (Note 1)..............................       29,322        16,675        27,150
  Service and distribution expenses: (Note 2)
    Class A..........................................................      264,969       228,195       235,253
    Class B..........................................................      567,064     1,109,235     1,338,087
  Transfer agent fees (Note 2).......................................      305,528       322,530       423,540
  Other expenses.....................................................        5,612         8,524         8,145
                                                                       -----------  ------------   -----------
  Total expenses.....................................................    2,790,119     3,714,170     3,839,751
                                                                       -----------  ------------   -----------
Net investment income................................................    8,516,431    21,409,215    16,636,625
                                                                       -----------  ------------   -----------
Net realized and unrealized gain on investments: (Note 1)
  Net realized gain (loss) on investments............................   (5,554,013)    8,329,245     3,769,467
  Net realized gain (loss) on foreign currency transactions..........    5,895,662    (2,059,452)    3,468,998
                                                                       -----------  ------------   -----------
    Net realized gain during the period..............................      341,649     6,269,793     7,238,465
                                                                       -----------  ------------   -----------
  Net change in unrealized appreciation (depreciation) on translation
   of assets and liabilities in foreign currencies...................   (3,252,473)      946,476    (1,450,607)
  Net change in unrealized appreciation of investments...............    4,464,608     3,389,849       158,475
                                                                       -----------  ------------   -----------
    Net unrealized appreciation (depreciation) during the period.....    1,212,135     4,336,325    (1,292,132)
                                                                       -----------  ------------   -----------
Net realized and unrealized gain on investments and foreign
 currencies..........................................................    1,553,784    10,606,118     5,946,333
                                                                       -----------  ------------   -----------
Net increase in net assets resulting from operations.................  $10,070,215  $ 32,015,333   $22,582,958
                                                                       -----------  ------------   -----------
                                                                       -----------  ------------   -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-53
<PAGE>   1367
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                      STATEMENTS OF CHANGES IN NET ASSETS
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                  AIM
                                     ----------------------------------------------------------------------------------------------
                                     GLOBAL GOVERNMENT INCOME FUND         GLOBAL HIGH INCOME
                                     ------------------------------        FUND-CONSOLIDATED             STRATEGIC INCOME FUND
                                       SIX MONTHS                    ------------------------------  ------------------------------
                                         ENDED         YEAR ENDED      SIX MONTHS      YEAR ENDED      SIX MONTHS      YEAR ENDED
                                     APRIL 30, 1998    OCTOBER 31,       ENDED         OCTOBER 31,       ENDED         OCTOBER 31,
                                      (UNAUDITED)         1997       APRIL 30, 1998       1997       APRIL 30, 1998       1997
                                     --------------   -------------  --------------   -------------  --------------   -------------
<S>                                  <C>              <C>            <C>              <C>            <C>              <C>
Increase (decrease) in net assets
Operations:
  Net investment income............  $   8,516,431    $  19,128,003  $  21,409,215    $  31,937,784  $  16,636,625    $  27,580,494
  Net realized gain on investments
   and foreign currency
   transactions....................        341,649          246,114      6,269,793       69,702,746      7,238,465       39,498,013
  Net change in unrealized
   appreciation (depreciation) on
   translation of assets and
   liabilities in foreign
   currencies......................     (3,252,473)       5,553,094        946,476       (1,099,793)    (1,450,607)       2,627,595
  Net change in unrealized
   appreciation (depreciation) of
   investments.....................      4,464,608      (11,452,067)     3,389,849      (36,470,606)       158,475      (26,190,807)
                                     --------------   -------------  --------------   -------------  --------------   -------------
    Net increase in net assets
     resulting from operations.....     10,070,215       13,475,144     32,015,333       64,070,131     22,582,958       43,515,295
                                     --------------   -------------  --------------   -------------  --------------   -------------
Class A:
Distributions to shareholders:
 (Note 1)
  From net investment income.......     (4,583,533)      (6,827,721)    (7,715,585)     (12,555,399)    (4,692,291)     (10,228,265)
  From net realized gain on
   investments.....................             --               --    (24,244,657)      (2,751,509)            --               --
  In excess of net investment
   income..........................             --       (4,449,488)            --               --             --         (775,601)
Class B:
Distributions to shareholders:
 (Note 1)
  From net investment income.......     (2,902,894)      (4,503,257)   (12,421,981)     (17,789,317)    (8,398,431)     (18,434,103)
  From net realized gain on
   investments.....................             --               --    (40,998,478)      (3,911,565)            --               --
  In excess of net investment
   income..........................             --       (2,934,682)            --               --             --       (1,397,843)
Advisor Class:
Distributions to shareholders:
 (Note 1)
  From net investment income.......        (11,971)          (4,070)      (213,548)      (1,289,469)       (29,497)         (43,148)
  From net realized gain on
   investments.....................             --               --       (625,775)        (264,339)            --               --
  In excess of net investment
   income..........................             --           (2,653)            --               --             --           (3,272)
                                     --------------   -------------  --------------   -------------  --------------   -------------
      Total distributions..........     (7,498,398)     (18,721,871)   (86,220,024)     (38,561,598)   (13,120,219)     (30,882,232)
                                     --------------   -------------  --------------   -------------  --------------   -------------
Capital share transactions: (Note
4)
  Increase from capital shares sold
   and reinvested..................    591,892,734      667,541,828    173,649,654      561,523,639    109,089,465      335,031,026
  Decrease from capital shares
   repurchased.....................   (643,833,097)    (787,794,141)  (130,547,381)    (665,858,246)  (152,806,341)    (445,823,540)
                                     --------------   -------------  --------------   -------------  --------------   -------------
    Net decrease from capital share
     transactions..................    (51,940,363)    (120,252,313)    43,102,273     (104,334,607)   (43,716,876)    (110,792,514)
                                     --------------   -------------  --------------   -------------  --------------   -------------
Total increase (decrease) in net
 assets............................    (49,368,546)    (125,499,040)   (11,102,418)     (78,826,074)   (34,254,137)     (98,159,451)
Net assets:
  Beginning of period..............    282,109,478      407,608,518    365,792,411      444,618,485    420,623,795      518,783,246
                                     --------------   -------------  --------------   -------------  --------------   -------------
  End of period  *.................  $ 232,740,932    $ 282,109,478  $ 354,689,993    $ 365,792,411  $ 386,369,658    $ 420,623,795
                                     --------------   -------------  --------------   -------------  --------------   -------------
                                     --------------   -------------  --------------   -------------  --------------   -------------
 * Includes undistributed
   (distributions in excess of) net
   investment income...............  $   1,018,033    $          --  $   1,361,701    $     303,600  $     165,400    $  (3,351,006)
                                     --------------   -------------  --------------   -------------  --------------   -------------
                                     --------------   -------------  --------------   -------------  --------------   -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-54
<PAGE>   1368
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                              FINANCIAL HIGHLIGHTS
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                 Global Government Income Fund
                                          ----------------------------------------------------------------------------
                                                                            Class A
                                          ----------------------------------------------------------------------------
                                            SIX MONTHS
                                              ENDED                          Year ended October 31,
                                          APRIL 30, 1998   -----------------------------------------------------------
                                          (UNAUDITED)(d)     1997(d)      1996(d)     1995(d)     1994(d)     1993(d)
                                          --------------   -----------   ---------   ---------   ---------   ---------
<S>                                       <C>              <C>           <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   8.62         $   8.74    $   8.81    $   8.63    $  11.07    $   9.83
                                          --------------   -----------   ---------   ---------   ---------   ---------
Income from investment operations:
  Net investment income.................        0.29             0.52        0.57        0.62        0.65        0.74
  Net realized and unrealized gain
   (loss) on investments................        0.07            (0.13)       0.03        0.15       (1.52)       1.34
                                          --------------   -----------   ---------   ---------   ---------   ---------
    Net increase (decrease) from
     investment operations..............        0.36             0.39        0.60        0.77       (0.87)       2.08
                                          --------------   -----------   ---------   ---------   ---------   ---------
Distributions to shareholders:
  From net investment income............       (0.26)           (0.31)      (0.57)      (0.59)      (0.65)      (0.74)
  From net realized gain on
   investments..........................          --               --       (0.10)         --       (0.27)         --
  In excess of net investment income....          --            (0.20)         --          --          --          --
  In excess of net realized gain on
   investments..........................          --               --          --          --       (0.55)         --
  Return of capital.....................          --               --          --          --       (0.10)         --
  From sources other than net investment
   income...............................          --               --          --          --          --       (0.10)
                                          --------------   -----------   ---------   ---------   ---------   ---------
    Total distributions.................       (0.26)           (0.51)      (0.67)      (0.59)      (1.57)      (0.84)
                                          --------------   -----------   ---------   ---------   ---------   ---------
Net asset value, end of period..........    $   8.72         $   8.62    $   8.74    $   8.81    $   8.63    $  11.07
                                          --------------   -----------   ---------   ---------   ---------   ---------
                                          --------------   -----------   ---------   ---------   ---------   ---------
 
Total investment return (c).............        4.05% (b)        4.78%       7.11%       9.22%      (8.87)%      21.9%
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $130,246         $154,272    $240,945    $385,404    $502,094    $708,301
Ratio of net investment income to
 average net assets.....................        6.69% (a)        6.04%       6.52%       6.98%       6.87%        7.1%
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......        1.50% (a)        1.34%       1.34%       1.35%       1.33%        1.4%
  Without expense reductions............        1.50% (a)        1.51%       1.39%       1.38%        N/A         N/A
Ratio of interest expense to average net
 assets.................................        0.32% (a)         N/A         N/A         N/A         N/A         N/A
Portfolio turnover rate++...............         211% (a)         241%        268%        385%        625%        495%
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-55
<PAGE>   1369
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                  Global Government Income Fund
                                          -----------------------------------------------------------------------------
                                                                             Class B
                                          -----------------------------------------------------------------------------
                                            SIX MONTHS
                                              ENDED                           Year ended October 31,
                                          APRIL 30, 1998   ------------------------------------------------------------
                                          (UNAUDITED)(d)     1997(d)       1996(d)     1995(d)     1994(d)     1993(d)
                                          --------------   ------------   ---------   ---------   ---------   ---------
<S>                                       <C>              <C>            <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   8.62         $   8.74     $   8.80    $   8.64    $  11.07    $   9.83
                                          --------------   ------------   ---------   ---------   ---------   ---------
Income from investment operations:
  Net investment income.................        0.26             0.46         0.51        0.55        0.59        0.67
  Net realized and unrealized gain
   (loss) on investments................        0.07            (0.12)        0.04        0.14       (1.52)       1.34
                                          --------------   ------------   ---------   ---------   ---------   ---------
    Net increase (decrease) from
     investment operations..............        0.33             0.34         0.55        0.69       (0.93)       2.01
                                          --------------   ------------   ---------   ---------   ---------   ---------
Distributions to shareholders:
  From net investment income............       (0.23)           (0.28)       (0.51)      (0.53)      (0.59)      (0.67)
  From net realized gain on
   investments..........................          --               --        (0.10)         --       (0.27)         --
  In excess of net investment income....          --            (0.18)          --          --          --          --
  In excess of net realized gain on
   investments..........................          --               --           --          --       (0.54)         --
  Return of capital.....................          --               --           --          --       (0.10)         --
  From sources other than net investment
   income...............................          --               --           --          --          --       (0.10)
                                          --------------   ------------   ---------   ---------   ---------   ---------
    Total distributions.................       (0.23)           (0.46)       (0.61)      (0.53)      (1.50)      (0.77)
                                          --------------   ------------   ---------   ---------   ---------   ---------
Net asset value, end of period..........    $   8.72         $   8.62     $   8.74    $   8.80    $   8.64    $  11.07
                                          --------------   ------------   ---------   ---------   ---------   ---------
                                          --------------   ------------   ---------   ---------   ---------   ---------
 
Total investment return (c).............        3.85% (b)        4.00%        6.54%       8.22%      (9.39)%      21.1%
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $102,299         $127,722     $166,577    $235,481    $262,405    $182,972
Ratio of net investment income to
 average net assets.....................        6.04% (a)        5.39%        5.87%       6.33%       6.22%        6.5%
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......        2.15% (a)        1.99%        1.99%       2.00%       1.98%        2.0%
  Without expense reductions............        2.15% (a)        2.16%        2.04%       2.03%        N/A         N/A
Ratio of interest expense to average net
 assets.................................        0.32% (a)         N/A          N/A         N/A         N/A         N/A
Portfolio turnover rate++...............         211% (a)         241%         268%        385%        625%        495%
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-56
<PAGE>   1370
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                 GLOBAL GOVERNMENT INCOME FUND
                                          -------------------------------------------
                                                        Advisor Class+
                                          -------------------------------------------
                                            SIX
                                          MONTHS                             June 1,
                                           ENDED                              1995
                                           APRIL          Year ended           to
                                            30,           October 31,        October
                                           1998       -------------------      31,
                                          (UNAUDITED)(d)  1997(d) 1996(d)    1995(d)
                                          -------     ---------   -------   ---------
<S>                                       <C>         <C>         <C>       <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $ 8.61        $ 8.73    $ 8.80      $ 8.98
                                          -------     ---------   -------   ---------
Income from investment operations:
  Net investment income.................    0.30          0.55      0.60        0.26
  Net realized and unrealized gain
   (loss) on investments................    0.11         (0.13)     0.03       (0.19)
                                          -------     ---------   -------   ---------
    Net increase (decrease) from
     investment operations..............    0.41          0.42      0.63        0.07
                                          -------     ---------   -------   ---------
Distributions to shareholders:
  From net investment income............   (0.27)        (0.33)    (0.60)      (0.25)
  From net realized gain on
   investments..........................      --            --     (0.10)         --
  In excess of net investment income....      --         (0.21)       --          --
  In excess of net realized gain on
   investments..........................      --            --        --          --
  Return of capital.....................                    --        --          --
  From sources other than net investment
   income...............................      --            --        --          --
                                          -------     ---------   -------   ---------
    Total distributions.................   (0.27)        (0.54)    (0.70)      (0.25)
                                          -------     ---------   -------   ---------
Net asset value, end of period..........  $ 8.75        $ 8.61    $ 8.73      $ 8.80
                                          -------     ---------   -------   ---------
                                          -------     ---------   -------   ---------
 
Total investment return (c).............    4.71%(b)      5.15%     7.49%       0.83%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  196        $  116    $   86      $  131
Ratio of net investment income to
 average net assets.....................    7.04%(a)      6.39%     6.87%       7.33%(a)
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......    1.15%(a)      0.99%     0.99%       1.00%(a)
  Without expense reductions............    1.15%(a)      1.16%     1.04%       1.03%(a)
Ratio of interest expense to average net
 assets.................................    0.32%(a)       N/A       N/A         N/A
Portfolio turnover rate++...............     211%(a)       241%      268%        385%
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-57
<PAGE>   1371
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                              FINANCIAL HIGHLIGHTS
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                  Global High Income Fund
                                          ------------------------------------------------------------------------
                                                                          Class A
                                          ------------------------------------------------------------------------
                                          SIX MONTHS
                                            ENDED                         Year ended October 31,
                                          APRIL 30,      ---------------------------------------------------------
                                           1998(d)        1997(d)     1996(d)      1995       1994(d)     1993(d)
                                          ----------     ---------   ---------   ---------   ---------   ---------
<S>                                       <C>            <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $  15.56       $  14.85    $  11.70    $  12.56    $  14.92    $  11.43
                                          ----------     ---------   ---------   ---------   ---------   ---------
Income from investment operations:
  Net investment income.................      0.84*          1.19        1.27        1.35        0.94        0.78
  Net realized and unrealized gain
   (loss) on investments................      0.38           0.93        3.09       (1.09)      (1.87)       3.92
                                          ----------     ---------   ---------   ---------   ---------   ---------
    Net increase (decrease) from
     investment operations..............      1.22           2.12        4.36        0.26       (0.93)       4.70
                                          ----------     ---------   ---------   ---------   ---------   ---------
Distributions to shareholders:
  From net investment income............     (0.83)         (1.18)      (1.11)      (1.03)      (0.94)      (0.78)
  From net realized gain on
   investments..........................     (2.83)         (0.23)      (0.10)      (0.03)      (0.27)         --
  In excess of net realized gain on
   investments..........................        --             --          --          --       (0.22)         --
  Return of capital.....................        --             --          --       (0.06)         --          --
  From sources other than net investment
   income...............................        --             --          --          --          --       (0.43)
                                          ----------     ---------   ---------   ---------   ---------   ---------
    Total distributions.................     (3.66)         (1.41)      (1.21)      (1.12)      (1.43)      (1.21)
                                          ----------     ---------   ---------   ---------   ---------   ---------
Net asset value, end of period..........  $  13.12       $  15.56    $  14.85    $  11.70    $  12.56    $  14.92
                                          ----------     ---------   ---------   ---------   ---------   ---------
                                          ----------     ---------   ---------   ---------   ---------   ---------
 
Total investment return (c).............      9.73%(b)      14.46%      39.05%       2.81%      (6.45)%      43.6%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $130,645       $133,973    $178,318    $142,002    $167,974    $143,171
Ratio of net investment income to
 average net assets.....................     10.87%(a)       7.39%       9.52%      11.85%       7.00%       6.40%
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......      1.68%(a)       1.53%       1.69%       1.75%       1.57%       2.20%
  Without expense reductions............      1.68%(a)       1.58%       1.69%       1.75%       1.57%       2.20%
Ratio of interest expense to average net
 assets.................................      0.01%(a)        N/A        0.04%        N/A        0.22%        N/A
Portfolio turnover rate++...............       222%(a)        214%        290%        213%        178%        195%
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the period.
  *  Net investment income per share reflects an interest payment received
     from the conversion of Vnesheconombank loan agreements. Without such a
     payment net investment income would have been $0.63, $0.58 and $0.66
     per share for Class A, B and Advisor, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the fund as a whole
     without distinguishing among the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-58
<PAGE>   1372
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                  Global High Income Fund
                                          ------------------------------------------------------------------------
                                                                          Class B
                                          ------------------------------------------------------------------------
                                          SIX MONTHS
                                             ENDED                        Year ended October 31,
                                           APRIL 30,     ---------------------------------------------------------
                                            1998(d)       1997(d)     1996(d)      1995       1994(d)     1993(d)
                                          -----------    ---------   ---------   ---------   ---------   ---------
<S>                                       <C>            <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $  15.54       $  14.83    $  11.69    $  12.56    $  14.90    $  11.43
                                          -----------    ---------   ---------   ---------   ---------   ---------
Income from investment operations:
  Net investment income.................      0.79*          1.09        1.17        1.27        0.86        0.70
  Net realized and unrealized gain
   (loss) on investments................      0.39           0.93        3.09       (1.09)      (1.85)       3.90
                                          -----------    ---------   ---------   ---------   ---------   ---------
    Net increase (decrease) from
     investment operations..............      1.18           2.02        4.26        0.18       (0.99)       4.60
                                          -----------    ---------   ---------   ---------   ---------   ---------
Distributions to shareholders:
  From net investment income............     (0.79)         (1.08)      (1.03)      (0.96)      (0.86)      (0.70)
  From net realized gain on
   investments..........................     (2.83)         (0.23)      (0.09)      (0.03)      (0.27)         --
  In excess of net realized gain on
   investments..........................        --             --          --          --       (0.22)         --
  Return of capital.....................        --             --          --       (0.06)         --          --
  From sources other than net investment
   income...............................        --             --          --          --          --       (0.43)
                                          -----------    ---------   ---------   ---------   ---------   ---------
    Total distributions.................     (3.62)         (1.31)      (1.12)      (1.05)      (1.35)      (1.13)
                                          -----------    ---------   ---------   ---------   ---------   ---------
Net asset value, end of period..........  $  13.10       $  15.54    $  14.83    $  11.69    $  12.56    $  14.90
                                          -----------    ---------   ---------   ---------   ---------   ---------
                                          -----------    ---------   ---------   ---------   ---------   ---------
 
Total investment return (c).............      9.37% (b)     13.77%      38.16%       2.07%      (6.99)%      42.6%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $221,039       $228,101    $251,002    $214,897    $232,423    $127,035
Ratio of net investment income to
 average net assets.....................     10.22% (a)      6.74%       8.87%      11.20%       6.35%        5.8%
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......      2.33% (a)      2.18%       2.34%       2.40%       2.22%        2.8%
  Without expense reductions............      2.33% (a)      2.23%       2.34%       2.40%       2.22%        2.8%
Ratio of interest expense to average net
 assets.................................      0.01% (a)       N/A        0.04%        N/A        0.22%        N/A
Portfolio turnover rate++...............       222% (a)       214%        290%        213%        178%        195%
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the period.
  *  Net investment income per share reflects an interest payment received
     from the conversion of Vnesheconombank loan agreements. Without such a
     payment net investment income would have been $0.63, $0.58 and $0.66
     per share for Class A, B and Advisor, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the fund as a whole
     without distinguishing among the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-59
<PAGE>   1373
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                    Global High Income Fund
                                          --------------------------------------------
                                                         Advisor Class+
                                          --------------------------------------------
                                            SIX                              June 1,
                                           MONTHS                              1995
                                           ENDED           Year Ended           to
                                           APRIL          October 31,        October
                                            30,        ------------------      31,
                                          1998(d)      1997(d)   1996(d)       1995
                                          --------     -------   --------   ----------
<S>                                       <C>          <C>       <C>        <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $15.52      $14.83    $ 11.71      $11.44
                                          --------     -------   --------   ----------
Income from investment operations:
  Net investment income.................     0.87*       1.22       1.34        0.57
  Net realized and unrealized gain
   (loss) on investments................     0.36        0.93       3.05        0.17
                                          --------     -------   --------   ----------
    Net increase (decrease) from
     investment operations..............     1.23        2.15       4.39        0.74
                                          --------     -------   --------   ----------
Distributions to shareholders:
  From net investment income............    (0.86)      (1.23)     (1.16)      (0.44)
  From net realized gain on
   investments..........................    (2.83)      (0.23)     (0.11)         --
  In excess of net realized gain on
   investments..........................       --          --         --          --
  Return of capital.....................       --          --         --       (0.03)
  From sources other than net investment
   income...............................       --          --         --          --
                                          --------     -------   --------   ----------
    Total distributions.................    (3.69)      (1.46)     (1.27)      (0.47)
                                          --------     -------   --------   ----------
Net asset value, end of period..........   $13.06      $15.52    $ 14.83      $11.71
                                          --------     -------   --------   ----------
                                          --------     -------   --------   ----------
 
Total investment return (c).............     9.81%(b)   14.72%     39.38%       6.54%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $3,005      $3,719    $15,298      $1,463
Ratio of net investment income to
 average net assets.....................    11.22%(a)    7.74%      9.87%      12.20%(a)
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......     1.33%(a)    1.18%      1.34%       1.40%(a)
  Without expense reductions............     1.33%(a)    1.23%      1.34%       1.40%
Ratio of interest expense to average net
 assets.................................     0.01%(a)     N/A       0.04%        N/A
Portfolio turnover rate++...............      222%(a)     214%       290%        213%(a)
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the period.
  *  Net investment income per share reflects an interest payment received
     from the conversion of Vnesheconombank loan agreements. Without such a
     payment net investment income would have been $0.63, $0.58 and $0.66
     per share for Class A, B and Advisor, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the fund as a whole
     without distinguishing among the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-60
<PAGE>   1374
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                              FINANCIAL HIGHLIGHTS
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                         Strategic Income Fund
                                            --------------------------------------------------------------------------------
                                                                                Class A
                                            --------------------------------------------------------------------------------
                                            SIX MONTHS
                                              ENDED                             Year ended October 31,
                                            APRIL 30,      -----------------------------------------------------------------
                                             1998(d)         1997         1996(d)       1995(d)        1994         1993(d)
                                            ----------     ---------     ---------     ---------     ---------     ---------
<S>                                         <C>            <C>           <C>           <C>           <C>           <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $  12.00       $  11.76      $  10.32      $  10.88      $  13.61      $  11.25
                                            ----------     ---------     ---------     ---------     ---------     ---------
Income from investment operations:
  Net investment income.................        0.52*          0.74          0.89          0.97          0.79          0.96
  Net realized and unrealized gain
   (loss) on investments................        0.19           0.34          1.44         (0.69)        (2.14)         2.85
                                            ----------     ---------     ---------     ---------     ---------     ---------
    Net increase (decrease) from
     investment operations..............        0.71           1.08          2.33          0.28         (1.35)         3.81
                                            ----------     ---------     ---------     ---------     ---------     ---------
Distributions to shareholders:
  From net investment income............       (0.42)         (0.78)        (0.82)        (0.80)        (0.79)        (0.96)
  From net realized gain on
   investments..........................          --             --            --            --         (0.38)        (0.37)
  In excess of net investment income....          --          (0.06)        (0.07)           --            --            --
  Return of capital.....................          --             --            --         (0.04)        (0.21)           --
  From sources other than net investment
   income...............................          --             --            --            --            --         (0.12)
                                            ----------     ---------     ---------     ---------     ---------     ---------
    Total distributions.................       (0.42)         (0.84)        (0.89)        (0.84)        (1.38)        (1.45)
                                            ----------     ---------     ---------     ---------     ---------     ---------
Net asset value, end of period..........    $  12.29       $  12.00      $  11.76      $  10.32      $  10.88      $  13.61
                                            ----------     ---------     ---------     ---------     ---------     ---------
                                            ----------     ---------     ---------     ---------     ---------     ---------
 
Total investment return (c).............        5.92%(b)       9.40%        23.00%         3.06%       (10.44)%        37.0%
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $131,367       $138,715      $185,126      $188,165      $275,241      $287,870
Ratio of net investment income to
 average net assets.....................        7.78%(a)       6.18%         8.09%         9.64%         6.74%          7.2%
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......        1.46%(a)       1.35%         1.38%         1.42%         1.40%          1.7%
  Without expense reductions............        1.46%(a)       1.44%         1.40%         1.45%          N/A           N/A
Ratio of interest expense to average net
 assets.................................        0.01%(a)        N/A           N/A           N/A          0.10%          N/A
Portfolio turnover rate++...............         244%(a)        149%          177%          238%          583%          310%
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Net investment income per share reflects an interest payment received
     from the conversion of Vnesheconombank loan agreements. Without such a
     payment net investment income would have been $0.41, $0.37 and $0.44
     per share for Class A, B and Advisor, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-61
<PAGE>   1375
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                         Strategic Income Fund
                                            --------------------------------------------------------------------------------
                                                                                Class B
                                            --------------------------------------------------------------------------------
                                            SIX MONTHS
                                              ENDED                             Year ended October 31,
                                            APRIL 30,      -----------------------------------------------------------------
                                             1998(d)         1997         1996(d)       1995(d)        1994         1993(d)
                                            ----------     ---------     ---------     ---------     ---------     ---------
<S>                                         <C>            <C>           <C>           <C>           <C>           <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $  12.01       $  11.77      $  10.33      $  10.88      $  13.60      $  11.24
                                            ----------     ---------     ---------     ---------     ---------     ---------
Income from investment operations:
  Net investment income.................        0.48*          0.67          0.82          0.91          0.73          0.89
  Net realized and unrealized gain
   (loss) on investments................        0.19           0.33          1.44         (0.69)        (2.14)         2.85
                                            ----------     ---------     ---------     ---------     ---------     ---------
    Net increase (decrease) from
     investment operations..............        0.67           1.00          2.26          0.22         (1.41)         3.74
                                            ----------     ---------     ---------     ---------     ---------     ---------
Distributions to shareholders:
  From net investment income............       (0.38)         (0.71)        (0.75)        (0.73)        (0.72)        (0.89)
  From net realized gain on
   investments..........................          --             --            --            --         (0.38)        (0.37)
  In excess of net investment income....          --          (0.05)        (0.07)           --            --            --
  Return of capital.....................          --             --            --         (0.04)        (0.21)           --
  From sources other than net investment
   income...............................          --             --            --            --            --         (0.12)
                                            ----------     ---------     ---------     ---------     ---------     ---------
    Total distributions.................       (0.38)         (0.76)        (0.82)        (0.77)        (1.31)        (1.38)
                                            ----------     ---------     ---------     ---------     ---------     ---------
Net asset value, end of period..........    $  12.30       $  12.01      $  11.77      $  10.33      $  10.88      $  13.60
                                            ----------     ---------     ---------     ---------     ---------     ---------
                                            ----------     ---------     ---------     ---------     ---------     ---------
 
Total investment return (c).............        5.58%(b)       8.70%        22.15%         2.48%       (11.02)%        36.2%
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $254,225       $281,376      $333,178      $357,852      $458,550      $310,431
Ratio of net investment income to
 average net assets.....................        7.13%(a)       5.53%         7.44%         8.99%         6.09%          6.5%
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......        2.11%(a)       2.00%         2.03%         2.07%         2.05%          2.4%
  Without expense reductions............        2.11%(a)       2.09%         2.05%         2.10%          N/A           N/A
Ratio of interest expense to average net
 assets.................................        0.01%(a)        N/A           N/A           N/A          0.10%          N/A
Portfolio turnover rate++...............         244%(a)        149%          177%          238%          583%          310%
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Net investment income per share reflects an interest payment received
     from the conversion of Vnesheconombank loan agreements. Without such a
     payment net investment income would have been $0.41, $0.37 and $0.44
     per share for Class A, B and Advisor, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-62
<PAGE>   1376
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                            Strategic Income Fund
                                            -----------------------------------------------------
                                                               Advisor Class+
                                            -----------------------------------------------------
                                            SIX MONTHS          Year Ended           June 1, 1995
                                              ENDED             October 31,               to
                                            APRIL 30,      ---------------------     October 31,
                                             1998(d)         1997       1996(d)        1995(d)
                                            ----------     --------     --------     ------------
<S>                                         <C>            <C>          <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....     $ 12.02       $ 11.77      $ 10.33        $ 10.32
                                            ----------     --------     --------     ------------
Income from investment operations:
  Net investment income.................        0.55*         0.79         0.93           0.41
  Net realized and unrealized gain
   (loss) on investments................        0.18          0.34         1.44          (0.04)
                                            ----------     --------     --------     ------------
    Net increase (decrease) from
     investment operations..............        0.73          1.13         2.37           0.37
                                            ----------     --------     --------     ------------
Distributions to shareholders:
  From net investment income............       (0.44)        (0.82)       (0.86)         (0.34)
  From net realized gain on
   investments..........................          --            --           --             --
  In excess of net investment income....          --         (0.06)       (0.07)            --
  Return of capital.....................          --            --           --          (0.02)
  From sources other than net investment
   income...............................          --            --           --             --
                                            ----------     --------     --------     ------------
    Total distributions.................       (0.44)        (0.88)       (0.93)         (0.36)
                                            ----------     --------     --------     ------------
Net asset value, end of period..........     $ 12.31       $ 12.02      $ 11.77        $ 10.33
                                            ----------     --------     --------     ------------
                                            ----------     --------     --------     ------------
 
Total investment return (c).............        6.09%(b)      9.86%       23.39%          3.72% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....     $   777       $   533      $   479        $   443
Ratio of net investment income to
 average net assets.....................        8.13%(a)      6.53%        8.44%          9.99% (a)
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......        1.11%(a)      1.00%        1.03%          1.07% (a)
  Without expense reductions............        1.11%(a)      1.09%        1.05%          1.10% (a)
Ratio of interest expense to average net
 assets.................................        0.01%(a)       N/A          N/A            N/A
Portfolio turnover rate++...............         244%(a)       149%         177%           238%
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Net investment income per share reflects an interest payment received
     from the conversion of Vnesheconombank loan agreements. Without such a
     payment net investment income would have been $0.41, $0.37 and $0.44
     per share for Class A, B and Advisor, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-63
<PAGE>   1377
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
The following Notes to Financial Statements are for the period ending April 30,
1998, and unless otherwise indicated, reflect facts as of that date. Please see
"Note 6 -- Subsequent Events" for a discussion of certain changes which took
place after April 30, 1998.
 
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 6)
GT Global Government Income Fund, GT Global High Income Fund and GT Global
Strategic Income Fund ("Funds") are non-diversified separate series of GT
Investment Funds, Inc. ("Company"). Effective June 1, 1998, the Company was
renamed AIM Investment Funds, Inc. and these separate series were renamed as
follows: AIM Global Government Income Fund, AIM Global High Income Fund and AIM
Strategic Income Fund, respectively. Collectively, these Funds are now known as
the "AIM Global Income Funds." The Company is organized as a Maryland
corporation and is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as an open-end management investment company. The Company
has thirteen series of shares in operation, each series corresponding to a
distinct portfolio of investments.
 
The GT Global High Income Fund invests substantially all of its investable
assets in Global High Income Portfolio ("Portfolio"). The Portfolio is organized
as a New York Trust and is registered under the 1940 Act as a non-diversified,
open-end management investment company.
 
The Portfolio has investment objectives, policies and limitations substantially
identical to those of its corresponding Fund. Therefore, the financial
statements of the Fund and its respective Portfolio have been presented on a
consolidated basis, and represent all activities of both the Fund and Portfolio.
Through April 30, 1998, all of the shares of beneficial interest of the
Portfolio were owned by either its Fund or Chancellor LGT Asset Management, Inc.
(the "Manager"), which has a nominal ($100) investment in the Portfolio.
 
The Funds offer Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective service and distribution expenses, and
may differ in its transfer agent, registration, and certain other class-specific
fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
 
(A) PORTFOLIO VALUATION
The Funds calculate the net asset value of and complete orders to purchase,
exchange, or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by the Manager to be the
primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments with a maturity of 60
days or less are valued at amortized cost adjusted for foreign exchange
translation and market fluctuation, if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors or the Trust's Board of Trustees.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors or
the Trust's Board of Trustees.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of each Fund and Portfolio are maintained in U.S.
dollars. The market values of foreign securities, currency holdings, and other
assets and liabilities are recorded in the books and records of the Funds or
Portfolio (the phrase "Funds or Portfolio" hereinafter refers to the GT Global
Government Income Fund, the GT Global Strategic Income Fund, and the Global High
Income Portfolio) after translation to U.S. dollars based on the exchange rates
on that day. The cost of each security is determined
 
                                      FS-64
<PAGE>   1378
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when earned or incurred.
 
A Fund or Portfolio does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from
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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on a
Fund's or Portfolio's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains or losses arise
from changes in the value of assets and liabilities other than investments in
securities at period end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by a Fund or Portfolio, it is
the Fund's or Portfolio's policy to always receive, as collateral, United States
government securities or other high quality debt securities of which the value,
including accrued interest, is at least equal to the amount to be repaid to the
Fund or Portfolio under each agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by a Fund or Portfolio as an unrealized gain or loss.
When the Forward Contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference between the value at the time it was opened
and the value at the time it was closed. Forward Contracts involve market risk
in excess of the amount shown in the Fund's or Portfolio's "Statement of Assets
and Liabilities." A Fund or Portfolio could be exposed to risk if a counterparty
is unable to meet the terms of the contract or if the value of the currency
changes unfavorably. A Fund or Portfolio may enter into Forward Contracts in
connection with planned purchases or sales of securities, or to hedge against
adverse fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When a Fund or Portfolio writes a call or put option, an amount equal to the
premium received is included in the Fund's or Portfolio's "Statement of Assets
and Liabilities" as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market value
of the option. The current market value of an option listed on an exchange is
valued at its last bid price, or, in the case of an over-the-counter option, is
valued at the average of the last bid prices obtained from brokers, unless a
quotation from only one broker is available, in which case only that broker's
price will be used. If an option expires on its stipulated expiration date or if
the Fund or Portfolio enters into a closing purchase transaction, a gain or loss
is realized without regard to any unrealized gain or loss on the underlying
security and the liability related to such option is extinguished. If a written
call option is exercised, a gain or loss is realized from the sale of the
underlying security and the proceeds of the sale are increased by the premium
originally received. If a written put option is exercised, the cost of the
underlying security purchased would be decreased by the premium originally
received. The Fund or Portfolio can write options only on a covered basis,
which, for a call, requires that the Fund or Portfolio hold the underlying
security and, for a put, requires the Fund or Portfolio to set aside cash, U.S.
government securities or other liquid securities in an amount not less than the
exercise price, or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund or Portfolio may use options to manage its
exposure to the stock market and to fluctuations in currency values or interest
rates.
 
The premium paid by the Fund or Portfolio for the purchase of a call or put
option is included in the Fund's or Portfolio's "Statement of Assets and
Liabilities" as an investment and subsequently "marked-to-market" to reflect the
current market value of the option. If an option which the Fund or Portfolio has
purchased expires on the stipulated expiration date, the Fund or Portfolio
realizes a loss in the amount of the cost of the option. If the Fund or
Portfolio enters into a closing sale transaction, the Fund or Portfolio realizes
a gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund or Portfolio
exercises a call option, the cost of the securities acquired by exercising the
call is increased by the premium paid to buy the call. If the Fund or Portfolio
exercises a put option, it realizes a gain or loss from the sale of the
underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund or Portfolio may forego
the opportunity of profit if the market value of the underlying security or
index increases and the option is exercised. The risk in writing a put option is
that the Portfolio may incur a loss if the market value of the underlying
security or index decreases and the option is exercised. In addition, there is
the risk the Fund or Portfolio may not be able to enter into a closing
transaction because of an illiquid secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract a
Fund or Portfolio is required to pledge to the broker an amount of cash or
securities equal to the minimum "initial margin" requirements of the exchange on
which the contract is traded. Pursuant to the contract, the Fund or Portfolio
agrees to receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known as
"variation margin" and are recorded by the Fund or Portfolio as
 
                                      FS-65
<PAGE>   1379
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
unrealized gains or losses. When the contract is closed, the Fund or Portfolio
records a realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed. The
potential risk to the Fund or Portfolio is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
A Fund or Portfolio may use futures contracts to manage its exposure to the
stock market and to fluctuations in currency values or interest rates.
 
(G) SWAP CONTRACTS AND OTHER DERIVATIVE INSTRUMENTS
Swap contracts involve the exchange by a Fund or Portfolio with a counterparty
of respective commitments to pay or receive, fixed or floating rates with
respect to a notional amount. A Fund or Portfolio may enter into these
transactions primarily to preserve a return or spread on a particular investment
or portion of its portfolio, to protect against currency fluctuations, as a
technique for managing the portfolio's duration or to protect against any
increase in the price of securities the Fund or Portfolio anticipates purchasing
at a later date. A Fund or Portfolio may be exposed to risk if a counterparty is
unable to meet the terms of the contract, the value of the contract changes
unfavorably, or the change in value of the underlying securities, indexes or
similar reference item does not correlate to the change in the value of the
contracts.
(H) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out-basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. A Fund or Portfolio may
trade securities on other than normal settlement terms. This may increase the
risk if the other party to the transaction fails to deliver and causes the Fund
or Portfolio to subsequently invest at less advantageous prices.
 
(I) PORTFOLIO SECURITIES LOANED
At April 30, 1998, stocks with an aggregate value listed below were on loan to
brokers. The loans were secured by cash collateral received by the Funds:
 
<TABLE>
<CAPTION>
                                                   APRIL 30, 1998             PERIOD ENDED
                                          --------------------------------   APRIL 30, 1998
                                          AGGREGATE VALUE        CASH        --------------
                                              ON LOAN         COLLATERAL     FEES RECEIVED
                                          ---------------   --------------   --------------
<S>                                       <C>               <C>              <C>
GT Global Government Income Fund........   $  5,105,020      $  7,410,000       $313,851
Global High Income Portfolio............   $ 41,346,275      $ 44,614,120       $662,637
GT Global Strategic Income Fund.........   $ 23,358,514      $ 25,208,069       $677,327
</TABLE>
 
For international securities, cash collateral is received by a Fund or Portfolio
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by a Fund or Portfolio against loaned securities in the
amount at least equal to 102% of the market value of the loaned securities at
the inception of each loan. This collateral must be maintained at not less than
100% of the market value of the loaned securities during the period of the loan.
The cash collateral is invested in a securities lending trust which consists of
a portfolio of high quality short duration securities whose average effective
duration is restricted to 120 days or less.
 
(J) TAXES
It is the intended policy of the Funds and Portfolios to meet the requirements
for qualification as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended ("Code"). It is also the intention of the Funds and
Portfolios to make distributions sufficient to avoid imposition of any excise
tax under Section 4982 of the Code. Therefore, no provision has been made for
Federal taxes on income, capital gains, or unrealized appreciation of securities
held, and excise tax on income and capital gains. The GT Global Government
Income Fund has a capital loss carryforward of $139,369,056 of which
$123,623,470 expires in 2002, and $15,745,586 expires in 2003. The GT Global
Strategic Income Fund has a capital loss carryforward of $65,749,433 which
expires in 2003.
 
(K) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by each Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 Funds or Portfolio and timing
differences.
 
(L) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the GT Global High Income Fund and the Portfolio in
connection with their organization, their initial registration with the
Securities and Exchange Commission and with various states and the initial
public offering of its shares aggregated $149,100 and $25,000, respectively.
These expenses are being amortized on a straightline basis over a five-year
period.
 
(M) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's or Portfolio's investment in emerging
market countries may involve greater risks than investments in more developed
markets and the price of such investments may be volatile. These risks of
investing in foreign and emerging markets may include foreign currency exchange
rate fluctuations, perceived credit risk, adverse political and economic
developments and possible adverse foreign government intervention.
 
                                      FS-66
<PAGE>   1380
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
(N) INDEXED SECURITIES
A Fund or Portfolio may invest in indexed securities whose value is linked
either directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
 
(O) RESTRICTED SECURITIES
A Fund or Portfolio is permitted to invest in privately placed restricted
securities. These securities may be resold in transactions exempt from
registration or to the public if the securities are registered. Disposal of
these securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) are shown at the end of the Fund's
or Portfolio's Portfolio of Investments.
 
(P) LINE OF CREDIT
Each of the Funds, along with certain other funds ("Funds") advised and/or
administered by the Manager, has a line of credit with BankBoston. GT Global
Government Income Fund, along with certain other funds ("GT Funds") advised
and/or administered by the Manager, has a line of credit with State Street Bank
& Trust Company. The arrangements with the banks allow all specified funds and
the GT Funds to borrow an aggregate maximum amount of $250,000,000. Each of
these funds is limited to borrowing up to 33 1/3% of the value of each Fund's
total assets. On April 30, 1998, GT Global Government Income Fund and GT Global
Strategic Income Fund had $21,178,000 and $1,000,000, respectively, in loans
outstanding.
 
For the period ended April 30, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for GT Global Government Income Fund, GT Global High Income Fund, and GT Global
Strategic Income Fund was $14,452,819, $5,000,000 and $4,538,462 respectively,
with a weighted average interest rate of 6.34%, 6.24% and 6.24%, respectively.
Interest expense for the GT Global Government Income Fund, GT Global High Income
Fund and GT Global Strategic Income Fund for the period ended April 30, 1998 was
$394,370, $15,597 and $10,231, respectively. Other interest expense charges
amounted to $31,586, $1,685, and $1,124, respectively.
 
(Q) SECURITIES PURCHASED ON A WHEN-ISSUED OR FORWARD COMMITMENT BASIS
A Fund or Portfolio may trade securities on a when-issued or forward commitment
basis, with payment and delivery scheduled for a future date. These transactions
are subject to market fluctuations and are subject to the risk that the value at
delivery may be more or less than the trade date purchase price. Although the
Fund or Portfolio will generally purchase these securities with the intention of
acquiring such securities, they may sell such securities before the settlement
date. These securities are identified on the accompanying Portfolio of
Investments. The Fund or Portfolio has set aside sufficient cash or liquid
securities as collateral for these purchase commitments.
 
2. RELATED PARTIES (SEE ALSO NOTE 6)
For the period ended April 30, 1998, Chancellor LGT Asset Management, Inc. was
the Funds' and Portfolios' investment manager and administrator. The GT Global
Government Income Fund and GT Global Strategic Income Fund each pays the Manager
investment management and administration fees at the annualized rate of 0.725%
on the first $500 million of the average daily net assets of the Fund; 0.70% on
the next $1 billion; 0.675% on the next $1 billion; and 0.65% on amounts
thereafter. The GT Global High Income Fund pays administration fees to the
Manager at the annualized rate of 0.25% of its average daily net assets. These
fees are computed daily and paid monthly.
 
The Global High Income Portfolio pays investment management and administration
fees to the Manager at the annualized rate of 0.475% on the first $500 million
of average daily net assets of the Portfolio; 0.45% on the next $1 billion;
0.425% on the next $1 billion; and 0.40% on amounts thereafter, plus 2% of the
Portfolio's total investment income calculated in accordance with generally
accepted accounting principles, adjusted daily for currency revaluations, on a
mark to market basis, of the Portfolio's assets; provided, however, that during
any fiscal year this amount shall not exceed 2% of the Portfolio's total
investment income calculated in accordance with generally accepted accounting
principles. These fees are computed daily and paid monthly.
 
For the period ended April 30, 1998, GT Global, Inc. ("GT Global"), an affiliate
of the Manager, serves as the Funds' distributor. The Funds offer Class A, Class
B, and Advisor Class shares for purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Funds' current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the period ended April 30, 1998, GT Global retained the
following sales charges: $1,501 for the GT Global Government Income Fund,
$30,238 for the GT Global High Income Fund, and $13,334 for the GT Global
Strategic Income Fund. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Funds' current prospectus. GT Global collected CDSCs for the
period ended April 30, 1998, as follows: $1,119 for the GT Global Strategic
Income Fund. GT Global also makes ongoing shareholder servicing and trail
commission payments to dealers whose clients hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Funds' current
prospectus. For the period ended April 30, 1998, GT Global collected CDSCs in
the amount of: $443,566 for the GT Global Government Income Fund, $520,304 for
the GT Global High Income Fund, and $815,729 for the GT Global Strategic Income
Fund. In addition, GT Global makes
 
                                      FS-67
<PAGE>   1381
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class B shares.
 
Pursuant to the then effective separate distribution plans adopted under 1940
Act Rule 12b-1 by the Company's Board of Directors with respect to the Funds'
Class A shares ("Class A Plan") and Class B shares ("Class B Plan"), a Fund
reimbursed GT Global for a portion of its shareholder servicing and
distributions expenses. Under that Class A Plan, a Fund was permitted to pay GT
Global a service fee at the annualized rate of up to 0.25% of the average daily
net assets of the Fund's Class A shares for GT Global's expenditures incurred in
servicing and maintaining shareholder accounts, and was permitted to pay GT
Global a distribution fee at the annualized rate of up to 0.35% of the average
daily net assets of the Fund's Class A shares, less any amounts paid by the Fund
as the aforementioned service fee, for GT Global's expenditures incurred in
providing services as distributor. All expenses for which GT Global was
reimbursed under the Class A Plan would have been incurred within one year of
such reimbursement.
 
For the period ended April 30, 1998, pursuant to that Fund's Class B Plan, a
Fund was permitted to pay GT Global a service fee at the annualized rate of up
to 0.25% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in servicing and maintaining shareholder
accounts, and was permitted to pay GT Global a distribution fee at the
annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually were permitted to be carried forward for reimbursement in subsequent
years as long as that Plan continued in effect.
 
The Manager and GT Global voluntarily undertook to limit each GT Global
Government Income Fund, GT Global High Income Fund and GT Global Strategic
Income Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expense) to the maximum annual rate of 1.75%, 2.40%, and 1.40% of
the average daily net assets of the Fund's Class A, Class B, and Advisor Class
shares, respectively. If necessary, this limitation will be effected by waivers
by the Manager of investment management and administration fees, waivers by GT
Global of payments under the Class A Plan and/or Class B Plan and/or
reimbursements by the Manager or GT Global of portions of the Fund's other
operating expenses.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and LGT and GT Global, is the transfer agent of the Funds. For performing
shareholder servicing, reporting, and general transfer agent services, GT
Services receives an annual maintenance fee of $17.50 per account, a new account
fee of $4.00 per account, a per transaction fee of $1.75 for all transactions
other than exchanges and per exchange fee of $2.25. GT Services also is
reimbursed by the Fund for its out-of-pocket expenses for such items as postage,
forms, telephone charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the Funds and Portfolio. The
monthly fee for these services to the Manager is a percentage, not to exceed
0.03% annually, of a Fund or Portfolio's average daily net assets. The annual
fee rate is derived by applying 0.03% to the first $5 billion of assets of all
registered mutual funds advised by the Manager and 0.02% to the assets in excess
of $5 billion and allocating the result according to each Fund's average daily
net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager or any other affiliated company, $5,000 per year plus
$300 for each meeting of the board or any committee thereof attended by the
Director. Each Portfolio pays each of its Trustees who is not an employee,
officer, or director of the Manager, GT Global or GT Services $500 per year plus
$150 for each meeting of the board or any committee thereof attended by the
Trustees.
 
3. PURCHASES AND SALES OF SECURITIES
The following summarizes purchases and sales of investment securities, other
than short-term investments, by each Fund or Portfolio for the period ended
April 30, 1998:
 
                       PURCHASES AND SALES OF SECURITIES
 
<TABLE>
<CAPTION>
                                                           PURCHASES
                                          --------------------------------------------
                                             U.S. GOVERNMENT AND
PORTFOLIO                                    GOVERNMENT AGENCIES       OTHER ISSUES
- ----------------------------------------  -------------------------  -----------------
<S>                                       <C>                        <C>
GT Global Government Income Fund........     $       133,735,073     $     128,648,284
Global High Income Portfolio............                      --           379,500,657
GT Global Strategic Income Fund.........             187,793,767           270,132,637
</TABLE>
 
<TABLE>
<CAPTION>
                                                             SALES
                                          --------------------------------------------
                                             U.S. GOVERNMENT AND
PORTFOLIO                                    GOVERNMENT AGENCIES       OTHER ISSUES
- ----------------------------------------  -------------------------  -----------------
<S>                                       <C>                        <C>
GT Global Government Income Fund........     $       139,465,563     $     124,729,282
Global High Income Portfolio............              27,908,116           343,049,255
GT Global Strategic Income Fund.........             189,918,004           288,987,174
</TABLE>
 
                                      FS-68
<PAGE>   1382
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
4. CAPITAL SHARES
At April 30, 1998, there were 6,000,000,000 shares of the Company's common stock
authorized, at $0.0001 par value. Of this amount, 400,000,000 were classified as
shares of the GT Global Telecommunications Fund; 400,000,000 were classified as
shares of GT Global Government Income Fund; 200,000,000 were classified as
shares of GT Global Developing Markets Fund; 200,000,000 were classified as
shares of GT Global Health Care Fund; 200,000,000 were classified as shares of
GT Global Strategic Income Fund; 200,000,000 were classified as shares of GT
Global Currency Fund (inactive); 200,000,000 were classified as shares of GT
Global Growth & Income Fund; 200,000,000 were classified as shares of GT Global
Small Companies Fund (inactive); 200,000,000 were classified as shares of GT
Global Latin America Growth Fund; 200,000,000 were classified as shares of GT
Global Emerging Markets Fund; 200,000,000 were classified as shares of GT Global
High Income Fund; 200,000,000 were classified as shares of GT Global Financial
Services Fund; 200,000,000 were classified as shares of GT Global Natural
Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; 200,000,000 were classified as shares of GT Global Consumer
Products and Services Fund. The shares of each of the foregoing series of the
Company were divided equally into two classes, designated Class A and Class B
common stock. With respect to the issuance of Advisor Class shares, 100,000,000
shares were classified as shares of each of the fifteen series of the Company
and designated as Advisor Class common stock. 1,100,000,000 shares remain
unclassified. Transactions in capital shares of the Fund were as follows:
 
                           CAPITAL SHARE TRANSACTIONS
 
GT GLOBAL GOVERNMENT INCOME FUND
<TABLE>
<CAPTION>
                                                   SIX MONTHS ENDED
                                                    APRIL 30, 1998                         YEAR ENDED
                                                      (UNAUDITED)                       OCTOBER 31, 1997
                                          -----------------------------------  -----------------------------------
CLASS A                                       SHARES             AMOUNT            SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       49,640,287  $      429,719,475       48,767,558  $      419,503,866
Shares issued in connection with
  reinvestment of distributions.........          287,743           2,491,642          741,916           6,372,599
                                          ---------------  ------------------  ---------------  ------------------
                                               49,928,030         432,211,117       49,509,474         425,876,465
Shares repurchased......................      (52,874,140)       (457,771,262)     (59,180,268)       (509,133,563)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (2,946,110) $      (25,560,145)      (9,670,794) $      (83,257,098)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
 
<CAPTION>
 
CLASS B
- ---------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       17,961,751  $      155,476,178       27,713,479  $      237,734,254
Shares issued in connection with
  reinvestment of distributions.........          177,734           1,539,092          452,575           3,886,536
                                          ---------------  ------------------  ---------------  ------------------
                                               18,139,485         157,015,270       28,166,054         241,620,790
Shares repurchased......................      (21,223,134)       (183,485,262)     (32,406,087)       (278,645,805)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (3,083,649) $      (26,469,992)      (4,240,033) $      (37,025,015)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
<CAPTION>
 
ADVISOR CLASS
- ---------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................          306,611  $        2,655,164            4,551  $           38,769
Shares issued in connection with
  reinvestment of distributions.........            1,290              11,183              680               5,804
                                          ---------------  ------------------  ---------------  ------------------
                                                  307,901           2,666,347            5,231              44,573
Shares repurchased......................         (298,911)         (2,576,573)          (1,717)            (14,773)
                                          ---------------  ------------------  ---------------  ------------------
Net increase............................            8,990  $           89,774            3,514  $           29,800
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
                                      FS-69
<PAGE>   1383
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
GT GLOBAL HIGH INCOME FUND
<TABLE>
<CAPTION>
                                                 SIX MONTHS ENDED                      YEAR ENDED
                                                  APRIL 30, 1998                    OCTOBER 31, 1997
                                          -------------------------------  -----------------------------------
CLASS A                                      SHARES           AMOUNT           SHARES             AMOUNT
- ----------------------------------------  -------------  ----------------  ---------------  ------------------
<S>                                       <C>            <C>               <C>              <C>
Shares sold.............................      4,475,750  $     60,464,937       17,142,418  $      272,139,950
Shares issued in connection with
  reinvestment of distributions.........      1,842,696        23,121,404          574,707           9,164,383
                                          -------------  ----------------  ---------------  ------------------
                                              6,318,446        83,586,341       17,717,125         281,304,333
Shares repurchased......................     (4,970,234)      (66,962,848)     (21,118,898)       (335,756,037)
                                          -------------  ----------------  ---------------  ------------------
Net increase (decrease).................      1,348,212  $     16,623,493       (3,401,773) $      (54,451,704)
                                          -------------  ----------------  ---------------  ------------------
                                          -------------  ----------------  ---------------  ------------------
 
<CAPTION>
 
CLASS B
- ---------------------------------------
<S>                                       <C>            <C>               <C>              <C>
Shares sold.............................      3,832,158  $     51,750,586       13,848,218  $      221,702,040
Shares issued in connection with
  reinvestment of distributions.........      2,557,448        32,030,312          721,148          11,494,889
                                          -------------  ----------------  ---------------  ------------------
                                              6,389,606        83,780,898       14,569,366         233,196,929
Shares repurchased......................     (4,198,490)      (57,090,112)     (16,813,796)       (270,094,630)
                                          -------------  ----------------  ---------------  ------------------
Net increase (decrease).................      2,191,116  $     26,690,786       (2,244,430) $      (36,897,701)
                                          -------------  ----------------  ---------------  ------------------
                                          -------------  ----------------  ---------------  ------------------
<CAPTION>
 
ADVISOR CLASS
- ---------------------------------------
<S>                                       <C>            <C>               <C>              <C>
Shares sold.............................        422,054  $      5,476,786        2,868,282  $       45,874,009
Shares issued in connection with
  reinvestment of distributions.........         64,250           805,629           72,440           1,148,368
                                          -------------  ----------------  ---------------  ------------------
                                                486,304         6,282,415        2,940,722          47,022,377
Shares repurchased......................       (495,918)       (6,494,421)      (3,732,584)        (60,007,579)
                                          -------------  ----------------  ---------------  ------------------
Net decrease............................         (9,614) $       (212,006)        (791,862) $      (12,985,202)
                                          -------------  ----------------  ---------------  ------------------
                                          -------------  ----------------  ---------------  ------------------
</TABLE>
 
GT GLOBAL STRATEGIC INCOME FUND
<TABLE>
<CAPTION>
                                                   SIX MONTHS ENDED                        YEAR ENDED
                                                    APRIL 30, 1998                      OCTOBER 31, 1997
                                          -----------------------------------  -----------------------------------
CLASS A                                       SHARES             AMOUNT            SHARES             AMOUNT
- ---------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................        5,949,616  $       72,536,998       13,750,221  $      167,009,888
Shares issued in connection with
  reinvestment of distributions.........          262,369           3,187,409          615,860           7,488,021
                                          ---------------  ------------------  ---------------  ------------------
                                                6,211,985          75,724,407       14,366,081         174,497,909
Shares repurchased......................       (7,078,583)        (86,175,022)     (18,557,237)       (225,311,673)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................         (866,598) $      (10,450,615)      (4,191,156) $      (50,813,764)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
 
<CAPTION>
 
CLASS B
- ---------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................        2,051,347  $       24,855,354       11,499,580  $      140,731,511
Shares issued in connection with
  reinvestment of distributions.........          390,707           4,751,410          896,610          10,918,610
                                          ---------------  ------------------  ---------------  ------------------
                                                2,442,054          29,606,764       12,396,190         151,650,121
Shares repurchased......................       (5,194,373)        (63,078,359)     (17,287,235)       (211,600,543)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (2,752,319) $      (33,471,595)      (4,891,045) $      (59,950,422)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
<CAPTION>
 
ADVISOR CLASS
- ---------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................          304,802  $        3,731,180          712,165  $        8,839,212
Shares issued in connection with
  reinvestment of distributions.........            2,226              27,114            3,581              43,784
                                          ---------------  ------------------  ---------------  ------------------
                                                  307,028           3,758,294          715,746           8,882,996
Shares repurchased......................         (288,256)         (3,552,960)        (712,116)         (8,911,324)
                                          ---------------  ------------------  ---------------  ------------------
Net increase (decrease).................           18,772  $          205,334            3,630  $          (28,328)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
                                      FS-70
<PAGE>   1384
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
5. WRITTEN OPTIONS:
The GT Global Government Income Fund's written options contract activity for the
six months ended April 30, 1998 was as follows:
 
                      COVERED CALL AND PUT OPTIONS WRITTEN
 
<TABLE>
<CAPTION>
                                          UNDERLYING
                                            NOMINAL
                                           AMOUNT IN
GT GLOBAL GOVERNMENT INCOME FUND              USD      PREMIUMS
- ----------------------------------------  -----------  ---------
<S>                                       <C>          <C>
Options outstanding at October 31,
  1997..................................  $4,840,000   $  44,673
Options written.........................  35,488,342     182,826
Options cancelled in closing purchase
  transactions..........................          --          --
Options expired prior to exercise.......  (40,328,342)  (227,499)
Options exercised.......................          --          --
                                          -----------  ---------
Options outstanding at April 30, 1998...  $       --   $      --
                                          -----------  ---------
                                          -----------  ---------
</TABLE>
 
6. SUBSEQUENT EVENTS
On May 29, 1998, Liechtenstein Global Trust ("LGT"), the former indirect parent
organization of Chancellor LGT Asset Management, Inc. ("Chancellor LGT"),
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included Chancellor LGT and
certain other affiliates. As a result of this transaction, Chancellor LGT was
renamed INVESCO (NY), Inc. and is now an indirect wholly-owned subsidiary of
AMVESCAP PLC. In connection with this transaction, A I M Advisors, Inc. ("AIM"),
an indirect wholly-owned subsidiary of AMVESCAP PLC, became the investment
adviser and administrator of the Funds and INVESCO (NY), Inc. became the
sub-adviser and sub-administrator of the Funds. In addition, A I M Distributors,
Inc. replaced GT Global, Inc. as the Fund's principal underwriter and the Funds
became subject to compensation-type Rule 12b-1 plans of distribution, which
replaced the Funds' former reimbursement-type Rule 12b-1 plans of distribution.
All of the changes became effective as of the close of business on May 29, 1998.
 
                                      FS-71
<PAGE>   1385
                             GT GLOBAL INCOME FUNDS
 
                                   REPORT OF
                            INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
ANNUAL REPORT
To the Shareholders and Board of Directors of
G.T. Investment Funds, Inc.:
 
We have audited the accompanying statement of assets and liabilities of GT
Global Government Income Fund, GT Global High Income Fund-Consolidated, and GT
Global Strategic Income Fund, including the portfolios of investments, as of
October 31, 1997, the related statements of operations for the year then ended,
the statements of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the periods indicated
herein. These financial statements and the financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial positions of GT
Global Government Income Fund, GT Global High Income Fund-Consolidated and GT
Global Strategic Income Fund as of October 31, 1997, the results of their
operations for the year then ended, the changes in their net assets for each of
the two years in the period then ended, and the financial highlights for each of
the periods indicated herein, in conformity with generally accepted accounting
principles.



                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
DECEMBER 15, 1997
 
                                       FS-72
<PAGE>   1386
                        GT GLOBAL GOVERNMENT INCOME FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (49.4%)
  Australia (3.0%)
    Commonwealth of Australia, 7.5% due 9/15/09 ..........   AUD           10,660,000   $  8,416,716         3.0
  Canada (2.0%)
    Canadian Government, 7.25% due 6/1/07 ................   CAD            6,920,000      5,548,964         2.0
  Germany (4.7%)
    Deutschland Republic, 6% due 1/5/06 ..................   DEM           22,050,000     13,180,133         4.7
  Italy (9.4%)
    Italian Buoni Poliennali del Tesoro (BTPS):
      9.50% due 1/1/05 ...................................   ITL       13,100,000,000      9,228,992         3.3
      9% due 11/1/23 .....................................   ITL       11,730,000,000      8,839,498         3.1
      7.25% due 11/1/26 ..................................   ITL       13,200,000,000      8,361,624         3.0
  New Zealand (4.4%)
    New Zealand Government, 8% due 4/15/04 ...............   NZD           18,570,000     12,360,425         4.4
  Spain (2.3%)
    Spain Government, 10.5% due 10/30/03 .................   ESP          770,000,000      6,581,165         2.3
  Sweden (2.9%)
    Swedish Government, 8% due 8/15/07 ...................   SEK           54,800,000      8,163,505         2.9
  United Kingdom (4.4%)
    United Kingdom Treasury:
      9.5% due 4/18/05 ...................................   GBP            5,000,000      9,775,453         3.5
      7.25% due 12/7/07 ..................................   GBP            1,420,000      2,503,816         0.9
  United States (15.3%)
    United States Treasury:
      8% due 11/15/21{./} {z} ............................   USD           17,000,000     20,683,023         7.3
      6.125% due 8/15/07 .................................   USD            9,750,000      9,958,711         3.5
      6.375% due 8/15/27 .................................   USD            6,250,000      6,431,641         2.3
      6.625% due 5/15/07 .................................   USD            5,800,000      6,106,992         2.2
  Uruguay (1.0%)
    Republic of Uruguay, 7.875% due 7/15/27 -
     144A{./}{.} .........................................   USD            3,000,000      2,898,000         1.0
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $136,776,126) ...........................................                               139,038,658
                                                                                        ------------
Corporate Bonds (23.5%)
  Denmark (5.4%)
    Realkredit Bank, 7% due 10/1/29 ......................   DKK          104,000,000     15,287,266         5.4
  Germany (2.0%)
    Commerzbank O/S Financial, 8.5% due 5/13/02 ..........   NZD            5,340,000      3,467,559         1.2
    Kredit Fuer Wiederaufbau International Finance, 7.25%
     due 7/16/07 .........................................   AUD            3,100,000      2,304,569         0.8
  New Zealand (3.8%)
    Transpower Finance Ltd., 8% due 3/15/02 ..............   NZD           16,500,000     10,590,896         3.8
  South Africa (5.5%)
    Eskom, 11% due 6/1/08{./} ............................   ZAR           68,500,000     11,346,106         4.0
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-73
<PAGE>   1387
                        GT GLOBAL GOVERNMENT INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Corporate Bonds (Continued)
    Transnet Ltd., 7.5% due 4/1/08 .......................   ZAR           28,140,000   $  3,612,816         1.3
    Development Bank of South Africa, due 12/31/27 .......   ZAR          124,000,000        580,042         0.2
  Tunisia (1.5%)
    Banque Centrals de Tunisie, 8.25% due 9/19/27 ........   USD            4,750,000      4,314,235         1.5
  United Kingdom (5.3%)
    SBC Jersey, 8.75% due 6/20/05 ........................   GBP            8,200,000     14,927,163         5.3
                                                                                        ------------
Total Corporate Bonds (cost $68,215,638) .................                                66,430,652
                                                                                        ------------
Mortgage Backed (12.0%)
  United States (12.0%)
    Federal National Mortgage Association:
      7.25% due 6/20/02 ..................................   NZD           15,050,000      9,421,474         3.3
      6.375% due 8/15/07 .................................   AUD            7,300,000      5,212,020         1.8
    Government National Mortgage Association:
      TBA Pool, 7% due 11/15/27{*} .......................   USD            8,725,000      8,774,078         3.1
      Pool #780515, 9.5% due 12/15/21 ....................   USD            5,026,270      5,475,493         1.9
    Federal Home Loan Mortgage Association Pool #E62449,
     8.5% due 3/1/10 .....................................   USD            2,595,424      2,769,195         1.0
    Salomon Brothers Mortgage Securities CMO, effective
     yield 6.0867% due 12/25/30 ..........................   USD            2,342,065      2,400,617         0.9
                                                                                        ------------
Total Mortgage Backed (cost $34,786,107) .................                                34,052,877
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $239,777,871) .......                               239,522,187        84.9
                                                                                        ------------       -----
<CAPTION>
 
                                                                         UNDERLYING        VALUE         % OF NET
OPTIONS                                                     CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Deutsche Marks Put Option, strike 1.7825, expires
   11/13/97
   (cost $80,102) ........................................   USD            4,840,000          3,896          --
                                                                                        ------------       -----
    CURRENCY OPTIONS
<CAPTION>
 
                                                                         PRINCIPAL         VALUE         % OF NET
SHORT-TERM INVESTMENTS                                      CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (14.9%)
  Egypt (1.1%)
    Egypt Treasury Bill, 0% due 11/25/97 .................   EGP           11,000,000      3,215,643         1.1
  Italy (7.1%)
    Italian Buoni Poliennali del Tesoro (BTPS), 10.5% due
     4/15/98 .............................................   ITL       33,520,000,000     20,073,397         7.1
  Mexico (1.6%)
    Mexican Cetes due 11/13/97 ...........................   MXN            3,732,000      4,445,773         1.6
  United Kingdom (5.1%)
    United Kingdom Treasury, 7.25% due 3/30/98 ...........   GBP            8,550,000     14,354,277         5.1
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $41,749,459) ............................................                                42,089,090
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-74
<PAGE>   1388
                        GT GLOBAL GOVERNMENT INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
SHORT-TERM INVESTMENTS                                      CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Commercial Paper - Discounted (3.1%)
  United States (3.1%)
    General Electric Capital Corp., effective yield 5.68%
     due 11/19/97 (cost $8,659,446){./} ..................   USD            8,725,000   $  8,659,446         3.1
                                                                                        ------------       -----
 
TOTAL SHORT-TERM INVESTMENTS (cost $50,408,905) ..........                                50,748,536        18.0
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $290,266,878)  * .................                               290,274,619       102.9
Other Assets and Liabilities .............................                                (8,165,141)       (2.9)
                                                                                        ------------       -----
 
NET ASSETS ...............................................                              $282,109,478       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
       {./}  All or part of the Fund's holdings in this security is segregated
             as collateral for when-issued securities or forward currency
             contracts. See Note 1 to the Financial Statements.
        {z}  All or part of the Fund's holdings in this security is segregated
             as collateral for written options. See Note 1 to the Financial
             Statements.
        {.}  Security 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.
        {*}  Purchased on a forward commitment basis.
          *  For Federal income tax purposes, cost is $290,620,342 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $   5,885,779
                 Unrealized depreciation:            (6,231,502)
                                                  -------------
                 Net unrealized depreciation:     $    (345,723)
                                                  -------------
                                                  -------------
</TABLE>
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                     WRITTEN OPTIONS CONTRACTS OUTSTANDING
                                OCTOBER 31, 1997
 
<TABLE>
<CAPTION>
                                            UNDERLYING     EXPIRATION  STRIKE      MARKET
PUT OPTIONS                                   AMOUNT         DATE     PRICE        VALUE
- ----------------------------------------  --------------   --------  --------  --------------
<S>                                       <C>              <C>       <C>       <C>
DEM.....................................     4,840,000     11/13/97   DEM1.82   $      (406)
                                                                                     ------
  Total outstanding written options
   (Premium received $44,673)...........                                               (406)
                                                                                     ------
                                                                                     ------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-75
<PAGE>   1389
                        GT GLOBAL GOVERNMENT INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                OCTOBER 31, 1997
<TABLE>
<CAPTION>
                                                                                 UNREALIZED
                                           MARKET VALUE    CONTRACT  DELIVERY   APPRECIATION
CONTRACTS TO BUY:                         (U.S. DOLLARS)    PRICE      DATE    (DEPRECIATION)
- ----------------------------------------  --------------   --------  --------  --------------
<S>                                       <C>              <C>       <C>       <C>
Australian Dollars......................      14,130,053    1.33485   11/6/97   $  (927,862)
Australian Dollars......................       2,108,963    1.37000   11/6/97       (80,812)
Australian Dollars......................       4,077,329    1.37155   11/6/97      (151,451)
Australian Dollars......................       8,168,717    1.36885   11/6/97      (320,158)
British Pounds..........................      17,545,780    0.62087    2/5/98       505,103
Canadian Dollars........................       1,412,149    1.37160   11/6/97       (38,712)
Danish Kroner...........................       5,263,096    6.67385   11/6/97        87,497
Deutsche Marks..........................       4,607,616    1.79770   11/6/97       187,616
Deutsche Marks..........................       7,647,020    1.72473   11/6/97         1,020
Deutsche Marks..........................       8,632,762    1.85468    2/5/98       650,345
Deutsche Marks..........................       9,831,529    1.86050    2/5/98       769,116
Deutsche Marks..........................       9,121,259    1.84900    2/5/98       661,259
Deutsche Marks..........................      10,320,977    1.82590    2/5/98       627,127
Deutsche Marks..........................      22,031,550    1.76970    2/5/98       681,550
Deutsche Marks..........................      15,399,073    1.74950    2/5/98       304,074
Deutsche Marks..........................       7,856,456    1.74980    2/5/98       156,456
Deutsche Marks..........................       7,924,376    1.74230    2/5/98       124,376
Italian Liras...........................       3,458,975   1,768.30000   2/5/98      138,837
Italian Liras...........................       8,545,464   1,747.52000   2/5/98      245,464
Italian Liras...........................       3,796,301   1,741.50000   2/5/98       96,301
Italian Liras...........................      15,238,110   1,732.32000   2/5/98      307,843
Italian Liras...........................       5,672,764   1,699.54000   2/5/98        7,399
Italian Liras...........................         996,994   1,697.70000   2/5/98          221
South African Rand......................         873,181    4.81550   11/6/97           997
Swedish Kronor..........................       8,468,638    7.57006   11/6/97        92,472
Swedish Kronor..........................       2,827,601    7.49385    2/5/98        11,645
                                          --------------                       --------------
  Total Contracts to Buy (Payable amount
   $201,819,010)........................     205,956,733                          4,137,723
                                          --------------                       --------------
THE VALUE OF CONTRACTS TO BUY AS
 PERCENTAGE OF NET ASSETS IS 73.01%.
 
<CAPTION>
 
CONTRACTS TO SELL:
- ----------------------------------------
<S>                                       <C>              <C>       <C>       <C>
Australian Dollars......................      35,852,373    1.34162   11/6/97     2,161,497
Australian Dollars......................       8,548,124    1.43055   11/6/97       (48,124)
British Pounds..........................       8,269,037    0.62724   11/6/97      (409,138)
British Pounds..........................       9,476,686    0.63291   11/6/97      (549,686)
British Pounds..........................       8,830,253    0.60165    2/5/98        19,747
Canadian Dollars........................       1,412,149    1.39136   11/6/97        36,705
Canadian Dollars........................       5,516,238    1.39136    2/5/98        43,762
Danish Kroner...........................       7,511,923    6.95000   11/6/97      (418,398)
Deutsche Marks..........................       4,699,886    1.83370   11/6/97      (279,886)
Deutsche Marks..........................       7,559,969    1.78347   11/6/97      (249,969)
Deutsche Marks..........................       8,548,334    1.71846    2/5/98       (17,440)
Deutsche Marks..........................       7,689,586    1.71600    2/5/98        (4,687)
Deutsche Marks..........................      57,287,100    1.71600    2/5/98       (34,920)
Deutsche Marks..........................      18,029,667    1.71800    2/5/98       (31,966)
Italian Lira............................      39,768,497   1,696.15000   2/5/98       27,512
New Zealand Dollars.....................      36,510,209    1.57878   11/6/97       638,701
South African Rand......................       8,879,420    4.83145  11/12/97       (39,420)
South African Rand......................       7,946,694    4.95150  11/28/97      (171,272)
Swedish Kronor..........................       4,273,847    7.94000   11/6/97      (243,620)
Swedish Kronor..........................       9,215,482    8.00000   11/6/97      (590,482)
                                          --------------                       --------------
  Total Contracts to Sell (Receivable
   amount $295,664,390).................     295,825,474                           (161,084)
                                          --------------                       --------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 104.86%.
  Total Open Forward Foreign Currency
   Contracts, Net.......................                                        $ 3,976,639
                                                                               --------------
                                                                               --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-76
<PAGE>   1390
                          GLOBAL HIGH INCOME PORTFOLIO
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (53.2%)
  Argentina (5.2%)
    Republic of Argentina:
      Global Bond, 11% due 10/9/06 .......................   USD           11,919,000   $ 11,814,709         3.2
      Par Bond Series L, 5.50% due 3/31/23++ .............   USD            6,610,000      4,498,931         1.2
      Global Bond, 11.375% due 1/30/17 ...................   USD            3,048,000      2,910,840         0.8
  Brazil (2.1%)
    Republic of Brazil, Par Z-L Bond, 5.25% due
     4/15/24++ ...........................................   USD           11,384,000      7,527,670         2.1
  Bulgaria (5.1%)
    Republic of Bulgaria:
      Front Loaded Interest Reduction Bond Series A, 2.25%
       due 7/28/12++ .....................................   USD           18,357,000     10,004,565         2.7
      Interest Arrears Bond, 6.6875% due 7/28/11 -
       Euro+ .............................................   USD           13,522,000      8,882,264         2.4
  Costa Rica (1.7%)
    Banco Central de Costa Rica:
      Interest Bond Series A, 6.5391% due 5/21/05
       (effective maturity date 8/21/02)+ ................   USD            4,270,656      4,270,656         1.2
      Principal Bond Series A, 6.25% due 5/21/10 .........   USD            1,900,000      1,653,000         0.5
  Ecuador (2.1%)
    Republic of Ecuador Discount Bond, 6.6875% due 2/28/25
     - EURO+ .............................................   USD           11,069,000      7,775,973         2.1
  Mexico (11.7%)
    United Mexican States:
      Discount Bond Series D, 6.8125% due 12/31/19+ ......   USD           24,328,000     22,032,045         6.0
      Global Bond, 11.5 due 5/15/26 ......................   USD            7,290,000      7,873,200         2.2
      Global Bond, 9.875% due 1/15/07 ....................   USD            6,430,000      6,502,338         1.8
      Global Bond, 11.375% due 9/15/16 ...................   USD            5,793,000      6,162,304         1.7
  Nigeria (3.4%)
    Central Bank of Nigeria, Par Bond, 6.25% due
     11/15/20+/+ .........................................   USD           18,750,000     12,281,250         3.4
  Panama (3.4%)
    Republic of Panama, Interest Reduction Bond, 3.75% due
     7/17/14++ ...........................................   USD           17,850,000     12,550,781         3.4
  Peru (1.6%)
    Republic of Peru, Past Due Interest Bond, 4% due
     3/7/17 - 144A{.} ....................................   USD           10,086,000      5,749,020         1.6
  South Africa (5.0%)
    Republic of South Africa, 13% due 8/31/10{./} ........   ZAR           97,113,000     18,329,766         5.0
  United States (7.5%)
    United States Treasury:
      6.375% due 8/15/27 .................................   USD           15,337,000     15,782,732         4.3
      5.875% due 9/30/02{./} .............................   USD           11,747,000     11,811,242         3.2
  Uruguay (2.1%)
    Banco Central del Uruguay:
      Debt Conversion Bond Series B, 6.8125% due
       2/18/07+ ..........................................   USD            4,000,000      4,000,000         1.1
      Par Bond Series A, 6.75% due 2/19/21+/+ ............   USD            2,290,000      2,129,700         0.6
      Par Bond Series B, 6.75% due 2/19/21+/+ ............   USD            1,500,000      1,395,000         0.4
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-77
<PAGE>   1391
                          GLOBAL HIGH INCOME PORTFOLIO
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (Continued)
  Venezuela (2.3%)
    Republic of Venezuela, Par Bond Series A, 6.75% due
     3/31/20+/+ ..........................................   USD           10,025,000   $  8,389,672         2.3
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $202,758,127) ...........................................                               194,327,658
                                                                                        ------------
Corporate Bonds (25.9%)
  Argentina (1.7%)
    Supermercados Norte, 10.875% due 2/9/04 - 144A{.} ....   USD            2,655,000      2,469,150         0.7
    Impsa Corp., 9.5% due 5/31/02 - 144A{.} ..............   USD            2,409,000      2,276,505         0.6
    Acindar Industrial Argentina, 11.25% due 2/15/04 .....   USD            1,497,000      1,482,030         0.4
  Brazil (0.6%)
    RBS Participacoes S.A., 11% due 4/1/07 - 144A{.} .....   USD            2,273,000      2,216,175         0.6
  Canada (0.8%)
    Pacalta Resources Ltd., 10.75% due 6/15/04 -
     144A{.} .............................................   USD            2,978,000      2,970,555         0.8
  China (2.9%)
    Panda Global Energy Co., 12.5% due 4/15/04 -
     144A{.} .............................................   USD            7,559,000      7,105,460         1.9
    Greater Beijing First, 9.5% due 6/15/07 - 144A{.} ....   USD            3,210,000      2,929,125         0.8
    Huaneng Power International PLC Convertible, 1.75% due
     5/21/04 .............................................   USD              790,000        743,390         0.2
  Dominican Republic (0.7%)
    Tricom S.A., 11.375% due 9/1/04 - 144A{.} ............   USD            2,628,000      2,601,720         0.7
  Hong Kong (1.1%)
    GS Superhighway Holdings, 9.875% due 8/15/04 -
     144A{.} .............................................   USD            2,434,000      2,281,875         0.6
    Road King Infrastructure, 9.5% due 7/15/07 -
     144A{.} .............................................   USD            2,100,000      1,958,250         0.5
  India (1.1%)
    Tata Electric Co., 8.5% due 8/19/17 - 144A{.} ........   USD            4,395,000      3,836,835         1.1
  Indonesia (3.9%)
    Polysindo International Finance, 8.9063%, due
     4/22/99 .............................................   IDR       27,500,000,000      5,114,793         1.4
    DGS International Finance Co., 10% due 6/1/07 -
     144A{.} .............................................   USD            4,961,000      4,564,120         1.3
    Tjiwi Kimia Financial Mauritius, 10% due 8/1/04 -
     144A{.} .............................................   USD            2,964,000      2,645,370         0.7
    Pratama Datakom Asia BV, 12.75% due 7/15/05 -
     144A{.} .............................................   USD            2,141,000      1,884,080         0.5
  Jamaica (1.1%)
    Mechala Group Jamaica Ltd.:
      12.75% due 12/30/99 - Series B .....................   USD            2,846,000      2,760,620         0.8
      12.75% due 12/30/99 - Reg S{c} .....................   USD            1,288,000      1,249,360         0.3
  Mexico (6.4%)
    Petroleos Mexicanos:
      9.5% due 9/15/27 - 144A{.} .........................   USD            8,768,000      8,044,640         2.2
      8.85% due 9/15/07 - 144A{.} ........................   USD            4,388,000      4,217,965         1.2
    Fideicomiso Petacalco Trust, 10.16% due 12/23/09 - Reg
     S{c} ................................................   USD            2,720,000      2,720,000         0.7
    TV Azteca, S.A. de C.V., 10.5% due 2/15/07 -
     144A{.} .............................................   USD            2,350,000      2,393,851         0.7
    Dine, S.A. de C.V., 8.75% due 10/15/07 - 144A{.} .....   USD            2,440,000      2,305,800         0.6
    Copamex Industrias S.A., 11.375% due 4/30/04 -
     144A{.} .............................................   USD            1,903,000      2,079,028         0.6
    Hylsa, S.A. de C.V., 9.25% due 9/15/07{.} ............   USD            1,560,000      1,497,600         0.4
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-78
<PAGE>   1392
                          GLOBAL HIGH INCOME PORTFOLIO
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Corporate Bonds (Continued)
  Russia (1.3%)
    Lukinter Finance BV Convertible, 3.5% due 5/6/02 -
     144A{.} .............................................   USD            2,283,000   $  3,070,635         0.8
    Mosenergo Finance BV, 8.375% due 10/9/02 - 144A{.} ...   USD            2,184,000      1,921,920         0.5
  South Africa (4.3%)
    Eskom, 11% due 6/1/08 ................................   ZAR           94,900,000     15,718,912         4.3
                                                                                        ------------
Total Corporate Bonds (cost $103,242,812) ................                                95,059,764
                                                                                        ------------
Sovereign Debt (12.8%)
  Russia (12.8%)
    Bank for Foreign Economic Affairs (Vnesheconombank)
     Loan Agreement:
      Assignment ** -/- ..................................   USD           46,757,000     41,583,888        11.4
      Participation ** -/- ...............................   DEM            9,819,000      5,224,084         1.4
                                                                                        ------------
Total Sovereign Debt (cost $25,217,395) ..................                                46,807,972
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $331,218,334) .......                               336,195,394        91.9
                                                                                        ------------       -----
<CAPTION>
 
                                                                         UNDERLYING        VALUE         % OF NET
OPTIONS                                                     CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Federal Republic of Brazil Debt Conversion Bond, Call
   Option, strike 82.25, expires 1/12/98 (cost
   $1,032,750) ...........................................   USD           57,375,000        418,608         0.1
                                                                                        ------------       -----
    GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS
<CAPTION>
 
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- ----------------------------------------------------------                              ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Dated October 31, 1997, with State Street Bank & Trust
   Co., due November 3, 1997, for an effective yield of
   5.57% collateralized by $8,950,000 U.S. Treasury Bonds,
   8.875% due 8/15/17 (market value of collateral is
   $11,741,829, including accrued interest).
   (cost $11,510,781)  ...................................                                11,510,781         3.2
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $343,761,865)  * .................                               348,124,783        95.2
Other Assets and Liabilities .............................                                17,667,628         4.8
                                                                                        ------------       -----
 
NET ASSETS ...............................................                              $365,792,411       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
         **  Underlying loan agreement currently in default.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
         ++  The coupon rate shown on step-up coupon bond represents the rate at
             period end.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
        +/+  Issued with detachable warrants or value recovery rights. The
             current market value of each warrant or right is zero.
       {./}  All or part of the Fund's holdings in this security is segregated
             as collateral for when-issued securities or forward currency
             contracts. See Note 1 to the Financial Statements.
          *  For Federal income tax purposes, cost is $343,911,253 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  26,533,602
                 Unrealized depreciation:           (22,320,072)
                                                  -------------
                 Net unrealized appreciation:     $   4,213,530
                                                  -------------
                                                  -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-79
<PAGE>   1393
                          GLOBAL HIGH INCOME PORTFOLIO
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
                 OUTSTANDING FORWARD FOREIGN CURRENCY CONTRACTS
                                OCTOBER 31, 1997
 
<TABLE>
<CAPTION>
                                                                                    UNREALIZED
                                           MARKET VALUE     CONTRACT    DELIVERY   APPRECIATION
CONTRACTS TO SELL:                        (U.S. DOLLARS)      PRICE       DATE    (DEPRECIATION)
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Deutsche Marks..........................     3,966,367         1.84950   11/6/97     $(268,070)
Indonesian Rupiah.......................    10,445,682     3,610.00000   11/5/97      (57,871)
South African Rand......................    24,288,532         5.04500   1/30/98     (535,715)
South African Rand......................       608,060         5.06350   1/30/98      (15,584)
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $38,431,401)..................    39,308,641                               (877,240)
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 10.75%.
  Total Open Forward Foreign Currency
   Contracts............................                                             $(877,240)
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-80
<PAGE>   1394
                        GT GLOBAL STRATEGIC INCOME FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (65.6%)
  Argentina (2.0%)
    Republic of Argentina:
      Global Bond, 11% due 10/9/06 .......................   USD            5,618,000   $  5,568,843         1.3
      Global Bond, 11.375% due 1/30/17 ...................   USD            3,177,000      3,034,035         0.7
      Par Bond Series L, 5.5% due 3/31/23++ ..............   USD               95,000         64,659          --
  Australia (2.3%)
    Commonwealth of Australia, 7.5% due 9/15/09 ..........   AUD           12,500,000      9,869,508         2.3
  Brazil (0.9%)
    Republic of Brazil, Par Z-L Bond, 5.25% due
     4/15/24{./} ++ ......................................   USD            5,856,000      3,872,280         0.9
  Bulgaria (2.0%)
    Republic of Bulgaria:
      Interest Arrears Bond, 6.6875% due 7/28/11 -
       Euro{./} + ........................................   USD            6,486,000      4,260,491         1.0
      Front Loaded Interest Reduction Bond Series A, 2.25%
       due 7/28/12{./} ++ ................................   USD            7,396,000      4,030,820         1.0
  Canada (2.2%)
    Canadian Government, 8.75% due 12/1/05 ...............   CAD           10,500,000      9,075,362         2.2
  Colombia (0.6%)
    Republic of Colombia, 8.7% due 2/15/16 ...............   USD            2,538,000      2,480,895         0.6
  Costa Rica (0.9%)
    Banco Central de Costa Rica:
      Interest Bond Series A, 6.5391% due 5/21/05
       (effective maturity date 8/21/02)+ ................   USD            1,918,176      1,918,176         0.5
      Principal Bond Series A, 6.25% due 5/21/10 .........   USD            1,900,000      1,653,000         0.4
  Ecuador (0.9%)
    Discount Bond, 6.6875% due 2/28/25 - Euro+ ...........   USD            5,485,000      3,853,213         0.9
  France (1.9%)
    France O.A.T., 7.25% due 4/25/06 .....................   FRF           40,000,000      7,779,107         1.9
  Germany (11.0%)
    Deutschland Republic:
      6% due 1/5/06 ......................................   DEM           35,500,000     21,219,716         5.0
      8.25% due 9/20/01 ..................................   DEM           24,000,000     15,532,850         3.7
    Treuhandanstalt, 7.125% due 1/29/03 ..................   DEM           15,000,000      9,474,050         2.3
  Italy (4.3%)
    Italian Buoni Poliennali del Tesoro (BTPS):
      9.5% due 2/1/99 ....................................   ITL       18,000,000,000     11,092,869         2.6
    Italian Government, 7.25% due 11/1/26 ................   ITL       11,000,000,000      6,968,020         1.7
  Mexico (5.8%)
    United Mexican States:
      Discount Bond Series A, 6.6925% due 12/31/19+
       +/+ ...............................................   USD           10,849,000      9,825,126         2.3
      Global Bond, 11.5% due 5/15/26 .....................   USD            7,755,000      8,375,400         2.0
      Global Bond, 9.875% due 1/15/07 ....................   USD            3,045,000      3,079,256         0.7
      Global Bond, 11.375% due 9/15/16 ...................   USD            2,744,000      2,918,930         0.7
      Discount Bond Series D, 6.8125% due 12/31/19+ ......   USD              672,000        608,580         0.1
  Netherlands (1.5%)
    Netherlands Government Bond, 5.75% due 2/15/07 .......   NLG           12,000,000      6,260,896         1.5
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-81
<PAGE>   1395
                        GT GLOBAL STRATEGIC INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (Continued)
  New Zealand (1.9%)
    New Zealand Government, 8% due 4/15/04 ...............   NZD           12,000,000   $  7,987,351         1.9
  Nigeria (1.7%)
    Central Bank of Nigeria, Par Bond, 6.25% due
     11/15/20{./} +/+ ....................................   USD           11,000,000      7,205,000         1.7
  Panama (3.6%)
    Republic of Panama:
      Interest Reduction Bond, 3.75% due 7/17/14++ .......   USD           16,705,000     11,745,703         2.8
      7.875% due 2/13/02 - 144A{.} .......................   USD            3,360,000      3,200,400         0.8
  Peru (0.6%)
    Republic of Peru, Past Due Interest Bond, 4% due
     3/7/17 - 144A++ {.} .................................   USD            4,776,000      2,722,320         0.6
  South Africa (2.2%)
    Republic of South Africa, 13% due 8/31/10 ............   ZAR           48,561,000      9,165,732         2.2
  Spain (2.0%)
    Spain Government, 10.5% due 10/30/03 .................   ESP        1,000,000,000      8,546,967         2.0
  Sweden (1.3%)
    Swedish Government, 8% due 8/15/07 ...................   SEK           37,000,000      5,511,856         1.3
  United Kingdom (6.6%)
    United Kingdom Treasury, 7% due 6/7/02 ...............   GBP           11,900,000     20,234,192         4.8
    United Kingdom Conversion, 9.5% due 4/18/05 ..........   GBP            3,800,000      7,429,344         1.8
  United States (8.1%)
    United States Treasury:
      5.875% due 9/30/02{./} .............................   USD           12,865,000     12,935,356         3.1
      6.875% due 8/15/25{./} {z} .........................   USD            8,000,000      8,686,250         2.1
      6.375% due 8/15/27 .................................   USD            8,293,000      8,534,015         2.0
      6.50% due 10/15/06{z} ..............................   USD            3,500,000      3,639,111         0.9
  Uruguay (0.3%)
    Banco Central del Uruguay, Par Bond Series A, 6.75%
     due2/19/21{./} +/+ ..................................   USD            1,370,000      1,274,100         0.3
  Venezuela (1.0%)
    Republic of Venezuela:
      Par Bond Series A, 6.75% due 3/31/20{./} +/+ .......   USD            4,880,000      4,083,950         1.0
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $281,695,109) ...........................................                               275,717,729
                                                                                        ------------
Corporate Bonds (10.5%)
  Argentina (0.5%)
    Impsa Corp., 9.5% due 5/31/02 - 144A{.} ..............   USD            1,377,000      1,301,265         0.3
    Acindar Industrial Argentina, 11.25% due 2/15/04 .....   USD              816,000        807,840         0.2
  Brazil (0.3%)
    RBS Participacoes S.A., 11% due 4/1/07 - 144A{.} .....   USD            1,278,000      1,246,050         0.3
  China (1.1%)
    Panda Global Energy Co., 12.5% due 4/15/04 -
     144A{.} .............................................   USD            3,145,000      2,956,300         0.7
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-82
<PAGE>   1396
                        GT GLOBAL STRATEGIC INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Corporate Bonds (Continued)
    Greater Beijing First, 9.5% due 6/15/07 - 144A{.} ....   USD            1,720,000   $  1,569,500         0.4
  Denmark (1.0%)
    Realkredit Danmark, 6% due 10/1/26 ...................   DKK           30,000,000      4,226,028         1.0
  Dominican Republic (0.3%)
    Tricom S.A., 11.375% due 9/1/04 - 144A{.} ............   USD            1,294,000      1,281,060         0.3
  Ecuador (0.4%)
    Pacalta Resources Ltd., 10.75% due 6/15/04 -
     144A{.} .............................................   USD            1,601,000      1,596,998         0.4
  Hong Kong (0.5%)
    GS Superhighway Holdings, 9.875% due 8/15/04 -
     144A{.} .............................................   USD            1,210,000      1,134,375         0.3
    Road King Infrastructure, 9.5% due 7/15/07 -
     144A{.} .............................................   USD            1,100,000      1,025,750         0.2
  India (0.4%)
    Tata Electric Co., 8.5% due 8/19/17 - 144A{.} ........   USD            2,151,000      1,877,823         0.4
  Indonesia (1.1%)
    DGS International Finance Co., 10% due 6/1/07 -
     144A{.} .............................................   USD            2,717,000      2,499,640         0.6
    Tjiwi Kimia Financial Mauritius, 10% due 8/1/04 -
     144A{.} .............................................   USD            1,471,000      1,312,868         0.3
    Pratama Datakom Asia BV, 12.75% due 7/15/05 -
     144A{.} .............................................   USD            1,134,000        997,920         0.2
  Jamaica (0.2%)
    Mechala Group Jamaica, 12.75% due 12/30/99 - Reg
     S{c} ................................................   USD              719,000        697,430         0.2
  Mexico (2.5%)
    Petroleos Mexicanos:
      9.5% due 9/15/27 - 144A{.} .........................   USD            4,224,000      3,875,520         0.9
      8.85% due 9/15/07 - 144A{.} ........................   USD            2,108,000      2,026,315         0.5
    TV Azteca, S.A. de C.V., 10.5% due 2/15/07 -
     144A{.} .............................................   USD            1,300,000      1,324,258         0.3
    Copamex Industrias S.A., 11.375% due 4/30/04 -
     144A{.} .............................................   USD            1,134,000      1,238,895         0.3
    Dine, S.A. de C.V., 8.75% due 10/15/07 - 144A{.} .....   USD            1,140,000      1,077,300         0.3
    Hylsa, S.A. de C.V., 9.25% due 9/15/07{.} ............   USD              760,000        729,600         0.2
  Russia (0.7%)
    Lukinter Finance BV Convertible, 3.5% due 5/6/02 -
     144A{.} .............................................   USD            1,526,000      2,052,470         0.5
    Mosenergo Finance BV, 8.375% due 10/9/02 - 144A{.} ...   USD            1,040,000        915,200         0.2
  South Africa (0.2%)
    Eskom, 11% due 6/1/08 ................................   ZAR            6,175,000      1,022,806         0.2
  United States (1.3%)
    Chase Manhattan Corp., 6.25% due 1/15/06{z} ..........   USD            2,835,000      2,774,864         0.7
    General Motors Acceptance Corp., 6.625% due
     10/15/05 ............................................   USD            2,700,000      2,719,405         0.6
                                                                                        ------------
Total Corporate Bonds (cost $45,203,836) .................                                44,287,480
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-83
<PAGE>   1397
                        GT GLOBAL STRATEGIC INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Mortgage Backed (9.9%)
  United States (9.9%)
    Government National Mortgage Association TBA Pass Thru
     Pool, 6.5% due11/15/27{*} ...........................   USD           28,000,000   $ 27,693,764         6.6
    Federal National Mortgage Association Pool:
      #313439, 7% due 3/1/04 .............................   USD            9,718,752      9,837,204         2.3
      7.25% due 6/20/02{./} ..............................   NZD            7,000,000      4,382,081         1.0
                                                                                        ------------
Total Mortgage Backed (cost $42,198,154) .................                                41,913,049
                                                                                        ------------
Sovereign Debt (7.3%)
  Russia (7.3%)
    Bank for Foreign Economic Affairs (Vnesheconombank)
     Loan Agreement:
      Assignment ** -/- ..................................   USD           31,585,000     28,090,723         6.7
      Participation ** -/- ...............................   DEM            4,566,000      2,429,287         0.6
                                                                                        ------------
Total Sovereign Debt (cost $16,899,775) ..................                                30,520,010
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $385,996,874) .......                               392,438,268        93.3
                                                                                        ------------       -----
<CAPTION>
 
                                                                         UNDERLYING        VALUE         % OF NET
OPTIONS                                                     CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Federal Republic of Brazil Debt Conversion Bond, Call
   Option, strike 82.25, expires 1/12/98 (cost
   $567,036) .............................................   USD           31,502,000        229,839         0.1
                                                                                        ------------       -----
    GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS
<CAPTION>
 
                                                                         PRINCIPAL         VALUE         % OF NET
SHORT-TERM INVESTMENTS                                      CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Commercial Paper - Discounted (6.6%)
  United States (6.6%)
    Ford Motor Credit Corp., effective yield 5.50%, due
     11/19/97{./} ........................................   USD           19,000,000     18,947,940         4.5
    General Electric Capital Corp., effective yield 5.50%,
     due 11/19/97{./} ....................................   USD            9,000,000      8,975,340         2.1
                                                                                        ------------
Total Commercial Paper - Discounted (cost $27,923,280) ...                                27,923,280
                                                                                        ------------       -----
 
TOTAL SHORT-TERM INVESTMENTS (cost $27,923,280) ..........                              $ 27,923,280         6.6
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-84
<PAGE>   1398
                        GT GLOBAL STRATEGIC INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- ----------------------------------------------------------                              ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Dated October 31, 1997, with State Street Bank & Trust
   Co., due November 3, 1997, for an effective yield of
   5.57%, collateralized by $7,860,000 U.S. Treasury
   Bonds, 8.875% due 8/15/17 (market value of collateral
   is $10,311,818, including accrued interest).
   (cost $10,107,564)  ...................................                              $ 10,107,564         2.4
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $424,594,754)  * .................                               430,698,951       102.4
Other Assets and Liabilities .............................                               (10,075,156)       (2.4)
                                                                                        ------------       -----
 
NET ASSETS ...............................................                              $420,623,795       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
         **  Underlying loan agreement currently in default.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
        {z}  All or part of the Fund's holdings in this security is segregated
             as collateral for written futures. See Note 1 to the Financial
             Statements.
         ++  The coupon rate shown on step-up coupon bond represents the rate at
             period end.
       {./}  All or part of the Fund's holdings in this security is segregated
             as collateral for when-issued securities or forward currency
             contracts. See Note 1 to the Financial Statements.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
        +/+  Issued with detachable warrants or value recovery rights. The
             current market value of each warrant or right is zero.
        {*}  Purchased on a forward commitment basis.
          *  For Federal income tax purposes, cost is $425,319,173 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  21,044,316
                 Unrealized depreciation:           (15,664,538)
                                                  -------------
                 Net unrealized appreciation:     $   5,379,778
                                                  -------------
                                                  -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-85
<PAGE>   1399
                        GT GLOBAL STRATEGIC INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                OCTOBER 31, 1997
<TABLE>
<CAPTION>
                                          MARKET VALUE                           UNREALIZED
                                             (U.S.       CONTRACT    DELIVERY   APPRECIATION
CONTRACTS TO BUY:                           DOLLARS)       PRICE       DATE    (DEPRECIATION)
- ----------------------------------------  ------------  -----------  --------  --------------
<S>                                       <C>           <C>          <C>       <C>
Australian Dollars......................     3,022,847      1.37155   11/6/97    $(112,283)
British Pounds..........................    16,534,161      0.62123    2/5/98      485,452
British Pounds..........................    11,608,739      0.60397    2/5/98       18,839
Danish Kroner...........................     7,886,019      6.86340    2/5/98      382,449
Deutsche Marks..........................    25,918,384      1.77087    2/5/98      818,384
Deutsche Marks..........................    24,380,246      1.81000    2/5/98    1,280,246
Deutsche Marks..........................    11,573,533      1.74950    2/5/98      228,533
Deutsche Marks..........................     5,831,060      1.70250    2/5/98      (42,655)
Deutsche Marks..........................     4,932,669      1.82070    2/5/98      286,489
Deutsche Marks..........................     3,702,605      1.77285    2/5/98      120,916
Italian Liras...........................     6,451,334  1,697.68000    2/5/98        1,355
Italian Liras...........................     3,240,396  1,766.50000    2/5/98      126,895
Netherland Guilders.....................     6,358,320      1.97453    2/5/98      144,185
Spanish Pasetas.........................     8,955,096    148.86800    2/5/98      222,526
                                          ------------                         --------------
  Total Contracts to Buy (Payable amount
   $136,434,078)........................   140,395,409                           3,961,331
                                          ------------                         --------------
THE VALUE OF CONTRACTS TO BUY AS
 PERCENTAGE OF NET ASSETS IS 33.38%.
 
<CAPTION>
 
CONTRACTS TO SELL:
- ----------------------------------------
<S>                                       <C>           <C>          <C>       <C>
Australian Dollars......................     7,838,313      1.44611   11/6/97     (127,976)
Australian Dollars......................     4,674,868      1.36032   11/6/97      213,680
British Pounds..........................    11,858,437      0.61312   11/6/97     (327,267)
British Pounds..........................     4,864,140      0.63386   11/6/97     (289,013)
British Pounds..........................    11,724,826      0.62274    2/5/98     (371,820)
Canadian Dollars........................     1,774,056      1.38250   11/6/97       34,262
Danish Kroner...........................     7,847,141      6.95000   11/6/97     (437,069)
Deutsche Marks..........................    44,512,909      1.71600    2/5/98      (27,133)
Deutsche Marks..........................    16,981,429      1.72000    2/5/98      (49,819)
Deutsche Marks..........................    15,337,714      1.71800    2/5/98      (27,194)
Deutsche Marks..........................     3,280,903      1.71600    2/5/98       (2,000)
Italian Lira............................     9,691,730  1,696.15000    2/5/98        6,705
Netherland Guilders.....................     6,321,484      2.05140   11/6/97     (340,203)
New Zealand Dollars.....................    12,132,719      1.57878   11/6/97      212,247
South African Rand......................     7,285,042      5.04500   1/30/98     (160,681)
Spanish Pesetas.........................     8,939,623    154.70000   11/6/97     (536,262)
                                          ------------                         --------------
  Total Contracts to Sell (Receivable
   amount $172,835,791).................   175,065,334                          (2,229,543)
                                          ------------                         --------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 41.62%.
  Total Open Forward Foreign Currency
   Contracts, Net.......................                                         $1,731,788
                                                                               --------------
                                                                               --------------
</TABLE>
 
- --------------
See Note 1 to the financial statements.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                     WRITTEN FUTURES CONTRACTS OUTSTANDING
                                OCTOBER 31, 1997
 
<TABLE>
<CAPTION>
                                           MATURITY     NO. OF                  MARKET
DESCRIPTION                                  DATE      CONTRACTS   CURRENCY     VALUE
- ----------------------------------------  ----------   ---------   --------   ----------
<S>                                       <C>          <C>         <C>        <C>
U.S. 10-Year Bond Future (face
 $8,849,548)............................    12/19/97      80         USD      $8,902,400
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-86
<PAGE>   1400
                             GT GLOBAL INCOME FUNDS
 
                              STATEMENTS OF ASSETS
                                 AND LIABILITIES
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                               GT GLOBAL
                                                                                  ------------------------------------
                                                                                                  HIGH
                                                                                                 INCOME
                                                                                  GOVERNMENT      FUND-     STRATEGIC
                                                                                    INCOME     CONSOLIDATED   INCOME
                                                                                     FUND       (NOTE 1)       FUND
                                                                                  -----------  -----------  ----------
<S>                                                                               <C>          <C>          <C>
Assets:
  Investments in securities, at value (cost $290,266,878; $343,761,865; and
   $424,594,754, respectively) (Note 1).........................................  $290,274,619 3$48,124,783 $430,698,951
  U.S. currency.................................................................           63     598,195      906,033
  Foreign Currencies (Cost $562,392; $2,793,297; and $740,247, respectively)....      572,795   2,785,516      734,313
  Interest receivable...........................................................    5,620,712   6,748,730    7,672,126
  Receivable for Fund shares sold...............................................    1,790,045     757,060      523,422
  Receivable for open forward foreign currency contracts (Note 1)...............    3,976,639          --    1,731,788
  Receivable for securities sold................................................   12,795,967  21,411,490   16,967,090
  Miscellaneous receivable......................................................           --      17,246      105,000
                                                                                  -----------  -----------  ----------
    Total assets................................................................  315,030,840  380,443,020  459,338,723
                                                                                  -----------  -----------  ----------
Liabilities:
  Payable for custodian fees (Note 1)...........................................       13,985      19,132       31,825
  Payable for Directors' and Trustees' fees and expenses (Note 2)...............        7,943      10,881        5,472
  Payable for forward foreign currency contracts -- closed (Note 1).............    6,013,174          --    3,799,153
  Payable for fund accounting fees (Note 2).....................................        6,285       9,778        9,847
  Payable for Fund shares repurchased (Note 2)..................................   13,090,101   3,038,650    1,446,639
  Payable for investment management and administration fees (Note 2)............      177,596     341,976      278,408
  Payable for loan outstanding (Note 1).........................................    4,451,000          --           --
  Payable for open forward foreign currency contracts (Note 1)..................           --     877,240           --
  Payable for printing and postage expenses.....................................      109,344      79,859       85,448
  Payable for professional fees.................................................       37,427      52,845       28,107
  Payable for registration and filing fees......................................       16,015       5,502       14,782
  Payable for securities purchased..............................................    8,707,277   9,848,640   32,628,138
  Payable for service and distribution expenses (Note 2)........................      160,788     285,897      310,485
  Payable for transfer agent fees (Note 2)......................................      121,280      60,286       63,713
  Payable for variation margin..................................................           --          --        5,000
  Payable for written options, at value.........................................          406          --           --
  Other accrued expenses........................................................        8,741      19,823        7,911
                                                                                  -----------  -----------  ----------
    Total liabilities...........................................................   32,921,362  14,650,509   38,714,928
    Minority interest (Notes 1 & 2).............................................           --         100           --
                                                                                  -----------  -----------  ----------
Net assets......................................................................  $282,109,478 3$65,792,411 $420,623,795
                                                                                  -----------  -----------  ----------
                                                                                  -----------  -----------  ----------
Class A:
Net asset value and offering price per share ($154,272,250 DIVIDED BY
 17,888,878; $133,972,818 DIVIDED BY 8,609,881; and $138,714,970 DIVIDED BY
 11,557,042 shares outstanding, respectively)...................................  $      8.62   $   15.56   $    12.00
                                                                                  -----------  -----------  ----------
                                                                                  -----------  -----------  ----------
Maximum offering price per share (100/95.25 of $8.62; 100/95.25 of $15.56; and
 100/95.25 of $12.00, respectively) *...........................................  $      9.05   $   16.34   $    12.60
                                                                                  -----------  -----------  ----------
                                                                                  -----------  -----------  ----------
Class B:+
Net asset value and offering price per share ($127,721,696 DIVIDED BY
 14,819,308; $228,100,869 DIVIDED BY 14,675,701; and $281,375,602 DIVIDED BY
 23,423,332 shares outstanding, respectively)...................................  $      8.62   $   15.54   $    12.01
                                                                                  -----------  -----------  ----------
                                                                                  -----------  -----------  ----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share
 ($115,532 DIVIDED BY 13,411; $3,718,724 DIVIDED BY 239,667; and $533,223
 DIVIDED BY 44,355 shares outstanding, respectively)............................  $      8.61   $   15.52   $    12.02
                                                                                  -----------  -----------  ----------
                                                                                  -----------  -----------  ----------
Net assets consist of:
  Paid in capital (Note 4)......................................................  $424,806,101 2$94,116,233 $485,352,425
  Undistributed net investment income/(distribution in excess of income)........           --     303,600   (3,351,006)
  Accumulated net realized gain (loss) on investments...........................  (146,657,834) 67,929,136  (69,137,537)
  Net unrealized appreciation (depreciation) on translation of assets and
   liabilities in foreign currencies............................................    3,909,203    (919,476)   1,745,551
  Net unrealized appreciation of investments....................................       52,008   4,362,918    6,014,362
                                                                                  -----------  -----------  ----------
Total -- representing net assets applicable to capital shares outstanding.......  $282,109,478 3$65,792,411 $420,623,795
                                                                                  -----------  -----------  ----------
                                                                                  -----------  -----------  ----------
<FN>
- ----------------
    * On sales of $50,000 or more, the offering price is reduced.
    + Redemption price per share is equal to the net asset value per share less
      any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-87
<PAGE>   1401
                             GT GLOBAL INCOME FUNDS
 
                            STATEMENTS OF OPERATIONS
 
                          Year ended October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                  GT GLOBAL
                                                                    -------------------------------------
                                                                                    HIGH
                                                                                   INCOME
                                                                    GOVERNMENT      FUND-      STRATEGIC
                                                                      INCOME     CONSOLIDATED   INCOME
                                                                       FUND       (NOTE 1)       FUND
                                                                    -----------  -----------  -----------
<S>                                                                 <C>          <C>          <C>
Investment income:
  Interest income.................................................  $24,435,113  $40,562,334  $36,075,707
  Other income....................................................       51,190           --       26,003
                                                                    -----------  -----------  -----------
    Total investment income.......................................   24,486,303   40,562,334   36,101,710
                                                                    -----------  -----------  -----------
Expenses:
  Investment management and administration fees (Note 2)..........    2,403,043    4,107,638    3,474,804
  Amortization of organization costs (Note 1).....................           --       34,678           --
  Custodian Fees (Note 1).........................................      203,911      182,500      256,523
  Directors' and Trustees' fees and expenses (Note 2).............       14,600       19,345       13,962
  Fund accounting fees (Note 2)...................................       85,149      116,607      123,309
  Printing and postage expenses...................................      131,035       88,337      144,457
  Professional fees...............................................       79,570      119,674       81,841
  Registration and filing fees (Note 1)...........................       52,925       68,590       44,726
  Service and distribution expenses: (Note 2)
    Class A.......................................................      672,237      605,133      560,886
    Class B.......................................................    1,392,802    2,653,190    3,185,408
  Transfer agent fees (Note 2)....................................      734,235      676,490      831,440
  Other expenses (Note 1).........................................      132,382      187,152      264,542
                                                                    -----------  -----------  -----------
    Total expenses before reductions..............................    5,901,889    8,859,334    8,981,898
                                                                    -----------  -----------  -----------
    Expense reductions (Note 1)...................................     (543,589)    (234,784)    (460,682)
                                                                    -----------  -----------  -----------
  Total net expenses..............................................    5,358,300    8,624,550    8,521,216
                                                                    -----------  -----------  -----------
Net investment income.............................................   19,128,003   31,937,784   27,580,494
                                                                    -----------  -----------  -----------
Net realized and unrealized gain (loss) on investments: (Note 1)
  Net realized gain (loss) on investments.........................   (6,424,453)  65,778,885   35,321,536
  Net realized gain on foreign currency transactions..............    6,670,567    3,923,861    4,176,477
                                                                    -----------  -----------  -----------
    Net realized gain during the year.............................      246,114   69,702,746   39,498,013
                                                                    -----------  -----------  -----------
  Net change in unrealized appreciation(depreciation) on
   translation of assets and liabilities in foreign currencies....    5,553,094   (1,099,793)   2,627,595
  Net change in unrealized appreciation of investments............  (11,452,067) (36,470,606) (26,190,807)
                                                                    -----------  -----------  -----------
    Net unrealized depreciation during the year...................   (5,898,973) (37,570,399) (23,563,212)
                                                                    -----------  -----------  -----------
Net realized and unrealized gain (loss) on investments and foreign
 currencies.......................................................   (5,652,859)  32,132,347   15,934,801
                                                                    -----------  -----------  -----------
Net increase in net assets resulting from operations..............  $13,475,144  $64,070,131  $43,515,295
                                                                    -----------  -----------  -----------
                                                                    -----------  -----------  -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-88
<PAGE>   1402
                             GT GLOBAL INCOME FUNDS
 
                      STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<S>                                       <C>          <C>          <C>          <C>          <C>          <C>
- --------------------------------------------------------------------------------
 
<CAPTION>
<S>                                       <C>          <C>          <C>          <C>          <C>          <C>
<CAPTION>
                                                                           GT GLOBAL
                                          ----------------------------------------------------------------------------
                                                                          HIGH INCOME
                                           GOVERNMENT INCOME FUND      FUND-CONSOLIDATED       STRATEGIC INCOME FUND
                                          ------------------------  ------------------------  ------------------------
                                          YEAR ENDED   YEAR ENDED   YEAR ENDED   YEAR ENDED   YEAR ENDED   YEAR ENDED
                                          OCTOBER 31,  OCTOBER 31,  OCTOBER 31,  OCTOBER 31,  OCTOBER 31,  OCTOBER 31,
                                             1997         1996         1997         1996         1997         1996
                                          -----------  -----------  -----------  -----------  -----------  -----------
<S>                                       <C>          <C>          <C>          <C>          <C>          <C>
Increase (decrease) in net assets
Operations:
  Net investment income.................  $19,128,003  $31,802,934  $31,937,784  $37,117,017  $27,580,494  $40,286,756
  Net realized gain (loss) on
   investments and foreign currency
   transactions.........................      246,114   (1,896,895)  69,702,746   62,517,472   39,498,013   36,675,981
  Net change in unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies...........................    5,553,094    2,319,205   (1,099,793)     174,082    2,627,595    1,913,734
  Net change in unrealized appreciation
   (depreciation) of investments........  (11,452,067)  (1,121,083) (36,470,606)  31,730,913  (26,190,807)  27,794,834
                                          -----------  -----------  -----------  -----------  -----------  -----------
    Net increase in net assets resulting
     from operations....................   13,475,144   31,104,161   64,070,131  131,539,484   43,515,295  106,671,305
                                          -----------  -----------  -----------  -----------  -----------  -----------
Class A:
Distributions to shareholders: (Note 1)
  From net investment income............   (6,827,721) (15,504,590) (12,555,399) (13,418,057) (10,228,265) (12,520,881)
  From net realized gain on
   investments..........................           --   (8,183,323)  (2,751,509)  (1,230,117)          --           --
  In excess of net investment income....   (4,449,488)          --           --           --     (775,601)  (1,097,884)
Class B:
Distributions to shareholders: (Note 1)
  From net investment income............   (4,503,257)  (9,165,193) (17,789,317) (18,753,394) (18,434,103) (22,200,673)
  From net realized gain on
   investments..........................           --   (5,303,358)  (3,911,565)  (1,719,241)          --           --
  In excess of net investment income....   (2,934,682)          --           --           --   (1,397,843)  (1,946,649)
Advisor Class:
Distributions to shareholders: (Note 1)
  From net investment income............       (4,070)      (7,915)  (1,289,469)    (505,715)     (43,148)     (46,547)
  From net realized gain on
   investments..........................           --       (2,893)    (264,339)     (46,362)          --           --
  In excess of net investment income....       (2,653)          --           --           --       (3,272)      (4,081)
                                          -----------  -----------  -----------  -----------  -----------  -----------
    Total distributions.................  (18,721,871) (38,167,272) (38,561,598) (35,672,886) (30,882,232) (37,816,715)
                                          -----------  -----------  -----------  -----------  -----------  -----------
Capital share transactions: (Note 4)
  Increase from capital shares sold and
   reinvested...........................  667,541,828  386,482,407  561,523,639  583,133,415  335,031,026  335,665,174
  Decrease from capital shares
   repurchased..........................  (787,794,141) (592,826,606) (665,858,246) (592,743,855) (445,823,540) (432,196,117)
                                          -----------  -----------  -----------  -----------  -----------  -----------
    Net decrease from capital share
     transactions.......................  (120,252,313) (206,344,199) (104,334,607)  (9,610,440) (110,792,514) (96,530,943)
                                          -----------  -----------  -----------  -----------  -----------  -----------
Total increase (decrease) in net
 assets.................................  (125,499,040) (213,407,310) (78,826,074)  86,256,158 (98,159,451) (27,676,353)
Net assets:
  Beginning of year.....................  407,608,518  621,015,828  444,618,485  358,362,327  518,783,246  546,459,599
                                          -----------  -----------  -----------  -----------  -----------  -----------
  End of year  *........................  $282,109,478 $407,608,518 $365,792,411 $444,618,485 $420,623,795 $518,783,246
                                          -----------  -----------  -----------  -----------  -----------  -----------
                                          -----------  -----------  -----------  -----------  -----------  -----------
 * Includes undistributed (distributions
   in excess of) net investment income..  $        --  $   364,918  $   303,600  $        --  $(3,351,006) $        --
                                          -----------  -----------  -----------  -----------  -----------  -----------
                                          -----------  -----------  -----------  -----------  -----------  -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-89
<PAGE>   1403
                        GT GLOBAL GOVERNMENT INCOME FUND
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS A
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)    1996 (D)    1995 (D)    1994 (D)    1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $    8.74   $    8.81   $    8.63   $   11.07   $    9.83
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................       0.52        0.57        0.62        0.65        0.74
  Net realized and unrealized gain
   (loss) on investments................      (0.13)       0.03        0.15       (1.52)       1.34
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       0.39        0.60        0.77       (0.87)       2.08
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............      (0.31)      (0.57)      (0.59)      (0.65)      (0.74)
  From net realized gain on
   investments..........................         --       (0.10)         --       (0.27)         --
  In excess of net investment income....      (0.20)         --          --          --          --
  In excess of net realized gain on
   investments..........................         --          --          --       (0.55)         --
  Return of capital.....................         --          --          --       (0.10)         --
  From sources other than net investment
   income...............................         --          --          --          --       (0.10)
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (0.51)      (0.67)      (0.59)      (1.57)      (0.84)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $    8.62   $    8.74   $    8.81   $    8.63   $   11.07
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............       4.78%       7.11%       9.22%      (8.87)%      21.9%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 154,272   $ 240,945   $ 385,404   $ 502,094   $ 708,301
Ratio of net investment income to
 average net assets.....................       6.04%       6.52%       6.98%       6.87%        7.1%
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......       1.34%       1.34%       1.35%       1.33%        1.4%
  Without expense reductions............       1.51%       1.39%       1.38%        N/A         N/A
Portfolio turnover rate++...............        241%        268%        385%        625%        495%
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the year.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-90
<PAGE>   1404
                        GT GLOBAL GOVERNMENT INCOME FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS B
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)    1996 (D)    1995 (D)    1994 (D)    1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $    8.74   $    8.80   $    8.64   $   11.07   $    9.83
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................       0.46        0.51        0.55        0.59        0.67
  Net realized and unrealized gain
   (loss) on investments................      (0.12)       0.04        0.14       (1.52)       1.34
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       0.34        0.55        0.69       (0.93)       2.01
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............      (0.28)      (0.51)      (0.53)      (0.59)      (0.67)
  From net realized gain on
   investments..........................         --       (0.10)         --       (0.27)         --
  In excess of net investment income....      (0.18)         --          --          --          --
  In excess of net realized gain on
   investments..........................         --          --          --       (0.54)         --
  Return of capital.....................         --          --          --       (0.10)         --
  From sources other than net investment
   income...............................         --          --          --          --       (0.10)
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (0.46)      (0.61)      (0.53)      (1.50)      (0.77)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $    8.62   $    8.74   $    8.80   $    8.64   $   11.07
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............       4.00%       6.54%       8.22%      (9.39)%      21.1%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 127,722   $ 166,577   $ 235,481   $ 262,405   $ 182,972
Ratio of net investment income to
 average net assets.....................       5.39%       5.87%       6.33%       6.22%        6.5%
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......       1.99%       1.99%       2.00%       1.98%        2.0%
  Without expense reductions............       2.16%       2.04%       2.03%        N/A         N/A
Portfolio turnover rate++...............        241%        268%        385%        625%        495%
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the year.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-91
<PAGE>   1405
                        GT GLOBAL GOVERNMENT INCOME FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                       ADVISOR CLASS+
                                          -----------------------------------------
                                                                      JUNE 1, 1995
                                           YEAR ENDED    YEAR ENDED        TO
                                          OCTOBER 31,   OCTOBER 31,    OCTOBER 31,
                                            1997 (D)      1996 (D)      1995 (D)
                                          ------------  ------------  -------------
<S>                                       <C>           <C>           <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $    8.73     $    8.80      $    8.98
                                          ------------  ------------  -------------
Income from investment operations:
  Net investment income.................        0.55          0.60           0.26
  Net realized and unrealized gain
   (loss) on investments................       (0.13)         0.03          (0.19)
                                          ------------  ------------  -------------
    Net increase (decrease) from
     investment operations..............        0.42          0.63           0.07
                                          ------------  ------------  -------------
Distributions to shareholders:
  From net investment income............       (0.33)        (0.60)         (0.25)
  From net realized gain on
   investments..........................          --         (0.10)            --
  In excess of net investment income....       (0.21)           --             --
  In excess of net realized gain on
   investments..........................          --            --             --
  Return of capital.....................          --            --             --
  From sources other than net investment
   income...............................          --            --             --
                                          ------------  ------------  -------------
    Total distributions.................       (0.54)        (0.70)         (0.25)
                                          ------------  ------------  -------------
Net asset value, end of period..........   $    8.61     $    8.73      $    8.80
                                          ------------  ------------  -------------
                                          ------------  ------------  -------------
 
Total investment return (c).............        5.15 %        7.49 %         0.83%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $     116     $      86      $     131
Ratio of net investment income to
 average net assets.....................        6.39 %        6.87 %         7.33%(a)
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......        0.99 %        0.99 %         1.00%(a)
  Without expense reductions............        1.16 %        1.04 %         1.03%(a)
Portfolio turnover rate++...............         241 %         268 %          385%
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the year.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-92
<PAGE>   1406
                           GT GLOBAL HIGH INCOME FUND
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS A
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)    1996 (D)      1995      1994 (D)    1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   14.85   $   11.70   $   12.56   $   14.92   $   11.43
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................       1.19        1.27        1.35        0.94        0.78
  Net realized and unrealized gain
   (loss) on investments................       0.93        3.09       (1.09)      (1.87)       3.92
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       2.12        4.36        0.26       (0.93)       4.70
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............      (1.18)      (1.11)      (1.03)      (0.94)      (0.78)
  From net realized gain on
   investments..........................      (0.23)      (0.10)      (0.03)      (0.27)         --
  In excess of net realized gain on
   investments..........................         --          --          --       (0.22)         --
  Return of capital.....................         --          --       (0.06)         --          --
  From sources other than net investment
   income...............................         --          --          --          --       (0.43)
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (1.41)      (1.21)      (1.12)      (1.43)      (1.21)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $   15.56   $   14.85   $   11.70   $   12.56   $   14.92
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............      14.46%      39.05%       2.81%      (6.45)%      43.6%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 133,973   $ 178,318   $ 142,002   $ 167,974   $ 143,171
Ratio of net investment income to
 average net assets.....................       7.39%       9.52%      11.85%       7.00%       6.40%
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......       1.53%       1.69%       1.75%       1.57%       2.20%
  Without expense reductions............       1.58%       1.69%       1.75%       1.57%       2.20%
Ratio of interest expense to average net
 assets.................................        N/A        0.04%        N/A        0.22%        N/A
Portfolio turnover rate++...............        214%        290%        213%        178%        195%
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the year.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the fund as a whole
     without distinguishing among the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-93
<PAGE>   1407
                           GT GLOBAL HIGH INCOME FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS B
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)    1996 (D)      1995      1994 (D)    1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   14.83   $   11.69   $   12.56   $   14.90   $   11.43
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................       1.09        1.17        1.27        0.86        0.70
  Net realized and unrealized gain
   (loss) on investments................       0.93        3.09       (1.09)      (1.85)       3.90
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       2.02        4.26        0.18       (0.99)       4.60
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............      (1.08)      (1.03)      (0.96)      (0.86)      (0.70)
  From net realized gain on
   investments..........................      (0.23)      (0.09)      (0.03)      (0.27)         --
  In excess of net realized gain on
   investments..........................         --          --          --       (0.22)         --
  Return of capital.....................         --          --       (0.06)         --          --
  From sources other than net investment
   income...............................         --          --          --          --       (0.43)
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (1.31)      (1.12)      (1.05)      (1.35)      (1.13)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $   15.54   $   14.83   $   11.69   $   12.56   $   14.90
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............      13.77%      38.16%       2.07%      (6.99)%      42.6%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 228,101   $ 251,002   $ 214,897   $ 232,423   $ 127,035
Ratio of net investment income to
 average net assets.....................       6.74%       8.87%      11.20%       6.35%        5.8%
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......       2.18%       2.34%       2.40%       2.22%        2.8%
  Without expense reductions............       2.23%       2.34%       2.40%       2.22%        2.8%
Ratio of interest expense to average net
 assets.................................        N/A        0.04%        N/A        0.22%        N/A
Portfolio turnover rate++...............        214%        290%        213%        178%        195%
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the year.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the fund as a whole
     without distinguishing among the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-94
<PAGE>   1408
                           GT GLOBAL HIGH INCOME FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                      ADVISOR CLASS+
                                          --------------------------------------
                                                                    JUNE 1, 1995
                                          YEAR ENDED   YEAR ENDED        TO
                                          OCTOBER 31,  OCTOBER 31,  OCTOBER 31,
                                           1997 (D)     1996 (D)        1995
                                          -----------  -----------  ------------
<S>                                       <C>          <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $   14.83    $   11.71    $   11.44
                                          -----------  -----------  ------------
Income from investment operations:
  Net investment income.................        1.22         1.34         0.57
  Net realized and unrealized gain
   (loss) on investments................        0.93         3.05         0.17
                                          -----------  -----------  ------------
    Net increase (decrease) from
     investment operations..............        2.15         4.39         0.74
                                          -----------  -----------  ------------
Distributions to shareholders:
  From net investment income............       (1.23)       (1.16)       (0.44)
  From net realized gain on
   investments..........................       (0.23)       (0.11)          --
  In excess of net realized gain on
   investments..........................          --           --           --
  Return of capital.....................          --           --        (0.03)
  From sources other than net investment
   income...............................          --           --           --
                                          -----------  -----------  ------------
    Total distributions.................       (1.46)       (1.27)       (0.47)
                                          -----------  -----------  ------------
Net asset value, end of period..........   $   15.52    $   14.83    $   11.71
                                          -----------  -----------  ------------
                                          -----------  -----------  ------------
 
Total investment return (c).............       14.72%       39.38%        6.54 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $   3,719    $  15,298    $   1,463
Ratio of net investment income to
 average net assets.....................        7.74%        9.87%       12.20 %(a)
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......        1.18%        1.34%        1.40 %(a)
  Without expense reductions............        1.23%        1.34%        1.40 %
Ratio of interest expense to average net
 assets.................................         N/A         0.04%         N/A
Portfolio turnover rate++...............         214%         290%         213 %(a)
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the year.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the fund as a whole
     without distinguishing among the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-95
<PAGE>   1409
                        GT GLOBAL STRATEGIC INCOME FUND
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS A
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                             1997      1996 (D)    1995 (D)      1994      1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   11.76   $   10.32   $   10.88   $   13.61   $   11.25
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................       0.74        0.89        0.97        0.79        0.96
  Net realized and unrealized gain
   (loss) on investments................       0.34        1.44       (0.69)      (2.14)       2.85
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       1.08        2.33        0.28       (1.35)       3.81
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............      (0.78)      (0.82)      (0.80)      (0.79)      (0.96)
  From net realized gain on
   investments..........................         --          --          --       (0.38)      (0.37)
  In excess of net investment income....      (0.06)      (0.07)         --          --          --
  Return of capital.....................         --          --       (0.04)      (0.21)         --
  From sources other than net investment
   income...............................         --          --          --          --       (0.12)
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (0.84)      (0.89)      (0.84)      (1.38)      (1.45)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $   12.00   $   11.76   $   10.32   $   10.88   $   13.61
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............       9.40%      23.00%       3.06%     (10.44)%      37.0%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 138,715   $ 185,126   $ 188,165   $ 275,241   $ 287,870
Ratio of net investment income to
 average net assets.....................       6.18%       8.09%       9.64%       6.74%        7.2%
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......       1.35%       1.38%       1.42%       1.40%        1.7%
  Without expense reductions............       1.44%       1.40%       1.45%        N/A         N/A
Ratio of interest expenses to average
 net assets.............................        N/A         N/A         N/A        0.10%        N/A
Portfolio turnover rate++...............        149%        177%        238%        583%        310%
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-96
<PAGE>   1410
                        GT GLOBAL STRATEGIC INCOME FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS B
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                             1997      1996 (D)    1995 (D)      1994      1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   11.77   $   10.33   $   10.88   $   13.60   $   11.24
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................       0.67        0.82        0.91        0.73        0.89
  Net realized and unrealized gain
   (loss) on investments................       0.33        1.44       (0.69)      (2.14)       2.85
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       1.00        2.26        0.22       (1.41)       3.74
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............      (0.71)      (0.75)      (0.73)      (0.72)      (0.89)
  From net realized gain on
   investments..........................         --          --          --       (0.38)      (0.37)
  In excess of net investment income....      (0.05)      (0.07)         --          --          --
  Return of capital.....................         --          --       (0.04)      (0.21)         --
  From sources other than net investment
   income...............................         --          --          --          --       (0.12)
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (0.76)      (0.82)      (0.77)      (1.31)      (1.38)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $   12.01   $   11.77   $   10.33   $   10.88   $   13.60
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............       8.70%      22.15%       2.48%     (11.02)%      36.2%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 281,376   $ 333,178   $ 357,852   $ 458,550   $ 310,431
Ratio of net investment income to
 average net assets.....................       5.53%       7.44%       8.99%       6.09%        6.5%
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......       2.00%       2.03%       2.07%       2.05%        2.4%
  Without expense reductions............       2.09%       2.05%       2.10%        N/A         N/A
Ratio of interest expenses to average
 net assets.............................        N/A         N/A         N/A        0.10%        N/A
Portfolio turnover rate++...............        149%        177%        238%        583%        310%
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-97
<PAGE>   1411
                        GT GLOBAL STRATEGIC INCOME FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                       ADVISOR CLASS+
                                          -----------------------------------------
                                                                      JUNE 1, 1995
                                           YEAR ENDED    YEAR ENDED        TO
                                          OCTOBER 31,   OCTOBER 31,    OCTOBER 31,
                                              1997        1996 (D)      1995 (D)
                                          ------------  ------------  -------------
<S>                                       <C>           <C>           <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $   11.77     $   10.33      $   10.32
                                          ------------  ------------  -------------
Income from investment operations:
  Net investment income.................        0.79          0.93           0.41
  Net realized and unrealized gain
   (loss) on investments................        0.34          1.44          (0.04)
                                          ------------  ------------  -------------
    Net increase (decrease) from
     investment operations..............        1.13          2.37           0.37
                                          ------------  ------------  -------------
Distributions to shareholders:
  From net investment income............       (0.82)        (0.86)         (0.34)
  From net realized gain on
   investments..........................          --            --             --
  In excess of net investment income....       (0.06)        (0.07)            --
  Return of capital.....................          --            --          (0.02)
  From sources other than net investment
   income...............................          --            --             --
                                          ------------  ------------  -------------
    Total distributions.................       (0.88)        (0.93)         (0.36)
                                          ------------  ------------  -------------
Net asset value, end of period..........   $   12.02     $   11.77      $   10.33
                                          ------------  ------------  -------------
                                          ------------  ------------  -------------
 
Total investment return (c).............        9.86 %       23.39 %         3.72%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $     533     $     479      $     443
Ratio of net investment income to
 average net assets.....................        6.53 %        8.44 %         9.99%(a)
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......        1.00 %        1.03 %         1.07%(a)
  Without expense reductions............        1.09 %        1.05 %         1.10%(a)
Ratio of interest expenses to average
 net assets.............................         N/A           N/A            N/A
Portfolio turnover rate++...............         149 %         177 %          238%
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-98
<PAGE>   1412
                             GT GLOBAL INCOME FUNDS
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Government Income Fund, GT Global High Income Fund, GT Global
Strategic Income Fund ("Funds") are non-diversified separate series of G.T.
Investment Funds, Inc. ("Company"). Collectively, these Funds are known as the
"GT Global Income Funds". The Company is organized as a Maryland corporation and
is registered under the Investment Company Act of 1940, as amended ("1940 Act"),
as an open-end management investment company. The Company has thirteen series of
shares in operation, each series corresponding to a distinct portfolio of
investments.
 
The GT Global High Income Fund invests substantially all of its investable
assets in Global High Income Portfolio ("Portfolio"). The Portfolio is organized
as a New York Trust and is registered under the 1940 Act as a non-diversified,
open-end management investment company.
 
The Portfolio has investment objectives, policies and limitations substantially
identical to those of its corresponding Fund. Therefore, the financial
statements of the Fund and its respective Portfolio have been presented on a
consolidated basis, and represent all activities of both the Fund and Portfolio.
Through October 31, 1997, all of the shares of beneficial interest of the
Portfolio were owned by either its Fund or Chancellor LGT Asset Management, Inc.
(the "Manager"), which has a nominal ($100) investment in the Portfolio.
 
The Funds offer Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges except that Class A and Class B
each has exclusive voting rights with respect to its distribution plan.
Investment income, realized and unrealized capital gains and losses, and the
common expenses of the Funds are allocated on a pro rata basis to each class
based on the relative net assets of each class to the total net assets of the
Funds. Each class of shares differs in its respective service and distribution
expenses, and may differ in its transfer agent, registration, and certain other
class-specific fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
 
(A) PORTFOLIO VALUATION
 
The Funds calculate the net asset value of and complete orders to purchase,
exchange, or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by the Manager to be the
primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality, and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments are valued at
amortized cost adjusted for foreign exchange translation and market fluctuation,
if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors or the Trust's Board of Trustees.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors or
the Trust's Board of Trustees.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of each Fund and Portfolio are maintained in U.S.
dollars. The market values of foreign securities, currency holdings, and other
assets and liabilities are recorded in the books and records of the Funds or
Portfolio (the phrase "Funds or Portfolio" hereinafter refers to the GT Global
Government Income Fund, the GT Global Strategic Income Fund, and the Global High
Income Portfolio) after translation to U.S. dollars based on the exchange rates
on that day. The cost of each security is determined using historical exchange
rates. Income and withholding taxes are translated at prevailing exchange rates
when earned or incurred.
 
A Fund or Portfolio does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from
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.
 
                                      FS-99
<PAGE>   1413
                             GT GLOBAL INCOME FUNDS
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on a
Fund's or Portfolio's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains or losses arise
from changes in the value of assets and liabilities other than investments in
securities at period end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by a Fund or Portfolio, it is
the Fund's or Portfolio's policy to always receive, as collateral, United States
government securities or other high quality debt securities of which the value,
including accrued interest, is at least equal to the amount to be repaid to the
Fund or Portfolio under each agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by a Fund or Portfolio as an unrealized gain or loss.
When the Forward Contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference between the value at the time it was opened
and the value at the time it was closed. Forward Contracts involve market risk
in excess of the amount shown in the Fund's or Portfolio's "Statement of Assets
and Liabilities". A Fund or Portfolio could be exposed to risk if a counterparty
is unable to meet the terms of the contract or if the value of the currency
changes unfavorably. A Fund or Portfolio may enter into Forward Contracts in
connection with planned purchases or sales of securities, or to hedge against
adverse fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When a Fund or Portfolio writes a call or put option, an amount equal to the
premium received is included in the Fund's or Portfolio's "Statement of Assets
and Liabilities" as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market value
of the option. The current market value of an option listed on a traded exchange
is valued at its last bid price, or, in the case of an over-the-counter option,
is valued at the average of the last bid prices obtained from brokers, unless a
quotation from only one broker is available, in which case only that broker's
price will be used. If an option expires on its stipulated expiration date or if
the Fund or Portfolio enters into a closing purchase transaction, a gain or loss
is realized without regard to any unrealized gain or loss on the underlying
security and the liability related to such option is extinguished. If a written
call option is exercised, a gain or loss is realized from the sale of the
underlying security and the proceeds of the sale are increased by the premium
originally received. If a written put option is exercised, the cost of the
underlying security purchased would be decreased by the premium originally
received. The Fund or Portfolio can write options only on a covered basis,
which, for a call, requires that the Fund or Portfolio hold the underlying
security and, for a put, requires the Fund or Portfolio to set aside cash, U.S.
government securities or other liquid securities in an amount not less than the
exercise price, or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund or Portfolio may use options to manage its
exposure to the stock market and to fluctuations in currency values or interest
rates.
 
The premium paid by the Fund or Portfolio for the purchase of a call or put
option is included in the Fund's or Portfolio's "Statement of Assets and
Liabilities" as an investment and subsequently "marked-to-market" to reflect the
current market value of the option. If an option which the Fund or Portfolio has
purchased expires on the stipulated expiration date, the Fund or Portfolio
realizes a loss in the amount of the cost of the option. If the Fund or
Portfolio enters into a closing sale transaction, the Fund or Portfolio realizes
a gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund or Portfolio
exercises a call option, the cost of the securities acquired by exercising the
call is increased by the premium paid to buy the call. If the Fund or Portfolio
exercises a put option, it realizes a gain or loss from the sale of the
underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund or Portfolio may forego
the opportunity of profit if the market value of the underlying security or
index increases and the option is exercised. The risk in writing a put option is
that the Fund or Portfolio may incur a loss if the market value of the
underlying security or index decreases and the option is exercised. In addition,
there is the risk the Fund or Portfolio may not be able to enter into a closing
transaction because of an illiquid secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract a
Fund or Portfolio is required to pledge to the broker an amount of cash or
securities equal to the minimum "initial margin" requirements of the exchange on
which the contract is traded. Pursuant to the contract, the Fund or Portfolio
agrees to receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known as
"variation margin" and are recorded by the Fund or Portfolio as unrealized gains
or losses. When the contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed. The potential risk
to the Fund or Portfolio is that the change in value of the underlying
securities may not correlate to the change in value of the contracts. A Fund or
 
                                      FS-100
<PAGE>   1414
                             GT GLOBAL INCOME FUNDS
 
Portfolio may use futures contracts to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out-basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. A Fund or Portfolio may
trade securities on other than normal settlement terms. This may increase the
risk if the other party to the transaction fails to deliver and causes the Fund
or Portfolio to subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1997, stocks with an aggregate value listed below were on loan to
brokers. The loans were secured by cash collateral received by the Funds:
 
<TABLE>
<CAPTION>
                                                                               YEAR ENDED
                                                  OCTOBER 31, 1997            OCTOBER 31,
                                          --------------------------------        1997
                                          AGGREGATE VALUE        CASH        --------------
                                              ON LOAN         COLLATERAL     FEES RECEIVED
                                          ---------------   --------------   --------------
<S>                                       <C>               <C>              <C>
GT Global Government Income Fund........   $ 29,895,986      $  31,386,675      $543,589
Global High Income Portfolio............   $ 25,907,465      $  32,857,776      $234,784
GT Global Strategic Income Fund.........   $ 37,623,556      $  43,190,488      $460,682
</TABLE>
 
For international securities, cash collateral is received by a Fund or Portfolio
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by a Fund or Portfolio against loaned securities in the
amount at least equal to 102% of the market value of the loaned securities at
the inception of each loan. This collateral must be maintained at not less than
100% of the market value of the loaned securities during the period of the loan.
Fees received from securities loaned were used to reduce the Funds' or
Portfolios' custodian and other administrative expenses.
 
(I) TAXES
It is the intended policy of the Funds and Portfolios to meet the requirements
for qualification as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended ("Code"). It is also the intention of the Funds and
Portfolios to make distributions sufficient to avoid imposition of any excise
tax under Section 4982 of the Code. Therefore, no provision has been made for
Federal taxes on income, capital gains, or unrealized appreciation of securities
held, and excise tax on income and capital gains. The GT Global Government
Income Fund has a capital loss carryforward of $139,369,056 of which
$123,623,470 expires in 2002, and $15,745,586 expires in 2003. The GT Global
Strategic Income Fund has a capital loss carryforward of $65,749,433 which
expires in 2003.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by each Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 Funds or Portfolio and timing
differences.
 
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the GT Global High Income Fund and the Portfolio in
connection with their organization, their initial registration with the
Securities and Exchange Commission and with various states and the initial
public offering of its shares aggregated $149,100 and $25,000, respectively.
These expenses were amortized on a straightline basis over a five-year period.
 
(L) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's or Portfolio's investment in emerging
market countries may involve greater risks than investments in more developed
markets and the price of such investments may be volatile. These risks of
investing in foreign and emerging markets may include foreign currency exchange
rate fluctuations, perceived credit risk, adverse political and economic
developments and possible adverse foreign government intervention.
 
(M) INDEXED SECURITIES
A Fund or Portfolio may invest in indexed securities whose value is linked
either directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
 
(N) RESTRICTED SECURITIES
A Fund or Portfolio is permitted to invest in privately placed restricted
securities. These securities may be resold in transactions exempt from
registration or to the public if the securities are registered. Disposal of
these securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) are shown at the end of the Fund's
or Portfolio's Portfolio of Investments.
 
                                      FS-101
<PAGE>   1415
                             GT GLOBAL INCOME FUNDS
 
(O) LINE OF CREDIT
Each of the Funds, along with certain other funds ("GT Funds") advised or
administered by the Manager, has a line of credit with BankBoston. GT Global
Income Funds, along with certain other funds ("GT Funds") advised or
administered by the Manager, has a line of credit with State Street Bank & Trust
Company. The arrangements with the banks allow all specified funds and the GT
Funds to borrow an aggregate maximum amount of $200,000,000. Each Fund is
limited to borrowing up to 33 1/3% of the value of each Fund's total assets. On
October 31, 1997, GT Global Government Income Fund had $4,451,000 in loans
outstanding.
 
For the year ended October 31, 1997, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for GT Global Government Income Fund, GT Global High Income Fund, and GT Global
Strategic Income Fund was $7,107,892, $11,820,513 and $10,277,220 respectively,
with a weighted average interest rate of 6.33%, 6.47% and 6.38%, respectively.
Interest expense for the GT Global Government Income Fund, GT Global High Income
Fund and GT Global Strategic Income Fund for the year ended October 31, 1997 was
$103,696, $165,711 and $230,880, respectively, included in "Other Expenses" on
the Statement of Operations.
 
(P) SECURITIES PURCHASED ON A WHEN-ISSUED OR FORWARD COMMITMENT BASIS
A Fund or Portfolio may trade securities on a when-issued or forward commitment
basis, with payment and delivery scheduled for a future date. These transactions
are subject to market fluctuations and are subject to the risk that the value at
delivery may be more or less than the trade date purchase price. Although the
Fund or Portfolio will generally purchase these securities with the intention of
acquiring such securities, they may sell such securities before the settlement
date. These securities are identified on the accompanying Portfolio of
Investments. The Fund or Portfolio has set aside sufficient cash or liquid
securities as collateral for these purchase commitments.
 
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc. is the Funds' and Portfolio's investment
manager and administrator. The GT Global Government Income Fund and GT Global
Strategic Income Fund each pays the Manager investment management and
administration fees at the annualized rate of 0.725% on the first $500 million
of the average daily net assets of the Fund; 0.70% on the next $1 billion;
0.675% on the next $1 billion; and 0.65% on amounts thereafter. The GT Global
High Income Fund pays administration fees to the Manager at the annualized rate
of 0.25% of its average daily net assets. These fees are computed daily and paid
monthly.
 
The Global High Income Portfolio pays investment management and administration
fees to the Manager at the annualized rate of 0.475% on the first $500 million
of average daily net assets of the Portfolio; 0.45% on the next $1 billion;
0.425% on the next $1 billion; and 0.40% on amounts thereafter, plus 2% of the
Portfolio's total investment income calculated in accordance with generally
accepted accounting principles, adjusted daily for currency revaluations, on a
mark to market basis, of the Portfolio's assets; provided, however, that during
any fiscal year this amount shall not exceed 2% of the Portfolio's total
investment income calculated in accordance with generally accepted accounting
principles. These fees are computed daily and paid monthly.
 
GT Global, Inc. ("GT Global"), an affiliate of the Manager, serves as the Funds'
distributor. The Funds offer Class A, Class B, and Advisor Class shares for
purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Funds' current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the year ended October 31, 1997, GT Global retained the
following sales charges: $10,240 for the GT Global Government Income Fund,
$65,982 for the Global High Income Fund, and $29,451 for the GT Global Strategic
Income Fund. Purchases of Class A shares exceeding $500,000 may be subject to a
contingent deferred sales charge ("CDSC") upon redemption, in accordance with
the Funds' current prospectus. GT Global collected CDSCs for the year ended
October 31, 1997, as follows: $5,273 for the GT Global Government Income Fund,
$18,156 for the Global High Income Fund, and $0 for the GT Global Strategic
Income Fund. GT Global also makes ongoing shareholder servicing and trail
commission payments to dealers whose clients hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Funds' current
prospectus. For the year ended October 31, 1997, GT Global collected CDSCs in
the amount of: $1,118,343 for the GT Global Government Income Fund, $1,598,989
for the Global High Income Fund, and $1,750,253 for the GT Global Strategic
Income Fund. In addition, GT Global makes ongoing shareholder servicing and
trail commission payments to dealers whose clients hold Class B shares.
 
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Funds' Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which a Fund
reimburses GT Global for a portion of its shareholder servicing and
distributions expenses. Under the Class A Plan, a Fund may pay GT Global a
service fee at the annualized rate of up to 0.25% of the average daily net
assets of the Fund's Class A shares for GT Global's expenditures incurred in
servicing and maintaining shareholder accounts, and may pay GT Global a
distribution fee at the annualized rate of up to 0.35% of the average daily net
assets of the Fund's Class A shares, less any amounts paid by the Fund as the
aforementioned service fee, for GT Global's expenditures incurred in providing
services as distributor. All expenses for which GT Global is reimbursed under
the Class A Plan will have been incurred within one year of such reimbursement.
 
                                      FS-102
<PAGE>   1416
                             GT GLOBAL INCOME FUNDS
 
Pursuant to the Fund's Class B Plan, a Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
 
The Manager and GT Global voluntarily have undertaken to limit each GT Global
Government Income Fund's and GT Global Strategic Income Fund's expenses
(exclusive of brokerage commissions, taxes, interest, and extraordinary expense)
to the maximum annual rate of 1.85%, 2.50%, and 1.50% of the average daily net
assets of the Fund's Class A, Class B, and Advisor Class shares, respectively.
Similarly, they voluntarily have undertaken to limit GT Global High Income
Fund's expenses to the maximum annual rate of 2.20%, 2.85%, and 1.85% of the
average daily net assets of the Fund's Class A, Class B, and Advisor Class
shares, respectively. If necessary, this limitation will be effected by waivers
by the Manager of investment management and administration fees, waivers by GT
Global of payments under the Class A Plan and/or Class B Plan and/or
reimbursements by the Manager or GT Global of portions of the Fund's other
operating expenses.
 
Effective November 1, 1997, the Manager and GT Global have undertaken to limit
each Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expenses) to the annual rate of 1.75%, 2.40%, and 1.40% of the
average daily net assets of the Fund's Class A, Class B and Advisor Class
shares, respectively. This undertaking may be changed or eliminated in the
future.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and LGT and GT Global, is the transfer agent of the Funds. For performing
shareholder servicing, reporting, and general transfer agent services, GT
Services receives an annual maintenance fee of $17.50 per account, a new account
fee of $4.00 per account, a per transaction fee of $1.75 for all transactions
other than exchanges and per exchange fee of $2.25. GT Services also is
reimbursed by the Fund for its out-of-pocket expenses for such items as postage,
forms, telephone charges, stationery and office supplies.
The Manager is the pricing and accounting agent for the Funds and Portfolio. The
monthly fee for these services to the Manager is a percentage, not to exceed
0.03% annually, of a Fund or Portfolio's average daily net assets. The annual
fee rate is derived by applying 0.03% to the first $5 billion of assets of all
registered mutual funds advised by the Manager and 0.02% to the assets in excess
of $5 billion and allocating the result according to each Fund's average daily
net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager or any other affiliated company, $5,000 per year plus
$300 for each meeting of the board or any committee thereof attended by the
Director. Each Portfolio pays each of its Trustees who is not an employee,
officer, or director of the Manager, GT Global or GT Services $500 per year plus
$150 for each meeting of the board or any committee thereof attended by the
Trustees.
 
3. PURCHASES AND SALES OF SECURITIES
The following summarizes purchases and sales of investment securities, other
than short-term investments, by each Fund or Portfolio for the year ended
October 31, 1997:
 
                        PURCHASE AND SALES OF SECURITIES
 
<TABLE>
<CAPTION>
                                                                                            PURCHASES
                                                                                  ------------------------------
                                                                                  U.S. GOVERNMENT
                                                                                  AND GOVERNMENT
                                                                                     AGENCIES       OTHER ISSUES
                                                                                  ---------------   ------------
<S>                                                                               <C>               <C>
GT Global Government Income Fund................................................   $133,075,601     $576,675,060
Global High Income Portfolio....................................................   $ 27,699,458     $829,268,070
GT Global Strategic Income Fund.................................................   $ 67,247,574     $607,924,472
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                              SALES
                                                                                  ------------------------------
                                                                                  U.S. GOVERNMENT
                                                                                  AND GOVERNMENT
                                                                                     AGENCIES       OTHER ISSUES
                                                                                  ---------------   ------------
<S>                                                                               <C>               <C>
GT Global Government Income Fund................................................   $118,888,065     $702,800,147
Global High Income Portfolio....................................................   $ 11,689,150     $933,111,597
GT Global Strategic Income Fund.................................................   $ 47,239,453     $728,047,126
</TABLE>
 
                                      FS-103
<PAGE>   1417
                             GT GLOBAL INCOME FUNDS
 
4. CAPITAL SHARES
At October 31, 1997, there were 6,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 400,000,000 were
classified as shares of the GT Global Telecommunications Fund; 400,000,000 were
classified as shares of GT Global Government Income Fund; 200,000,000 were
classified as shares of GT Global Developing Markets Fund; 200,000,000 were
classified as shares of GT Global Health Care Fund; 200,000,000 were classified
as shares of GT Global Strategic Income Fund; 200,000,000 were classified as
shares of GT Global Currency Fund (inactive); 200,000,000 were classified as
shares of GT Global Growth & Income Fund; 200,000,000 were classified as shares
of GT Global Small Companies Fund (inactive); 200,000,000 were classified as
shares of GT Global Latin America Growth Fund; 200,000,000 were classified as
shares of GT Global Emerging Markets Fund; 200,000,000 were classified as shares
of GT Global High Income Fund; 200,000,000 were classified as shares of GT
Global Financial Services Fund; 200,000,000 were classified as shares of GT
Global Natural Resources Fund; 200,000,000 were classified as shares of GT
Global Infrastructure Fund; 200,000,000 were classified as shares of GT Global
Consumer Products and Services Fund. The shares of each of the foregoing series
of the Company were divided equally into two classes, designated Class A and
Class B common stock. With respect to the issuance of Advisor Class shares,
100,000,000 shares were classified as shares of each of the fifteen series of
the Company and designated as Advisor Class common stock. 1,100,000,000 shares
remain unclassified. Transactions in capital shares of the Fund were as follows:
 
                           CAPITAL SHARE TRANSACTIONS
GT GLOBAL GOVERNMENT INCOME FUND
<TABLE>
<CAPTION>
                                                      YEAR ENDED                           YEAR ENDED
                                                   OCTOBER 31, 1997                     OCTOBER 31, 1996
                                          -----------------------------------  -----------------------------------
CLASS A                                       SHARES             AMOUNT            SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       48,767,558  $      419,503,866       19,126,586  $      164,293,090
Shares issued in connection with
  reinvestment of distributions.........          741,916           6,372,599        1,643,833          14,228,931
                                          ---------------  ------------------  ---------------  ------------------
                                               49,509,474         425,876,465       20,770,419         178,522,021
Shares repurchased......................      (59,180,268)       (509,133,563)     (36,969,597)       (318,856,283)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (9,670,794) $      (83,257,098)     (16,199,178) $     (140,334,262)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
 
<CAPTION>
 
CLASS B
- ----------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       27,713,479  $      237,734,254       23,047,364  $      198,774,141
Shares issued in connection with
  reinvestment of distributions.........          452,575           3,886,536          956,866           8,282,950
                                          ---------------  ------------------  ---------------  ------------------
                                               28,166,054         241,620,790       24,004,230         207,057,091
Shares repurchased......................      (32,406,087)       (278,645,805)     (31,688,935)       (273,022,079)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (4,240,033) $      (37,025,015)      (7,684,705) $      (65,964,988)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
<CAPTION>
 
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................            4,551  $           38,769          105,543             892,487
Shares issued in connection with
  reinvestment of distributions.........              680               5,804            1,345              10,808
                                          ---------------  ------------------  ---------------  ------------------
                                                    5,231              44,573          106,888             903,295
Shares repurchased......................           (1,717)            (14,773)        (111,905)           (948,244)
                                          ---------------  ------------------  ---------------  ------------------
Net increase (decrease).................            3,514  $           29,800           (5,017) $          (44,949)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
                                      FS-104
<PAGE>   1418
                             GT GLOBAL INCOME FUNDS
 
GT GLOBAL HIGH INCOME FUND
<TABLE>
<CAPTION>
                                                      YEAR ENDED                           YEAR ENDED
                                                   OCTOBER 31, 1997                     OCTOBER 31, 1996
                                          -----------------------------------  -----------------------------------
CLASS A                                       SHARES             AMOUNT            SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       17,142,418  $      272,139,950       25,694,335  $      346,426,450
Shares issued in connection with
  reinvestment of distributions.........          574,707           9,164,383          607,445           8,023,249
                                          ---------------  ------------------  ---------------  ------------------
                                               17,717,125         281,304,333       26,301,780         354,449,699
Shares repurchased......................      (21,118,898)       (335,756,037)     (26,422,858)       (355,715,247)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (3,401,773) $      (54,451,704)        (121,078) $       (1,265,548)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
 
<CAPTION>
 
CLASS B
- ----------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       13,848,218  $      221,702,040       14,568,804  $      194,636,619
Shares issued in connection with
  reinvestment of distributions.........          721,148          11,494,889          765,798          10,086,445
                                          ---------------  ------------------  ---------------  ------------------
                                               14,569,366         233,196,929       15,334,602         204,723,064
Shares repurchased......................      (16,813,796)       (270,094,630)     (16,793,522)       (225,719,415)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (2,244,430) $      (36,897,701)      (1,458,920) $      (20,996,351)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
<CAPTION>
 
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................        2,868,282  $       45,874,009        1,706,101  $       23,413,749
Shares issued in connection with
  reinvestment of distributions.........           72,440           1,148,368           40,101             546,903
                                          ---------------  ------------------  ---------------  ------------------
                                                2,940,722          47,022,377        1,746,202          23,960,652
Shares repurchased......................       (3,732,584)        (60,007,579)        (839,670)        (11,309,193)
                                          ---------------  ------------------  ---------------  ------------------
Net increase (decrease).................         (791,862) $      (12,985,202)         906,532  $       12,651,459
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
GT GLOBAL STRATEGIC INCOME FUND
<TABLE>
<CAPTION>
                                                      YEAR ENDED                           YEAR ENDED
                                                   OCTOBER 31, 1997                     OCTOBER 31, 1996
                                          -----------------------------------  -----------------------------------
CLASS A                                       SHARES             AMOUNT            SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       13,750,221  $      167,009,888       15,025,486  $      168,473,834
Shares issued in connection with
  reinvestment of distributions.........          615,860           7,488,021          829,046           9,085,802
                                          ---------------  ------------------  ---------------  ------------------
                                               14,366,081         174,497,909       15,854,532         177,559,636
Shares repurchased......................      (18,557,237)       (225,311,673)     (18,331,797)       (204,237,090)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (4,191,156) $      (50,813,764)      (2,477,265) $      (26,677,454)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
 
<CAPTION>
 
CLASS B
- ----------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       11,499,580  $      140,731,511       12,778,909  $      141,835,937
Shares issued in connection with
  reinvestment of distributions.........          896,610          10,918,610        1,206,362          13,216,165
                                          ---------------  ------------------  ---------------  ------------------
                                               12,396,190         151,650,121       13,985,271         155,052,102
Shares repurchased......................      (17,287,235)       (211,600,543)     (20,318,197)       (224,904,917)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (4,891,045) $      (59,950,422)      (6,332,926) $      (69,852,815)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
<CAPTION>
 
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................          712,165  $        8,839,212          278,551  $        3,010,280
Shares issued in connection with
  reinvestment of distributions.........            3,581              43,784            3,931              43,156
                                          ---------------  ------------------  ---------------  ------------------
                                                  715,746           8,882,996          282,482           3,053,436
Shares repurchased......................         (712,116)         (8,911,324)        (284,638)         (3,054,110)
                                          ---------------  ------------------  ---------------  ------------------
Net increase (decrease).................            3,630  $          (28,328)          (2,156) $             (674)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
                                      FS-105
<PAGE>   1419
                             GT GLOBAL INCOME FUNDS
 
5. WRITTEN OPTIONS:
The GT Global Government Income Fund's and the GT Global Strategic Income Fund's
written options contract activity for the year ended October 31, 1997 was as
follows:
 
                      COVERED CALL AND PUT OPTION WRITTEN
 
<TABLE>
<CAPTION>
                                                                                                          UNDERLYING
                                                                                                            NOMINAL
                                                                                                           AMOUNT IN
GT GLOBAL GOVERNMENT INCOME FUND                                                                              USD      PREMIUMS
- --------------------------------------------------------------------------------------------------------  -----------  ---------
<S>                                                                                                       <C>          <C>
Options outstanding at October 31, 1996.................................................................  $        --  $      --
Options written.........................................................................................  213,530,000  1,091,938
Options cancelled in closing purchase transactions......................................................  (14,700,000)   (93,163)
Options expired prior to exercise.......................................................................  (193,990,000)  (954,102)
Options exercised.......................................................................................           --         --
                                                                                                          -----------  ---------
Options outstanding at October 31, 1997.................................................................  $ 4,840,000  $  44,673
                                                                                                          -----------  ---------
                                                                                                          -----------  ---------
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                                          UNDERLYING
                                                                                                            NOMINAL
                                                                                                           AMOUNT IN
GT GLOBAL STRATEGIC INCOME FUND                                                                               USD      PREMIUMS
- --------------------------------------------------------------------------------------------------------  -----------  ---------
<S>                                                                                                       <C>          <C>
Options outstanding at October 31, 1996.................................................................  $        --  $      --
Options written.........................................................................................    5,208,000    301,543
Options cancelled in closing purchase transactions......................................................           --         --
Options expired prior to exercise.......................................................................           --         --
Options exercised.......................................................................................   (5,208,000)  (301,543)
                                                                                                          -----------  ---------
Options outstanding at October 31, 1997.................................................................  $        --  $      --
                                                                                                          -----------  ---------
                                                                                                          -----------  ---------
</TABLE>
 
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Funds designate the
following amounts as capital gain dividends for the fiscal year ended October
31, 1997:
 
<TABLE>
<CAPTION>
                                                                                                          CAPITAL GAIN
FUND                                                                                                        DIVIDEND
- --------------------------------------------------------------------------------------------------------  ------------
<S>                                                                                                       <C>
GT Global Government Income Fund........................................................................            --
GT Global High Income Fund..............................................................................   $ 6,927,413
GT Global Strategic Income Fund.........................................................................            --
</TABLE>
 
                                      FS-106
<PAGE>   1420
 
                                                                    STATEMENT OF
                                                          ADDITIONAL INFORMATION
 
                            ADVISOR CLASS SHARES OF
 
                          AIM DEVELOPING MARKETS FUND
                           AIM EMERGING MARKETS FUND
                         AIM LATIN AMERICAN GROWTH FUND
 
                             (SERIES PORTFOLIOS OF
                             AIM INVESTMENT FUNDS)
 
                               11 GREENWAY PLAZA
                                   SUITE 100
                             HOUSTON, TX 77046-1173
                                 (713) 626-1919
 
                             ---------------------
 
        THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND
           IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS OF THE
            ABOVE-NAMED FUNDS, A COPY OF WHICH MAY BE OBTAINED FREE
                OF CHARGE FROM AUTHORIZED DEALERS OR BY WRITING
                           A I M DISTRIBUTORS, INC.,
                     P.O. BOX 4739, HOUSTON, TX 77210-4739
                          OR BY CALLING (800) 347-4246
 
                             ---------------------
 
          STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 8, 1998
     RELATING TO THE AIM DEVELOPING MARKETS FUND: ADVISOR CLASS PROSPECTUS,
   THE AIM EMERGING MARKETS FUND: ADVISOR CLASS PROSPECTUS AND THE AIM LATIN
  AMERICAN GROWTH FUND: ADVISOR CLASS PROSPECTUS EACH DATED SEPTEMBER 8, 1998
<PAGE>   1421
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                                              PAGE NO.
                                                              --------
<S>                                                           <C>
INTRODUCTION................................................      4
GENERAL INFORMATION ABOUT THE FUNDS.........................      4
  The Trust and Its Shares..................................      4
INVESTMENT OBJECTIVES AND POLICIES..........................      5
  Investment Objectives.....................................      5
  Selection of Equity Investments...........................      5
  Investments in Other Investment Companies.................      6
  Depositary Receipts.......................................      6
  Warrants or Rights........................................      7
  Lending of Portfolio Securities...........................      7
  Commercial Bank Obligations...............................      7
  Repurchase Agreements.....................................      7
  Borrowing, Reverse Repurchase Agreements and "Roll"
     Transactions...........................................      8
  Short Sales...............................................      8
  Temporary Defensive Strategies............................      9
  Samurai and Yankee Bonds..................................      9
  Debt Conversions..........................................      9
  Premium Securities........................................     10
  Indexed Debt Securities...................................     10
  Structured Investments....................................     10
  Stripped Income Securities................................     10
  Floating and Variable Rate Income Securities..............     11
  Swaps, Caps, Floors and Collars...........................     11
OPTIONS, FUTURES AND CURRENCY STRATEGIES....................     11
  Special Risks of Options, Futures and Currency
     Strategies.............................................     11
  Writing Call Options......................................     12
  Writing Put Options.......................................     13
  Purchasing Put Options....................................     13
  Purchasing Call Options...................................     13
  Index Options.............................................     15
  Interest Rate, Currency and Stock Index Futures
     Contracts..............................................     15
  Options on Futures Contracts..............................     17
  Limitations on Use of Futures, Options on Futures and
     Certain Options on Currencies..........................     17
  Forward Contracts.........................................     18
  Foreign Currency Strategies -- Special Considerations.....     18
  Cover.....................................................     19
RISK FACTORS................................................     19
  Illiquid Securities.......................................     19
  Foreign Securities........................................     20
INVESTMENT LIMITATIONS......................................     25
  Developing Markets Fund...................................     25
  Emerging Markets Fund.....................................     26
  Latin American Fund.......................................     28
EXECUTION OF PORTFOLIO TRANSACTIONS.........................     29
  Portfolio Trading and Turnover............................     30
</TABLE>
    
 
                                        2
<PAGE>   1422
 
   
<TABLE>
<CAPTION>
                                                              PAGE NO.
                                                              --------
<S>                                                           <C>
MANAGEMENT..................................................     31
  Trustees and Executive Officers...........................     31
  Investment Management and Administration Services.........     33
  Distribution Services.....................................     33
  Expenses of the Funds.....................................     33
NET ASSET VALUE DETERMINATION...............................     34
HOW TO PURCHASE AND REDEEM SHARES...........................     34
  Programs and Services for Shareholders....................     35
  Dividend Order............................................     35
TAXES.......................................................     35
  General...................................................     35
  Foreign Taxes.............................................     36
  Passive Foreign Investment Companies......................     36
  Non-U.S. Shareholders.....................................     36
  Options, Futures and Foreign Currency Transactions........     37
MISCELLANEOUS INFORMATION...................................     37
  Custodian.................................................     38
  Transfer Agency and Accounting Agency Services............     38
  Independent Accountants...................................     38
  Shareholder Liability.....................................     38
  Name......................................................     38
  Control Persons and Principal Holders of Securities.......     39
INVESTMENT RESULTS..........................................     40
  Total Return Quotations...................................     40
  Other Information Regarding Standard Total and Cumulative
     Total Returns for Developing Markets Fund..............     41
  Performance Information...................................     42
APPENDIX....................................................     44
  Description of Bond Ratings...............................     44
  Description of Commercial Paper Ratings...................     45
  Absence of Rating.........................................     45
FINANCIAL STATEMENTS........................................     FS
</TABLE>
    
 
                                        3
<PAGE>   1423
 
                                  INTRODUCTION
 
  This Statement of Additional Information relates to the Advisor Class shares
of AIM Developing Markets Fund ("Developing Markets Fund"), AIM Emerging Markets
Fund ("Emerging Markets Fund"), and AIM Latin American Growth Fund ("Latin
American Fund") (each, a "Fund," and collectively, the "Funds"). Developing
Markets Fund and Latin American Fund each is a non-diversified, and Emerging
Markets Fund is a diversified, series of AIM Investment Funds (the "Trust"), a
registered open-end management investment company organized as a Delaware
business trust. On October 31, 1997, the Developing Markets Fund, which had no
prior operating history, acquired the assets and assumed the liabilities of G.T.
Global Developing Markets Fund, Inc. (the "Predecessor Fund"), a closed-end
investment company.
 
   
  A I M Advisors, Inc. ("AIM") serves as the investment manager of and
administrator for, and INVESCO (NY), Inc. (the "Sub-advisor") serves as the
investment sub-advisor and sub-administrator for the Funds.
    
 
   
  The Trust is a series mutual fund. The rules and regulations of the Securities
and Exchange Commission (the "SEC") require all mutual funds to furnish
prospective investors certain information concerning the activities of the fund
being considered for investment. This information for Developing Markets Fund is
included in a separate Prospectus dated September 8, 1998, for Emerging Markets
Fund is included in a separate Prospectus dated September 8, 1998 and for Latin
American Fund is included in a separate Prospectus dated September 8, 1998.
Additional copies of the Prospectuses and this Statement of Additional
Information may be obtained without charge by writing the principal distributor
of the Funds' shares, A I M Distributors, Inc. ("AIM Distributors"), P.O. Box
4739, Houston, TX 77210-4739 or by calling (800) 347-4246. Investors must
receive a Prospectus before they invest.
    
 
  This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Funds. Some of the
information required to be in this Statement of Additional Information is also
included in the Prospectus; and, in order to avoid repetition, reference will be
made to sections of the Prospectus. Additionally, the Prospectus and this
Statement of Additional Information omit certain information contained in the
Registration Statement filed with the SEC. Copies of the Registration Statement,
including items omitted from the Prospectus and this Statement of Additional
Information, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
 
                      GENERAL INFORMATION ABOUT THE FUNDS
 
THE TRUST AND ITS SHARES
 
   
  The Trust previously operated under the name G.T. Investment Funds, Inc.,
which was organized as a Maryland corporation on October 29, 1987. The Trust was
reorganized on September 8, 1998 as a Delaware business trust, and is registered
with the SEC as a diversified open-end series management investment company. The
Trust currently consists of the following portfolios: AIM Global Financial
Services Fund, AIM Global Infrastructure Fund, AIM Global Resources Fund, AIM
Global Consumer Products and Services Fund, AIM Global Healthcare Fund, AIM
Global Telecommunications Fund, AIM Global Government Income Fund, AIM Global
High Income Fund, AIM Strategic Income Fund, AIM Global Growth and Income Fund,
AIM Emerging Markets Fund, AIM Developing Markets Fund, and AIM Latin American
Growth Fund. Each of these funds has three separate classes: Class A, Class B
and Advisor Class shares. All historical financial and other information
contained in this Statement of Additional Information for periods prior to
September 8, 1998, is that of the series of G.T. Investment Funds, Inc. (renamed
AIM Investment Funds, Inc.).
    
 
  This Statement of Additional Information relates solely to the Advisor Class
shares of the Fund.
 
  The term "majority of the outstanding shares" of the Trust, a particular Fund
or a particular class of a Fund means, respectively, the vote of the lesser of
(a) 67% or more of the shares of the Trust, such Fund or such class present at a
meeting of the Trust's shareholders, if the holders of more than 50% of the
outstanding shares of the Trust, such Fund or such class are present or
represented by proxy, or (b) more than 50% of the outstanding shares of the
Trust, such Fund or such class.
 
  Class A, Class B and Advisor Class shares of each Fund have equal rights and
privileges. Each share of a particular class is entitled to one vote, to
participate equally in dividends and distributions declared by the Trust's Board
of Trustees with respect to the class of such Fund and, upon liquidation of the
Fund, to participate proportionately in the net assets of the Fund allocable to
such class remaining after satisfaction of outstanding liabilities of the Fund
allocable to such class. Fund shares are fully paid, non-assessable and fully
transferable when issued and have no preemptive rights and have such conversion
and exchange rights as set forth in the Prospectus and this Statement of
Additional Information. Fractional shares have proportionately the same rights,
including voting rights, as are provided for a full share.
 
                                        4
<PAGE>   1424
 
   
  Shareholders of the Funds do not have cumulative voting rights, and therefore
the holders of more than 50% of the outstanding shares of all Funds voting
together for election of trustees may elect all of the members of the Board of
Trustees of the Trust. In such event, the remaining holders cannot elect any
trustees of the Trust.
    
 
                       INVESTMENT OBJECTIVES AND POLICIES
 
INVESTMENT OBJECTIVES
 
  Developing Markets Fund. The primary investment objective of Developing
Markets Fund is long-term capital appreciation. Its secondary investment
objective is income, to the extent consistent with seeking capital appreciation.
The Fund normally invests substantially all of its assets in issuers in the
developing (or "emerging") markets of Asia, Europe, Latin America and elsewhere.
The Fund does not consider the following countries to be emerging markets:
Australia, Austria, Belgium, Canada, Denmark, England, Finland, France, Germany,
Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Spain, Sweden,
Switzerland and the United States.
 
  Emerging Markets Fund. The investment objective of Emerging Markets Fund is
long-term growth of capital. The Fund seeks this objective by investing, under
normal circumstances, at least 65% of its total assets in equity securities of
companies in emerging markets. The Fund does not consider the following
countries to be emerging markets: Australia, Austria, Belgium, Canada, Denmark,
England, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New
Zealand, Norway, Spain, Sweden, Switzerland and United States. The Fund normally
may invest up to 35% of its assets in a combination of (i) debt securities of
government or corporate issuers in emerging markets; (ii) equity and debt
securities of issuers in developed countries, including the United States; (iii)
securities of issuers in emerging markets not included in the list of emerging
markets set forth in the Fund's current Prospectus, if investing therein becomes
feasible and desirable subsequent to the date of the Fund's current Prospectus;
and (iv) cash and money market instruments.
 
   
  In determining what countries constitute emerging markets with respect to
Developing Market Fund and Emerging Markets Fund, the Sub-advisor will consider,
among other things, data, analysis, and classification of countries published or
disseminated by the International Bank for Reconstruction and Development
(commonly known as the World Bank) and the International Finance Corporation
("IFC").
    
 
  Latin American Fund. The investment objective of Latin American Fund is
capital appreciation. The Fund will normally invest at least 65% of its total
assets in securities of a broad range of Latin American issuers. Under current
market conditions, the Fund expects to invest primarily in equity and debt
securities issued by companies and governments in Mexico, Chile, Brazil and
Argentina. Though the Fund can normally invest up to 35% of its total assets in
U.S. securities, the Fund reserves the right to be primarily invested in U.S.
securities for temporary defensive purposes or pending investment of the
proceeds of the offering made hereby.
 
SELECTION OF EQUITY INVESTMENTS
 
   
  In determining the appropriate distribution of investments among various
countries and geographic regions for the Funds, the Sub-advisor ordinarily
considers the following factors: prospects for relative economic growth among
the different countries in which a Fund may invest; expected levels of
inflation; government policies influencing business conditions; the outlook for
currency relationships; and the range of the individual investment opportunities
available to international investors.
    
 
   
  In analyzing companies for investment by each Fund, the Sub-advisor ordinarily
looks for one or more of the following characteristics: an above-average
earnings growth per share; high return on invested capital; healthy balance
sheet; sound financial and accounting policies and overall financial strength;
strong competitive advantages; effective research and product development and
marketing; efficient service; pricing flexibility; strength of management; and
general operating characteristics which will enable the companies to compete
successfully in their respective marketplaces. In certain countries,
governmental restrictions and other limitations on investment may affect the
maximum percentage of equity ownership in any one company by the Funds. In
addition, in some instances only special classes of securities may be purchased
by foreigners and the market prices, liquidity and rights with respect to those
securities may vary from shares owned by nationals.
    
 
  Although the Funds value their assets daily in terms of U.S. dollars, the
Funds do not intend to convert their holdings of foreign currencies into U.S.
dollars on a daily basis. The Funds will do so from time to time, and investors
should be aware of the costs of currency conversion. Although foreign exchange
dealers do not charge a fee for conversion, they do realize a profit based on
the difference ("spread") between the prices at which they are buying and
selling various currencies.
 
                                        5
<PAGE>   1425
 
Thus, a dealer may offer to sell a foreign currency to the Funds at one rate,
while offering a lesser rate of exchange should a Fund desire to sell that
currency to the dealer.
 
   
  There may be times when, in the opinion of the Sub-advisor, prevailing market,
economic or political conditions warrant reducing the proportion of each Fund's
assets invested in equity securities and increasing the proportion held in cash
or short-term obligations denominated in U.S. dollars or other currencies. A
portion of each Fund's assets may be held in U.S. dollars or short-term
interest-bearing dollar-denominated securities to provide for ongoing expenses
and redemptions.
    
 
   
  The Funds may be prohibited under the Investment Company Act of 1940, as
amended ("1940 Act"), from purchasing the securities of any foreign company
that, in its most recent fiscal year, derived more than 15% of its gross
revenues from securities-related activities ("securities-related companies"). In
a number of countries, including those in Latin America, commercial banks act as
securities broker/dealers, investment advisors and underwriters or otherwise
engage in securities-related activities, which may limit the Fund's ability to
hold securities issued by such banks. The Fund has obtained an exemption from
the SEC to permit it to invest in certain of these securities subject to certain
restrictions.
    
 
   
  For investment purposes, an issuer is typically considered as located in a
particular country if it (a) is incorporated under the laws of or has its
principal office in that country, or (b) it normally derives 50% or more of its
total revenue from business in that country. However, these are not absolute
requirements, and certain companies incorporated in a particular country and
considered by the Sub-advisor to be located in that country may have substantial
off-shore operations or subsidiaries and/or export sales exceeding in size the
assets or sales in that country.
    
 
INVESTMENTS IN OTHER INVESTMENT COMPANIES
 
   
  The Funds may invest in the securities of investment companies (including
investment vehicles or companies advised by the Sub-advisor or its affiliates
("Affiliated Funds")) within the limits of the 1940 Act. These limitations
currently provide that, in general, each Fund may purchase shares of a
closed-end investment company unless (a) such a purchase would cause the Fund to
own in the aggregate more than 3 percent of the total outstanding voting stock
of the investment company or (b) such a purchase would cause the Fund to have
more than 5 percent of its total assets invested in the investment company or
more than 10 percent of its total assets invested in an aggregate of all such
investment companies. Investment in such investment companies may also involve
the payment of substantial premiums above the value of such companies' portfolio
securities. The Funds do not intend to invest in such investment companies
unless, in the judgment of the Sub-advisor, the potential benefits of such
investments justify the payment of any applicable premiums. The return on such
securities will be reduced by operating expenses of such companies including
payments to the investment managers of those investment companies. With respect
to investments in Affiliated Funds, the Sub-advisor waives its advisory fee to
the extent that such fees are based on assets of the Fund invested in Affiliated
Funds.
    
 
  Certain countries in which the Funds invest presently may be made only by
acquiring shares of other investment companies with local governmental approval
to invest in those countries. At such time as direct investment in those
countries is allowed, the Funds anticipate investing directly in those markets.
 
DEPOSITARY RECEIPTS
 
  Each Fund may hold equity securities of foreign issuers in the form of
American Depositary Receipts ("ADRs"), American Depositary Shares ("ADSs"),
Global Depositary Receipts ("GDRs") and European Depositary Receipts ("EDRs"),
or other securities convertible into securities of eligible issuers. These
securities may not necessarily be denominated in the same currency as the
securities for which they may be exchanged. ADRs and ADSs typically are issued
by an American bank or trust company and evidence ownership of underlying
securities issued by a foreign corporation. EDRs, which are sometimes referred
to as Continental Depositary Receipts ("CDRs"), are issued in Europe typically
by foreign banks and trust companies and evidence ownership of either foreign or
domestic securities. GDRs are similar to EDRs and are designed for use in
several international financial markets. Generally, ADRs and ADSs in registered
form are designed for use in United States securities markets and EDRs in bearer
form are designed for use in European securities markets. For purposes of each
Fund's investment policies, a Fund's investments in ADRs, ADSs, GDRs and EDRs
will be deemed to be investments in the equity securities representing
securities of foreign issuers into which they may be converted.
 
   
  ADR facilities may be established as either "unsponsored" or "sponsored."
While ADRs issued under these two types of facilities are in some respects
similar, there are distinctions between them relating to the rights and
obligations of ADR holders and the practices of market participants. A
depository may establish an unsponsored facility without participation by (or
even necessarily the acquiescence of) the issuer of the deposited securities,
although typically the depository requests a letter of non-objection from such
issuer prior to the establishment of the facility. Holders of unsponsored ADRs
    
                                        6
<PAGE>   1426
 
   
generally bear all the costs of such facilities. The depository usually charges
fees upon the deposit and withdrawal of the deposited securities, the conversion
of dividends into U.S. dollars, the disposition of non-cash distributions, and
the performance of other services. The depository of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited securities or to pass-through voting
rights to ADR holders in respect of the deposited securities. Sponsored ADR
facilities are created in generally the same manner as unsponsored facilities,
except that the issuer of the deposited securities enters into a deposit
agreement with the depository. The deposit agreement sets out the rights and
responsibilities of the issuer, the depository and the ADR holders. With
sponsored facilities, the issuer of the deposited securities generally will bear
some of the costs relating to the facility (such as dividend payment fees of the
depository), although ADR holders continue to bear certain other costs (such as
deposit and withdrawal fees). Under the terms of most sponsored arrangements,
depositories agree to distribute notices of shareholder meetings and voting
instructions, and to provide shareholder communications and other information to
the ADR holders at the request of the issuer of the deposited securities. The
Fund may invest in both sponsored and unsponsored ADRs.
    
 
WARRANTS OR RIGHTS
 
  Warrants or rights may be acquired by each Fund in connection with other
securities or separately and provide a Fund with the right to purchase at a
later date other securities of the issuer. Warrants are securities permitting,
but not obligating, their holder to subscribe for other securities or
commodities. Warrants do not carry with them the right to dividends or voting
rights with respect to the securities that they entitle their holder to
purchase, and they do not represent any rights in the assets of the issuer. As a
result, warrants may be considered more speculative than certain other types of
investments. In addition, the value of a warrant does not necessarily change
with the value of the underlying securities and a warrant ceases to have value
if it is not exercised prior to its expiration date.
 
LENDING OF PORTFOLIO SECURITIES
 
   
  For the purpose of realizing additional income, the Funds may make secured
loans of portfolio securities amounting to not more than 30% (in the case of
Developing Markets Fund and Emerging Markets Fund) or 25% (in the case of Latin
American Fund) of its total assets. Securities loans are made to broker/dealers
or institutional investors pursuant to agreements requiring that the loans
continuously be secured by collateral at least equal at all times to the value
of the securities lent plus any accrued interest, "marked to market" on a daily
basis. The Funds may pay reasonable administrative and custodial fees in
connection with loans of its securities. While the securities loan is
outstanding with respect to a Fund, the Fund will continue to receive the
equivalent of the interest or dividends paid by the issuer on the securities, as
well as interest on the investment of the collateral or a fee from the borrower.
The Fund will have a right to call each loan and obtain the securities within
the stated settlement period. The Fund will not have the right to vote equity
securities while they are lent, but it may call in a loan in anticipation of any
important vote. Loans will be made only to firms deemed by the Sub-advisor to be
of good standing and will not be made unless, in the judgment of the
Sub-advisor, the consideration to be earned from such loans would justify the
risk.
    
 
COMMERCIAL BANK OBLIGATIONS
 
  For the purposes of each Fund's investment policies with respect to bank
obligations, obligations of foreign branches of U.S. banks and of foreign banks
are obligations of the issuing bank and may be general obligations of the parent
bank. Such obligations, however, may be limited by the terms of a specific
obligation and by government regulation. As with investment in non-U.S.
securities in general, investments in the obligations of foreign branches of
U.S. banks and of foreign banks may subject a Fund to investment risks that are
different in some respects from those of investments in obligations of domestic
issuers. Although a Fund typically will acquire obligations issued and supported
by the credit of U.S. or foreign banks having total assets at the time of
purchase in excess of $1 billion, this $1 billion figure is not an investment
policy or restriction of any Fund. For the purposes of calculation with respect
to the $1 billion figure, the assets of a bank will be deemed to include the
assets of its U.S. and non-U.S. branches.
 
REPURCHASE AGREEMENTS
 
   
  A repurchase agreement is a transaction in which a Fund purchases a security
from a bank or recognized securities dealer and simultaneously commits to resell
that security to the bank or dealer at an agreed upon price, date, and market
rate of interest unrelated to the coupon rate or maturity of the purchased
security. Although repurchase agreements carry certain risks not associated with
direct investments in securities, including possible decline in the market value
of the underlying securities and delays and costs to a Fund if the other party
to the repurchase agreement becomes bankrupt, the Funds intend to enter into
repurchase agreements only with banks and dealers believed by the Sub-advisor to
present
    
 
                                        7
<PAGE>   1427
 
   
minimum credit risks in accordance with guidelines established by the Trust's
Board of Trustees. The Sub-advisor will review and monitor the creditworthiness
of such institutions under the Board's general supervision.
    
 
  The Funds will invest only in repurchase agreements collateralized at all
times in an amount at least equal to the repurchase price plus accrued interest.
To the extent that the proceeds from any sale of such collateral upon a default
in the obligation to repurchase were less than the repurchase price, a Fund
would suffer a loss. If the financial institution which is party to the
repurchase agreement petitions for bankruptcy or otherwise becomes subject to
bankruptcy or other liquidation proceedings, there may be restrictions on a
Fund's ability to sell the collateral and the Fund could suffer a loss. However,
with respect to financial institutions whose bankruptcy or liquidation
proceedings are subject to the U.S. Bankruptcy Code, each Fund intends to comply
with provisions under the U.S. Bankruptcy Code that would allow it immediately
to resell the collateral. There is no limitation on the amount of a Fund's
assets that may be subject to repurchase agreements at any given time. The Funds
will not enter into a repurchase agreement with a maturity of more than seven
days if, as a result, more than 15% (for Emerging Markets Fund and Developing
Markets Fund) or 10% (for Latin American Fund) of the value of its net assets
would be invested in such repurchase agreements and other illiquid investments.
 
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
 
  No Fund's borrowings will exceed 33 1/3% of the Fund's total assets, i.e.,
each Fund's total assets at all times will equal at least 300% of the amount of
outstanding borrowings. If market fluctuations in the value of a Fund's
portfolio holdings or other factors cause the ratio of the Fund's total assets
to outstanding borrowings to fall below 300%, within three days (excluding
Sundays and holidays) of such event the Fund may be required to sell portfolio
securities to restore the 300% asset coverage, even though from an investment
standpoint such sales might be disadvantageous. Each Fund also may borrow up to
5% of its total assets for temporary or emergency purposes other than to meet
redemptions. Any borrowing by a Fund may cause greater fluctuation in the value
of its shares than would be the case if the Fund did not borrow.
 
  The Funds' fundamental investment limitations permit them to borrow money for
leveraging purposes. Developing Markets Fund, however, currently is prohibited,
pursuant to a non-fundamental investment policy, from borrowing money in order
to purchase securities. In addition, Emerging Markets Fund and Latin American
Fund currently are prohibited, pursuant to a non-fundamental investment policy,
from purchasing securities during times when outstanding borrowings represent
more than 5% of its assets. Nevertheless, this policy may be changed in the
future by a vote of a majority of the Trust's Board of Trustees. If a Fund
employs leverage in the future, it would be subject to certain additional risks.
Use of leverage creates an opportunity for greater growth of capital but would
exaggerate any increases or decreases in the Fund's net asset value. When the
income and gains on securities purchased with the proceeds of borrowings exceed
the costs of such borrowings, the Fund's earnings or net asset value will
increase faster than otherwise would be the case; conversely, if such income and
gains fail to exceed such costs, the Fund's earnings or net asset value would
decline faster than would otherwise be the case.
 
   
  Each Fund may enter into reverse repurchase agreements. A reverse repurchase
agreement is a borrowing transaction in which a Fund transfers possession of a
security to another party, such as a bank or broker/dealer in return for cash,
and agrees to repurchase the security in the future at an agreed upon price,
which includes an interest component. Emerging Markets Fund also may engage in
"roll" borrowing transactions which involve the Fund's sale of Government
National Mortgage Association certificates or other securities together with a
commitment (for which the Fund may receive a fee) to purchase similar, but not
identical, securities at a future date. Each Fund will segregate with a
custodian liquid assets in an amount sufficient to cover its obligations under
"roll" transactions (for Emerging Markets Fund) and reverse repurchase
agreements with broker/dealers. No segregation is required for reverse
repurchase agreements with banks.
    
 
SHORT SALES
 
  The Fund may make short sales of securities, although it has no current
intention of doing so. A short sale is a transaction in which the Fund sells a
security in anticipation that the market price of that security will decline.
The Fund may make short sales (i) as a form of hedging to offset potential
declines in long positions in securities it owns, or anticipates acquiring, and
(ii) in order to maintain portfolio flexibility.
 
  When a Fund makes a short sale of a security it does not own, it must borrow
the security sold short and deliver it to the broker-dealer or other
intermediary through which it made the short sale. The Fund may have to pay a
fee to borrow particular securities and will often be obligated to pay over any
payments received on such borrowed securities.
 
  A Fund's obligation to replace the borrowed security when the borrowing is
called or expires will be secured by collateral deposited with the intermediary.
The Fund will also be required to deposit collateral with its custodian to the
extent, if any, necessary so that the value of both collateral deposits in the
aggregate is at all times equal to at least 100%
                                        8
<PAGE>   1428
 
of the current market value of the security sold short. Depending on
arrangements made with the intermediary from which it borrowed the security
regarding payment of any amounts received by the Fund on such security, the Fund
may not receive any payments (including interest) on its collateral deposited
with such intermediary.
 
  If the price of the security sold short increases between the time of the
short sale and the time the Fund replaces the borrowed security, the Fund will
incur a loss; conversely, if the price declines, the Fund will realize a gain.
Any gain will be decreased, and any loss increased, by the transaction costs
associated with the transaction. Although the Fund's gain is limited by the
price at which it sold the security short, its potential loss is theoretically
unlimited.
 
  Neither Emerging Markets Fund nor Latin American Fund will make a short sale
if, after giving effect to such sale, the market value of the securities sold
short exceeds 25% of the value of its total assets or the Fund's aggregate short
sales of the securities of any one issuer exceed the lesser of 2% of the Fund's
net assets or 2% of the securities of any class of the issuer. Moreover, these
Funds may engage in short sales only with respect to securities listed on a
national securities exchange. These Funds may make short sales "against the box"
without respect to such limitations. In this type of short sale, at the time of
the sale the Fund owns the security it has sold short or has the immediate and
unconditional right to acquire at no additional cost the identical security.
 
   
  Developing Markets Fund may only make short sales "against the box." The Fund
might make a short sale "against the box" in order to hedge against market risks
when the Sub-advisor believes that the price of a security may decline, causing
a decline in the value of a security owned by the Fund or a security convertible
into or exchangeable for such security. In such case, any future losses in the
Fund's long position should be reduced by a gain in the short position.
Conversely, any gain in the long position should be reduced by a loss in the
short position. The extent to which such gains or losses in the long position
are reduced will depend upon the amount of the securities sold short relative to
the amount of the securities the Fund owns, either directly or indirectly, and,
in the case where the Fund owns convertible securities, changes in the
investment values or conversion premiums of such securities. There will be
certain additional transaction costs associated with short sales "against the
box," but the Fund will endeavor to offset these costs with income from the
investment of the cash proceeds of short sales.
    
 
TEMPORARY DEFENSIVE STRATEGIES
 
  The Funds may invest in the following types of money market instruments (i.e.,
debt instruments with less than 12 months remaining until maturity) denominated
in U.S. dollars or other currencies (in the case of Latin American Fund, the
currency of any Latin American country): (a) obligations issued or guaranteed by
the U.S. or foreign governments (in the case of Latin American Fund, the
government of any Latin American country), their agencies, instrumentalities or
municipalities; (b) obligations of international organizations designed or
supported by multiple foreign governmental entities to promote economic
reconstruction or development; (c) finance company obligations, corporate
commercial paper and other short-term commercial obligations; (d) bank
obligations (including certificates of deposit, time deposits, demand deposits
and bankers' acceptances); (e) repurchase agreements with respect to the
foregoing; and (f) other substantially similar short-term debt securities with
comparable characteristics.
 
  The Funds may invest in commercial paper rated as low as A-3 by Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P") or P-3 by Moody's
Investors Service, Inc. ("Moody's") or, if not rated, determined by the Manager
to be of comparable quality. Obligations rated A-3 and P-3 are considered by S&P
and Moody's, respectively, to have an acceptable capacity for timely repayment.
However, these securities may be more vulnerable to adverse effects of changes
in circumstances than obligations carrying higher designations.
 
SAMURAI AND YANKEE BONDS
 
  Subject to its fundamental investment restrictions, Developing Markets Fund
and Emerging Markets Fund may invest in yen-denominated bonds sold in Japan by
non-Japanese issuers ("Samurai bonds"), and may invest in dollar-denominated
bonds sold in the United States by non-U.S. issuers ("Yankee bonds"). As
compared with bonds issued in their countries of domicile, such bond issues
normally carry a higher interest rate but are less actively traded. It is the
policy of each of these Funds to invest in Samurai or Yankee bond issues only
after taking into account considerations of quality and liquidity, as well as
yield. In the case of Emerging Markets Fund, these bonds would be issued by
governments which are members of the Organization for Economic Cooperation and
Development or have AAA ratings.
 
DEBT CONVERSIONS
 
  Several Latin American countries have adopted debt conversion programs,
pursuant to which investors may use external debt of a country, directly or
indirectly, to make investments in local companies. The terms of the various
programs vary
 
                                        9
<PAGE>   1429
 
   
from country to country, although each program includes significant restrictions
on the application of the proceeds received in the conversion and on the
remittance of profits on the investment and of the invested capital. Latin
American Fund intends to acquire Sovereign Debt, as defined in the Prospectus,
to hold and trade in appropriate circumstances as described in the Prospectus,
as well as to participate in Latin American debt conversion programs. The
Sub-advisor will evaluate opportunities to enter into debt conversion
transactions as they arise but does not currently intend to invest more than 5%
of the Fund's assets in such programs.
    
 
PREMIUM SECURITIES
 
  Developing Markets Fund may invest in income securities bearing coupon rates
higher than prevailing market rates. Such "premium" securities are typically
purchased at prices greater than the principal amounts payable on maturity. The
Fund will not amortize the premium paid for such securities in calculating its
net investment income. As a result, in such cases the purchase of such
securities provides the Fund a higher level of investment income distributable
to shareholders on a current basis than if the Fund purchased securities bearing
current market rates of interest. If securities purchased by the Fund at a
premium are called or sold prior to maturity, the Fund will realize a loss to
the extent the call or sale price is less than the purchase price. Additionally,
the Fund will realize a loss if it holds such securities to maturity.
 
INDEXED DEBT SECURITIES
 
  Developing Markets Fund may invest in debt securities issued by banks and
other business entities not located in developing market countries that are
indexed to certain specific foreign currency exchange rates, interest rates or
other reference rates. The terms of such securities provide that their principal
amount is adjusted upwards or downwards (but ordinarily not below zero) at
maturity to reflect changes in the exchange rate between two currencies (or
other rates) while the obligations are outstanding. While such securities offer
the potential for an attractive rate of return, they also entail the risk of
loss of principal. New forms of such securities continue to be developed. The
Fund may invest in such securities to the extent consistent with its investment
objectives.
 
STRUCTURED INVESTMENTS
 
  Developing Markets Fund may invest a portion of its assets in interests in
entities organized and operated solely for the purpose of restructuring the
investment characteristics of Sovereign Debt. This type of restructuring
involves the deposit with or purchase by an entity, such as a corporation or
trust, of specified instruments (such as commercial bank loans or Brady Bonds)
and the issuance by that entity of one or more classes of securities
("Structured Investments") backed by, or representing interests in, the
underlying instruments. The cash flow on the underlying instruments may be
apportioned among the newly issued Structured Investments to create securities
with different investment characteristics such as varying maturities, payment
priorities and interest rate provisions, and the extent of the payments made
with respect to Structured Investments is dependent on the extent of the cash
flow on the underlying instruments. Because Structured Investments of the type
in which the Fund anticipates it will invest typically involve no credit
enhancement, their credit risk generally will be equivalent to that of the
underlying instruments.
 
  Developing Markets Fund is permitted to invest in a class of Structured
Investments that is either subordinated or not subordinated to the right of
payment of another class. Subordinated Structured Investments typically have
higher yields and present greater risks than unsubordinated Structured
Investments.
 
  Certain issuers of Structured Investments may be deemed to be "investment
companies" as defined in the 1940 Act. As a result, Developing Markets Fund's
investment in these Structured Investments may be limited by the restrictions
contained in the 1940 Act described above under "Investment Objectives and
Policies -- Investments in Other Investment Companies." Structured Investments
are typically sold in private placement transactions, and there currently is no
active trading market for Structured Investments.
 
STRIPPED INCOME SECURITIES
 
   
  Developing Markets Fund may invest a portion of its assets in stripped income
securities, which are obligations representing an interest in all or a portion
of the income or principal components of an underlying or related security, a
pool of securities or other assets. In the most extreme case, one class will
receive all of the interest (the "interest only class" or the "IO class"), while
the other class will receive all of the principal (the "principal-only class" or
the "PO class"). The market values of stripped income securities tend to be more
volatile in response to changes in interest rates than are conventional income
securities.
    
 
                                       10
<PAGE>   1430
 
FLOATING AND VARIABLE RATE INCOME SECURITIES
 
  Developing Markets Fund may invest a portion of its assets in floating or
variable rate income securities. Income securities may provide for floating or
variable rate interest or dividend payments. The floating or variable rate may
be determined by reference to a known lending rate, such as a bank's prime rate,
a certificate of deposit rate or the London Inter Bank Offered Rate (LIBOR).
Alternatively, the rate may be determined through an auction or remarketing
process. The rate also may be indexed to changes in the values of interest rate
or securities indexes, currency exchange rates or other commodities. The amount
by which the rate paid on an income security may increase or decrease may be
subject to periodic or lifetime caps. Floating and variable rate income
securities include securities whose rates vary inversely with changes in market
rates of interest. Such securities may also pay a rate of interest determined by
applying a multiple to the variable rate. The extent of increases and decreases
in the value of securities whose rates vary inversely with changes in market
rates of interest generally will be larger than comparable changes in the value
of an equal principal amount of a fixed rate security having similar credit
quality, redemption provisions and maturity.
 
SWAPS, CAPS, FLOORS AND COLLARS
 
  Developing Markets Fund may enter into interest rate, currency and index swaps
and may purchase or sell related caps, floors and collars and other derivative
instruments. The Fund expects to enter into these transactions primarily to
preserve a return or spread on a particular investment or portion of its
portfolio, to protect against currency fluctuations, as a technique for managing
the portfolio's duration (i.e., the price sensitivity to changes in interest
rates) or to protect against any increase in the price of securities the Fund
anticipates purchasing at a later date. The Fund intends to use these
transactions as hedges and will not sell interest rate caps, floors or collars
if it does not own securities or other instruments providing an income stream
roughly equivalent to what the Fund may be obligated to pay.
 
  Interest rate swaps involve the exchange by Developing Markets Fund with
another party of their respective commitments to pay or receive interest (for
example, an exchange of floating rate payments for fixed rate payments) with
respect to a notional amount of principal. A currency swap is an agreement to
exchange cash flows on a notional amount based on changes in the values of the
reference indices.
 
  The purchase of a cap entitles the purchaser to receive payments on a notional
principal amount from the party selling the cap to the extent that a specified
index exceeds a predetermined interest rate. The purchase of an interest rate
floor entitles the purchaser to receive payments on a notional principal amount
from the party selling the floor to the extent that a specified index falls
below a predetermined interest rate or amount. A collar is a combination of a
cap and a floor that preserves a certain return within a predetermined range of
interest rates or values.
 
                    OPTIONS, FUTURES AND CURRENCY STRATEGIES
 
SPECIAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES
 
  The use of options, futures contracts and forward currency contracts ("Forward
Contracts") involves special considerations and risks, as described below. Risks
pertaining to particular instruments are described in the sections that follow.
 
   
          (1) Successful use of most of these instruments depends upon the
     Sub-advisor's ability to predict movements of the overall securities and
     currency markets, which requires different skills than predicting changes
     in the prices of individual securities. While the Sub-advisor is
     experienced in the use of these instruments, there can be no assurance that
     any particular strategy adopted will succeed.
    
 
          (2) There might be imperfect correlation, or even no correlation,
     between price movements of an instrument and price movements of the
     investments being hedged. For example, if the value of an instrument used
     in a short hedge increased by less than the decline in value of the hedged
     investment, the hedge would not be fully successful. Such a lack of
     correlation might occur due to factors unrelated to the value of the
     investments being hedged, such as speculative or other pressures on the
     markets in which the hedging instrument is traded. The effectiveness of
     hedges using hedging instruments on indices will depend on the degree of
     correlation between price movements in the index and price movements in the
     investments being hedged.
 
   
          (3) Hedging strategies, if successful, can reduce risk of loss by
     wholly or partially offsetting the negative effect of unfavorable price
     movements in the investments being hedged. However, hedging strategies can
     also reduce opportunity for gain by offsetting the positive effect of
     favorable price movements in the hedged investments. For example, if a Fund
     entered into a short hedge because the Sub-advisor projected a decline in
     the price of a security in
    
 
                                       11
<PAGE>   1431
 
   
     the Fund's portfolio, and the price of that security increased instead, the
     gain from that increase might be wholly or partially offset by a decline in
     the price of the hedging instrument. Moreover, if the price of the hedging
     instrument declined by more than the increase in the price of the security,
     the Fund could suffer a loss. In either such case, the Fund would have been
     in a better position had it not hedged at all.
    
 
          (4) As described below, a Fund might be required to maintain assets as
     "cover," maintain segregated accounts or make margin payments when it takes
     positions in instruments involving obligations to third parties (i.e.,
     instruments other than purchased options). If the Fund were unable to close
     out its positions in such instruments, it might be required to continue to
     maintain such assets or accounts or make such payments until the position
     expired or matured. The requirements might impair the Fund's ability to
     sell a portfolio security or make an investment at a time when it would
     otherwise be favorable to do so, or require that the Fund sell a portfolio
     security at a disadvantageous time. A Fund's ability to close out a
     position in an instrument prior to expiration or maturity depends on the
     existence of a liquid secondary market or, in the absence of such a market,
     the ability and willingness of the other party to the transaction ("contra
     party") to enter into a transaction closing out the position. Therefore,
     there is no assurance that any position can be closed out at a time and
     price that is favorable to the Funds.
 
WRITING CALL OPTIONS
 
   
  Each Fund may write (sell) call options on securities, indices and currencies.
Call options generally will be written on securities and currencies that, in the
opinion of the Sub-advisor are not expected to make any major price moves in the
near future but that, over the long term, are deemed to be attractive
investments for a Fund.
    
 
  A call option gives the holder (buyer) the right to purchase a security or
currency at a specified price (the exercise price) at any time until (American
Style) or on (European Style) a certain date (the expiration date). So long as
the obligation of the writer of a call option continues, he may be assigned an
exercise notice, requiring him to deliver the underlying security or currency
against payment of the exercise price. This obligation terminates upon the
expiration of the call option, or such earlier time at which the writer effects
a closing purchase transaction by purchasing an option identical to that
previously sold.
 
  Portfolio securities or currencies on which call options may be written will
be purchased solely on the basis of investment considerations consistent with
each Fund's investment objective. When writing a call option, a Fund, in return
for the premium, gives up the opportunity for profit from a price increase in
the underlying security or currency above the exercise price, and retains the
risk of loss should the price of the security or currency decline. Unlike one
who owns securities or currencies not subject to an option, a Fund has no
control over when it may be required to sell the underlying securities or
currencies, since most options may be exercised at any time prior to the
option's expiration. If a call option that a Fund has written expires, the Fund
will realize a gain in the amount of the premium; however, such gain may be
offset by a decline in the market value of the underlying security or currency
during the option period. If the call option is exercised, the Fund will realize
a gain or loss from the sale of the underlying security or currency, which will
be increased or offset by the premium received. The Funds do not consider a
security or currency covered by a call option to be "pledged" as that term is
used in the Funds' policies that limit the pledging or mortgaging of their
assets.
 
  Writing call options can serve as a limited short hedge because declines in
the value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
appreciates to a price higher than the exercise price of the call option, it can
be expected that the option will be exercised and a Fund will be obligated to
sell the security or currency at less than its market value.
 
   
  The premium that a Fund receives for writing a call option is deemed to
constitute the market value of an option. The premium a Fund will receive from
writing a call option will reflect, among other things, the current market price
of the underlying investment, the relationship of the exercise price to such
market price, the historical price volatility of the underlying investment, and
the length of the option period. In determining whether a particular call option
should be written, the Sub-advisor will consider the reasonableness of the
anticipated premium and the likelihood that a liquid secondary market will exist
for those options.
    
 
  Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security or currency from
being called, or to permit the sale of the underlying security or currency.
Furthermore, effecting a closing transaction will permit a Fund to write another
call option on the underlying security or currency with either a different
exercise price, expiration date or both.
 
  Each Fund will pay transaction costs in connection with the writing of options
and in entering into closing purchase contracts. Transaction costs relating to
options activity normally are higher than those applicable to purchases and
sales of portfolio securities.
 
                                       12
<PAGE>   1432
 
  The exercise price of the options may be below, equal to or above the current
market values of the underlying securities or currencies at the time the options
are written. From time to time, a Fund may purchase an underlying security or
currency for delivery in accordance with the exercise of an option, rather than
delivering such security or currency from its portfolio. In such cases,
additional costs will be incurred.
 
  A Fund will realize a profit or loss from a closing purchase transaction if
the cost of the transaction is less or more, respectively, than the premium
received from writing the option. Because increases in the market price of a
call option generally will reflect increases in the market price of the
underlying security or currency, any loss resulting from the repurchase of a
call option is likely to be offset in whole or in part by appreciation of the
underlying security or currency owned by the Fund.
 
WRITING PUT OPTIONS
 
  Each Fund may write put options on securities, indices and currencies. A put
option gives the purchaser of the option the right to sell, and the writer
(seller) the obligation to buy, the underlying security or currency at the
exercise price at any time until (American style) or on (European style) the
expiration date. The operation of put options in other respects, including their
related risks and rewards, is identical substantially to that of call options.
 
   
  A Fund generally would write put options in circumstances where the
Sub-advisor wishes to purchase the underlying security or currency for the
Fund's portfolio at a price lower than the current market price of the security
or currency. In such event, the Fund would write a put option at an exercise
price that, reduced by the premium received on the option, reflects the lower
price it is willing to pay. Since the Fund would also receive interest on debt
securities or currencies maintained to cover the exercise price of the option,
this technique could be used to enhance current return during periods of market
uncertainty. The risk in such a transaction would be that the market price of
the underlying security or currency would decline below the exercise price less
the premium received.
    
 
  Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
depreciates to a price lower than the exercise price of the put option, it can
be expected that the put option will be exercised and the Fund will be obligated
to sell the security or currency at more than its market value.
 
PURCHASING PUT OPTIONS
 
  Each Fund may purchase put options on securities, indices and currencies. As
the holder of a put option, a Fund would have the right to sell the underlying
security or currency at the exercise price at any time until (American style) or
on (European style) the expiration date. A Fund may enter into closing sale
transactions with respect to such options, exercise them or permit them to
expire.
 
  A Fund may purchase a put option on an underlying security or currency
("protective put") owned by the Fund to protect against an anticipated decline
in the value of the security or currency. Such protection is provided only
during the life of the put option when the Fund, as the holder of the put
option, is able to sell the underlying security or currency at the put exercise
price regardless of any decline in the underlying security's market price or
currency's exchange value. The premium paid for the put option and any
transaction costs would reduce any profit otherwise available for distribution
when the security or currency is eventually sold.
 
  A Fund also may purchase put options at a time when the Fund does not own the
underlying security or currency. By purchasing put options on a security or
currency it does not own, the Fund seeks to benefit from a decline in the market
price of the underlying security or currency. If the put option is not sold when
it has remaining value, and if the market price of the underlying security or
currency remains equal to or greater than the exercise price during the life of
the put option, the Fund will lose its entire investment in the put option. In
order for the purchase of a put option to be profitable, the market price of the
underlying security or currency must decline sufficiently below the exercise
price to cover the premium and transaction costs, unless the put option is sold
in a closing sale transaction.
 
PURCHASING CALL OPTIONS
 
  Each Fund may purchase call options on securities, indices and currencies. As
the holder of a call option, a Fund would have the right to purchase the
underlying security or currency at the exercise price at any time until
(American style) or on (European style) the expiration date. A Fund may enter
into closing sale transactions with respect to such options, exercise them or
permit them to expire.
 
                                       13
<PAGE>   1433
 
  Call options may be purchased by a Fund for the purpose of acquiring the
underlying security or currency for its portfolio. Utilized in this fashion, the
purchase of call options would enable the Fund to acquire the security or
currency at the exercise price of the call option plus the premium paid. At
times, the net cost of acquiring the security or currency in this manner may be
less than the cost of acquiring the security or currency directly. This
technique also may be useful to a Fund in purchasing a large block of securities
that would be more difficult to acquire by direct market purchases. So long as
it holds such a call option, rather than the underlying security or currency
itself, the Fund is partially protected from any unexpected decline in the
market price of the underlying security or currency and, in such event, could
allow the call option to expire, incurring a loss only to the extent of the
premium paid for the option.
 
  A Fund also may purchase call options on underlying securities or currencies
it owns to avoid realizing losses that would result in a reduction of its
current return. For example, where a Fund has written a call option on an
underlying security or currency having a current market value below the price at
which it purchased the security or currency, an increase in the market price
could result in the exercise of the call option written by the Fund and the
realization of a loss on the underlying security or currency. Accordingly, the
Fund could purchase a call option on the same underlying security or currency,
which could be exercised to fulfill the Fund's delivery obligations under its
written call (if it is exercised). This strategy could allow the Fund to avoid
selling the portfolio security or currency at a time when it has an unrealized
loss; however, the Fund would have to pay a premium to purchase the call option
plus transaction costs.
 
  Aggregate premiums paid for put and call options will not exceed 5% of a
Fund's total assets at the time of purchase.
 
  Each Fund may attempt to accomplish objectives similar to those involved in
its use of Forward Contracts by purchasing put or call options on currencies. A
put option gives a Fund as purchaser the right (but not the obligation) to sell
a specified amount of currency at the exercise price at any time until (American
style) or on (European style) the expiration date. A call option gives a Fund as
purchaser the right (but not the obligation) to purchase a specified amount of
currency at the exercise price at any time until (American style) or on
(European style) the expiration date. A Fund might purchase a currency put
option, for example, to protect itself against a decline in the dollar value of
a currency in which it holds or anticipates holding securities. If the
currency's value should decline against the dollar, the loss in currency value
should be offset, in whole or in part, by an increase in the value of the put.
If the value of the currency instead should rise against the dollar, any gain to
the Fund would be reduced by the premium it had paid for the put option. A
currency call option might be purchased, for example, in anticipation of, or to
protect against, a rise in the value against the dollar of a currency in which a
Fund anticipates purchasing securities.
 
  Options may be either listed on an exchange or traded in over-the-counter
("OTC") markets. Listed options are third-party contracts (i.e., performance of
the obligations of the purchaser and seller is guaranteed by the exchange or
clearing corporation), and have standardized strike prices and expiration dates.
OTC options are two-party contracts with negotiated strike prices and expiration
dates. A Fund will not purchase an OTC option unless it believes that daily
valuations for such options are readily obtainable. OTC options differ from
exchange-traded options in that OTC options are transacted with dealers directly
and not through a clearing corporation (which guarantees performance).
Consequently, there is a risk of non-performance by the dealer. Since no
exchange is involved, OTC options are valued on the basis of an average of the
last bid prices obtained from dealers, unless a quotation from only one dealer
is available, in which case only that dealer's price will be used. In the case
of OTC options, there can be no assurance that a liquid secondary market will
exist for any particular option at any specific time.
 
  The staff of the SEC considers purchased OTC options to be illiquid
securities. A Fund may also sell OTC options and, in connection therewith,
segregate assets or cover its obligations with respect to OTC options written by
the Fund. The assets used as cover for OTC options written by the Fund will be
considered illiquid unless the OTC options are sold to qualified dealers who
agree that the Fund may repurchase any OTC option it writes at a maximum price
to be calculated by a formula set forth in the option agreement. The cover for
an OTC option written subject to this procedure would be considered illiquid
only to the extent that the maximum repurchase price under the formula exceeds
the intrinsic value of the option.
 
  A Fund's ability to establish and close out positions in exchange-listed
options depends on the existence of a liquid market. Each Fund intends to
purchase or write only those exchange-traded options for which there appears to
be a liquid secondary market. However, there can be no assurance that such a
market will exist at any particular time. Closing transactions can be made for
OTC options only by negotiating directly with the contra party or by a
transaction in the secondary market if any such market exists. Although each
Fund will enter into OTC options only with contra parties that are expected to
be capable of entering into closing transactions with the Fund, there is no
assurance that the Funds will in fact be able to close out an OTC option
position at a favorable price prior to expiration. In the event of insolvency of
the contra party, a Fund might be unable to close out an OTC option position at
any time prior to its expiration.
 
                                       14
<PAGE>   1434
 
INDEX OPTIONS
 
  Puts and calls on indices are similar to puts and calls on securities or
futures contracts except that all settlements are in cash and gain or loss
depends on changes in the index in question (and thus on price movements in the
securities market or a particular market sector generally) rather than on price
movements in individual securities or futures contracts. When a Fund writes a
call on an index, it receives a premium and agrees that, prior to the expiration
date, the purchaser of the call, upon exercise of the call, will receive from
the Fund an amount of cash if the closing level of the index upon which the call
is based is greater than the exercise price of the call. The amount of cash is
equal to the difference between the closing price of the index and the exercise
price of the call times a specified multiple (the "multiplier"), which
determines the total dollar value for each point of such difference. When a Fund
buys a call on an index, it pays a premium and has the same rights as to such
call as are indicated above. When a Fund buys a put on an index, it pays a
premium and has the right, prior to the expiration date, to require the seller
of the put, upon the Fund's exercise of the put, to deliver to the Fund an
amount of cash if the closing level of the index upon which the put is based is
less than the exercise price of the put, which amount of cash is determined by
the multiplier, as described above for calls. When a Fund writes a put on an
index, it receives a premium and the purchaser has the right, prior to the
expiration date, to require the Fund to deliver to it an amount of cash equal to
the difference between the closing level of the index and the exercise price
times the multiplier, if the closing level is less than the exercise price.
 
  The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Fund writes a call
on an index it cannot provide in advance for its potential settlement
obligations by acquiring and holding the underlying securities. A Fund can
offset some of the risk of writing a call index option position by holding a
diversified portfolio of securities similar to those on which the underlying
index is based. However, a Fund cannot, as a practical matter, acquire and hold
a portfolio containing exactly the same securities as underlie the index and, as
a result, bears a risk that the value of the securities held will vary from the
value of the index.
 
  Even if a Fund could assemble a securities portfolio that exactly reproduced
the composition of the underlying index, it still would not be fully covered
from a risk standpoint because of the "timing risk" inherent in writing index
options. When an index option is exercised, the amount of cash that the holder
is entitled to receive is determined by the difference between the exercise
price and the closing index level on the date when the option is exercised. As
with other kinds of options, a Fund, as the call writer, will not know that it
has been assigned until the next business day at the earliest. The time lag
between exercise and notice of assignment poses no risk for the writer of a
covered call on a specific underlying security, such as common stock, because
there the writer's obligation is to deliver the underlying security, not to pay
its value as of a fixed time in the past. So long as the writer already owns the
underlying security, it can satisfy its settlement obligations by simply
delivering it, and the risk that its value may have declined since the exercise
date is borne by the exercising holder. In contrast, even if the writer of an
index call holds securities that exactly match the composition of the underlying
index, it will not be able to satisfy its assignment obligations by delivering
those securities against payment of the exercise price. Instead, it will be
required to pay cash in an amount based on the closing index value on the
exercise date; and by the time it learns that it has been assigned, the index
may have declined, with a corresponding decline in the value of its securities
portfolio. This "timing risk" is an inherent limitation on the ability of index
call writers to cover their risk exposure by holding securities positions.
 
  If a Fund purchases an index option and exercises it before the closing index
value for that day is available, it runs the risk that the level of the
underlying index may subsequently change. If such a change causes the exercised
option to fall out-of-the-money, the Fund will be required to pay the difference
between the closing index value and the exercise price of the option (times the
applicable multiplier) to the assigned writer.
 
INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES CONTRACTS
 
  Each Fund may enter into interest rate or currency futures contracts, and may
enter into stock index futures contracts (collectively, "Futures" or "Futures
Contracts"), as a hedge against changes in prevailing levels of interest rates,
currency exchange rates or stock prices in order to establish more definitely
the effective return on securities or currencies held or intended to be acquired
by the Fund. A Fund's transactions may include sales of Futures as an offset
against the effect of expected increases in interest rates, and decreases in
currency exchange rates and stock prices, and purchases of Futures as an offset
against the effect of expected declines in interest rates, and increases in
currency exchange rates and stock prices.
 
  A Fund will only enter into Futures Contracts that are traded on futures
exchanges and are standardized as to maturity date and underlying financial
instrument. Futures exchanges and trading thereon in the United States are
regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC"). Futures are exchanged in London at the London International
Financial Futures Exchange.
 
                                       15
<PAGE>   1435
 
  Although techniques other than sales and purchases of Futures Contracts could
be used to reduce a Fund's exposure to interest rate, currency exchange rate and
stock market fluctuations, a Fund may be able to hedge its exposure more
effectively and at a lower cost through using Futures Contracts.
 
  A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument (security
or currency) for a specified price at a designated date, time and place. An
index Futures Contract provides for the delivery, at a designated date, time and
place, of an amount of cash equal to a specified dollar amount times the
difference between the index value at the close of trading on the contract and
the price at which the Futures Contract is originally struck; no physical
delivery of the securities comprising the index is made. Brokerage fees are
incurred when a Futures Contract is bought or sold, and margin deposits must be
maintained at all times the Futures Contract is outstanding.
 
  Although Futures Contracts typically require future delivery of and payment
for financial instruments or currencies, Futures Contracts are usually closed
out before the delivery date. Closing out an open Futures Contract sale or
purchase is effected by entering into an offsetting Futures Contract purchase or
sale, respectively, for the same aggregate amount of the identical financial
instrument or currency and the same delivery date. If the offsetting purchase
price is less than the original sale price, a Fund realizes a gain; if it is
more, a Fund realizes a loss. Conversely, if the offsetting sale price is more
than the original purchase price, a Fund realizes a gain; if it is less, the
Fund realizes a loss. The transaction costs must also be included in these
calculations. There can be no assurance, however, that a Fund will be able to
enter into an offsetting transaction with respect to a particular Futures
Contract at a particular time. If a Fund is not able to enter into an offsetting
transaction, the Fund will continue to be required to maintain the margin
deposits on the Futures Contract.
 
  As an example of an offsetting transaction, the contractual obligations
arising from the sale of one Futures Contract of September Deutschemarks on an
exchange may be fulfilled at any time before delivery under the Futures Contract
is required (i.e., on a specified date in September, the "delivery month") by
the purchase of another Futures Contract of September Deutschemarks on the same
exchange. In such instance the difference between the price at which the Futures
Contract was sold and the price paid for the offsetting purchase, after
allowance for transaction costs, represents the profit or loss to the Fund.
 
  Each Fund's Futures transactions will be entered into for hedging purposes
only; that is, Futures Contracts will be sold to protect against a decline in
the price of securities or currencies that the Fund owns, or Futures Contracts
will be purchased to protect the Fund against an increase in the price of
securities or currencies it has committed to purchase or expects to purchase.
 
  "Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by a Fund in order to initiate Futures trading and to maintain the
Fund's open positions in Futures Contracts. A margin deposit made when the
Futures Contract is entered into ("initial margin") is intended to assure a
Fund's performance under the Futures Contract. The margin required for a
particular Futures Contract is set by the exchange on which the Futures Contract
is traded and may be modified significantly from time to time by the exchange
during the term of the Futures Contract.
 
  Subsequent payments, called "variation margin," to and from the futures
commission merchant through which a Fund entered into the Futures Contract will
be made on a daily basis as the price of the underlying security, currency or
index fluctuates making the Futures Contract more or less valuable, a process
known as marking-to-market.
 
  Risks of Using Futures Contracts. The prices of Futures Contracts are volatile
and are influenced by, among other things, actual and anticipated changes in
interest rates and currency exchange rates, and in stock market movements, which
in turn are affected by fiscal and monetary policies and national and
international political and economic events.
 
  There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities or currencies in a Fund's portfolio being
hedged. The degree of imperfection of correlation depends upon circumstances
such as: variations in speculative market demand for Futures and for securities
or currencies, including technical influences in Futures trading; and
differences between the financial instruments being hedged and the instruments
underlying the standard Futures Contracts available for trading. A decision of
whether, when, and how to hedge involves skill and judgment, and even a
well-conceived hedge may be unsuccessful to some degree because of unexpected
market behavior or interest or currency rate trends.
 
  Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
 
                                       16
<PAGE>   1436
 
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
 
  Most U.S. Futures exchanges limit the amount of fluctuation permitted in
Futures Contract and options on Futures Contract prices during a single trading
day. The daily limit establishes the maximum amount that the price of a Futures
Contract or option may vary either up or down from the previous day's settlement
price at the end of a trading session. Once the daily limit has been reached in
a particular type of Futures Contract or option, no trades may be made on that
day at a price beyond that limit. The daily limit governs only price movement
during a particular trading day and therefore does not limit potential losses,
because the limit may prevent the liquidation of unfavorable positions. Futures
Contract and option prices have occasionally moved to the daily limit for
several consecutive trading days with little or no trading, thereby preventing
prompt liquidation of positions and subjecting some traders to substantial
losses.
 
  If a Fund were unable to liquidate a Futures or option on Futures position due
to the absence of a liquid secondary market or the imposition of price limits,
it could incur substantial losses. The Fund would continue to be subject to
market risk with respect to the position. In addition, except in the case of
purchased options, the Fund would continue to be required to make daily
variation margin payments and might be required to maintain the position being
hedged by the Future or option or to maintain cash or securities in a segregated
account.
 
  Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit requirements in the Futures market are less
onerous than margin requirements in the securities markets, there might be
increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
 
OPTIONS ON FUTURES CONTRACTS
 
  Options on Futures Contracts are similar to options on securities or
currencies except that options on Futures Contracts give the purchaser the
right, in return for the premium paid, to assume a position in a Futures
Contract (a long position if the option is a call and a short position if the
option is a put) at a specified exercise price at any time during the period of
the option. Upon exercise of the option, the delivery of the Futures position by
the writer of the option to the holder of the option will be accompanied by
delivery of the accumulated balance in the writer's Futures margin account,
which represents the amount by which the market price of the Futures Contract,
at exercise, exceeds (in the case of a call) or is less than (in the case of a
put) the exercise price of the option on the Futures Contract. If an option is
exercised on the last trading day prior to the expiration date of the option,
the settlement will be made entirely in cash equal to the difference between the
exercise price of the option and the closing level of the securities, currencies
or index upon which the Futures Contract is based on the expiration date.
Purchasers of options who fail to exercise their options prior to the exercise
date suffer a loss of the premium paid.
 
  The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities, foreign currencies or indices.
 
  If a Fund writes an option on a Futures Contract, it will be required to
deposit initial and variation margin pursuant to requirements similar to those
applicable to Futures Contracts. Premiums received from the writing of an option
on a Futures Contract are included in the initial margin deposit.
 
  A Fund may seek to close out an option position by selling an option covering
the same Futures Contract and having the same exercise price and expiration
date. The ability to establish and close out positions on such options is
subject to the maintenance of a liquid secondary market.
 
LIMITATIONS ON USE OF FUTURES, OPTIONS ON FUTURES AND CERTAIN OPTIONS ON
CURRENCIES
 
  To the extent that a Fund enters into Futures Contracts, options on Futures
Contracts, and options on foreign currencies traded on a CFTC-regulated
exchange, in each case other than for bona fide hedging purposes (as defined by
the CFTC), the aggregate initial margin and premiums required to establish those
positions (excluding the amount by which options
 
                                       17
<PAGE>   1437
 
are "in-the-money") will not exceed 5% of the liquidation value of the Fund's
portfolio, after taking into account unrealized profits and unrealized losses on
any contracts the Fund has entered into. In general, a call option on a Futures
Contract is "in-the-money"if the value of the underlying Futures Contract
exceeds the strike, i.e., exercise, price of the call; a put option on a Futures
Contract is "in-the-money" if the value of the underlying Futures Contract is
exceeded by the strike price of the put. This guideline may be modified by the
Trust's Board of Trustees without a shareholder vote. This limitation does not
limit the percentage of the Fund's assets at risk to 5%.
 
FORWARD CONTRACTS
 
  A Forward Contract is an obligation, usually arranged with a commercial bank
or other currency dealer, to purchase or sell a currency against another
currency at a future date and price as agreed upon by the parties. A Fund either
may accept or make delivery of the currency at the maturity of the Forward
Contract. The Fund may also, if its contra party agrees, prior to maturity,
enter into a closing transaction involving the purchase or sale of an offsetting
contract.
 
  A Fund engages in forward currency transactions in anticipation of, or to
protect itself against, fluctuations in exchange rates. A Fund might sell a
particular foreign currency forward, for example, when it holds bonds
denominated in a foreign currency but anticipates, and seeks to be protected
against, a decline in the currency against the U.S. dollar. Similarly, the Fund
might sell the U.S. dollar forward when it holds bonds denominated in U.S.
dollars but anticipates, and seeks to be protected against, a decline in the
U.S. dollar relative to other currencies. Further, the Fund might purchase a
currency forward to "lock in" the price of securities denominated in that
currency that it anticipates purchasing.
 
  Forward Contracts are traded in the interbank market conducted directly
between currency traders (usually large commercial banks) and their customers. A
Forward Contract generally has no deposit requirement and no commissions are
charged at any stage for trades. Each Fund will enter into such Forward
Contracts with major U.S. or foreign banks and securities or currency dealers in
accordance with the guidelines approved by the Trust's Board of Trustees.
 
  Each Fund may enter into Forward Contracts either with respect to specific
transactions or with respect to the Fund's portfolio positions. The precise
matching of the Forward Contract amounts and the value of specific securities
generally will not be possible because the future value of such securities in
foreign currencies will change as a consequence of market movements in the value
of those securities between the date the Forward Contract is entered into and
the date it matures. Accordingly, it may be necessary for a Fund to purchase
additional foreign currency on the spot (i.e., cash) market (and bear the
expense of such purchase) if the market value of the security is less than the
amount of foreign currency the Fund is obligated to deliver and if a decision is
made to sell the security and make delivery of the foreign currency. Conversely,
it may be necessary to sell on the spot market some of the foreign currency the
Fund is obligated to deliver. The projection of short-term currency market
movements is extremely difficult, and the successful execution of a short-term
hedging strategy is highly uncertain. Forward Contracts involve the risk that
anticipated currency movements will not be predicted accurately, causing a Fund
to sustain losses on these contracts and transaction costs.
 
  At or before the maturity of a Forward Contract requiring a Fund to sell a
currency, the Fund either may sell a portfolio security and use the sale
proceeds to make delivery of the currency or retain the security and offset its
contractual obligation to deliver the currency by purchasing a second contract
pursuant to which the Fund will obtain, on the same maturity date, the same
amount of the currency that it is obligated to deliver. Similarly, a Fund may
close out a Forward Contract requiring it to purchase a specified currency by
entering into a second contract, if its contra party agrees, entitling it to
sell the same amount of the same currency on the maturity date of the first
contract. The Fund would realize a gain or loss as a result of entering into
such an offsetting Forward Contract under either circumstance to the extent the
exchange rate or rates between the currencies involved moved between the
execution dates of the first contract and the offsetting contract.
 
  The cost to a Fund of engaging in Forward Contracts varies with factors such
as the currencies involved, the length of the contract period and the market
conditions then prevailing. Because Forward Contracts usually are entered into
on a principal basis, no fees or commissions are involved. The use of Forward
Contracts does not eliminate fluctuations in the prices of the underlying
securities a Fund owns or intends to acquire, but it does establish a rate of
exchange in advance. In addition, while Forward Contract sales limit the risk of
loss due to a decline in the value of the hedged currencies, they also limit any
potential gain that might result should the value of the currencies increase.
 
FOREIGN CURRENCY STRATEGIES -- SPECIAL CONSIDERATIONS
 
  Each Fund may use options on foreign currencies, Futures on foreign
currencies, options on Futures on foreign currencies and Forward Contracts to
hedge against movements in the values of the foreign currencies in which the
Fund's securities are denominated. Such currency hedges can protect against
price movements in a security that a Fund owns or
 
                                       18
<PAGE>   1438
 
intends to acquire that are attributable to changes in the value of the currency
in which it is denominated. Such hedges do not, however, protect against price
movements in the securities that are attributable to other causes.
 
   
  A Fund might seek to hedge against changes in the value of a particular
currency when no Futures Contract, Forward Contract or option involving that
currency is available or one of such contracts is more expensive than certain
other contracts. In such cases, a Fund may hedge against price movements in that
currency by entering into a contract on another currency or basket of
currencies, the values of which the Sub-advisor believes will have a positive
correlation to the value of the currency being hedged. The risk that movements
in the price of the contract will not correlate perfectly with movements in the
price of the currency being hedged is magnified when this strategy is used.
    
 
  The value of Futures Contracts, options on Futures Contracts, Forward
Contracts, and options on foreign currencies depends on the value of the
underlying currency relative to the U.S. dollar. Because foreign currency
transactions occurring in the interbank market might involve substantially
larger amounts than those involved in the use of Futures Contracts, Forward
Contracts or options, a Fund could be disadvantaged by dealing in the odd lot
market (generally consisting of transactions of less than $1 million) for the
underlying foreign currencies at prices that are less favorable than for round
lots.
 
  There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirements that quotations available through
dealers or other market sources be firm or revised on a timely basis. Quotation
information generally is representative of very large transactions in the
interbank market and thus might not reflect odd-lot transactions where rates
might be less favorable. The interbank market in foreign currencies is a global,
round-the-clock market. To the extent the U.S. options or Futures markets are
closed while the markets for the underlying currencies remain open, significant
price and rate movements might take place in the underlying markets that cannot
be reflected in the markets for the Futures contracts or options until they
reopen.
 
  Settlement of Futures Contracts, Forward Contracts and options involving
foreign currencies might be required to take place within the country issuing
the underlying currency. Thus, a Fund might be required to accept or make
delivery of the underlying foreign currency in accordance with any U.S. or
foreign regulations regarding the maintenance of foreign banking arrangements by
U.S. residents and might be required to pay any fees, taxes and charges
associated with such delivery assessed in the issuing country.
 
COVER
 
  Transactions using Forward Contracts, Futures Contracts and options (other
than options purchased by a Fund) expose the Fund to an obligation to another
party. No Fund will enter into any such transactions unless it owns either (1)
an offsetting ("covered") position in securities, currencies, or other options,
Forward Contracts or Futures Contracts, or (2) cash, receivables and short-term
debt securities with a value sufficient at all times to cover its potential
obligations not covered as provided in (1) above. The Funds will comply with SEC
guidelines regarding cover for these instruments and, if the guidelines so
require, set aside cash or liquid securities.
 
  Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Forward Contract, Futures Contract or option is
open, unless they are replaced with other appropriate assets. If a large portion
of a Fund's assets are used for cover or otherwise set aside, it could affect
portfolio management or the Fund's ability to meet redemption requests or other
current obligations.
 
                                  RISK FACTORS
 
ILLIQUID SECURITIES
 
  Developing Markets Fund and Emerging Markets Fund each may invest up to 15% of
its net assets, and Latin American Fund up to 10% of its net assets, in illiquid
securities. Securities may be considered illiquid if a Fund cannot reasonably
expect within seven days to sell the security for approximately the amount at
which the Fund values such securities. The sale of illiquid securities, if they
can be sold at all, generally will require more time and result in higher
brokerage charges or dealer discounts and other selling expenses than the sale
of liquid securities, such as securities eligible for trading on U.S. securities
exchanges or in the over-the-counter markets. Moreover, restricted securities
which may be illiquid for purposes of this limitation, often sell, if at all, at
a price lower than similar securities that are not subject to restrictions on
resale.
 
  Illiquid securities include those that are subject to restrictions contained
in the securities laws of other countries. However, securities that are freely
marketable in the country where they are principally traded, but would not be
freely
 
                                       19
<PAGE>   1439
 
marketable in the United States, will not be considered illiquid. Where
registration is required, a Fund may be obligated to pay all or part of the
registration expenses and a considerable period may elapse between the time of
the decision to sell and the time the Fund may be permitted to sell a security
under an effective registration statement. If, during such a period, adverse
market conditions were to develop, the Fund might obtain a less favorable price
than prevailed when it decided to sell.
 
  Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the Securities Act of 1933, as amended ("1933 Act"), including
private placements, repurchase agreements, commercial paper, foreign securities
and corporate bonds and notes. These instruments are often restricted securities
because the securities are sold in transactions not requiring registration.
Institutional investors generally will not seek to sell these instruments to the
general public, but instead will often depend either on an efficient
institutional market in which such unregistered securities can be readily resold
or on an issuer's ability to honor a demand for repayment. Therefore, the fact
that there are contractual or legal restrictions on resale to the general public
or certain institutions is not dispositive of the liquidity of such investments.
 
  Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of unregistered securities of domestic and foreign
issuers, such as the PORTAL System sponsored by the National Association of
Securities Dealers, Inc. An insufficient number of qualified institutional
buyers interested in purchasing Rule 144A-eligible restricted securities held by
a Fund, however, could affect adversely the marketability of such portfolio
securities and the Fund might be unable to dispose of such securities promptly
or at favorable prices.
 
   
  With respect to liquidity determinations generally, the Trust's Board of
Trustees has the ultimate responsibility for determining whether specific
securities, including restricted securities pursuant to Rule 144A under the 1933
Act, are liquid or illiquid. The Board has delegated the function of making
day-to-day determinations of liquidity to the Sub-advisor in accordance with
procedures approved by the Board. The Sub-advisor takes into account a number of
factors in reaching liquidity decisions, including (i) the frequency of trading
in the security, (ii) the number of dealers who make quotes for the security,
(iii) the number of dealers who have undertaken to make a market in the
security, (iv) the number of other potential purchasers and (v) the nature of
the security and how trading is effected (e.g., the time needed to sell the
security, how offers are solicited and the mechanics of transfer). The
Sub-advisor monitors the liquidity of securities in each Fund's portfolio and
periodically reports such determinations to the Board. If the liquidity
percentage restriction of a Fund is satisfied at the time of investment, a later
increase in the percentage of illiquid securities held by the Fund resulting
from a change in market value or assets will not constitute a violation of that
restriction. If as a result of a change in market value or assets, the
percentage of illiquid securities held by a Fund increases above the applicable
limit, the Sub-advisor will take appropriate steps to bring the aggregate amount
of illiquid assets back within the prescribed limitations as soon as reasonably
practicable, taking into account the effect of any disposition on the Fund.
    
 
FOREIGN SECURITIES
 
  Political, Social and Economic Risks. Investing in securities of non-U.S.
companies may entail additional risks due to the potential political, social and
economic instability of certain countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility of currencies into U.S. dollars and on repatriation
of capital invested. In the event of such expropriation, nationalization or
other confiscation by any country, a Fund could lose its entire investment in
any such country.
 
  In addition, even though opportunities for investment may exist in emerging
markets, any change in the leadership or policies of the governments of those
countries or in the leadership or policies of any other government which
exercises a significant influence over those countries, may halt the expansion
of or reverse the liberalization of foreign investment policies now occurring
and thereby eliminate any investment opportunities which may currently exist.
 
  Investors should note that upon the accession to power of authoritarian
regimes, the governments of a number of Latin American countries previously
expropriated large quantities of real and personal property similar to the
property which will be represented by the securities purchased by the Funds. The
claims of property owners against those governments were never finally settled.
There can be no assurance that any property represented by securities purchased
by the Funds will not also be expropriated, nationalized, or otherwise
confiscated. If such confiscation were to occur, the Funds could lose their
entire investment in such countries. The Funds' investments would similarly be
adversely affected by exchange control regulation in any of those countries.
 
                                       20
<PAGE>   1440
 
  Religious and Ethnic Stability. Certain countries in which the Funds may
invest may have groups that advocate radical religious or revolutionary
philosophies or support ethnic independence. Any disturbance on the part of such
individuals could carry the potential for widespread destruction or confiscation
of property owned by individuals and entities foreign to such country and could
cause the loss of a Fund's investment in those countries. Instability may also
result from, among other things, (i) authoritarian governments or military
involvement in political and economic decision-making, including changes in
government through extra-constitutional means, (ii) popular unrest associated
with demands for improved political, economic and social conditions and (iii)
hostile relations with neighboring or other countries. Such political, social
and economic instability could disrupt the principal financial markets in which
the Funds invest and adversely affect the value of the Funds' assets.
 
  Foreign Investment Restrictions. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as the Funds. These restrictions
or controls may at times limit or preclude investment in certain securities and
may increase the cost and expenses of the Funds. For example, certain countries
require prior governmental approval before investments by foreign persons may be
made or may limit the amount of investment by foreign persons in a particular
company, or limit the investment by foreign persons to only a specific class of
securities of a company that may have less advantageous terms than securities of
the company available for purchase by nationals. Moreover, the national policies
of certain countries may restrict investment opportunities in issuers or
industries deemed sensitive to national interests. In addition, some countries
require governmental approval for the repatriation of investment income, capital
or the proceeds of securities sales by foreign investors. If there is a
deterioration in a country's balance of payments or for other reasons, a country
may impose restrictions on foreign capital remittances abroad. The Funds could
be adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation, as well as by the application to it of
other restrictions on investments.
 
   
  Non-Uniform Corporate Disclosure Standards and Governmental
Regulation. Foreign companies are subject to accounting, auditing and financial
standards and requirements that differ in some cases significantly from those
applicable to U.S. companies. In particular, the assets, liabilities and profits
appearing on the financial statements of such a company may not reflect its
financial position or results of operations in the way they would be reflected
had such financial statements been prepared in accordance with U.S. generally
accepted accounting principles. Most of the securities held by the Funds will
not be registered with the SEC or regulators of any foreign country, nor will
the issuers thereof be subject to the SEC's reporting requirements. Thus, there
will be less available information concerning most foreign issuers of securities
held by the Funds than is available concerning U.S. issuers. In instances where
the financial statements of an issuer are not deemed to reflect accurately the
financial situation of the issuer, the Sub-advisor will take appropriate steps
to evaluate the proposed investment, which may include on-site inspection of the
issuer, interviews with its management and consultations with accountants,
bankers and other specialists. There is substantially less publicly available
information about foreign companies than there are reports and ratings published
about U.S. companies and the U.S. government. In addition, where public
information is available, it may be less reliable than such information
regarding U.S. issuers. Issuers of securities on foreign jurisdictions are
generally not subject to the same degree of regulation as are U.S. issuers with
respect to such matters as restrictions on market manipulation, insider trading
rules, shareholder proxy requirements and timely disclosure of information. In
addition, for companies that keep accounting records in local currency,
inflation accounting rules in some Latin American countries require, for both
tax and accounting purposes, that certain assets and liabilities be restated on
the company's balance sheet in order to express items in terms of currency of
constant purchasing power. Inflation accounting may indirectly generate losses
or profits.
    
 
  Currency Fluctuations. Because the Funds, under normal circumstances, each
will invest a substantial portion of its total assets in the securities of
foreign issuers which are denominated in foreign currencies, the strength or
weakness of the U.S. dollar against such foreign currencies will account for
part of each Fund's investment performance. A decline in the value of any
particular currency against the U.S. dollar will cause a decline in the U.S.
dollar value of a Fund's holdings of securities and cash denominated in such
currency and, therefore, will cause an overall decline in the Fund's net asset
value and any net investment income and capital gains derived from such
securities to be distributed in U.S. dollars to shareholders of that Fund.
Moreover, if the value of the foreign currencies in which a Fund receives its
income falls relative to the U.S. dollar between receipt of the income and the
making of Fund distributions, the Fund may be required to liquidate securities
in order to make distributions if the Fund has insufficient cash in U.S. dollars
to meet distribution requirements.
 
  The rate of exchange between the U.S. dollar and other currencies is
determined by several factors including the supply and demand for particular
currencies, central bank efforts to support particular currencies, the movement
of interest rates, the pace of business activity in certain other countries and
the United States, and other economic and financial conditions affecting the
world economy.
 
                                       21
<PAGE>   1441
 
  Although the Funds value their assets daily in terms of U.S. dollars, they do
not intend to convert their holdings of foreign currencies into U.S. dollars on
a daily basis. The Funds will do so from time to time, and investors should be
aware of the costs of currency conversion. Although foreign exchange dealers do
not charge a fee for conversion, they do realize a profit based on the
difference ("spread") between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign currency to a
Fund at one rate, while offering a lesser rate of exchange should a Fund desire
to sell that currency to the dealer.
 
  Certain Latin American countries may have managed currencies which are
maintained at artificial levels to the U.S. dollar rather than at levels
determined by the market. This type of system can lead to sudden and large
adjustments in the currency which, in turn, can have a disruptive and negative
effect on foreign investors. For example, in late 1994 the value of the Mexican
peso lost more than one-third of its value relative to the dollar. Certain Latin
American countries also may restrict the free conversion of their currency into
foreign currencies, including the U.S. dollar. There is no significant foreign
exchange market for certain currencies and it would, as a result, be difficult
for the Funds to engage in foreign currency transactions designed to protect the
value of the Funds' interests in securities denominated in such currencies.
 
   
  Adverse Market Characteristics. Securities of many foreign issuers may be less
liquid and their prices more volatile than securities of comparable U.S.
issuers. In addition, foreign securities markets and brokers generally are
subject to less governmental supervision and regulation than in the United
States and foreign securities transactions usually are subject to fixed
commissions, which generally are higher than negotiated commissions on U.S.
transactions. In addition, foreign securities transactions may be subject to
difficulties associated with the settlement of such transactions. Delays in
settlement could result in temporary periods when assets of the Funds are
uninvested and no return is earned thereon. The inability of a Fund to make
intended security purchases due to settlement problems could cause the Fund to
miss attractive opportunities. Inability to dispose of a portfolio security due
to settlement problems either could result in losses to a Fund due to subsequent
declines in value of the portfolio security or, if the Fund has entered into a
contract to sell the security, could result in possible liability to the
purchaser. The Sub-advisor will consider such difficulties when determining the
allocation of the Funds' assets, although the Sub-advisor does not believe that
such difficulties will have a material adverse effect on the Funds' portfolio
trading activities.
    
 
  Each Fund may use foreign custodians, which may involve risks in addition to
those related to the use of U.S. custodians. Such risks include uncertainties
relating to (i) determining and monitoring the financial strength, reputation
and standing of the foreign custodian, (ii) maintaining appropriate safeguards
to protect a Fund's investments and (iii) possible difficulties in obtaining and
enforcing judgments against such custodians.
 
  A high proportion of the shares of many Latin American companies may be held
by a limited number of persons, which may further limit the number of shares
available for investment by the Funds, particularly Latin American Fund. A
limited number of issuers in most, if not all, Latin American securities markets
may represent a disproportionately large percentage of market capitalization and
trading value. The limited liquidity of Latin American securities markets also
may affect a Fund's ability to acquire or dispose of securities at the price and
time it wishes to do so. In addition, certain Latin American securities markets,
including those of Argentina, Brazil, Chile and Mexico, are susceptible to being
influenced by large investors trading significant blocks of securities or by
large dispositions of securities resulting from the failure to meet margin calls
when due.
 
  The high volatility of certain Latin American securities markets is evidenced
by dramatic movements in the Brazilian and Mexican markets in recent years. This
market volatility may result in greater volatility in a Fund's net asset value
than would be the case for companies investing in domestic securities. If a Fund
were to experience unexpected net redemptions, it could be forced to sell
securities in its portfolio without regard to investment merit, thereby
decreasing the asset base over which Fund expenses can be spread and possibly
reducing the Fund's rate of return.
 
  Withholding Taxes. Each Fund's net investment income from securities of
foreign issuers may be subject to withholding taxes by the foreign issuer's
country, thereby reducing that income or delaying the receipt of income where
those taxes may be recaptured. See "Taxes."
 
  Concentration. To the extent a Fund invests a significant portion of its
assets in securities of issuers located in a particular country or region of the
world, it may be subject to greater risks and may experience greater volatility
than a fund that is more broadly diversified geographically.
 
  Special Considerations Affecting Emerging Markets. Investing in equity
securities of companies in emerging markets may entail greater risks than
investing in equity securities in developed countries. These risks include (i)
less social, political and economic stability; (ii) the small current size of
the markets for such securities and the currently low or nonexistent volume of
trading, which result in a lack of liquidity and in greater price volatility;
(iii) certain national policies which may restrict a Fund's investment
opportunities, including restrictions on investment in issuers or industries
 
                                       22
<PAGE>   1442
 
deemed sensitive to national interests; (iv) foreign taxation; and (v) the
absence of developed structures governing private or foreign investment or
allowing for judicial redress for injury to private property.
 
  Investing in the securities of companies in emerging markets, including the
markets of Latin America and certain Asian markets such as Taiwan, Malaysia and
Indonesia, may entail special risks relating to potential political and economic
instability and the risks of expropriation, nationalization, confiscation or the
imposition of restrictions on foreign investment, convertibility into U.S.
dollars and on repatriation of capital invested. In the event of such
expropriation, nationalization or other confiscation by any country, a Fund
could lose its entire investment in any such country.
 
  Emerging securities markets, such as the markets of Latin America, are
substantially smaller, less developed, less liquid and more volatile than the
major securities markets. The limited size of emerging securities markets and
limited trading value in issuers compared to the volume of trading in U.S.
securities could cause prices to be erratic for reasons apart from factors that
affect the quality of the securities. For example, limited market size may cause
prices to be unduly influenced by traders who control large positions. Adverse
publicity and investors' perceptions, whether or not based on fundamental
analysis, may decrease the value and liquidity of portfolio securities,
especially in these markets. In addition, securities traded in certain emerging
markets may be subject to risks due to the inexperience of financial
intermediaries, a lack of modern technology, the lack of a sufficient capital
base to expand business operations, and the possibility of permanent or
temporary termination of trading.
 
  Settlement mechanisms in emerging securities markets may be less efficient and
reliable than in more developed markets. In such emerging securities there may
be share registration and delivery delays or failures.
 
  Many emerging market countries, including markets in Latin America, have
experienced substantial, and in some periods extremely high, rates of inflation
for many years. This has, in turn, lead to high interest rates, extreme measures
by governments to keep inflation in check and a generally debilitating effect on
economic growth. Inflation and rapid fluctuations in inflation rates and
corresponding currency devaluations have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries, including markets in Latin America.
 
  Special Considerations Affecting Russia and Eastern European
Countries. Investing in Russia and Eastern European countries involves a high
degree of risk and special considerations not typically associated with
investing in the U.S. securities markets and should be considered highly
speculative. Such risks include the following: (1) delays in settling portfolio
transactions and risk of loss arising out of the system of share registration
and custody; (2) the risk that it may be impossible or more difficult than in
other countries to obtain and/or enforce a judgement; (3) pervasiveness of
corruption and crime in the economic system; (4) currency exchange rate
volatility and the lack of available currency hedging instruments; (5) higher
rates of inflation (including the risk of social unrest associated with periods
of hyper-inflation) and high unemployment; (6) controls on foreign investment
and local practices disfavoring foreign investors and limitations on
repatriation of invested capital, profits and dividends, and on the ability of
Developing Markets Fund and Emerging Markets Fund to exchange local currencies
for U.S. dollars; (7) political instability and social unrest and violence; (8)
the risk that the governments of Russia and Eastern European countries may
decide not to continue to support the economic reform programs implemented
recently and could follow radically different political and/or economic policies
to the detriment of investors, including non-market-oriented policies such as
the support of certain industries at the expense of other sectors or investors,
or a return to the centrally planned economy that existed when such countries
had a communist form of government; (9) the financial condition of companies in
these countries, including large amounts of inter-company debt which may create
a payments crisis on a national scale; (10) dependency on exports and the
corresponding importance of international trade; (11) the risk that the tax
system in these countries will not be reformed to prevent inconsistent,
retroactive and/or exorbitant taxation; and (12) the underdeveloped nature of
the securities markets.
 
  Special Considerations Affecting Pacific Region Countries. Certain of the
risks associated with international investments are heightened for investments
in Pacific region countries. For example, some of the currencies of Pacific
region countries have experienced steady devaluations relative to the U.S.
dollar, and major adjustments have been made periodically in certain of such
currencies. Certain countries, such as India, face serious exchange constraints.
 
  Many of the Asia Pacific region countries may be subject to a greater degree
of social, political and economic instability than is the case in the United
States. Such instability may result from, among other things, the following: (i)
authoritarian governments or military involvement in political and economic
decision making, and changes in government through extra-constitutional means;
(ii) popular unrest associated with demands for improved political, economic and
social conditions; (iii) internal insurgencies; (iv) hostile relations with
neighboring countries; and (v) ethnic, religious and racial disaffection. Such
social, political and economic instability could significantly disrupt the
principal financial markets in which Developing Markets Fund and Emerging
Markets Fund invest and adversely affect the value of such Funds' assets. In
addition, asset expropriations or future confiscatory levels of taxation
possibly may affect the Funds.
 
                                       23
<PAGE>   1443
 
  Several of the Asia Pacific region countries have, or in the past have had,
hostile relationships with neighboring nations or have experienced internal
insurgency. Thailand has experienced border conflicts with Laos and Cambodia,
and India is engaged in border disputes with several of its neighbors, including
China and Pakistan. An uneasy truce exists between North Korea and South Korea,
and the recurrence of hostilities remains possible. Reunification of North Korea
and South Korea could have a detrimental effect on the economy of South Korea.
Also, China continues to claim sovereignty over Taiwan and recently has
conducted military maneuvers near Taiwan.
 
  The economies of most of the Asia Pacific region countries are heavily
dependent upon international trade and are accordingly affected by protective
trade barriers and the economic conditions of their trading partners,
principally the United States, Japan, China and the European Community. The
enactment by the United States or other principal trading partners of
protectionist trade legislation, reduction of foreign investment in the local
economies and general declines in the international securities markets could
have a significant adverse effect upon the securities markets of the Asia
Pacific region countries. In addition, the economies of some of the Asia Pacific
region countries, Australia and Indonesia, for example, are vulnerable to
weakness in world prices for their commodity exports, including crude oil.
 
  China recently assumed sovereignty over Hong Kong in July 1997. Although China
has committed by treaty to preserve the economic and social freedoms enjoyed in
Hong Kong for fifty years, the continuation of the current form of the economic
system in Hong Kong will depend on the actions of the government of China. In
addition, such assumption of sovereignty has increased sensitivity in Hong Kong
to political developments and statements by public figures in China. Business
confidence in Hong Kong, therefore, can be significantly affected by such
developments and statements, which in turn can affect markets and business
performance.
 
  In addition, there is continuing risk that the Hong Kong dollar will be
devalued and a risk of possible loss of investor confidence in the Hong Kong
markets and dollar. However, factors exist that are likely to mitigate this
risk. First, China has stated its intention to implement a "one country, two
systems" policy, which would preserve monetary sovereignty and leave control in
the hands of the Hong Kong Monetary Authority ("HKMA").
 
  Second, fixed rate parity with the U.S. dollar is seen as critical to
maintaining investors' confidence in the transition to Chinese rule, and,
therefore, it is anticipated that, if international investors lose confidence in
Hong Kong dollar assets, the HKMA would take steps to support the currency,
though the taking of such steps cannot be assured. Third, Hong Kong's and
China's sizable combined foreign exchange reserve may be used to support the
value of the Hong Kong dollar, provided that China does not appropriate such
reserves for other uses, which is not anticipated but cannot be assured.
Finally, China would be likely to experience significant adverse political and
economic consequences if confidence in the Hong Kong dollar and the territory
assets were to be endangered.
 
  Special Considerations Affecting Latin American Countries. Most Latin American
countries have experienced substantial, and in some periods extremely high,
rates of inflation for many years. Inflation and rapid fluctuations in inflation
rates have had and may continue to have very negative effects on the economies
and securities markets of certain Latin American countries. Certain Latin
American countries are also among the largest debtors to commercial banks and
foreign governments. At times certain Latin American countries have declared
moratoria on the payment of principal and/or interest on external debt. In
addition, certain Latin American securities markets have experienced high
volatility in recent years.
 
  Latin American countries may also close certain sectors of their economies to
equity investments by foreigners. Further due to the absence of securities
markets and publicly owned corporations and due to restrictions on direct
investment by foreign entities, investments may only be made in certain Latin
American countries solely or primarily through governmentally approved
investment vehicles or companies.
 
  Certain Latin American countries may have managed currencies that are
maintained at artificial levels to the U.S. dollar rather than at levels
determined by the market. This type of system can lead to sudden and large
adjustments in the currency which, in turn, can have a disruptive and negative
effect on foreign investors. For example, in late 1994, the value of the Mexican
peso lost more than one-third of its value relative to the U.S. dollar.
 
  It should be noted that some Latin American countries require governmental
approval for the repatriation of investment income, capital or the proceeds of
securities sales by foreign investors. For instance, at present, capital
invested directly in Chile cannot under most circumstances be repatriated for at
least one year. The Funds, particularly Latin American Fund, could be adversely
affected by delays in, or a refusal to grant, any required governmental approval
for repatriation, as well as by the application to it of other restrictions on
investments.
 
  Sovereign Debt. Sovereign Debt generally offers high yields, reflecting not
only perceived credit risk, but also the need to compete with other local
investments in domestic financial markets. Certain Latin American countries are
among the largest debtors to commercial banks and foreign governments. A
sovereign debtor's willingness or ability to repay
                                       24
<PAGE>   1444
 
principal and interest due in a timely manner may be affected by, among other
factors, its cash flow situation, the extent of its foreign reserves, the
availability of sufficient foreign exchange on the date a payment is due, the
relative size of the debt service burden to the economy as a whole, the
sovereign debtor's policy towards the International Monetary Fund and the
political constraints to which a sovereign debtor may be subject. Sovereign
debtors may default on their Sovereign Debt. Sovereign debtors may also be
dependent on expected disbursements from foreign governments, multilateral
agencies and others abroad to reduce principal and interest arrearages on their
debt. The commitment on the part of these governments, agencies and others to
make such disbursements may be conditioned on a sovereign debtor's
implementation of economic reforms and/or economic performance and the timely
service of such debtor's obligations. Failure to implement such reforms, achieve
such levels of economic performance or repay principal or interest when due, may
result in the cancellation of such third parties' commitments to lend funds to
the sovereign debtor, which may further impair such debtor's ability or
willingness to timely service its debts.
 
  In recent years, some of the Latin American countries in which the Funds
expect to invest have encountered difficulties in servicing their Sovereign
Debt. Some of these countries have withheld payments of interest and/or
principal of Sovereign Debt. These difficulties have also led to agreements to
restructure external debt obligations -- in particular, commercial bank loans,
typically by rescheduling principal payments, reducing interest rates and
extending new credits to finance interest payments on existing debt. In the
future, holders of Sovereign Debt may be requested to participate in similar
reschedulings of such debt.
 
  The ability of Latin American governments to make timely payments on their
Sovereign Debt is likely to be influenced strongly by a country's balance of
trade and its access to trade and other international credits. A country whose
exports are concentrated in a few commodities could be vulnerable to a decline
in the international prices of one or more of such commodities. Increased
protectionism on the part of a country's trading partners could also adversely
affect its exports. Such events could diminish a country's trade account
surplus, if any. To the extent that a country receives payment for its exports
in currencies other than hard currencies, its ability to make hard currency
payments could be affected.
 
   
  The occurrence of political, social or diplomatic changes in one or more of
the countries issuing Sovereign Debt could adversely affect a Fund's
investments. The countries issuing such instruments are faced with social and
political issues and some of them have experienced high rates of inflation in
recent years and have extensive internal debt. Among other effects, high
inflation and internal debt service requirements may adversely affect the cost
and availability of future domestic sovereign borrowing to finance governmental
programs, and may have other adverse social, political and economic
consequences. Political changes or a deterioration of a country's domestic
economy or balance of trade may affect the willingness of countries to service
their Sovereign Debt. While the Sub-advisor intends to manage each Fund's
portfolio in a manner that will minimize the exposure to such risks, there can
be no assurance that adverse political changes will not cause the Funds to
suffer losses of interest or principal on any of their holdings.
    
 
  Periods of economic uncertainty may result in the volatility of market prices
of Sovereign Debt and in turn, a Fund's net asset value, to a greater extent
than the volatility inherent in domestic securities. The value of Sovereign Debt
will likely vary inversely with changes in prevailing interest rates, which are
subject to considerable variance in the international market. If a Fund were to
experience unexpected net redemptions, it may be forced to sell Sovereign Debt
in its portfolio without regard to investment merit, thereby decreasing its
asset base over which Fund expenses can be spread and possibly reducing its rate
of return.
 
                             INVESTMENT LIMITATIONS
 
DEVELOPING MARKETS FUND
 
   
  Developing Markets Fund has adopted the following investment limitations as
fundamental policies which (unless otherwise noted) may not be changed without
approval of a majority of the Fund's outstanding shares.
    
 
  Developing Markets Fund may not:
 
          (1) issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of Developing Markets Fund's
     total assets (including the amount borrowed but reduced by any liabilities
     not constituting borrowings) at the time of the borrowing, except that the
     Fund may borrow up to an additional 5% of its total assets (not including
     the amount borrowed) for temporary or emergency purposes;
 
          (2) purchase any security if, as a result of that purchase, 25% or
     more of Developing Markets Fund's total assets would be invested in
     securities of issuers having their principal business activities in the
     same industry, except
 
                                       25
<PAGE>   1445
 
     that this limitation does not apply to securities issued or guaranteed by
     the U.S. government, its agencies or instrumentalities;
 
          (3) engage in the business of underwriting securities of other
     issuers, except to the extent that Developing Markets Fund might be
     considered an underwriter under the federal securities laws in connection
     with its disposition of portfolio securities;
 
          (4) purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-backed securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that Developing Markets Fund may exercise rights under
     agreements relating to such securities, including the right to enforce
     security interests and to hold real estate acquired by reason of such
     enforcement until that real estate can be liquidated in an orderly manner;
 
          (5) purchase or sell physical commodities, but Developing Markets Fund
     may purchase, sell or enter into financial options and futures, forward and
     spot currency contracts, swap transactions and other financial contracts or
     derivative instruments; or
 
          (6) make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan.
 
  Notwithstanding any other investment policy, Developing Markets Fund may
invest all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
 
  For purposes of the concentration policy of Developing Markets Fund contained
in limitation (2) above, the Fund intends to comply with the SEC staff position
that securities issued or guaranteed as to principal and interest by any one
single foreign government, or by all supranational organizations in the
aggregate, are considered to be securities of issuers in the same industry.
 
   
  In addition, to comply with federal tax requirements for qualification as a
"regulated investment company" ("RIC"), Developing Markets Fund's investments
will be limited so that, at the close of each quarter of its taxable year, (a)
not more than 25% of the value of its total assets is invested in the securities
(other than U.S. government securities or the securities of other RICs) of any
one issuer and (b) at least 50% of the value of its total assets is represented
by cash and cash items, U.S. government securities, securities of other RICs and
other securities, with these other securities limited, in respect of any one
issuer, to an amount that does not exceed 5% of the value of its total assets
and that does not represent more than 10% of the issuer's outstanding voting
securities ("Diversification Requirements"). These tax-related limitations may
be changed by the Company's Board of Trustees to the extent necessary to comply
with changes to applicable tax requirements.
    
 
  The following investment policy of Developing Markets Fund is not a
fundamental policy and may be changed by vote of the Trust's Board of Trustees
without shareholder approval: Developing Markets Fund will not purchase
securities on margin, provided that the Fund may obtain short-term credits as
may be necessary for the clearance of purchases and sales of securities, and
further provided that the Fund may make margin deposits in connection with its
use of financial options and futures, forward and spot currency contracts, swap
transactions and other financial contracts or derivative instruments.
 
   
  Investors should refer to the Developing Markets Fund's prospectus for further
information with respect to the Developing Markets Funds investment objective,
which may not be changed without the approval of its shareholders, and other
investment policies, techniques and limitations, which may be changed without
shareholder approval.
    
 
EMERGING MARKETS FUND
 
  Emerging Markets Fund has adopted the following investment limitations as
fundamental policies which (unless otherwise noted) may not be changed without
approval of a majority of the outstanding shares of the Fund.
 
  Emerging Markets Fund may not:
 
          (1) Purchase any security if, as a result of that purchase, 25% or
     more of Emerging Markets Fund's total assets would be invested in
     securities of issuers having their principal business activities in the
     same industry, except that this limitation does not apply to securities
     issued or guaranteed by the U.S. government, its agencies or
     instrumentalities;
 
                                       26
<PAGE>   1446
 
          (2) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-backed securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that Emerging Markets Fund may exercise rights under agreements
     relating to such securities, including the right to enforce security
     interests and to hold real estate acquired by reason of such enforcement
     until that real estate can be liquidated in an orderly manner;
 
          (3) Purchase or sell physical commodities, but Emerging Markets Fund
     may purchase, sell or enter into financial options and futures, forward and
     spot currency contracts, swap transactions and other financial contracts or
     derivative instruments;
 
          (4) Engage in the business of underwriting securities of other
     issuers, except to the extent that Emerging Markets Fund might be
     considered an underwriter under the federal securities laws in connection
     with its disposition of portfolio securities;
 
          (5) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan;
 
          (6) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of Emerging Markets Fund's
     total assets (including the amount borrowed but reduced by any liabilities
     not constituting borrowings) at the time of the borrowing, except that the
     Fund may borrow up to an additional 5% of its total assets (not including
     the amount borrowed) for temporary or emergency purposes; or
 
          (7) Purchase securities of any one issuer if, as a result, more than
     5% of Emerging Markets Fund's total assets would be invested in securities
     of that issuer or the Fund would own or hold more than 10% of the
     outstanding voting securities of that issuer, except that up to 25% of the
     Fund's total assets may be invested without regard to this limitation, and
     except that this limitation does not apply to securities issued or
     guaranteed by the U.S. government, its agencies or instrumentalities or to
     securities issued by other investment companies.
 
  Notwithstanding any other investment policy, Emerging Markets Fund may invest
all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
 
  For purposes of Emerging Markets Fund's concentration policy contained in
limitation (1) above, the Fund intends to comply with the SEC staff position
that securities issued or guaranteed as to principal and interest by any single
foreign government or any supranational organizations in the aggregate are
considered to be securities of issuers in the same industry.
 
  The following operating policies of Emerging Markets Fund are not fundamental
policies and may be changed by vote of the Trust's Board of Trustees without
shareholder approval. Emerging Markets Fund may not:
 
          (1) Invest in securities of an issuer if the investment would cause
     Emerging Markets Fund to own more than 10% of any class of securities of
     any one issuer;
 
          (2) Invest in companies for the purpose of exercising control or
     management;
 
          (3) Enter into a futures contract, an option on a futures contract, or
     an option on foreign currency traded on a CFTC-regulated exchange, in each
     case other than for bona fide hedging purposes (as defined by the CFTC), if
     the aggregate initial margin and premiums required to establish all of
     those positions (excluding the amount by which options are "in-the-money")
     exceeds 5% of the liquidation value of Emerging Markets Fund's portfolio,
     after taking into account unrealized profits and unrealized losses on any
     contracts the Fund has entered into;
 
          (4) Borrow money except for temporary or emergency purposes (not for
     leveraging) not in excess of 33 1/3% of the value of Emerging Markets
     Fund's total assets, except that the Fund may purchase securities when
     outstanding borrowings represent less than 5% of the Fund's assets;
 
          (5) Purchase securities on margin, provided that Emerging Markets Fund
     may obtain short-term credits as may be necessary for the clearance of
     purchases and sales of securities, and further provided that the Fund may
     make margin deposits in connection with its use of financial options and
     futures, forward and spot currency contracts, swap transactions and other
     financial contracts or derivative instruments; or
 
                                       27
<PAGE>   1447
 
          (6) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities.
 
   
  Investors should refer to the Emerging Markets Fund's Prospectus for further
information with respect to the Emerging Markets Fund's investment objective,
which may not be changed without the approval of its shareholders, and other
investment policies, techniques and limitations, which may be changed without
shareholder approval.
    
 
LATIN AMERICAN FUND
 
  Latin American Fund has adopted the following investment limitations as
fundamental policies which (unless otherwise noted) may not be changed without
approval a majority of the outstanding shares of the Fund.
 
  Latin American Fund may not:
 
          (1) Purchase any security if, as a result of that purchase, 25% or
     more of Latin American Fund's total assets would be invested in securities
     of issuers having their principal business activities in the same industry,
     except that this limitation does not apply to securities issued or
     guaranteed by the U.S. government, its agencies or instrumentalities;
 
          (2) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-backed securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that Latin American Fund may exercise rights under agreements
     relating to such securities, including the right to enforce security
     interests and to hold real estate acquired by reason of such enforcement
     until that real estate can be liquidated in an orderly manner;
 
          (3) Engage in the business of underwriting securities of other
     issuers, except to the extent that Latin American Fund might be considered
     an underwriter under the federal securities laws in connection with its
     disposition of portfolio securities;
 
          (4) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan;
 
          (5) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of Latin American Fund's
     total assets (including the amount borrowed but reduced by any liabilities
     not constituting borrowings) at the time of the borrowing, except that the
     Fund may borrow up to an additional 5% of its total assets (not including
     the amount borrowed) for temporary or emergency purposes; or
 
          (6) Purchase or sell physical commodities, but Latin American Fund may
     purchase, sell or enter into financial options and futures, forward and
     spot currency contracts, swap transactions and other financial contracts or
     derivative instruments.
 
  Notwithstanding any other investment policy, Latin American Fund may invest
all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
 
  For purposes of Latin American Fund's concentration policy contained in
limitation (1), above, the Fund intends to comply with the SEC staff position
that securities issued or guaranteed as to principal and interest by any single
foreign government are considered to be securities of issuers in the same
industry.
 
  The following operating policies of Latin American Fund are not fundamental
policies and may be changed by vote of the Trust's Board of Trustees without
shareholder approval. Latin American Fund may not:
 
          (1) Invest in securities of an issuer if the investment would cause
     Latin American Fund to own more than 10% of any class of securities of any
     one issuer;
 
          (2) Invest in companies for the purpose of exercising control or
     management;
 
          (3) Invest more than 10% of its net assets in illiquid securities,
     including securities that are illiquid by virtue of the absence of a
     readily available market;
 
                                       28
<PAGE>   1448
 
          (4) Enter into a futures contract, an option on a futures contract, or
     an option on foreign currency traded on a CFTC-regulated exchange, in each
     case other than for bona fide hedging purposes (as defined by the CFTC), if
     the aggregate initial margin and premiums required to establish all of
     those positions (excluding the amount by which options are "in-the-money")
     exceeds 5% of the liquidation value of Latin American Fund's portfolio,
     after taking into account unrealized profits and unrealized losses on any
     contracts the Fund has entered into;
 
          (5) Make any additional investments while borrowings exceed 5% of
     Latin American Fund's total assets;
 
          (6) Purchase securities on margin, provided that Latin American Fund
     may obtain short-term credits as may be necessary for the clearance of
     purchases and sales of securities, and further provided that the Fund may
     make margin deposits in connection with its use of financial options and
     futures, forward and spot currency contracts, swap transactions and other
     financial contracts or derivative instruments; or
 
          (7) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities.
 
  Latin American Fund has the authority to invest up to 10% of its total assets
in shares of other investment companies pursuant to the 1940 Act. The Fund may
not invest more than 5% of its total assets in any one investment company or
acquire more than 3% of the outstanding voting securities of any one investment
company.
 
   
  Investors should refer to the Latin American Fund's Prospectus for further
information with respect to the Latin American Fund's investment objective,
which may not be changed without the approval of its shareholders, and other
investment policies, techniques and limitations, which may be changed without
shareholder approval.
    
 
                      EXECUTION OF PORTFOLIO TRANSACTIONS
 
   
  Subject to policies established by the Trust's Board of Trustees, the
Sub-advisor is responsible for the execution of each Fund's portfolio
transactions and the selection of broker/dealers who execute such transactions
on behalf of the Funds. In executing portfolio transactions, the Sub-advisor
seeks the best net results for each Fund, taking into account such factors as
the price (including the applicable brokerage commission or dealer spread), size
of the order, difficulty of execution and operational facilities of the firm
involved. Although the Sub-advisor generally seeks reasonably competitive
commission rates and spreads, payment of the lowest commission or spread is not
necessarily consistent with the best net results. While the Funds may engage in
soft dollar arrangements for research services, as described below, the Funds
have no obligation to deal with any broker/dealer or group of broker/dealers in
the execution of portfolio transactions.
    
 
  Debt securities generally are traded on a "net" basis with a dealer acting as
principal for its own account without a stated commission, although the price of
the security usually includes a profit to the dealer. U.S. and foreign
government securities and money market instruments generally are traded in the
OTC markets. In underwritten offerings, securities usually are purchased at a
fixed price which includes an amount of compensation to the underwriter. On
occasion, securities may be purchased directly from an issuer, in which case no
commissions or discounts are paid. Broker/dealers may receive commissions on
futures, currency and options transactions.
 
   
  Consistent with the interests of each Fund, the Sub-advisor may select brokers
to execute a Fund's portfolio transactions, on the basis of the research and
brokerage services they provide to the Sub-advisor for its use in managing the
Fund and its other advisory accounts. Such services may include furnishing
analyses, reports and information concerning issuers, industries, securities,
geographic regions, economic factors and trends, portfolio strategy, and
performance of accounts; and effecting securities transactions and performing
functions incidental thereto (such as clearance and settlement). Research and
brokerage services received from such brokers are in addition to, and not in
lieu of, the services required to be performed by the Sub-advisor under the
investment management and administration contracts. A commission paid to such
brokers may be higher than that which another qualified broker would have
charged for effecting the same transaction, provided that the Sub-advisor
determines in good faith that such commission is reasonable in terms either of
that particular transaction or the overall responsibility of the Sub-advisor to
a Fund and its other clients and that the total commissions paid by that Fund
will be reasonable in relation to the benefits it received over the long term.
Research services may also be received from dealers who execute Fund
transactions in OTC markets.
    
 
   
  The Sub-advisor may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by a Fund toward payment of the Fund's expenses, such as
transfer agent and custodian fees.
    
 
                                       29
<PAGE>   1449
 
   
  Investment decisions for each Fund and for other investment accounts managed
by the Sub-advisor are made independently of each other in light of differing
conditions. However, the same investment decision occasionally may be made for
two or more of such accounts including the Funds. In such cases, simultaneous
transactions may occur. Purchases or sales are then allocated as to price or
amount in a manner deemed fair and equitable to all accounts involved. While in
some cases this practice could have a detrimental effect upon the price or value
of the security as far as a Fund is concerned, in other cases, the Sub-advisor
believes that coordination and the ability to participate in volume transactions
will be beneficial to that Fund.
    
 
   
  Under a policy adopted by the Trust's Board of Trustees, and subject to the
policy of obtaining the best net results, the Sub-advisor may consider a
broker/dealer's sale of the shares of a Fund and the other funds for which AIM
or the Sub-advisor serves as investment manager in selecting brokers and dealers
for the execution of portfolio transactions. This policy does not imply a
commitment to execute portfolio transactions through all broker/dealers that
sell shares of the Funds and such other funds.
    
 
  Each Fund contemplates purchasing most foreign equity securities in
over-the-counter markets or stock exchanges located in the countries in which
the respective principal offices of the issuers of the various securities are
located, if that is the best available market. The fixed commissions paid in
connection with most such foreign stock transactions generally are higher than
negotiated commissions on U.S. transactions. There generally is less government
supervision and regulation of foreign stock exchanges and brokers than in the
United States. Foreign security settlements may in some instances be subject to
delays and related administrative uncertainties.
 
  Foreign equity securities may be held by each Fund in the form of ADRs, ADSs,
EDRs, GDRs and CDRs or securities convertible into foreign equity securities.
ADRs, ADSs, EDRs, GDRs and CDRs may be listed on stock exchanges, or traded in
the OTC markets in the United States or Europe, as the case may be. ADRs, like
other securities traded in the United States, will be subject to negotiated
commission rates. The foreign and domestic debt securities and money market
instruments in which a Fund may invest generally are traded in the OTC markets.
 
   
  Each Fund contemplates that, consistent with the policy of obtaining the best
net results, brokerage transactions may be conducted through certain companies
affiliated with AIM or the Sub-advisor. The Trust's Board of Trustees has
adopted procedures in conformity with Rule 17e-1 under the 1940 Act to ensure
that all brokerage commissions paid to such affiliates are reasonable and fair
in the context of the market in which they are operating. Any such transactions
will be effected and related compensation paid only in accordance with
applicable SEC regulations.
    
 
   
  The Funds may engage in certain principal and agency transactions with banks
and their affiliates that own 5% or more of the outstanding voting securities of
a Fund, provided the conditions of an exemptive order received by the Funds from
the SEC are met. In addition, a Fund may purchase or sell a security from or to
another AIM Fund provided the Funds follow procedures adopted by the Boards of
Directors/Trustees of the various AIM Funds, including the Trust. These inter-
fund transactions do not generate brokerage commissions but may result in
custodial fees or taxes or other related expenses.
    
 
  For the fiscal years ended December 31, 1997, 1996 and 1995, the Predecessor
Fund paid aggregate brokerage commissions of $2,212,022, $1,580,879 and
$1,311,090, respectively. For the fiscal years ended October 31, 1997, 1996 and
1995, Emerging Markets Fund paid aggregate brokerage commissions of $3,274,528,
$3,648,347 and $3,307,402, respectively. For the fiscal years ended October 31,
1997, 1996 and 1995, Latin American Fund paid aggregate brokerage commissions of
$2,719,660, $2,094,634 and $891,513, respectively.
 
PORTFOLIO TRADING AND TURNOVER
 
   
  Each Fund engages in portfolio trading when the Sub-advisor has concluded that
the sale of a security owned by the Fund and/or the purchase of another security
of better value can enhance principal and/or increase income. A security may be
sold to avoid any prospective decline in market value, or a security may be
purchased in anticipation of a market rise. Consistent with each Fund's
investment objective, a security also may be sold and a comparable security
purchased coincidentally in order to take advantage of what is believed to be a
disparity in the normal yield and price relationship between the two securities.
Although none of the Funds generally intends to trade for short-term profits,
the securities in a Fund's portfolio will be sold whenever management believes
it is appropriate to do so, without regard to the length of time a particular
security may have been held. Portfolio turnover rate is calculated by dividing
the lesser of sales or purchases of portfolio securities by a Fund's average
month-end portfolio values, excluding short-term investments. The portfolio
turnover rate will not be a limiting factor when the Sub-advisor deems portfolio
changes appropriate. Higher portfolio turnover involves correspondingly greater
brokerage commissions and other transaction costs that a Fund will bear directly
and may result in the realization of net capital gains that are taxable when
distributed to that Fund's shareholders. For the fiscal years ended December 31,
1997 and 1996, the Predecessor Fund's portfolio turnover rates were 184% and
    
                                       30
<PAGE>   1450
 
138%, respectively. For the fiscal years ended October 31, 1997 and 1996,
Emerging Markets Fund's portfolio turnover rates were 150% and 104%,
respectively. Latin American Fund's portfolio turnover rates for the fiscal
years ended October 31, 1997 and 1996 were 130% and 101%, respectively.
 
   
                                   MANAGEMENT
    
 
   
TRUSTEES AND EXECUTIVE OFFICERS
    
 
  The Trust's Trustees and Executive Officers are listed below. Unless otherwise
indicated, the address of each Executive Officer is 11 Greenway Plaza, Suite
100, Houston, Texas 77046.
   
    
 
   
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
   NAME, ADDRESS AND AGE     POSITIONS HELD WITH REGISTRANT   PRINCIPAL OCCUPATION WITH REGISTRANT
   ---------------------     ------------------------------   ------------------------------------
- ----------------------------------------------------------------------------------------------------
<S>                          <C>                             <C>
 ROBERT H. GRAHAM (51)       Trustee, Chairman of the Board  Director, President and Chief Executive
                             and President                   Officer, A I M Management Group Inc.;
                                                             Director and President, A I M Advisors,
                                                             Inc.; Director and Senior Vice
                                                             President, A I M Capital Management,
                                                             Inc., A I M Distributors, Inc., A I M
                                                             Fund Services, Inc. and Fund Management
                                                             Company; and Director, AMVESCAP PLC.
- ----------------------------------------------------------------------------------------------------
 C. DEREK ANDERSON (57)      Trustee                         Mr. Anderson is President, Plantagenet
 220 Sansome Street                                          Capital Management, LLC (an investment
 Suite 400                                                   partnership); Chief Executive Officer,
 San Francisco, CA 94104                                     Plantagenet Holdings, Ltd. (an
                                                             investment banking firm); Director,
                                                             Anderson Capital Management, Inc. since
                                                             1988; Director, PremiumWear, Inc.
                                                             (formerly Munsingwear, Inc.) (a casual
                                                             apparel company) and Director, "R"
                                                             Homes, Inc. and various other
                                                             companies. Mr. Anderson is also a
                                                             trustee of each of the other investment
                                                             companies registered under the 1940 Act
                                                             that is sub-advised or sub-administered
                                                             by the Sub-advisor.
- ----------------------------------------------------------------------------------------------------
 FRANK S. BAYLEY (59)        Trustee                         Mr. Bayley is a partner of the law firm
 Two Embarcadero Center                                      of Baker & McKenzie, and serves as a
 Suite 2400                                                  Director and Chairman of C.D. Stimson
 San Francisco, CA 94111                                     Company (a private investment company).
                                                             Mr. Bayley is also a trustee of each of
                                                             the other investment companies
                                                             registered under the 1940 Act that is
                                                             sub-advised or sub-administered by the
                                                             Sub-advisor.
- ----------------------------------------------------------------------------------------------------
 ARTHUR C. PATTERSON (54)    Trustee                         Mr. Patterson is Managing Partner of
 428 University Avenue                                       Accel Partners (a venture capital
 Palo Alto, CA 94301                                         firm). He also serves as a director of
                                                             Viasoft and PageMart, Inc. (both public
                                                             software companies), as well as several
                                                             other privately held software and
                                                             communications companies. Mr. Patterson
                                                             is also a trustee of each of the other
                                                             investment companies registered under
                                                             the 1940 Act that is sub-advised or
                                                             sub-administered by the Sub-advisor.
- ----------------------------------------------------------------------------------------------------
 RUTH H. QUIGLEY (63)        Trustee                         Miss Quigley is a private investor.
 1055 California Street                                      From 1984 to 1986, she was President of
 San Francisco, CA 94108                                     Quigley Friedlander & Co., Inc. (a
                                                             financial advisory services firm). Miss
                                                             Quigley is also a trustee of each of
                                                             the other investment companies
                                                             registered under the 1940 Act that is
                                                             sub-advised or sub-administered by the
                                                             Sub-advisor.
- ----------------------------------------------------------------------------------------------------
</TABLE>
    
 
                                       31
<PAGE>   1451
 
   
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
   NAME, ADDRESS AND AGE     POSITIONS HELD WITH REGISTRANT   PRINCIPAL OCCUPATION WITH REGISTRANT
   ---------------------     ------------------------------   ------------------------------------
- ----------------------------------------------------------------------------------------------------
<S>                          <C>                             <C>
 +JOHN J. ARTHUR (53)        Vice President                  Director, Senior Vice President and
                                                             Treasurer, A I M Advisors, Inc.; Vice
                                                             President and Treasurer, A I M
                                                             Management Group Inc., A I M Capital
                                                             Management, Inc., A I M Distributors,
                                                             Inc., A I M Fund Services, Inc. and
                                                             Fund Management Company.
- ----------------------------------------------------------------------------------------------------
 KENNETH W. CHANCEY (52)     Vice President and Principal    Senior Vice President -- Mutual Fund
 50 California Street        Accounting Officer              Accounting, the Sub-advisor since 1997;
 San Francisco, CA 94111                                     Vice President -- Mutual Fund
                                                             Accounting, the Sub-advisor from 1992
                                                             to 1997.
- ----------------------------------------------------------------------------------------------------
 MELVILLE B. COX (54)        Vice President                  Vice President and Chief Compliance
                                                             Officer, A I M Advisors, Inc., A I M
                                                             Capital Management, Inc., A I M
                                                             Distributors, Inc., A I M Fund
                                                             Services, Inc. and Fund Management
                                                             Company.
- ----------------------------------------------------------------------------------------------------
 GARY T. CRUM (50)           Vice President                  Director and President, A I M Capital
                                                             Management, Inc.; Director and Senior
                                                             Vice President, A I M Management Group
                                                             Inc. and A I M Advisors, Inc.; and
                                                             Director, A I M Distributors, Inc. and
                                                             AMVESCAP PLC.
- ----------------------------------------------------------------------------------------------------
 HELGE K. LEE (52)           Vice President                  Chief Legal and Compliance
 50 California Street                                        Officer -- North America, the
 San Francisco, CA 94111                                     Sub-advisor since October 1997;
                                                             Secretary and Chief Legal and
                                                             Compliance Officer, INVESCO (NY), Asset
                                                             Management, Inc., INVESCO (NY), Inc.,
                                                             GT Global Investor Services, Inc. and
                                                             GT Global Insurance Agency, Inc. since
                                                             August 1997; Secretary and Chief Legal
                                                             and Compliance Officer, GT Global, Inc.
                                                             from August 1997 to April 1998;
                                                             Executive Vice President of the Asset
                                                             Management Division of Liechtenstein
                                                             Global Trust since October 1996 to May
                                                             1998; Senior Vice President, General
                                                             Counsel and Secretary of LGT Asset
                                                             Management, Inc., INVESCO (NY), Inc.,
                                                             GT Global, GT Global Investor Services,
                                                             Inc. and G.T. Insurance from May 1994
                                                             to October 1996; Senior Vice President,
                                                             General Counsel and Secretary of
                                                             Strong/Corneliuson Management, Inc. and
                                                             Secretary of each of the Strong Funds
                                                             from October 1991 through May 1994.
- ----------------------------------------------------------------------------------------------------
 +CAROL F. RELIHAN (43)      Vice President                  Director, Senior Vice President,
                                                             General Counsel and Secretary, A I M
                                                             Advisors, Inc.; Vice President, General
                                                             Counsel and Secretary, A I M Management
                                                             Group Inc.; Director, Vice President
                                                             and General Counsel, Fund Management
                                                             Company; Vice President and General
                                                             Counsel, A I M Fund Services, Inc.; and
                                                             Vice President, A I M Capital
                                                             Management, Inc. and A I M
                                                             Distributors, Inc.
- ----------------------------------------------------------------------------------------------------
 DANA R. SUTTON (39)         Vice President and Assistant    Vice President and Fund Controller,
                             Treasurer                       A I M Advisors, Inc.; and Assistant
                                                             Vice President and Assistant Treasurer,
                                                             Fund Management Company.
- ----------------------------------------------------------------------------------------------------
</TABLE>
    
 
- ---------------
 
+ Mr. Arthur and Ms. Relihan are married to each other.
 
                                       32
<PAGE>   1452
 
   
  The Board of Trustees has a Nominating and Audit Committee, comprised of Miss
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Trust and its
funds and recommending firms to serve as independent auditors for the Trust. All
of the Trust's Trustees also serve as directors or trustees of some or all of
the other investment companies managed, administered or advised by AIM. All of
the Trust's Executive Officers hold similar offices with some or all of the
other investment companies managed, administered or advised by AIM. Each Trustee
who is not a director, officer or employee of the Sub-advisor or any affiliated
company is paid aggregate fees of $5,000 a year plus $300 per Fund for each
meeting of the Board attended, and reimbursed travel and other expenses incurred
in connection with attendance at such meetings. Other Trustees and Officers
receive no compensation or expense reimbursement from the Trust. For the fiscal
year ended October 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss
Quigley, who are not directors, officers or employees of the Sub-advisor or any
affiliated company, received total compensation of $38,650, $38,650, $27,850 and
$38,650, respectively, from the Trust for their services as Trustees. For the
fiscal year ended October 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and
Miss Quigley, who are not directors, officers or employees of the Sub-advisor or
any other affiliated company, received total compensation of $117,304, $114,386,
$88,350 and $111,688, respectively, from the investment companies managed or
administered by AIM and sub-advised or sub-administered by the Sub-advisor for
which he or she serves as a Director or Trustee. Fees and expenses disbursed to
the Trustees contained no accrued or payable pension or retirement benefits. As
of June 26, 1998, the Officers and Trustees and their families as a group owned
in the aggregate beneficially or of record less than 1% of the outstanding
shares of the Funds or of all the Trust's series in the aggregate.
    
 
   
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES
    
 
   
  AIM serves as each Fund's investment manager and administrator under an
investment management and administration contract ("Management Contract")
between the Trust and AIM. The Sub-advisor serves as the sub-advisor and sub-
administrator to each Fund under a sub-advisory and sub-administration contract
between AIM and the Sub-advisor ("Sub-Management Contract," and together with
the Management Contract, the "Management Contracts"). As investment managers and
administrators, AIM and the Sub-advisor make all investment decisions for the
Funds and administer each Fund's affairs. Among other things, AIM and the
Sub-advisor furnish the services and pay the compensation and travel expenses of
persons who perform the executive, administrative, clerical and bookkeeping
functions of the Trust and the Funds, and provide suitable office space,
necessary small office equipment and utilities.
    
 
   
  The Management Contracts for each Fund may be renewed for one-year terms,
provided that any such renewal has been specifically approved at least annually
by (i) the Trust's Board of Trustees, or by the vote of a majority of a Fund's
outstanding voting securities (as defined in the 1940 Act) and (ii) a majority
of Trustees who are not parties to the Management Contracts or "interested
persons" of any such party (as defined in the 1940 Act), cast in person at a
meeting called for the specific purpose of voting on such approval. The
Management Contracts provide that with respect to each Fund, the Trust or each
of AIM or the Sub-advisor may terminate the Management Contracts without penalty
upon sixty days' written notice. The Management Contracts terminate
automatically in the event of their assignment (as defined in the 1940 Act).
    
 
   
  For the fiscal years ended October 31, 1997, December 31, 1996 and December
31, 1995, the Predecessor Fund of Developing Markets Fund paid investment
management and administration fees to the Sub-advisor in the amounts of
$7,383,823, $7,864,840 and $6,878,640, respectively. For the fiscal years ended
October 31, 1997, 1996 and 1995, Emerging Markets Fund paid investment
management and administration fees to the Sub-advisor in the amounts of
$3,907,922, $4,883,626 and $5,410,744, respectively. For the fiscal years ended
October 31, 1997, 1996 and 1995, Latin American Fund paid investment management
and administration fees to the Sub-advisor in the amounts of $3,538,586,
$3,365,375 and $3,913,429, respectively.
    
 
DISTRIBUTION SERVICES
 
  Each Fund's Advisor Class shares are offered continuously through the Funds'
principal underwriter and distributor, AIM Distributors, on a "best efforts"
basis pursuant to a distribution contract between the Trust and AIM Distributors
without a sales charge or a contingent deferred sales charge.
 
   
EXPENSES OF THE FUNDS
    
 
   
  Each Fund pays all expenses not assumed by AIM, the Sub-advisor, AIM
Distributors and other agents. These expenses include, in addition to the
advisory, distribution, transfer agency, pricing and accounting agency and
brokerage fees discussed above, legal and audit expenses, custodian fees,
trustees' fees, organizational fees, fidelity bond and other insurance premiums,
taxes, extraordinary expenses and the expenses of reports and prospectuses sent
to existing investors. The allocation of general Trust expenses and expenses
shared among the Funds and other funds organized as
    
                                       33
<PAGE>   1453
 
series of the Trust are allocated on a basis deemed fair and equitable, which
may be based on the relative net assets of the Funds or the nature of the
services performed and relative applicability to the Funds. Expenditures,
including costs incurred in connection with the purchase or sale of portfolio
securities, which are capitalized in accordance with generally accepted
accounting principles applicable to investment companies, are accounted for as
capital items and not as expenses. The ratio of each Fund's expenses to its
relative net assets can be expected to be higher than the expense ratios of
funds investing solely in domestic securities, since the cost of maintaining the
custody of foreign securities and the rate of investment management fees paid by
each Fund generally are higher than the comparable expenses of such other funds.
 
   
                         NET ASSET VALUE DETERMINATION
    
 
  The net asset value per share of each Fund is normally determined daily as of
the close of trading of the New York Stock Exchange ("NYSE") (generally 4:00
p.m. Eastern time) on each business day of the Funds. In the event the NYSE
closes early (i.e., before 4:00 p.m. Eastern time) on a particular day, the net
asset value of a Fund is determined as of the close of the NYSE on such day. Net
asset value per share is determined by dividing the value of a Fund's
securities, cash and other assets (including interest accrued but not collected)
attributable to a particular class, less all its liabilities (including accrued
expenses and dividends payable) attributable to that class, by the total number
of shares outstanding of that class. Determination of each Fund's net asset
value per share is made in accordance with generally accepted accounting
principles.
 
  Each equity security held by a Fund is valued at its last sales price on the
exchange where the security is principally traded or, lacking any sales on a
particular day, the security is valued at the mean between the closing bid and
asked prices on that day. Each security traded in the over-the-counter market
(but not including securities reported on the NASDAQ National Market System) is
valued at the mean between the last bid and asked prices based upon quotes
furnished by market makers for such securities. Each security reported on the
NASDAQ National Market System is valued at the last sales price on the valuation
date or absent a last sales price, at the mean between the closing bid and asked
prices on that day. Debt securities 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 institution-size trading in similar groups of
securities, developments related to special securities, yield, quality, coupon
rate, maturity, type of issue, individual trading characteristics and other
market data. 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 Trust's officers in a manner specifically
authorized by the Board of Trustees. Short-term obligations having 60 days or
less to maturity are valued on the basis of amortized cost. For purposes of
determining net asset value per share, futures and options contracts generally
will be valued 15 minutes after the close of trading of the NYSE.
 
   
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of each Fund's shares are determined at such
times. Foreign currency exchange rates are also generally determined prior to
the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which such
values are determined and the close of the NYSE which will not be reflected in
the computation of a 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 Trustees.
    
 
                       HOW TO PURCHASE AND REDEEM SHARES
 
   
  A complete description of the manner in which shares of the Funds may be
purchased appears in the Funds' Prospectuses under the headings "How to Purchase
Shares," "Terms and Conditions of Purchase of the AIM Funds" and "Special
Plans."
    
 
   
  For purposes of a Letter of Intent entered into prior to June 1, 1998, any
registered investment advisor, trust company or bank trust department which
exercises investment discretion and which intends within thirteen months to
invest $500,000 or more can be treated as a single purchaser, provided further
that such entity places all purchases and redemption orders. Such entities
should be prepared to establish their qualifications for such treatment.
    
 
  Complete information concerning the method of exchanging shares of the Funds
for shares of the other AIM Funds is set forth in the Prospectuses under the
heading "Exchange Privilege."
 
                                       34
<PAGE>   1454
 
   
  Information concerning redemption of the Funds' shares is set forth in the
Prospectuses under the heading "How to Redeem Shares." In addition to the Funds'
obligation to redeem shares, AIM Distributors may also repurchase shares as an
accommodation to shareholders. To effect a repurchase, those dealers who have
executed Selected Dealer Agreements with AIM Distributors must phone orders to
the order desk of the Funds at (800) 959-4246 and guarantee delivery of all
required documents in good order. A repurchase is effected at the net asset
value per share of the applicable Fund next determined after the repurchase
order is received. Such an arrangement is subject to timely receipt by A I M
Fund Services, Inc. ("AFS"), the Funds' transfer agent, of all required
documents in good order. If such documents are not received within a reasonable
time after the order is placed, the order is subject to cancellation. While
there is no charge imposed by a Fund or by AIM Distributors (other than any
applicable contingent deferred sales charge) when shares are redeemed or
repurchased, dealers may charge a fair service fee for handling the transaction.
    
 
  The right of redemption may be suspended or the date of payment postponed when
(a) trading on the NYSE is restricted, as determined by applicable rules and
regulations of the SEC, (b) the NYSE is closed for other than customary weekend
and holiday closings, (c) the SEC has by order permitted such suspension, or (d)
an emergency as determined by the SEC exists making disposition of portfolio
securities or the valuation of the net assets of a Fund not reasonably
practicable.
 
  A Fund's net asset value is calculated by dividing the number of outstanding
shares into the net assets of the Fund. Net assets are the excess of a Fund's
assets over its liabilities. A more detailed description of how each Fund's net
asset value is calculated appears in the Prospectuses under the heading
"Determination of Net Asset Value."
 
PROGRAMS AND SERVICES FOR SHAREHOLDERS
 
  The Funds provide certain services for shareholders and certain investment or
redemption programs. See "Exchange Privilege" and "How to Redeem Shares" in the
Prospectus. All inquiries concerning these programs should be made directly to
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, toll free
at (800) 959-4246.
 
DIVIDEND ORDER
 
   
  Dividends may be paid to someone other than the registered owner, or sent to
an address other than the address of record. (Please note that signature
guarantees are required to effect this option.) An investor also may direct that
his or her dividends be invested in one of the other AIM Funds and there is no
sales charge for these investments; initial investment minimums apply. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" in the
Prospectus. To effect this option, please contact your authorized dealer. For
more information concerning AIM Funds other than the Fund, please obtain a
current prospectus by contacting your authorized dealer, by writing to A I M
Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, or by calling
toll free (800) 959-4246.
    
 
                                     TAXES
 
GENERAL
 
  Each Fund is treated as a separate corporation for federal income tax
purposes. To continue to qualify for treatment as a RIC under the Code, each
Fund must distribute to its shareholders for each taxable year at least 90% of
its investment company taxable income (consisting generally of net investment
income, net short-term capital gain and net gains from certain foreign currency
transactions) ("Distribution Requirement") and must meet several additional
requirements. These requirements include the following: (1) the Fund must derive
at least 90% of its gross income each taxable year from dividends, interest,
payments with respect to securities loans and gains from the sale or other
disposition of securities or foreign currencies, or other income (including
gains from options, Futures or Forward Contracts) derived with respect to its
business of investing in securities or those currencies ("Income Requirement");
and (2) the Diversification Requirements.
 
  Dividends and other distributions declared by a Fund in, and payable to
shareholders of record as of a date in, October, November or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during the following January. Accordingly, those distributions will be
taxed to shareholders for the year in which that December 31 falls.
 
  If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
 
                                       35
<PAGE>   1455
 
  Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to
the extent it fails to distribute by the end of any calendar year substantially
all of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
 
FOREIGN TAXES
 
  Dividends and interest received by each Fund, and gains realized thereby, may
be subject to income, withholding or other taxes imposed by foreign countries
and U.S. possessions ("foreign taxes") that would reduce the yield and/or total
return on its securities. Tax conventions between certain countries and the
United States may reduce or eliminate foreign taxes, however, and many foreign
countries do not impose taxes on capital gains in respect of investments by
foreign investors. If more than 50% of the value of a Fund's total assets at the
close of its taxable year consists of securities of foreign corporations, the
Fund will be eligible to, and may, file an election with the Internal Revenue
Service that will enable its shareholders, in effect, to receive the benefit of
the foreign tax credit with respect to any foreign taxes paid by it. Pursuant to
the election, the Fund would treat those taxes as dividends paid to its
shareholders and each shareholder would be required to (1) include in gross
income, and treat as paid by him, his share of those taxes, (2) treat his share
of those taxes and of any dividend paid by the Fund that represents income from
foreign and U.S. possessions sources as his own income from those sources and
(3) either deduct the taxes deemed paid by him in computing his taxable income
or, alternatively, use the foregoing information in calculating the foreign tax
credit against his federal income tax. Each Fund will report to its shareholders
shortly after each taxable year their respective shares of the Fund's foreign
taxes and income from sources within, and taxes paid to, foreign countries and
U.S. possessions if it makes this election. Pursuant to the Taxpayer Relief Act
of 1997 ("Tax Act"), individuals who have no more than $300 ($600 for married
persons filing jointly) of creditable foreign taxes included on Form 1099 and
all of whose foreign source income is "qualified passive income" may elect each
year to be exempt from the extremely complicated foreign tax credit limitation
and will be able to claim a foreign tax credit without having to file the
detailed Form 1116 that otherwise is required.
 
PASSIVE FOREIGN INVESTMENT COMPANIES
 
  Each Fund may invest in the stock of "passive foreign investment companies"
("PFICs"). A PFIC is a foreign corporation -- other than a "controlled foreign
corporation" (i.e., a foreign corporation in which, on any day during its
taxable year, more than 50% of the total voting power of all voting stock
therein or the total value of all stock therein is owned, directly, indirectly
or constructively, by "U.S. shareholders," defined as U.S. persons that
individually own, directly, indirectly or constructively, at least 10% of that
voting power) as to which a Fund is a U.S. shareholder (effective with respect
to each Fund for its taxable year beginning November 1, 1998) -- that, in
general, meets either of the following tests: (1) at least 75% of its gross
income is passive or (2) an average of at least 50% of its assets produce, or
are held for the production of, passive income. Under certain circumstances, a
Fund will be subject to federal income tax on a portion of any "excess
distribution" received on, or of any gain from the disposition of, stock of a
PFIC (collectively "PFIC income"), plus interest thereon, even if the Fund
distributes the PFIC income as a taxable dividend to its shareholders. The
balance of the PFIC income will be included in the Fund's investment company
taxable income and, accordingly, will not be taxable to it to the extent it
distributes that income to its shareholders.
 
  If a Fund invests in a PFIC and elects to treat the PFIC as a "qualified
electing fund" ("QEF"), then in lieu of the foregoing tax and interest
obligation, the Fund would be required to include in income each year its pro
rata share of the QEF's ordinary earnings and net capital gain (i.e., the excess
of net long-term capital gain over net short-term capital loss) -- which most
likely would have to be distributed by the Fund to satisfy the Distribution
Requirement and avoid imposition of the Excise Tax -- even if those earnings and
gain were not received by the Fund from the QEF. In most instances it will be
very difficult, if not impossible, to make this election because of certain
requirements thereof.
 
  Effective for its taxable year beginning November 1, 1998, each Fund may elect
to "mark to market" its stock in any PFIC. "Marking-to-market," in this context,
means including in ordinary income each taxable year the excess, if any, of the
fair market value of the stock over a Fund's adjusted basis therein as of the
end of that year. Pursuant to the election, a Fund also will be allowed to
deduct (as an ordinary, not capital, loss) the excess, if any, of its adjusted
basis in PFIC stock over the fair market value thereof as of the taxable
year-end, but only to the extent of any net mark-to-market gains with respect to
that stock included in income by the Fund for prior taxable years. A Fund's
adjusted basis in each PFIC's stock subject to the election will be adjusted to
reflect the amounts of income included and deductions taken thereunder.
Regulations proposed in 1992 provided a similar election with respect to the
stock of certain PFICs.
 
NON-U.S. SHAREHOLDERS
 
  Dividends paid by a Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership ("foreign shareholder") generally
will be
                                       36
<PAGE>   1456
 
subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply, however, to a dividend paid by a Fund to a foreign
shareholder that is "effectively connected with the conduct of a U.S. trade or
business," in which case the reporting and withholding requirements applicable
to domestic shareholders will apply. A distribution of net capital gain by a
Fund to a foreign shareholder generally will be subject to U.S. federal income
tax (at the rates applicable to domestic persons) only if the distribution is
"effectively connected" or the foreign shareholder is treated as a resident
alien individual for federal income tax purposes.
 
OPTIONS, FUTURES AND FOREIGN CURRENCY TRANSACTIONS
 
  Each Fund's use of hedging transactions, such as selling (writing) and
purchasing options and Futures and entering into Forward Contracts, involves
complex rules that will determine, for federal income tax purposes, the amount,
character and timing of recognition of the gains and losses a Fund realizes in
connection therewith. Gains from the disposition of foreign currencies (except
certain gains that may be excluded by future regulations), and gains from
options, Futures and Forward Contracts derived by a Fund with respect to its
business of investing in securities or foreign currencies, will qualify as
permissible income under the Income Requirement.
 
  Futures and Forward Contracts that are subject to section 1256 of the Code
(other than those that are part of a "mixed straddle") ("Section 1256
Contracts") and that are held by a Fund at the end of its taxable year generally
will be deemed to have been sold at that time at market value for federal income
tax purposes. Sixty percent of any net gain or loss recognized on these deemed
sales, and 60% of any net gain or loss realized from any actual sales of Section
1256 Contracts, will be treated as long-term capital gain or loss, and the
balance will be treated as short-term capital gain or loss. That 60% portion
will qualify for the reduced maximum tax rates on noncorporate taxpayers' net
capital gain enacted by the Tax Act -- 20% (10% for taxpayers in the 15%
marginal tax bracket) for gain recognized on capital assets held for more than
18 months -- instead of the 28% rate in effect before that legislation, which
now applies to gain recognized on capital assets held for more than one year but
not more than 18 months.
 
  Section 988 of the Code also may apply to gains and losses from transactions
in foreign currencies, foreign-currency-denominated debt securities and options,
Futures and Forward Contracts on foreign currencies ("Section 988" gains and
losses). Each Section 988 gain or loss generally is computed separately and
treated as ordinary income or loss. In the case of overlap between sections 1256
and 988, special provisions determine the character and timing of any income,
gain or loss. The Funds attempt to monitor section 988 transactions to minimize
any adverse tax impact.
 
  If a Fund has an "appreciated financial position" -- generally, an interest
(including an interest through an option, Futures or Forward Contract or short
sale) with respect to any stock, debt instrument (other than "straight debt") or
partnership interest the fair market value of which exceeds its adjusted
basis -- and enters into a "constructive sale" of the same or substantially
similar property, the Fund will be treated as having made an actual sale
thereof, with the result that gain will be recognized at that time. A
constructive sale generally consists of a short sale, an offsetting notional
principal contract or Futures or Forward Contract entered into by a Fund or a
related person with respect to the same or substantially similar property. In
addition, if the appreciated financial position is itself a short sale or such a
contract, acquisition of the underlying property or substantially similar
property will be deemed a constructive sale.
 
   
  The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting each Fund and its shareholders. Investors are urged to
consult their own tax advisors for more detailed information and for information
regarding any foreign, state and local taxes applicable to distributions
received from the Funds.
    
 
   
                           MISCELLANEOUS INFORMATION
    
 
   
  AIM was organized in 1976, and, together with its subsidiaries, manages or
advises approximately 90 investment company portfolios encompassing a broad
range of investment objectives. AIM is a direct, wholly owned subsidiary of
A I M Management Group Inc. ("AIM Management"), a holding company that has been
engaged in the financial services business since 1976. AIM is the sole
shareholder of the Fund's principal underwriter, AIM Distributors. AIM
Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London, EC2M 4YR, England. AMVESCAP PLC and its subsidiaries are
independent investment management groups that have a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia.
    
 
                                       37
<PAGE>   1457
 
CUSTODIAN
 
  State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, MA 02110, acts as custodian of each Fund's assets. State Street is
authorized to establish and has established separate accounts in foreign
currencies and to cause securities of each Fund to be held in separate accounts
outside the United States in the custody of non-U.S. banks.
 
   
TRANSFER AGENCY AND ACCOUNTING AGENCY SERVICES
    
 
   
  The Transfer Agency and Service Agreement between the Trust and AFS, a
registered transfer agent and wholly-owned subsidiary of AIM, provides that AFS
will perform certain shareholder services for the Funds for a fee per account
serviced. The Transfer Agency and Service Agreement provides that AFS will
receive a per account fee plus out-of-pocket expenses to process orders for
purchases, redemptions and exchanges of shares; prepare and transmit payments
for dividends and distributions declared by the Funds; maintain shareholder
accounts and provide shareholders with information regarding the Funds and their
accounts. The Transfer Agency and Service Agreement became effective on
September 8, 1998. The Sub-advisor serves as each Fund's pricing and accounting
agent. For the fiscal years ended October 31, 1997, 1996 and 1995, Emerging
Markets Fund paid accounting services fees to the Sub-advisor of $103,144,
$125,349 and $33,216, and Latin American Fund paid accounting services fees of
$90,733, $86,436 and $24,138, respectively.
    
 
INDEPENDENT ACCOUNTANTS
 
   
  The Funds' independent accountants are PricewaterhouseCoopers LLP.
PricewaterhouseCoopers LLP conducts an annual audit of each Fund, assists in the
preparation of the Funds' federal and state income tax returns and consults with
the Trust and the Funds as to matters of accounting, regulatory filings, and
federal and state income taxation.
    
 
   
  The audited financial statements of the Company included in this Statement of
Additional Information have been examined by PricewaterhouseCoopers LLP, as
stated in their opinion appearing herein and are included in reliance upon such
opinion given upon the authority of that firm as experts in accounting and
auditing.
    
 
SHAREHOLDER LIABILITY
 
   
  Under Delaware law, the shareholders of the Trust enjoy the same limitations
extended to shareholders of private, for-profit corporations. There is a remote
possibility, however, that under certain circumstances shareholders of the Trust
may be held personally liable for the Trust's obligations. However, the Trust
Agreement disclaims shareholder liability for acts or obligations of the Trust
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Trust or a trustee. If
a shareholder is held personally liable for the obligations of the Trust, the
Trust Agreement provides that the shareholder shall be entitled out of the
assets belonging to the applicable Fund (or allocable to the applicable Class),
to be held harmless from and indemnified against all loss and expense arising
from such liability in accordance with the Trust's Bylaws and applicable law.
Thus, the risk of a shareholder incurring financial loss on account of such
liability is limited to circumstances in which the Trust itself would be unable
to meet its obligations and where the other party was held not to be bound by
the disclaimer.
    
 
NAME
 
  Prior to May 29, 1998, Developing Markets Fund, Emerging Markets Fund and
Latin American Fund operated under the names GT Global Developing Markets Fund,
GT Global Emerging Markets Fund, and GT Global Latin America Growth Fund,
respectively.
 
                                       38
<PAGE>   1458
 
   
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
    
 
   
  As of August 10, 1998, the Trustees and officers of the Trust, as a group,
owned less than 1% of the outstanding shares of any class of the Trust. To the
best knowledge of the Trust, the names and addresses of the holders of 5% or
more of the outstanding shares of any class of each Fund's equity securities as
of August 10, 1998, and the percentage of the outstanding shares held by such
holders are set forth below.
    
 
   
<TABLE>
<CAPTION>
                                                                                         PERCENT
                                                                            PERCENT      OWNED OF
                                                                            OWNED OF    RECORD AND
FUND                                       NAME AND ADDRESS OF OWNER        RECORD*    BENEFICIALLY
- ----                                       -------------------------        --------   ------------
<S>                                   <C>                                   <C>        <C>
Developing Markets Fund -- Class B    Olde Discount                          55.67%        -0-
                                      FBO 05012322
                                      751 Griswold Street
                                      Detroit, Michigan 48226-3224
                                      Raymond James & Assoc. Inc. CSDN        7.64%        -0-
                                      Mary Lynn James IRA
                                      1215 W. Los Angeles Circle
                                      Broken Arrow, Oklahoma 74011-4215
                                      Smith Barney Inc.                       5.16%        -0-
                                      150926032
                                      388 Greenwich Street
                                      New York, New York 10013-2339
                                      PaineWebber FBO                         5.06%        -0-
                                      Joseph McDonald & Mildred McDonald
                                      JJWRO
                                      379 Quarry Pond Court
                                      Moriches, New York 11955-1706
Developing Markets Fund -- Advisor    G.T. Capital Holdings, Inc. 401(k)     78.57%        -0-
  Class                               FBO
                                      Account 546-33-3477
                                      50 California Street, 27th Floor
                                      San Francisco, California 94111-4624
                                      Attn: Human Resources
Emerging Markets Fund -- Advisor      Wells Fargo Bank NA TTEE FBO           22.42%        -0-
  Class
                                      LGT Asset Management AC 5000201000
                                      Serp Prft Shr Pln ###-##-####
                                      P O Box 9800 MAC 9137-027
                                      Calabasas, CA 91372-0800
Emerging Markets Fund -- Class A      MLPF& S for the Sole Benefit of Its     5.72%        -0-
                                      Customers, Security #97OEL
                                      Attn: Fund Administration
                                      4800 Deer Lake Drive East, 2nd Floor
                                      Jacksonville, FL 32246-6484
Latin American Fund -- Advisor Class  G.T. Capital Holdings, Inc. 401(k)      8.48%        -0-
                                      FBO
                                      Account 102505451
                                      50 California Street, 27th Floor
                                      San Francisco, California 94111-4624
                                      Attn: Human Resources
                                      G.T. Capital Holdings, Inc. 401(k)        35%        -0-
                                      FBO
                                      Acct # ###-##-####
                                      50 California Street, 27th Floor
                                      San Francisco, California 94111-4624
                                      Attn: Human Resources
</TABLE>
    
 
- ---------------
 
   
<TABLE>
<S>                                   <C>                                   <C>        <C>
* The Trust has no knowledge as to whether all or any portion of the shares owned are also owned
  beneficially.
</TABLE>
    
 
                                       39
<PAGE>   1459
 
   
<TABLE>
<CAPTION>
                                                                                         PERCENT
                                                                            PERCENT      OWNED OF
                                                                            OWNED OF    RECORD AND
FUND                                       NAME AND ADDRESS OF OWNER        RECORD*    BENEFICIALLY
- ----                                       -------------------------        --------   ------------
<S>                                   <C>                                   <C>        <C>
                                      Wells Fargo Bank NA TTEE FBO            6.45%        -0-
                                      LGT Asset Management AC 5000201000
                                      Serp Prft Shr Pln ###-##-####
                                      P O Box 9800 MAC 9137-027
                                      Calabasas, CA 91372-0800

Latin American Growth Fund --         MLPF& S for the Sole Benefit of Its     7.99%        -0-
  Class A                             Customers, Security #977S6
                                      Attn: Fund Administration
                                      4800 Deer Lake Drive East, 2nd Floor
                                      Jacksonville, FL 32246-6484
                                                                          
</TABLE>
    
 
- ---------------
 
   
* The Trust has no knowledge as to whether all or any portion of the shares
  owned are also owned beneficially.
    
 
                               INVESTMENT RESULTS
 
TOTAL RETURN QUOTATIONS
 
  The standard formula for calculating total return, as described in each
Prospectus, is as follows:
 
   
                                       (n)
                                 P(1+T)   =ERV
    
 
<TABLE>
<S>    <C>  <C>  <C>
Where  P    =    a hypothetical initial payment of $1,000.
       T    =    average annual total return (assuming the applicable maximum
                 sales load is deducted at the beginning of the 5, or 10 year
                 periods).
       n    =    number of years.
       ERV  =    ending redeemable value of a hypothetical $1,000 payment at
                 the end of the 1, 5, or 10 year periods (or fractional
                 portion of such period).
</TABLE>
 
  The standard total returns of Developing Markets Fund's Predecessor Fund
(recomputed for Class A shares to reflect the deduction of the maximum sales
charge of 4.75% for Class A shares), stated as average annualized total returns
for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                               DEVELOPING
                                                              MARKETS FUND
                           PERIOD                              (CLASS A)
                           ------                             ------------
<S>                                                           <C>
Fiscal year ended Oct. 31, 1997.............................    (9.59)%
Jan. 11, 1994 (commencement of operations) through Oct. 31,
  1997......................................................    (2.47)%
</TABLE>
    
 
  Advisor Class shares of Developing Markets Fund have not been in operation for
a full year since the Fund's conversion from a closed-end to an open-end fund.
 
  The standard total returns for the Class A and Advisor Class shares of
Emerging Markets Fund, stated as average annualized total returns for the
periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                                 EMERGING MARKETS
                           PERIOD                              FUND (ADVISOR CLASS)
                           ------                              --------------------
<S>                                                            <C>
Fiscal year ended Oct. 31, 1997.............................         (14.05)%
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................          (7.37)%
Oct. 31, 1992 through Oct. 31, 1997.........................              n/a
</TABLE>
    
 
                                       40
<PAGE>   1460
 
  The standard total returns for the Class A and Advisor Class shares of Latin
American Fund, stated as average annualized total returns for the periods shown,
were:
 
   
<TABLE>
<CAPTION>
                                                                  LATIN AMERICAN
                           PERIOD                              FUND (ADVISOR CLASS)
                           ------                              --------------------
<S>                                                            <C>
Fiscal year ended Oct. 31, 1997.............................            8.91%
Oct. 31, 1992 through Oct. 31, 1997.........................              n/a
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................            9.29%
Aug. 13, 1991 (commencement of operations) through Oct. 31,
  1997......................................................              n/a
</TABLE>
    
 
  Cumulative total return across a stated period may be calculated as follows:
 
    
                                       (n)
                                 P(1+V)   =ERV
    
 
<TABLE>
<S>    <C>  <C>  <C>
Where  P    =    a hypothetical initial payment of $1,000.
       V    =    cumulative total return assuming payment of all of, a stated
                 portion of, or none the applicable maximum sales load at the
                 beginning of the stated period.
       n    =    number of years.
       ERV  =    ending redeemable value of a hypothetical $1,000 payment at
                 the end of the stated period.
</TABLE>
 
   
  The cumulative total return of Developing Markets Fund's Predecessor Fund (not
recomputed to take sales charges into account) for the period January 11, 1994
(commencement of operations) through October 31, 1997 was (4.53)%.
    
 
  The cumulative total return (not taking sales charges into account) for the
Class A and Advisor Class shares of Emerging Markets Fund, stated as aggregate
total returns for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                                 EMERGING MARKETS
                           PERIOD                              FUND (ADVISOR CLASS)
                           ------                              --------------------
<S>                                                            <C>
April 1, 1993 (commencement of operations) through Oct 31,
  1997......................................................              n/a
May 18, 1992 (commencement of operations) through Oct. 31,
  1997......................................................              n/a
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................         (16.88)%
</TABLE>
    
 
  The cumulative total return (not taking sales charges into account) for the
Class A and Advisor Class shares of Latin American Fund, stated as aggregate
total returns for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                                  LATIN AMERICAN
                           PERIOD                              FUND (ADVISOR CLASS)
                           ------                              --------------------
<S>                                                            <C>
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................           23.94%
Aug. 13, 1991 (commencement of operations) through Oct. 31,
  1997......................................................              n/a
</TABLE>
    
 
OTHER INFORMATION REGARDING STANDARD TOTAL AND CUMULATIVE TOTAL RETURNS FOR
DEVELOPING MARKETS FUND
 
  The standard total and cumulative total return data of Developing Markets Fund
are based on the performance of the Predecessor Fund as a closed-end investment
company. The standard total return data, however, have been recomputed to
reflect the deduction of the current maximum sales charge of 4.75% for Class A
shares, which went into effect on November 1, 1997. Future performance of
Developing Markets Fund will be effected by expenses that it will incur as a
series of an open-end investment company.
 
                                       41
<PAGE>   1461
 
PERFORMANCE INFORMATION
 
  Total return and yield figures for the Funds are neither fixed nor guaranteed,
and no Fund's principal is insured. Performance quotations reflect historical
information and should not be considered representative of a Fund's performance
for any period in the future. Performance is a function of a number of factors
which can be expected to fluctuate. The Funds may provide performance
information in reports, sales literature and advertisements. The Funds may also,
from time to time, quote information about the Funds published or aired by
publications or other media entities which contain articles or segments relating
to investment results or other data about one or more of the Funds. Such
publications or media entities may include the following, among others:
 
     Advertising Age
     Barron's
     Best's Review
     Broker World
     Business Week
     Changing Times
     Christian Science Monitor
     Consumer Reports
     Economist
     EuroMoney
     FACS of the Week
     Financial Planning
     Financial Product News
     Financial World
     Forbes
     Fortune
     Global Finance
     Hartford Courant Inc.
     Institutional Investor
     Insurance Forum
     Insurance Week
     Investor's Daily
     Journal of the American
       Society of CLU & ChFC
     Kiplinger Letter
     Money
     Mutual Fund Forecaster
     Mutual Fund Magazine
     Nation's Business
     New York Times
     Pension World
     Pensions & Investments
     Personal Investor
     Financial Services Week
     Philadelphia Inquirer
     Smart Money
     USA Today
     U.S. News & World Report
     Wall Street Journal
     Washington Post
     CNN
     CNBC
     PBS
 
  The Funds and AIM Distributors may from time to time, in advertisements, sales
literature and reports furnished to present or prospective shareholders, compare
each Fund with the following, or compare each Fund's performance to performance
data of similar mutual funds as published in the following, among others:
 
     Bank Rate National Monitor Index
     Bear Stearns Foreign Bond Index
     Bond Buyer Index
     CDA/Wiesenberger Investment Company Services
       (data and mutual fund rankings and
       comparisons)
     CNBC/Financial News Composite Index
     COFI
     Consumer Price Index
     Datastream
     Donoghue's
     Dow Jones Industrial Average
     EAFE Index
     First Boston High Yield Index
     Fitch (publications)
     Ibbotson Associates International Bond Index
     International Bank for Reconstruction and
       Development (publications)
     International Finance Corporation Emerging
       Markets Database
     International Financial Statistics
     Lehman Bond Indices
     Lipper Analytical Data Services, Inc. (data and
       mutual fund rankings and comparisons)
     Micropal, Inc. (data and mutual fund rankings
       and comparisons)
     Moody's Investors Service (publications)
     Morgan Stanley Capital International All Country
       (AC) World Index
     Morgan Stanley Capital International World
       Indices
     Morningstar, Inc. (data and mutual fund rankings
       and comparisons)
     NASDAQ
     Organization for Economic Cooperation and
       Development (publications)
     Salomon Brothers Global Telecommunications
       Index
     Salomon Brothers World Government Bond
       Index-Non-U.S.
     Salomon Brothers World Government Bond
       Index
     Standard & Poor's (publications)
     Standard & Poor's 500 Composite Stock Price
       Index
     Stangar
     Wilshire Associates
     World Bank (publications and reports)
     The World Bank Publication of Trends in
       Developing Countries
     Worldscope
 
                                       42
<PAGE>   1462
 
  Each Fund may also compare its performance to rates on Certificates of Deposit
and other fixed rate investments such as the following:
 
          10-year Treasuries
          30-year Treasuries
          30-day Treasury Bills
 
  Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable but may be subject
to revision and has not been independently verified by the Funds or AIM
Distributors. Advertising for the Funds may from time to time include
discussions of general economic conditions and interest rates. Advertising for
the Funds may also include reference to the use of those Funds as part of an
individual's overall retirement investment program. From time to time, sales
literature and/or advertisements for any of the Funds may disclose (i) the
largest holdings in the Fund's portfolio, (ii) certain selling group members
and/or (iii) certain institutional shareholders.
 
  From time to time, the Funds' sales literature and/or advertisements may
discuss generic topics pertaining to the mutual fund industry. This includes,
but is not limited to, literature addressing general information about mutual
funds, variable annuities, dollar-cost averaging, stocks, bonds, money markets,
certificates of deposit, retirement, retirement plans, asset allocation,
tax-free investing, college planning, and inflation.
 
  Although performance data may be useful to prospective investors when
comparing a Fund's performance with other funds and other potential investments,
investors should note that the methods of computing performance of other
potential investments are not necessarily comparable to the methods employed by
a Fund.
 
                                       43
<PAGE>   1463
 
   
                                    APPENDIX
    
 
                          DESCRIPTION OF BOND RATINGS
 
   
  Moody's Investors Service, Inc. ("Moody's") rates the debt securities issued
by various entities from "Aaa" to "C." Investment grade ratings are the first
four categories: Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bond because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. Ba -- Bonds which are rated Ba
are judged to have speculative elements; their future cannot be considered as
well-assured. Often the protection of interest and principal payments may be
very moderate, and thereby not well safeguarded during other good and bad times
over the future. Uncertainty of position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest. Ca -- Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings. C -- Bonds which are rated C are the lowest rated class of
bonds, and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
    
 
   
  Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"),
rates the securities debt of various entities in categories ranging from "AAA"
to "D" according to quality. Investment grade ratings are the first four
categories: AAA -- An obligation rated "AAA" has the highest rating assigned by
S&P. The obligor's capacity to meet its financial commitment on the obligation
is extremely strong. AA -- An obligation rated "AA" differs from the highest
rated obligations only in a small degree. The obligor's capacity to meet its
financial commitment on the obligation is very strong. A -- An obligation rated
"A" is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than obligations in higher rated
categories. BBB -- An obligation rated "BBB" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation. BB, B, CCC, CC, C -- Obligations rated "BB," "B,"
"CCC," "CC," and "C" are regarded as having significant speculative
characteristics. "BB" indicates the least degree of speculation and "C" the
highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions. BB -- An obligation rated "BB" is less
vulnerable to nonpayment than other speculative issues. However, it faces major
ongoing uncertainties or exposure to adverse business, financial, or economic
conditions which could lead to the obligor's inadequate capacity to meet its
financial commitment on the obligation. B -- An obligation rated "B" is more
vulnerable to nonpayment than obligations rated "BB," but the obligor currently
has the capacity to meet its financial commitment on the obligation. Adverse
business, financial, or economic conditions will likely impair the obligor's
capacity or willingness to meet its financial commitment on the obligation.
CCC -- An obligation rated "CCC" is currently vulnerable to nonpayment, and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.
CC -- An obligation rated "CC" is currently highly vulnerable to nonpayment.
C -- The "C" rating may be used to cover a situation where a bankruptcy petition
has been filed or similar action has been taken, but payments on this obligation
are being continued. D -- An obligation rated "D" is in payment default. The "D"
rating category is used when payments on an obligation are not made on the date
due even if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The "D" rating also
will be used upon the filing of a bankruptcy petition or the taking of a similar
action if payments on an obligation are jeopardized.
    
 
                                       44
<PAGE>   1464
 
  PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
 
  NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
 
                    DESCRIPTION OF COMMERCIAL PAPER RATINGS
 
  Moody's employs the designation "Prime-1" to indicate commercial paper having
a superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. Issues rated Prime-2 have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many of
the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
 
   
  S&P ratings of commercial paper are graded into several categories ranging
from "A1" for the highest quality obligations to "D" for the lowest. Issues in
the "A" category are delineated with numbers 1, 2, and 3 to indicate the
relative degree of safety. A-1 -- This highest category indicates that the
degree of safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics will be denoted with a plus sign
(+) designation. A-2 -- Capacity for timely payments on issues with this
designation is satisfactory; however, the relative degree of safety is not as
high as for issues designated "A-1."
    
 
   
                               ABSENCE OF RATING
    
 
   
  Where no rating has been assigned or where a rating has been suspended or
withdrawn, it may be for reasons unrelated to the quality of the issue.
    
 
   
  Should no rating be assigned, the reason may be one of the following:
    
 
   
          1. An application for rating was not received or accepted.
    
 
   
          2. The issue or issuer belongs to a group of securities or companies
     that are not rated as a matter of policy.
    
 
   
          3. There is a lack of essential data pertaining to the issue or
     issuer.
    
 
   
          4. The issue was privately placed, in which case the rating is not
     published in Moody's publications.
    
 
   
  Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.
    
 
   
  Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the Company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the Company ranks in the
lower end of its generic rating category.
    
 
                                       45
<PAGE>   1465
 
   
                              FINANCIAL STATEMENTS
    
 
                                       FS
<PAGE>   1466

                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
- -------------------------------------------------------------------------------
 
To the Shareholders and Board of Directors of AIM Developing Markets Fund
("Fund"):
 
We have audited the accompanying statement of assets and liabilities of AIM
Developing Markets Fund (formerly GT Global Developing Markets Fund), including
the portfolio of investments, as of April 30, 1998, the related statement of
operations for the six months then ended, the statements of changes in net
assets for the six months then ended, for the ten months ended October 31, 1997
and for the year ended December 31, 1996, and the financial highlights for each
of the periods indicated therein. These financial statements and the financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and the financial
highlights based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1998, by correspondence with the custodians and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of AIM
Developing Markets Fund as of April 30, 1998, the results of its operations for
the six months then ended, the changes in its net assets for the six months then
ended, for the ten months ended October 31, 1997 and for the year ended December
31, 1996, and the financial highlights for each of the periods indicated
therein, in conformity with generally accepted accounting principles.
 



                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
JUNE 17, 1998
 
                                     FS-1
<PAGE>   1467
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                            PORTFOLIO OF INVESTMENTS
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (16.8%)
  Telecomunicacoes Brasileiras S.A. (Telebras): .............  BRZL                --             --         3.6
    TELEPHONE NETWORKS
    ADR{\/} .................................................  --              40,191   $  4,895,254          --
    Common ..................................................  --          25,866,258      2,567,399          --
  Telefonos de Mexico, S.A. de C.V. "L" - ADR{\/} ...........  MEX             43,283      2,450,900         1.2
    TELEPHONE NETWORKS
  Telefonica del Peru S.A. - ADR{\/} ........................  PERU           104,070      2,302,549         1.1
    TELEPHONE NETWORKS
  Pick'n Pay Stores Ltd.: ...................................  SAFR                --             --         1.0
    RETAILERS-OTHER
    Common ..................................................  --           1,087,304      2,065,931          --
    "N" .....................................................  --              11,602         21,126          --
  Magyar Tavkozlesi Rt. - ADR-/- {\/} .......................  HGRY            59,100      1,743,450         0.8
    TELEPHONE NETWORKS
  Philippine Long Distance Telephone Co.: ...................  PHIL                --             --         0.7
    TELEPHONE - LONG DISTANCE
    Common ..................................................  --              36,900        990,449          --
    ADR{\/} .................................................  --              19,000        513,000          --
  Mahanagar Telephone Nigam Ltd. ............................  IND            229,700      1,458,413         0.7
    TELECOM - OTHER
  Cifra, S.A. de C.V. "V" ...................................  MEX            820,662      1,443,668         0.7
    RETAILERS-OTHER
  Grupo Televisa, S.A. de C.V. - GDR-/- {\/} ................  MEX             34,300      1,406,300         0.7
    BROADCASTING & PUBLISHING
  Carso Global Telecom "A1" .................................  MEX            295,300      1,133,087         0.5
    TELEPHONE NETWORKS
  Telefonica de Argentina S.A. - ADR{\/} ....................  ARG             27,528      1,061,549         0.5
    TELEPHONE NETWORKS
  Companhia de Saneamento Basico do Estado de Sao Paulo -
   SABESP ...................................................  BRZL         4,531,127      1,030,252         0.5
    BUSINESS & PUBLIC SERVICES
  Cia de Telecomunicaciones de Chile S.A. - ADR{\/} .........  CHLE            39,302        985,006         0.5
    TELEPHONE NETWORKS
  Telecomunicacoes de Sao Paulo S.A. (TELESP)-/- ............  BRZL         3,195,000        834,025         0.4
    TELEPHONE NETWORKS
  Nortel Inversora S.A. - ADR{\/} ...........................  ARG             23,500        699,125         0.3
    TELEPHONE NETWORKS
  Vimpel-Communications - ADR-/- {\/} .......................  RUS             12,900        696,600         0.3
    WIRELESS COMMUNICATIONS
  Telecom Argentina S.A. - ADR{\/} ..........................  ARG             15,800        568,800         0.3
    TELEPHONE NETWORKS
  Hellenic Telecommunications Organization S.A. .............  GREC            19,730        565,042         0.3
    TELEPHONE NETWORKS
  Genting Bhd. ..............................................  MAL            154,000        516,108         0.3
    LEISURE & TOURISM
  Guangshen Railway Co., Ltd. ...............................  HK           2,606,000        487,857         0.2
    TRANSPORTATION - ROAD & RAIL
  Rostelecom - ADR-/- {\/} ..................................  RUS             20,600        441,613         0.2
    TELEPHONE - LONG DISTANCE
  Telekom Malaysia Bhd. .....................................  MAL            143,000        432,865         0.2
    TELEPHONE NETWORKS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-2
<PAGE>   1468
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (Continued)
  Danubius Hotel and Spa Rt.-/- .............................  HGRY            16,320   $    398,870         0.2
    LEISURE & TOURISM
  Telecomunicacoes do Parana (TELPAR) .......................  BRZL           616,000        351,769         0.2
    TELECOM - OTHER
  Malaysia International Shipping Bhd. - Foreign ............  MAL            192,000        337,297         0.2
    TRANSPORTATION - SHIPPING
  Indian Hotels Co., Ltd. ...................................  IND             23,150        308,987         0.2
    LEISURE & TOURISM
  Advanced Info. Service - Foreign ..........................  THAI            43,800        306,373         0.1
    WIRELESS COMMUNICATIONS
  Telecomunicacoes de Minas Gerais - Telemig ................  BRZL         1,787,700        275,933         0.1
    TELECOM - OTHER
  Tanjong PLC ...............................................  MAL            116,000        266,486         0.1
    LEISURE & TOURISM
  Santa Isabel S.A. - ADR{\/} ...............................  CHLE            13,514        222,981         0.1
    RETAILERS-FOOD
  Migros Turk T.A.S. ........................................  TRKY           220,300        216,110         0.1
    RETAILERS-FOOD
  Pakistan Telecommunications Co., Ltd. - GDR-/- {\/} .......  PAK              2,900        200,100         0.1
    TELEPHONE NETWORKS
  Super Sol Ltd. ............................................  ISRL            60,231        189,953         0.1
    RETAILERS-FOOD
  Berjaya Sports Toto Bhd. ..................................  MAL             76,000        181,784         0.1
    LEISURE & TOURISM
  Trade House GUM - ADR{\/} .................................  RUS             32,660        163,300         0.1
    RETAILERS-OTHER
  Goody's S.A. ..............................................  GREC             4,850        129,792         0.1
    RESTAURANTS
  Siam Makro Public Co., Ltd. - Foreign .....................  THAI            45,000         74,028          --
    RETAILERS-OTHER
                                                                                        ------------
                                                                                          34,934,131
                                                                                        ------------
Finance (16.2%)
  Alpha Credit Bank .........................................  GREC            17,700      1,867,438         0.9
    BANKS-REGIONAL
  Uniao de Bancos Brasileiros S.A. (Unibanco): ..............  BRZL                --             --         0.9
    BANKS-MONEY CENTER
    Units ...................................................  --          14,649,042      1,127,470          --
    GDR-/- {\/} .............................................  --              18,510        735,773          --
  State Bank of India Ltd. ..................................  IND            218,400      1,584,762         0.8
    BANKS-MONEY CENTER
  Turkiye Garanti Bankasi AS-/- .............................  TRKY        29,372,000      1,558,274         0.8
    BANKS-REGIONAL
  ABSA Group Ltd. ...........................................  SAFR           172,076      1,490,020         0.7
    BANKS-REGIONAL
  Commercial International Bank: ............................  EGPT                --             --         0.6
    BANKS-MONEY CENTER
    144A GDR{.} {\/} ........................................  --              43,400        735,630          --
    Common ..................................................  --              23,940        411,606          --
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-3

<PAGE>   1469
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Finance (Continued)
  Yapi ve Kredi Bankasi AS ..................................  TRKY        23,117,092   $  1,133,871         0.5
    BANKS-REGIONAL
  Bank Hapoalim Ltd. ........................................  ISRL           416,100      1,117,568         0.5
    BANKS-REGIONAL
  Credicorp Ltd. - ADR{\/} ..................................  PERU            66,220      1,109,185         0.5
    BANKS-MONEY CENTER
  Akbank T.A.S. .............................................  TRKY        12,775,000      1,086,962         0.5
    BANKS-REGIONAL
  Cathay Life Insurance Co., Ltd. ...........................  TWN            251,000      1,004,914         0.5
    INSURANCE-BROKER
  Grupo Financiero Banamex Accival, S.A. de C.V. "B"-/- .....  MEX            308,800        966,139         0.5
    BANKS-MONEY CENTER
  National Bank of Greece S.A. ..............................  GREC             5,400        950,232         0.5
    BANKS-MONEY CENTER
  Liberty Life Association of Africa Ltd. ...................  SAFR            27,600        934,112         0.5
    INSURANCE-LIFE
  C.G. Smith Ltd. ...........................................  SAFR           178,600        883,721         0.4
    INVESTMENT MANAGEMENT
  China Development Corp.-/- ................................  TWN            303,000        822,520         0.4
    BANKS-MONEY CENTER
  Banco de Galicia y Buenos Aires, S.A. de C.V. - ADR{\/} ...  ARG             28,872        707,364         0.3
    BANKS-MONEY CENTER
  Standard Bank Investment Corporation Ltd. .................  SAFR            11,900        704,226         0.3
    BANKS-MONEY CENTER
  Kazkommertsbank Co. - GDR-/- {\/} .........................  KAZ             26,600        698,250         0.3
    BANKS-REGIONAL
  Banco Frances del Rio de la Plata S.A. - ADR{\/} ..........  ARG             23,368        679,133         0.3
    BANKS-MONEY CENTER
  Aksigorta AS ..............................................  TRKY         9,123,000        675,778         0.3
    INSURANCE - MULTI-LINE
  Banco do Estado de Sao Paulo S.A. - Banespa ...............  BRZL         9,930,000        659,974         0.3
    BANKS-REGIONAL
  Hua Nan Commercial Bank ...................................  TWN            267,000        647,862         0.3
    BANKS-MONEY CENTER
  Ergo Bank S.A. ............................................  GREC             6,800        640,489         0.3
    BANKS-REGIONAL
  National Societe Generale Bank ............................  EGPT            24,000        603,439         0.3
    BANKS-MONEY CENTER
  Nedcor Ltd. ...............................................  SAFR            20,500        584,265         0.3
    BANKS-REGIONAL
  Banco Santander Chile - ADR{\/} ...........................  CHLE            40,700        569,800         0.3
    BANKS-REGIONAL
  MISR International Bank - Reg S GDR-/- {c} {\/} ...........  EGPT            45,000        562,500         0.3
    BANKS-MONEY CENTER
  Banco de A. Edwards - ADR{\/} .............................  CHLE            34,994        562,091         0.3
    BANKS-MONEY CENTER
  Bank Leumi Le - Israel ....................................  ISRL           249,668        456,496         0.2
    BANKS-REGIONAL
  Turkiye Is Bankasi (Isbank) "C" ...........................  TRKY         3,608,400        455,114         0.2
    BANKS-MONEY CENTER
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-4
<PAGE>   1470
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Finance (Continued)
  Administradora de Fondos de Pensiones Provida S.A. -
   ADR{\/} ..................................................  CHLE            25,086   $    448,412         0.2
    INVESTMENT MANAGEMENT
  National Development Bank-/- ..............................  SLNKA          116,300        431,898         0.2
    BANKS-REGIONAL
  Bank Slaski S.A. ..........................................  POL              4,766        408,635         0.2
    BANKS-MONEY CENTER
  Banco Rio de La Plata S.A. - ADR-/- {\/} ..................  ARG             26,900        369,875         0.2
    BANKS-MONEY CENTER
  Bank of the Philippine Islands ............................  PHIL           147,000        367,041         0.2
    BANKS-MONEY CENTER
  Commercial Bank of Greece S.A. ............................  GREC             5,800        364,968         0.2
    BANKS-MONEY CENTER
  Inversiones y Representaciones S.A. (IRSA) - GDR{\/} ......  ARG              9,000        349,875         0.2
    REAL ESTATE
  Liberty Investors Ltd. ....................................  SAFR            61,400        312,924         0.2
    INVESTMENT MANAGEMENT
  Muslim Commercial Bank Ltd.-/- ............................  PAK            367,300        291,839         0.1
    BANKS-MONEY CENTER
  Global Menkul Degerler AS-/- ..............................  TRKY        12,103,256        290,769         0.1
    SECURITIES BROKER
  F.I.B.I. Holdings Ltd. ....................................  ISRL             1,520        269,696         0.1
    BANKS-REGIONAL
  Ayala Land, Inc. ..........................................  PHIL           633,600        249,169         0.1
    REAL ESTATE
  National Mortgage Bank of Greece ..........................  GREC             3,040        231,197         0.1
    BANKS-REGIONAL
  OTP Bank Rt. ..............................................  HGRY             4,270        202,446         0.1
    BANKS-MONEY CENTER
  Malayan Banking Bhd. ......................................  MAL             66,000        196,216         0.1
    BANKS-MONEY CENTER
  Egyptian American Bank SAE ................................  EGPT             5,363        137,129         0.1
    BANKS-MONEY CENTER
  Shinhan Bank-/- ...........................................  KOR             24,300         94,652          --
    BANKS-MONEY CENTER
  Samsung Fire & Marine Insurance-/- ........................  KOR                260         76,929          --
    INSURANCE - MULTI-LINE
  Kookmin Bank - GDR-/- {\/} ................................  KOR             10,400         68,224          --
    BANKS-MONEY CENTER
  Bangkok Bank Public Co., Ltd. - Foreign ...................  THAI            20,600         51,767          --
    BANKS-MONEY CENTER
  Thai Farmers Bank Public Co., Ltd. - Foreign ..............  THAI            17,200         39,435          --
    BANKS-MONEY CENTER
                                                                                        ------------
                                                                                          33,980,074
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-5
<PAGE>   1471
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Energy (13.3%)
  Centrais Eletricas Brasileiras S.A. (Eletrobras): .........  BRZL                --             --         1.6
    ELECTRICAL & GAS UTILITIES
    "B" ADR{\/} .............................................  --             118,958   $  2,661,685          --
    Common-/- ...............................................  --           9,090,500        373,637          --
    "B" Preferred ...........................................  --           4,460,000        198,955          --
  Petroleo Brasileiro S.A. (Petrobras) Preferred ............  BRZL        11,865,398      3,009,152         1.4
    OIL
  Sasol Ltd. ................................................  SAFR           223,556      2,256,577         1.1
    ENERGY SOURCES
  LUKoil Holding - ADR{\/} ..................................  RUS             31,666      2,058,290         1.0
    OIL
  Unified Energy Systems - Reg S GDR-/- {c} {\/} ............  RUS             57,100      1,827,200         0.9
    ELECTRICAL & GAS UTILITIES
  Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} ....  BRZL            36,144      1,752,984         0.8
    ELECTRICAL & GAS UTILITIES
  YPF S.A. - ADR{\/} ........................................  ARG             37,260      1,299,443         0.6
    ENERGY SOURCES
  Empresa Nacional de Electricidad S.A. - ADR{\/} ...........  CHLE            67,677      1,180,118         0.6
    ELECTRICAL & GAS UTILITIES
  Light - Participacoes S.A. ................................  BRZL         4,613,750      1,129,733         0.5
    ELECTRICAL & GAS UTILITIES
  Enersis S.A. - ADR{\/} ....................................  CHLE            37,038      1,090,306         0.5
    ELECTRICAL & GAS UTILITIES
  Bombay Suburban Electric Supply (BSES) Ltd. ...............  IND            199,850        921,959         0.4
    ELECTRICAL & GAS UTILITIES
  Light - Servicos de Electricidade S.A. ....................  BRZL         2,271,290        913,680         0.4
    ELECTRICAL & GAS UTILITIES
  Cukurova Elektrik AS ......................................  TRKY           308,000        887,928         0.4
    ELECTRICAL & GAS UTILITIES
  MOL Magyar Olaj-es Gazipari RT - Reg S GDR{c} {\/} ........  HGRY            26,400        805,860         0.4
    ENERGY SOURCES
  Manila Electric Co. "B" ...................................  PHIL           281,300        800,704         0.4
    ELECTRICAL & GAS UTILITIES
  Gener S.A. - ADR{\/} ......................................  CHLE            33,092        740,434         0.4
    ELECTRICAL & GAS UTILITIES
  The Hub Power Co., Ltd. - GDR-/- {\/} .....................  PAK             24,800        626,200         0.3
    ENERGY SOURCES
  Perez Companc S.A. "B" ....................................  ARG             71,460        429,518         0.2
    OIL
  Irkutskenergo - ADR{\/} ...................................  RUS             43,300        422,175         0.2
    ELECTRICAL & GAS UTILITIES
  Surgutneftegaz - ADR{\/} ..................................  RUS             54,820        383,740         0.2
    OIL
  Ingwe Coal Corp. ..........................................  SAFR            87,200        312,384         0.2
    COAL
  Petronas Gas Bhd. .........................................  MAL            124,000        301,622         0.1
    OIL
  Chilectra S.A. - ADR{\/} ..................................  CHLE            10,630        293,654         0.1
    ELECTRICAL & GAS UTILITIES
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-6
<PAGE>   1472
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Energy (Continued)
  Companhia Brasileira de Petroleo Ipiranga S.A.
   Preferred ................................................  BRZL        19,148,000   $    249,502         0.1
    OIL
  Electricity Generating Public Co., Ltd. - Foreign .........  THAI           126,100        245,013         0.1
    ELECTRICAL & GAS UTILITIES
  Tenaga Nasional Bhd. ......................................  MAL            108,000        217,459         0.1
    ELECTRICAL & GAS UTILITIES
  PTT Exploration and Production Public Co., Ltd. -
   Foreign ..................................................  THAI            14,000        147,979         0.1
    OIL
  Korea Electric Power Corp. ................................  KOR             10,500        143,146         0.1
    ELECTRICAL & GAS UTILITIES
  Companhia Paranaense de Energia - Copel ...................  BRZL        10,185,000        117,571         0.1
    ELECTRICAL & GAS UTILITIES
  Transportadora de Gas del Sur S.A. (TGS) - ADR{\/} ........  ARG              2,000         23,125          --
    GAS PRODUCTION & DISTRIBUTION
  Banpu Public Co., Ltd. - Foreign ..........................  THAI             3,000         20,674          --
    COAL
                                                                                        ------------
                                                                                          27,842,407
                                                                                        ------------
Materials/Basic Industry (10.8%)
  Suez Cement Co. - Reg S GDR{c} {\/} .......................  EGPT           118,295      2,413,218         1.2
    CEMENT
  Helioplis Housing .........................................  EGPT            17,100      2,211,315         1.1
    BUILDING MATERIALS & COMPONENTS
  Kimberly-Clark de Mexico, S.A. de C.V. "A" ................  MEX            406,179      1,997,326         1.0
    PAPER/PACKAGING
  Companhia Vale do Rio Doce Preferred ......................  BRZL            55,700      1,315,173         0.6
    METALS - STEEL
  De Beers Centenary AG - Linked Unit{.:} ...................  SAFR            42,900      1,112,301         0.5
    MISC. MATERIALS & COMMODITIES
  Industrias Penoles S.A. (CP) ..............................  MEX            255,003      1,053,731         0.5
    METALS - NON-FERROUS
  Reliance Industries Ltd. - GDR-/- {\/} ....................  IND            114,420      1,044,083         0.5
    CHEMICALS
  Cemex, S.A. de C.V. "CPO" .................................  MEX            203,800      1,020,203         0.5
    CEMENT
  Apasco, S.A. de C.V. ......................................  MEX            147,133      1,000,574         0.5
    CEMENT
  SA Iron & Steel Industrial Corporation Ltd. (ISCOR) .......  SAFR         2,706,606        873,185         0.4
    METALS - STEEL
  Anglo American Platinum Corporation Ltd. ..................  SAFR            44,900        718,045         0.3
    METALS - NON-FERROUS
  Compania de Minas Buenaventura S.A. - ADR{\/} .............  PERU            44,400        688,200         0.3
    METALS - NON-FERROUS
  Ameriyah Cement Co. .......................................  EGPT            32,500        629,464         0.3
    CEMENT
  Sociedad Quimica y Minera de Chile S.A. - ADR{\/} .........  CHLE            13,500        586,406         0.3
    CHEMICALS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-7
<PAGE>   1473
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Materials/Basic Industry (Continued)
  Hindalco Industries Ltd.: .................................  IND                 --             --         0.2
    METALS - NON-FERROUS
    GDR{\/} .................................................  --              26,200   $    510,900          --
    Common ..................................................  --               1,634         31,083          --
  Siderca S.A. "A" ..........................................  ARG            213,000        513,381         0.2
    METALS - STEEL
  Larsen & Toubro Ltd. - Reg S GDR{c} {\/} ..................  IND             37,800        498,015         0.2
    CEMENT
  Grupo Mexico S.A.: ........................................  MEX                 --             --         0.2
    METALS - NON-FERROUS
    "B" .....................................................  --             133,100        432,143          --
    "L" .....................................................  --                 300            956          --
  Nan Ya Plastics Corp. .....................................  TWN            208,000        343,828         0.2
    PLASTICS & RUBBER
  AECI Ltd. .................................................  SAFR            65,400        323,602         0.2
    CHEMICALS
  Turk Sise ve Cam Fabrikalari AS-/- ........................  TRKY         6,248,550        306,485         0.1
    GLASS
  Titan Cement Co., S.A. ....................................  GREC             3,400        291,033         0.1
    BUILDING MATERIALS & COMPONENTS
  Kuala Lumpur Kepong Bhd. ..................................  MAL            123,000        287,554         0.1
    FOREST PRODUCTS
  Makhteshim Chemical Works Ltd.-/- .........................  ISRL            31,439        267,009         0.1
    CHEMICALS
  Pannonplast Rt. ...........................................  HGRY             5,842        247,894         0.1
    MISC. MATERIALS & COMMODITIES
  Torah Portland Cement Co. .................................  EGPT            11,150        236,436         0.1
    CEMENT
  Golden Hope Plantations Bhd. ..............................  MAL            189,000        235,995         0.1
    FOREST PRODUCTS
  Fauji Fertilizer Co., Ltd. ................................  PAK            116,300        229,432         0.1
    CHEMICALS
  Grupo Cementos de Chihuahua, S.A. de C.V. "B" .............  MEX            202,900        216,554         0.1
    CEMENT
  Engro Chemicals Pakistan Ltd. .............................  PAK             90,270        201,238         0.1
    CHEMICALS
  Formosa Plastics Corp. ....................................  TWN            113,000        193,646         0.1
    CHEMICALS
  Agros Holding S.A. "C"-/- .................................  POL              6,953        153,646         0.1
    MISC. MATERIALS & COMMODITIES
  HI Cement Corp. ...........................................  PHIL         1,178,000        141,184         0.1
    CEMENT
  Malakoff Bhd. .............................................  MAL             50,000        132,432         0.1
    FOREST PRODUCTS
  Israel Chemicals Ltd. .....................................  ISRL           101,158        122,029         0.1
    CHEMICALS
  Pohang Iron & Steel Co., Ltd. .............................  KOR              2,130        115,508         0.1
    METALS - STEEL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-8
<PAGE>   1474
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Materials/Basic Industry (Continued)
  Maderas y Sinteticos S.A. - ADR{\/} .......................  CHLE             7,000   $     66,938          --
    MISC. MATERIALS & COMMODITIES
                                                                                        ------------
                                                                                          22,762,145
                                                                                        ------------
Multi-Industry/Miscellaneous (9.8%)
  The Saudi Arabian Investment Fund Ltd.-/- {\/} ............  UK             281,000      2,214,280         1.1
    COUNTRY FUNDS
  Barlow Ltd. ...............................................  SAFR           216,924      2,097,326         1.0
    CONGLOMERATE
  Central Asia Regional Growth Fund(::) -/- {\/} ............  IRE            175,000      1,862,000         0.9
    COUNTRY FUNDS
  Haci Omer Sabanci Holding AS ..............................  TRKY        24,915,100      1,820,623         0.9
    CONGLOMERATE
  Rembrandt Group Ltd. ......................................  SAFR           185,300      1,687,046         0.8
    CONGLOMERATE
  NASR (El) City Company For Housing & Construction .........  EGPT            23,005      1,413,024         0.7
    MISCELLANEOUS
  Koc Holding AS ............................................  TRKY         6,419,150      1,362,222         0.7
    CONGLOMERATE
  Grupo Carso, S.A. de C.V. "A1" ............................  MEX            200,900      1,266,595         0.6
    MULTI-INDUSTRY
  Sanluis Corporacion, S.A. de C.V. .........................  MEX            172,177        914,754         0.4
    CONGLOMERATE
  Koor Industries Ltd. - ADR{\/} ............................  ISRL            32,643        828,316         0.4
    CONGLOMERATE
  Dogan Sirketler Grubu Holding AS-/- .......................  TRKY        13,003,000        741,913         0.4
    MULTI-INDUSTRY
  GT Taiwan Fund-/- +X+ {\/} ................................  TWN             49,751        703,483         0.3
    COUNTRY FUNDS
  John Keells Holdings Ltd.-/- ..............................  SLNKA          125,000        661,741         0.3
    MULTI-INDUSTRY
  Anglo American Corporation of South Africa Ltd. ...........  SAFR            10,920        646,231         0.3
    CONGLOMERATE
  Empresas La Moderna, S.A. de C.V. "A"-/- ..................  MEX             80,400        402,949         0.2
    MULTI-INDUSTRY
  Ayala Corp. ...............................................  PHIL           813,300        360,451         0.2
    CONGLOMERATE
  Quinenco S.A. - ADR-/- {\/} ...............................  CHLE            34,700        357,844         0.2
    CONGLOMERATE
  Alfa, S.A. de C.V. "A" ....................................  MEX             63,000        344,380         0.2
    CONGLOMERATE
  Antofagasta Holdings PLC ..................................  UK              46,200        252,246         0.1
    CONGLOMERATE
  ONA (Omnium Nord Africain) S.A. "A" .......................  MOR              1,320        139,891         0.1
    CONGLOMERATE
                                                                                        ------------
                                                                                          20,077,315
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-9
<PAGE>   1475
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Consumer Non-Durables (6.8%)
  South African Breweries Ltd. ..............................  SAFR            48,392   $  1,624,400         0.8
    BEVERAGES - ALCOHOLIC
  Hindustan Lever Ltd. ......................................  IND             40,650      1,615,144         0.8
    PERSONAL CARE/COSMETICS
  ITC Ltd. ..................................................  IND             79,900      1,586,827         0.8
    TOBACCO
  Fomento Economico Mexicano, S.A. de C.V. "B" ..............  MEX            206,556      1,531,490         0.7
    BEVERAGES - ALCOHOLIC
  Gruma S.A. "B"-/- .........................................  MEX            423,373        973,708         0.5
    FOOD
  A-Ahram Beverages Co. S.A.E. - 144A GDR{.} {\/} ...........  EGPT            28,114        894,025         0.4
    BEVERAGES - ALCOHOLIC
  Embotelladora Andina S.A. "B" - ADR{\/} ...................  CHLE            41,497        840,314         0.4
    BEVERAGES - NON-ALCOHOLIC
  Eastern Tobacco Co. .......................................  EGPT            31,185        710,312         0.3
    TOBACCO
  C.G. Smith Foods Ltd. .....................................  SAFR            41,000        641,069         0.3
    FOOD
  Compania Cervecerias Unidas S.A. - ADR{\/} ................  CHLE            18,100        500,013         0.2
    BEVERAGES - ALCOHOLIC
  Hellenic Bottling Co. S.A. ................................  GREC            12,620        469,847         0.2
    BEVERAGES - NON-ALCOHOLIC
  Rothmans of Pall Mall Bhd. ................................  MAL             48,800        405,568         0.2
    TOBACCO
  San Miguel Corp. "B" ......................................  PHIL           244,000        402,097         0.2
    BEVERAGES - ALCOHOLIC
  Companhia Cervejaria Brahma Preferred .....................  BRZL           563,721        367,269         0.2
    BEVERAGES - ALCOHOLIC
  SUN Brewing Ltd. - GDR-/- {\/} ............................  RUS             19,500        347,826         0.2
    BEVERAGES - ALCOHOLIC
  Far Eastern Textile Ltd. ..................................  TWN            359,000        326,661         0.2
    TEXTILES & APPAREL
  Pepsi-Gemex S.A. - GDR-/- {\/} ............................  MEX             22,400        303,800         0.1
    BEVERAGES - NON-ALCOHOLIC
  Zaklady Piwowarskie w Zywcu S.A. (Zywiec) .................  POL              1,639        163,224         0.1
    BEVERAGES - ALCOHOLIC
  Carlsberg Brewery Malaysia Bhd. ...........................  MAL             33,900        118,192         0.1
    BEVERAGES - ALCOHOLIC
  Oriental Weavers "C"-/- ...................................  EGPT             5,600        116,855         0.1
    TEXTILES & APPAREL
  Nong Shim Co., Ltd. .......................................  KOR              2,100         91,551          --
    FOOD
  Erciyas Biracilik ve Malt Sanayii AS ......................  TRKY           111,000         18,000          --
    BEVERAGES - ALCOHOLIC
                                                                                        ------------
                                                                                          14,048,192
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-10
<PAGE>   1476
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Technology (2.4%)
  Asustek Computer Inc. - Reg. S GDR-/- {c} {\/} ............  TWN            122,448   $  2,525,490         1.2
    COMPUTERS & PERIPHERALS
  Formula Systems Ltd.-/- ...................................  ISRL            16,415        634,454         0.3
    SOFTWARE
  Alcatel Teletas Telekomunikasyon Endustri ve Ticaret AS ...  TRKY         2,885,500        456,365         0.2
    TELECOM TECHNOLOGY
  Tadiran Ltd. ..............................................  ISRL            10,100        393,379         0.2
    TELECOM TECHNOLOGY
  Delta Electronics, Inc. ...................................  TWN             98,000        359,660         0.2
    COMPUTERS & PERIPHERALS
  Clal Electronics Industries Ltd. ..........................  ISRL             2,054        293,333         0.1
    SEMICONDUCTORS
  Samsung Electronics (1/2 of Common Share) - GDR{\/} .......  KOR              9,900        277,200         0.1
    SEMICONDUCTORS
  United Microelectronics Corporation Ltd.-/- ...............  TWN            128,000        240,704         0.1
    SEMICONDUCTORS
                                                                                        ------------
                                                                                           5,180,585
                                                                                        ------------
Consumer Durables (2.1%)
  Bajaj Auto Ltd. ...........................................  IND             79,200      1,188,798         0.6
    AUTOMOBILES
  Imperial Holdings Ltd. ....................................  SAFR            52,840        721,615         0.3
    AUTOMOBILES
  Hon Hai Precision Industry-/- .............................  TWN            101,000        588,171         0.3
    CONSUMER ELECTRONICS
  Qingling Motors Co., Ltd.{*} ..............................  CHNA         1,022,000        442,024         0.2
    AUTOMOBILES
  Tata Engineering and Locomotive Co., Ltd. - GDR{\/} .......  IND             48,000        349,200         0.2
    AUTOMOBILES
  Mahindra & Mahindra Ltd. ..................................  IND             43,300        315,395         0.2
    AUTOMOBILES
  Ford Otomotiv Sanayi AS ...................................  TRKY           324,000        233,514         0.1
    AUTOMOBILES
  Tofas Turk Otomobil Fabrikasi AS ..........................  TRKY         4,219,000        219,608         0.1
    AUTOMOBILES
  Arcelik AS ................................................  TRKY         1,601,300        179,525         0.1
    APPLIANCES & HOUSEHOLD DURABLES
                                                                                        ------------
                                                                                           4,237,850
                                                                                        ------------
Health Care (1.7%)
  Ranbaxy Laboratories Ltd. .................................  IND             79,850      1,334,857         0.6
    MEDICAL TECHNOLOGY & SUPPLIES
  Teva Pharmaceutical Industries Ltd. .......................  ISRL            24,700      1,047,539         0.5
    PHARMACEUTICALS
  Richter Gedeon Rt. - Reg S GDR{c} {\/} ....................  HGRY             6,002        640,714         0.3
    PHARMACEUTICALS
  Egypt International Pharmaceutical Industries Co.
   (EIPICO) .................................................  EGPT             7,000        499,927         0.2
    PHARMACEUTICALS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-11
<PAGE>   1477
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Health Care (Continued)
  EGIS Rt. ..................................................  HGRY             4,750   $    247,724         0.1
    PHARMACEUTICALS
  Medison Co., Ltd. .........................................  KOR              8,200         67,174          --
    MEDICAL TECHNOLOGY & SUPPLIES
                                                                                        ------------
                                                                                           3,837,935
                                                                                        ------------
Capital Goods (1.7%)
  NICE-Systems Ltd.-/- ......................................  ISRL            13,650        568,935         0.3
    TELECOM EQUIPMENT
  Taiwan Semiconductor Manufacturing Co.-/- .................  TWN            121,000        522,975         0.3
    MACHINERY & ENGINEERING
  Corporacion GEO, S.A. de C.V. "B"-/- ......................  MEX             51,700        357,688         0.2
    CONSTRUCTION
  ECI Telecommunications Ltd.{\/} ...........................  ISRL            10,600        323,300         0.2
    TELECOM EQUIPMENT
  Arabian International Construction-/- .....................  EGPT             6,298        296,159         0.1
    CONSTRUCTION
  Netas Telekomunik-/- ......................................  TRKY           670,200        249,564         0.1
    TELECOM EQUIPMENT
  Elektrim Spolka Akcyjna S.A. ..............................  POL             13,472        192,514         0.1
    ELECTRICAL PLANT/EQUIPMENT
  Samsung Display Devices Co. ...............................  KOR              3,090        153,921         0.1
    ELECTRICAL PLANT/EQUIPMENT
  Daewoo Heavy Industries ...................................  KOR             30,600        151,510         0.1
    INDUSTRIAL COMPONENTS
  Samsung Electro-Mechanics Co. .............................  KOR              6,600        138,427         0.1
    ELECTRICAL PLANT/EQUIPMENT
  Sindo Ricoh Co. ...........................................  KOR              3,300        116,180         0.1
    OFFICE EQUIPMENT
  Delta Electronics (Thailand) Public Co., Ltd. - Foreign ...  THAI             6,200         63,927          --
    ELECTRICAL PLANT/EQUIPMENT
  LG Electronics ............................................  KOR              4,148         49,403          --
    ELECTRICAL PLANT/EQUIPMENT
  Madeco S.A. - ADR{\/} .....................................  CHLE             2,000         32,000          --
    INDUSTRIAL COMPONENTS
                                                                                        ------------
                                                                                           3,216,503
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $168,597,232) ................                            170,117,137        81.6
                                                                                        ------------       -----
<CAPTION>
 
                                                                           PRINCIPAL       VALUE         % OF NET
FIXED INCOME INVESTMENTS                                       CURRENCY     AMOUNT        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Government & Government Agency Obligations (13.4%)
  Argentina (1.1%)
    Republic of Argentina:
      Par Bond Series L, 5.75% (6% at 4/99) due 3/31/23++ ...  USD          1,270,000        967,581         0.5
      Global Bond, 9.75% due 9/19/27 ........................  USD            419,000        404,021         0.2
      Global Bond, 11.375% due 1/30/17 ......................  USD            358,000        396,038         0.2
      Discount Bond, 6.625% due 3/31/23+ ....................  USD            415,000        357,678         0.2
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-12
<PAGE>   1478
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                           PRINCIPAL       VALUE         % OF NET
FIXED INCOME INVESTMENTS                                       CURRENCY     AMOUNT        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Government & Government Agency Obligations (Continued)
  Brazil (2.1%)
    Republic of Brazil:
      C Bond, 5% (8% at 4/00) due 4/15/14 (Effective rate at
       year end is 8%, including "payment-in-kind" bonds.)[.]
       ++ ...................................................  USD          5,175,697   $  4,289,359         2.1
      Debt Conversion Bond Series L, 6.6875% due 4/15/12+ ...  USD            124,000         98,580          --
  Bulgaria (0.9%)
    Republic of Bulgaria:
      Front Loaded Interest Reduction Bond Series A, 2.25%
       (2.5% at 7/98) due 7/28/12++ .........................  USD          1,500,000      1,014,375         0.5
      Interest Arrears Bond, 6.625% due 7/28/11+ ............  USD          1,000,000        790,625         0.4
  Croatia (0.4%)
    Croatian Government Series A, 6.625% due 7/31/10+ .......  USD          1,000,000        898,125         0.4
  Ecuador (0.4%)
    Republic of Ecuador:
      Past Due Interest Bond, 6.625% due 2/27/15[.]+ ........  USD            578,588        371,743         0.2
      Past Due Interest Bond, 6.625% due 2/27/15 -
       Registered[.]+ .......................................  USD            535,194        343,862         0.2
  Jordan (0.9%)
    Kingdom of Jordan, 5% (5.5% at 12/98) due 12/23/23 ......  USD          2,500,000      1,825,000         0.9
  Korea (0.3%)
    Republic of Korea, 8.875% due 4/15/08 ...................  USD            670,000        660,654         0.3
  Pakistan (0.1%)
    Republic of Pakistan, 6% due 2/26/02 - Reg S{c} .........  USD            285,000        268,613         0.1
  Panama (0.4%)
    Republic of Panama:
      Interest Reduction Bond, 3.75% (4% at 7/98) due
       7/17/14++ ............................................  USD          1,173,000        921,538         0.4
      8.875% due 9/30/27 ....................................  USD             67,000         65,627          --
  Peru (0.3%)
    Republic of Peru, Past Due Interest Bond, 4% (4.5% at
     7/98) due 3/7/17++ .....................................  USD            946,000        645,054         0.3
  Philippines (0.3%)
    Republic of Philippines, 8.875% due 4/15/08 - 144A{.} ...  USD            320,000        316,512         0.2
    Bangko Sentral Pilipinas, 8.6% due 6/15/27 ..............  USD            226,000        205,991         0.1
  Russia (5.5%)
    Bank of Foreign Economic Affairs (Vnesheconombank)
     Interest Notes, 6.72% due 12/15/15+ ....................  USD         10,601,311      7,646,196         3.7
    Bank of Foreign Economic Affairs (Vnesheconombank)
     Principal Loans, 3.36% due 12/15/20+ ...................  USD          5,774,860      3,667,036         1.8
  Venezuela (0.7%)
    Republic of Venezuela, 9.25% due 9/15/27{j} .............  USD          1,734,000      1,535,891         0.7
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $26,379,949) ...............................................                             27,690,099
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-13
<PAGE>   1479
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                           PRINCIPAL       VALUE         % OF NET
FIXED INCOME INVESTMENTS                                       CURRENCY     AMOUNT        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Corporate Bonds (3.4%)
  Argentina (0.7%)
    Telefonica de Argentina, 9.125% due 5/7/08 - 144A{.} ....  USD          1,504,000   $  1,511,009         0.7
  Brazil (1.0%)
    RBS Participacoes S.A., 11% due 4/1/07 - 144A{.} ........  USD            942,000        946,710         0.5
    Banco Hipotecario Espana, 10% due 4/17/03 - 144A{.} .....  USD            710,000        717,988         0.3
    Comtel Brasileira Ltd. "A", 10.75% due 9/26/04 -
     144A{.} ................................................  USD            165,000        169,125         0.1
    Banco Do Brasil (Cayman), 9.375% due 6/15/07 ............  USD            122,000        120,170         0.1
  China (0.4%)
    Greater Beijing First, 9.5% due 6/15/07 - 144A{.} .......  USD            960,000        764,976         0.4
  Hong Kong (0.3%)
    Road King Infrastructure, 9.5% due 7/15/07 - 144A{.} ....  USD            700,000        571,760         0.3
  Korea (0.2%)
    L.G.-Caltex Oil Corp., 12.75% due 3/31/01 - 144A{.} .....  USD            511,000        519,943         0.2
    Pohang Iron & Steel, 2% due 10/9/00 .....................  JPY          5,500,000         36,996          --
    Korea Development Bank, 4.35% due 5/25/99 ...............  JPY          1,500,000         10,770          --
  Malaysia (0.1%)
    Tenaga Nasional Bhd., 7.875% due 6/15/04 - 144A{.} ......  USD            226,000        213,379         0.1
    Petroliam Nasional Bhd.:
      7.125% due 8/15/05 - 144A{.} ..........................  USD             94,000         83,308          --
      7.625% due 10/15/26 - 144A{.} .........................  USD             88,000         76,868          --
  Mexico (0.2%)
    Petroleos Mexicanos:
      9.25% due 3/30/18 - 144A{.} ...........................  USD            440,000        430,100         0.2
      9.5% due 9/15/27 - 144A{.} ............................  USD              4,000          4,010          --
  Russia (0.5%)
    Lukinter Finance BV Convertible, 3.5% due 5/6/02 -
     144A{.} ................................................  USD            851,000      1,025,455         0.5
    Mosenergo Finance BV, 8.375% due 10/9/02 - 144A{.} ......  USD              5,000          4,425          --
                                                                                        ------------
Total Corporate Bonds (cost $7,326,458) .....................                              7,206,992
                                                                                        ------------
Structured Notes (0.2%)
  Korea (0.2%)
    Fixed Rate Trust Certificate 13.55% due 2/15/02[::]
     (Issued by a newly created Delaware Business Trust,
     collateralized by triple A paper. This trust certificate
     has a credit risk component linked to the value of a
     referenced security: Korean Development Bank 1.875%
     2002.) (cost $470,000) .................................  USD            470,000        467,650         0.2
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $34,176,407) ...........                             35,364,741        17.0
                                                                                        ------------       -----
 
<CAPTION>
 
                                                                            NO. OF         VALUE         % OF NET
RIGHTS                                                         COUNTRY      RIGHTS        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Delta Electronics (Thailand) Public Co., Ltd. (UNAV NP
   RTS), due 5/15/98 - Foreign ..............................  THAI             3,100         31,161          --
    ELECTRICAL PLANT/EQUIPMENT
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 

                                     FS-14
<PAGE>   1480
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                            NO. OF         VALUE         % OF NET
RIGHTS                                                         COUNTRY      RIGHTS        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Samsung Electronics Rights, due 5/27/98 - GDR 144A{.}
   {\/} .....................................................  KOR                788          7,835          --
    SEMICONDUCTORS
  Samsung Development Rights, due 5/13/98 ...................  KOR                444   $      7,717          --
    ELECTRICAL PLANT/EQUIPMENT
                                                                                        ------------       -----
 
TOTAL RIGHTS (cost $27,062) .................................                                 46,713          --
                                                                                        ------------       -----
 
<CAPTION>
 
                                                                            NO. OF         VALUE         % OF NET
WARRANTS                                                       COUNTRY     WARRANTS       (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Belle Corp. Warrants, expire 2002 (cost $0) ...............  PHIL           659,400          1,893          --
                                                                                        ------------       -----
    OIL
 
TOTAL INVESTMENTS (cost $202,800,701)  * ....................                            205,530,484        98.6
Other Assets and Liabilities ................................                              2,882,202         1.4
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $208,412,686       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        {*}  Security is denominated in Hong Kong Dollars.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
       {.:}  Each Centenary Linked Unit consists of 1 registered deferred share
             of De Beers Consolidated Mine + 1 Centenary Depositary Receipt.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (See Note 1 of Notes to Financial Statements).
        +X+  The GT Global Developing Markets Fund (the "Fund") has invested in
             the GT Global Taiwan Fund, a fund managed by LGT Asset Management
             Ltd. who is an affiliate of the Fund's manager, Chancellor LGT
             Asset Management, Inc.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
         ++  The coupon rate shown on step-up coupon bond represents the rate at
             period end.
        [.]  Bond pays stated or additional interest with "payment-in-kind"
             (PIK) bonds.
       [::]  Certain events may cause the contract to terminate prior to date
             shown.
        {j}  All or part of the Fund's holdings in this security is segregated
             as collateral for extended settlement of derivative instruments.
             (See Note 1 of Notes to Financial Statements.)
          *  For Federal income tax purposes, cost is $204,117,118 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  17,708,574
                 Unrealized depreciation:           (16,295,208)
                                                  -------------
                 Net unrealized appreciation:     $   1,413,366
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviations:
    ADR--American Depositary Receipt
    GDR--Global Depositary Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-15
<PAGE>   1481
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {d}
                                        -------------------------------------------
                                                 FIXED INCOME,
                                                   RIGHTS &      SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS       & OTHER     TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Argentina (ARG/ARS) ..................    3.1         1.8                       4.9
Brazil (BRZL/BRL) ....................   11.7         3.1                      14.8
Bulgaria (BUL/LEV) ...................                0.9                       0.9
Chile (CHLE/CLP) .....................    4.1                                   4.1
China (CHNA/RMB) .....................    0.2         0.4                       0.6
Croatia (CRT/HRK) ....................                0.4                       0.4
Ecuador (ECDR/ECS) ...................                0.4                       0.4
Egypt (EGPT/EGP) .....................    5.8                                   5.8
Greece (GREC/GRD) ....................    2.7                                   2.7
Hong Kong (HK/HKD) ...................    0.2         0.3                       0.5
Hungary (HGRY/HUF) ...................    2.0                                   2.0
India (IND/INR) ......................    6.2                                   6.2
Ireland (IRE/IEP) ....................    0.9                                   0.9
Israel (ISRL/ILS) ....................    3.1                                   3.1
Jordan (JDN/JOD) .....................                0.9                       0.9
Kazakhstan (KAZ/KTS) .................    0.3                                   0.3
Korea (KOR/KRW) ......................    0.7         0.7                       1.4
Malaysia (MAL/MYR) ...................    1.8         0.1                       1.9
Mexico (MEX/MXN) .....................    9.3         0.2                       9.5
Morocco (MOR/MAD) ....................    0.1                                   0.1
Pakistan (PAK/PKR) ...................    0.7         0.1                       0.8
Panama (PAN/PND) .....................                0.4                       0.4
Peru (PERU/PES) ......................    1.9         0.3                       2.2
Philippines (PHIL/PHP) ...............    1.9         0.3                       2.2
Poland (POL/PLZ) .....................    0.5                                   0.5
Russia (RUS/SUR) .....................    3.1         6.0                       9.1
South Africa (SAFR/ZAR) ..............    9.6                                   9.6
Sri Lanka (SLNKA/LKR) ................    0.5                                   0.5
Taiwan (TWN/TWD) .....................    4.1                                   4.1
Thailand (THAI/THB) ..................    0.3                                   0.3
Turkey (TRKY/TRL) ....................    5.6                                   5.6
United Kingdom (UK/GBP) ..............    1.2                                   1.2
United States (US/USD) ...............                               1.4        1.4
Venezuela (VENZ/VEB) .................                0.7                       0.7
                                        ------      -----            ---      -----
Total  ...............................   81.6        17.0            1.4      100.0
                                        ------      -----            ---      -----
                                        ------      -----            ---      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $208,412,686.
 
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                 APRIL 30, 1998
 
<TABLE>
<CAPTION>
                                           MARKET VALUE     CONTRACT    DELIVERY    UNREALIZED
CONTRACTS TO SELL:                        (U.S. DOLLARS)      PRICE       DATE     APPRECIATION
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Japanese Yen............................        37,065       122.90001   7/31/98   $     2,308
Japanese Yen............................        10,953       121.89997   7/31/98           778
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $51,104)......................        48,018                                   3,086
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS A
 PERCENTAGE OF NET ASSETS IS 0.02%.
  Total Open Forward Foreign Currency
   Contracts............................                                           $     3,086
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 of Notes to Financial Statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-16
<PAGE>   1482
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                     <C>         <C>
Assets:
  Investments in securities, at value (cost $202,800,701) (Note 1)................  $205,530,484
  U.S. currency.......................................................  $  444,445
  Foreign currencies (cost $2,551,489)................................   2,543,606     2,988,051
                                                                        ----------
  Receivable for securities sold..................................................     4,460,160
  Interest receivable.............................................................       772,897
  Dividends receivable............................................................       682,025
  Receivable from Chancellor LGT Asset Management, Inc. (Note 2)..................       540,059
  Unamortized organizational costs (Note 1).......................................        50,225
  Receivable for Fund shares sold.................................................         4,417
  Receivable for open forward foreign currency contracts (Note 1).................         3,086
                                                                                    ------------
    Total assets..................................................................   215,031,404
                                                                                    ------------
Liabilities:
  Payable for securities purchased................................................     5,089,190
  Payable for Fund shares repurchased.............................................       760,558
  Payable for investment management and administration fees (Note 2)..............       422,779
  Payable for professional fees...................................................       105,562
  Payable for transfer agent fees (Note 2)........................................        71,387
  Payable for service and distribution expenses (Note 2)..........................        50,898
  Payable for custodian fees......................................................        17,067
  Payable for printing and postage expenses.......................................        16,019
  Payable for Directors' fees and expenses (Note 2)...............................        13,860
  Payable for registration and filing fees........................................        10,941
  Payable for fund accounting fees (Note 2).......................................         4,224
  Other accrued expenses..........................................................        56,233
                                                                                    ------------
    Total liabilities.............................................................     6,618,718
                                                                                    ------------
Net assets........................................................................  $208,412,686
                                                                                    ------------
                                                                                    ------------
Class A:
Net asset value and redemption price per share ($208,168,793 DIVIDED BY 16,756,318
 shares outstanding)..............................................................  $      12.42
                                                                                    ------------
                                                                                    ------------
Maximum offering price per share (100/95.25 of $12.42) *..........................  $      13.04
                                                                                    ------------
                                                                                    ------------
Class B:+
Net asset value and offering price per share ($207,318 DIVIDED BY 16,731 shares
 outstanding).....................................................................  $      12.39
                                                                                    ------------
                                                                                    ------------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($36,575
 DIVIDED BY 2,941 shares outstanding).............................................  $      12.44
                                                                                    ------------
                                                                                    ------------
Net assets consist of:
  Paid in capital (Note 4)........................................................  $303,197,267
  Undistributed net investment income.............................................     1,755,638
  Accumulated net realized loss on investments and foreign currency
   transactions...................................................................   (99,259,192)
  Net unrealized depreciation on translation of assets and liabilities in foreign
   currencies.....................................................................       (10,810)
  Net unrealized appreciation of investments......................................     2,729,783
                                                                                    ------------
Total -- representing net assets applicable to capital shares outstanding.........  $208,412,686
                                                                                    ------------
                                                                                    ------------
<FN>
- --------------
   * On sales of $50,000 or more, the offering price is reduced.
   + Redemption price per share is equal to the net asset value per share less
     any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-17
<PAGE>   1483
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                            STATEMENT OF OPERATIONS
 
                        Six months ended April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                              <C>          <C>
Investment income: (Note 1)
  Interest income...........................................................................  $ 4,633,495
  Dividend income (net of foreign withholding tax of $104,449)..............................    2,423,523
  Securities lending income.................................................................      155,608
                                                                                              -----------
    Total investment income.................................................................    7,212,626
                                                                                              -----------
Expenses:
  Investment management and administration fees (Note 2)....................................    1,130,939
  Transfer agent fees (Note 2)..............................................................      392,250
  Professional fees.........................................................................      354,647
  Service and distribution expenses: (Note 2)
    Class A....................................................................  $   298,300
    Class B....................................................................          709      299,009
                                                                                 -----------
  Interest expense (Note 1).................................................................      260,016
  Printing and postage expenses.............................................................      147,676
  Custodian fees............................................................................       83,146
  Registration and filing fees..............................................................       78,500
  Fund accounting fees (Note 2).............................................................       37,617
  Amortization of organization costs (Note 1)...............................................       35,087
  Directors' fees and expenses (Note 2).....................................................       15,204
  Other expenses............................................................................        4,477
                                                                                              -----------
    Total expenses before reductions........................................................    2,838,568
                                                                                              -----------
      Expenses reimbursed by Chancellor LGT Asset Management, Inc. (Note 2).................     (540,059)
      Expense reductions (Note 5)...........................................................      (40,839)
                                                                                              -----------
    Total net expenses......................................................................    2,257,670
                                                                                              -----------
Net investment income.......................................................................    4,954,956
                                                                                              -----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
  (Note 1)
  Net realized loss on investments.............................................  (41,994,248)
  Net realized loss on foreign currency transactions...........................   (1,662,852)
                                                                                 -----------
    Net realized loss during the period.....................................................  (43,657,100)
  Net change in unrealized depreciation on translation of assets and
   liabilities in foreign currencies...........................................      196,235
  Net change in unrealized appreciation of investments.........................   43,290,356
                                                                                 -----------
    Net unrealized appreciation during the period...........................................   43,486,591
                                                                                              -----------
Net realized and unrealized loss on investments and foreign currencies......................     (170,509)
                                                                                              -----------
Net increase in net assets resulting from operations........................................  $ 4,784,447
                                                                                              -----------
                                                                                              -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-18
<PAGE>   1484
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                       STATEMENT OF CHANGES IN NET ASSETS
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
<S>                                                             <C>                <C>                <C>
                                                                SIX MONTHS ENDED   TEN MONTHS ENDED      YEAR ENDED
                                                                 APRIL 30, 1998    OCTOBER 31, 1997   DECEMBER 31, 1996
                                                                ----------------   ----------------   -----------------
Decrease in net assets
Operations:
  Net investment income.......................................   $   4,954,956      $   9,089,483       $ 19,406,553
  Net realized gain (loss) on investments and foreign currency
   transactions...............................................     (43,657,100)        45,653,300            945,154
  Net change in unrealized appreciation (depreciation) on
   translation of assets and liabilities in foreign
   currencies.................................................         196,235           (297,303)            91,835
  Net change in unrealized appreciation (depreciation) of
   investments................................................      43,290,356       (101,078,671)        78,628,364
                                                                ----------------   ----------------   -----------------
    Net increase (decrease) in net assets resulting from
     operations...............................................       4,784,447        (46,633,191)        99,071,906
                                                                ----------------   ----------------   -----------------
Class A:
Distributions to shareholders: (Note 1)
  From net investment income..................................     (11,843,408)                --        (17,407,047)
Class B:
Distributions to shareholders: (Note 1)
  From net investment income..................................          (1,499)                --                 --
Advisor Class:
Distributions to shareholders: (Note 1)
  From net investment income..................................             (46)                --                 --
                                                                ----------------   ----------------   -----------------
    Total distributions.......................................     (11,844,953)                --        (17,407,047)
                                                                ----------------   ----------------   -----------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and reinvested............      11,481,861                 --                 --
  Decrease from capital shares repurchased....................    (253,387,857)                --                 --
                                                                ----------------   ----------------   -----------------
    Net increase (decrease) from capital share transactions...    (241,905,996)                --                 --
                                                                ----------------   ----------------   -----------------
Total decrease in net assets..................................    (248,966,502)       (46,633,191)        81,664,859
Net assets:
  Beginning of period.........................................     457,379,188        504,012,379        422,347,520
                                                                ----------------   ----------------   -----------------
  End of period *.............................................   $ 208,412,686      $ 457,379,188       $504,012,379
                                                                ----------------   ----------------   -----------------
                                                                ----------------   ----------------   -----------------
 * Includes undistributed net investment income of............   $   1,755,638      $   8,645,635       $    363,782
                                                                ----------------   ----------------   -----------------
                                                                ----------------   ----------------   -----------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-19
<PAGE>   1485
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                              FINANCIAL HIGHLIGHTS
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                           CLASS A+
                                          ---------------------------------------------------------------------------
                                                                                                     JANUARY 11, 1994
                                                                                                      (COMMENCEMENT
                                          SIX MONTHS     TEN MONTHS            YEAR ENDED             OF OPERATIONS)
                                            ENDED           ENDED             DECEMBER 31,                  TO
                                          APRIL 30,      OCTOBER 31,     -----------------------       DECEMBER 31,
                                           1998 (D)       1997 (E)       1996 (E)      1995 (E)          1994 (E)
                                          ----------     -----------     ---------     ---------     ----------------
<S>                                       <C>            <C>             <C>           <C>           <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $  12.56        $  13.84       $  11.60      $  12.44         $  15.00
                                          ----------     -----------     ---------     ---------     ----------------
Income from investment operations:
  Net investment income.................      0.23*{/\}       0.25           0.53          0.72             0.35
  Net realized and unrealized gain
   (loss) on investments................        --           (1.53)          2.19         (0.84)           (2.46)
                                          ----------     -----------     ---------     ---------     ----------------
    Net increase (decrease) from
     investment operations..............      0.23           (1.28)          2.72         (0.12)           (2.11)
                                          ----------     -----------     ---------     ---------     ----------------
  Redemption fees retained (Note 4).....      0.23              --             --            --               --
                                          ----------     -----------     ---------     ---------     ----------------
  Distributions to shareholders:
    From net investment income..........     (0.60)             --          (0.48)        (0.72)           (0.35)
    From net realized gain on
     investments........................        --              --             --            --            (0.10)
                                          ----------     -----------     ---------     ---------     ----------------
      Total distributions...............     (0.60)             --          (0.48)        (0.72)           (0.45)
                                          ----------     -----------     ---------     ---------     ----------------
Net asset value, end of period..........  $  12.42        $  12.56       $  13.84      $  11.60         $  12.44
                                          ----------     -----------     ---------     ---------     ----------------
                                          ----------     -----------     ---------     ---------     ----------------
    Market value, end of period.........  $    N/A        $  11.81       $  11.63      $   9.75         $   9.75
                                          ----------     -----------     ---------     ---------     ----------------
                                          ----------     -----------     ---------     ---------     ----------------
    Total investment return (based on
     market value)......................       N/A            1.62%(b)      24.18%         6.60%          (32.16)% (b)
    Total investment return (based on
     net asset value)...................      3.68%(b)(c)     (9.25)%(b)    23.59%        (0.95)%         (14.07)% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $208,169        $457,379       $504,012      $422,348         $452,872
Ratio of net investment income to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      3.06%(a)        2.03%(a)       4.07%         6.33%            2.75% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      2.56%(a)        1.95%(a)       4.04%         6.30%            2.75% (a)
Ratio of operating expenses to average
 net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      1.72%(a)        1.75%(a)       1.82%         1.77%            2.01% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      2.22%(a)        1.83%(a)       1.85%         1.80%            2.01% (a)
Ratio of interest expense to average net
 assets (Note 1)+++.....................      0.22%(a)         N/A            N/A           N/A              N/A
Portfolio turnover rate.................        99%(a)         184%(a)        138%           75%              56%
Average commission rate per share paid
 on portfolio transactions..............  $ 0.0017        $ 0.0023       $ 0.0022           N/A              N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon the average
     shares outstanding during the period.
 (e) These financial highlights provide per share information of G.T.
     Global Developing Markets Fund, Inc. ("Predecessor Fund") (See Note 1
     to Notes to Financial Statements) for the periods up to and including
     October 31, 1997. The fees and expenses of the Fund differ from those
     of the Predecessor Fund.
{/\} Net investment income per share reflects an interest payment received
     from the conversion of Vnesheconombank loan agreements. Without such a
     payment net investment would have been $0.09, $0.07 and $0.13 per
     share for Class A, B, and Advisor, respectively.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.03 for Class
     A, B, and Advisor.
  +  All capital shares issued and outstanding October 31, 1997 were
     reclassified as Class A shares.
 ++  Commencing November 1, 1997, the Fund began offering Class B and
     Advisor Class shares.
+++  Portfolio turnover rate, average commission rate, and ratio of
     interest expense to average net assets are calculated on the basis of
     the Fund as whole without distinguishing between the classes of shares
     issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-20
<PAGE>   1486
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                              FINANCIAL HIGHLIGHTS
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                              CLASS B++          ADVISOR CLASS++
                                          -----------------     -----------------
                                             SIX MONTHS            SIX MONTHS
                                                ENDED                 ENDED
                                          APRIL 30, 1998(D)     APRIL 30, 1998(D)
                                          -----------------     -----------------
<S>                                       <C>                   <C>
Per Share Operating Performance:
Net asset value, beginning of period....      $ 12.56               $ 12.56
                                          -----------------     -----------------
Income from investment operations:
  Net investment income.................         0.21*{/\}             0.27*{/\}
  Net realized and unrealized gain
   (loss) on investments................        (0.01)                (0.02)
                                          -----------------     -----------------
    Net increase (decrease) from
     investment operations..............         0.20                  0.25
                                          -----------------     -----------------
  Redemption fees retained (Note 4).....         0.23                  0.23
                                          -----------------     -----------------
  Distributions to shareholders:
    From net investment income..........        (0.60)                (0.60)
    From net realized gain on
     investments........................           --                    --
                                          -----------------     -----------------
      Total distributions...............        (0.60)                (0.60)
                                          -----------------     -----------------
Net asset value, end of period..........      $ 12.39               $ 12.44
                                          -----------------     -----------------
                                          -----------------     -----------------
 
    Total investment return (based on
     net asset value)...................         3.36% (b)(c)          3.88% (b)(c)
Ratios and supplemental data:
Net assets, end of period (in 000's)....      $   207               $    37
Ratio of net investment income to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         2.32% (a)             3.32% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         1.82% (a)             2.82% (a)
Ratio of operating expenses to average
 net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         2.46% (a)             1.46% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.96% (a)             1.96% (a)
Ratio of interest expense to average net
 assets (Note 1)+++.....................         0.22% (a)             0.22% (a)
Portfolio turnover rate.................           99% (a)               99% (a)
Average commission rate per share paid
 on portfolio transactions..............      $0.0017               $0.0017
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon the average
     shares outstanding during the period.
{/\} Net investment income per share reflects an interest payment received
     from the conversion of Vnesheconombank loan agreements. Without such a
     payment net investment would have been $0.09, $0.07 and $0.13 per
     share for Class A, B, and Advisor, respectively.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.03 for Class
     A, B, and Advisor.
  +  All capital shares issued and outstanding October 31, 1997 were
     reclassified as Class A shares.
 ++  Commencing November 1, 1997, the Fund began offering Class B and
     Advisor Class shares.
+++  Portfolio turnover rate, average commission rate, and ratio of
     interest expense to average net assets are calculated on the basis of
     the Fund as whole without distinguishing between the classes of shares
     issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-21
<PAGE>   1487
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
The following Notes to Financial Statements are for the period ending April 30,
1998, and unless otherwise indicated reflect facts as of that date. Please see
"Note 6 -- Subsequent Events" for a discussion of certain changes which took
place after April 30, 1998.
 
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 6)
 
GT Global Developing Markets Fund ("Fund") is a separate series of G.T.
Investment Funds, Inc. ("Company"). Effective June 1, 1998, the Company was
renamed AIM Investment Funds, Inc. and the Fund was renamed AIM Developing
Markets Fund. The Company is organized as a Maryland corporation and is
registered under the Investment Company Act of 1940, as amended ("1940 Act"), as
an open-end management investment company. The Company has thirteen series of
shares in operation, each series corresponding to a distinct portfolio of
investments.
 
On October 31, 1997, at the close of business, the Fund acquired the assets and
assumed the liabilities of G.T. Global Developing Markets Fund, Inc., a Maryland
corporation registered under the 1940 Act as a non-diversified closed-end
management investment company ("Predecessor Fund"), in exchange for Class A
shares of the Fund in a tax-free reorganization of the Predecessor Fund.
Shareholders of the Predecessor Fund approved the reorganization on October 20,
1997. Prior to October 28, 1997 the Closed-End Fund's shares traded on the New
York Stock Exchange.
 
Commencing November 1, 1997, the Fund began to offer Class A, Class B, and
Advisor Class shares, each of which has equal rights as to assets and voting
privileges except that Class A and Class B each has exclusive voting rights with
respect to its distribution plan. Investment income, realized and unrealized
capital gains and losses, and the common expenses of the Fund are allocated on a
pro rata basis to each class based on the relative net assets of each class to
the total net assets of the Fund. Each class of shares differs in its respective
service and distribution expenses, and may differ in its transfer agent,
registration, and certain other class-specific fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund in the preparation of the financial
statements.
 
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. (the "Manager") to be the primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
asked prices for securities or, if such prices are not available, at prices for
securities of comparative maturity, quality and type; however, when the Manager
deems it appropriate, prices obtained for the day of valuation from a bond
pricing service will be used. Short-term investments with a maturity of 60 days
or less are valued at amortized cost, adjusted for foreign exchange translation
and market fluctuation, if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Fund's Board of Directors.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Fund's Board of Directors.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, other assets and liabilities
are recorded in the books and records of the Fund after translation to U.S.
dollars based on the exchange rates on that day. The cost of each security is
determined using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when earned or incurred.
 
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
existing from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
 
Reported net realized foreign exchange gains and losses arise from sales and
maturities of short-term investments, forward foreign currency contracts, sales
of foreign currencies, currency gains or
 
                                     FS-22
<PAGE>   1488
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
losses realized between the trade and settlement dates on securities
transactions, and the differences between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Fund's books and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at year end, resulting from
changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which the value, including accrued
interest, is at least equal to the amount to be repaid to the Fund under each
agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. The Fund could be exposed to risk if a counterparty is
unable to meet the terms of a contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities or to hedge against adverse
fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on an exchange is valued at its last bid price,
or, in the case of an over-the-counter option, is valued at the average of the
last bid prices obtained from brokers, unless a quotation from only one broker
is available, in which case only that broker's price will be used. If an option
expires on its stipulated expiration date or if the Fund enters into a closing
purchase transaction, a gain or loss is realized without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option is extinguished. If a written call option is exercised, a gain or
loss is realized from the sale of the underlying security and the proceeds of
the sale are increased by the premium originally received. If a written put
option is exercised, the cost of the underlying security purchased would be
decreased by the premium originally received. The Fund can write options only on
a covered basis, which, for a call, requires that the Fund hold the underlying
security, and, for a put, requires the Fund to set aside cash, U.S. government
securities or other liquid securities in an amount not less than the exercise
price or otherwise provide adequate cover at all times while the put option is
outstanding. The Fund may use options to manage its exposure to the stock and
bond markets and to fluctuations in currency values or interest rates.
 
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock and bond
markets and to fluctuations in currency values or interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to collection of income on securities, income is
recorded net of all
 
                                     FS-23
<PAGE>   1489
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
withholding tax with any rebate recorded when received. The Fund may trade
securities on other than normal settlement terms. This may increase the market
risk if the other party to the transaction fails to deliver and causes the Fund
to subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At April 30, 1998, stocks with an aggregate value of approximately $13,962,416
were on loan to brokers. The loans were secured by cash collateral of
$14,552,194 received by the Fund. For international securities, cash collateral
is received by the Fund against loaned securities in an amount at least equal to
105% of the market value of the loaned securities at the inception of each loan.
This collateral must be maintained at not less than 103% of the market value of
the loaned securities during the period of the loan. For domestic securities,
cash collateral is received by the Fund against loaned securities in an amount
at least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of each loan. The
cash collateral is invested in a securities lending trust which consists of a
portfolio of high quality short duration securities whose average effective
duration is restricted to 120 days or less. For the six months ended April 30,
1998, the Fund received securities lending income of $155,608.
 
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, and unrealized appreciation of securities held, or excise tax on income
and capital gains. The Fund currently has a capital loss carryforward of
$54,472,976 which expires in 2003.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 and timing differences.
 
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the Fund in connection with its organization, its
registration with the Securities and Exchange Commission and with various states
aggregated $353,775. These expenses are being amortized on a straightline basis
over a five-year period.
 
(L) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
 
(M) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
 
(N) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
 
(O) SECURITIES PURCHASED ON A WHEN-ISSUED OR FORWARD COMMITMENT BASIS
The Fund may trade securities on a when-issued or forward commitment basis, with
payment and delivery scheduled for a future date. These transactions are subject
to market fluctuations and are subject to the risk that the value at delivery
may be more or less than the trade date purchase price. Although the Fund will
generally purchase these securities with the intention of acquiring such
securities, they may sell such securities before the settlement date. These
securities are identified on the accompanying Portfolio of Investments. The Fund
has purchased and sold when-issued securities during the period and has set
aside liquid securities as collateral for these commitments.
 
(P) LINE OF CREDIT
The Fund, along with certain other funds advised and/or administered by the
Manager ("GT Funds"), has a line of credit with each of BankBoston and State
Street Bank & Trust Company. The arrangements with the banks allow the Fund and
the GT Funds to borrow an aggregate maximum amount of $250,000,000. The Fund is
limited to borrowing up to 33 1/3% of the value of each Fund's total assets. On
April 30, 1998, the Fund had no loans outstanding.
 
For the six months ended April 30, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $7,671,408, with a weighted average interest rate of 6.29%.
Interest expense for the Fund for the six months ended April 30, 1998 was
$210,460. Other interest expense charges amounted to $49,556.
 
2. RELATED PARTIES (SEE ALSO NOTE 6)
For the period ended April 30, 1998, Chancellor LGT Asset Management, Inc. was
the Fund's investment manager and administrator. The Fund pays the Manager
investment management and administration fees at the annualized rate of 0.975%
on the first $500 million of average daily net assets of the Fund; 0.95% on the
 
                                     FS-24

<PAGE>   1490
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
next $500 million; 0.925% on the next $500 million and 0.90% on amounts
thereafter. These fees are computed daily and paid monthly.
 
For the period ended April 30, 1998, GT Global, Inc. ("GT Global"), an affiliate
of the Manager, serves as the Fund's distributor. The Fund offers Class A, Class
B, and Advisor Class shares for purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the six months ended April 30, 1998, GT Global did not
retain any of such sales charges. Purchases of Class A shares exceeding $500,000
may be subject to a contingent deferred sales charge ("CDSC") upon redemption,
in accordance with the Fund's current prospectus. GT Global did not collect
CDSCs for the six months ended April 30, 1998. GT Global also makes ongoing
shareholder servicing and trail commission payments to dealers whose clients
hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global, from its own resources, pays commissions to dealers through
which the sales are made. Certain redemptions of Class B shares made within six
years of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the six months ended April 30, 1998, GT Global did not collect
any CDSCs. In addition, GT Global makes ongoing shareholder servicing and trail
commission payments to dealers whose clients hold Class B shares.
 
Pursuant to the then effective separate distribution plans adopted under 1940
Act Rule 12b-1 by the Company's Board of Directors with respect to the Fund's
Class A shares ("Class A Plan") and Class B shares ("Class B Plan"), the Fund
reimbursed GT Global for a portion of its shareholder servicing and distribution
expenses. Under that Class A Plan, the Fund was permitted to pay GT Global a
service fee at the annualized rate of up to 0.25% of the average daily net
assets of the Fund's Class A shares for GT Global's expenditures incurred in
servicing and maintaining shareholder accounts, and was permitted to pay GT
Global a distribution fee at the annualized rate of up to 0.50% of the average
daily net assets of the Fund's Class A shares, less any amounts paid by the Fund
as the aforementioned service fee, for GT Global's expenditures incurred in
providing services as distributor. All expenses for which GT Global was
reimbursed under the Class A Plan would have been incurred within one year of
such reimbursement.
 
For the period ended April 30, 1998, pursuant to that Class B Plan, the Fund was
permitted to pay GT Global a service fee at the annualized rate of up to 0.25%
of the average daily net assets of the Fund's Class B shares for GT Global's
expenditures incurred in servicing and maintaining shareholder accounts, and was
permitted to pay GT Global a distribution fee at the annualized rate of up to
0.75% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually were permitted to be
carried forward for reimbursement in subsequent years as long as that Plan
continued in effect.
 
The Manager and GT Global voluntarily undertook to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 2.00%, 2.50%, and 1.50% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by the waivers by
the Manager of investment management and administration fees, waivers by GT
Global of payments under the Class A Plan and/or Class B Plan and/or
reimbursements by the Manager or GT Global of portions of the Fund's other
operating expenses.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager or any of its affiliated companies $5,000 per year plus
$300 for each meeting of the board or any committee thereof attended by the
Director.
 
3. PURCHASES AND SALES OF SECURITIES
For the six months ended April 30, 1998, purchases and sales of investment
securities by the Fund, other than U.S. government obligations and short-term
investments, aggregated $120,141,572 and $302,645,182, respectively. There were
no purchases of U.S. government obligations by the Fund for the period. Sales of
U.S. government obligations by the Fund were $7,170,550 for the period.
 
4. CAPITAL SHARES
At April 30, 1998, there were 6,000,000,000 shares of the Company's common stock
authorized, at $0.0001 par value. Of this amount, 200,000,000 were classified as
shares of GT Global Developing Markets Fund; 400,000,000 were classified as
shares of GT Global Government Income Fund; 200,000,000 were classified as
shares of GT Global Health Care Fund; 200,000,000 were classified as shares of
GT Global Strategic Income Fund; 200,000,000 were classified as shares of GT
Global Currency Fund (inactive); 200,000,000 were classified as shares of GT
Global Growth & Income Fund; 200,000,000 were classified as shares of GT Global
Small Companies Fund
 
                                     FS-25
<PAGE>   1491
                          AIM DEVELOPING MARKETS FUND
                  (FORMERLY GT GLOBAL DEVELOPING MARKETS FUND)
 
(inactive); 200,000,000 were classified as shares of GT Global Latin America
Growth Fund; 200,000,000 were classified as shares of GT Global Emerging Markets
Fund; 400,000,000 were classified as shares of GT Global Telecommunications
Fund; 200,000,000 were classified as shares of GT Global High Income Fund;
200,000,000 were classified as shares of GT Global Financial Services Fund;
200,000,000 were classified as shares of GT Global Natural Resources Fund;
200,000,000 were classified as shares of GT Global Infrastructure Fund; and
200,000,000 were classified as shares of GT Global Consumer Products and
Services Fund. The shares of each of the foregoing series of the Company were
divided equally into two classes, designated Class A and Class B common stock.
With respect to the issuance of Advisor Class shares, 100,000,000 shares were
classified as shares of each of the fifteen series of the Company and designated
as Advisor Class common stock. 1,100,000,000 shares remain unclassified.
Transactions in capital shares of the Fund were as follows:
 
                           CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
                                                   SIX MONTHS ENDED
                                                    APRIL 30, 1998
                                          -----------------------------------
CLASS A                                       SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------
<S>                                       <C>              <C>
Shares sold.............................          252,838  $        3,022,409
Shares issued in connection with
  reinvestment of distributions.........          676,249           8,202,878
                                          ---------------  ------------------
                                                  929,087          11,225,287
Shares repurchased including those
  purchased in connection with open
  ending of the Fund on 11/1/97*........      (20,589,436)       (253,365,429)
                                          ---------------  ------------------
Net decrease............................      (19,660,349) $     (242,140,142)
                                          ---------------  ------------------
                                          ---------------  ------------------
 
<CAPTION>
 
CLASS B
- ----------------------------------------
<S>                                       <C>              <C>
Shares sold.............................           18,606  $          220,436
Shares issued in connection with
  reinvestment of distributions.........              124               1,499
                                          ---------------  ------------------
                                                   18,730             221,935
Shares repurchased......................           (1,999)            (22,428)
                                          ---------------  ------------------
Net increase............................           16,731  $          199,507
                                          ---------------  ------------------
                                          ---------------  ------------------
<CAPTION>
 
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>              <C>
Shares sold.............................            2,937  $           34,593
Shares issued in connection with
  reinvestment of distributions.........                4                  46
                                          ---------------  ------------------
                                                    2,941              34,639
Shares repurchased......................               --                  --
                                          ---------------  ------------------
Net increase............................            2,941  $           34,639
                                          ---------------  ------------------
                                          ---------------  ------------------
</TABLE>
 
- --------------
* The redemption amount for Class A redemptions is net of a 2% redemption fee of
  $4,923,187 incurred in the period from November 1, 1997 to April 30, 1998 in
  connection with redemptions upon the open ending of the Fund.
 
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the six months ended April 30, 1998, the Fund's
expenses were reduced by $40,839 under these arrangements.
 
6. SUBSEQUENT EVENTS
On May 29, 1998, Liechtenstein Global Trust ("LGT"), the former indirect parent
organization of Chancellor LGT Asset Management, Inc. ("Chancellor LGT"),
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included Chancellor LGT and
certain other affiliates. As a result of this transaction, Chancellor LGT was
renamed INVESCO (NY), Inc. and is now an indirect wholly-owned subsidiary of
AMVESCAP PLC. In connection with this transaction, A I M Advisors, Inc. ("AIM"),
an indirect wholly-owned subsidiary of AMVESCAP PLC, became the investment
adviser and administrator of the Fund and INVESCO (NY), Inc. became the
sub-adviser and sub-administrator of the Fund. In addition, A I M Distributors,
Inc. replaced GT Global, Inc. as the Fund's principal underwriter, and the Fund
became subject to compensation-type Rule 12b-1 plans of distribution, which
replaced the Fund's former reimbursement-type Rule 12b-1 plans of distribution.
All of the changes became effective as of the close of business on May 29, 1998.
 
                                     FS-26
<PAGE>   1492
                        GT GLOBAL DEVELOPING MARKETS FUND
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
To the Shareholders and Board of Directors of
GT Global Developing Markets Fund ("Fund"):
 
We have audited the accompanying statement of assets and liabilities of GT
Global Developing Markets Fund (formerly G.T. Global Developing Markets Fund,
Inc.), including the portfolio of investments, as of October 31, 1997, the
related statement of operations for the ten months then ended and for the year
ended December 31, 1996, the statements of changes in net assets for the ten
months then ended and for each of the two years in the period ended December 31,
1996, and the financial highlights for each of the periods indicated therein.
These financial statements and the financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997, by correspondence with the custodians and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global Developing Markets Fund as of October 31, 1997, the results of its
operations for the ten months then ended and for the year ended December 31,
1996, the changes in its net assets for the ten months then ended and for each
of the two years in the period ended December 31, 1996, and the financial
highlights for the periods indicated therein, in conformity with generally
accepted accounting principles.
 
'

                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
DECEMBER 15, 1997
 
                                     FS-27
<PAGE>   1493
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Energy (13.0%)
  LUKoil Holding - ADR{\/} ................................   RUS              97,586   $  8,172,833         1.8
    OIL
  Sasol Ltd. ..............................................   SAFR            537,556      6,481,964         1.4
    ENERGY SOURCES
  Petroleo Brasileiro S.A. (Petrobras) Preferred ..........   BRZL         27,126,040      5,044,302         1.1
    OIL
  C.A. La Electricidad de Caracas .........................   VENZ          3,443,139      4,526,264         1.0
    ELECTRICAL & GAS UTILITIES
  Companhia Energetica de Minas Gerais (CEMIG) -
   ADR{\/} ................................................   BRZL             94,834      3,793,360         0.8
    ELECTRICAL & GAS UTILITIES
  Centrais Eletricas Brasileiras S.A. (Eletrobras): .......   BRZL                 --             --         0.8
    ELECTRICAL & GAS UTILITIES
    "B" ADR{\/} ...........................................   --              118,958      2,617,076          --
    Preferred .............................................   --            2,112,000        913,846          --
  Chilgener S.A. - ADR{\/} ................................   CHLE            124,972      3,374,244         0.7
    ELECTRICAL & GAS UTILITIES
  Enersis S.A. - ADR{\/} ..................................   CHLE             94,858      3,130,314         0.7
    ELECTRICAL & GAS UTILITIES
  Empresa Nacional de Electricidad S.A. - ADR{\/} .........   CHLE            127,657      2,569,097         0.6
    ELECTRICAL & GAS UTILITIES
  YPF S.A. - ADR{\/} ......................................   ARG              68,960      2,206,720         0.5
    OIL
  The Hub Power Co., Ltd. - GDR-/- {\/} ...................   PAK              70,300      2,196,875         0.5
    ENERGY SOURCES
  Light - Participacoes S.A. ..............................   BRZL          7,485,850      1,914,922         0.4
    ELECTRICAL & GAS UTILITIES
  Light - Servicos de Electricidade S.A. ..................   BRZL          5,322,290      1,767,016         0.4
    ELECTRICAL & GAS UTILITIES
  Surgutneftegaz - ADR-/- {\/} ............................   RUS             174,640      1,484,440         0.3
    OIL
  PTT Exploration and Production Public Co., Ltd. -
   Foreign ................................................   THAI            138,800      1,415,622         0.3
    OIL
  Unified Energy Systems - Reg S GDR-/- {c} {\/} ..........   RUS              40,700      1,271,875         0.3
    ELECTRICAL & GAS UTILITIES
  Manila Electric Co. "B" .................................   PHIL            361,110      1,111,108         0.2
    ELECTRICAL & GAS UTILITIES
  Bombay Suburban Electric Supply (BSES) Ltd. .............   IND             200,000      1,004,209         0.2
    ELECTRICAL & GAS UTILITIES
  MOL Magyar Olaj-es Gazipari RT - Reg S GDR{c} {\/} ......   HGRY             43,600        942,850         0.2
    ENERGY SOURCES
  Mosenergo: ..............................................   RUS                  --             --         0.2
    ELECTRICAL & GAS UTILITIES
    ADR-/- {\/} ...........................................   --               10,964        460,488          --
    144A ADR{.} {\/} ......................................   --               10,000        420,000          --
  Korea Electric Power Corp. - ADR{\/} ....................   KOR              93,330        764,139         0.2
    ELECTRICAL & GAS UTILITIES
  Electricity Generating Public Co., Ltd. - Foreign .......   THAI            447,200        745,333         0.2
    ELECTRICAL & GAS UTILITIES
  Perez Companc S.A. ......................................   ARG             100,460        629,257         0.1
    OIL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-28
<PAGE>   1494
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Energy (Continued)
  Tenaga Nasional Bhd. ....................................   MAL             235,000   $    508,261         0.1
    ELECTRICAL & GAS UTILITIES
  Yukong Ltd. .............................................   KOR              10,980        148,688          --
    OIL
  Guangdong Electric Power Development Co., Ltd. "B"{*} ...   CHNA            201,000        113,371          --
    ENERGY SOURCES
                                                                                        ------------
                                                                                          59,728,474
                                                                                        ------------
Multi-Industry/Miscellaneous (11.6%)
  Barlow Ltd. .............................................   SAFR            657,524      6,629,920         1.4
    CONGLOMERATE
  PT Telekomunikasi Indonesia .............................   INDO          5,018,500      4,683,001         1.0
    MULTI-INDUSTRY
  Anglo American Corporation of South Africa Ltd. .........   SAFR            104,020      4,498,162         1.0
    CONGLOMERATE
  Grupo Carso, S.A. de C.V. "A1" ..........................   MEX             567,700      3,610,164         0.8
    MULTI-INDUSTRY
  Delta Corporation Ltd. (subdivision)-/- .................   ZBBW          2,472,400      3,520,823         0.8
    MULTI-INDUSTRY
  ITC Ltd.: ...............................................   IND                  --             --         0.7
    MULTI-INDUSTRY
    Common ................................................   --              136,000      2,102,842          --
    GDR-/- {\/} ...........................................   --               44,370        811,971          --
  Billiton PLC-/- .........................................   SAFR            980,865      2,875,301         0.6
    CONGLOMERATE
  The Saudi Arabian Investment Fund Ltd.-/- {\/} ..........   UK              281,000      2,810,000         0.6
    COUNTRY FUNDS
  PT Gudang Garam .........................................   INDO            949,500      2,697,744         0.6
    MULTI-INDUSTRY
  China Resources Enterprise Ltd. .........................   HK              870,000      2,386,028         0.5
    CONGLOMERATE
  Shanghai Industrial Holdings Ltd. .......................   HK              471,000      2,096,041         0.5
    MULTI-INDUSTRY
  Sanluis Corporacion, S.A. de C.V. .......................   MEX             263,477      2,044,708         0.4
    CONGLOMERATE
  Central Asia Regional Growth Fund-/- {\/} ...............   IRE             210,000      1,999,200         0.4
    COUNTRY FUNDS
  Malaysian Resources Corp., Bhd. .........................   MAL           2,396,000      1,425,077         0.3
    CONGLOMERATE
  Koc Holding AS ..........................................   TRKY          3,234,900      1,216,923         0.3
    CONGLOMERATE
  Empresas La Moderna, S.A. de C.V. "A"-/- ................   MEX             240,600      1,181,389         0.3
    MULTI-INDUSTRY
  NASR (El) City Company For Housing & Construction-/- ....   EGPT             17,005      1,175,296         0.3
    MISCELLANEOUS
  PT Bimantara Citra ......................................   INDO          1,219,000      1,120,529         0.2
    MULTI-INDUSTRY
  PT Hanjaya Mandala Sampoerna ............................   INDO            590,500      1,032,141         0.2
    MULTI-INDUSTRY
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-29
<PAGE>   1495
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Multi-Industry/Miscellaneous (Continued)
  Koor Industries Ltd.: ...................................   ISRL                 --             --         0.2
    CONGLOMERATE
    ADR{\/} ...............................................   --               22,043   $    471,169          --
    Common ................................................   --                2,850        294,482          --
  Graboplast Rt. ..........................................   HGRY             13,452        725,231         0.2
    MISCELLANEOUS
  GT Taiwan Fund-/- +X+ {\/} ..............................   TWN              49,751        626,368         0.1
    COUNTRY FUNDS
  Quinenco S.A. - ADR-/- {\/} .............................   CHLE             32,400        473,850         0.1
    CONGLOMERATE
  Discount Investment Corp. ...............................   ISRL             11,613        316,356         0.1
    MULTI-INDUSTRY
                                                                                        ------------
                                                                                          52,824,716
                                                                                        ------------
Services (11.3%)
  Telecomunicacoes Brasileiras S.A. (Telebras): ...........   BRZL                 --             --         2.3
    TELEPHONE NETWORKS
    ADR{\/} ...............................................   --               57,481      5,834,322          --
    Common ................................................   --           49,594,258      4,408,329          --
  Telefonos de Mexico, S.A. de C.V. "L" - ADR{\/} .........   MEX             176,363      7,627,700         1.7
    TELEPHONE NETWORKS
  Compania Anonima Nacional Telefonos de Venezuela (CANTV)
   - ADR{\/} ..............................................   VENZ            114,579      5,012,831         1.1
    TELEPHONE NETWORKS
  Pick'n Pay Stores Ltd.: .................................   SAFR                 --             --         0.8
    RETAILERS-OTHER
    Common ................................................   --            1,889,154      2,847,477          --
    "N" ...................................................   --              780,702      1,071,234          --
  Cia de Telecomunicaciones de Chile S.A. - ADR{\/} .......   CHLE            128,402      3,563,156         0.8
    TELEPHONE NETWORKS
  Telefonica del Peru S.A. - ADR{\/} ......................   PERU            155,070      3,062,633         0.7
    TELEPHONE NETWORKS
  Cifra, S.A. de C.V.: ....................................   MEX                  --             --         0.3
    RETAILERS-OTHER
    "C" ...................................................   --              636,000      1,104,431          --
    "A" ...................................................   --              306,000        563,626          --
    "B" ...................................................   --               66,334        132,509          --
  Companhia de Saneamento Basico do Estado de Sao Paulo -
   SABESP-/- ..............................................   BRZL          9,188,127      1,666,932         0.4
    BUSINESS & PUBLIC SERVICES
  Mahanagar Telephone Nigam Ltd. ..........................   IND             233,600      1,627,623         0.4
    TELECOM - OTHER
  Telefonica de Argentina S.A. - ADR{\/} ..................   ARG              55,228      1,553,288         0.3
    TELEPHONE NETWORKS
  Indian Hotels Co., Ltd.: ................................   IND                  --             --         0.2
    LEISURE & TOURISM
    GDR-/- {\/} ...........................................   --               35,200        607,200          --
    Common ................................................   --               25,850        418,541          --
  Migros Turk T.A.S. ......................................   TRKY            848,300        890,294         0.2
    RETAILERS-FOOD
  Portugal Telecom S.A. - Registered ......................   PORT             20,551        843,433         0.2
    TELEPHONE NETWORKS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-30
<PAGE>   1496
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Services (Continued)
  TelecomAsia Corp. - Foreign-/- ..........................   THAI          1,878,600   $    841,164         0.2
    TELEPHONE NETWORKS
  PT Citra Marga Nusaphala Persada ........................   INDO          2,847,000        812,862         0.2
    BUSINESS & PUBLIC SERVICES
  PT Indosat ..............................................   INDO            344,500        779,683         0.2
    TELECOM - OTHER
  Santa Isabel S.A. - ADR{\/} .............................   CHLE             40,666        752,321         0.2
    RETAILERS-FOOD
  Sonae Investimentos-Sociedade Gestora de Participacoes
   Sociais S.A. ...........................................   PORT             18,602        695,194         0.2
    RETAILERS-OTHER
  Danubius Hotel and Spa Rt.-/- ...........................   HGRY             21,940        686,611         0.2
    LEISURE & TOURISM
  Konsortium Perkapalan Bhd. ..............................   MAL             267,000        501,277         0.1
    TRANSPORTATION - SHIPPING
  Pakistan Telecommunications Co., Ltd. - GDR-/- {\/} .....   PAK               6,000        486,000         0.1
    TELEPHONE NETWORKS
  Advanced Info. Service - Foreign ........................   THAI             85,700        460,478         0.1
    WIRELESS COMMUNICATIONS
  Investec-Consultoria Internacional S.A.-/- ..............   PORT             14,612        457,144         0.1
    BROADCASTING & PUBLISHING
  Super Sol Ltd. ..........................................   ISRL            154,231        443,830         0.1
    RETAILERS-FOOD
  BEC World Public Co., Ltd. - Foreign ....................   THAI             77,800        406,418         0.1
    BROADCASTING & PUBLISHING
  Estabelecimentos Jeronimo Martins & Filho, Sociedade
   Gestora de Participacoes Sociais S.A. ..................   PORT              3,854        252,110         0.1
    RETAILERS-OTHER
  Siam Makro Public Co., Ltd. - Foreign-/- ................   THAI            170,000        224,129          --
    RETAILERS-OTHER
  PT Matahari Putra Prima .................................   INDO          1,035,000        201,811          --
    RETAILERS-APPAREL
  Telecomunicacoes de Sao Paulo S.A. (TELESP) Preferred ...   BRZL            495,118        129,349          --
    TELEPHONE NETWORKS
  Guangshen Railway Co., Ltd. .............................   HK              162,000         50,298          --
    TRANSPORTATION - ROAD & RAIL
                                                                                        ------------
                                                                                          51,016,238
                                                                                        ------------
Materials/Basic Industry (10.9%)
  Kimberly-Clark de Mexico, S.A. de C.V. "A" ..............   MEX           1,389,779      6,125,014         1.3
    PAPER/PACKAGING
  SA Iron & Steel Industrial Corp., Ltd. (ISCOR) ..........   SAFR          9,521,806      4,948,964         1.1
    METALS - STEEL
  Sappi Ltd. ..............................................   SAFR            587,133      3,722,985         0.8
    FOREST PRODUCTS
  Helwan Portland Cement Co.-/- ...........................   EGPT            166,230      3,507,942         0.8
    CEMENT
  Suez Cement Co. - Reg S GDR{c} {\/} .....................   EGPT            158,195      3,282,546         0.7
    CEMENT
  Apasco S.A. .............................................   MEX             428,533      2,617,387         0.6
    CEMENT
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-31
<PAGE>   1497
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Materials/Basic Industry (Continued)
  Industrias Penoles S.A. (CP) ............................   MEX             634,803   $  2,527,808         0.6
    METALS - NON-FERROUS
  Ameriyah Cement Co.-/- ..................................   EGPT             94,500      2,390,294         0.5
    CEMENT
  De Beers Centenary AG - Linked Unit{=} ..................   SAFR             78,000      1,861,622         0.4
    MISC. MATERIALS & COMMODITIES
  Torah Portland Cement Co.-/- ............................   EGPT             67,950      1,858,632         0.4
    CEMENT
  Hindalco Industries Ltd. ................................   IND              63,600      1,660,561         0.4
    METALS - NON-FERROUS
  Paints & Chemical Industry: .............................   EGPT                 --             --         0.3
    CHEMICALS
    Common-/- .............................................   --               31,400      1,052,916          --
    144A GDR{.} -/- {\/} ..................................   --               44,000        440,000          --
  Pohang Iron & Steel Co., Ltd. - ADR{\/} .................   KOR              88,870      1,444,138         0.3
    METALS - STEEL
  Turk Sise ve Cam Fabrikalari AS-/- ......................   TRKY         16,264,000      1,396,565         0.3
    GLASS
  North Cairo Flour Mills-/- ..............................   EGPT             32,010      1,393,376         0.3
    MISC. MATERIALS & COMMODITIES
  Pannonplast Rt. .........................................   HGRY             20,732      1,138,897         0.2
    MISC. MATERIALS & COMMODITIES
  Helioplis Housing-/- ....................................   EGPT              8,000      1,094,353         0.2
    BUILDING MATERIALS & COMPONENTS
  Grupo Industrial Minera Mexico "L" ......................   MEX             277,300        823,598         0.2
    METALS - NON-FERROUS
  Maanshan Iron and Steel Co. "H"{*} ......................   CHNA          4,939,000        785,895         0.2
    METALS - STEEL
  Sociedad Quimica y Minera de Chile S.A. - ADR{\/} .......   CHLE             12,200        632,875         0.1
    CHEMICALS
  Israel Chemicals Ltd. ...................................   ISRL            499,158        625,750         0.1
    CHEMICALS
  Cosco Pacific Ltd. ......................................   HK              516,000        600,776         0.1
    PAPER/PACKAGING
  Cimpor-Cimentos de Portugal, SGPS S.A. ..................   PORT             21,964        555,972         0.1
    CEMENT
  PT Aneka Tambang-/- .....................................   INDO          1,364,500        532,117         0.1
    METALS - NON-FERROUS
  Engro Chemicals Pakistan Ltd. ...........................   PAK             137,800        435,263         0.1
    CHEMICALS
  HI Cement Corp. .........................................   PHIL          3,961,000        361,117         0.1
    CEMENT
  Cahya Mata Sarawak Bhd. .................................   MAL             355,000        345,509         0.1
    BUILDING MATERIALS & COMPONENTS
  Siam Cement Co., Ltd. - Foreign .........................   THAI             39,800        338,597         0.1
    CEMENT
  Agros Holding S.A.-/- ...................................   POL              16,123        338,212         0.1
    MISC. MATERIALS & COMMODITIES
  Compania de Minas Buenaventura S.A. - ADR{\/} ...........   PERU             16,000        287,000         0.1
    METALS - NON-FERROUS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-32
<PAGE>   1498
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Materials/Basic Industry (Continued)
  PT Indah Kiat Pulp & Paper Corp.Tbk .....................   INDO            709,000   $    271,553         0.1
    PAPER/PACKAGING
  Fauji Fertilizer Co., Ltd. ..............................   PAK             116,300        258,997         0.1
    MISC. MATERIALS & COMMODITIES
                                                                                        ------------
                                                                                          49,657,231
                                                                                        ------------
Finance (8.3%)
  ABSA Group Ltd. .........................................   SAFR            761,136      4,509,849         1.0
    BANKS-REGIONAL
  Uniao Bancos Brasileiras "A" Preferred ..................   BRZL        142,972,483      3,628,783         0.8
    BANKS-MONEY CENTER
  State Bank of India Ltd.: ...............................   IND                  --             --         0.7
    BANKS-MONEY CENTER
    Common ................................................   --              267,000      1,931,961          --
    GDR{\/} ...............................................   --               71,640      1,318,176          --
  Administradora de Fondos de Pensiones Provida S.A. -
   ADR{\/} ................................................   CHLE            142,366      2,384,631         0.5
    INVESTMENT MANAGEMENT
  Egyptian American Bank SAE-/- ...........................   EGPT             57,663      1,857,088         0.4
    BANKS-MONEY CENTER
  Commercial International Bank: ..........................   EGPT                 --             --         0.4
    BANKS-MONEY CENTER
    144A GDR{.} {\/} ......................................   --               58,000      1,261,500          --
    Common ................................................   --               23,940        553,789          --
  Banco de A. Edwards - ADR{\/} ...........................   CHLE            100,934      1,753,728         0.4
    BANKS-MONEY CENTER
  Credicorp Ltd. - ADR{\/} ................................   PERU             94,800      1,700,475         0.4
    BANKS-MONEY CENTER
  Global Menkul Degerler AS-/- ............................   TRKY         69,103,256      1,601,182         0.4
    SECURITIES BROKER
  Banco LatinoAmericano de Exportaciones S.A. (Bladex)
   "E"{\/} ................................................   PAN              37,631      1,495,832         0.3
    OTHER FINANCIAL
  Turkiye Is Bankasi (Isbank) "C" .........................   TRKY         15,098,500      1,461,119         0.3
    BANKS-MONEY CENTER
  Banco Frances del Rio de la Plata S.A. - ADR{\/} ........   ARG              48,968      1,205,837         0.3
    BANKS-MONEY CENTER
  Aksigorta A.S. ..........................................   TRKY         15,080,000      1,171,573         0.3
    INSURANCE - MULTI-LINE
  Liberty Life Association of Africa Ltd. .................   SAFR             37,400        933,056         0.2
    INSURANCE-LIFE
  BPI-SGPS S.A. ...........................................   PORT             40,637        914,217         0.2
    BANKS-MONEY CENTER
  Yapi ve Kredi Bankasi AS ................................   TRKY         29,106,092        888,639         0.2
    BANKS-REGIONAL
  Kookmin Bank - GDR-/- {\/} ..............................   KOR             128,480        822,272         0.2
    BANKS-MONEY CENTER
  Ayala Land, Inc. "B" ....................................   PHIL          1,723,800        675,278         0.1
    REAL ESTATE
  Bank Leumi Le - Israel ..................................   ISRL            406,668        624,411         0.1
    BANKS-REGIONAL
  Metroplex Bhd. ..........................................   MAL           1,751,000        610,141         0.1
    REAL ESTATE
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-33
<PAGE>   1499
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Finance (Continued)
  Turkiye Garanti Bankasi AS ..............................   TRKY         11,565,600   $    599,025         0.1
    BANKS-REGIONAL
  Bank Hapoalim Ltd. ......................................   ISRL            244,830        579,448         0.1
    BANKS-REGIONAL
  Muslim Commercial Bank Ltd.-/- ..........................   PAK             546,500        558,844         0.1
    BANKS-MONEY CENTER
  JSC Kazkommertsbank Co. - GDR-/- {\/} (.) ...............   KAZ              26,600        558,600         0.1
    BANKS-REGIONAL
  SM Prime Holdings, Inc. .................................   PHIL          2,664,600        470,670         0.1
    REAL ESTATE
  Thai Farmers Bank Public Co., Ltd. - Foreign ............   THAI            166,400        455,323         0.1
    BANKS-REGIONAL
  Bank Slaski S.A. ........................................   POL               7,316        426,767         0.1
    BANKS-MONEY CENTER
  Banco Santander Chile - ADR{\/} .........................   CHLE             28,100        365,300         0.1
    BANKS-REGIONAL
  Land and House Public Co., Ltd. - Foreign ...............   THAI            392,300        341,555         0.1
    REAL ESTATE
  Belle Corp.-/- ..........................................   PHIL          3,297,000        300,581         0.1
    REAL ESTATE
  Malaysian Assurance Alliance Bhd. .......................   MAL             116,200        209,432          --
    INSURANCE - MULTI-LINE
  Bangkok Bank Public Co., Ltd. - Foreign .................   THAI             56,400        196,418          --
    BANKS-MONEY CENTER
  C & P Homes, Inc. .......................................   PHIL          1,382,000        104,339          --
    REAL ESTATE
                                                                                        ------------
                                                                                          38,469,839
                                                                                        ------------
Consumer Non-Durables (6.5%)
  South African Breweries Ltd. ............................   SAFR            226,892      6,037,874         1.3
    BEVERAGES - ALCOHOLIC
  Fomento Economico Mexicano, S.A. de C.V. "B" ............   MEX             738,356      5,217,126         1.1
    BEVERAGES - ALCOHOLIC
  Gruma S.A. "B"-/- .......................................   MEX             883,073      3,468,838         0.8
    FOOD
  Companhia Cervejaria Brahma Preferred ...................   BRZL          4,662,721      2,918,430         0.6
    BEVERAGES - ALCOHOLIC
  C.G. Smith Foods Ltd. ...................................   SAFR            174,000      2,496,050         0.5
    FOOD
  Eastern Tobacco Co.-/- ..................................   EGPT             90,785      2,276,300         0.5
    TOBACCO
  A-Ahram Beverages Co. S.A.E. - 144A GDR{.} -/- {\/} .....   EGPT             62,514      1,719,135         0.4
    BEVERAGES - ALCOHOLIC
  Embotelladora Andina S.A.: ..............................   CHLE                 --             --         0.4
    BEVERAGES - NON-ALCOHOLIC
    "B" ADR{\/} ...........................................   --               41,497        850,689          --
    "A" ADR{\/} ...........................................   --               34,400        825,600          --
  Hindustan Lever Ltd. ....................................   IND              40,650      1,438,245         0.3
    PERSONAL CARE/COSMETICS
  San Miguel Corp. "B" ....................................   PHIL            851,600        958,353         0.2
    BEVERAGES - ALCOHOLIC
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-34
<PAGE>   1500
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Consumer Non-Durables (Continued)
  Compania Cervecerias Unidas S.A. ADR{\/} ................   CHLE             36,800   $    897,000         0.2
    BEVERAGES - ALCOHOLIC
  Zaklady Piwowarskie w Zywcu S.A. (Zywiec) ...............   POL               4,461        333,293         0.1
    BEVERAGES - ALCOHOLIC
  Reliance Industries Ltd. - GDR-/- {\/} (.) ..............   IND              12,100        255,008         0.1
    TEXTILES & APPAREL
  Kuala Lumpur Kepong Bhd. ................................   MAL              60,000        144,187          --
    OTHER CONSUMER GOODS
  La Tondena Distillers, Inc. .............................   PHIL            137,900         84,469          --
    BEVERAGES - ALCOHOLIC
                                                                                        ------------
                                                                                          29,920,597
                                                                                        ------------
Technology (2.3%)
  Asustek Computer Inc. - Reg. S GDR-/- {c} {\/} ..........   TWN             830,248     10,149,782         2.2
    COMPUTERS & PERIPHERALS
  Clal Electronics Industries Ltd. ........................   ISRL              2,754        399,041         0.1
    SEMICONDUCTORS
  LG Information & Communication ..........................   KOR               2,728        156,860          --
    TELECOM TECHNOLOGY
                                                                                        ------------
                                                                                          10,705,683
                                                                                        ------------
Capital Goods (1.6%)
  New World Infrastructure Ltd.-/- ........................   HK            1,076,000      2,129,728         0.5
    CONSTRUCTION
  Cheung Kong Infrastructure Holdings .....................   HK              643,000      1,663,648         0.4
    CONSTRUCTION
  United Engineers Ltd. ...................................   MAL             428,000      1,015,680         0.2
    CONSTRUCTION
  Irkutskenergo - ADR-/- {\/} .............................   RUS              68,712        927,612         0.2
    ELECTRICAL PLANT/EQUIPMENT
  Daewoo Heavy Industries .................................   KOR              99,000        577,500         0.1
    INDUSTRIAL COMPONENTS
  Elektrim Spolka Akcyjna S.A. ............................   POL              58,947        555,592         0.1
    ELECTRICAL PLANT/EQUIPMENT
  ECI Telecommunications Ltd.{\/} .........................   ISRL             16,200        447,525         0.1
    TELECOM EQUIPMENT
  Sungmi Telecom Electronics Co. ..........................   KOR                 184          8,999          --
    TELECOM EQUIPMENT
                                                                                        ------------
                                                                                           7,326,284
                                                                                        ------------
Health Care (1.6%)
  Egypt International Pharmaceutical Industries Co.
   (EIPICO) ...............................................   EGPT             33,200      2,402,118         0.5
    PHARMACEUTICALS
  Richter Gedeon Rt. - Reg S GDR{c} {\/} ..................   HGRY             17,552      1,632,336         0.4
    PHARMACEUTICALS
  Ranbaxy Laboratories Ltd. ...............................   IND              79,850      1,555,391         0.3
    MEDICAL TECHNOLOGY & SUPPLIES
  Teva Pharmaceutical Industries Ltd. .....................   ISRL             25,548      1,189,452         0.3
    PHARMACEUTICALS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-35
<PAGE>   1501
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                           COUNTRY       SHARES         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Health Care (Continued)
  PT Kalbe Farma - Foreign ................................   INDO            479,000   $    293,538         0.1
    PHARMACEUTICALS
                                                                                        ------------
                                                                                           7,072,835
                                                                                        ------------
Consumer Durables (1.4%)
  Arcelik AS ..............................................   TRKY         12,233,800      1,367,315         0.3
    APPLIANCES & HOUSEHOLD
  Bajaj Auto Ltd. .........................................   IND              79,200      1,261,094         0.3
    AUTOMOBILES
  Qingling Motors Co., Ltd.{*} ............................   CHNA          1,671,000      1,091,662         0.2
    AUTOMOBILES
  Tata Engineering and Locomotive Co., Ltd.: ..............   IND                  --             --         0.2
    AUTOMOBILES
    GDR{\/} ...............................................   --               48,000        499,200          --
    Common ................................................   --               25,000        219,069          --
  Samsung Electronics Co. - 144A GDR{.} -/- {\/} ..........   KOR              34,850        705,713         0.2
    CONSUMER ELECTRONICS
  PT Astra International, Inc. ............................   INDO            785,000        584,923         0.1
    AUTOMOBILES
  Mahindra & Mahindra Ltd. ................................   IND              43,300        430,653         0.1
    AUTOMOBILES
                                                                                        ------------
                                                                                           6,159,629
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $359,966,965) ..............                              312,881,526        68.5
                                                                                        ------------       -----
<CAPTION>
 
                                                                          PRINCIPAL        VALUE         % OF NET
FIXED INCOME INVESTMENTS                                     CURRENCY      AMOUNT         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Government & Government Agency Obligations (10.1%)
  Argentina (1.2%)
    Republic of Argentina:
      Global Bond, 11.375% due 1/30/17 ....................   USD           2,741,000      2,617,655         0.6
      Par Bond Series L, 5.5% due 3/31/23++ ...............   USD           2,690,000      1,830,881         0.4
      Global Bond, 11% due 10/9/06 ........................   USD             720,000        713,700         0.2
  Brazil (0.4%)
    Republic of Brazil, Par Z-L Bond, 5.25% due
     4/15/24++ ............................................   USD           3,020,000      1,996,975         0.4
  Bulgaria (2.1%)
    Republic of Bulgaria:
      Front Loaded Interest Reduction Bond Series A, 2.25%
       due 7/28/12++ ......................................   USD           9,017,000      4,914,265         1.1
      Interest Arrears Bond, 6.6875% due 7/28/11 -
       Euro+ ..............................................   USD           7,099,000      4,663,156         1.0
  Ecuador (0.4%)
    Republic of Ecuador, Discount Bond, 6.6875% due 2/28/25
     - Euro+ ..............................................   USD           2,845,000      1,998,613         0.4
  Mexico (2.2%)
    United Mexican States:
      Discount Bond Series A, 6.6925% due 12/31/19+ +/+ ...   USD           6,110,000      5,533,369         1.2
      Global Bond, 9.875% due 1/15/07 .....................   USD           1,615,000      1,633,169         0.4
      Global Bond, 11.375% due 9/15/16 ....................   USD           1,455,000      1,547,756         0.3
      Global Bond, 11.5% due 5/15/26 ......................   USD           1,421,000      1,534,680         0.3
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-36
<PAGE>   1502
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                          PRINCIPAL        VALUE         % OF NET
FIXED INCOME INVESTMENTS                                     CURRENCY      AMOUNT         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Government & Government Agency Obligations (Continued)
  Panama (0.6%)
    Republic of Panama, Interest Reduction Bond, 3.75% due
     7/17/14++ ............................................   USD           3,536,000   $  2,486,250         0.6
  Peru (0.3%)
    Republic of Peru, Past Due Interest Bond, 4% due
     3/7/17++ .............................................   USD           2,533,000      1,443,810         0.3
  South Africa (0.8%)
    Republic of South Africa, 13% due 8/31/10{j} ..........   ZAR          20,173,000      3,807,589         0.8
  United States (1.6%)
    United States Treasury:
      6.375% due 8/15/27 ..................................   USD           4,032,000      4,149,180         0.9
      5.875% due 9/30/02 ..................................   USD           3,033,000      3,049,587         0.7
  Venezuela (0.5%)
    Republic of Venezuela, Par Bond Series A, 6.75% due
     3/31/20+/+ ...........................................   USD           2,543,000      2,128,173         0.5
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $49,316,056) .............................................                               46,048,808
                                                                                        ------------
Sovereign Debt (4.9%)
  Russia (4.9%)
    Bank for Foreign Economic Affairs (Vnesheconombank)
     Loan Agreement:
      Assignment ** -/- {j} ...............................   USD          22,635,000     20,131,003         4.4
      Participation ** -/- ................................   DEM           4,186,000      2,227,112         0.5
                                                                                        ------------
Total Sovereign Debt (cost $12,006,889) ...................                               22,358,115
                                                                                        ------------
Corporate Bonds (3.2%)
  Argentina (0.5%)
    Supermercados Norte, 10.875% due 2/9/04 - 144A{.} .....   USD           1,193,000      1,109,490         0.3
    Acindar Industrial Argentina, 11.25% due 2/15/04 ......   USD             661,000        654,390         0.2
  Brazil (0.2%)
    RBS Participacoes S.A., 11% due 4/1/07 - 144A{.} ......   USD           1,107,000      1,079,325         0.2
  China (0.6%)
    Panda Global Energy Co., 12.5% due 4/15/04{.} .........   USD           2,139,000      2,010,660         0.4
    Greater Beijing First, 9.5% due 6/15/07 - 144A{.} .....   USD             960,000        876,000         0.2
  Dominican Republic (0.1%)
    Tricom S.A., 11.375% due 9/1/04 - 144A{.} .............   USD             652,000        645,480         0.1
  Hong Kong (0.1%)
    Road King Infrastructure, 9.5% due 7/15/07 -
     144A{.} ..............................................   USD             700,000        652,750         0.1
  India (0.2%)
    Tata Electric Co., 8.5% due 8/19/17 - 144A{.} .........   USD           1,093,000        954,189         0.2
  Indonesia (0.1%)
    Pratama Datakom Asia BV, 12.75% due 7/15/05 -
     144A{.} ..............................................   USD             653,000        574,640         0.1
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-37
<PAGE>   1503
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                          PRINCIPAL        VALUE         % OF NET
FIXED INCOME INVESTMENTS                                     CURRENCY      AMOUNT         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
Corporate Bonds (Continued)
  Mexico (0.8%)
    Petroleos Mexicanos:
      9.5% due 9/15/27 - 144A{.} ..........................   USD           2,104,000   $  1,930,420         0.4
      8.85% due 9/15/07 - 144A{.} .........................   USD           1,050,000      1,009,313         0.2
    Copamex Industrias S.A., 11.375% due 4/30/04 -
     144A{.} ..............................................   USD             996,000      1,088,130         0.2
  Russia (0.4%)
    Lukinter Finance BV Convertible, 3.5% due 5/6/02 -
     144A{.} ..............................................   USD             851,000      1,144,595         0.3
    Mosenergo Finance BV, 8.375% due 10/9/02 - 144A{.} ....   USD             555,000        488,400         0.1
  South Africa (0.2%)
    Eskom, 11% due 6/1/08 .................................   ZAR           4,990,000        826,527         0.2
                                                                                        ------------
Total Corporate Bonds (cost $15,533,169) ..................                               15,044,309
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $76,856,114) .........                               83,451,232        18.2
                                                                                        ------------       -----
 
<CAPTION>
 
                                                                         UNDERLYING
                                                                           NOMINAL         VALUE         % OF NET
OPTIONS                                                      CURRENCY      AMOUNT         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
  Federal Republic of Brazil Debt Conversion Bond, Call
   Option, strike 82.25, expires 1/12/98 (cost
   $312,660) ..............................................   USD          17,370,000        126,732          --
                                                                                        ------------       -----
    GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS
<CAPTION>
 
                                                                           NO. OF          VALUE         % OF NET
RIGHTS                                                       COUNTRY       RIGHTS         (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
  PT Matahari Putra Prima Rights, expire 12/3/97 ..........   INDO          2,070,000        115,320          --
    RETAILERS-APPAREL
  Telecomunicacoes de Sao Paulo S.A. (TELESP) Rights,
   expire 11/12/97 ........................................   BRZL            257,975            234          --
    TELEPHONE NETWORKS
                                                                                        ------------       -----
 
TOTAL RIGHTS (cost $0) ....................................                                  115,554          --
                                                                                        ------------       -----
<CAPTION>
 
                                                                           NO. OF          VALUE         % OF NET
WARRANTS                                                     COUNTRY      WARRANTS        (NOTE 1)        ASSETS
- -----------------------------------------------------------  --------   -------------   ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
  Belle Corp. Warrants, expire 2002 (cost $0) .............   PHIL            659,400            122          --
                                                                                        ------------       -----
    OIL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-38
<PAGE>   1504
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- -----------------------------------------------------------                             ------------   -------------
<S>                                                          <C>        <C>             <C>            <C>
  Dated October 31, 1997, with State Street Bank & Trust
   Co., due November 3, 1997, for an effective yield of
   5.57%, collateralized by $34,850,000 U.S. Treasury Bond,
   8.875% due 8/15/17 (market value of collateral is
   $45,720,975, including accrued interest).
   (cost $44,816,933)  ....................................                             $ 44,816,933         9.8
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $481,952,672)  * ..................                              441,392,099        96.5
Other Assets and Liabilities ..............................                               15,987,089         3.5
                                                                                        ------------       -----
 
NET ASSETS ................................................                             $457,379,188       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
        +X+  The GT Global Developing Markets Fund (the "Fund") has invested in
             the GT Global Taiwan Fund, a fund managed by LGT Asset Management
             Ltd. who is an affiliate of the Fund's manager, Chancellor LGT
             Asset Management, Inc.
         **  Underlying loan agreement currently in default.
        {j}  All or part of the Fund's holdings in this security is segregated
             as collateral for when-issued securities. See Note 1 to the
             Financial Statements.
         ++  The coupon rate shown on step-up coupon bond represents the rate at
             period end.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
        +/+  Issued with detachable warrants or value recovery rights. The
             current market value of each warrant or right is zero.
        {*}  Security denominated in Hong Kong Dollars.
        {=}  Each Centenary Linked Unit consists of 1 registered deferred share
             of De Beers Consolidated Mine + 1 Centenary Depositary Receipt.
        (.)  Restricted securities: At October 31, 1997, the Fund owned the
             following restricted securities constituting 0.2% of net assets
             which may not be publicly sold without registration under the
             Securities Act of 1933 (Note 1). Additional information on the
             securities is as follows:
 
<TABLE>
<CAPTION>
                                 ACQUISITION                              MARKET VALUE
DESCRIPTION                         DATE        SHARES        COST          PER SHARE
- ------------------------------  -------------  ---------  -------------  ---------------
<S>                             <C>            <C>        <C>            <C>
JSC Kazkommertsbank Co. -
 GDR..........................     7/15/97        26,600   $   500,080      $   21.00
Reliance Industries - GDR.....     5/20/94        12,100       223,850          21.08
</TABLE>
 
          *  For Federal income tax purposes, cost is $483,269,089 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  26,262,525
                 Unrealized depreciation:           (68,139,515)
                                                  -------------
                 Net unrealized depreciation:     $ (41,876,990)
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviations:
    ADR--American Depository Receipt
    GDR--Global Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-39
<PAGE>   1505
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {D}
                                        -------------------------------------------
                                                 FIXED INCOME,
                                                   RIGHTS &      SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS       & OTHER     TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Argentina (ARG/ARS) ..................    1.2         1.7                       2.9
Brazil (BRZL/BRL) ....................    7.6         0.6                       8.2
Bulgaria (BUL/LEV) ...................                2.1                       2.1
Chile (CHLE/CLP) .....................    4.8                                   4.8
China (CHNA/RMB) .....................    0.4         0.6                       1.0
Dominican Republic (DR/USD) ..........                0.1                       0.1
Ecuador (ECDR/ECS) ...................                0.4                       0.4
Egypt (EGPT/EGP) .....................    5.7                                   5.7
Hong Kong (HK/HKD) ...................    2.0         0.1                       2.1
Hungary (HGRY/HUF) ...................    1.2                                   1.2
India (IND/INR) ......................    3.8         0.2                       4.0
Indonesia (INDO/IDR) .................    2.9         0.1                       3.0
Ireland (IRE/IEP) ....................    0.4                                   0.4
Israel (ISRL/ILS) ....................    1.2                                   1.2
Kazakhstan (KAZ/KTS) .................    0.1                                   0.1
Korea (KOR/KRW) ......................    1.0                                   1.0
Malaysia (MAL/MYR) ...................    0.9                                   0.9
Mexico (MEX/MXN) .....................    8.1         3.0                      11.1
Pakistan (PAK/PKR) ...................    0.9                                   0.9
Panama (PAN/PND) .....................    0.3         0.6                       0.9
Peru (PERU/PES) ......................    1.2         0.3                       1.5
Philippines (PHIL/PHP) ...............    0.8                                   0.8
Poland (POL/PLZ) .....................    0.4                                   0.4
Portugal (PORT/PTE) ..................    0.9                                   0.9
Russia (RUS/SUR) .....................    2.8         5.3                       8.1
South Africa (SAFR/ZAR) ..............   10.5         1.0                      11.5
Taiwan (TWN/TWD) .....................    2.3                                   2.3
Thailand (THAI/THB) ..................    1.2                                   1.2
Turkey (TRKY/TRL) ....................    2.4                                   2.4
United Kingdom (UK/GBP) ..............    0.6                                   0.6
United States (US/USD) ...............                1.6           13.3       14.9
Venezuela (VENZ/VEB) .................    2.1         0.5                       2.6
Zimbabwe (ZBBW/ZWD) ..................    0.8                                   0.8
                                        ------      -----          -----      -----
Total  ...............................   68.5        18.2           13.3      100.0
                                        ------      -----          -----      -----
                                        ------      -----          -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $457,379,188.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                OCTOBER 31, 1997
 
<TABLE>
<CAPTION>
                                           MARKET VALUE     CONTRACT    DELIVERY    UNREALIZED
CONTRACTS TO SELL:                        (U.S. DOLLARS)      PRICE       DATE    (DEPRECIATION)
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Deutsche Marks..........................     1,681,647         1.84950  11/06/97   $  (113,656)
Indonesian Rupiahs......................     1,114,206      3610.00000  11/05/97        (6,173)
South African Rands.....................     3,338,977         5.04500   1/30/98       (73,645)
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $5,941,356)...................     6,134,830                                (193,474)
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS A
 PERCENTAGE OF NET ASSETS IS 1.34%.
  Total Open Forward Foreign Currency
   Contracts............................                                           $  (193,474)
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-40
<PAGE>   1506
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                               <C>         <C>
Assets:
  Investments in securities, at value (cost $481,952,672) (Note 1)..........................  $441,392,099
  U.S. currency.................................................................  $1,159,740
  Foreign currencies (cost $14,108,834).........................................  14,122,604   15,282,344
                                                                                  ----------
  Receivable for securities sold............................................................   13,029,046
  Interest receivable.......................................................................    1,251,368
  Dividends receivable......................................................................      366,109
  Unamortized organizational costs (Note 1).................................................       85,312
  Miscellaneous receivable..................................................................       11,894
                                                                                              -----------
    Total assets............................................................................  471,418,172
                                                                                              -----------
Liabilities:
  Payable for securities purchased..........................................................   12,905,923
  Payable for investment management and administration fees (Note 2)........................      722,480
  Payable for open forward foreign currency contracts (Note 1)..............................      193,474
  Payable for professional fees.............................................................       39,732
  Payable for printing and postage expenses.................................................       37,656
  Payable for custodian fees................................................................       30,062
  Payable for Directors' fees and expenses (Note 2).........................................       15,494
  Payable for transfer agent fees (Note 2)..................................................        5,964
  Payable for fund accounting fees (Note 2).................................................        4,387
  Payable for registration and filing fees..................................................        2,127
  Other accrued expenses....................................................................       81,685
                                                                                              -----------
    Total liabilities.......................................................................   14,038,984
                                                                                              -----------
Net assets..................................................................................  $457,379,188
                                                                                              -----------
                                                                                              -----------
Class A:
Net asset value per share ($457,379,188 DIVIDED BY 36,416,667 shares outstanding)...........  $     12.56
                                                                                              -----------
                                                                                              -----------
Net assets consist of:
  Paid in capital (Note 4)..................................................................  $545,103,263
  Undistributed net investment income.......................................................    8,645,635
  Accumulated net realized loss on investments and foreign currency transactions............  (55,602,092)
  Net unrealized depreciation on translation of assets and liabilities in foreign
   currencies...............................................................................     (207,045)
  Net unrealized depreciation of investments................................................  (40,560,573)
                                                                                              -----------
Total -- representing net assets applicable to capital shares outstanding...................  $457,379,188
                                                                                              -----------
                                                                                              -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-41
<PAGE>   1507
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                            STATEMENTS OF OPERATIONS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                               TEN MONTHS
                                                                                  ENDED       YEAR ENDED
                                                                               OCTOBER 31,   DECEMBER 31,
                                                                                  1997           1996
                                                                              -------------  -------------
<S>                                                                           <C>            <C>
Investment income: (Note 1)
  Interest income...........................................................   $11,436,242    $20,641,051
  Dividend income (net of foreign withholding tax of $365,717 and $420,409,
   respectively)............................................................     5,481,523      7,351,830
  Other income..............................................................            --         74,487
                                                                              -------------  -------------
    Total investment income.................................................    16,917,765     28,067,368
                                                                              -------------  -------------
Expenses:
  Investment management fees (Note 2).......................................     6,274,911      6,673,159
  Administration fees (Note 2)..............................................     1,108,912      1,191,681
  Custodian fees (Note 1)...................................................       317,289        332,166
  Fund accounting fees (Note 2).............................................       108,484        119,321
  Professional fees.........................................................        92,091        101,382
  Printing and postage expenses.............................................        33,504         65,880
  Transfer agent fees (Note 2)..............................................        63,520        190,834
  Amortization of organization costs (Note 1)...............................        58,930         70,949
  Directors' fees and expenses (Note 2).....................................        25,536         38,064
  Registration and filing fees..............................................            --          3,000
  Other expenses............................................................       119,278         37,139
                                                                              -------------  -------------
    Total expenses before reductions........................................     8,202,455      8,823,575
      Expense reductions (Notes 1 & 5)......................................      (374,173)      (162,760)
                                                                              -------------  -------------
    Total net expenses......................................................     7,828,282      8,660,815
                                                                              -------------  -------------
Net investment income.......................................................     9,089,483     19,406,553
                                                                              -------------  -------------
Net realized and unrealized gain (loss) on investments and foreign
  currencies: (Note 1)
  Net realized gain on investments..........................................    46,804,651      1,845,666
  Net realized loss on foreign currency transactions........................    (1,151,351)      (900,512)
                                                                              -------------  -------------
    Net realized gain during the periods....................................    45,653,300        945,154
                                                                              -------------  -------------
  Net change in unrealized appreciation (depreciation) on translation of
   assets and liabilities in foreign currencies.............................      (297,303)        91,835
  Net change in unrealized appreciation (depreciation) of investments.......  (101,078,671)    78,628,364
                                                                              -------------  -------------
    Net unrealized appreciation (depreciation) during the periods...........  (101,375,974)    78,720,199
                                                                              -------------  -------------
Net realized and unrealized gain (loss) on investments and foreign
 currencies.................................................................   (55,722,674)    79,665,353
                                                                              -------------  -------------
Net increase (decrease) in net assets resulting from operations.............   $(46,633,191)  $99,071,906
                                                                              -------------  -------------
                                                                              -------------  -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-42
<PAGE>   1508
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                      STATEMENTS OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
 
                                                                    TEN MONTHS
                                                                       ENDED      YEAR ENDED DECEMBER 31,
                                                                    OCTOBER 31,   ------------------------
                                                                       1997          1996         1995
                                                                   -------------  -----------  -----------
<S>                                                                <C>            <C>          <C>
Increase (Decrease) in net assets
Operations:
  Net investment income..........................................   $ 9,089,483   $19,406,553  $26,375,900
  Net realized gain (loss) on investments and foreign currency
   transactions..................................................    45,653,300       945,154  (78,379,558)
  Net change in unrealized appreciation (depreciation) on
   translation of assets and liabilities in foreign currencies...      (297,303)       91,835       (3,021)
  Net change in unrealized appreciation (depreciation) of
   investments...................................................  (101,078,671)   78,628,364   47,401,359
                                                                   -------------  -----------  -----------
    Net increase (decrease) in net assets resulting from
     operations..................................................   (46,633,191)   99,071,906   (4,605,320)
                                                                   -------------  -----------  -----------
Distributions to shareholders: (Note 1)
  From net investment income.....................................            --   (17,407,047) (26,292,834)
                                                                   -------------  -----------  -----------
Capital share transactions: (Note 4)
  Adjustment to estimate of initial offering expenses............            --            --      373,757
                                                                   -------------  -----------  -----------
    Total increase (decrease) in net assets......................   (46,633,191)   81,664,859  (30,524,397)
Net assets:
  Beginning of period............................................   504,012,379   422,347,520  452,871,917
                                                                   -------------  -----------  -----------
  End of period *................................................   $457,379,188  $504,012,379 $422,347,520
                                                                   -------------  -----------  -----------
                                                                   -------------  -----------  -----------
 * Includes undistributed net investment income (loss) of........   $ 8,645,635   $   363,782  $    (7,034)
                                                                   -------------  -----------  -----------
                                                                   -------------  -----------  -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-43
<PAGE>   1509
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements and market price
data for the shares.
 
<TABLE>
<CAPTION>
                                                                               JANUARY 11, 1994
                                                                                (COMMENCEMENT
                                          TEN MONTHS         YEAR ENDED         OF OPERATIONS)
                                             ENDED          DECEMBER 31,              TO
                                          OCTOBER 31,  ----------------------    DECEMBER 31,
                                             1997         1996        1995           1994
                                          -----------  ----------  ----------  ----------------
<S>                                       <C>          <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $   13.84   $   11.60   $   12.44      $   15.00
                                          -----------  ----------  ----------  ----------------
Income from investment operations:
  Net investment income.................        0.25        0.53        0.72           0.35
  Net realized and unrealized gain
   (loss) on investments................       (1.53)       2.19       (0.84)         (2.46)
                                          -----------  ----------  ----------  ----------------
    Net increase (decrease) from
     investment operations..............       (1.28)       2.72       (0.12)         (2.11)
                                          -----------  ----------  ----------  ----------------
Distributions to shareholders:
  From net investment income............          --       (0.48)      (0.72)         (0.35)
  From net realized gain on
   investments..........................          --          --          --          (0.10)
                                          -----------  ----------  ----------  ----------------
    Total distributions.................          --       (0.48)      (0.72)         (0.45)
                                          -----------  ----------  ----------  ----------------
Net asset value, end of period..........   $   12.56   $   13.84   $   11.60      $   12.44
                                          -----------  ----------  ----------  ----------------
                                          -----------  ----------  ----------  ----------------
Market value, end of period.............   $   11.81   $   11.63   $    9.75      $    9.75
                                          -----------  ----------  ----------  ----------------
                                          -----------  ----------  ----------  ----------------
 
Total investment return (based on market
 value).................................        1.62%(b)     24.18%      6.60%       (32.16)% (b)
 
Total investment return (based on net
 asset value)...........................       (9.25)%(b)     23.59%     (0.95)%       (14.07)% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $ 457,379   $ 504,012   $ 422,348      $ 452,872
Ratio of net investment income to
 average net assets.....................        2.03%(a)      4.07%      6.33%         2.75 % (a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................        1.75%(a)      1.82%      1.77%         2.01 % (a)
  Without expense reductions............        1.83%(a)      1.85%      1.80%         2.01 % (a)
Portfolio turnover rate.................         184%(a)       138%        75%           56 %
Average commission rate per share paid
 on portfolio transactions..............   $  0.0023   $  0.0022         N/A            N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
N/A  Not Applicable.
 
These financial highlights provide per share financial information of G.T.
Global Developing Markets Fund, Inc. ("Predecessor Fund") for the periods
shown. The fees and expenses of the Fund differ from those of the
Predecessor Fund (See Note 2).
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-44
<PAGE>   1510
                       GT GLOBAL DEVELOPING MARKETS FUND
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Developing Markets Fund ("Fund") is a separate series of G.T.
Investment Funds, Inc. ("Company"). The Company is organized as a Maryland
corporation and is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as an open-end management investment company. The Company
has thirteen series of shares in operation, each series corresponding to a
distinct portfolio of investments.
 
On October 31, 1997, at the close of business, the Fund acquired the assets and
assumed the liabilities of G.T. Global Developing Markets Fund, Inc., a Maryland
corporation registered under the 1940 Act as a non-diversified closed-end
management investment company ("Predecessor Fund"), in exchange for Class A
shares of the Fund in a tax-free reorganization of the Predecessor Fund.
Shareholders of the Predecessor Fund approved the reorganization on October 20,
1997. Prior to October 28, 1997 the Closed-End Fund's shares traded on the New
York Stock Exchange. As a result of the reorganization of the Predecessor Fund
into the Fund, the Fund has a fiscal year end of October 31 to coincide with the
fiscal years of the other series of the Company. Class A shares of the Fund
issued in connection with the reorganization of the Predecessor Fund will be
subject to a 2% redemption fee for redemptions until May 1, 1998. The financial
statements presented are the financial statements for the Predecessor Fund.
 
Commencing November 1, 1997, the Fund began to offer Class A, Class B, and
Advisor Class shares, each of which has equal rights as to assets and voting
privileges except that Class A and Class B each has exclusive voting rights with
respect to its distribution plan. Investment income, realized and unrealized
capital gains and losses, and the common expenses of the Fund are allocated on a
pro rata basis to each class based on the relative net assets of each class to
the total net assets of the Fund. Each class of shares differs in its respective
service and distribution expenses, and may differ in its transfer agent,
registration, and certain other class-specific fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund in the preparation of the financial
statements.
 
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. (the "Manager") to be the primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
asked prices for securities or, if such prices are not available, at prices for
securities of comparative maturity, quality and type; however, when the Manager
deems it appropriate, prices obtained for the day of valuation from a bond
pricing service will be used. Short-term investments with a maturity of 60 days
or less are valued at amortized cost, adjusted for foreign exchange translation
and market fluctuation, if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Fund's Board of Directors.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Fund's Board of Directors.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, other assets and liabilities
are recorded in the books and records of the Fund after translation to U.S.
dollars based on the exchange rates on that day. The cost of each security is
determined using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when earned or incurred.
 
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
existing from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
 
Reported net realized foreign exchange gains and losses arise from sales and
maturities of short-term investments, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from
 
                                     FS-45
<PAGE>   1511
                       GT GLOBAL DEVELOPING MARKETS FUND
 
changes in the value of assets and liabilities other than investments in
securities at year end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which the value, including accrued
interest, is at least equal to the amount to be repaid to the Fund under each
agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. The Fund could be exposed to risk if a counterparty is
unable to meet the terms of a contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities or to hedge against adverse
fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on a traded exchange is valued at its last bid
price, or, in the case of an over-the-counter option, is valued at the average
of the last bid prices obtained from brokers, unless a quotation from only one
broker is available, in which case only that broker's price will be used. If an
option expires on its stipulated expiration date or if the Fund enters into a
closing purchase transaction, a gain or loss is realized without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option is extinguished. If a written call option is exercised, a gain or
loss is realized from the sale of the underlying security and the proceeds of
the sale are increased by the premium originally received. If a written put
option is exercised, the cost of the underlying security purchased would be
decreased by the premium originally received. The Fund can write options only on
a covered basis, which, for a call, requires that the Fund hold the underlying
security, and, for a put, requires the Fund to set aside cash, U.S. government
securities or other liquid securities in an amount not less than the exercise
price or otherwise provide adequate cover at all times while the put option is
outstanding. The Fund may use options to manage its exposure to the stock and
bond markets and to fluctuations in currency values or interest rates.
 
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock and bond
markets and to fluctuations in currency values or interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to collection of income on securities, income is
recorded net of all withholding tax with any rebate recorded when received. The
Fund may trade securities on other than normal settlement terms. This may
increase the market risk if the other party to the transaction fails to deliver
and causes the Fund to subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1997, stocks with an aggregate value of approximately $29,571,465
were on loan to brokers. The loans were secured by cash collateral of
$33,239,507 received by the Fund. For international
 
                                     FS-46
<PAGE>   1512
                       GT GLOBAL DEVELOPING MARKETS FUND
 
securities, cash collateral is received by the Fund against loaned securities in
an amount at least equal to 105% of the market value of the loaned securities at
the inception of each loan. This collateral must be maintained at not less than
103% of the market value of the loaned securities during the period of the loan.
For domestic securities, cash collateral is received by the Fund against loaned
securities in an amount at least equal to 102% of the market value of the loaned
securities at the inception of each loan. This collateral must be maintained at
not less than 100% of the market value of the loaned securities during the
period of each loan. For the period ended October 31, 1997, the Fund received
securities lending income of $302,308 which was used to reduce the Fund's
custodian fees and administrative expenses.
 
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, and unrealized appreciation of securities held, or excise tax on income
and capital gains. The Fund currently has a capital loss carryforward of
$54,472,976 which expires in 2003.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 and timing differences.
 
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the Fund in connection with its organization, its
registration with the Securities and Exchange Commission and with various states
aggregated $353,775. These expenses are being amortized on a straightline basis
over a five-year period.
 
(L) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
 
(M) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
 
(N) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult. At the end of the period, restricted
securities (excluding 144A issues) are shown at the end of the Fund's Portfolio
of Investments.
 
(O) SECURITIES PURCHASED ON A WHEN-ISSUED OR FORWARD COMMITMENT BASIS
The Fund may trade securities on a when-issued or forward commitment basis, with
payment and delivery scheduled for a future date. These transactions are subject
to market fluctuations and are subject to the risk that the value at delivery
may be more or less than the trade date purchase price. Although the Fund will
generally purchase these securities with the intention of acquiring such
securities, they may sell such securities before the settlement date. These
securities are identified on the accompanying Portfolio of Investments. The Fund
has purchased and sold when-issued securities during the period and has set
aside liquid securities as collateral for these commitments.
 
(P) LINE OF CREDIT
The Fund, along with certain other funds advised and/or administered by the
Manager ("GT Funds"), has a line of credit with each of BankBoston and State
Street Bank & Trust Company. The arrangements with the banks allow the GT Funds
to borrow an aggregate maximum amount of $200,000,000. The Fund is limited to
borrowing up to 33 1/3% of the value of the Fund's total assets. On October 31,
1997, the Fund had no loans outstanding.
 
For the period ended October 31, 1997, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $12,607,909, with a weighted average interest rate of 6.29%.
Interest expense for the Fund for the period ended October 31, 1997 was $24,241,
and is included in "Other Expenses" on the Statement of Operations.
 
2. RELATED PARTIES
 
(A) PREDECESSOR FUND THROUGH OCTOBER 31, 1997
Chancellor LGT Asset Management, Inc. was the Predecessor Fund's investment
manager and administrator. The Predecessor Fund paid the Manager investment
management fees, which were computed weekly and paid monthly, at the annualized
rate of 1.40% of the funds average weekly net assets. The Manager also acted as
administrator of the Predecessor Fund and paid the Manager administration fees,
which were computed and paid monthly, at an annualized rate of 0.25% of the
Fund's average weekly net assets.
 
The Manager was the pricing and accounting agent for the Predecessor Fund. The
monthly fee for these services to the Manager was a percentage, not to exceed
0.03% annually, of the Predecessor Fund's average daily net assets. The annual
fee rate was derived by applying 0.03% to the first $5 billion of assets of all
registered mutual funds advised by the Manager and 0.02% to the assets in excess
of
 
                                     FS-47
<PAGE>   1513
                       GT GLOBAL DEVELOPING MARKETS FUND
 
$5 billion and allocating the result according to the Predecessor Fund's average
daily net assets.
 
The Predecessor Fund paid each of its Directors who was not an employee, officer
or director of the Manager or any of its affiliated companies $5,000 per year
plus $300 for each meeting of the board or any committee thereof attended by the
Director.
 
(B) THE FUND COMMENCING NOVEMBER 1, 1997
Chancellor LGT Asset Management, Inc. is the Fund's investment manager and
administrator. The Fund pays the Manager investment management and
administration fees at the annualized rate of 0.975% on the first $500 million
of average daily net assets of the Fund; 0.95% on the next $500 million; 0.925%
on the next $500 million and 0.90% on amounts thereafter. These fees are
computed daily and paid monthly.
 
GT Global, Inc. ("GT Global"), an affiliate of the Manager, serves as the Fund's
distributor. The Fund offers Class A, Class B, and Advisor Class shares for
purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. Purchases of Class A shares exceeding $500,000 may be subject to
a contingent deferred sales charge ("CDSC") upon redemption, in accordance with
the Fund's current prospectus. GT Global also makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class A
shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global, from its own resources, pays commissions to dealers through
which the sales are made. Certain redemptions of Class B shares made within six
years of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. In addition, GT Global makes ongoing shareholder servicing and trail
commission payments to dealers whose clients hold Class B shares.
 
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.50% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global is reimbursed under the Class A Plan will have
been incurred within one year of such reimbursement.
 
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
 
The Manager and GT Global voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 2.00%, 2.50%, and 1.50% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by the waivers by
the Manager of investment management and administration fees, waivers by GT
Global of payments under the Class A Plan and/or Class B Plan and/or
reimbursements by the Manager or GT Global of portions of the Fund's other
operating expenses.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager or any of its affiliated companies $5,000 per year plus
$300 for each meeting of the board or any committee thereof attended by the
Director.
 
3. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1997, purchases and sales of investment
securities by the Fund, other than U.S. government obligations and short-term
investments, aggregated $736,422,573 and $765,404,012, respectively. Purchases
of U.S. government obligations by the Fund were $7,226,388 for the year. There
were no sales of U.S. government obligations by the Fund for the year.
 
4. CAPITAL SHARES
At October 31, 1997, the Predecessor Fund was authorized to issue 100 million
shares of capital stock, $0.001 par value, all of which was classified as Common
Stock.
 
At October 31, 1997, there were 6,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 200,000,000 were
classified as shares of GT Global Developing Markets Fund; 400,000,000 were
classified as shares of GT
 
                                     FS-48
<PAGE>   1514
                       GT GLOBAL DEVELOPING MARKETS FUND
 
Global Government Income Fund; 200,000,000 were classified as shares of GT
Global Health Care Fund; 200,000,000 were classified as shares of GT Global
Strategic Income Fund; 200,000,000 were classified as shares of GT Global
Currency Fund (inactive); 200,000,000 were classified as shares of GT Global
Growth & Income Fund; 200,000,000 were classified as shares of GT Global Small
Companies Fund (inactive); 200,000,000 were classified as shares of GT Global
Latin America Growth Fund; 400,000,000 were classified as shares of GT Global
Telecommunications Fund; 200,000,000 were classified as shares of GT Global
Emerging Markets Fund; 200,000,000 were classified as shares of GT Global High
Income Fund; 200,000,000 were classified as shares of GT Global Financial
Services Fund; 200,000,000 were classified as shares of GT Global Natural
Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; and 200,000,000 were classified as shares of GT Global
Consumer Products and Services Fund. The shares of each of the foregoing series
of the Company were divided equally into two classes, designated Class A and
Class B common stock. With respect to the issuance of Advisor Class shares,
100,000,000 shares were classified as shares of each of the fourteen series of
the Company and designated as Advisor Class common stock. 1,100,000,000 shares
remain unclassified.
 
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the year ended October 31, 1997, the Fund's expenses
 
were reduced by $71,865 under these arrangements.
 
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
 
For its fiscal year ended October 31, 1997, the total amount of income received
by the Fund from sources within foreign countries and possessions of the United
States was approximately $.7797 per share (representing an approximate total of
$15,509,507). The total amount of taxes paid by the Fund to such countries was
approximately $.0213 per share (representing an approximate total of $424,399).
 
                                     FS-49
<PAGE>   1515
                            AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
To the Shareholders of AIM Emerging Markets Fund
(formerly GT Global Emerging Markets Fund) and
Board of Directors of AIM Investment Funds, Inc.:
 
We have audited the accompanying statement of assets and liabilities of AIM
Emerging Markets Fund (formerly GT Global Emerging Markets Fund), one of the
funds organized as a series of AIM Investment Funds, Inc., including the
portfolio of investments, as of April 30, 1998, the related statement of
operations for the six months then ended, the statements of changes in net
assets for the six months then ended and for the year ended October 31, 1997,
and the financial highlights for each of the periods indicated therein. These
financial statements and the financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1998 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of AIM
Emerging Markets Fund as of April 30, 1998, the results of its operations for
the six months then ended, the changes in its net assets for the six months then
ended and for the year ended October 31, 1997, and the financial highlights for
each of the periods indicated therein, in conformity with generally accepted
accounting principles.
 


                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
JUNE 17, 1998
 
                                     FS-50
<PAGE>   1516
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                            PORTFOLIO OF INVESTMENTS
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (19.8%)
  Telecomunicacoes Brasileiras S.A. (Telebras): .............   BRZL               --             --         4.6
    TELEPHONE NETWORKS
    ADR{\/} .................................................   --             50,962   $  6,207,802          --
    Common ..................................................   --         30,136,813      2,991,280          --
  Telefonos de Mexico, S.A. de C.V. "L" - ADR{\/} ...........   MEX            51,127      2,895,066         1.4
    TELEPHONE NETWORKS
  Telefonica del Peru S.A. - ADR{\/} ........................   PERU          119,250      2,638,406         1.3
    TELEPHONE NETWORKS
  Pick'n Pay Stores Ltd.: ...................................   SAFR               --             --         1.1
    RETAILERS-OTHER
    Common ..................................................   --          1,191,699      2,264,287          --
    "N" .....................................................   --             25,198         45,883          --
  Magyar Tavkozlesi Rt. - ADR-/- {\/} .......................   HGRY           67,990      2,005,705         1.0
    TELEPHONE NETWORKS
  Cifra, S.A. de C.V. "V" ...................................   MEX         1,080,730      1,901,166         0.9
    RETAILERS-OTHER
  Grupo Televisa, S.A. de C.V. - GDR-/- {\/} ................   MEX            41,300      1,693,300         0.8
    BROADCASTING & PUBLISHING
  Philippine Long Distance Telephone Co.: ...................   PHIL               --             --         0.7
    TELEPHONE - LONG DISTANCE
    ADR{\/} .................................................   --             30,200        815,400          --
    Common ..................................................   --             21,500        577,091          --
  Carso Global Telecom "A1" .................................   MEX           339,700      1,303,453         0.6
    TELEPHONE NETWORKS
  Mahanagar Telephone Nigam Ltd.: ...........................   IND                --             --         0.6
    TELECOM - OTHER
    GDR-/- {\/} .............................................   --             43,300        694,965          --
    Common ..................................................   --             84,400        535,873          --
  Companhia de Saneamento Basico do Estado de Sao Paulo -
   SABESP ...................................................   BRZL        5,368,655      1,220,682         0.6
    BUSINESS & PUBLIC SERVICES
  Telefonica de Argentina S.A. - ADR{\/} ....................   ARG            30,983      1,194,782         0.6
    TELEPHONE NETWORKS
  Cia de Telecomunicaciones de Chile S.A. - ADR{\/} .........   CHLE           47,107      1,180,619         0.6
    TELEPHONE NETWORKS
  Telecomunicacoes de Sao Paulo S.A. (TELESP)-/- ............   BRZL        3,945,000      1,029,805         0.5
    TELEPHONE NETWORKS
  Nortel Inversora S.A. - ADR{\/} ...........................   ARG            27,900        830,025         0.4
    TELEPHONE NETWORKS
  Vimpel-Communications - ADR-/- {\/} .......................   RUS            14,700        793,800         0.4
    WIRELESS COMMUNICATIONS
  Telecom Argentina S.A. - ADR{\/} ..........................   ARG            19,400        698,400         0.3
    TELEPHONE NETWORKS
  Hellenic Telecommunications Organization S.A. .............   GREC           24,180        692,484         0.3
    TELEPHONE NETWORKS
  Genting Bhd. ..............................................   MAL           183,000        613,297         0.3
    LEISURE & TOURISM
  Guangshen Railway Co., Ltd. ...............................   HK          3,195,000        598,121         0.3
    TRANSPORTATION - ROAD & RAIL
  Telekom Malaysia Bhd. .....................................   MAL           171,000        517,622         0.3
    TELEPHONE NETWORKS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-51
<PAGE>   1517
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (Continued)
  Rostelecom - ADR-/- {\/} ..................................   RUS            24,100   $    516,644         0.3
    TELEPHONE - LONG DISTANCE
  Danubius Hotel and Spa Rt.-/- .............................   HGRY           19,037        465,275         0.2
    LEISURE & TOURISM
  Malaysia International Shipping Bhd. - Foreign ............   MAL           240,000        421,622         0.2
    TRANSPORTATION - SHIPPING
  Telecomunicacoes do Parana (TELPAR) .......................   BRZL          719,000        410,588         0.2
    TELECOM - OTHER
  Advanced Info. Service - Foreign ..........................   THAI           54,600        381,917         0.2
    WIRELESS COMMUNICATIONS
  Telecomunicacoes de Minas Gerais - Telemig ................   BRZL        2,245,200        346,548         0.2
    TELECOM - OTHER
  Tanjong PLC ...............................................   MAL           142,000        326,216         0.2
    LEISURE & TOURISM
  Pakistan Telecommunications Co., Ltd. - GDR-/- {\/} .......   PAK             3,700        255,300         0.1
    TELEPHONE NETWORKS
  Berjaya Sports Toto Bhd. ..................................   MAL            98,000        234,405         0.1
    LEISURE & TOURISM
  Migros Turk T.A.S. ........................................   TRKY          238,400        233,866         0.1
    RETAILERS-FOOD
  Santa Isabel S.A. - ADR{\/} ...............................   CHLE           12,144        200,376         0.1
    RETAILERS-FOOD
  Trade House GUM - ADR{\/} .................................   RUS            38,320        191,600         0.1
    RETAILERS-OTHER
  Super Sol Ltd. ............................................   ISRL           56,545        178,328         0.1
    RETAILERS-FOOD
  Goody's S.A. ..............................................   GREC            6,230        166,723         0.1
    RESTAURANTS
  Siam Makro Public Co., Ltd. - Foreign .....................   THAI           53,400         87,847          --
    RETAILERS-OTHER
  Indian Hotels Co., Ltd. ...................................   IND             2,700         36,037          --
    LEISURE & TOURISM
                                                                                        ------------
                                                                                          40,392,606
                                                                                        ------------
Finance (19.1%)
  Alpha Credit Bank .........................................   GREC           21,400      2,257,807         1.1
    BANKS-REGIONAL
  Uniao de Bancos Brasileiros S.A. (Unibanco): ..............   BRZL               --             --         1.0
    BANKS-MONEY CENTER
    Units{=} ................................................   --         16,569,429      1,275,274          --
    GDR-/- {\/} .............................................   --             21,670        861,383          --
  Turkiye Garanti Bankasi AS-/- .............................   TRKY       37,629,400      1,996,355         1.0
    BANKS-REGIONAL
  ABSA Group Ltd. ...........................................   SAFR          176,757      1,530,553         0.8
    BANKS-REGIONAL
  Yapi ve Kredi Bankasi AS ..................................   TRKY       27,168,347      1,332,582         0.7
    BANKS-REGIONAL
  Bank Hapoalim Ltd. ........................................   ISRL          494,510      1,328,163         0.7
    BANKS-REGIONAL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-52
<PAGE>   1518
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- - -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Finance (Continued)
  Commercial International Bank: ............................   EGPT               --             --         0.6
    BANKS-MONEY CENTER
    144A GDR{.} {\/} ........................................   --             63,000   $  1,067,850          --
    Common ..................................................   --             14,000        240,705          --
  Credicorp Ltd. - ADR{\/} ..................................   PERU           77,770      1,302,648         0.6
    BANKS-MONEY CENTER
  Akbank T.A.S. .............................................   TRKY       15,141,000      1,288,273         0.6
    BANKS-REGIONAL
  Cathay Life Insurance Co., Ltd. ...........................   TWN           319,000      1,277,161         0.6
    INSURANCE-BROKER
  National Bank of Greece S.A. ..............................   GREC            6,700      1,178,992         0.6
    BANKS-MONEY CENTER
  Grupo Financiero Banamex Accival, S.A. de C.V. "B"-/- .....   MEX           374,300      1,171,068         0.6
    BANKS-MONEY CENTER
  State Bank of India Ltd. ..................................   IND           146,487      1,062,944         0.5
    BANKS-MONEY CENTER
  Liberty Life Association of Africa Ltd. ...................   SAFR           30,100      1,018,723         0.5
    INSURANCE-LIFE
  China Development Corp.-/- ................................   TWN           353,000        958,250         0.5
    BANKS-MONEY CENTER
  C.G. Smith Ltd. ...........................................   SAFR          189,300        936,665         0.5
    INVESTMENT MANAGEMENT
  Nedcor Ltd. ...............................................   SAFR           30,400        866,423         0.4
    BANKS-REGIONAL
  Standard Bank Investment Corporation Ltd. .................   SAFR           13,930        824,358         0.4
    BANKS-MONEY CENTER
  Ergo Bank S.A. ............................................   GREC            8,600        810,030         0.4
    BANKS-REGIONAL
  Aksigorta AS ..............................................   TRKY       10,482,500        776,481         0.4
    INSURANCE - MULTI-LINE
  Hua Nan Commercial Bank ...................................   TWN           318,000        771,611         0.4
    BANKS-MONEY CENTER
  Banco do Estado de Sao Paulo S.A. - Banespa ...............   BRZL       11,550,000        767,643         0.4
    BANKS-REGIONAL
  National Societe Generale Bank ............................   EGPT           30,000        754,298         0.4
    BANKS-MONEY CENTER
  MISR International Bank - Reg S GDR-/- {c} {\/} ...........   EGPT           57,300        716,250         0.4
    BANKS-MONEY CENTER
  Banco de Galicia y Buenos Aires, S.A. de C.V. - ADR{\/} ...   ARG            28,226        691,537         0.3
    BANKS-MONEY CENTER
  Banco de A. Edwards - ADR{\/} .............................   CHLE           42,284        679,187         0.3
    BANKS-MONEY CENTER
  Banco Frances del Rio de la Plata S.A. - ADR{\/} ..........   ARG            23,178        673,611         0.3
    BANKS-MONEY CENTER
  Turkiye Is Bankasi (Isbank) "C" ...........................   TRKY        4,775,900        602,366         0.3
    BANKS-MONEY CENTER
  Bank Leumi Le - Israel ....................................   ISRL          298,645        546,046         0.3
    BANKS-REGIONAL
  Kazkommertsbank Co. - GDR-/- {\/} .........................   KAZ            19,530        512,663         0.3
    BANKS-REGIONAL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-53
<PAGE>   1519
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Finance (Continued)
  Administradora de Fondos de Pensiones Provida S.A. -
   ADR{\/} ..................................................   CHLE           28,448   $    508,508         0.3
    INVESTMENT MANAGEMENT
  Bank Slaski S.A. ..........................................   POL             5,773        494,974         0.2
    BANKS-MONEY CENTER
  Commercial Bank of Greece S.A. ............................   GREC            7,460        469,425         0.2
    BANKS-MONEY CENTER
  Banco Santander Chile - ADR{\/} ...........................   CHLE           33,100        463,400         0.2
    BANKS-REGIONAL
  National Development Bank-/- ..............................   SLNKA         120,200        446,381         0.2
    BANKS-REGIONAL
  Banco Rio de La Plata S.A. - ADR-/- {\/} ..................   ARG            32,100        441,375         0.2
    BANKS-MONEY CENTER
  Inversiones y Representaciones S.A. (IRSA) - GDR{\/} ......   ARG            10,750        417,906         0.2
    REAL ESTATE
  Bank of the Philippine Islands ............................   PHIL          145,200        362,547         0.2
    BANKS-MONEY CENTER
  F.I.B.I. Holdings Ltd. ....................................   ISRL            1,851        328,426         0.2
    BANKS-REGIONAL
  Liberty Investors Ltd. ....................................   SAFR           63,600        324,137         0.2
    INVESTMENT MANAGEMENT
  Muslim Commercial Bank Ltd.-/- ............................   PAK           403,000        320,204         0.2
    BANKS-MONEY CENTER
  Ayala Land, Inc. ..........................................   PHIL          807,600        317,596         0.2
    REAL ESTATE
  Global Menkul Degerler AS-/- ..............................   TRKY       13,011,257        312,583         0.2
    SECURITIES BROKER
  National Mortgage Bank of Greece ..........................   GREC            3,810        289,757         0.1
    BANKS-REGIONAL
  OTP Bank Rt. ..............................................   HGRY            5,370        254,599         0.1
    BANKS-MONEY CENTER
  Malayan Banking Bhd. ......................................   MAL            83,000        246,757         0.1
    BANKS-MONEY CENTER
  Egyptian American Bank SAE ................................   EGPT            7,490        191,515         0.1
    BANKS-MONEY CENTER
  Shinhan Bank-/- ...........................................   KOR            26,400        102,831         0.1
    BANKS-MONEY CENTER
  Samsung Fire & Marine Insurance-/- ........................   KOR               300         88,764          --
    INSURANCE - MULTI-LINE
  Kookmin Bank - GDR-/- {\/} ................................   KOR            12,100         79,376          --
    BANKS-MONEY CENTER
  Bangkok Bank Public Co., Ltd. - Foreign ...................   THAI           24,110         60,587          --
    BANKS-MONEY CENTER
  Thai Farmers Bank Public Co., Ltd. - Foreign ..............   THAI           19,300         44,250          --
    BANKS-MONEY CENTER
  Housing Development Finance Corp. .........................   IND                 5            407          --
    OTHER FINANCIAL
                                                                                        ------------
                                                                                          38,644,205
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-54
<PAGE>   1520
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Energy (15.2%)
  Petroleo Brasileiro S.A. (Petrobras) Preferred ............   BRZL       13,807,080   $  3,501,577         1.7
    OIL
  Centrais Eletricas Brasileiras S.A. (Eletrobras): .........   BRZL               --             --         1.5
    ELECTRICAL & GAS UTILITIES
    "B" - ADR{\/} ...........................................   --             89,855      2,010,506          --
    "B" Preferred ...........................................   --         13,148,000        586,515          --
    Common-/- ...............................................   --         10,494,500        431,344          --
  LUKoil Holding - ADR{\/} ..................................   RUS            36,976      2,403,440         1.2
    OIL
  Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} ....   BRZL           44,739      2,169,842         1.1
    ELECTRICAL & GAS UTILITIES
  Sasol Ltd. ................................................   SAFR          214,407      2,164,227         1.1
    ENERGY SOURCES
  Unified Energy Systems - Reg S GDR-/- {c} {\/} ............   RUS            67,500      2,160,000         1.1
    ELECTRICAL & GAS UTILITIES
  YPF S.A. - ADR{\/} ........................................   ARG            45,665      1,592,567         0.8
    ENERGY SOURCES
  Empresa Nacional de Electricidad S.A. - ADR{\/} ...........   CHLE           80,362      1,401,312         0.7
    ELECTRICAL & GAS UTILITIES
  Light - Participacoes S.A. ................................   BRZL        5,481,073      1,342,108         0.7
    ELECTRICAL & GAS UTILITIES
  Enersis S.A. - ADR{\/} ....................................   CHLE           44,268      1,303,139         0.6
    ELECTRICAL & GAS UTILITIES
  Light - Servicos de Electricidade S.A. ....................   BRZL        2,772,561      1,115,328         0.6
    ELECTRICAL & GAS UTILITIES
  Cukurova Elektrik AS ......................................   TRKY          358,000      1,032,072         0.5
    ELECTRICAL & GAS UTILITIES
  MOL Magyar Olaj-es Gazipari RT - Reg S GDR{c} {\/} ........   HGRY           32,360        987,789         0.5
    ENERGY SOURCES
  Gener S.A. - ADR{\/} ......................................   CHLE           37,873        847,408         0.4
    ELECTRICAL & GAS UTILITIES
  The Hub Power Co., Ltd. - GDR-/- {\/} .....................   PAK            24,750        624,938         0.3
    ENERGY SOURCES
  Manila Electric Co. "B" ...................................   PHIL          201,900        574,697         0.3
    ELECTRICAL & GAS UTILITIES
  Irkutskenergo - ADR{\/} ...................................   RUS            52,000        507,000         0.3
    ELECTRICAL & GAS UTILITIES
  Perez Companc S.A. "B" ....................................   ARG            77,418        465,329         0.2
    OIL
  Surgutneftegaz - ADR{\/} ..................................   RUS            63,555        444,885         0.2
    OIL
  Petronas Gas Bhd. .........................................   MAL           153,000        372,162         0.2
    OIL
  Chilectra S.A. - ADR{\/} ..................................   CHLE           13,100        361,888         0.2
    ELECTRICAL & GAS UTILITIES
  Ingwe Coal Corp. ..........................................   SAFR          100,200        358,955         0.2
    COAL
  Pakistan State Oil Co., Ltd. ..............................   PAK            65,184        329,102         0.2
    OIL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-55
<PAGE>   1521
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Energy (Continued)
  Companhia Brasileira de Petroleo Ipiranga S.A.
   Preferred ................................................   BRZL       23,126,000   $    301,336         0.1
    OIL
  BSES Ltd. - Reg. S GDR-/- {c} {\/} ........................   IND            18,330        301,070         0.1
    ELECTRICAL & GAS UTILITIES
  Electricity Generating Public Co., Ltd. - Foreign .........   THAI          127,400        247,539         0.1
    ELECTRICAL & GAS UTILITIES
  Tenaga Nasional Bhd. ......................................   MAL           122,000        245,649         0.1
    ELECTRICAL & GAS UTILITIES
  PTT Exploration and Production Public Co., Ltd. -
   Foreign ..................................................   THAI           16,600        175,461         0.1
    OIL
  Korea Electric Power Corp. ................................   KOR            12,500        170,412         0.1
    ELECTRICAL & GAS UTILITIES
  Companhia Paranaense de Energia - Copel ...................   BRZL        8,012,000         92,487          --
    ELECTRICAL & GAS UTILITIES
  Transportadora de Gas del Sur S.A. (TGS) - ADR{\/} ........   ARG             2,400         27,750          --
    GAS
  Banpu Public Co., Ltd. - Foreign ..........................   THAI            2,600         17,917          --
    COAL
                                                                                        ------------
                                                                                          30,667,751
                                                                                        ------------
Materials/Basic Industry (12.7%)
  Suez Cement Co. - Reg S GDR{c} {\/} .......................   EGPT          140,235      2,860,794         1.4
    CEMENT
  Helioplis Housing .........................................   EGPT           20,165      2,607,671         1.3
    BUILDING MATERIALS & COMPONENTS
  Kimberly-Clark de Mexico, S.A. de C.V. "A" ................   MEX           492,744      2,422,997         1.2
    PAPER/PACKAGING
  Companhia Vale do Rio Doce Preferred ......................   BRZL           69,200      1,633,931         0.8
    METALS - STEEL
  Industrias Penoles S.A. (CP) ..............................   MEX           289,887      1,197,880         0.6
    METALS - NON-FERROUS
  Reliance Industries Ltd. - GDR-/- {\/} ....................   IND           121,000      1,104,125         0.5
    CHEMICALS
  Apasco, S.A. de C.V. ......................................   MEX           159,381      1,083,866         0.5
    CEMENT
  De Beers Centenary AG - Linked Unit{.:} ...................   SAFR           41,800      1,083,780         0.5
    MISC. MATERIALS & COMMODITIES
  Cemex, S.A. de C.V.: ......................................   MEX                --             --         0.5
    CEMENT
    "CPO" ...................................................   --            171,700        859,514          --
    "A" .....................................................   --             43,400        217,256          --
  SA Iron & Steel Industrial Corporation Ltd. (ISCOR) .......   SAFR        2,970,244        958,238         0.5
    METALS - STEEL
  Anglo American Platinum Corporation Ltd. ..................   SAFR           51,600        825,191         0.4
    METALS - NON-FERROUS
  Ameriyah Cement Co. .......................................   EGPT           42,386        820,937         0.4
    CEMENT
  Compania de Minas Buenaventura S.A. - ADR{\/} .............   PERU           50,900        788,950         0.4
    METALS - NON-FERROUS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-56
<PAGE>   1522
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Materials/Basic Industry (Continued)
  Hindalco Industries Ltd.: .................................   IND                --             --         0.3
    METALS - NON-FERROUS
    "GDR"{\/} ...............................................   --             34,200   $    666,900          --
    Common ..................................................   --              1,802         34,278          --
  Sociedad Quimica y Minera de Chile S.A. - ADR{\/} .........   CHLE           14,670        637,228         0.3
    CHEMICALS
  Larsen & Toubro Ltd. - Reg S GDR{c} {\/} ..................   IND            37,100        488,793         0.2
    CEMENT
  Grupo Mexico S.A. "L" .....................................   MEX           147,100        468,914         0.2
    METALS - NON-FERROUS
  Siderca S.A. "A" ..........................................   ARG           187,600        452,161         0.2
    METALS - STEEL
  Nan Ya Plastics Corp. .....................................   TWN           255,000        421,520         0.2
    PLASTICS & RUBBER
  Kuala Lumpur Kepong Bhd. ..................................   MAL           153,000        357,689         0.2
    FOREST PRODUCTS
  Titan Cement Co., S.A. ....................................   GREC            4,000        342,392         0.2
    BUILDING MATERIALS & COMPONENTS
  AECI Ltd. .................................................   SAFR           66,900        331,024         0.2
    CHEMICALS
  Makhteshim Chemical Works Ltd.-/- .........................   ISRL           37,330        317,040         0.2
    CHEMICALS
  Pannonplast Rt. ...........................................   HGRY            7,188        305,009         0.2
    MISC. MATERIALS & COMMODITIES
  Torah Portland Cement Co. .................................   EGPT           14,100        298,990         0.1
    CEMENT
  Dhan Fibres Ltd.-/- .......................................   PAK         4,273,000        291,010         0.1
    CHEMICALS
  Turk Sise ve Cam Fabrikalari AS-/- ........................   TRKY        5,880,600        288,438         0.1
    GLASS
  Golden Hope Plantations Bhd. ..............................   MAL           227,000        283,443         0.1
    FOREST PRODUCTS
  Grupo Cementos de Chihuahua, S.A. de C.V. "B" .............   MEX           241,000        257,218         0.1
    CEMENT
  Formosa Plastics Corp. ....................................   TWN           127,000        217,637         0.1
    CHEMICALS
  HI Cement Corp. ...........................................   PHIL        1,623,000        194,517         0.1
    CEMENT
  Agros Holding S.A. "C"-/- .................................   POL             8,726        192,826         0.1
    MISC. MATERIALS & COMMODITIES
  Malakoff Bhd. .............................................   MAL            66,000        174,811         0.1
    FOREST PRODUCTS
  Engro Chemicals Pakistan Ltd. .............................   PAK            77,924        173,714         0.1
    CHEMICALS
  Israel Chemicals Ltd. .....................................   ISRL          130,676        157,637         0.1
    CHEMICALS
  Fauji Fertilizer Co., Ltd. ................................   PAK            71,900        141,841         0.1
    CHEMICALS
  Pohang Iron & Steel Co., Ltd. .............................   KOR             2,310        125,269         0.1
    METALS - STEEL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-57
<PAGE>   1523
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Materials/Basic Industry (Continued)
  Maderas y Sinteticos S.A. - ADR{\/} .......................   CHLE            8,400   $     80,325          --
    MISC. MATERIALS & COMMODITIES
  Associated Cement Cos., Ltd. ..............................   IND                51          2,009          --
    CEMENT
  Dewan Salman Fibre Ltd.-/- ................................   PAK                 4              2          --
    CHEMICALS
                                                                                        ------------
                                                                                          26,167,765
                                                                                        ------------
Multi-Industry/Miscellaneous (10.6%)
  Haci Omer Sabanci Holding AS: .............................   TRKY               --             --         1.1
    CONGLOMERATE
    Common ..................................................   --         27,128,500      1,982,363          --
    Reg S ADR-/- {c} {\/} ...................................   --             10,700        193,938          --
  Barlow Ltd. ...............................................   SAFR          220,377      2,130,711         1.0
    CONGLOMERATE
  The Saudi Arabian Investment Fund Ltd.-/- {\/} ............   UK            263,400      2,075,592         1.0
    COUNTRY FUNDS
  Rembrandt Group Ltd. ......................................   SAFR          213,660      1,945,247         1.0
    CONGLOMERATE
  NASR (El) City Company For Housing & Construction .........   EGPT           27,170      1,668,849         0.8
    MISCELLANEOUS
  Central Asia Regional Growth Fund-/- {\/} (::) ............   IRE           156,000      1,659,840         0.8
    COUNTRY FUNDS
  Koc Holding AS ............................................   TRKY        7,734,450      1,641,345         0.8
    CONGLOMERATE
  Grupo Carso, S.A. de C.V. "A1" ............................   MEX           251,000      1,582,456         0.8
    MULTI-INDUSTRY
  Dogan Sirketler Grubu Holding AS-/- .......................   TRKY       15,917,000        908,177         0.4
    MULTI-INDUSTRY
  Sanluis Corporacion, S.A. de C.V. .........................   MEX           160,832        854,479         0.4
    CONGLOMERATE
  Koor Industries Ltd. - ADR{\/} ............................   ISRL           31,615        802,231         0.4
    CONGLOMERATE
  John Keells Holdings Ltd.-/- ..............................   SLNKA         143,750        761,003         0.4
    MULTI-INDUSTRY
  Anglo American Corporation of South Africa Ltd. ...........   SAFR           12,207        722,393         0.4
    CONGLOMERATE
  Romanian Growth Fund-/- ...................................   ROM            75,800        526,810         0.3
    COUNTRY FUNDS
  Empresas La Moderna, S.A. de C.V. "A"-/- ..................   MEX            97,800        490,155         0.2
    MULTI-INDUSTRY
  Ayala Corp. ...............................................   PHIL          803,400        356,064         0.2
    CONGLOMERATE
  Alfa, S.A. de C.V. "A" ....................................   MEX            64,000        349,847         0.2
    CONGLOMERATE
  Antofagasta Holdings PLC ..................................   UK             56,300        307,390         0.2
    CONGLOMERATE
  Quinenco S.A. - ADR-/- {\/} ...............................   CHLE           27,900        287,719         0.1
    CONGLOMERATE
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-58
<PAGE>   1524
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Multi-Industry/Miscellaneous (Continued)
  ONA (Omnium Nord Africain) S.A. "A" .......................   MOR             1,590   $    168,505         0.1
    CONGLOMERATE
  KEC International Ltd. ....................................   IND               300            287          --
    MISCELLANEOUS
                                                                                        ------------
                                                                                          21,415,401
                                                                                        ------------
Consumer Non-Durables (8.2%)
  Fomento Economico Mexicano, S.A. de C.V. "B" ..............   MEX           277,610      2,058,313         1.0
    BEVERAGES - ALCOHOLIC
  Hindustan Lever Ltd. ......................................   IND            51,000      2,026,379         1.0
    PERSONAL CARE/COSMETICS
  ITC Ltd. ..................................................   IND            92,128      1,829,677         0.9
    TOBACCO
  South African Breweries Ltd. ..............................   SAFR           53,912      1,809,693         0.9
    BEVERAGES - ALCOHOLIC
  Gruma S.A. "B"-/- .........................................   MEX           495,083      1,138,632         0.6
    FOOD
  A-Ahram Beverages Co. S.A.E. - 144A GDR{.} {\/} ...........   EGPT           33,135      1,053,693         0.5
    BEVERAGES - ALCOHOLIC
  Eastern Tobacco Co. .......................................   EGPT           43,845        998,674         0.5
    TOBACCO
  Embotelladora Andina S.A. "B" - ADR{\/} ...................   CHLE           42,247        855,502         0.4
    BEVERAGES - NON-ALCOHOLIC
  Compania Cervecerias Unidas S.A. - ADR{\/} ................   CHLE           21,346        589,683         0.3
    BEVERAGES - ALCOHOLIC
  Hellenic Bottling Co. S.A. ................................   GREC           15,140        563,667         0.3
    BEVERAGES - NON-ALCOHOLIC
  C.G. Smith Foods Ltd. .....................................   SAFR           33,000        515,982         0.3
    FOOD
  San Miguel Corp. "B" ......................................   PHIL          309,000        509,213         0.3
    BEVERAGES - ALCOHOLIC
  Companhia Cervejaria Brahma Preferred .....................   BRZL          663,129        432,034         0.2
    BEVERAGES - ALCOHOLIC
  SUN Brewing Ltd. - GDR-/- {\/} ............................   RUS            22,600        403,122         0.2
    BEVERAGES - ALCOHOLIC
  Far Eastern Textile Ltd. ..................................   TWN           428,000        389,445         0.2
    TEXTILES & APPAREL
  Rothmans of Pall Mall Bhd. ................................   MAL            45,900        381,466         0.2
    TOBACCO
  Pepsi-Gemex S.A. - GDR-/- {\/} ............................   MEX            26,300        356,694         0.2
    BEVERAGES - NON-ALCOHOLIC
  Zaklady Piwowarskie w Zywcu S.A. (Zywiec) .................   POL             2,018        200,968         0.1
    BEVERAGES - ALCOHOLIC
  Carlsberg Brewery Malaysia Bhd. ...........................   MAL            44,500        155,149         0.1
    BEVERAGES - ALCOHOLIC
  Nong Shim Co., Ltd. .......................................   KOR             2,000         87,191          --
    FOOD
  Oriental Weavers "C"-/- ...................................   EGPT            3,400         70,948          --
    TEXTILES & APPAREL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-59
<PAGE>   1525
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Consumer Non-Durables (Continued)
  Erciyas Biracilik ve Malt Sanayii AS ......................   TRKY          136,000   $     22,054          --
    BEVERAGES - ALCOHOLIC
                                                                                        ------------
                                                                                          16,448,179
                                                                                        ------------
Technology (2.7%)
  Asustek Computer Inc. - Reg. S GDR-/- {c} {\/} ............   TWN           128,164      2,643,383         1.3
    COMPUTERS & PERIPHERALS
  Formula Systems Ltd.-/- ...................................   ISRL           16,415        634,454         0.3
    SOFTWARE
  Alcatel Teletas Telekomunikasyon Endustri ve Ticaret AS ...   TRKY        3,198,100        505,806         0.3
    TELECOM TECHNOLOGY
  Delta Electronics, Inc. ...................................   TWN           120,000        440,400         0.2
    COMPUTERS & PERIPHERALS
  Clal Electronics Industries Ltd. ..........................   ISRL            2,459        351,172         0.2
    SEMICONDUCTORS
  Samsung Electronics (1/2 of Common Share) - GDR{\/} .......   KOR            11,300        316,400         0.2
    SEMICONDUCTORS
  United Microelectronics Corporation Ltd.-/- ...............   TWN           158,000        297,119         0.1
    SEMICONDUCTORS
  Tadiran Ltd. ..............................................   ISRL            7,000        272,639         0.1
    TELECOM TECHNOLOGY
                                                                                        ------------
                                                                                           5,461,373
                                                                                        ------------
Health Care (2.1%)
  Teva Pharmaceutical Industries Ltd. .......................   ISRL           29,600      1,255,350         0.6
    PHARMACEUTICALS
  Ranbaxy Laboratories Ltd. .................................   IND            75,000      1,253,779         0.6
    MEDICAL TECHNOLOGY & SUPPLIES
  Richter Gedeon Rt. - Reg S GDR{c} {\/} ....................   HGRY            7,266        775,646         0.4
    PHARMACEUTICALS
  Egypt International Pharmaceutical Industries Co.
   (EIPICO) .................................................   EGPT            9,000        642,763         0.3
    PHARMACEUTICALS
  EGIS Rt. ..................................................   HGRY            5,920        308,743         0.2
    PHARMACEUTICALS
  Medison Co., Ltd. .........................................   KOR            10,200         83,559          --
    MEDICAL TECHNOLOGY & SUPPLIES
                                                                                        ------------
                                                                                           4,319,840
                                                                                        ------------
Consumer Durables (1.8%)
  Imperial Holdings Ltd. ....................................   SAFR           58,161        794,282         0.4
    AUTOMOBILES
  Hon Hai Precision Industry-/- .............................   TWN           120,400        701,146         0.3
    CONSUMER ELECTRONICS
  Qingling Motors Co., Ltd.{*} ..............................   CHNA        1,475,000        637,951         0.3
    AUTOMOBILES
  Tata Engineering and Locomotive Co., Ltd.: ................   IND                --             --         0.3
    AUTOMOBILES
    GDR{\/} .................................................   --             84,000        611,100          --
    Common ..................................................   --                980          6,859          --
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-60
<PAGE>   1526
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Consumer Durables (Continued)
  Mahindra & Mahindra Ltd. - GDR{\/} ........................   IND            42,600   $    317,370         0.2
    AUTOMOBILES
  Ford Otomotiv Sanayi AS ...................................   TRKY          377,000        271,712         0.1
    AUTOMOBILES
  Tofas Turk Otomobil Fabrikasi AS ..........................   TRKY        4,909,000        255,524         0.1
    AUTOMOBILES
  Arcelik AS ................................................   TRKY        2,024,800        227,005         0.1
    APPLIANCES & HOUSEHOLD DURABLES
  BEC World Public Co., Ltd. ................................   THAI            6,100         32,238          --
    CONSUMER ELECTRONICS
                                                                                        ------------
                                                                                           3,855,187
                                                                                        ------------
Capital Goods (1.8%)
  NICE-Systems Ltd.-/- ......................................   ISRL           15,910        663,132         0.3
    TELECOM EQUIPMENT
  Taiwan Semiconductor Manufacturing Co.-/- .................   TWN           145,000        626,706         0.3
    MACHINERY & ENGINEERING
  Corporacion GEO, S.A. de C.V. "B"-/- ......................   MEX            63,800        441,403         0.2
    CONSTRUCTION
  ECI Telecommunications Ltd.{\/} ...........................   ISRL           13,100        399,550         0.2
    TELECOM EQUIPMENT
  Arabian International Construction-/- .....................   EGPT            7,319        344,170         0.2
    CONSTRUCTION
  Netas Telekomunik-/- ......................................   TRKY          724,500        269,784         0.1
    TELECOM EQUIPMENT
  Elektrim Spolka Akcyjna S.A. ..............................   POL            15,630        223,352         0.1
    ELECTRICAL PLANT/EQUIPMENT
  Samsung Display Devices Co. ...............................   KOR             3,690        183,809         0.1
    ELECTRICAL PLANT/EQUIPMENT
  Daewoo Heavy Industries ...................................   KOR            36,240        179,436         0.1
    INDUSTRIAL COMPONENTS
  Samsung Electro-Mechanics Co. .............................   KOR             6,200        130,037         0.1
    ELECTRICAL PLANT/EQUIPMENT
  Sindo Ricoh Co. ...........................................   KOR             3,100        109,139         0.1
    OFFICE EQUIPMENT
  Delta Electronics (Thailand) Public Co., Ltd. - Foreign ...   THAI            8,000         82,487          --
    ELECTRICAL PLANT/EQUIPMENT
  LG Electronics ............................................   KOR             5,225         62,230          --
    ELECTRICAL PLANT/EQUIPMENT
  Madeco S.A. - ADR{\/} .....................................   CHLE            2,400         38,400          --
    INDUSTRIAL COMPONENTS
                                                                                        ------------
                                                                                           3,753,635
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $185,429,876) ................                            191,125,942        94.0
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-61
<PAGE>   1527
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                           PRINCIPAL       VALUE         % OF NET
FIXED INCOME INVESTMENTS                                       CURRENCY     AMOUNT        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Government & Government Agency Obligations (1.2%)
  Pakistan (0.1%)
    Republic of Pakistan, 6% due 2/26/02 - Reg S{c} .........   USD           250,000   $    235,625         0.1
  Russia (1.1%)
    Bank for Foreign Economic Affairs (Venesheconombank)
     Interest Notes, 6.72% due 12/15/15+ ....................   USD         3,000,000      2,163,750         1.1
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $2,264,540) ................................................                              2,399,375
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $2,264,540) ............                              2,399,375         1.2
                                                                                        ------------       -----
<CAPTION>
 
                                                                            NO. OF         VALUE         % OF NET
RIGHTS                                                         COUNTRY      RIGHTS        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Delta Electronics (Thailand) Public Co., Ltd. (UNAV NP
   RTS), due 5/15/98 - Foreign ..............................   THAI            4,000         40,207          --
    ELECTRICAL PLANT/EQUIPMENT
  Samsung Development Rights, due 5/13/98 ...................   KOR               530          9,210          --
    ELECTRICAL PLANT/EQUIPMENT
  Samsung Electronics Rights, due 5/27/98 - GDR 144A{.}
   {\/} .....................................................   KOR               899          8,943          --
    SEMICONDUCTORS
                                                                                        ------------       -----
 
TOTAL RIGHTS (cost $34,933) .................................                                 58,360          --
                                                                                        ------------       -----
<CAPTION>
 
                                                                            NO. OF         VALUE         % OF NET
WARRANTS                                                       COUNTRY     WARRANTS       (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Belle Corp. Warrants, expire 2002 (cost $0) ...............   PHIL          708,400          2,034          --
                                                                                        ------------       -----
    OIL
 
TOTAL INVESTMENTS (cost $187,729,349)  * ....................                            193,585,711        95.2
Other Assets and Liabilities ................................                              9,695,248         4.8
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $203,280,959       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (See Note 1 of Notes to Financial Statements).
       {\/}  U.S. currency denominated.
        {*}  Security denominated in Hong Kong Dollars.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
       {.:}  Each Centenary Linked Unit consists of 1 registered deferred share
             of De Beers Consolidated Mine + 1 Centenary Depositary Receipt.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
        {=}  Each unit represents one preferred share of Unibanco and one
             preferred "B" share of Unibanco Holdings.
          *  For Federal income tax purposes, cost is $189,023,855 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  21,939,088
                 Unrealized depreciation:           (17,377,232)
                                                  -------------
                 Net unrealized appreciation:     $   4,561,856
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviations:
    ADR--American Depositary Receipt
    GDR--Global Depositary Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-62
<PAGE>   1528
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {d}
                                        -------------------------------------------
                                                 FIXED INCOME,
                                                   RIGHTS &
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS        OTHER      TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Argentina (ARG/ARS) ..................    3.5                                   3.5
Brazil (BRZL/BRL) ....................   14.2                                  14.2
Chile (CHLE/CLP) .....................    4.5                                   4.5
China (CHNA/RMB) .....................    0.3                                   0.3
Egypt (EGPT/EGP) .....................    7.0                                   7.0
Greece (GREC/GRD) ....................    3.3                                   3.3
Hong Kong (HK/HKD) ...................    0.3                                   0.3
Hungary (HGRY/HUF) ...................    2.6                                   2.6
India (IND/INR) ......................    5.2                                   5.2
Ireland (IRE/IEP) ....................    0.8                                   0.8
Israel (ISRL/ILS) ....................    3.7                                   3.7
Kazakhstan (KAZ/KTS) .................    0.3                                   0.3
Korea (KOR/KRW) ......................    0.9                                   0.9
Malaysia (MAL/MYR) ...................    2.2                                   2.2
Mexico (MEX/MXN) .....................   11.0                                  11.0
Morocco (MOR/MAD) ....................    0.1                                   0.1
Pakistan (PAK/PKR) ...................    1.1         0.1                       1.2
Peru (PERU/PES) ......................    2.3                                   2.3
Philippines (PHIL/PHP) ...............    2.0                                   2.0
Poland (POL/PLZ) .....................    0.5                                   0.5
Romania (ROM/ROL) ....................    0.3                                   0.3
Russia (RUS/SUR) .....................    3.8         1.1                       4.9
South Africa (SAFR/ZAR) ..............   10.8                                  10.8
Sri Lanka (SLNKA/LKR) ................    0.6                                   0.6
Taiwan (TWN/TWD) .....................    4.2                                   4.2
Thailand (THAI/THB) ..................    0.4                                   0.4
Turkey (TRKY/TRL) ....................    6.9                                   6.9
United Kingdom (UK/GBP) ..............    1.2                                   1.2
United States (US/USD) ...............                               4.8        4.8
                                        ------        ---            ---      -----
Total  ...............................   94.0         1.2            4.8      100.0
                                        ------        ---            ---      -----
                                        ------        ---            ---      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $203,280,959.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-63
<PAGE>   1529
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                           <C>         <C>
Assets:
  Investments in securities, at value (cost $187,729,349) (Note 1)......  $193,585,711
  U.S. currency.............................................  $      738
  Foreign currencies (cost $8,611,907)......................   8,665,582     8,666,320
                                                              ----------
  Receivable for Fund shares sold.......................................     3,696,199
  Receivable for securities sold........................................     3,162,673
  Dividends receivable..................................................       805,918
  Receivable from Chancellor LGT Asset Management, Inc. (Note 2)........       459,815
  Interest receivable...................................................        90,413
                                                                          ------------
    Total assets........................................................   210,467,049
                                                                          ------------
Liabilities:
  Payable for loan outstanding (Note 1).................................     3,353,000
  Payable for securities purchased......................................     1,872,212
  Payable for Fund shares repurchased...................................       788,130
  Payable for investment management and administration fees (Note 2)....       479,744
  Payable for transfer agent fees (Note 2)..............................       243,519
  Payable for printing and postage expenses.............................       131,413
  Payable for service and distribution expenses (Note 2)................       123,207
  Payable for custodian fees............................................        57,525
  Payable for professional fees.........................................        33,130
  Payable for registration and filing fees..............................        22,556
  Payable for fund accounting fees (Note 2).............................         4,139
  Payable for Directors' fees and expenses (Note 2).....................         1,115
  Other accrued expenses................................................        76,400
                                                                          ------------
    Total liabilities...................................................     7,186,090
                                                                          ------------
Net assets..............................................................  $203,280,959
                                                                          ------------
                                                                          ------------
Class A:
Net asset value and redemption price per share ($100,647,556 DIVIDED BY
 8,035,606 shares outstanding)..........................................  $      12.53
                                                                          ------------
                                                                          ------------
Maximum offering price per share (100/95.25 of $12.53) *................  $      13.15
                                                                          ------------
                                                                          ------------
Class B:+
Net asset value and offering price per share ($100,831,448 DIVIDED BY
 8,244,890 shares outstanding)..........................................  $      12.23
                                                                          ------------
                                                                          ------------
Advisor Class:
Net asset value, offering price per share, and redemption price per
 share ($1,801,955 DIVIDED BY 142,562 shares outstanding)...............  $      12.64
                                                                          ------------
                                                                          ------------
Net assets consist of:
  Paid in capital (Note 4)..............................................  $246,288,977
  Undistributed net investment income...................................        73,763
  Accumulated net realized loss on investments and foreign currency
   transactions.........................................................   (48,990,457)
  Net unrealized appreciation on translation of assets and liabilities
   in foreign currencies................................................        52,314
  Net unrealized appreciation of investments............................     5,856,362
                                                                          ------------
Total -- representing net assets applicable to capital shares
 outstanding............................................................  $203,280,959
                                                                          ------------
                                                                          ------------
<FN>
- --------------
   * On sales of $50,000 or more, the offering price is reduced.
   + Redemption price per share is equal to the net asset value per share less
     any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-64
<PAGE>   1530
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                            STATEMENT OF OPERATIONS
 
                        Six months ended April 30, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                              <C>          <C>
Investment income: (Note 1)
  Dividend income (net of foreign withholding tax of $111,452)..............................  $ 2,595,058
  Securities lending income.................................................................       85,994
  Interest income...........................................................................       73,454
                                                                                              -----------
    Total investment income.................................................................    2,754,506
                                                                                              -----------
Expenses:
  Investment management and administration fees (Note 2)....................................    1,027,785
  Service and distribution expenses: (Note 2)
    Class A....................................................................  $   249,648
    Class B....................................................................      540,658      790,306
                                                                                 -----------
  Transfer agent fees (Note 2)..............................................................      778,300
  Interest expense (Note 1).................................................................      347,489
  Custodian fees............................................................................      121,000
  Printing and postage expenses.............................................................      108,600
  Professional fees.........................................................................       68,214
  Registration and filing fees..............................................................       47,060
  Fund accounting fees (Note 2).............................................................       27,756
  Directors' fees and expenses (Note 2).....................................................        6,878
  Other expenses (Note 1)...................................................................        5,429
                                                                                              -----------
    Total expenses before reductions........................................................    3,328,817
                                                                                              -----------
      Expenses reimbursed by Chancellor LGT Asset Management, Inc...........................     (609,815)
      Expense reductions (Note 5)...........................................................      (38,259)
                                                                                              -----------
    Total net expenses......................................................................    2,680,743
                                                                                              -----------
Net investment income.......................................................................       73,763
                                                                                              -----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
  (Note 1)
  Net realized loss on investments.............................................  (35,414,012)
  Net realized loss on foreign currency transactions...........................   (2,083,497)
                                                                                 -----------
    Net realized loss during the period.....................................................  (37,497,509)
  Net change in unrealized appreciation on translation of assets and
   liabilities in foreign currencies...........................................      672,976
  Net change in unrealized appreciation of investments.........................   40,080,042
                                                                                 -----------
    Net unrealized appreciation during the period...........................................   40,753,018
                                                                                              -----------
Net realized and unrealized gain on investments and foreign currencies......................    3,255,509
                                                                                              -----------
Net increase in net assets resulting from operations........................................  $ 3,329,272
                                                                                              -----------
                                                                                              -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-65
<PAGE>   1531
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                       STATEMENT OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                        SIX MONTHS ENDED      YEAR ENDED
                                                                         APRIL 30, 1998    OCTOBER 31, 1997
                                                                        ----------------   ----------------
<S>                                                                     <C>                <C>
Decrease in net assets
Operations:
  Net investment income (loss)........................................   $      73,763      $    (1,050,632)
  Net realized gain (loss) on investments and foreign currency
   transactions.......................................................     (37,497,509)          26,113,895
  Net change in unrealized appreciation (depreciation) on translation
   of assets and liabilities in foreign currencies....................         672,976             (282,179)
  Net change in unrealized appreciation (depreciation) of
   investments........................................................      40,080,042          (52,070,476)
                                                                        ----------------   ----------------
    Net increase (decrease) in net assets resulting from operations...       3,329,272          (27,289,392)
                                                                        ----------------   ----------------
Class A:
Distributions to shareholders: (Note 1)
  From net investment income..........................................              --              (37,319)
  In excess of net investment income..................................              --             (104,807)
Advisor Class: (Note 1)
Distributions to shareholders:
  From net investment income..........................................              --               (4,161)
  In excess of net investment income..................................              --              (11,686)
                                                                        ----------------   ----------------
    Total distributions...............................................              --             (157,973)
                                                                        ----------------   ----------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and reinvested....................     296,466,663        1,140,272,411
  Decrease from capital shares repurchased............................    (339,416,025)      (1,314,030,266)
                                                                        ----------------   ----------------
    Net decrease from capital share transactions......................     (42,949,362)        (173,757,855)
                                                                        ----------------   ----------------
Total decrease in net assets..........................................     (39,620,090)        (201,205,220)
Net assets:
  Beginning of period.................................................     242,901,049          444,106,269
                                                                        ----------------   ----------------
  End of period.......................................................   $ 203,280,959*     $   242,901,049*
                                                                        ----------------   ----------------
                                                                        ----------------   ----------------
 * Includes undistributed net investment income of....................   $      73,763      $            --
                                                                        ----------------   ----------------
                                                                        ----------------   ----------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-66
<PAGE>   1532
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                          CLASS A+
                                          ------------------------------------------------------------------------
                                          SIX MONTHS
                                            ENDED                         YEAR ENDED OCTOBER 31,
                                          APRIL 30,      ---------------------------------------------------------
                                           1998 (d)      1997 (d)    1996 (d)    1995 (d)      1994        1993
                                          ----------     ---------   ---------   ---------   ---------   ---------
<S>                                       <C>            <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $  12.20       $  14.26    $  13.85    $  18.81    $  14.42    $  11.10
                                          ----------     ---------   ---------   ---------   ---------   ---------
Income from investment operations:
  Net investment income (loss)..........      0.02*            --        0.11        0.13       (0.02)       0.02**
  Net realized and unrealized gain
   (loss) on investments................      0.31          (2.05)       0.30       (4.32)       4.68        3.38
                                          ----------     ---------   ---------   ---------   ---------   ---------
    Net increase (decrease) from
     investment operations..............      0.33          (2.05)       0.41       (4.19)       4.66        3.40
                                          ----------     ---------   ---------   ---------   ---------   ---------
Distributions to shareholders:
  From net investment income............        --             --          --          --       (0.01)      (0.08)
  From net realized gain on
   investments..........................        --             --          --       (0.77)      (0.26)         --
  In excess of net investment income....        --          (0.01)         --          --          --          --
                                          ----------     ---------   ---------   ---------   ---------   ---------
    Total distributions.................        --          (0.01)         --       (0.77)      (0.27)      (0.08)
                                          ----------     ---------   ---------   ---------   ---------   ---------
Net asset value, end of period..........  $  12.53       $  12.20    $  14.26    $  13.85    $  18.81    $  14.42
                                          ----------     ---------   ---------   ---------   ---------   ---------
                                          ----------     ---------   ---------   ---------   ---------   ---------
 
Total investment return (c).............      2.79%(b)     (14.45)%      2.96%     (23.04)%     32.58%      30.90%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $100,648       $113,319    $224,964    $252,457    $417,322    $187,808
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      0.31%(a)      (0.01)%      0.76%       0.89%      (0.11)%       0.1%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................     (0.30)%(a)     (0.09)%      0.64%       0.87%        N/A       (0.11)%
Ratio of operating expenses to average
 net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      1.96%(a)       2.10%       1.96%       2.12%       2.06%        2.4%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      2.57%(a)       2.18%       2.08%       2.14%        N/A        2.61%
Ratio of interest expense to average net
 assets (Note 1)++++....................      0.33%(a)        N/A         N/A         N/A         N/A         N/A
Portfolio turnover rate++++.............       117%(a)        150%        104%        114%        100%         99%
Average commission rate per share paid
 on portfolio transactions++++..........  $ 0.0016       $ 0.0015    $ 0.0040         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a)  Annualized
 (b)  Not annualized
 (c)  Total investment return does not include sales charges.
 (d)  These selected per share data were calculated based upon average
      shares outstanding during the period.
   *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.03.
  **  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
 ***  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
   +  All capital shares issued and outstanding as of March 31, 1993, were
      reclassified as Class A shares.
  ++  Commencing April 1, 1993, the Fund began offering Class B shares.
 +++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++  Portfolio turnover rate, average commission rate, and ratio of
      interest expense to average net assets are calculated on the basis of
      the Fund as a whole without distinguishing between the classes of
      shares issued.
 N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-67
<PAGE>   1533
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                           CLASS B++
                                          ---------------------------------------------------------------------------
                                                                                                           APRIL 1,
                                          SIX MONTHS                                                         1993
                                            ENDED                    YEAR ENDED OCTOBER 31,                   TO
                                          APRIL 30,       ---------------------------------------------   OCTOBER 31,
                                           1998 (d)       1997 (d)    1996 (d)    1995 (d)      1994         1993
                                          ----------      ---------   ---------   ---------   ---------   -----------
<S>                                       <C>             <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $  11.94        $  14.02    $  13.68    $  18.68    $  14.39     $ 11.47
                                          ----------      ---------   ---------   ---------   ---------   -----------
Income from investment operations:
  Net investment income (loss)..........     (0.01) *        (0.08)       0.04        0.06       (0.12)       0.00***
  Net realized and unrealized gain
   (loss) on investments................      0.30           (2.00)       0.30       (4.29)       4.67        2.92
                                          ----------      ---------   ---------   ---------   ---------   -----------
    Net increase (decrease) from
     investment operations..............      0.29           (2.08)       0.34       (4.23)       4.55        2.92
                                          ----------      ---------   ---------   ---------   ---------   -----------
Distributions to shareholders:
  From net investment income............        --              --          --          --          --          --
  From net realized gain on
   investments..........................        --              --          --       (0.77)      (0.26)         --
  In excess of net investment income....        --              --          --          --          --          --
                                          ----------      ---------   ---------   ---------   ---------   -----------
    Total distributions.................        --              --          --       (0.77)      (0.26)         --
                                          ----------      ---------   ---------   ---------   ---------   -----------
Net asset value, end of period..........  $  12.23        $  11.94    $  14.02    $  13.68    $  18.68     $ 14.39
                                          ----------      ---------   ---------   ---------   ---------   -----------
                                          ----------      ---------   ---------   ---------   ---------   -----------
 
Total investment return (c).............      2.51%(b)      (14.91)%      2.49%     (23.37)%     31.77%       25.5% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $100,831        $127,658    $216,004    $225,861    $291,289     $32,318
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......     (0.19)%(a)      (0.51)%      0.26%       0.39%      (0.61)%      (0.4)% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................     (0.80)%(a)      (0.59)%      0.14%       0.37%        N/A       (0.61)% (a)
Ratio of operating expenses to average
 net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      2.46%(a)        2.60%       2.46%       2.62%       2.56%        2.9% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      3.07%(a)        2.68%       2.58%       2.64%        N/A        3.11% (a)
Ratio of interest expense to average net
 assets (Note 1)++++....................      0.33%(a)         N/A         N/A         N/A         N/A         N/A
Portfolio turnover rate++++.............       117%(a)         150%        104%        114%        100%         99%
Average commission rate per share paid
 on portfolio transactions++++..........  $ 0.0016        $ 0.0015    $ 0.0040         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a)  Annualized
 (b)  Not annualized
 (c)  Total investment return does not include sales charges.
 (d)  These selected per share data were calculated based upon average
      shares outstanding during the period.
   *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.03.
  **  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
 ***  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
   +  All capital shares issued and outstanding as of March 31, 1993, were
      reclassified as Class A shares.
  ++  Commencing April 1, 1993, the Fund began offering Class B shares.
 +++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++  Portfolio turnover rate, average commission rate, and ratio of
      interest expense to average net assets are calculated on the basis of
      the Fund as a whole without distinguishing between the classes of
      shares issued.
 N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-68
<PAGE>   1534
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                         ADVISOR CLASS+++
                                          -----------------------------------------------
                                          SIX MONTHS   YEAR ENDED OCTOBER    JUNE 1, 1995
                                            ENDED              31,                TO
                                          APRIL 30,    -------------------   OCTOBER 31,
                                           1998 (d)    1997 (d)   1996 (d)       1995
                                          ----------   --------   --------   ------------
<S>                                       <C>          <C>        <C>        <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $ 12.27     $ 14.38    $ 13.88      $14.71
                                          ----------   --------   --------   ------------
Income from investment operations:
  Net investment income (loss)..........      0.05*       0.05       0.18        0.08
  Net realized and unrealized gain
   (loss) on investments................      0.32       (2.05)      0.32       (0.91)
                                          ----------   --------   --------   ------------
    Net increase (decrease) from
     investment operations..............      0.37       (2.00)      0.50       (0.83)
                                          ----------   --------   --------   ------------
Distributions to shareholders:
  From net investment income............        --       (0.03)        --          --
  From net realized gain on
   investments..........................        --          --         --          --
  In excess of net investment income....        --       (0.08)        --          --
                                          ----------   --------   --------   ------------
    Total distributions.................        --       (0.11)        --          --
                                          ----------   --------   --------   ------------
Net asset value, end of period..........   $ 12.64     $ 12.27    $ 14.38      $13.88
                                          ----------   --------   --------   ------------
                                          ----------   --------   --------   ------------
 
Total investment return (c).............      3.10%(b)  (14.05)%     3.60%      (5.71)% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $ 1,802     $ 1,924    $ 3,139      $1,675
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      0.81%(a)    0.49%      1.26%       1.39% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      0.20%(a)    0.41%      1.14%       1.37% (a)
Ratio of operating expenses to average
 net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      1.46%(a)    1.60%      1.46%       1.62% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      2.07%(a)    1.68%      1.58%       1.64% (a)
Ratio of interest expense to average net
 assets (Note 1)++++....................      0.33%(a)     N/A        N/A         N/A
Portfolio turnover rate++++.............       117%(a)     150%       104%        114%
Average commission rate per share paid
 on portfolio transactions++++..........   $0.0016     $0.0015    $0.0040         N/A
</TABLE>
 
- ----------------
 
 (a)  Annualized
 (b)  Not annualized
 (c)  Total investment return does not include sales charges.
 (d)  These selected per share data were calculated based upon average
      shares outstanding during the period.
   *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.03.
  **  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
 ***  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
   +  All capital shares issued and outstanding as of March 31, 1993, were
      reclassified as Class A shares.
  ++  Commencing April 1, 1993, the Fund began offering Class B shares.
 +++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++  Portfolio turnover rate, average commission rate, and ratio of
      interest expense to average net assets are calculated on the basis of
      the Fund as a whole without distinguishing between the classes of
      shares issued.
 N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-69
<PAGE>   1535
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
 
The following Notes to Financial Statements are for the period ending April 30,
1998, and unless otherwise indicated reflect facts as of that date. Please see
"Note 6 -- Subsequent Events" for a discussion of certain changes which took
place after April 30, 1998.
 
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 6)
GT Global Emerging Markets Fund ("Fund") is a separate series of G.T. Investment
Funds, Inc. ("Company"). Effective June 1, 1998, the Company was renamed AIM
Investment Funds, Inc. and the Fund was renamed AIM Emerging Markets Fund. The
Company is organized as a Maryland corporation and is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as a diversified,
open-end management investment company. The Company has thirteen series of
shares in operation, each series corresponding to a distinct portfolio of
investments.
 
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective service and distribution expenses, and
may differ in its transfer agent, registration, and certain other class-specific
fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund in the preparation of the financial
statements.
 
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or in the principal over-the-counter market in which
such securities are traded, as of the close of business on the day the
securities are being valued , or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. (the "Manager") to be the primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when GT
Capital deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments with a maturity of 60
days or less are valued at amortized cost adjusted for foreign exchange
translation and market fluctuation, if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records are maintained in U.S. dollars. The market values of
foreign securities, currency holdings, and other assets and liabilities are
recorded in the books and records of the Fund after translation to U.S. dollars
based on the exchange rates on that day. The cost of each security is determined
using historical exchange rates. Income and withholding taxes are translated at
prevailing exchange rates when earned or incurred.
 
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from 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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains or losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. government securities or other
high quality debt securities of which the value,
 
                                     FS-70
<PAGE>   1536
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
including accrued interest, is at least equal to the amount to be repaid to the
Fund under each agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. The Fund could be exposed to risk if a counterparty is
unable to meet the terms of the contract or if the value of the currency changes
unfavorably. The Fund may enter into Forwards Contracts in connection with
planned purchases or sales of securities, or to hedge against adverse
fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on an exchange is valued at its last bid price,
or, in the case of an over-the-counter option, is valued at the average of the
last bid prices obtained from brokers. If an option expires on its stipulated
expiration date or if the Fund enters into a closing purchase transaction, a
gain or loss is realized without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is extinguished.
If a written call option is exercised, a gain or loss is realized from the sale
of the underlying security and the proceeds of the sale are increased by the
premium originally received. If a written put option is exercised, the cost of
the underlying security purchased would be decreased by the premium originally
received. The Fund can write options only on a covered basis, which, for a call,
requires that the Fund hold the underlying securities and, for a put, requires
the Fund to set aside cash, U.S. government securities, or other liquid
securities in an amount not less than the exercise price or otherwise provide
adequate cover at all times while the put option is outstanding. The Fund may
use options to manage its exposure to the stock market and to fluctuations in
currency values or interest rates.
 
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund would realize a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund would
realize a gain or loss, depending on whether proceeds from the closing sale
transaction are greater or less than the cost of the option. If the Fund
exercises a call option, the cost of the securities acquired by exercising the
call is increased by the premium paid to buy the call. If the Fund exercises a
put option, it realizes a gain or loss from the sale of the underlying security,
and the proceeds from such sale are decreased by the premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund may trade
securities on other than normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At April 30, 1998, stocks with an aggregate value of approximately $16,035,409
were on loan to brokers. The loans were secured by cash collateral of
$16,583,830 received by the Fund. For international securities, cash collateral
is received by the Fund against loaned securities in an amount at least equal to
105% of the market value of the loaned securities at the inception of each loan.
This collateral must be maintained at not less than 103% of the market value of
the loaned securities during the period of the loan. For domestic
 
                                     FS-71
<PAGE>   1537
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
securities, cash collateral is received by the Fund against loaned securities in
the amount at least equal to 102% of the market value of the loaned securities
at the inception of each loan. This collateral must be maintained at not less
than 100% of the market value of the loaned securities during the period of each
loan. The cash collateral is invested in a securities lending trust which
consists of a portfolio of high quality short duration securities whose average
effective duration is restricted to 120 days or less. For the six months ended
April 30, 1998, the Fund received securities lending fees of $85,994.
 
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains. The Fund currently has a capital loss carryforward of
$10,198,442, of which $5,776,568 expires in 2003 and $4,421,874 expires in 2004.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 and timing differences.
 
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
 
(L) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
 
(M) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
 
(N) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised and/or
administered by the Manager, has a line of credit with each of BankBoston and
State Street Bank & Trust Company. The arrangements with the banks allow the
Fund and the GT Funds to borrow an aggregate maximum amount of $250,000,000. The
Fund is limited to borrowing up to 33 1/3% of the value of its total assets. On
April 30, 1998, the Fund had $3,353,000 in loans outstanding.
 
For the six months ended April 30, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $10,572,144, with a weighted average interest rate of 6.29%.
Interest expense for the Fund for the six months ended April 30, 1998 was
$334,748. Other interest expense charges amounted to $12,741.
 
2. RELATED PARTIES (SEE ALSO NOTE 6)
For the period ended April 30, 1998, Chancellor LGT Asset Management, Inc. was
the Fund's investment manager and administrator. The Fund pays investment
management and administration fees to the Manager at the annualized rate of
0.975% on the first $500 million of average daily net assets of the Fund; 0.95%
on the next $500 million; 0.925% on the next $500 million and 0.90% on amounts
thereafter. These fees are computed daily and paid monthly.
 
For the period ended April 30, 1998, GT Global, Inc. ("GT Global"), an affiliate
of the Manager, serves as the Fund's distributor. The Fund offers Class A, Class
B, and Advisor Class shares for purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the six months ended April 30, 1998, GT Global retained
$8,591 of such sales charges. Purchases of Class A shares exceeding $500,000 may
be subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Fund's current prospectus. GT Global collected CDSCs in the
amount of $1,590 for the six months ended April 30, 1998. GT Global also makes
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global, from its own resources, pays commissions to dealers through
which the sales are made. Certain redemptions of Class B shares made within six
years of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the six months ended April 30, 1998, GT Global collected CDSCs
in the amount of $565,010. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
 
Pursuant to the then effective separate distribution plans adopted under 1940
Act Rule 12b-1 by the Company's Board of Directors with respect to the Fund's
Class A shares ("Class A Plan") and Class B
 
                                     FS-72
<PAGE>   1538
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
shares ("Class B Plan"), the Fund reimbursed GT Global for a portion of its
shareholder servicing and distribution expenses. Under that Class A Plan, the
Fund was permitted to pay GT Global a service fee at the annualized rate of up
to 0.25% of the average daily net assets of the Fund's Class A shares for GT
Global's expenditures incurred in servicing and maintaining shareholder
accounts, and was permitted to pay GT Global a distribution fee at the
annualized rate of up to 0.50% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global was reimbursed under the Class A Plan would
have been incurred within one year of such reimbursement.
 
For the period ended April 30, 1998, pursuant to that Class B Plan, the Fund was
permitted to pay GT Global a service fee at the annualized rate of up to 0.25%
of the average daily net assets of the Fund's Class B shares for GT Global's
expenditures incurred in servicing and maintaining shareholder accounts, and was
permitted to pay GT Global a distribution fee at the annualized rate of up to
0.75% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually were permitted to be
carried forward for reimbursement in subsequent years as long as that Plan
continued in effect.
 
The Manager and GT Global voluntarily undertook to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 2.00%, 2.50%, and 1.50% of the average
daily net assets of the Fund's Class A, Class B and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.
 
3. PURCHASES AND SALES OF SECURITIES
For the six months ended April 30, 1998, purchases and sales of investment
securities by the Fund, other than short-term investments, aggregated
$123,495,635 and $178,354,580 respectively. There were no purchases or sales of
U.S. government obligations by the Fund for the six months ended April 30, 1998.
 
4. CAPITAL SHARES
At April 30, 1998, there were 6,000,000,000 shares of the Company's common stock
authorized, at $0.0001 par value. Of this amount, 200,000,000 were classified as
shares of the Fund; 400,000,000 were classified as shares of GT Global
Government Income Fund; 200,000,000 were classified as shares of GT Global
Developing Markets Fund; 200,000,000 were classified as shares of GT Global
Health Care Fund; 200,000,000 were classified as shares of GT Global Strategic
Income Fund; 200,000,000 were classified as shares of GT Global Currency Fund
(inactive); 200,000,000 were classified as shares of GT Global Growth & Income
Fund; 200,000,000 were classified as shares of GT Global Small Companies Fund
(inactive); 200,000,000 were classified as shares of GT Global Latin America
Growth Fund; 400,000,000 were classified as shares of GT Global
Telecommunications Fund; 200,000,000 were classified as shares of GT Global High
Income Fund; 200,000,000 were classified as shares of GT Global Financial
Services Fund; 200,000,000 were classified as shares of GT Global Natural
Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; and 200,000,000 were classified as shares of GT Global
Consumer Products and Services Fund. The shares of each of the foregoing series
of the Company were divided equally into two classes, designated Class A and
Class B common stock. With respect to the issuance of Advisor Class shares,
100,000,000 shares were classified as shares of each of the fifteen series of
the Company and designated as Advisor Class common stock. 1,100,000,000 shares
remain unclassified. Transactions in capital shares of the Fund were as follows:
 
                                     FS-73
<PAGE>   1539
                           AIM EMERGING MARKETS FUND
                   (FORMERLY GT GLOBAL EMERGING MARKETS FUND)
 
                           CAPITAL SHARE TRANSACTIONS
 
<TABLE>
<CAPTION>
                                               SIX MONTHS ENDED               YEAR ENDED
                                                APRIL 30, 1998             OCTOBER 31, 1997
                                          --------------------------  --------------------------
CLASS A                                     SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................   17,134,342  $ 200,989,101   57,294,454  $ 859,844,827
Shares issued in connection with
  reinvestment of distributions.........           --             --        8,654        123,333
                                          -----------  -------------  -----------  -------------
                                           17,134,342    200,989,101   57,303,108    859,968,160
Shares repurchased......................  (18,390,591)  (216,637,505) (63,783,507)  (962,241,730)
                                          -----------  -------------  -----------  -------------
Net decrease............................   (1,256,249) $ (15,648,404)  (6,480,399) $(102,273,570)
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
CLASS B
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    4,798,521  $  55,553,088   16,394,355  $ 245,887,976
Shares repurchased......................   (7,248,568)   (83,530,468) (21,109,926)  (316,251,415)
                                          -----------  -------------  -----------  -------------
Net decrease............................   (2,450,047) $ (27,977,380)  (4,715,571) $ (70,363,439)
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    3,375,138  $  39,924,474    2,213,447  $  34,400,471
Shares issued in connection with
  reinvestment of distributions.........           --             --        1,106         15,804
                                          -----------  -------------  -----------  -------------
                                            3,375,138     39,924,474    2,214,553     34,416,275
Shares repurchased......................   (3,389,407)   (39,248,052)  (2,275,943)   (35,537,121)
                                          -----------  -------------  -----------  -------------
Net increase (decrease).................      (14,269) $     676,422      (61,390) $  (1,120,846)
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the six months ended April 30, 1998, the Fund's
expenses were reduced by $38,259 under these arrangements.
 
6. SUBSEQUENT EVENTS
On May 29, 1998, Liechtenstein Global Trust ("LGT"), the former indirect parent
organization of Chancellor LGT Asset Management, Inc. ("Chancellor LGT"),
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included Chancellor LGT and
certain other affiliates. As a result of this transaction, Chancellor LGT was
renamed INVESCO (NY), Inc. and is now an indirect wholly-owned subsidiary of
AMVESCAP PLC. In connection with this transaction, A I M Advisors, Inc. ("AIM"),
an indirect wholly-owned subsidiary of AMVESCAP PLC, became the investment
adviser and administrator of the Fund and INVESCO (NY), Inc. became the
sub-adviser and sub-administrator of the Fund. In addition, A I M Distributors,
Inc. replaced GT Global, Inc. as the Fund's principal underwriter, and the Fund
became subject to compensation-type Rule 12b-1 plans of distribution, which
replaced the Fund's former reimbursement-type Rule 12b-1 plans of distribution.
All of the changes became effective as of the close of business on May 29, 1998.
 
                                     FS-74
<PAGE>   1540
                         GT GLOBAL EMERGING MARKETS FUND
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
ANNUAL REPORT
To the Shareholders of GT Global Emerging Markets Fund and
Board of Directors of G.T. Investment Funds, Inc.:
 
We have audited the accompanying statement of assets and liabilities of GT
Global Emerging Markets Fund, one of the funds organized as a series of G.T.
Investment Funds, Inc., including the portfolio of investments, as of October
31, 1997, the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global Emerging Markets Fund as of October 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
 


                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
DECEMBER 15, 1997
 
                                     FS-75
<PAGE>   1541
                        GT GLOBAL EMERGING MARKETS FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Energy (18.6%)
  LUKoil Holding - ADR{\/} .................................   RUS             68,826   $  5,764,178         2.4
    OIL
  Sasol Ltd. ...............................................   SAFR           402,507      4,853,515         2.0
    ENERGY SOURCES
  Petroleo Brasileiro S.A. (Petrobras) Preferred ...........   BRZL        22,113,561      4,112,192         1.7
    OIL
  Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} ...   BRZL            85,389      3,415,560         1.4
    ELECTRICAL & GAS UTILITIES
  C.A. La Electricidad de Caracas ..........................   VENZ         2,529,153      3,324,761         1.4
    ELECTRICAL & GAS UTILITIES
  Centrais Eletricas Brasileiras S.A.-Eletrobras "B" -
   ADR{\/} .................................................   BRZL           133,855      2,944,810         1.2
    ELECTRICAL & GAS UTILITIES
  Chilgener S.A. - ADR{\/} .................................   CHLE            88,263      2,383,101         1.0
    ELECTRICAL & GAS UTILITIES
  Enersis S.A. - ADR{\/} ...................................   CHLE            64,238      2,119,854         0.9
    ELECTRICAL & GAS UTILITIES
  Empresa Nacional de Electricidad S.A. - ADR{\/} ..........   CHLE           100,922      2,031,055         0.8
    ELECTRICAL & GAS UTILITIES
  Light - Servicos de Electricidade S.A. ...................   BRZL         5,020,561      1,666,841         0.7
    ELECTRICAL & GAS UTILITIES
  Light - Participacoes S.A. ...............................   BRZL         6,360,473      1,627,044         0.7
    ELECTRICAL & GAS UTILITIES
  YPF S.A. - ADR{\/} .......................................   ARG             49,065      1,570,080         0.7
    OIL
  The Hub Power Co., Ltd. - GDR-/- {\/} ....................   PAK             49,150      1,535,938         0.6
    ENERGY SOURCES
  Unified Energy Systems - Reg S GDR-/- {c} {\/} ...........   RUS             37,000      1,156,246         0.5
    ELECTRICAL & GAS UTILITIES
  Surgutneftegaz - ADR-/- {\/} .............................   RUS            123,235      1,047,498         0.4
    OIL
  PTT Exploration and Production Public Co., Ltd. -
   Foreign .................................................   THAI           101,800      1,038,259         0.4
    OIL
  MOL Magyar Olaj-es Gazipari RT - Reg S GDR{c} {\/} .......   HGRY            35,800        774,175         0.3
    ENERGY SOURCES
  Manila Electric Co. "B" ..................................   PHIL           236,700        728,308         0.3
    ELECTRICAL & GAS UTILITIES
  Mosenergo - 144A ADR{.} {\/} .............................   RUS             15,000        630,000         0.3
    ELECTRICAL & GAS UTILITIES
  Electricity Generating Public Co., Ltd. - Foreign ........   THAI           329,100        548,500         0.2
    ELECTRICAL & GAS UTILITIES
  Perez Companc S.A. .......................................   ARG             74,818        468,642         0.2
    OIL
  Tenaga Nasional Bhd. .....................................   MAL            194,000        419,585         0.2
    ELECTRICAL & GAS UTILITIES
  Korea Electric Power Corp. - ADR{\/} .....................   KOR             44,271        362,469         0.2
    ELECTRICAL & GAS UTILITIES
  BSES Ltd. - Reg. S GDR{c} ................................   IND             19,100        296,050         0.1
    ELECTRICAL & GAS UTILITIES
  Yukong Ltd. ..............................................   KOR              7,543        102,145          --
    OIL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-76
<PAGE>   1542
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Energy (Continued)
  Guangdong Electric Power Development Co., Ltd. "B"+X+ ....   CHNA           127,800   $     72,084          --
    ENERGY SOURCES
  Pakistan State Oil Co., Ltd. .............................   PAK                 20            216          --
    OIL
                                                                                        ------------
                                                                                          44,993,106
                                                                                        ------------
Multi-Industry/Miscellaneous (16.1%)
  Barlow Ltd. ..............................................   SAFR           407,077      4,104,623         1.7
    CONGLOMERATE
  Anglo American Corporation of South Africa Ltd. ..........   SAFR            82,607      3,572,195         1.5
    CONGLOMERATE
  Delta Corporation Ltd. (subdivision)-/- ..................   ZBBW         2,187,074      3,114,504         1.3
    MULTI-INDUSTRY
  PT Telekomunikasi Indonesia ..............................   INDO         3,075,500      2,869,896         1.2
    MULTI-INDUSTRY
  Grupo Carso, S.A. de C.V. "A1" ...........................   MEX            396,200      2,519,547         1.0
    MULTI-INDUSTRY
  ITC Ltd.: ................................................   IND                 --             --         1.0
    MULTI-INDUSTRY
    Common .................................................   --             123,928      1,916,184          --
    GDR-/- {\/} ............................................   --              25,987        475,562          --
  The Saudi Arabian Investment Fund Ltd.-/- {\/} ...........   UK             211,000      2,110,000         0.9
    COUNTRY FUNDS
  PT Gudang Garam ..........................................   INDO           625,500      1,777,187         0.7
    MULTI-INDUSTRY
  China Resources Enterprise Ltd. ..........................   HK             623,000      1,708,616         0.7
    CONGLOMERATE
  Malaysian Resources Corp., Bhd. ..........................   MAL          2,556,000      1,520,240         0.6
    CONGLOMERATE
  Shanghai Industrial Holdings Ltd. ........................   HK             339,000      1,508,616         0.6
    MULTI-INDUSTRY
  Central Asia Regional Growth Fund-/- {\/} ................   IRE            156,000      1,485,120         0.6
    COUNTRY FUNDS
  NASR (El) City Company For Housing & Construction-/- .....   EGPT            18,870      1,304,195         0.5
    MISCELLANEOUS
  Billiton PLC-/- ..........................................   SAFR           395,102      1,158,199         0.5
    CONGLOMERATE
  Sanluis Corporacion, S.A. de C.V. ........................   MEX            145,432      1,128,622         0.5
    CONGLOMERATE
  John Keells Holdings Ltd. ................................   SLNKA          183,000        934,142         0.4
    MULTI-INDUSTRY
  Empresas La Moderna, S.A. de C.V. "A"-/- .................   MEX            186,000        913,293         0.4
    MULTI-INDUSTRY
  PT Bimantara Citra .......................................   INDO           965,000        887,047         0.4
    MULTI-INDUSTRY
  Romanian Growth Fund{\/} .................................   ROM             75,800        784,530         0.3
    COUNTRY FUNDS
  Koc Holding AS ...........................................   TRKY         1,827,500        687,480         0.3
    CONGLOMERATE
  Rembrandt Group Ltd. .....................................   SAFR            77,200        633,971         0.3
    CONGLOMERATE
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-77
<PAGE>   1543
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Multi-Industry/Miscellaneous (Continued)
  Koor Industries Ltd. - ADR{\/} ...........................   ISRL            22,315   $    476,983         0.2
    CONGLOMERATE
  PT Hanjaya Mandala Sampoerna .............................   INDO           262,000        457,953         0.2
    MULTI-INDUSTRY
  Discount Investment Corp. ................................   ISRL            12,474        339,811         0.1
    MULTI-INDUSTRY
  Quinenco S.A. - ADR-/- {\/} ..............................   CHLE            21,500        314,438         0.1
    CONGLOMERATE
  KEC International Ltd.-/- ................................   IND            160,500        162,280         0.1
    MISCELLANEOUS
                                                                                        ------------
                                                                                          38,865,234
                                                                                        ------------
Services (15.6%)
  Telecomunicacoes Brasileiras S.A. (Telebras): ............   BRZL                --             --         3.0
    TELEPHONE NETWORKS
    ADR{\/} ................................................   --              37,332      3,789,198          --
    Common .................................................   --          38,472,813      3,419,767          --
  Telefonos de Mexico, S.A. de C.V. "L" - ADR{\/} ..........   MEX            122,827      5,312,268         2.2
    TELEPHONE NETWORKS
  Compania Anonima Nacional Telefonos de Venezuela (CANTV) -
   ADR{\/} .................................................   VENZ            85,004      3,718,925         1.5
    TELEPHONE NETWORKS
  Pick'n Pay Stores Ltd.: ..................................   SAFR                --             --         1.4
    RETAILERS-OTHER
    Common .................................................   --           1,646,589      2,481,865          --
    "N" ....................................................   --             719,798        987,665          --
  Cia de Telecomunicaciones de Chile S.A. - ADR{\/} ........   CHLE            84,227      2,337,299         1.0
    TELEPHONE NETWORKS
  Telefonica del Peru S.A. - ADR{\/} .......................   PERU           100,740      1,989,615         0.8
    TELEPHONE NETWORKS
  Cifra, S.A. de C.V.: .....................................   MEX                 --             --         0.6
    RETAILERS-OTHER
    "C" ....................................................   --             593,000      1,029,760          --
    "A" ....................................................   --             275,000        506,527          --
    "B" ....................................................   --              26,656         53,248          --
  Companhia de Saneamento Basico do Estado de Sao Paulo -
   SABESP-/- ...............................................   BRZL         7,509,655      1,362,419         0.6
    BUSINESS & PUBLIC SERVICES
  Telefonica de Argentina S.A. - ADR{\/} ...................   ARG             42,183      1,186,397         0.5
    TELEPHONE NETWORKS
  Telecomunicacoes de Sao Paulo S.A. (TELESP) Preferred ....   BRZL         3,388,663        885,282         0.4
    TELEPHONE NETWORKS
  TelecomAsia Corp. - Foreign-/- ...........................   THAI         1,521,400        681,224         0.3
    TELEPHONE NETWORKS
  Santa Isabel S.A. - ADR{\/} ..............................   CHLE            36,543        676,046         0.3
    RETAILERS-FOOD
  PT Indosat ...............................................   INDO           264,500        598,625         0.3
    TELECOM - OTHER
  Danubius Hotel and Spa Rt.-/- ............................   HGRY            19,037        595,762         0.2
    LEISURE & TOURISM
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-78
<PAGE>   1544
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Services (Continued)
  PT Citra Marga Nusaphala Persada .........................   INDO         2,073,000   $    591,873         0.2
    BUSINESS & PUBLIC SERVICES
  Mahanagar Telephone Nigam Ltd. ...........................   IND             84,400        588,062         0.2
    TELECOM - OTHER
  Portugal Telecom S.A. - Registered .......................   PORT            13,630        559,388         0.2
    TELEPHONE NETWORKS
  Sonae Investimentos-Sociedade Gestora de Participacoes
   Sociais S.A. ............................................   PORT            14,423        539,017         0.2
    RETAILERS-OTHER
  Migros Turk T.A.S. .......................................   TRKY           479,400        503,132         0.2
    RETAILERS-FOOD
  Investec-Consultoria Internacional S.A.-/- ...............   PORT            15,692        490,933         0.2
    BROADCASTING & PUBLISHING
  Super Sol Ltd. ...........................................   ISRL           127,545        367,036         0.2
    RETAILERS-FOOD
  Advanced Info. Service - Foreign .........................   THAI            68,300        366,985         0.2
    WIRELESS COMMUNICATIONS
  Indian Hotels Co., Ltd. ..................................   IND                 --             --         0.1
    LEISURE & TOURISM
    GDR-/- {\/} ............................................   --              20,200        348,450          --
    Common .................................................   --               3,000         48,573          --
  Konsortium Perkapalan Bhd. ...............................   MAL            182,000        341,694         0.1
    TRANSPORTATION - SHIPPING
  Pakistan Telecommunications Co., Ltd. - GDR-/- {\/} ......   PAK              3,700        299,700         0.1
    TELEPHONE NETWORKS
  Guangshen Railway Co., Ltd. ..............................   HK             924,000        286,882         0.1
    TRANSPORTATION - ROAD & RAIL
  Vimpel-Communications - ADR-/- {\/} ......................   RUS              8,500        278,375         0.1
    WIRELESS COMMUNICATIONS
  BEC World Public Co., Ltd. - Foreign .....................   THAI            53,000        276,866         0.1
    BROADCASTING & PUBLISHING
  Estabelecimentos Jeronimo Martins & Filho, Sociedade
   Gestora de Participacoes Sociais S.A. ...................   PORT             4,141        270,885         0.1
    RETAILERS-OTHER
  Himachal Futuristic Communications Ltd. ..................   IND            450,000        241,423         0.1
    TELECOM - OTHER
  PT Matahari Putra Prima ..................................   INDO         1,109,000        216,240         0.1
    RETAILERS-APPAREL
                                                                                        ------------
                                                                                          38,227,406
                                                                                        ------------
Materials/Basic Industry (15.5%)
  Kimberly-Clark de Mexico, S.A. de C.V. "A" ...............   MEX          1,012,344      4,461,588         1.8
    PAPER/PACKAGING
  SA Iron & Steel Industrial Corp., Ltd. (ISCOR) ...........   SAFR         6,948,244      3,611,353         1.5
    METALS - STEEL
  Suez Cement Co. - Reg S GDR{c} {\/} ......................   EGPT           169,935      3,526,151         1.5
    CEMENT
  Sappi Ltd. ...............................................   SAFR           427,859      2,713,035         1.1
    FOREST PRODUCTS
  Helwan Portland Cement Co.-/- ............................   EGPT           104,210      2,199,138         0.9
    CEMENT
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-79
<PAGE>   1545
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Materials/Basic Industry (Continued)
  Ameriyah Cement Co.-/- ...................................   EGPT            84,386   $  2,134,469         0.9
    CEMENT
  Industrias Penoles S.A. (CP) .............................   MEX            452,187      1,800,625         0.7
    METALS - NON-FERROUS
  Torah Portland Cement Co.-/- .............................   EGPT            60,900      1,665,794         0.7
    CEMENT
  De Beers Centenary AG - Linked Unit ......................   SAFR            68,900      1,644,432         0.7
    MISC. MATERIALS & COMMODITIES
  Apasco S.A. ..............................................   MEX            254,481      1,554,315         0.6
    CEMENT
  North Cairo Flour Mills-/- ...............................   EGPT            30,170      1,313,282         0.5
    MISC. MATERIALS & COMMODITIES
  Helioplis Housing-/- .....................................   EGPT             8,500      1,162,750         0.5
    BUILDING MATERIALS & COMPONENTS
  Pannonplast Rt. ..........................................   HGRY            18,188        999,145         0.4
    MISC. MATERIALS & COMMODITIES
  Pohang Iron & Steel Co., Ltd.: ...........................   KOR                 --             --         0.5
    METALS - STEEL
    ADR{\/} ................................................   --              52,475        852,719          --
    Common .................................................   --               2,580        114,060          --
  Paints & Chemical Industry-/- ............................   EGPT            20,500        687,413         0.3
    CHEMICALS
  Grupo Industrial Minera Mexico "L" .......................   MEX            231,300        686,975         0.3
    METALS - NON-FERROUS
  Cimpor-Cimentos de Portugal, SGPS S.A. ...................   PORT            23,585        597,004         0.2
    CEMENT
  Cosco Pacific Ltd. .......................................   HK             462,000        537,904         0.2
    PAPER/PACKAGING
  Hindalco Industries Ltd. .................................   IND             19,350        505,218         0.2
    METALS - NON-FERROUS
  Siam Cement Co., Ltd. - Foreign ..........................   THAI            57,200        486,627         0.2
    CEMENT
  Israel Chemicals Ltd. ....................................   ISRL           386,976        485,117         0.2
    CHEMICALS
  Maanshan Iron and Steel Co. "H"+X+ .......................   CHNA         2,874,000        457,312         0.2
    METALS - STEEL
  Sociedad Quimica y Minera de Chile S.A. - ADR{\/} ........   CHLE             8,500        440,938         0.2
    CHEMICALS
  PT Aneka Tambang-/- ......................................   INDO           940,000        366,574         0.2
    METALS - NON-FERROUS
  Dhan Fibres Ltd.-/- ......................................   PAK          4,273,000        325,286         0.1
    CHEMICALS
  Turk Sise ve Cam Fabrikalari AS-/- .......................   TRKY         3,564,000        306,035         0.1
    GLASS
  HI Cement Corp. ..........................................   PHIL         3,197,000        291,464         0.1
    CEMENT
  Engro Chemicals Pakistan Ltd. ............................   PAK             85,412        269,787         0.1
    CHEMICALS
  Agros Holding S.A.-/- ....................................   POL             11,876        249,123         0.1
    MISC. MATERIALS & COMMODITIES
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-80
<PAGE>   1546
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Materials/Basic Industry (Continued)
  Cahya Mata Sarawak Bhd. ..................................   MAL            229,000   $    222,878         0.1
    BUILDING MATERIALS & COMPONENTS
  Compania de Minas Buenaventura S.A. - ADR{\/} ............   PERU            11,800        211,663         0.1
    METALS - NON-FERROUS
  PT Indah Kiat Pulp & Paper Corp. Tbk .....................   INDO           517,000        198,015         0.1
    PAPER/PACKAGING
  Associated Cement Cos., Ltd. .............................   IND              5,086        163,542         0.1
    CEMENT
  Fauji Fertilizer Co., Ltd. ...............................   PAK             71,900        160,119         0.1
    MISC. MATERIALS & COMMODITIES
  Dewan Salman Fibre Ltd.-/- ...............................   PAK                  4              3          --
    CHEMICALS
                                                                                        ------------
                                                                                          37,401,853
                                                                                        ------------
Finance (15.1%)
  State Bank of India Ltd. .................................   IND            646,650      4,679,037         1.9
    BANKS-REGIONAL
  Uniao Bancos Brasileiras "A" Preferred ...................   BRZL       155,867,458      3,956,070         1.6
    BANKS-MONEY CENTER
  ABSA Group Ltd. ..........................................   SAFR           631,687      3,742,844         1.5
    BANKS-REGIONAL
  Egyptian American Bank SAE-/- ............................   EGPT            72,790      2,344,266         1.0
    BANKS-MONEY CENTER
  Administradora de Fondos de Pensiones Provida S.A. -
   ADR{\/} .................................................   CHLE           114,258      1,913,822         0.8
    INVESTMENT MANAGEMENT
  Malayan Banking Bhd. .....................................   MAL            401,800      1,556,990         0.6
    BANKS-MONEY CENTER
  Banco LatinoAmericano de Exportaciones S.A. (Bladex)
   "E"{\/} .................................................   PAN             36,337      1,444,396         0.6
    OTHER FINANCIAL
  Global Menkul Degerler AS-/- .............................   TRKY        60,574,257      1,403,558         0.6
    SECURITIES BROKER
  Banco de A. Edwards - ADR{\/} ............................   CHLE            74,184      1,288,947         0.5
    BANKS-MONEY CENTER
  Credicorp Ltd. - ADR{\/} .................................   PERU            67,200      1,205,400         0.5
    BANKS-MONEY CENTER
  Aksigorta A.S. ...........................................   TRKY        14,655,000      1,138,555         0.5
    INSURANCE - MULTI-LINE
  Commercial International Bank ............................   EGPT                --             --         0.4
    BANKS-MONEY CENTER
    144A GDR{.} {\/} .......................................   --              37,000        804,750          --
    Common .................................................   --              14,000        323,853          --
  Liberty Life Association of Africa Ltd. ..................   SAFR            36,900        920,582         0.4
    INSURANCE-LIFE
  Banco Frances del Rio de la Plata S.A. - ADR{\/} .........   ARG             34,978        861,333         0.4
    BANKS-MONEY CENTER
  Turkiye Is Bankasi (Isbank) "C" ..........................   TRKY         8,527,300        825,208         0.3
    BANKS-MONEY CENTER
  Kookmin Bank - GDR-/- {\/} ...............................   KOR            100,650        644,160         0.3
    BANKS-MONEY CENTER
  BPI-SGPS S.A. ............................................   PORT            27,269        613,475         0.3
    BANKS-MONEY CENTER
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-81
<PAGE>   1547
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Finance (Continued)
  Thai Farmers Bank Public Co., Ltd. - Foreign .............   THAI           205,700   $    562,861         0.2
    BANKS-REGIONAL
  SM Prime Holdings, Inc. ..................................   PHIL         2,860,800        505,326         0.2
    REAL ESTATE
  Yapi ve Kredi Bankasi AS .................................   TRKY        16,419,347        501,299         0.2
    BANKS-REGIONAL
  C.G. Smith Ltd. ..........................................   SAFR           109,100        476,320         0.2
    INVESTMENT MANAGEMENT
  Nedcor Ltd. ..............................................   SAFR            22,000        461,954         0.2
    BANKS-REGIONAL
  Bank Hapoalim Ltd. .......................................   ISRL           191,250        452,638         0.2
    BANKS-REGIONAL
  Metroplex Bhd. ...........................................   MAL          1,242,000        432,779         0.2
    REAL ESTATE
  JSC Kazkommertsbank Co. - GDR-/- {\/} ....................   KAZ             19,530        410,130         0.2
    BANKS-REGIONAL
  Muslim Commercial Bank Ltd.-/- ...........................   PAK            379,600        388,174         0.2
    BANKS-MONEY CENTER
  Bank Leumi Le - Israel ...................................   ISRL           242,645        372,565         0.2
    BANKS-REGIONAL
  Turkiye Garanti Bankasi AS ...............................   TRKY         6,533,800        338,410         0.1
    BANKS-REGIONAL
  Bank Slaski S.A. .........................................   POL              5,773        336,758         0.1
    BANKS-MONEY CENTER
  Belle Corp.-/- ...........................................   PHIL         3,542,000        322,917         0.1
    REAL ESTATE
  Ayala Land, Inc. "B" .....................................   PHIL           670,000        262,464         0.1
    REAL ESTATE
  Banco Santander Chile - ADR{\/} ..........................   CHLE            18,800        244,400         0.1
    BANKS-REGIONAL
  Land and House Public Co., Ltd. - Foreign ................   THAI           273,000        237,687         0.1
    REAL ESTATE
  Malaysian Assurance Alliance Bhd. ........................   MAL             79,100        142,565         0.1
    INSURANCE - MULTI-LINE
  Bangkok Bank Public Co., Ltd. - Foreign ..................   THAI            39,600        137,910         0.1
    BANKS-MONEY CENTER
  C & P Homes, Inc. ........................................   PHIL         1,487,000        112,266         0.1
    REAL ESTATE
  HDFC Bank Ltd. ...........................................   IND                500          1,118          --
    BANKS-MONEY CENTER
  Housing Development Finance Corp.-/- .....................   IND                  5            422          --
    OTHER FINANCIAL
                                                                                        ------------
                                                                                          36,368,209
                                                                                        ------------
Consumer Non-Durables (9.0%)
  South African Breweries Ltd. .............................   SAFR           158,112      4,207,554         1.7
    BEVERAGES - ALCOHOLIC
  Fomento Economico Mexicano, S.A. de C.V. "B" .............   MEX            530,710      3,749,927         1.5
    BEVERAGES - ALCOHOLIC
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-82
<PAGE>   1548
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Consumer Non-Durables (Continued)
  Gruma S.A. "B"-/- ........................................   MEX            678,283   $  2,664,393         1.1
    FOOD
  Eastern Tobacco Co.-/- ...................................   EGPT            99,245      2,488,422         1.0
    TOBACCO
  Companhia Cervejaria Brahma Preferred ....................   BRZL         3,909,129      2,446,752         1.0
    BEVERAGES - ALCOHOLIC
  C.G. Smith Foods Ltd. ....................................   SAFR           123,000      1,764,449         0.7
    FOOD
  A-Ahram Beverages Co. S.A.E. - 144A GDR{.} -/- {\/} ......   EGPT            48,235      1,326,463         0.5
    BEVERAGES - ALCOHOLIC
  Embotelladora Andina S.A. "B" - ADR{\/} ..................   CHLE            51,047      1,046,464         0.4
    BEVERAGES - NON-ALCOHOLIC
  San Miguel Corp. "B" .....................................   PHIL           877,800        987,838         0.4
    BEVERAGES - ALCOHOLIC
  Compania Cervecerias Unidas S.A. ADR{\/} .................   CHLE            30,046        732,371         0.3
    BEVERAGES - ALCOHOLIC
  Graboplast Rt. (Australian Certificates) .................   HGRY            10,319        556,323         0.2
    OTHER CONSUMER GOODS
  Kuala Lumpur Kepong Bhd. .................................   MAL            108,000        259,537         0.1
    OTHER CONSUMER GOODS
  Zaklady Piwowarskie w Zywcu S.A. (Zywiec) ................   POL              3,416        255,218         0.1
    BEVERAGES - ALCOHOLIC
  La Tondena Distillers, Inc. ..............................   PHIL           149,400         91,513          --
    BEVERAGES - ALCOHOLIC
                                                                                        ------------
                                                                                          22,577,224
                                                                                        ------------
Technology (3.7%)
  Asustek Computer Inc. - Reg. S GDR-/- {c} {\/} ...........   TWN            695,564      8,503,270         3.5
    COMPUTERS & PERIPHERALS
  Clal Electronics Industries Ltd. .........................   ISRL             2,159        312,828         0.1
    SEMICONDUCTORS
  LG Information & Communication ...........................   KOR              1,956        112,470         0.1
    TELECOM TECHNOLOGY
                                                                                        ------------
                                                                                           8,928,568
                                                                                        ------------
Capital Goods (2.5%)
  New World Infrastructure Ltd.-/- .........................   HK             929,000      1,838,771         0.8
    CONSTRUCTION
  Cheung Kong Infrastructure Holdings ......................   HK             586,000      1,516,171         0.6
    CONSTRUCTION
  United Engineers Ltd. ....................................   MAL            318,000        754,641         0.3
    CONSTRUCTION
  Irkutskenergo - ADR-/- {\/} ..............................   RUS             48,200        650,700         0.3
    ELECTRICAL PLANT/EQUIPMENT
  Daewoo Heavy Industries ..................................   KOR             86,000        501,667         0.2
    INDUSTRIAL COMPONENTS
  Elektrim Spolka Akcyjna S.A. .............................   POL             45,830        431,961         0.2
    ELECTRICAL PLANT/EQUIPMENT
  ECI Telecommunications Ltd.{\/} ..........................   ISRL             9,100        251,388         0.1
    TELECOM EQUIPMENT
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-83
<PAGE>   1549
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                            COUNTRY       SHARES        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
Capital Goods (Continued)
  Sungmi Telecom Electronics Co. ...........................   KOR                189   $      9,247          --
    TELECOM EQUIPMENT
  Gujarat Telephone Cables-/- ..............................   IND              6,200            853          --
    TELECOM EQUIPMENT
                                                                                        ------------
                                                                                           5,955,399
                                                                                        ------------
Consumer Durables (2.3%)
  Bajaj Auto Ltd. - GDR{\/} ................................   IND             81,000      1,441,800         0.6
    AUTO PARTS
  Arcelik AS ...............................................   TRKY         9,393,800      1,049,901         0.4
    APPLIANCES & HOUSEHOLD DURABLES
  Qingling Motors Co., Ltd.+X+ .............................   CHNA         1,475,000        963,616         0.4
    AUTOMOBILES
  Tata Engineering and Locomotive Co., Ltd. ................   IND            107,410        941,208         0.4
    AUTOMOBILES
  Samsung Electronics Co.: .................................   KOR                 --             --         0.3
    CONSUMER ELECTRONICS
    Common .................................................   --              14,801        586,279          --
    144A GDR{.} -/- {\/} ...................................   --               8,200        166,050          --
  PT Astra International, Inc. .............................   INDO           592,000        441,114         0.2
    AUTOMOBILES
                                                                                        ------------
                                                                                           5,589,968
                                                                                        ------------
Health Care (1.8%)
  Ranbaxy Laboratories Ltd. ................................   IND             75,000      1,460,918         0.6
    MEDICAL TECHNOLOGY & SUPPLIES
  Richter Gedeon Rt. - Reg S GDR{c} {\/} ...................   HGRY            14,046      1,306,278         0.5
    PHARMACEUTICALS
  Teva Pharmaceutical Industries Ltd. ......................   ISRL            16,640        774,717         0.3
    PHARMACEUTICALS
  Egypt International Pharmaceutical Industries Co.
   (EIPICO) ................................................   EGPT            10,000        723,529         0.3
    PHARMACEUTICALS
  PT Kalbe Farma ...........................................   INDO           524,000        321,114         0.1
    PHARMACEUTICALS
  Core Healthcare ..........................................   IND                 50             20          --
    PHARMACEUTICALS
                                                                                        ------------
                                                                                           4,586,576
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $277,841,143) ...............                             243,493,543       100.2
                                                                                        ------------       -----
<CAPTION>
 
                                                                            NO. OF         VALUE         % OF NET
RIGHTS                                                        COUNTRY       RIGHTS        (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
  PT Matahari Putra Prima Rights, expire 12/3/97 ...........   INDO                --        123,565         0.1
    RETAILERS-APPAREL
  Telecomunicacoes de Sao Paulo S.A. (TELESP) Rights, expire
   11/12/97 ................................................   BRZL                --            224          --
    TELEPHONE NETWORKS
                                                                                        ------------       -----
 
TOTAL RIGHTS (cost $0) .....................................                                 123,789         0.1
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-84
<PAGE>   1550
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                            NO. OF         VALUE         % OF NET
WARRANTS                                                      COUNTRY      WARRANTS       (NOTE 1)        ASSETS
- ------------------------------------------------------------  --------   ------------   ------------   -------------
<S>                                                           <C>        <C>            <C>            <C>
  Belle Corp. Warrants, expire 2002 (cost $0) ..............   PHIL           708,400   $        131          --
    OIL
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $277,841,143)  * ...................                             243,617,463       100.3
Other Assets and Liabilities ...............................                                (716,414)       (0.3)
                                                                                        ------------       -----
 
NET ASSETS .................................................                            $242,901,049       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        +X+  Denominated in Hong Kong Dollars.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
          *  For Federal income tax purposes, cost is $279,135,649 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  17,948,897
                 Unrealized depreciation:           (53,467,083)
                                                  -------------
                 Net unrealized depreciation:     $ (35,518,186)
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviations:
    ADR--American Depository Receipt
    GDR--Global Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-85
<PAGE>   1551
                        GT GLOBAL EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {D}
                                        -------------------------------------------
                                                 FIXED INCOME,
                                                   RIGHTS &      SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS       & OTHER     TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Argentina (ARG/ARS) ..................    1.8                                   1.8
Brazil (BRZL/BRL) ....................   12.3                                  12.3
Chile (CHLE/CLP) .....................    6.4                                   6.4
China (CHNA/RMB) .....................    0.6                                   0.6
Egypt (EGPT/EGP) .....................    9.0                                   9.0
Hong Kong (HK/HKD) ...................    3.0                                   3.0
Hungary (HGRY/HUF) ...................    1.6                                   1.6
India (IND/INR) ......................    5.4                                   5.4
Indonesia (INDO/IDR) .................    3.7         0.1                       3.8
Ireland (IRE/IEP) ....................    0.6                                   0.6
Israel (ISRL/ILS) ....................    1.6                                   1.6
Kazakhstan (KAZ/KTS) .................    0.2                                   0.2
Korea (KOR/KRW) ......................    1.6                                   1.6
Malaysia (MAL/MYR) ...................    2.3                                   2.3
Mexico (MEX/MXN) .....................   10.7                                  10.7
Pakistan (PAK/PKR) ...................    1.2                                   1.2
Panama (PAN/PND) .....................    0.6                                   0.6
Peru (PERU/PES) ......................    1.4                                   1.4
Philippines (PHIL/PHP) ...............    1.3                                   1.3
Poland (POL/PLZ) .....................    0.5                                   0.5
Portugal (PORT/PTE) ..................    1.2                                   1.2
Romania (ROM/ROL) ....................    0.3                                   0.3
Russia (RUS/SUR) .....................    4.0                                   4.0
South Africa (SAFR/ZAR) ..............   15.4                                  15.4
Sri Lanka (SLNKA/LKR) ................    0.4                                   0.4
Taiwan (TWN/TWD) .....................    3.5                                   3.5
Thailand (THAI/THB) ..................    1.8                                   1.8
Turkey (TRKY/TRL) ....................    2.7                                   2.7
United Kingdom (UK/GBP) ..............    0.9                                   0.9
United States (US/USD) ...............                              (0.3)      (0.3)
Venezuela (VENZ/VEB) .................    2.9                                   2.9
Zimbabwe (ZBBW/ZWD) ..................    1.3                                   1.3
                                        ------      -----          -----      -----
Total  ...............................  100.2         0.1           (0.3)     100.0
                                        ------      -----          -----      -----
                                        ------      -----          -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $242,901,049.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-86
<PAGE>   1552
                        GT GLOBAL EMERGING MARKETS FUND
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                               <C>         <C>
Assets:
  Investments in securities, at value (cost $277,841,143) (Note 1)..........................  $243,617,463
  U.S. currency.................................................................  $  136,655
  Foreign currencies (cost $10,678,505).........................................  10,060,667   10,197,322
                                                                                  ----------
  Receivable for securities sold............................................................    7,396,760
  Receivable for Fund shares sold...........................................................    1,950,008
  Dividends receivable......................................................................      337,748
                                                                                              -----------
    Total assets............................................................................  263,499,301
                                                                                              -----------
Liabilities:
  Payable for securities purchased..........................................................   12,193,150
  Payable for loan outstanding (Note 1).....................................................    6,184,000
  Payable for Fund shares repurchased.......................................................    1,396,848
  Payable for investment management and administration fees (Note 2)........................      246,040
  Payable for service and distribution expenses (Note 2)....................................      199,887
  Payable for printing and postage expenses.................................................      140,103
  Payable for transfer agent fees (Note 2)..................................................      104,492
  Payable for custodian fees (Note 1).......................................................       43,774
  Payable for professional fees.............................................................       42,768
  Payable for registration and filing fees..................................................       23,221
  Payable for fund accounting fees (Note 2).................................................        6,498
  Payable for Directors' fees and expenses (Note 2).........................................        4,348
  Other accrued expenses....................................................................       13,123
                                                                                              -----------
    Total liabilities.......................................................................   20,598,252
                                                                                              -----------
Net assets..................................................................................  $242,901,049
                                                                                              -----------
                                                                                              -----------
Class A:
Net asset value and redemption price per share ($113,318,585 DIVIDED BY 9,291,855 shares
 outstanding)...............................................................................  $     12.20
                                                                                              -----------
                                                                                              -----------
Maximum offering price per share (100/95.25 of $12.20) *....................................  $     12.81
                                                                                              -----------
                                                                                              -----------
Class B:+
Net asset value and offering price per share ($127,658,086 DIVIDED BY 10,694,937 shares
 outstanding)...............................................................................  $     11.94
                                                                                              -----------
                                                                                              -----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($1,924,378
 DIVIDED BY 156,831 shares outstanding).....................................................  $     12.27
                                                                                              -----------
                                                                                              -----------
Net assets consist of:
  Paid in capital (Note 4)..................................................................  $289,238,339
  Accumulated net realized loss on investments and foreign currency transactions............  (11,492,948)
  Net unrealized depreciation on translation of assets and liabilities in foreign
   currencies...............................................................................     (620,662)
  Net unrealized depreciation of investments................................................  (34,223,680)
                                                                                              -----------
Total -- representing net assets applicable to capital shares outstanding...................  $242,901,049
                                                                                              -----------
                                                                                              -----------
<FN>
- --------------
   * On sales of $50,000 or more, the offering price is reduced.
   + Redemption price per share is equal to the net asset value per share less
     any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-87
<PAGE>   1553
                        GT GLOBAL EMERGING MARKETS FUND
 
                            STATEMENT OF OPERATIONS
 
                          Year ended October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                              <C>          <C>
Investment income: (Note 1)
  Dividend income (net of foreign withholding tax of $260,697)..............................  $ 7,205,935
  Interest income...........................................................................    1,168,490
                                                                                              -----------
    Total investment income.................................................................    8,374,425
                                                                                              -----------
Expenses:
  Investment management and administration fees (Note 2)....................................    3,907,922
  Service and distribution expenses: (Note 2)
    Class A....................................................................  $   977,082
    Class B....................................................................    2,022,092    2,999,174
                                                                                 -----------
  Transfer agent fees (Note 2)..............................................................    1,516,844
  Custodian fees (Note 1)...................................................................      349,533
  Printing and postage expenses.............................................................      237,674
  Registration and filing fees..............................................................      113,378
  Fund accounting fees (Note 2).............................................................      103,144
  Audit fees................................................................................       72,348
  Legal fees................................................................................       35,687
  Amortization of organization costs (Note 1)...............................................       16,342
  Directors' fees and expenses (Note 2).....................................................       13,636
  Other expenses (Note 1)...................................................................      385,661
                                                                                              -----------
    Total expenses before reductions........................................................    9,751,343
                                                                                              -----------
      Expense reductions (Notes 1 & 5)......................................................     (326,286)
                                                                                              -----------
    Total net expenses......................................................................    9,425,057
                                                                                              -----------
Net investment loss.........................................................................   (1,050,632)
                                                                                              -----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
  (Note 1)
  Net realized gain on investments.............................................   29,128,765
  Net realized loss on foreign currency transactions...........................   (3,014,870)
                                                                                 -----------
    Net realized gain during the year.......................................................   26,113,895
  Net change in unrealized depreciation on translation of assets and
   liabilities in foreign currencies...........................................     (282,179)
  Net change in unrealized depreciation of investments.........................  (52,070,476)
                                                                                 -----------
    Net unrealized depreciation during the year.............................................  (52,352,655)
                                                                                              -----------
Net realized and unrealized loss on investments and foreign currencies......................  (26,238,760)
                                                                                              -----------
Net decrease in net assets resulting from operations........................................  $(27,289,392)
                                                                                              -----------
                                                                                              -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-88
<PAGE>   1554
                        GT GLOBAL EMERGING MARKETS FUND
 
                      STATEMENTS OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                               YEAR ENDED      YEAR ENDED
                                                                              OCTOBER 31,     OCTOBER 31,
                                                                                  1997            1996
                                                                             --------------  --------------
<S>                                                                          <C>             <C>
Decrease in net assets
Operations:
  Net investment income (loss).............................................  $   (1,050,632) $    2,628,437
  Net realized gain (loss) on investments and foreign currency
   transactions............................................................      26,113,895      (5,528,958)
  Net change in unrealized appreciation (depreciation) on translation of
   assets and liabilities in foreign currencies............................        (282,179)         31,246
  Net change in unrealized appreciation (depreciation) of investments......     (52,070,476)     22,530,391
                                                                             --------------  --------------
    Net increase (decrease) in net assets resulting from operations........     (27,289,392)     19,661,116
                                                                             --------------  --------------
Class A:
Distributions to shareholders: (Note 1)
  From net investment income...............................................         (37,319)             --
  In excess of net investment income.......................................        (104,807)             --
Advisor Class:
Distributions to shareholders: (Note 1)
  From net investment income...............................................          (4,161)             --
  In excess of net investment income.......................................         (11,686)             --
                                                                             --------------  --------------
    Total distributions....................................................        (157,973)             --
                                                                             --------------  --------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and reinvested.........................   1,140,272,411   1,443,673,824
  Decrease from capital shares repurchased.................................  (1,314,030,266) (1,499,221,358)
                                                                             --------------  --------------
    Net decrease from capital share transactions...........................    (173,757,855)    (55,547,534)
                                                                             --------------  --------------
Total decrease in net assets...............................................    (201,205,220)    (35,886,418)
Net assets:
  Beginning of year........................................................     444,106,269     479,992,687
                                                                             --------------  --------------
  End of year *............................................................  $  242,901,049  $  444,106,269
                                                                             --------------  --------------
                                                                             --------------  --------------
  * Includes undistributed net investment income of........................  $           --  $       41,480
                                                                             --------------  --------------
                                                                             --------------  --------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-89
<PAGE>   1555
                        GT GLOBAL EMERGING MARKETS FUND
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS A+
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)    1996 (D)    1995 (D)      1994        1993
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   14.26   $   13.85   $   18.81   $   14.42   $   11.10
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income (loss)..........         --        0.11        0.13       (0.02)       0.02*
  Net realized and unrealized gain
   (loss) on investments................      (2.05)       0.30       (4.32)       4.68        3.38
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............      (2.05)       0.41       (4.19)       4.66        3.40
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............         --          --          --       (0.01)      (0.08)
  From net realized gain on
   investments..........................         --          --       (0.77)      (0.26)         --
  In excess of net investment income....      (0.01)         --          --          --          --
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (0.01)         --       (0.77)      (0.27)      (0.08)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $   12.20   $   14.26   $   13.85   $   18.81   $   14.42
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............     (14.45)%      2.96%     (23.04)%     32.58%      30.90%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 113,319   $ 224,964   $ 252,457   $ 417,322   $ 187,808
Ratio of net investment income (loss) to
 average net assets.....................      (0.01)%      0.76%       0.89%      (0.11)%       0.1%*
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................       2.10%       1.96%       2.12%       2.06%        2.4%*
  Without expense reductions............       2.18%       2.08%       2.14%        N/A         N/A
Portfolio turnover rate++++.............        150%        104%        114%        100%         99%
Average commission rate per share paid
 on portfolio transactions++++..........  $  0.0015   $  0.0040         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
  +  All capital shares issued and outstanding as of March 31, 1993, were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.02 for the year ended October 31, 1993.
     Without such reimbursements, the expense ratios would have been 2.61%
     and the ratio of net investment income to average net assets would
     have been 0.36% (See Note 2).
 * * Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.02. Without such reimbursements, the
     expense ratio would have been 3.63% and the ratio of net investment
     income to average net assets would have been (0.76%) (see Note 2).
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-90
<PAGE>   1556
                        GT GLOBAL EMERGING MARKETS FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
                                                                   CLASS B++
                                          -----------------------------------------------------------
                                                                                           APRIL 1,
                                                                                             1993
                                                      YEAR ENDED OCTOBER 31,                  TO
                                          ----------------------------------------------  OCTOBER 31,
                                           1997 (D)    1996 (D)    1995 (D)      1994        1993
                                          ----------  ----------  ----------  ----------  -----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   14.02   $   13.68   $   18.68   $   14.39    $   11.47
                                          ----------  ----------  ----------  ----------  -----------
Income from investment operations:
  Net investment income (loss)..........      (0.08)       0.04        0.06       (0.12)        0.00**
  Net realized and unrealized gain
   (loss) on investments................      (2.00)       0.30       (4.29)       4.67         2.92
                                          ----------  ----------  ----------  ----------  -----------
    Net increase (decrease) from
     investment operations..............      (2.08)       0.34       (4.23)       4.55         2.92
                                          ----------  ----------  ----------  ----------  -----------
Distributions to shareholders:
  From net investment income............         --          --          --          --           --
  From net realized gain on
   investments..........................         --          --       (0.77)      (0.26)          --
  In excess of net investment income....         --          --          --          --           --
                                          ----------  ----------  ----------  ----------  -----------
    Total distributions.................         --          --       (0.77)      (0.26)          --
                                          ----------  ----------  ----------  ----------  -----------
Net asset value, end of period..........  $   11.94   $   14.02   $   13.68   $   18.68    $   14.39
                                          ----------  ----------  ----------  ----------  -----------
                                          ----------  ----------  ----------  ----------  -----------
 
Total investment return (c).............     (14.91)%      2.49%     (23.37)%     31.77%        25.5%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 127,658   $ 216,004   $ 225,861   $ 291,289    $  32,318
Ratio of net investment income (loss) to
 average net assets.....................      (0.51)%      0.26%       0.39%      (0.61)%       (0.4)%**(a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................       2.60%       2.46%       2.62%       2.56%         2.9%**(a)
  Without expense reductions............       2.68%       2.58%       2.64%        N/A          N/A
Portfolio turnover rate++++.............        150%        104%        114%        100%          99%
Average commission rate per share paid
 on portfolio transactions++++..........  $  0.0015   $  0.0040         N/A         N/A          N/A
 
<CAPTION>
 
                                                      ADVISOR CLASS+++
                                          ----------------------------------------
                                             YEAR                    JUNE 1, 1995
                                             ENDED      YEAR ENDED        TO
                                          OCTOBER 31,   OCTOBER 31,   OCTOBER 31,
                                           1997 (D)      1996 (D)        1995
                                          -----------   -----------  -------------
<S>                                       <C>           <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $ 14.38       $   13.88     $   14.71
                                          -----------   -----------  -------------
Income from investment operations:
  Net investment income (loss)..........      0.05            0.18          0.08
  Net realized and unrealized gain
   (loss) on investments................     (2.05)           0.32         (0.91)
                                          -----------   -----------  -------------
    Net increase (decrease) from
     investment operations..............     (2.00)           0.50         (0.83)
                                          -----------   -----------  -------------
Distributions to shareholders:
  From net investment income............     (0.03)             --            --
  From net realized gain on
   investments..........................        --              --            --
  In excess of net investment income....     (0.08)             --            --
                                          -----------   -----------  -------------
    Total distributions.................     (0.11)             --            --
                                          -----------   -----------  -------------
Net asset value, end of period..........   $ 12.27       $   14.38     $   13.88
                                          -----------   -----------  -------------
                                          -----------   -----------  -------------
Total investment return (c).............    (14.05)%          3.60%        (5.71)%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $ 1,924       $   3,139     $   1,675
Ratio of net investment income (loss) to
 average net assets.....................      0.49%           1.26%         1.39%(a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................      1.60%           1.46%         1.62%(a)
  Without expense reductions............      1.68%           1.58%         1.64%(a)
Portfolio turnover rate++++.............       150%            104%          114%
Average commission rate per share paid
 on portfolio transactions++++..........   $0.0015       $  0.0040           N/A
</TABLE>
 
- ----------------
 
  +  All capital shares issued and outstanding as of March 31, 1993, were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.02 for the year ended October 31, 1993.
     Without such reimbursements, the expense ratios would have been 2.61%
     and the ratio of net investment income to average net assets would
     have been 0.36% (See Note 2).
 * * Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.02. Without such reimbursements, the
     expense ratio would have been 3.63% and the ratio of net investment
     income to average net assets would have been (0.76%) (see Note 2).
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-91
<PAGE>   1557
                        GT GLOBAL EMERGING MARKETS FUND
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Emerging Markets Fund ("Fund") is a separate series of G.T. Investment
Funds, Inc. ("Company"). The Company is organized as a Maryland corporation and
is registered under the Investment Company Act of 1940, as amended ("1940 Act"),
as a diversified, open-end management investment company. The Company has
thirteen series of shares in operation, each series corresponding to a distinct
portfolio of investments.
 
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective service and distribution expenses, and
may differ in its transfer agent, registration, and certain other class-specific
fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
 
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or in the principal over-the-counter market in which
such securities are traded, as of the close of business on the day the
securities are being valued , or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. (the "Manager") to be the primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when GT
Capital deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments are valued at
amortized cost adjusted for foreign exchange translation and market fluctuation,
if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records are maintained in U.S. dollars. The market values of
foreign securities, currency holdings, and other assets and liabilities are
recorded in the books and records of the Fund after translation to U.S. dollars
based on the exchange rates on that day. The cost of each security is determined
using historical exchange rates. Income and withholding taxes are translated at
prevailing exchange rates when earned or incurred.
 
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from 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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains or losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. government securities or other
high quality debt securities of which the value, including accrued interest, is
at least equal to the amount to be repaid to the Fund under each agreement at
its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract
 
                                     FS-92
<PAGE>   1558
                        GT GLOBAL EMERGING MARKETS FUND
 
fluctuates with changes in currency exchange rates. The Forward Contract is
marked-to-market daily and the change in market value is recorded by the Fund as
an unrealized gain or loss. When the Forward Contract is closed, the Fund
records a realized gain or loss equal to the difference between the value at the
time it was opened and the value at the time it was closed. The Fund could be
exposed to risk if a counterparty is unable to meet the terms of the contract or
if the value of the currency changes unfavorably. The Fund may enter into
Forwards Contracts in connection with planned purchases or sales of securities,
or to hedge against adverse fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on a traded exchange is valued at its last bid
price, or, in the case of an over-the-counter option, is valued at the average
of the last bid prices obtained from brokers. If an option expires on its
stipulated expiration date or if the Fund enters into a closing purchase
transaction, a gain or loss is realized without regard to any unrealized gain or
loss on the underlying security, and the liability related to such option is
extinguished. If a written call option is exercised, a gain or loss is realized
from the sale of the underlying security and the proceeds of the sale are
increased by the premium originally received. If a written put option is
exercised, the cost of the underlying security purchased would be decreased by
the premium originally received. The Fund can write options only on a covered
basis, which, for a call, requires that the Fund hold the underlying securities
and, for a put, requires the Fund to set aside cash, U.S. government securities,
or other liquid, high grade debt securities in an amount not less than the
exercise price or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund may use options to manage its exposure to the
stock market and to fluctuations in currency values or interest rates.
 
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund would realize a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund would
realize a gain or loss, depending on whether proceeds from the closing sale
transaction are greater or less than the cost of the option. If the Fund
exercises a call option, the cost of the securities acquired by exercising the
call is increased by the premium paid to buy the call. If the Fund exercises a
put option, it realizes a gain or loss from the sale of the underlying security,
and the proceeds from such sale are decreased by the premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund may trade
securities on other than normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1997, stocks with an aggregate value of approximately $17,629,705
were on loan to brokers. The loans were secured by cash collateral of
$18,687,600 received by the Fund. For international securities, cash collateral
is received by the Fund against loaned securities in an amount at least equal to
105% of the market value of the loaned securities at the inception of each loan.
This collateral must be maintained at not less than 103% of the market value of
the loaned securities during the period of the loan. For domestic securities,
cash collateral is received by the Fund against loaned securities in the amount
at least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of each loan. For
the year ended October 31, 1997, the Fund received fees of $186,729 which were
used to reduce the Fund's custodian and administrative expenses.
 
                                     FS-93
<PAGE>   1559
                        GT GLOBAL EMERGING MARKETS FUND
 
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains. The Fund currently has a capital loss carryforward of
$10,198,442, of which $5,776,568 expires in 2003 and $4,421,874 expires in 2004.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 and timing differences.
 
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the Fund in connection with its organization, its initial
registration with the Securities and Exchange Commission and with various states
and the initial public offering of its shares aggregated $150,006. These
expenses were being amortized on a straightline basis over a five-year period.
 
(L) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
 
(M) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
 
(N) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
 
(O) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised or administered by
the Manager, has a line of credit with each of BankBoston and State Street Bank
& Trust Company. The arrangements with the banks allow the Fund and the GT Funds
to borrow an aggregate maximum amount of $200,000,000. The Fund is limited to
borrowing up to 33 1/3% of the value of each Fund's total assets. On October 31,
1997, the Fund had $6,184,000 in loans outstanding.
 
For the year ended October 31, 1997, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $9,375,490 with a weighted average interest rate of 6.37%.
Interest expense for the Fund for the year ended October 31, 1997 was $165,714,
included in "Other Expenses" on the Statement of Operations.
 
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc. is the Fund's investment manager and
administrator. Fund pays investment management and administration fees to the
Manager at the annualized rate of 0.975% on the first $500 million of average
daily net assets of the Fund; 0.95% on the next $500 million; 0.925% on the next
$500 million and 0.90% on amounts thereafter. These fees are computed daily and
paid monthly.
 
GT Global, Inc. ("GT Global"), an affiliate of the Manager, serves as the Fund's
distributor. The Fund offers Class A, Class B, and Advisor Class shares for
purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the year ended October 31, 1997, GT Global retained $39,500
of such sales charges. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Fund's current prospectus. GT Global collected CDSCs in the
amount of $13,158 for the year ended October 31, 1997. GT Global also makes
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global, from its own resources, pays commissions to dealers through
which the sales are made. Certain redemptions of Class B shares made within six
years of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the year ended October 31, 1997, GT Global collected CDSCs in
the amount of $1,581,636. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
 
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT
 
                                     FS-94
<PAGE>   1560
                        GT GLOBAL EMERGING MARKETS FUND
 
Global a distribution fee at the annualized rate of up to 0.50% of the average
daily net assets of the Fund's Class A shares, less any amounts paid by the Fund
as the aforementioned service fee, for GT Global's expenditures incurred in
providing services as distributor. All expenses for which GT Global is
reimbursed under the Class A Plan will have been incurred within one year of
such reimbursement.
 
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
 
The Manager and GT Global voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 2.40% 2.90%, and 1.90% of the average
daily net assets of the Fund's Class A, Class B and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.
 
Effective November 1, 1997, the Manager and GT Global have undertaken to limit
each Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expenses) to the annual rate of 2.00%, 2.50% and 1.50% of the
average daily net assets of the Fund's Class A, Class B and Advisor Class
shares, respectively. This undertaking may be changed or eliminated in the
future.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and LGT and GT Global, is the transfer agent of the Fund. For performing
shareholder servicing, reporting, and general transfer agent services, GT
Services receives an annual maintenance fee of $17.50 per account, a new account
fee of $4.00 per account, a per transaction fee of $1.75 for all transactions
other than exchanges and per exchange fee of $2.25. GT Services also is
reimbursed by the Fund for its out-of-pocket expenses for such items as postage,
forms, telephone charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.
 
3. PURCHASES AND SALES OF SECURITIES
For the period then ended October 31, 1997, purchases and sales of investment
securities by the Fund, other than short-term investments, aggregated
$551,048,488 and $663,636,335 respectively. There were no purchases or sales of
U.S. government obligations by the Fund for the year ended October 31, 1997.
 
4. CAPITAL SHARES
At October 31, 1997, there were 6,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 200,000,000 were
classified as shares of the Fund; 400,000,000 were classified as shares of GT
Global Government Income Fund; 200,000,000 were classified as shares of GT
Global Developing Markets Fund; 200,000,000 were classified as shares of GT
Global Health Care Fund; 200,000,000 were classified as shares of GT Global
Strategic Income Fund; 200,000,000 were classified as shares of GT Global
Emerging Markets Fund; 200,000,000 were classified as shares of GT Global
Currency Fund (inactive); 200,000,000 were classified as shares of GT Global
Growth & Income Fund; 200,000,000 were classified as shares of GT Global Small
Companies Fund (inactive); 200,000,000 were classified as shares of GT Global
Latin America Growth Fund; 400,000,000 were classified as shares of GT Global
Telecommunications Fund; 200,000,000 were classified as shares of GT Global High
Income Fund; 200,000,000 were classified as shares of GT Global Financial
Services Fund; 200,000,000 were classified as shares of GT Global Natural
Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; and 200,000,000 were classified as shares of GT Global
Consumer Products and Services Fund. The shares of each of the foregoing series
of the Company were divided equally into two classes, designated Class A and
Class B common stock. With respect to the issuance of Advisor Class shares,
100,000,000 shares were classified as shares of each of the fifteen series of
the Company and designated as Advisor Class common stock. 1,100,000,000 shares
remain unclassified. Transactions in capital shares of the Fund were as follows:
 
                                     FS-95
<PAGE>   1561
                        GT GLOBAL EMERGING MARKETS FUND
 
                           CAPITAL SHARE TRANSACTIONS
 
<TABLE>
<CAPTION>
                                                  YEAR ENDED                  YEAR ENDED
                                               OCTOBER 31, 1997            OCTOBER 31, 1996
                                          --------------------------  --------------------------
CLASS A                                     SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................   57,294,454  $ 859,844,827   75,574,030  $1,106,260,084
Shares issued in connection with
  reinvestment of distributions.........        8,654        123,333           --             --
                                          -----------  -------------  -----------  -------------
                                           57,303,108    859,968,160   75,574,030  1,106,260,084
Shares repurchased......................  (63,783,507)  (962,241,730) (78,034,654) (1,146,692,253)
                                          -----------  -------------  -----------  -------------
Net decrease............................   (6,480,399) $(102,273,570)  (2,460,624) $ (40,432,169)
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
                                                  YEAR ENDED                  YEAR ENDED
                                               OCTOBER 31, 1997            OCTOBER 31, 1996
                                          --------------------------  --------------------------
CLASS B                                     SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................   16,394,355  $ 245,887,976   22,439,885  $ 323,192,109
Shares repurchased......................  (21,109,926)  (316,251,415) (23,539,619)  (339,644,019)
                                          -----------  -------------  -----------  -------------
Net decrease............................   (4,715,571) $ (70,363,439)  (1,099,734) $ (16,451,910)
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
                                                  YEAR ENDED                  YEAR ENDED
                                               OCTOBER 31, 1997            OCTOBER 31, 1996
                                          --------------------------  --------------------------
ADVISOR CLASS                               SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    2,213,447  $  34,400,471      966,362  $  14,221,631
Shares issued in connection with
  reinvestment of distributions.........        1,106         15,804           --             --
                                          -----------  -------------  -----------  -------------
                                            2,214,553     34,416,275      966,362     14,221,631
Shares repurchased......................   (2,275,943)   (35,537,121)    (868,859)   (12,885,086)
                                          -----------  -------------  -----------  -------------
Net increase (decrease).................      (61,390) $  (1,120,846)      97,503  $   1,336,545
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the year ended October 31, 1997, the Fund's expenses
were reduced by $139,557 under these arrangements.
 
6. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
Investments of 5% or more of an issuer's outstanding voting securities by the
Fund are defined in the Investment Company Act of 1940 as an affiliated company.
There were no investments in affiliated companies at October 31, 1997.
 
Transactions during the period with companies that are or were affiliates are as
follows:
 
<TABLE>
<CAPTION>
                                                                                                                  NET
                                                                                            PURCHASES  SALES    REALIZED  DIVIDEND
                                                                                              COST    PROCEEDS    GAIN     INCOME
                                                                                            --------  --------  --------  --------
<S>                                                                                         <C>       <C>       <C>       <C>
Sun Brewing Ltd. - 144A GDR...............................................................        --        --        --        --
</TABLE>
 
                                     FS-96
<PAGE>   1562
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
To the Shareholders of AIM Latin American Growth Fund and Board of Directors of
G.T. Investment Funds, Inc.:
 
We have audited the accompanying statement of assets and liabilities of AIM
Latin American Growth Fund (formerly GT Global Latin America Growth Fund), one
of the funds organized as a series of A I M Investment Funds, Inc., including
the portfolio of investments, as of April 30, 1998, the related statement of
operations for the six months then ended, the statements of changes in net
assets for the six months then ended and for the year ended October 31, 1997,
and the financial highlights for each of the periods indicated therein. These
financial statements and the financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1998, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of AIM
Latin American Growth Fund as of April 30, 1998, the results of operations for
the six months then ended, the changes in its net assets for the six months then
ended and for the year ended October 31, 1997, and the financial highlights for
each of the periods indicated therein, in conformity with generally accepted
accounting principles.


 
                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
JUNE 17, 1998
 
                                     FS-97
<PAGE>   1563
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                            PORTFOLIO OF INVESTMENTS
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (29.0%)
  Telecomunicacoes Brasileiras S.A. (Telebras): .............   BRZL               --             --         8.5
    TELEPHONE NETWORKS
    ADR{\/} .................................................   --            104,140   $ 12,685,554          --
    Common ..................................................   --         82,307,027      8,169,521          --
  Nortel Inversora S.A. - ADR{\/} ...........................   ARG           170,200      5,063,450         2.1
    TELEPHONE NETWORKS
  Telecomunicacoes de Sao Paulo S.A. (TELESP): ..............   BRZL               --             --         2.0
    TELEPHONE NETWORKS
    Preferred ...............................................   --          7,873,727      2,678,513          --
    Common-/- ...............................................   --          8,857,100      2,312,063          --
  Companhia de Saneamento Basico do Estado de Sao Paulo -
   SABESP ...................................................   BRZL       21,222,622      4,825,432         2.0
    BUSINESS & PUBLIC SERVICES
  Cifra, S.A. de C.V.: ......................................   MEX                --             --         2.0
    RETAILERS-OTHER
    "C" .....................................................   --          1,894,600      3,225,517          --
    "V" .....................................................   --            505,530        889,303          --
    "V" - ADR{\/} ...........................................   --             37,489        656,058          --
  Telefonos de Mexico, S.A. de C.V. "L" - ADR{\/} ...........   MEX            82,800      4,688,550         1.9
    TELEPHONE NETWORKS
  Grupo Televisa, S.A. de C.V. - GDR-/- {\/} ................   MEX           110,900      4,546,900         1.9
    BROADCASTING & PUBLISHING
  Telefonica del Peru S.A. - ADR{\/} ........................   PERU          195,700      4,329,863         1.8
    TELEPHONE NETWORKS
  Controladora Comercial Mexicana, S.A. de C.V.: ............   MEX                --             --         1.5
    RETAILERS-FOOD
    UBC[.] ..................................................   --          2,682,000      3,324,793          --
    GDR{\/} .................................................   --             13,900        342,288          --
  Telefonica de Argentina S.A. - ADR{\/} ....................   ARG            90,900      3,505,331         1.4
    TELEPHONE NETWORKS
  Telecomunicacoes do Rio de Janeiro S.A. (TELERJ)
   Preferred ................................................   BRZL       21,618,581      3,403,012         1.4
    TELEPHONE NETWORKS
  Cia de Telecomunicaciones de Chile S.A. - ADR{\/} .........   CHLE          119,700      2,999,981         1.2
    TELEPHONE NETWORKS
  Carso Global Telecom "A1" .................................   MEX           477,700      1,832,969         0.7
    TELEPHONE NETWORKS
  Santa Isabel S.A. - ADR{\/} ...............................   CHLE           36,684        605,286         0.2
    RETAILERS-FOOD
  El Puerto de Liverpool, S.A. de C.V. ......................   MEX           283,200        417,946         0.2
    RETAILERS-OTHER
  Supermercados Unimarc S.A. - ADR (Chile)-/- {\/} ..........   CHLE           33,000        356,813         0.1
    RETAILERS-FOOD
  Cintra S.A. ...............................................   MEX           165,800        160,515         0.1
    TRANSPORTATION - AIRLINES
                                                                                        ------------
                                                                                          71,019,658
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-98
<PAGE>   1564
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Energy (23.7%)
  Centrais Eletricas Brasileiras S.A. (Eletrobras): .........   BRZL               --             --         4.2
    ELECTRICAL & GAS UTILITIES
    "B" Preferred ...........................................   --        122,369,830   $  5,458,754          --
    Common-/- ...............................................   --        119,990,000      4,931,815          --
  Petroleo Brasileiro S.A. (Petrobras) Preferred ............   BRZL       38,899,000      9,865,072         4.0
    OIL
  Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} ....   BRZL          112,200      5,441,700         2.2
    ELECTRICAL & GAS UTILITIES
  Light - Servicos de Electricidade S.A. ....................   BRZL       11,949,000      4,806,769         2.0
    ELECTRICAL & GAS UTILITIES
  Enersis S.A. - ADR{\/} ....................................   CHLE          146,900      4,324,369         1.8
    ELECTRICAL & GAS UTILITIES
  YPF S.A. - ADR{\/} ........................................   ARG           119,500      4,167,563         1.7
    ENERGY SOURCES
  Empresa Nacional de Electricidad S.A. - ADR{\/} ...........   CHLE          223,400      3,895,538         1.6
    ELECTRICAL & GAS UTILITIES
  Harken Energy Corp.-/- ....................................   US            568,300      3,658,431         1.5
    OIL
  Gener S.A. - ADR{\/} ......................................   CHLE          121,819      2,725,700         1.1
    ELECTRICAL & GAS UTILITIES
  Companhia Brasileira de Petroleo Ipiranga S.A.
   Preferred ................................................   BRZL      173,785,000      2,264,448         0.9
    OIL
  Light - Participacoes S.A. ................................   BRZL        8,815,400      2,158,559         0.9
    ELECTRICAL & GAS UTILITIES
  C.A. La Electricidad de Caracas ...........................   VENZ        3,289,577      2,021,991         0.8
    ELECTRICAL & GAS UTILITIES
  Perez Companc S.A. "B" ....................................   ARG           198,696      1,194,282         0.5
    OIL
  Companhia Paulista de Forca e Luz .........................   BRZL               --             --         0.3
    ELECTRICAL & GAS UTILITIES
    Common ..................................................   --          5,030,000        695,007          --
    Preferred ...............................................   --             13,535          1,587          --
  Companhia Paranaense de Energia - Copel ...................   BRZL       45,050,000        520,035         0.2
    ELECTRICAL & GAS UTILITIES
                                                                                        ------------
                                                                                          58,131,620
                                                                                        ------------
Finance (13.0%)
  Uniao de Bancos Brasileiros S.A. (Unibanco) Units{=} ......   BRZL       83,494,700      6,426,208         2.6
    BANKS-MONEY CENTER
  Banco Frances del Rio de la Plata S.A. - ADR{\/} ..........   ARG           108,700      3,159,094         1.3
    BANKS-MONEY CENTER
  Banco Rio de La Plata S.A. - ADR-/- {\/} ..................   ARG           213,300      2,932,875         1.2
    BANKS-MONEY CENTER
  Banco LatinoAmericano de Exportaciones S.A. (Bladex)
   "E"{\/} ..................................................   PAN            76,135      2,721,826         1.1
    OTHER FINANCIAL
  Grupo Financiero Banorte, S.A. de C.V. "B"-/- .............   MEX         1,640,271      2,711,192         1.1
    BANKS-MONEY CENTER
  Administradora de Fondos de Pensiones Provida S.A. -
   ADR{\/} ..................................................   CHLE          149,900      2,679,463         1.1
    INVESTMENT MANAGEMENT
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-99
<PAGE>   1565
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Finance (Continued)
  Banco BHIF - ADR{\/} ......................................   CHLE          195,500   $  2,431,531         1.0
    BANKS-MONEY CENTER
  Credicorp Ltd. - ADR{\/} ..................................   PERU          124,782      2,090,099         0.9
    BANKS-MONEY CENTER
  Banco de A. Edwards - ADR{\/} .............................   CHLE          125,100      2,009,419         0.8
    BANKS-MONEY CENTER
  Grupo Financiero Banamex Accival, S.A. de C.V. "B"-/- .....   MEX           479,900      1,501,458         0.6
    BANKS-MONEY CENTER
  Inversiones y Representaciones S.A. (IRSA) - GDR{\/} ......   ARG            36,000      1,399,500         0.6
    REAL ESTATE
  Banco de Galicia y Buenos Aires, S.A. de C.V. - ADR{\/} ...   ARG            42,100      1,031,450         0.4
    BANKS-MONEY CENTER
  Banco Wiese - ADR{\/} .....................................   PERU          131,400        706,275         0.3
    BANKS-MONEY CENTER
                                                                                        ------------
                                                                                          31,800,390
                                                                                        ------------
Materials/Basic Industry (12.8%)
  Kimberly-Clark de Mexico, S.A. de C.V. "A" ................   MEX         1,895,100      9,318,880         3.8
    PAPER/PACKAGING
  Apasco, S.A. de C.V. ......................................   MEX           717,000      4,875,939         2.0
    CEMENT
  Companhia Vale do Rio Doce Preferred ......................   BRZL          193,403      4,566,577         1.9
    METALS - STEEL
  Sociedad Quimica y Minera de Chile S.A. - ADR{\/} .........   CHLE           95,100      4,130,906         1.7
    CHEMICALS
  Industrias Penoles S.A. (CP) ..............................   MEX           634,600      2,622,309         1.1
    METALS - NON-FERROUS
  Grupo Mexico S.A. "L" .....................................   MEX           412,324      1,314,374         0.5
    METALS - NON-FERROUS
  Siderca S.A. "A" ..........................................   ARG           543,400      1,309,725         0.5
    METALS - STEEL
  Grupo Cementos de Chihuahua, S.A. de C.V. "B" .............   MEX         1,026,500      1,095,580         0.4
    CEMENT
  Corcemar S.A. .............................................   ARG           158,000        948,095         0.4
    CEMENT
  Corporacion Venezolana de Cementos, S.A.C.A.: .............   VENZ               --             --         0.3
    CEMENT
    "A" .....................................................   --            347,758        454,148          --
    "B" .....................................................   --            161,928        211,769          --
  Compania de Minas Buenaventura S.A. - ADR{\/} .............   PERU           36,000        558,000         0.2
    METALS - NON-FERROUS
                                                                                        ------------
                                                                                          31,406,302
                                                                                        ------------
Multi-Industry/Miscellaneous (8.1%)
  Grupo Carso, S.A. de C.V. "A1" ............................   MEX           871,100      5,491,941         2.2
    MULTI-INDUSTRY
  Alfa, S.A. de C.V. "A" ....................................   MEX           830,100      4,537,619         1.9
    CONGLOMERATE
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-100
<PAGE>   1566
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Multi-Industry/Miscellaneous (Continued)
  Itausa Investimentos Itau S.A. Preferred ..................   BRZL        3,833,289   $  3,251,675         1.3
    MULTI-INDUSTRY
  Desc, S.A. de C.V. - ADR{\/} ..............................   MEX            93,800      2,702,613         1.1
    CONGLOMERATE
  Sanluis Corporacion, S.A. de C.V. .........................   MEX           455,500      2,420,012         1.0
    CONGLOMERATE
  Empresas La Moderna, S.A. de C.V. "A"-/- ..................   MEX           287,000      1,438,388         0.6
    MULTI-INDUSTRY
                                                                                        ------------
                                                                                          19,842,248
                                                                                        ------------
Consumer Non-Durables (6.9%)
  Fomento Economico Mexicano, S.A. de C.V. "B" ..............   MEX           976,750      7,242,019         3.0
    BEVERAGES - ALCOHOLIC
  Compania Cervecerias Unidas S.A. - ADR{\/} ................   CHLE          128,300      3,544,288         1.4
    BEVERAGES - ALCOHOLIC
  Companhia Cervejaria Brahma Preferred .....................   BRZL        3,006,000      1,958,435         0.8
    BEVERAGES - ALCOHOLIC
  Grupo Industrial Maseca, S.A. de C.V. "B" .................   MEX         2,653,900      1,917,576         0.8
    FOOD
  Pepsi-Gemex S.A. - GDR-/- {\/} ............................   MEX           122,800      1,665,475         0.7
    BEVERAGES - NON-ALCOHOLIC
  Embotelladora Andina S.A. - ADR{\/} .......................   CHLE           15,000        338,438         0.1
    BEVERAGES - NON-ALCOHOLIC
  Sudamtex de Venezuela "B" - ADR{\/} .......................   VENZ           32,592        138,516         0.1
    TEXTILES & APPAREL
  Mavesa S.A. - ADR{\/} .....................................   VENZ           24,090         96,360          --
    FOOD
  Cerveceria Backus & Johnston S.A. "T" .....................   PERU           75,905         59,133          --
    BEVERAGES - ALCOHOLIC
                                                                                        ------------
                                                                                          16,960,240
                                                                                        ------------
Capital Goods (1.3%)
  Corporacion GEO, S.A. de C.V. "B"-/- ......................   MEX           271,000      1,874,923         0.8
    CONSTRUCTION
  ARA, S.A. de C.V.-/- ......................................   MEX           230,000      1,148,642         0.5
    CONSTRUCTION
                                                                                        ------------
                                                                                           3,023,565
                                                                                        ------------
Consumer Durables (0.5%)
  Brasmotor S.A. Preferred ..................................   BRZL        8,532,000      1,182,617         0.5
    APPLIANCES & HOUSEHOLD DURABLES
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $228,528,134) ................                            233,366,640        95.3
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-101
<PAGE>   1567
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                           PRINCIPAL       VALUE         % OF NET
FIXED INCOME INVESTMENTS                                       CURRENCY     AMOUNT        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Corporate Bonds (0.0%)
  Brazil (0.0%)
    Companhia Vale do Rio Doce - Non Convertible (cost
     $0) ....................................................   BRL           276,400             --          --
                                                                                        ------------       -----
<CAPTION>
 
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- - -------------------------------------------------------------                           ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Dated April 30, 1998, with State Street Bank & Trust Co.,
   due May 1, 1998, for an effective yield of 5.44%,
   collateralized by $8,935,000 U.S. Treasury Bills, 6.125%
   due 8/31/98 (market value of collateral is $9,046,688,
   including accrued interest). (cost $8,868,000) ...........                           $  8,868,000         3.6
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $237,396,134)  * ....................                            242,234,640        98.9
Other Assets and Liabilities ................................                              2,658,295         1.1
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $244,892,935       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        [.]  Each unit represents 3 "B" shares and 1 "C" share.
        {=}  Each unit represents one preferred share of Unibanco and one
             preferred "B" share of Unibanco Holdings.
          *  For Federal income tax purposes, cost is $237,686,922 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  24,173,992
                 Unrealized depreciation:           (19,626,274)
                                                  -------------
                 Net unrealized appreciation:     $   4,547,718
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviations:
             ADR--American Depositary Receipt
             GDR--Global Depositary Receipt
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                                                                PERCENTAGE OF NET ASSETS {D}
                                                                          -----------------------------------------
                                                                                          SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)                                        EQUITY          & OTHER         TOTAL
- ------------------------------------------------------------------------  -----------  -----------------  ---------
<S>                                                                       <C>          <C>                <C>
Argentina (ARG/ARS) ....................................................        10.1                           10.1
Brazil (BRZL/BRL) ......................................................        35.7                           35.7
Chile (CHLE/CLP) .......................................................        12.1                           12.1
Mexico (MEX/MXN) .......................................................        30.4                           30.4
Panama (PAN/PND) .......................................................         1.1                            1.1
Peru (PERU/PES) ........................................................         3.2                            3.2
United States (US/USD) .................................................         1.5             4.7            6.2
Venezuela (VENZ/VEB) ...................................................         1.2                            1.2
                                                                               -----             ---      ---------
Total  .................................................................        95.3             4.7          100.0
                                                                               -----             ---      ---------
                                                                               -----             ---      ---------
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $244,892,935.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-102
<PAGE>   1568
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                               <C>         <C>
Assets:
  Investments in securities, at value (cost $237,396,134) (Note 1)..........................  $242,234,640
  U.S. currency.................................................................  $      427
  Foreign currencies (cost $7,378,125)..........................................   7,381,624     7,382,051
                                                                                  ----------
  Dividends receivable......................................................................     2,201,350
  Receivable for Fund shares sold...........................................................       199,570
  Receivable from Chancellor LGT Asset Management, Inc. (Note 2)............................       195,122
  Interest receivable.......................................................................         2,619
                                                                                              ------------
    Total assets............................................................................   252,215,352
                                                                                              ------------
Liabilities:
  Payable for securities purchased..........................................................     3,531,832
  Payable for Fund shares repurchased.......................................................     2,891,492
  Payable for investment management and administration fees (Note 2)........................       306,451
  Payable for transfer agent fees (Note 2)..................................................       217,388
  Payable for service and distribution expenses (Note 2)....................................       147,048
  Payable for printing and postage expenses.................................................        67,469
  Payable for custodian fees................................................................        49,709
  Payable for professional fees.............................................................        45,778
  Payable for registration and filing fees..................................................         6,621
  Payable for fund accounting fees (Note 2).................................................         2,722
  Payable for Directors' fees and expenses (Note 2).........................................           158
  Other accrued expenses....................................................................        55,749
                                                                                              ------------
    Total liabilities.......................................................................     7,322,417
                                                                                              ------------
Net assets..................................................................................  $244,892,935
                                                                                              ------------
                                                                                              ------------
Class A:
Net asset value and redemption price per share ($131,814,677 DIVIDED BY 6,364,611 shares
 outstanding)...............................................................................  $      20.71
                                                                                              ------------
                                                                                              ------------
Maximum offering price per share (100/95.25 of $20.71) *....................................  $      21.74
                                                                                              ------------
                                                                                              ------------
Class B:+
Net asset value and offering price per share ($112,321,626 DIVIDED BY 5,507,298 shares
 outstanding)...............................................................................  $      20.40
                                                                                              ------------
                                                                                              ------------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($756,632 DIVIDED
 BY 36,559 shares outstanding)..............................................................  $      20.70
                                                                                              ------------
                                                                                              ------------
Net assets consist of:
  Paid in capital (Note 4)..................................................................  $250,779,254
  Undistributed net investment income.......................................................       891,469
  Accumulated net realized loss on investments and foreign currency transactions............   (11,599,724)
  Net unrealized depreciation on translation of assets and liabilities in foreign
   currencies...............................................................................       (16,570)
  Net unrealized appreciation of investments................................................     4,838,506
                                                                                              ------------
Total -- representing net assets applicable to capital shares outstanding...................  $244,892,935
                                                                                              ------------
                                                                                              ------------
<FN>
- --------------
   * On sales of $50,000 or more, the offering price is reduced.
   + Redemption price per share is equal to the net asset value per share less
     any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-103
<PAGE>   1569
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                            STATEMENT OF OPERATIONS
 
                        Six months ended April 30, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                                <C>         <C>
Investment income: (Note 1)
  Dividend income (net of foreign withholding tax of $275,465)...............................  $3,895,778
  Securities lending income..................................................................      92,678
  Interest income............................................................................      74,780
                                                                                               ----------
    Total investment income..................................................................   4,063,236
                                                                                               ----------
Expenses:
  Investment management and administration fees (Note 2).....................................   1,294,289
  Service and distribution expenses: (Note 2)
    Class A......................................................................  $  355,309
    Class B......................................................................     611,111     966,420
                                                                                   ----------
  Transfer agent fees (Note 2)...............................................................     579,200
  Interest expense (Note 1)..................................................................     208,858
  Printing and postage expenses..............................................................      96,111
  Custodian fees.............................................................................      92,129
  Professional fees..........................................................................      79,345
  Registration and filing fees...............................................................      48,630
  Fund accounting fees (Note 2)..............................................................      35,020
  Directors' fees and expenses (Note 2)......................................................       5,249
  Other expenses.............................................................................       6,335
                                                                                               ----------
    Total expenses before reimbursement......................................................   3,411,586
                                                                                               ----------
      Expenses reimbursed by Chancellor LGT Asset Management, Inc. (Note 2)..................    (245,122)
                                                                                               ----------
    Total net expenses.......................................................................   3,166,464
                                                                                               ----------
Net investment income........................................................................     896,772
                                                                                               ----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
  (Note 1)
  Net realized gain on investments...............................................   3,786,790
  Net realized loss on foreign currency transactions.............................    (156,400)
                                                                                   ----------
    Net realized gain during the period......................................................   3,630,390
  Net change in unrealized depreciation on translation of assets and liabilities
   in foreign currencies.........................................................      (9,849)
  Net change in unrealized appreciation of investments...........................  13,997,378
                                                                                   ----------
    Net unrealized appreciation during the period............................................  13,987,529
                                                                                               ----------
Net realized and unrealized gain on investments and foreign currencies.......................  17,617,919
                                                                                               ----------
Net increase in net assets resulting from operations.........................................  $18,514,691
                                                                                               ----------
                                                                                               ----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-104
<PAGE>   1570
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                       STATEMENT OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                  SIX MONTHS ENDED      YEAR ENDED
                                                                                   APRIL 30, 1998    OCTOBER 31, 1997
                                                                                  ----------------   ----------------
<S>                                                                               <C>                <C>
Decrease in net assets
Operations:
  Net investment income.........................................................   $     896,772     $      1,116,958
  Net realized gain on investments and foreign currency transactions............       3,630,390           84,545,615
  Net change in unrealized appreciation (depreciation) on translation of assets
   and liabilities in foreign currencies........................................          (9,849)              25,640
  Net change in unrealized appreciation (depreciation) of investments...........      13,997,378          (47,707,162)
                                                                                  ----------------   ----------------
    Net increase in net assets resulting from operations........................      18,514,691           37,981,051
                                                                                  ----------------   ----------------
Class A:
Distributions to shareholders: (Note 1)
  From net investment income....................................................        (219,488)                  --
Advisor Class:
Distributions to shareholders: (Note 1)
  From net investment income....................................................          (5,487)                  --
                                                                                  ----------------   ----------------
    Total distributions.........................................................        (224,975)                  --
                                                                                  ----------------   ----------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and reinvested..............................     410,769,788        1,267,100,757
  Decrease from capital shares repurchased......................................    (477,746,631)      (1,327,093,718)
                                                                                  ----------------   ----------------
    Net decrease from capital share transactions................................     (66,976,843)         (59,992,961)
                                                                                  ----------------   ----------------
Total decrease in net assets....................................................     (48,687,127)         (22,011,910)
Net assets:
  Beginning of period...........................................................     293,580,062          315,591,972
                                                                                  ----------------   ----------------
  End of period *...............................................................   $ 244,892,935     $    293,580,062
                                                                                  ----------------   ----------------
                                                                                  ----------------   ----------------
 * Includes undistributed net investment income of..............................   $     891,469     $        219,672
                                                                                  ----------------   ----------------
                                                                                  ----------------   ----------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-105
<PAGE>   1571
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                         CLASS A+
                                          ----------------------------------------------------------------------
                                          SIX MONTHS
                                            ENDED                       YEAR ENDED OCTOBER 31,
                                          APRIL 30,    ---------------------------------------------------------
                                           1998 (d)    1997 (d)    1996 (d)    1995 (d)    1994 (d)    1993 (d)
                                          ----------   ---------   ---------   ---------   ---------   ---------
<S>                                       <C>          <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $  19.50     $  17.95    $  15.38    $  26.11    $  19.78    $  15.59
                                          ----------   ---------   ---------   ---------   ---------   ---------
Income from investment operations:
  Net investment income (loss)..........      0.09*        0.11        0.09        0.15       (0.08)       0.18**
  Net realized and unrealized gain
   (loss) on investments................      1.15         1.44        2.59       (9.28)       6.75        5.21
                                          ----------   ---------   ---------   ---------   ---------   ---------
    Net increase (decrease) from
     investment operations..............      1.24         1.55        2.68       (9.13)       6.67        5.39
                                          ----------   ---------   ---------   ---------   ---------   ---------
Distributions to shareholders:
  From net investment income............     (0.03)          --       (0.08)         --       (0.19)      (0.12)
  From net realized gain on
   investments..........................        --           --          --       (1.60)      (0.15)      (1.08)
  In excess of net investment income....        --           --       (0.03)         --          --          --
                                          ----------   ---------   ---------   ---------   ---------   ---------
    Total distributions.................     (0.03)          --       (0.11)      (1.60)      (0.34)      (1.20)
                                          ----------   ---------   ---------   ---------   ---------   ---------
Net asset value, end of period..........  $  20.71     $  19.50    $  17.95    $  15.38    $  26.11    $  19.78
                                          ----------   ---------   ---------   ---------   ---------   ---------
                                          ----------   ---------   ---------   ---------   ---------   ---------
 
Total investment return (c).............      6.50%(b)     8.52%      17.52%     (37.16)%     34.10%       37.1%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $131,815     $159,496    $177,373    $182,462    $336,960    $129,280
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Note 1)............      0.90%(a)     0.52%       0.46%       0.86%      (0.29)%      1.29%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      0.71%(a)     0.42%       0.39%       0.85%        N/A         1.2%
Ratio of operating expenses to average
 net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Note 1)............      1.99%(a)     1.96%       2.03%       2.11%       2.04%        2.4%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      2.18%(a)     2.06%       2.10%       2.12%        N/A        2.49%
Ratio of interest expense to average net
 assets (Note 1)++++....................      0.16%(a)      N/A         N/A         N/A         N/A         N/A
Portfolio turnover rate++++.............        27%(a)      130%        101%        125%        155%        112%
Average commission rate per share paid
 on portfolio transactions++++..........  $ 0.0016     $ 0.0007    $ 0.0005         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a)  Annualized
 (b)  Not annualized
 (c)  Total investment return does not include sales charges.
 (d)  These selected per share data were calculated based upon average
      shares outstanding during the period.
   *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
  **  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
   +  All capital shares issued and outstanding as of March 31, 1993 were
      reclassified as Class A shares.
  ++  Commencing April 1, 1993, the Fund began offering Class B shares.
 +++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++  Portfolio turnover rate, average commission rate, and ratio of
      interest expense to average net assets are calculated on the basis of
      the Fund as a whole without distinguishing between the classes of
      shares issued.
 N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-106
<PAGE>   1572
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                          CLASS B++
                                          --------------------------------------------------------------------------
                                          SIX MONTHS                                                   APRIL 1, 1993
                                            ENDED                 YEAR ENDED OCTOBER 31,                    TO
                                          APRIL 30,    ---------------------------------------------    OCTOBER 31,
                                           1998 (d)    1997 (d)    1996 (d)    1995 (d)    1994 (d)      1993 (d)
                                          ----------   ---------   ---------   ---------   ---------   -------------
<S>                                       <C>          <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $  19.23     $  17.78    $  15.21    $  25.94    $  19.75      $ 16.26
                                          ----------   ---------   ---------   ---------   ---------   -------------
Income from investment operations:
  Net investment income (loss)..........      0.04*        0.01       (0.00)       0.06       (0.22)       (0.07)
  Net realized and unrealized gain
   (loss) on investments................      1.13         1.44        2.59       (9.19)       6.74         3.56
                                          ----------   ---------   ---------   ---------   ---------   -------------
    Net increase (decrease) from
     investment operations..............      1.17         1.45        2.59       (9.13)       6.52         3.49
                                          ----------   ---------   ---------   ---------   ---------   -------------
Distributions to shareholders:
  From net investment income............        --           --       (0.01)         --       (0.18)          --
  From net realized gain on
   investments..........................        --           --          --       (1.60)      (0.15)          --
  In excess of net investment income....        --           --       (0.01)         --          --           --
                                          ----------   ---------   ---------   ---------   ---------   -------------
    Total distributions.................        --           --       (0.02)      (1.60)      (0.33)          --
                                          ----------   ---------   ---------   ---------   ---------   -------------
Net asset value, end of period..........  $  20.40     $  19.23    $  17.78    $  15.21    $  25.94      $ 19.75
                                          ----------   ---------   ---------   ---------   ---------   -------------
                                          ----------   ---------   ---------   ---------   ---------   -------------
 
Total investment return (c).............      6.19%(b)     8.04%      17.02%     (37.42)%     33.33%        21.5% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $112,322     $133,448    $137,400    $134,527    $211,673      $13,576
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Note 1)............      0.40%(a)     0.02%      (0.04)%      0.36%      (0.79)%       (0.7)% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      0.21%(a)    (0.08)%     (0.11)%      0.35%        N/A          N/A
Ratio of operating expenses to average
 net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Note 1)............      2.49%(a)     2.46%       2.53%       2.61%       2.54%         2.9% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      2.68%(a)     2.56%       2.60%       2.62%        N/A          N/A
Ratio of interest expense to average net
 assets (Note 1)++++....................      0.16%(a)      N/A         N/A         N/A         N/A          N/A
Portfolio turnover rate++++.............        27%(a)      130%        101%        125%        155%         112%
Average commission rate per share paid
 on portfolio transactions++++..........  $ 0.0016     $ 0.0007    $ 0.0005         N/A         N/A          N/A
</TABLE>
 
- ----------------
 
 (a)  Annualized
 (b)  Not annualized
 (c)  Total investment return does not include sales charges.
 (d)  These selected per share data were calculated based upon average
      shares outstanding during the period.
   *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
  **  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
   +  All capital shares issued and outstanding as of March 31, 1993 were
      reclassified as Class A shares.
  ++  Commencing April 1, 1993, the Fund began offering Class B shares.
 +++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++  Portfolio turnover rate, average commission rate, and ratio of
      interest expense to average net assets are calculated on the basis of
      the Fund as a whole without distinguishing between the classes of
      shares issued.
 N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
                                    
                                     FS-107
<PAGE>   1573
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                         ADVISOR CLASS+++
                                          -----------------------------------------------
                                          SIX MONTHS       YEAR ENDED        JUNE 1, 1995
                                            ENDED          OCTOBER 31,            TO
                                          APRIL 30,    -------------------   OCTOBER 31,
                                           1998 (d)    1997 (d)   1996 (d)       1995
                                          ----------   --------   --------   ------------
<S>                                       <C>          <C>        <C>        <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $ 19.57     $ 17.94    $ 15.40      $15.95
                                          ----------   --------   --------   ------------
Income from investment operations:
  Net investment income (loss)..........      0.13*       0.19       0.17        0.09
  Net realized and unrealized gain
   (loss) on investments................      1.15        1.44       2.58       (0.64)
                                          ----------   --------   --------   ------------
    Net increase (decrease) from
     investment operations..............      1.28        1.63       2.75       (0.55)
                                          ----------   --------   --------   ------------
Distributions to shareholders:
  From net investment income............     (0.15)         --      (0.14)         --
  From net realized gain on
   investments..........................        --          --         --          --
  In excess of net investment income....        --          --      (0.07)         --
                                          ----------   --------   --------   ------------
    Total distributions.................     (0.15)         --      (0.21)         --
                                          ----------   --------   --------   ------------
Net asset value, end of period..........   $ 20.70     $ 19.57    $ 17.94      $15.40
                                          ----------   --------   --------   ------------
                                          ----------   --------   --------   ------------
 
Total investment return (c).............      6.64%(b)    8.91%     18.16%      (3.45)% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $   757     $   636    $   818      $  369
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Note 1)............      1.40%(a)    1.02%      0.96%       1.36% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      1.21%(a)    0.92%      0.89%       1.35% (a)
Ratio of operating expenses to average
 net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Note 1)............      1.49%(a)    1.46%      1.53%       1.61% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      1.68%(a)    1.56%      1.60%       1.62% (a)
Ratio of interest expense to average net
 assets (Note 1)++++....................      0.16%(a)     N/A        N/A         N/A
Portfolio turnover rate++++.............        27%(a)     130%       101%        125%
Average commission rate per share paid
 on portfolio transactions++++..........   $0.0016     $0.0007    $0.0005         N/A
</TABLE>
 
- ----------------
 
 (a)  Annualized
 (b)  Not annualized
 (c)  Total investment return does not include sales charges.
 (d)  These selected per share data were calculated based upon average
      shares outstanding during the period.
   *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
  **  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
      investment income per share would have been reduced by $0.02.
   +  All capital shares issued and outstanding as of March 31, 1993 were
      reclassified as Class A shares.
  ++  Commencing April 1, 1993, the Fund began offering Class B shares.
 +++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++  Portfolio turnover rate, average commission rate, and ratio of
      interest expense to average net assets are calculated on the basis of
      the Fund as a whole without distinguishing between the classes of
      shares issued.
 N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-108
<PAGE>   1574
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                 April 30, 1998
 
- --------------------------------------------------------------------------------
 
The following Notes to Financial Statements are for the period ending April 30,
1998, and unless otherwise indicated reflect facts as of that date. Please see
"Note 5 -- Subsequent Events" for a discussion of certain changes which took
place after April 30, 1998.
 
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 5)
GT Global Latin America Growth Fund ("Fund") is a separate series of GT
Investment Funds, Inc. ("Company"). Effective June 1, 1998, the Company was
renamed A I M Investment Funds, Inc. and the Fund was renamed AIM Latin American
Growth Fund. The Company is organized as a Maryland corporation and is
registered under the Investment Company Act of 1940, as amended ("1940 Act"), as
a non-diversified, open-end management investment company. The Company has
thirteen series of shares in operation, each series corresponding to a distinct
portfolio of investments.
 
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective service and distribution expenses, and
may differ in its transfer agent, registration, and certain other class-specific
fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
 
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. ("the Manager") to be the primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments with maturity of 60
days or less are valued at amortized cost adjusted for foreign exchange
translation and market fluctuation, if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records are maintained in U.S. dollars. The market values of
foreign securities, currency holdings, and other assets and liabilities are
recorded in the books and records of the Fund after translation to U.S. dollars
based on the exchange rates on that day. The cost of each security is determined
using historical exchange rates. Income and withholding taxes are translated at
prevailing exchange rates when earned or incurred.
 
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from 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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which
 
                                     FS-109
<PAGE>   1575
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
the value, including accrued interest, is at least equal to the amount to be
repaid to the Fund under each agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. Forward Contracts involve market risk in excess of the
amount shown in the Fund's "Statement of Assets and Liabilities." The Fund could
be exposed to risk if a counterparty is unable to meet the terms of the contract
or if the value of the currency changes unfavorably. The Fund may enter into
Forward Contracts in connection with planned purchases or sales of securities,
or to hedge against adverse fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on an exchange is valued at its last bid price,
or, in the case of an over-the-counter option, is valued at the average of the
last bid prices obtained from brokers. If an option expires on its stipulated
expiration date or if the Fund enters into a closing purchase transaction, a
gain or loss is realized without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is extinguished.
If a written call option is exercised, a gain or loss is realized from the sale
of the underlying security and the proceeds of the sale are increased by the
premium originally received. If a written put option is exercised, the cost of
the underlying security purchased would be decreased by the premium originally
received. The Fund can write options only on a covered basis, which, for a call,
requires that the fund hold the underlying securities and, for a put, requires
the Fund to maintain in a segregated account cash, U.S. government securities,
or other liquid securities in an amount not less than the exercise price or
otherwise provide adequate cover at all times while the put option is
outstanding. The Fund may use options to manage its exposure to the stock or
bond market and to fluctuations in currency values or interest rates.
 
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock or bond
market and to fluctuations in currency values or interest rates. At April 30,
1998, the fund had no open futures contracts.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Interest income is recorded on the
accrual basis. Where a high level of uncertainty exists as to its collection,
income is recorded net of all withholding tax with any rebate recorded when
received. The Fund may trade securities on other than normal settlement terms.
This may increase the risk if the other party to the transaction fails to
deliver and causes the Fund to subsequently invest at less advantageous prices.
 
(H) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any
 
                                     FS-110
<PAGE>   1576
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
excise tax under Section 4982 of the Code. Therefore, no provision has been made
for Federal taxes on income, capital gains, or unrealized appreciation of
securities held, and excise tax on income and capital gains. The Fund currently
has a capital loss carry forward of $14,939,326, of which $8,211,999 expires in
2003 and $6,727,327 expires in 2004.
 
(I) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 and timing differences.
 
(J) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
 
(K) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
 
(L) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
 
(M) PORTFOLIO SECURITIES LOANED
At April 30, 1998, stocks with an aggregate value of approximately $29,932,877
were on loan to brokers. The loans were secured by cash collateral of
$30,797,802. For international securities, cash collateral is received by the
Fund against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by the Fund against loaned securities in an amount at
least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. The
cash collateral is invested in a securities lending trust which consists of a
portfolio of high quality short duration securities whose average effective
duration is restricted to 120 days or less. For the six months ended April 30,
1998, the Fund received $92,678 of income from securities lending.
 
(N) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised and/or
administered by the Manager, has a line of credit with each of BankBoston and
State Street Bank & Trust Company. The arrangements with the banks allow the
Fund and the GT Funds to borrow an aggregate maximum amount of $250,000,000. The
Fund is limited to borrowing up to 33 1/3% of the value of each Fund's total
assets. On April 30, 1998, the Fund had no loans outstanding.
 
For the six months ended April 30, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $8,818,847, with a weighted average interest rate of 6.28%.
Interest expense for the Fund for the six months ended April 30, 1998, was
$201,369. Other interest expense charges amounted to $7,489.
 
2. RELATED PARTIES (SEE ALSO NOTE 5)
For the period ended April 30, 1998, Chancellor LGT Asset Management, Inc. was
the Fund's investment manager and administrator. The Fund pays investment
management and administration fees to the Manager at the annualized rate of
0.975% of the first $500 million of average daily net assets of the Fund; 0.95%
of the next $500 million; 0.925% of the next $500 million and 0.90% on amounts
thereafter. These fees are computed daily and paid monthly.
 
For the period ended April 30, 1998, GT Global Inc. ("GT Global"), an affiliate
of the Manager, is the Fund's distributor. The Fund offers Class A, Class B and
Advisor Class shares for purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the period ended April 30, 1998, GT Global retained $15,816
of such sales charges. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Fund's current prospectus. GT Global collected CDSCs in the
amount of $74 for the period ended April 30, 1998. GT Global also makes ongoing
shareholder servicing and trail commission payments to dealers whose clients
hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the six months ended April 30, 1998, GT Global collected CDSCs
in the amount of $513,130. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
 
                                     FS-111
<PAGE>   1577
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
Pursuant to the then effective separate distribution plans adopted under 1940
Act Rule 12b-1 by the Company's Board of Directors with respect to the Fund's
Class A shares ("Class A Plan") and Class B shares ("Class B Plan"), the Fund
reimbursed GT Global for a portion of its shareholder servicing and distribution
expenses. Under that Class A Plan, the Fund was permitted to pay GT Global a
service fee at the annualized rate of up to 0.25% of the average daily net
assets of the Fund's Class A shares for GT Global's expenditures incurred in
servicing and maintaining shareholder accounts, and was permitted to pay GT
Global a distribution fee at the annualized rate of up to 0.50% of the average
daily net assets of the Fund's Class A shares, less any amounts paid by the Fund
as the aforementioned service fee, for GT Global's expenditures incurred in
providing services as distributor. All expenses for which GT Global was
reimbursed under the Class A Plan would have been incurred within one year of
such reimbursement.
 
For the period ended April 30, 1998, pursuant to that Class B Plan, the Fund was
permitted to pay GT Global a service fee at the annualized rate of up to 0.25%
of the average daily net assets of the Fund's Class B shares for GT Global's
expenditures incurred in servicing and maintaining shareholder accounts, and was
permitted to pay GT Global a distribution fee at the annualized rate of up to
0.75% of the average daily net assets of the Fund's Class B Shares for GT
Global's expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually were permitted to be
carried forward for reimbursement in subsequent years as long as that Plan
continued in effect.
 
The Manager and GT Global voluntarily undertook to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 2.00%, 2.50%, and 1.50% of the average
net assets of the Fund's Class A, Class B and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the results according to the Funds average daily net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.
 
3. PURCHASES AND SALES OF SECURITIES
For the six months ended April 30, 1998, purchases and sales of investment
securities by the Fund, other than short-term investments, aggregated
$36,018,185 and $101,582,285. There were no purchases or sales of U.S.
government obligations for the six months ended April 30, 1998.
 
4. CAPITAL SHARES
At April 30, 1998, there were 6,000,000,000 shares of the Company's common stock
authorized, at $0.0001 par value. Of this amount, 200,000,000 were classified as
shares of the Fund; 400,000,000 were classified as shares of GT Global
Government Income Fund; 200,000,000 were classified as shares of GT Global
Developing Markets Fund; 200,000,000 were classified as shares of GT Global
Health Care Fund; 200,000,000 were classified as shares of GT Global Strategic
Income Fund; 200,000,000 were classified as shares of GT Global Currency Fund
(inactive); 200,000,000 were classified as shares of GT Global Growth & Income
Fund; 200,000,000 were classified as shares of GT Global Small Companies Fund
(inactive); 200,000,000 were classified as shares of GT Global Natural Resources
Fund; 200,000,000 were classified as shares of GT Global Infrastructure Fund;
400,000,000 were classified as shares of GT Global Telecommunications Fund;
200,000,000 were classified as shares of GT Global Emerging Markets Fund; and
200,000,000 were classified as shares of GT Global Financial Services Fund;
200,000,000 were classified as shares of GT Global High Income Fund; and
200,000,000 were classified as shares of GT Global Consumer Products and
Services Fund. The shares of each of the foregoing series of the Company were
divided equally into two classes, designated Class A and Class B common stock.
With respect to the issuance of Advisor Class shares, 100,000,000 shares were
classified as shares of each of the fifteen series of the Company and designated
as Advisor Class common stock. 1,100,000,000 shares remain unclassified.
Transactions in capital shares of the Fund were as follows:
 
                                     FS-112
<PAGE>   1578
                         AIM LATIN AMERICAN GROWTH FUND
                 (FORMERLY GT GLOBAL LATIN AMERICA GROWTH FUND)
 
                           CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
                                                   SIX MONTHS ENDED                        YEAR ENDED
                                                    APRIL 30, 1998                      OCTOBER 31, 1997
                                          -----------------------------------  -----------------------------------
CLASS A                                       SHARES             AMOUNT            SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       13,405,201  $      265,384,384       46,171,230  $      937,785,689
Shares issued in connection with
  reinvestment of distributions.........            8,768             183,853               --                  --
                                          ---------------  ------------------  ---------------  ------------------
                                               13,413,969         265,568,237       46,171,230         937,785,689
Shares repurchased......................      (15,226,871)       (303,415,633)     (47,874,889)       (980,118,186)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (1,812,902) $      (37,847,396)      (1,703,659) $      (42,332,497)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
 
<CAPTION>
 
CLASS B
- ----------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................        6,421,237  $      124,959,479       14,424,170  $      299,346,687
Shares issued in connection with
  reinvestment of distributions.........               --                  --               --                  --
                                          ---------------  ------------------  ---------------  ------------------
                                                6,421,237         124,959,479       14,424,170         299,346,687
Shares repurchased......................       (7,853,666)       (154,120,468)     (15,210,392)       (316,506,347)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (1,432,429) $      (29,160,989)        (786,222) $      (17,159,660)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
<CAPTION>
 
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................        1,027,199  $       20,236,630        1,448,623  $       29,968,381
Shares issued in connection with
  reinvestment of distributions.........              260               5,442               --                  --
                                          ---------------  ------------------  ---------------  ------------------
                                                1,027,459          20,242,072        1,448,623          29,968,381
Shares repurchased......................       (1,023,376)        (20,210,530)      (1,461,777)        (30,469,185)
                                          ---------------  ------------------  ---------------  ------------------
Net increase (decrease).................            4,083  $           31,542          (13,154) $         (500,804)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
5. SUBSEQUENT EVENTS
On May 29, 1998, Liechtenstein Global Trust ("LGT"), the former indirect parent
organization of Chancellor LGT Asset Management, Inc. ("Chancellor LGT"),
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included Chancellor LGT and
certain other affiliates. As a result of this transaction, Chancellor LGT was
renamed INVESCO (NY), Inc. and is now an indirect wholly-owned subsidiary of
AMVESCAP PLC. In connection with this transaction, A I M Advisors, Inc. ("AIM"),
an indirect wholly-owned subsidiary of AMVESCAP PLC, became the investment
adviser and administrator of the Fund and INVESCO (NY), Inc. became the
sub-adviser and sub-administrator of the Fund. In addition, A I M Distributors,
Inc. replaced GT Global, Inc. as the Fund's principal underwriter and the Fund
became subject to compensation-type Rule 12b-1 plans of distribution, which
replaced the Fund's former reimbursement-type Rule 12b-1 plans of distribution.
All of the changes became effective as of the close of business on May 29, 1998.
 
                                     FS-113
<PAGE>   1579
                       GT GLOBAL LATIN AMERICA GROWTH FUND
 
                        REPORT OF INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
ANNUAL REPORT
To the Shareholders of GT Global Latin America Growth Fund and Board of
Directors of G.T. Investment Funds, Inc.:
 
We have audited the accompanying statement of assets and liabilities of GT
Global Latin America Growth Fund, one of the funds organized as a series of G.T.
Investment Funds, Inc., including the portfolio of investments, as of October
31, 1997, the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global Latin America Growth Fund as of October 31, 1997, the results of
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended in conformity with generally accepted
accounting principles.
 


                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
DECEMBER 15, 1997
 
                                     FS-114
<PAGE>   1580
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (28.3%)
  Telecomunicacoes Brasileiras S.A. (Telebras): .............   BRZL               --             --        10.4
    TELEPHONE NETWORKS
    ADR{\/} .................................................   --            208,900   $ 21,203,350          --
    Common ..................................................   --        106,900,000      9,502,114          --
  Telefonos de Mexico, S.A. de C.V. "L" - ADR{\/} ...........   MEX           170,500      7,374,125         2.5
    TELEPHONE NETWORKS
  Cifra, S.A. de C.V.: ......................................   MEX                --             --         2.3
    RETAILERS-OTHER
    "C" .....................................................   --          3,340,500      5,800,868          --
    "B" - ADR{\/} ...........................................   --            335,792        648,079          --
    "A" .....................................................   --            104,372        192,244          --
  Compania Anonima Nacional Telefonos de Venezuela (CANTV) -
   ADR{\/} ..................................................   VENZ          147,400      6,448,750         2.2
    TELEPHONE NETWORKS
  Telefonica del Peru S.A. - ADR{\/} ........................   PERU          254,100      5,018,475         1.7
    TELEPHONE NETWORKS
  Companhia de Saneamento Basico do Estado de Sao Paulo -
   SABESP-/- ................................................   BRZL       26,748,622      4,852,798         1.7
    BUSINESS & PUBLIC SERVICES
  Cia de Telecomunicaciones de Chile S.A. - ADR{\/} .........   CHLE          163,000      4,523,250         1.5
    TELEPHONE NETWORKS
  Telecomunicacoes de Sao Paulo S.A. (TELESP): ..............   BRZL               --             --         1.2
    TELEPHONE NETWORKS
    Preferred ...............................................   --         11,109,390      2,902,308          --
    Common-/- ...............................................   --          2,802,000        597,306          --
  Santa Isabel S.A. - ADR{\/} ...............................   CHLE          181,100      3,350,350         1.1
    RETAILERS-FOOD
  Telecomunicacoes do Rio de Janeiro S.A. (TELERJ)
   Preferred ................................................   BRZL       34,694,581      3,304,546         1.1
    TELEPHONE NETWORKS
  Controladora Comercial Mexicana, S.A. de C.V.: ............   MEX                --             --         1.0
    RETAILERS-FOOD
    UBC .....................................................   --          2,682,000      2,665,940          --
    GDR{\/} .................................................   --             13,900        276,263          --
  Telefonica de Argentina S.A. - ADR{\/} ....................   ARG            90,900      2,556,563         0.9
    TELEPHONE NETWORKS
  Grupo Televisa, S.A. de C.V. - GDR-/- {\/} ................   MEX            47,000      1,457,000         0.5
    BROADCASTING & PUBLISHING
  Supermercados Unimarc S.A. - ADR (Chile){\/} -/- ..........   CHLE           33,000        495,000         0.2
    RETAILERS-FOOD
                                                                                        ------------
                                                                                          83,169,329
                                                                                        ------------
Energy (24.6%)
  Centrais Eletricas Brasileiras S.A. (Eletrobras): .........   BRZL               --             --         4.7
    ELECTRICAL & GAS UTILITIES
    "B" Preferred ...........................................   --         20,252,000      8,762,885          --
    Common-/- ...............................................   --         11,999,000      4,843,573          --
  Petroleo Brasileiro S.A. (Petrobras) Preferred ............   BRZL       48,642,000      9,045,365         3.1
    OIL
  C.A. La Electricidad de Caracas ...........................   VENZ        5,672,038      7,456,318         2.5
    ELECTRICAL & GAS UTILITIES
  Light - Servicos de Electricidade S.A. ....................   BRZL       17,602,000      5,843,915         2.0
    ELECTRICAL & GAS UTILITIES
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-115
<PAGE>   1581
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Energy (Continued)
  Enersis S.A. - ADR{\/} ....................................   CHLE          174,500   $  5,758,500         2.0
    ELECTRICAL & GAS UTILITIES
  Empresa Nacional de Electricidad S.A. - ADR{\/} ...........   CHLE          254,300      5,117,788         1.7
    ELECTRICAL & GAS UTILITIES
  YPF S.A. - ADR{\/} ........................................   ARG           148,900      4,764,800         1.6
    OIL
  Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} ....   BRZL          112,200      4,488,000         1.5
    ELECTRICAL & GAS UTILITIES
  Harken Energy Corp.-/- ....................................   US            674,500      4,426,406         1.5
    OIL
  Chilgener S.A. - ADR{\/} ..................................   CHLE          121,819      3,289,113         1.1
    ELECTRICAL & GAS UTILITIES
  Light - Participacoes S.A. ................................   BRZL       10,585,000      2,707,701         0.9
    ELECTRICAL & GAS UTILITIES
  Companhia Brasileira de Petroleo Ipiranga S.A.
   Preferred ................................................   BRZL      173,785,000      2,522,279         0.9
    OIL
  Perez Companc S.A. "B" ....................................   ARG           377,196      2,362,665         0.8
    OIL
  Compania Paulista de Forca e Luz ..........................   BRZL        5,030,000        736,842         0.3
    ELECTRICAL & GAS UTILITIES
                                                                                        ------------
                                                                                          72,126,150
                                                                                        ------------
Materials/Basic Industry (13.4%)
  Kimberly-Clark de Mexico, S.A. de C.V. "A" ................   MEX         2,614,000     11,520,383         3.9
    PAPER/PACKAGING
  Apasco, S.A. de C.V. ......................................   MEX         1,331,000      8,129,461         2.8
    CEMENT
  Companhia Vale do Rio Doce Preferred ......................   BRZL          306,600      5,923,966         2.0
    METALS - STEEL
  Sociedad Quimica y Minera de Chile S.A. - ADR{\/} .........   CHLE           95,100      4,933,313         1.7
    CHEMICALS
  Grupo Industrial Minera Mexico "L" ........................   MEX         1,406,724      4,178,055         1.4
    METALS - NON-FERROUS
  Industrias Penoles S.A. (CP) ..............................   MEX           978,200      3,895,228         1.3
    METALS - NON-FERROUS
  Corporacion Venezolana de Cementos, S.A.C.A.: .............   VENZ               --             --         0.3
    CEMENT
    "A" .....................................................   --            347,758        704,225          --
    "B" .....................................................   --            161,928        324,987          --
                                                                                        ------------
                                                                                          39,609,618
                                                                                        ------------
Multi-Industry/Miscellaneous (10.6%)
  Alfa, S.A. de C.V. "A" ....................................   MEX         1,356,600      9,942,984         3.4
    CONGLOMERATE
  Grupo Carso, S.A. de C.V. "A1" ............................   MEX         1,357,000      8,629,545         2.9
    MULTI-INDUSTRY
  Sanluis Corporacion, S.A. de C.V.-/- ......................   MEX           830,200      6,442,750         2.2
    CONGLOMERATE
  Desc, S.A. de C.V. - ADR{\/} ..............................   MEX            93,800      3,177,475         1.1
    CONGLOMERATE
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-116
<PAGE>   1582
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Multi-Industry/Miscellaneous (Continued)
  Empresas La Moderna, S.A. de C.V. "A"-/- ..................   MEX           355,000   $  1,743,114         0.6
    MULTI-INDUSTRY
  Commercial Del Plata-/- ...................................   ARG           697,410      1,032,786         0.4
    CONGLOMERATE
                                                                                        ------------
                                                                                          30,968,654
                                                                                        ------------
Finance (9.9%)
  Uniao Bancos Brasileiras "A" Preferred ....................   BRZL      247,114,000      6,271,997         2.1
    BANKS-MONEY CENTER
  Banco LatinoAmericano de Exportaciones S.A. (Bladex)
   "E"{\/} ..................................................   PAN            89,035      3,539,141         1.2
    OTHER FINANCIAL
  Banco BHIF - ADR-/-{\/} ...................................   CHLE          195,500      3,396,813         1.2
    BANKS-MONEY CENTER
  Grupo Financiero Banorte "B"-/- ...........................   MEX         2,279,000      3,138,743         1.1
    BANKS-MONEY CENTER
  Credicorp Ltd. - ADR{\/} ..................................   PERU          140,320      2,516,990         0.9
    BANKS-MONEY CENTER
  Administradora de Fondos de Pensiones Provida S.A. -
   ADR{\/} ..................................................   CHLE          149,900      2,510,825         0.9
    INVESTMENT MANAGEMENT
  Banco Provincial S.A. .....................................   VENZ        1,196,992      2,390,332         0.8
    BANKS-MONEY CENTER
  Banco de A. Edwards - ADR{\/} .............................   CHLE          125,100      2,173,613         0.7
    BANKS-MONEY CENTER
  Banco Frances del Rio de la Plata S.A. - ADR{\/} ..........   ARG            58,000      1,428,250         0.5
    BANKS-MONEY CENTER
  ARA, S.A. de C.V.-/- ......................................   MEX           230,000        848,383         0.3
    REAL ESTATE
  Banco Wiese - ADR{\/} .....................................   PERU          131,400        730,913         0.2
    BANKS-MONEY CENTER
                                                                                        ------------
                                                                                          28,946,000
                                                                                        ------------
Consumer Non-Durables (8.1%)
  Fomento Economico Mexicano, S.A. de C.V. "B" ..............   MEX         1,274,500      9,005,449         3.1
    BEVERAGES - ALCOHOLIC
  Grupo Industrial Maseca, S.A. de C.V. "B" .................   MEX         4,980,000      4,830,898         1.6
    FOOD
  Companhia Cervejaria Brahma Preferred .....................   BRZL        6,838,000      4,279,949         1.5
    BEVERAGES - ALCOHOLIC
  Compania Cervecerias Unidas S.A. - ADR{\/} ................   CHLE          138,800      3,383,250         1.2
    BEVERAGES - ALCOHOLIC
  Mavesa S.A. - ADR{\/} .....................................   VENZ          147,500      1,106,250         0.4
    FOOD
  Sudamtex de Venezuela "B" - ADR{\/} .......................   VENZ           53,200        691,600         0.2
    TEXTILES & APPAREL
  Embotelladora Andina S.A. - ADR{\/} .......................   CHLE           15,000        360,000         0.1
    BEVERAGES - NON-ALCOHOLIC
  Cerveceria Backus & Johnston S.A. "T" .....................   PERU           75,905         69,463          --
    BEVERAGES - ALCOHOLIC
                                                                                        ------------
                                                                                          23,726,859
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-117
<PAGE>   1583
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Consumer Durables (0.9%)
  Brasmotor S.A. Preferred ..................................   BRZL       18,327,000   $  2,576,819         0.9
    APPLIANCES & HOUSEHOLD DURABLES
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $290,305,760) ................                            281,123,429        95.8
                                                                                        ------------       -----
<CAPTION>
 
                                                                            NO. OF         VALUE         % OF NET
RIGHTS                                                         COUNTRY      RIGHTS        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Telecomunicacoes do Rio de Janeiro S.A. (TELERJ) Rights -
   Preferred, expire 11/12/97 ...............................   BRZL        1,689,830         22,993          --
    TELEPHONE NETWORKS
  Telecomunicacoes de Sao Paulo S.A. (TELESP) Rights, expire
   11/12/97 .................................................   BRZL          513,280            466          --
    TELEPHONE NETWORKS
                                                                                        ------------       -----
 
TOTAL RIGHTS (cost $0) ......................................                                 23,459          --
                                                                                        ------------       -----
<CAPTION>
 
                                                                           PRINCIPAL       VALUE         % OF NET
FIXED INCOME INVESTMENTS                                       CURRENCY     AMOUNT        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Corporate Bonds (0.0%)
  Brazil (0.0%)
    Companhia Vale do Rio Doce - Non Convertible (cost
     $0) ....................................................   BRL           276,400             --          --
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $290,305,760)  * ....................                            281,146,888        95.8
Other Assets and Liabilities ................................                             12,433,174         4.2
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $293,580,062       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
       {\/}  U.S. currency denominated.
        -/-  Non-income producing security.
          *  For Federal income tax purposes, cost is $290,596,548 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  26,409,562
                 Unrealized depreciation:           (35,859,222)
                                                  -------------
                 Net unrealized depreciation:     $  (9,449,660)
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviations:
    ADR--American Depository Receipt
    GDR--Global Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-118
<PAGE>   1584
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                          PERCENTAGE OF NET ASSETS{d}
                                         -----------------------------
                                                   SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)     EQUITY    & OTHER       TOTAL
- --------------------------------------   -----     -------       -----
<S>                                      <C>       <C>           <C>
Argentina (ARG/ARS) ..................    4.2                      4.2
Brazil (BRZL/BRL) ....................   34.3                     34.3
Chile (CHLE/CLP) .....................   13.4                     13.4
Mexico (MEX/MXN) .....................   32.0                     32.0
Panama (PAN/PND) .....................    1.2                      1.2
Peru (PERU/PES) ......................    2.8                      2.8
United States (US/USD) ...............    1.5       4.2            5.7
Venezuela (VENZ/VEB) .................    6.4                      6.4
                                         -----     -------       -----
Total  ...............................   95.8       4.2          100.0
                                         -----     -------       -----
                                         -----     -------       -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $293,580,062.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-119
<PAGE>   1585
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                                   <C>        <C>
Assets:
  Investments in securities, at value (cost $290,305,760) (Note 1).............................  $281,146,888
  U.S. currency.....................................................................  $     924
  Foreign currencies (cost $44,025).................................................     44,033       44,957
                                                                                      ---------
  Receivable for Fund shares sold..............................................................   14,119,361
  Receivable for securities sold...............................................................    4,099,448
  Dividends receivable.........................................................................      686,435
  Miscellaneous receivable.....................................................................       19,727
                                                                                                 -----------
    Total assets...............................................................................  300,116,816
                                                                                                 -----------
Liabilities:
  Payable for loan outstanding (Note 1)........................................................    3,238,000
  Payable for Fund shares repurchased..........................................................    2,418,769
  Payable for investment management and administration fees (Note 2)...........................      305,562
  Payable for service and distribution expenses (Note 2).......................................      233,877
  Payable for transfer agent fees (Note 2).....................................................      174,161
  Payable for printing and postage expenses....................................................       87,242
  Payable for professional fees................................................................       37,498
  Payable for custodian fees (Note 1)..........................................................       17,552
  Payable for registration and filing fees.....................................................        5,729
  Payable for Directors' fees and expenses (Note 2)............................................        5,654
  Payable for fund accounting fees (Note 2)....................................................        5,612
  Other accrued expenses.......................................................................        7,098
                                                                                                 -----------
    Total liabilities..........................................................................    6,536,754
                                                                                                 -----------
Net assets.....................................................................................  $293,580,062
                                                                                                 -----------
                                                                                                 -----------
Class A:
Net asset value and redemption price per share ($159,496,474 DIVIDED BY 8,177,513 shares
 outstanding)..................................................................................  $     19.50
                                                                                                 -----------
                                                                                                 -----------
Maximum offering price per share (100/95.25 of $19.50) *.......................................  $     20.47
                                                                                                 -----------
                                                                                                 -----------
Class B:+
Net asset value and offering price per share ($133,448,007 DIVIDED BY 6,939,727 shares
 outstanding)..................................................................................  $     19.23
                                                                                                 -----------
                                                                                                 -----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($635,581 DIVIDED BY
 32,476 shares outstanding)....................................................................  $     19.57
                                                                                                 -----------
                                                                                                 -----------
Net assets consist of:
  Paid in capital (Note 4).....................................................................  $317,756,097
  Undistributed net investment income..........................................................      219,672
  Accumulated net realized loss on investments and foreign currency transactions...............  (15,230,114)
  Net unrealized depreciation on translation of assets and liabilities in foreign currencies...       (6,721)
  Net unrealized depreciation of investments...................................................   (9,158,872)
                                                                                                 -----------
Total -- representing net assets applicable to capital shares outstanding......................  $293,580,062
                                                                                                 -----------
                                                                                                 -----------
<FN>
- --------------
   * On sales of $50,000 or more, the offering price is reduced.
   + Redemption price per share is equal to the net asset value per share less
     any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-120
<PAGE>   1586
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                            STATEMENT OF OPERATIONS
 
                          Year ended October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                              <C>          <C>
Investment income: (Note 1)
  Dividend income (net of foreign withholding tax of $266,649)..............................  $ 8,471,075
  Interest income...........................................................................      530,160
                                                                                              -----------
    Total investment income.................................................................    9,001,235
                                                                                              -----------
Expenses:
  Investment management and administration fees (Note 2)....................................    3,538,586
  Service and distribution expenses: (Note 2)
    Class A....................................................................  $ 1,011,259
    Class B....................................................................    1,587,737    2,598,996
                                                                                 -----------
  Transfer agent fees (Note 2)..............................................................    1,261,524
  Custodian fees (Note 1)...................................................................      196,565
  Printing and postage expenses.............................................................      175,200
  Fund accounting fees (Note 2).............................................................       90,733
  Audit fees................................................................................       73,365
  Registration and filing fees..............................................................       64,495
  Legal fees................................................................................       17,155
  Directors' fees and expenses (Note 2).....................................................       13,140
  Other expenses (Note 1)...................................................................      215,751
                                                                                              -----------
    Total expenses before reductions........................................................    8,245,510
                                                                                              -----------
      Expense reductions (Notes 1 & 6)......................................................     (361,233)
                                                                                              -----------
    Total net expenses......................................................................    7,884,277
                                                                                              -----------
Net investment income.......................................................................    1,116,958
                                                                                              -----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
  (Note 1)
  Net realized gain on investments.............................................   85,442,902
  Net realized loss on foreign currency transactions...........................     (897,287)
                                                                                 -----------
    Net realized gain during the year.......................................................   84,545,615
  Net change in unrealized depreciation on translation of assets and
   liabilities in foreign currencies...........................................       25,640
  Net change in unrealized depreciation of investments.........................  (47,707,162)
                                                                                 -----------
    Net unrealized depreciation during the year.............................................  (47,681,522)
                                                                                              -----------
Net realized and unrealized gain on investments and foreign currencies......................   36,864,093
                                                                                              -----------
Net increase in net assets resulting from operations........................................  $37,981,051
                                                                                              -----------
                                                                                              -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-121
<PAGE>   1587
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                       STATEMENT OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                              YEAR ENDED     YEAR ENDED
                                                                              OCTOBER 31,    OCTOBER 31,
                                                                                 1997           1996
                                                                             -------------  -------------
<S>                                                                          <C>            <C>
Decrease in net assets
Operations:
  Net investment income....................................................  $   1,116,958  $     878,406
  Net realized gain (loss) on investments and foreign currency
   transactions............................................................     84,545,615     (4,964,724)
  Net change in unrealized appreciation on translation of assets and
   liabilities in foreign currencies.......................................         25,640        608,089
  Net change in unrealized appreciation (depreciation) of investments......    (47,707,162)    63,484,288
                                                                             -------------  -------------
    Net increase in net assets resulting from operations...................     37,981,051     60,006,059
                                                                             -------------  -------------
Class A:
Distributions to shareholders: (Note 1)
  From net investment income...............................................             --       (842,524)
  In excess of net investment income.......................................             --       (381,092)
Class B:
Distributions to shareholders: (Note 1)
  From net investment income...............................................             --        (93,201)
  In excess of net investment income.......................................             --        (42,157)
Advisor Class:
Distributions to shareholders: (Note 1)
  From net investment income...............................................             --         (4,285)
  In excess of net investment income.......................................             --         (1,938)
                                                                             -------------  -------------
    Total distributions....................................................             --     (1,365,197)
                                                                             -------------  -------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and reinvested.........................  1,267,100,757  1,551,794,195
  Decrease from capital shares repurchased.................................  (1,327,093,718) (1,612,200,649)
                                                                             -------------  -------------
    Net decrease from capital share transactions...........................    (59,992,961)   (60,406,454)
                                                                             -------------  -------------
Total decrease in net assets...............................................    (22,011,910)    (1,765,592)
Net assets:
  Beginning of year........................................................    315,591,972    317,357,564
                                                                             -------------  -------------
  End of year *............................................................  $ 293,580,062  $ 315,591,972
                                                                             -------------  -------------
                                                                             -------------  -------------
 * Includes undistributed net investment income of.........................  $     219,672             --
                                                                             -------------  -------------
                                                                             -------------  -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-122
<PAGE>   1588
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS A+
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (A)    1996 (A)    1995 (A)    1994 (A)    1993 (A)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   17.95   $   15.38   $   26.11   $   19.78   $   15.59
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income (loss)..........       0.11        0.09        0.15       (0.08)       0.18*
  Net realized and unrealized gain
   (loss) on investments................       1.44        2.59       (9.28)       6.75        5.21
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       1.55        2.68       (9.13)       6.67        5.39
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............         --       (0.08)         --       (0.19)      (0.12)
  From net realized gain on
   investments..........................         --          --       (1.60)      (0.15)      (1.08)
  In excess of net investment income....         --       (0.03)         --          --          --
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................         --       (0.11)      (1.60)      (0.34)      (1.20)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $   19.50   $   17.95   $   15.38   $   26.11   $   19.78
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (d).............       8.52%      17.52%     (37.16)%     34.10%       37.1%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 159,496   $ 177,373   $ 182,462   $ 336,960   $ 129,280
Ratio of net investment income (loss) to
 average net assets.....................       0.52%       0.46%       0.86%      (0.29)%       1.3%*
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   6)...................................       1.96%       2.03%       2.11%       2.04%        2.4%*
  Without expense reductions............       2.06%       2.10%       2.12%        N/A         N/A
Portfolio turnover rate++++.............        130%        101%        125%        155%        112%
Average commission rate per share paid
 on portfolio transactions++++..........  $  0.0007   $  0.0005         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
  +  All capital shares issued and outstanding as of March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.02 for the year ended October 31, 1993.
     Without such reimbursements, the expense ratio would have been 2.49%
     and the ratio of net investment income to average net assets would
     have been 1.25% for the year ended October 31, 1993.
 (a) These selected per share data were calculated based upon average
     shares outstanding during the period.
 (b) Not annualized.
 (c) Annualized.
 (d) Total investment return does not include sales charges.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-123
<PAGE>   1589
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
                                                                    CLASS B++
                                          -------------------------------------------------------------
                                                                                          APRIL 1, 1993
                                                      YEAR ENDED OCTOBER 31,                   TO
                                          ----------------------------------------------   OCTOBER 31,
                                           1997 (A)    1996 (A)    1995 (A)    1994 (A)     1993 (A)
                                          ----------  ----------  ----------  ----------  -------------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   17.78   $   15.21   $   25.94   $   19.75     $ 16.26
                                          ----------  ----------  ----------  ----------  -------------
Income from investment operations:
  Net investment income (loss)..........       0.01       (0.00)       0.06       (0.22)      (0.07)
  Net realized and unrealized gain
   (loss) on investments................       1.44        2.59       (9.19)       6.74        3.56
                                          ----------  ----------  ----------  ----------  -------------
    Net increase (decrease) from
     investment operations..............       1.45        2.59       (9.13)       6.52        3.49
                                          ----------  ----------  ----------  ----------  -------------
Distributions to shareholders:
  From net investment income............         --       (0.01)         --       (0.18)         --
  From net realized gain on
   investments..........................         --          --       (1.60)      (0.15)         --
  In excess of net investment income....         --       (0.01)         --          --          --
                                          ----------  ----------  ----------  ----------  -------------
    Total distributions.................         --       (0.02)      (1.60)      (0.33)         --
                                          ----------  ----------  ----------  ----------  -------------
Net asset value, end of period..........  $   19.23   $   17.78   $   15.21   $   25.94     $ 19.75
                                          ----------  ----------  ----------  ----------  -------------
                                          ----------  ----------  ----------  ----------  -------------
 
Total investment return (d).............       8.04%      17.02%     (37.42)%     33.33%       21.5% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 133,448   $ 137,400   $ 134,527   $ 211,673     $13,576
Ratio of net investment income (loss) to
 average net assets.....................       0.02%      (0.04)%      0.36%      (0.79)%      (0.7)% (c)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   6)...................................       2.46%       2.53%       2.61%       2.54%        2.9% (c)
  Without expense reductions............       2.56%       2.60%       2.62%        N/A         N/A
Portfolio turnover rate++++.............        130%        101%        125%        155%        112%
Average commission rate per share paid
 on portfolio transactions++++..........  $  0.0007   $  0.0005         N/A         N/A         N/A
 
<CAPTION>
                                                   ADVISOR CLASS+++
                                          -----------------------------------
 
                                               YEAR ENDED        JUNE 1, 1995
                                               OCTOBER 31,            TO
                                          ---------------------  OCTOBER 31,
                                          1997 (A)    1996 (A)       1995
                                          --------   ----------  ------------
<S>                                       <C>        <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $ 17.94    $   15.40    $   15.95
                                          --------   ----------  ------------
Income from investment operations:
  Net investment income (loss)..........     0.19         0.17         0.09
  Net realized and unrealized gain
   (loss) on investments................     1.44         2.58        (0.64)
                                          --------   ----------  ------------
    Net increase (decrease) from
     investment operations..............     1.63         2.75        (0.55)
                                          --------   ----------  ------------
Distributions to shareholders:
  From net investment income............       --        (0.14)          --
  From net realized gain on
   investments..........................       --           --           --
  In excess of net investment income....       --        (0.07)          --
                                          --------   ----------  ------------
    Total distributions.................       --        (0.21)          --
                                          --------   ----------  ------------
Net asset value, end of period..........  $ 19.57    $   17.94    $   15.40
                                          --------   ----------  ------------
                                          --------   ----------  ------------
Total investment return (d).............     8.91%       18.16%       (3.45)%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $   636    $     818    $     369
Ratio of net investment income (loss) to
 average net assets.....................     1.02%        0.96%        1.36 %(c)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   6)...................................     1.46%        1.53%        1.61 %(c)
  Without expense reductions............     1.56%        1.60%        1.62 %(c)
Portfolio turnover rate++++.............      130%         101%         125 %
Average commission rate per share paid
 on portfolio transactions++++..........  $0.0007    $  0.0005          N/A
</TABLE>
 
- ----------------
 
  +  All capital shares issued and outstanding as of March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.02 for the year ended October 31, 1993.
     Without such reimbursements, the expense ratio would have been 2.49%
     and the ratio of net investment income to average net assets would
     have been 1.25% for the year ended October 31, 1993.
 (a) These selected per share data were calculated based upon average
     shares outstanding during the period.
 (b) Not annualized.
 (c) Annualized.
 (d) Total investment return does not include sales charges.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                     FS-124
<PAGE>   1590
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Latin America Growth Fund ("Fund") is a separate series of G.T.
Investment Funds, Inc. ("Company"). The Company is organized as a Maryland
corporation and is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as a non-diversified, open-end management investment
company. The Company has thirteen series of shares in operation, each series
corresponding to a distinct portfolio of investments.
 
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective service and distribution expenses, and
may differ in its transfer agent, registration, and certain other class-specific
fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
 
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. ("the Manager") to be the primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments with maturity of 60
days or less are valued at amortized cost adjusted for foreign exchange
translation and market fluctuation, if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records are maintained in U.S. dollars. The market values of
foreign securities, currency holdings, and other assets and liabilities are
recorded in the books and records of the Fund after translation to U.S. dollars
based on the exchange rates on that day. The cost of each security is determined
using historical exchange rates. Income and withholding taxes are translated at
prevailing exchange rates when earned or incurred.
 
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from 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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which the value, including accrued
interest, is at least equal to the amount to be repaid to the Fund under each
agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract
 
                                     FS-125
<PAGE>   1591
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
fluctuates with changes in currency exchange rates. The Forward Contract is
marked-to-market daily and the change in market value is recorded by the Fund as
an unrealized gain or loss. When the Forward Contract is closed, the Fund
records a realized gain or loss equal to the difference between the value at the
time it was opened and the value at the time it was closed. Forward Contracts
involve market risk in excess of the amount shown in the Fund's "Statement of
Assets and Liabilities." The Fund could be exposed to risk if a counterparty is
unable to meet the terms of the contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities, or to hedge against adverse
fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on a traded exchange is valued at its last bid
price, or, in the case of an over-the-counter option, is valued at the average
of the last bid prices obtained from brokers. If an option expires on its
stipulated expiration date or if the Fund enters into a closing purchase
transaction, a gain or loss is realized without regard to any unrealized gain or
loss on the underlying security, and the liability related to such option is
extinguished. If a written call option is exercised, a gain or loss is realized
from the sale of the underlying security and the proceeds of the sale are
increased by the premium originally received. If a written put option is
exercised, the cost of the underlying security purchased would be decreased by
the premium originally received. The Fund can write options only on a covered
basis, which, for a call, requires that the fund hold the underlying securities
and, for a put, requires the Fund to maintain in a segregated account cash, U.S.
government securities, or other liquid securities in an amount not less than the
exercise price or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund may use options to manage its exposure to the
stock or bond market and to fluctuations in currency values or interest rates.
 
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock or bond
market and to fluctuations in currency values or interest rates. At October 31,
1997, the fund had no open futures contracts.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Interest income is recorded on the
accrual basis. Where a high level of uncertainty exists as to its collection,
income is recorded net of all withholding tax with any rebate recorded when
received. The Fund may trade securities on other than normal settlement terms.
This may increase the risk if the other party to the transaction fails to
deliver and causes the Fund to subsequently invest at less advantageous prices.
 
(H) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains. The Fund currently has a capital loss carryforward of
$14,939,326, of which $8,211,999 expires in 2003 and $6,727,327 expires in 2004.
 
(I) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in
 
                                     FS-126
<PAGE>   1592
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
accordance with Federal 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
and timing differences.
 
(J) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
 
(K) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
 
(L) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
 
(M) PORTFOLIO SECURITIES LOANED
At October 31, 1997, stocks with an aggregate value of approximately $32,165,965
were on loan to brokers. The loans were secured by cash collateral of
$34,658,600. For international securities, cash collateral is received by the
Fund against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by the Fund against loaned securities in an amount at
least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. For
the year ended October 31, 1997, the Fund received $315,802 of income from
securities lending which was used to reduce custodian and administrative
expenses.
 
(N) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised or administered by
the Manager, has a line of credit with each of BankBoston and State Street Bank
& Trust Company. The arrangements with the banks allow the Fund and the GT Funds
to borrow an aggregate maximum amount of $200,000,000. The Fund is limited to
borrowing up to 33 1/3% of the value of each Fund's total assets. On October 31,
1997, the Fund had $3,238,000 in loans outstanding.
 
For the year ended October 31, 1997, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $7,810,915, with a weighted average interest rate of 6.37%.
Interest expense for the Fund for the year ended October 31, 1997 was $98,132,
included in "Other Expenses" on the Statement of Operations.
 
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc. is the Funds Portfolios' investment
manager and administrator. The Fund pays investment management and
administration fees to the Manager at the annualized rate of 0.975% of the first
$500 million of average daily net assets of the Fund; 0.95% of the next $500
million; 0.925% of the next $500 million and 0.90% on amounts thereafter. These
fees are computed daily and paid monthly.
 
GT Global Inc. ("GT Global"), an affiliate of the Manager, is the Fund's
distributor. The Fund offers Class A, Class B and Advisor Class shares for
purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the period ended October 31, 1997, GT Global retained
$50,871 of such sales charges. Purchases of Class A shares exceeding $500,000
may be subject to a contingent deferred sales charge ("CDSC") upon redemption,
in accordance with the Fund's current prospectus. GT Global collected CDSCs in
the amount of $282 for the year ended October 31, 1997. GT Global also makes
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the year ended October 31, 1997, GT Global collected CDSCs in
the amount of $923,487. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
 
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.50% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
 
                                     FS-127
<PAGE>   1593
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
All expenses for which GT Global is reimbursed under the Class A Plan will have
been incurred within one year of such reimbursement.
 
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B Shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
 
The Manager and GT Global voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 2.40%, 2.90%, and 1.90% of the average
net assets of the Fund's Class A, Class B and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.
 
Effective November 1, 1997, the Manager and GT Global have undertaken to limit
each Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expenses) to the annual rate of 2.00%, 2.50% and 1.50% of the
average daily net assets of the Fund's Class A, Class B and Advisor Class
shares, respectively. This undertaking may be changed or eliminated in the
future.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the results according to the Funds average daily net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.
 
3. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1997, purchases and sales of investment
securities by the Fund, other than short-term investments, aggregated
$439,672,522 and $508,014,202. There were no purchases or sales of U.S.
government obligations for the year ended October 31, 1997.
 
4. CAPITAL SHARES
At October 31, 1997, there were 6,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 200,000,000 were
classified as shares of the Fund; 400,000,000 were classified as shares of GT
Global Government Income Fund; 200,000,000 were classified as shares of GT
Global Developing Markets Fund; 200,000,000 were classified as shares of GT
Global Health Care Fund; 200,000,000 were classified as shares of GT Global
Strategic Income Fund; 200,000,000 were classified as shares of GT Global
Currency Fund (inactive); 200,000,000 were classified as shares of GT Global
Growth & Income Fund; 200,000,000 were classified as shares of GT Global Small
Companies Fund (inactive); 200,000,000 were classified as shares of GT Global
Natural Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; 400,000,000 were classified as shares of GT Global
Telecommunications Fund; 200,000,000 were classified as shares of GT Global
Emerging Markets Fund; and 200,000,000 were classified as shares of GT Global
Financial Services Fund; 200,000,000 were classified as shares of GT Global High
Income Fund; and 200,000,000 were classified as shares of GT Global Consumer
Products and Services Fund. The shares of each of the foregoing series of the
Company were divided equally into two classes, designated Class A and Class B
common stock. With respect to the issuance of Advisor Class shares, 100,000,000
shares were classified as shares of each of the fifteen series of the Company
and designated as Advisor Class common stock. 1,100,000,000 shares remain
unclassified. Transactions in capital shares of the Fund were as follows:
 
                                     FS-128
<PAGE>   1594
                      GT GLOBAL LATIN AMERICA GROWTH FUND
 
                           CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
                                                            YEAR ENDED                   YEAR ENDED
                                                         OCTOBER 31,1997              OCTOBER 31, 1996
                                                    --------------------------  ----------------------------
CLASS A                                               SHARES        AMOUNT        SHARES         AMOUNT
- --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................   46,171,230  $ 937,785,689   76,364,877  $ 1,304,172,875
Shares issued in connection with reinvestment of
  distributions...................................           --             --       66,851        1,023,814
                                                    -----------  -------------  -----------  ---------------
                                                     46,171,230    937,785,689   76,431,728    1,305,196,689
Shares repurchased................................  (47,874,889)  (980,118,186) (78,414,835)  (1,346,357,898)
                                                    -----------  -------------  -----------  ---------------
Net decrease......................................   (1,703,659) $ (42,332,497)  (1,983,107) $   (41,161,209)
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
 
<CAPTION>
 
                                                            YEAR ENDED                   YEAR ENDED
                                                         OCTOBER 31, 1997             OCTOBER 31, 1996
                                                    --------------------------  ----------------------------
CLASS B                                               SHARES        AMOUNT        SHARES         AMOUNT
- --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................   14,424,170  $ 299,346,687   13,503,991  $   230,324,732
Shares issued in connection with reinvestment of
  distributions...................................           --             --        6,914          105,073
                                                    -----------  -------------  -----------  ---------------
                                                     14,424,170    299,346,687   13,510,905      230,429,805
Shares repurchased................................  (15,210,392)  (316,506,347) (14,627,921)    (250,064,111)
                                                    -----------  -------------  -----------  ---------------
Net decrease......................................     (786,222) $ (17,159,660)  (1,117,016) $   (19,634,306)
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
<CAPTION>
 
                                                            YEAR ENDED                   YEAR ENDED
                                                         OCTOBER 31, 1997             OCTOBER 31, 1996
                                                    --------------------------  ----------------------------
ADVISOR CLASS                                         SHARES        AMOUNT        SHARES         AMOUNT
- - --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    1,448,623  $  29,968,381      932,074  $    16,161,478
Shares issued in connection with reinvestment of
  distributions...................................           --             --          408            6,223
                                                    -----------  -------------  -----------  ---------------
                                                      1,448,623     29,968,381      932,482       16,167,701
Shares repurchased................................   (1,461,777)   (30,469,185)    (910,792)     (15,778,640)
                                                    -----------  -------------  -----------  ---------------
Net increase (decrease)...........................      (13,154) $    (500,804)      21,690  $       389,061
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
</TABLE>
 
5. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
Investments of 5% or more of an issuer's outstanding voting securities by the
Fund are defined in the Investment Company Act of 1940 as an affiliated company.
There were no investments in affiliated companies at October 31, 1997.
 
Transactions during the year with companies that were affiliates are as follows:
 
<TABLE>
<CAPTION>
                                                                               NET
                                                                             REALIZED
                                                    PURCHASES     SALES        GAIN     DIVIDEND
AFFILIATES                                             COST      PROCEEDS     (LOSS)     INCOME
- --------------------------------------------------  ----------  ----------  ----------  --------
<S>                                                 <C>         <C>         <C>         <C>
Compania Boliviana de Energia Electrica...........  $       --  $9,666,400  $2,805,315  $ 44,960
Sanluis Corporacion, S.A. de C.V..................          --   5,738,935   2,214,183   318,107
</TABLE>
 
6. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the year ended October 31, 1997, the Fund's expenses
were reduced by $45,431 under these arrangements.
 
                                     FS-129
<PAGE>   1595
 
   
                                                                    STATEMENT OF
    
                                                          ADDITIONAL INFORMATION
 
   
                            ADVISOR CLASS SHARES OF
    
   
                            AIM GLOBAL THEME FUNDS:
    
   
                       AIM GLOBAL FINANCIAL SERVICES FUND
    
   
                         AIM GLOBAL INFRASTRUCTURE FUND
    
   
                           AIM GLOBAL RESOURCES FUND
    
   
                 AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
    
   
                          AIM GLOBAL HEALTH CARE FUND
    
   
                       AIM GLOBAL TELECOMMUNICATIONS FUND
    
 
   
                             (SERIES PORTFOLIOS OF
    
   
                             AIM INVESTMENT FUNDS)
    
 
   
                               11 GREENWAY PLAZA
    
   
                                   SUITE 100
    
   
                           HOUSTON, TEXAS 77046-1173
    
                                 (713) 626-1919
 
                             ---------------------
 
   
        THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND
    
   
           IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS OF THE
    
   
            ABOVE-NAMED FUNDS, A COPY OF WHICH MAY BE OBTAINED FREE
    
   
                OF CHARGE FROM AUTHORIZED DEALERS OR BY WRITING
    
   
                           A I M DISTRIBUTORS, INC.,
    
   
                    P.O. BOX 4739, HOUSTON, TEXAS 77210-4739
    
                          OR BY CALLING (800) 347-4246
 
                             ---------------------
 
  STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 8, 1998 RELATING TO THE
AIM GLOBAL FINANCIAL SERVICES FUND PROSPECTUS, THE AIM GLOBAL INFRASTRUCTURE
FUND PROSPECTUS, THE AIM GLOBAL RESOURCES FUND PROSPECTUS, THE AIM GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND PROSPECTUS, THE AIM GLOBAL HEALTH CARE FUND
PROSPECTUS AND THE AIM GLOBAL TELECOMMUNICATIONS FUND PROSPECTUS EACH DATED
SEPTEMBER 8, 1998
<PAGE>   1596
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                                               PAGE NO.
                                                               --------
<S>                                                            <C>
INTRODUCTION................................................        4
GENERAL INFORMATION ABOUT THE FUNDS.........................        4
  The Trust and Its Shares..................................        4
INVESTMENT OBJECTIVES AND POLICIES..........................        5
  Investment Objectives.....................................        5
  Selection of Equity Investments...........................        5
  Investments in Other Investment Companies.................        6
  Depositary Receipts.......................................        6
  Warrants or Rights........................................        7
  Lending of Portfolio Securities...........................        7
  Money Market Instruments..................................        7
  Commercial Bank Obligations...............................        7
  Repurchase Agreements.....................................        7
  Borrowing, Reverse Repurchase Agreements and "Roll"
     Transactions...........................................        8
  Short Sales...............................................        8
OPTIONS, FUTURES AND CURRENCY STRATEGIES....................        9
  Special Risks of Options, Futures and Currency
     Strategies.............................................        9
  Writing Call Options......................................       10
  Writing Put Options.......................................       10
  Purchasing Put Options....................................       11
  Purchasing Call Options...................................       11
  Index Options.............................................       12
  Interest Rate, Currency and Stock Index Futures
     Contracts..............................................       13
  Options on Futures Contracts..............................       15
  Limitations on Use of Futures, Options on Futures and
     Certain Options on Currencies..........................       15
  Forward Contracts.........................................       16
  Foreign Currency Strategies -- Special Considerations.....       16
  Cover.....................................................       17
RISK FACTORS................................................       17
  Illiquid Securities.......................................       17
  Foreign Securities........................................       18
INVESTMENT LIMITATIONS......................................       22
  Feeder Funds..............................................       22
  Health Care Fund..........................................       23
  Telecommunications Fund...................................       24
EXECUTION OF PORTFOLIO TRANSACTIONS.........................       26
  Portfolio Trading and Turnover............................       27
MANAGEMENT..................................................       28
  Trustees and Executive Officers...........................       28
  Investment Management and Administration Services Relating
     to the Federal Funds and the Portfolios................       30
  Investment Management and Administration Services Relating
     to the Health Care Fund and Telecommunications Fund....       30
  Distribution Services Relating to Each Fund...............       32
  Expenses of the Funds and the Portfolios..................       32
NET ASSET VALUE DETERMINATION...............................       32
</TABLE>
    
 
                                        2
<PAGE>   1597
 
   
<TABLE>
<CAPTION>
                                                               PAGE NO.
                                                               --------
<S>                                                            <C>
HOW TO PURCHASE AND REDEEM SHARES...........................       33
  Programs and Services for Shareholders....................       33
  Dividend Order............................................       33
TAXES.......................................................       33
  Taxation of the Funds.....................................       33
  Taxation of the Theme Portfolios..........................       34
  Taxation of the Funds' Shareholders.......................       36
MISCELLANEOUS INFORMATION...................................       36
  Custodian.................................................       36
  Transfer Agency and Accounting Agency Services............       37
  Independent Accountants...................................       37
  Shareholder Liability.....................................       37
  Names.....................................................       37
  Special Servicing Agreement...............................       37
  Control Persons and Principal Holders of Security.........       38
INVESTMENT RESULTS..........................................       39
  Total Return Quotations...................................       39
  Performance Information...................................       42
  General Information About the Theme Funds and Theme
     Portfolios.............................................       43
  Health Care Fund..........................................       44
  Information About the Global Health Care Industries.......       44
  Telecommunications Fund...................................       45
  Deregulation in the United States.........................       45
  Consumer Products and Services Fund.......................       45
  Infrastructure Fund.......................................       46
  Financial Services Fund...................................       46
  Resources Fund............................................       46
APPENDIX....................................................       47
  Description of Bond Ratings...............................       47
  Description of Commercial Paper Ratings...................       48
  Absence of Rating.........................................       48
FINANCIAL STATEMENTS........................................       FS
</TABLE>
    
 
                                        3
<PAGE>   1598
 
                                  INTRODUCTION
 
  This Statement of Additional Information relates to the Advisor Class shares
of AIM Global Financial Services Fund ("Financial Services Fund"), AIM Global
Infrastructure Fund ("Infrastructure Fund"), AIM Global Resources Fund
("Resources Fund"), AIM Global Consumer Products and Services Fund ("Consumer
Products and Services Fund"), AIM Global Health Care Fund ("Health Care Fund")
and AIM Global Telecommunications Fund ("Telecommunications Fund") (each, a
"Fund" or "Theme Fund," and collectively, the "Funds" or "Theme Funds"). Each
Fund is a diversified series of AIM Investment Funds (the "Trust"), a registered
open-end management investment company organized as a Delaware business trust.
The Financial Services Fund, Infrastructure Fund, Resources Fund and Consumer
Products and Services Fund (each a "Feeder Fund," and, collectively the "Feeder
Funds,") invest all of their investable assets in the Global Financial Services
Portfolio, Global Infrastructure Portfolio, Global Resources Portfolio and
Global Consumer Products and Services Portfolio (each, a "Portfolio," and,
collectively, the "Portfolios"), respectively.
 
   
  A I M Advisors, Inc. ("AIM") serves as the investment manager of and
administrator for, and INVESCO (NY), Inc. (the "Sub-advisor") serves as the
investment sub-advisor of and sub-administrator for the Health Care Fund,
Telecommunications Fund and the Portfolios (each a "Theme Portfolio," and
collectively the "Theme Portfolios"). AIM and the Sub-advisor also serve as the
administrator and sub-administrator, respectively, for each Feeder Fund.
    
 
   
  The Trust is a series mutual fund. The rules and regulations of the Securities
and Exchange Commission (the "SEC") require all mutual funds to furnish
prospective investors certain information concerning the activities of the fund
being considered for investment. This information for Financial Services Fund is
included in a Prospectus dated September 8, 1998, for Infrastructure Fund is
included in a separate Prospectus dated September 8, 1998, for Resources Fund is
included in a separate Prospectus dated September 8, 1998, for Consumer Products
and Services Fund is included in a separate Prospectus dated September 8, 1998,
for Health Care Fund is included in a separate Prospectus dated September 8,
1998, and for Telecommunications Fund is included in a separate Prospectus dated
September 8, 1998. Additional copies of the Prospectuses and this Statement of
Additional Information may be obtained without charge by writing the principal
distributor of the Funds' shares, A I M Distributors, Inc. ("AIM Distributors"),
P.O. Box 4739, Houston, TX 77210-4739 or by calling (800) 347-4246. Investors
must receive a Prospectus before they invest.
    
 
  This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Funds. Some of the
information required to be in this Statement of Additional Information is also
included in the Prospectus, and, in order to avoid repetition, reference will be
made to sections of the Prospectus. Additionally, the Prospectus and this
Statement of Additional Information omit certain information contained in the
Registration Statement filed with the SEC. Copies of the Registration Statement,
including items omitted from the Prospectus and this Statement of Additional
Information, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
 
                      GENERAL INFORMATION ABOUT THE FUNDS
 
THE TRUST AND ITS SHARES
 
   
  The Trust previously operated under the name G.T. Investment Funds, Inc.,
which was organized as a Maryland corporation on October 29, 1987. The Trust was
reorganized on September 8, 1998 as a Delaware business trust, and is registered
with the SEC as a diversified open-end series management investment company. The
Trust currently consists of the following portfolios: AIM Global Financial
Services Fund, AIM Global Infrastructure Fund, AIM Global Resources Fund, AIM
Global Consumer Products and Services Fund, AIM Global HealthCare Fund, AIM
Global Telecommunications Fund, AIM Global Government Income Fund, AIM Global
High Income Fund, AIM Strategic Income Fund, AIM Global Growth and Income Fund,
AIM Emerging Markets Fund, AIM Developing Markets Fund, and AIM Latin American
Growth Fund. Each of these funds has three separate classes: Class A, Class B
and Advisor Class shares. All historical financial and other information
contained in this Statement of Additional Information for periods prior to
September 8, 1998, is that of the series G.T. Investment Funds, Inc. (renamed
AIM Investment Funds, Inc.).
    
 
  This Statement of Additional Information relates solely to the Advisor Class
shares of the Funds.
 
  The term "majority of the outstanding shares" of the Trust, of a particular
Fund or of a particular class of a Fund means, respectively, the vote of the
lesser of (a) 67% or more of the shares of the Trust, such Fund or such class
present at a meeting of the Trust's shareholders, if the holders of more than
50% of the outstanding shares of the Trust, such Fund or such class are present
or represented by proxy, or (b) more than 50% of the outstanding shares of the
Trust, such Fund or such class.
 
                                        4
<PAGE>   1599
 
  Class A, Class B and Advisor Class shares of each Fund have equal rights and
privileges. Each share of a particular class is entitled to one vote, to
participate equally in dividends and distributions declared by the Trust's Board
of Trustees with respect to the class of such Fund and, upon liquidation of the
Fund, to participate proportionately in the net assets of the Fund allocable to
such class remaining after satisfaction of outstanding liabilities of the Fund
allocable to such class. Fund shares are fully paid, non-assessable and fully
transferable when issued and have no preemptive rights and have such conversion
and exchange rights as set forth in the Prospectus and this Statement of
Additional Information. Fractional shares have proportionately the same rights,
including voting rights, as are provided for a full share.
 
  Shareholders of the Funds do not have cumulative voting rights, and therefore
the holders of more than 50% of the outstanding shares of all Funds voting
together for election of trustees may elect all of the members of the Board of
Trustees of the Trust. In such event, the remaining holders cannot elect any
trustees of the Trust.
 
   
                       INVESTMENT OBJECTIVES AND POLICIES
    
 
INVESTMENT OBJECTIVES
 
  The investment objective of each Feeder Fund is long-term capital growth. The
investment objective of the Health Care Fund and Telecommunications Fund is
long-term capital appreciation and long-term growth of capital, respectively.
 
  Each Feeder Fund seeks to achieve its investment objective by investing all of
its investable assets in a Portfolio, each of which is a subtrust (a "series")
of Global Investment Portfolio (an open-end management investment company), with
an investment objective that is identical to that of its corresponding Feeder
Fund. Whenever the phrase "all of a Fund's investable assets" is used herein and
in the Prospectus, it means that the only investment securities held by a Feeder
Fund will be its interest in its corresponding Portfolio. A Feeder Fund may
withdraw its investment in its corresponding Portfolio at any time, if the Board
of Trustees of the Trust determines that it is in the best interests of the Fund
and its shareholders to do so. Upon any such withdrawal, a Feeder Fund's assets
would be invested in accordance with the investment policies of its
corresponding Portfolio described below and in the Prospectus.
 
SELECTION OF EQUITY INVESTMENTS
 
   
  With respect to the Resources Portfolio, the Sub-advisor has identified four
areas that it expects will create investment opportunities: (i) improving
supply/demand fundamentals, which may result in higher commodity prices; (ii)
privatization of state-owned natural resource businesses; (iii) management which
can improve production efficiencies without correspondingly increasing commodity
prices; and (iv) service companies with emerging technologies that can enhance
productivity or reduce production costs. Of course, there is no certainty that
these factors will produce the anticipated results.
    
 
   
  With respect to the Telecommunications Fund, the Sub-advisor has identified
four areas that it expects will create investment opportunities: (i)
deregulation of companies in the industry, which will allow competition to
promote greater efficiencies; (ii) privatization of state-owned
telecommunications businesses; (iii) development of infrastructure in
underdeveloped countries and upgrading of services in other countries; and (iv)
emerging technologies that will enhance productivity and reduce costs in the
telecommunications industry. Of course, there is no certainty that these factors
will produce the anticipated results.
    
 
   
  There may be times when, in the opinion of the Sub-advisor, prevailing market,
economic or political conditions warrant reducing the proportion of the Theme
Portfolios' assets invested in equity securities and increasing the proportion
held in cash (U.S. dollars, foreign currencies or multinational currency units)
or invested in debt securities or high quality money market instruments issued
by corporations or the U.S., or a foreign government. A portion of each Theme
Portfolio's assets normally will be held in cash (U.S. dollars, foreign
currencies or multinational currency units) or invested in foreign or domestic
high quality money market instruments pending investment of proceeds from new
sales of fund shares to provide for ongoing expenses and to satisfy redemptions.
    
 
   
  For each Theme Portfolio's investment purposes, an issuer is typically
considered as located in a particular country if it (a) is organized under the
laws of or has its principal office in a particular country, or (b) normally
derives 50% or more of its total revenues from business in that country,
provided that, in the Sub-advisor's view, the value of such issuer's securities
will tend to reflect such country's development to a greater extent than
developments elsewhere. However, these are not absolute requirements, and
certain companies incorporated in a particular country and considered by the
Sub-advisor to be located in that country may have substantial foreign
operations or subsidiaries and/or export sales exceeding in size the assets or
sales in that country.
    
 
                                        5
<PAGE>   1600
 
   
  In certain countries, governmental restrictions and other limitations on
investment may affect a Theme Portfolio's ability to invest in such countries.
In addition, in some instances only special classes of securities may be
purchased by foreigners and the market prices, liquidity and rights with respect
to those securities may vary from shares owned by nationals. The Sub-advisor is
not aware at this time of the existence of any investment or exchange control
regulations which might substantially impair the operations of the Theme
Portfolios as described in the Prospectus and this Statement of Additional
Information. Restrictions may in the future, however, make it undesirable to
invest in certain countries. None of the Theme Portfolios has a present
intention of making any significant investment in any country or stock market in
which the Sub-advisor considers the political or economic situation to threaten
a Theme Portfolio with substantial or total loss of its investment in such
country or market.
    
 
INVESTMENTS IN OTHER INVESTMENT COMPANIES
 
   
  Each Theme Portfolio may invest in the securities of investment companies
(including investment vehicles or companies advised by the Sub-advisor or its
affiliates ("Affiliated Funds")) within the limits of the Investment Company Act
of 1940, as amended (the "1940 Act"). These limitations currently provide that,
in general, a Theme Portfolio may purchase shares of an investment company
unless (a) such a purchase would cause a Theme Portfolio to own in the aggregate
more than 3% of the total outstanding voting stock of the investment company or
(b) such a purchase would cause the Theme Portfolio to have more than 5% of its
assets invested in the investment company or more than 10% of its assets
invested in an aggregate of all such investment companies. The foregoing
restrictions do not apply to the investment of the Financial Services Fund,
Infrastructure Fund, Resources Fund and Consumer Products and Services Fund in
their corresponding Portfolios. Investment in closed-end investment companies
may involve the payment of substantial premiums above the value of such
companies' portfolio securities. Each Theme Portfolio does not intend to invest
in such investment companies unless, in the judgment of the Sub-advisor, the
potential benefits of such investments justify the payment of any applicable
premiums. The return on such securities will be reduced by operating expenses of
such companies, including payments to the investment managers of those
investment companies. With respect to investments in Affiliated Funds, the
Sub-advisor waives its advisory fee to the extent that such fees are based on
assets of a Theme Portfolio invested in Affiliated Funds.
    
 
DEPOSITARY RECEIPTS
 
  A Theme Portfolio may hold securities of foreign issuers in the form of
American Depositary Receipts ("ADRs"), American Depositary Shares ("ADSs"),
Global Depositary Receipts ("GDRs") and European Depositary Receipts ("EDRs") or
other securities convertible into securities of eligible foreign issuers. These
securities may not necessarily be denominated in the same currency as the
securities for which they may be exchanged. ADRs and ADSs are typically issued
by an American bank or trust company and evidence ownership of underlying
securities issued by a foreign corporation. EDRs, which are sometimes referred
to as Continental Depositary Receipts ("CDRs"), are issued in Europe typically
by foreign banks and trust companies and evidence ownership of either foreign or
domestic securities. GDRs are similar to EDRs and are designed for use in
several international financial markets. Generally, ADRs and ADSs in registered
form are designed for use in U.S. securities markets and EDRs in bearer form are
designed for use in European securities markets. For purposes of each Theme
Portfolio's investment policies, a Theme Portfolio's investments in ADRs, ADSs,
GDRs and EDRs will be deemed to be investments in the equity securities
representing securities of foreign issuers into which they may be converted.
 
  ADR facilities may be established as either "unsponsored" or "sponsored."
While ADRs issued under these two types of facilities are in some respects
similar, there are distinctions between them relating to the rights and
obligations of ADR holders and the practices of market participants. A
depository may establish an unsponsored facility without participation by (or
even necessarily the acquiescence of) the issuer of the deposited securities,
although typically the depository requests a letter of non-objection from such
issuer prior to the establishment of the facility. Holders of unsponsored ADRs
generally bear all the costs of such facilities. The depository usually charges
fees upon the deposit and withdrawal of the deposited securities, the conversion
of dividends into U.S. dollars, the disposition of non-cash distributions, and
the performance of other services. The depository of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited securities or to pass-through voting
rights to ADR holders in respect of the deposited securities. Sponsored ADR
facilities are created in generally the same manner as unsponsored facilities,
except that the issuer of the deposited securities enters into a deposit
agreement with the depository. The deposit agreement sets out the rights and
responsibilities of the issuer, the depository and the ADR holders. With
sponsored facilities, the issuer of the deposited securities generally will bear
some of the costs relating to the facility (such as dividend payment fees of the
depository), although ADR holders continue to bear certain other costs (such as
deposit and withdrawal fees). Under the terms of most sponsored arrangements,
depositories agree to distribute notices of shareholder meetings and voting
instructions, and to provide shareholder communications and other
 
                                        6
<PAGE>   1601
 
information to the ADR holders at the request of the issuer of the deposited
securities. The Theme Portfolios may invest in both sponsored and unsponsored
ADRs.
 
WARRANTS OR RIGHTS
 
   
  Warrants or rights may be acquired by a Theme Portfolio in connection with
other securities or separately and provide the Theme Portfolio with the right to
purchase at a later date other securities of the issuer. Warrants are securities
permitting, but not obligating, their holder to subscribe for other securities
or commodities. Warrants do not carry with them the right to dividends or voting
rights with respect to the securities that they entitle their holder to
purchase, and they do not represent any rights in the assets of the issuer. As a
result, warrants may be considered more speculative than certain other types of
investments. In addition, the value of a warrant does not necessarily change
with the value of the underlying securities and a warrant ceases to have value
if it is not exercised prior to its expiration date.
    
 
LENDING OF PORTFOLIO SECURITIES
 
   
  For the purpose of realizing additional income, each Theme Portfolio may make
secured loans of its securities holdings amounting to not more than 30% of its
total assets. Securities loans are made to broker/dealers or institutional
investors pursuant to agreements requiring that the loans be continuously
secured by collateral at least equal at all times to the value of the securities
lent plus any accrued interest, "marked to market" on a daily basis. The Theme
Portfolios may pay reasonable administrative and custodial fees in connection
with the loans of their securities. While the securities loan is outstanding, a
Theme Portfolio will continue to receive the equivalent of the interest or
dividends paid by the issuer on the securities, as well as interest on the
investment of the collateral or a fee from the borrower. A Theme Portfolio will
have a right to call each loan and obtain the securities within the stated
settlement period. A Theme Portfolio will not have the right to vote equity
securities while they are being lent, but it may call in a loan in anticipation
of any important vote. Loans will only be made to firms deemed by the
Sub-advisor to be of good standing and will not be made unless, in the judgment
of the Sub-advisor, the consideration to be earned from such loans would justify
the risk.
    
 
MONEY MARKET INSTRUMENTS
 
   
  Money market instruments in which the Theme Portfolios may invest include U.S.
government securities, high-grade commercial paper, bank certificates of
deposit, bankers' acceptances and repurchase agreements related to any of the
foregoing. "High-grade commercial paper" refers to commercial paper rated A-1 by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc., or P-1 by
Moody's Investors Services, Inc. or, if not rated, determined by the Sub-advisor
to be of comparable quality.
    
 
COMMERCIAL BANK OBLIGATIONS
 
  For the purposes of each Theme Portfolio's investment policies with respect to
bank obligations, obligations of foreign branches of U.S. banks and of foreign
banks are obligations of the issuing bank and may be general obligations of the
parent bank. Such obligations may, however, be limited by the terms of a
specific obligation and by government regulation. As with investments in
non-U.S. securities in general, investments in the obligations of foreign
branches of U.S. banks and of foreign banks may subject each Theme Portfolio to
investment risks that are different in some respects from those of investments
in obligations of U.S. issuers. Although each Theme Portfolio will typically
acquire obligations issued and supported by the credit of U.S. or foreign banks
having total assets at the time of purchase of $1 billion or more, this $1
billion figure is not an investment policy or restriction of each Theme
Portfolio. For the purposes of calculation with respect to the $1 billion
figure, the assets of a bank will be deemed to include the assets of its U.S.
and non-U.S. branches.
 
REPURCHASE AGREEMENTS
 
   
  A repurchase agreement is a transaction in which a Theme Portfolio purchases a
security from a bank or recognized securities dealer and simultaneously commits
to resell that security to the bank or dealer at an agreed-upon price, date, and
market rate of interest unrelated to the coupon rate or maturity of the
purchased security. Although repurchase agreements carry certain risks not
associated with direct investments in securities, including possible decline in
the market value of the underlying securities and delays and costs to the Theme
Portfolio if the other party to the repurchase agreement becomes bankrupt, the
Theme Portfolios intend to enter into repurchase agreements only with banks and
dealers believed by the Sub-advisor to present minimal credit risks in
accordance with guidelines established by the Trust's or the Portfolios' Board
of Trustees, as applicable. The Sub-advisor will review and monitor the
creditworthiness of such institutions under the applicable Board's general
supervision.
    
 
                                        7
<PAGE>   1602
 
  Each Theme Portfolio will invest only in repurchase agreements collateralized
at all times in an amount at least equal to the repurchase price plus accrued
interest. To the extent that the proceeds from any sale of such collateral upon
a default in the obligation to repurchase were less than the repurchase price, a
Theme Portfolio would suffer a loss. If the financial institution which is party
to the repurchase agreement petitions for bankruptcy or otherwise becomes
subject to bankruptcy or other liquidation proceedings, there may be
restrictions on a Theme Portfolio's ability to sell the collateral and a Theme
Portfolio could suffer a loss. However, with respect to financial institutions
whose bankruptcy or liquidation proceedings are subject to the U.S. Bankruptcy
Code, each Theme Portfolio intends to comply with provisions under such Code
that would allow the immediate resale of such collateral. Each Theme Portfolio
will not enter into a repurchase agreement with a maturity of more than seven
days if, as a result, more than 15% of the value of its net assets (except for
Health Care Fund, more than 10% of the value of its total assets) would be
invested in such repurchase agreements and other illiquid investments.
 
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
 
   
  Each Theme Portfolio's borrowings will not exceed 33 1/3% of its total assets,
i.e., the Theme Portfolio's total assets at all times will equal at least 300%
of the amount of outstanding borrowings. If market fluctuations in the value of
a Theme Portfolio's securities holdings or other factors cause the ratio of a
Theme Portfolio's total assets to outstanding borrowings to fall below 300%,
within three days (excluding Sundays and holidays) of such event that Theme
Portfolio may be required to sell portfolio securities to restore the 300% asset
coverage, even though from an investment standpoint such sales might be
disadvantageous. Each Theme Portfolio may also borrow up to 5% of its total
assets for temporary or emergency purposes other than to meet redemptions. Any
borrowing by a Theme Portfolio may cause greater fluctuation in the value of its
shares than would be the case if that Theme Portfolio did not borrow.
    
 
  Each Theme Portfolio's fundamental investment limitations permit the Theme
Portfolio to borrow money for leveraging purposes. However, each Theme Portfolio
(except the Health Care Fund) is currently prohibited, pursuant to a non-
fundamental investment policy, from borrowing money in order to purchase
securities. Nevertheless, this policy may be changed in the future by the
Trust's or the Portfolios' Board of Trustees, as applicable. If a Theme
Portfolio employs leverage in the future, it would be subject to certain
additional risks. Use of leverage creates an opportunity for greater growth of
capital but would exaggerate any increases or decreases in the net asset value
of the Financial Services Fund, Infrastructure Fund, Resources Fund, Consumer
Products and Services Fund or a Theme Portfolio. When the income and gains on
securities purchased with the proceeds of borrowings exceed the costs of such
borrowings, a Theme Portfolio's earnings or a Fund's net asset value will
increase faster than otherwise would be the case; conversely, if such income and
gains fail to exceed such costs, a Theme Portfolio's earnings or a Fund's net
asset value would decline faster than would otherwise be the case.
 
   
  Each Theme Portfolio may enter into reverse repurchase agreements. A reverse
repurchase agreement is a borrowing transaction in which the Portfolio transfers
possession of a security to another party such as a bank or broker/dealer in
return for cash, and agrees to repurchase the security in the future at an
agreed upon price, which includes an interest component. Each Theme Portfolio
may also engage in "roll" borrowing transactions, which involve the sale of
Government National Mortgage Association certificates or other securities
together with a commitment (for which the Theme Portfolio may receive a fee) to
purchase similar, but not identical, securities at a future date. Each Theme
Portfolio will segregate with a custodian, liquid assets in an amount sufficient
to cover its obligations under "roll" transactions and reverse repurchase
agreements with broker/dealers. No segregation is required for reverse
repurchase agreements with banks.
    
 
SHORT SALES
 
  Each Theme Portfolio may make short sales of securities. A short sale is a
transaction in which a Theme Portfolio sells a security in anticipation that the
market price of that security will decline. A Theme Portfolio may make short
sales (i) as a form of hedging to offset potential declines in long positions in
securities it owns, or anticipates acquiring, or in similar securities, and (ii)
in order to maintain flexibility in its securities holdings.
 
  When a Theme Portfolio makes a short sale of a security it does not own, it
must borrow the security sold short and deliver it to the broker/dealer or other
intermediary through which it made the short sale. The Theme Portfolio may have
to pay a fee to borrow particular securities and will often be obligated to pay
over any payments received on such borrowed securities.
 
  A Theme Portfolio's obligation to replace the borrowed security when the
borrowing is called or expires will be secured by collateral deposited with the
intermediary. The Theme Portfolio will also be required to deposit collateral
with its custodian to the extent, if any, necessary so that the value of both
collateral deposits in the aggregate is at all times equal
 
                                        8
<PAGE>   1603
 
to at least 100% of the current market value of the security sold short.
Depending on arrangements made with the intermediary from which it borrowed the
security regarding payment of any amounts received by that Theme Portfolio on
such security, a Theme Portfolio may not receive any payments (including
interest) on its collateral deposited with such intermediary.
 
  If the price of the security sold short increases between the time of the
short sale and the time a Theme Portfolio replaces the borrowed security, that
Theme Portfolio will incur a loss; conversely, if the price declines, the Theme
Portfolio will realize a gain. Any gain will be decreased, and any loss
increased, by the transaction costs associated with the transaction. Although a
Theme Portfolio's gain is limited by the price at which it sold the security
short, its potential loss theoretically is unlimited.
 
  No Theme Portfolio will make a short sale if, after giving effect to such
sale, the market value of the securities sold short exceeds 25% of the value of
its total assets or the Theme Portfolio's aggregate short sales of the
securities of any one issuer exceed the lesser of 2% of the Theme Portfolio's
net assets or 2% of the securities of any class of the issuer. Moreover, a Theme
Portfolio may engage in short sales only with respect to securities listed on a
national securities exchange. A Theme Portfolio may make short sales "against
the box" without respect to such limitations. In this type of short sale, at the
time of the sale the Theme Portfolio owns the security it has sold short or has
the immediate and unconditional right to acquire at no additional cost the
identical security.
 
   
                    OPTIONS, FUTURES AND CURRENCY STRATEGIES
    
 
SPECIAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES
 
  The use of options, futures contracts and forward currency contracts ("Forward
Contracts") involves special considerations and risks, as described below. Risks
pertaining to particular instruments are described in the sections that follow.
 
   
          (1) Successful use of most of these instruments depends upon the
     Sub-advisor's ability to predict movements of the overall securities and
     currency markets, which requires different skills than predicting changes
     in the prices of individual securities. While the Sub-advisor is
     experienced in the use of these instruments, there can be no assurance that
     any particular strategy adopted will succeed.
    
 
          (2) There might be imperfect correlation, or even no correlation,
     between price movements of an instrument and price movements of the
     investments being hedged. For example, if the value of an instrument used
     in a short hedge increased by less than the decline in value of the hedged
     investment, the hedge would not be fully successful. Such a lack of
     correlation might occur due to factors unrelated to the value of the
     investments being hedged, such as speculative or other pressures on the
     markets in which the hedging instrument is traded. The effectiveness of
     hedges using hedging instruments on indices will depend on the degree of
     correlation between price movements in the index and price movements in the
     investments being hedged.
 
   
          (3) Hedging strategies, if successful, can reduce risk of loss by
     wholly or partially offsetting the negative effect of unfavorable price
     movements in the investments being hedged. However, hedging strategies can
     also reduce opportunity for gain by offsetting the positive effect of
     favorable price movements in the hedged investments. For example, if a
     Theme Portfolio entered into a short hedge because the Sub-advisor
     projected a decline in the price of a security in the Theme Portfolio's
     portfolio, and the price of that security increased instead, the gain from
     that increase might be wholly or partially offset by a decline in the price
     of the hedging instrument. Moreover, if the price of the hedging instrument
     declined by more than the increase in the price of the security, the Theme
     Portfolio could suffer a loss. In either such case, the Theme Portfolio
     would have been in a better position had it not hedged at all.
    
 
          (4) As described below, a Theme Portfolio might be required to
     maintain assets as "cover," maintain segregated accounts or make margin
     payments when it takes positions in instruments involving obligations to
     third parties (i.e., instruments other than purchased options). If the
     Theme Portfolio were unable to close out its positions in such instruments,
     it might be required to continue to maintain such assets or accounts or
     make such payments until the position expired or matured. The requirements
     might impair the Theme Portfolio's ability to sell a portfolio security or
     make an investment at a time when it would otherwise be favorable to do so,
     or require that the Theme Portfolio sell a portfolio security at a
     disadvantageous time. The Theme Portfolio's ability to close out a position
     in an instrument prior to expiration or maturity depends on the existence
     of a liquid secondary market or, in the absence of such a market, the
     ability and willingness of the other party to the transaction ("contra
     party") to enter into a transaction closing out the position. Therefore,
     there is no assurance that any position can be closed out at a time and
     price that is favorable to the Theme Portfolio.
 
                                        9
<PAGE>   1604
 
WRITING CALL OPTIONS
 
   
  Each Theme Portfolio may write (sell) call options on securities, indices and
currencies. Call options generally will be written on securities and currencies
that, in the opinion of the Sub-advisor are not expected to make any major price
moves in the near future but that, over the long term, are deemed to be
attractive investments for the Theme Portfolios.
    
 
   
  A call option gives the holder (buyer) the right to purchase a security or
currency at a specified price (the exercise price) at any time until (American
style) or on (European style) a certain date (the expiration date). So long as
the obligation of the writer of a call option continues, he or she may be
assigned an exercise notice, requiring him or her to deliver the underlying
security or currency against payment of the exercise price. This obligation
terminates upon the expiration of the call option, or such earlier time at which
the writer effects a closing purchase transaction by purchasing an option
identical to that previously sold.
    
 
  Portfolio securities or currencies on which call options may be written will
be purchased solely on the basis of investment considerations consistent with
each Theme Portfolio's investment objective. When writing a call option, a Theme
Portfolio, in return for the premium, gives up the opportunity for profit from a
price increase in the underlying security or currency above the exercise price,
and retains the risk of loss should the price of the security or currency
decline. Unlike one who owns securities or currencies not subject to an option,
a Theme Portfolio has no control over when it may be required to sell the
underlying securities or currencies, since most options may be exercised at any
time prior to the option's expiration. If a call option that a Theme Portfolio
has written expires, the Theme Portfolio will realize a gain in the amount of
the premium; however, such gain may be offset by a decline in the market value
of the underlying security or currency during the option period. If the call
option is exercised, the Theme Portfolio will realize a gain or loss from the
sale of the underlying security or currency, which will be increased or offset
by the premium received. Each Theme Portfolio does not consider a security or
currency covered by a call option to be "pledged" as that term is used in that
Theme Portfolio's policy that limits the pledging or mortgaging of its assets.
 
  Writing call options can serve as a limited short hedge because declines in
the value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
appreciates to a price higher than the exercise price of the call option, it can
be expected that the option will be exercised and a Theme Portfolio will be
obligated to sell the security or currency at less than its market value.
 
   
  The premium that a Theme Portfolio receives for writing a call option is
deemed to constitute the market value of an option. The premium the Theme
Portfolio will receive from writing a call option will reflect, among other
things, the current market price of the underlying investment, the relationship
of the exercise price to such market price, the historical price volatility of
the underlying investment, and the length of the option period. In determining
whether a particular call option should be written, the Sub-advisor will
consider the reasonableness of the anticipated premium and the likelihood that a
liquid secondary market will exist for those options.
    
 
  Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security or currency from
being called, or to permit the sale of the underlying security or currency.
Furthermore, effecting a closing transaction will permit a Theme Portfolio to
write another call option on the underlying security or currency with either a
different exercise price or expiration date, or both.
 
  Each Theme Portfolio will pay transaction costs in connection with the writing
of options and in entering into closing purchase contracts. Transaction costs
relating to options activity are normally higher than those applicable to
purchases and sales of portfolio securities.
 
  The exercise price of the options may be below, equal to or above the current
market values of the underlying securities, indices or currencies at the time
the options are written. From time to time, a Theme Portfolio may purchase an
underlying security or currency for delivery in accordance with the exercise of
an option, rather than delivering such security or currency from its portfolio.
In such cases, additional costs will be incurred.
 
  A Theme Portfolio will realize a profit or loss from a closing purchase
transaction if the cost of the transaction is less or more, respectively, than
the premium received from writing the option. Because increases in the market
price of a call option generally will reflect increases in the market price of
the underlying security or currency, any loss resulting from the repurchase of a
call option is likely to be offset in whole or in part by appreciation of the
underlying security or currency owned by a Theme Portfolio.
 
WRITING PUT OPTIONS
 
  Each Theme Portfolio may write put options on securities, indices and
currencies. A put option gives the purchaser of the option the right to sell,
and the writer (seller) the obligation to buy, the underlying security or
currency at the
 
                                       10
<PAGE>   1605
 
exercise price at any time until (American style) or on (European style) the
expiration date. The operation of put options in other respects, including their
related risks and rewards, is substantially identical to that of call options.
 
   
  A Theme Portfolio generally would write put options in circumstances where the
Sub-advisor wishes to purchase the underlying security or currency for a Theme
Portfolio's holdings at a price lower than the current market price of the
security or currency. In such event, a Theme Portfolio would write a put option
at an exercise price that, reduced by the premium received on the option,
reflects the lower price it is willing to pay. Since the Theme Portfolio would
also receive interest on debt securities or currencies maintained to cover the
exercise price of the option, this technique could be used to enhance current
return during periods of market uncertainty. The risk in such a transaction
would be that the market price of the underlying security or currency would
decline below the exercise price less the premium received.
    
 
  Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
depreciates to a price lower than the exercise price of the put option, it can
be expected that the put option will be exercised and a Theme Portfolio will be
obligated to purchase the security or currency at greater than its market value.
 
PURCHASING PUT OPTIONS
 
  Each Theme Portfolio may purchase put options on securities, indices and
currencies. As the holder of a put option, a Theme Portfolio would have the
right to sell the underlying security or currency at the exercise price at any
time until (American style) or on (European style) the expiration date. A Theme
Portfolio may enter into closing sale transactions with respect to such options,
exercise such option or permit such option to expire.
 
  Each Theme Portfolio may purchase a put option on an underlying security or
currency ("protective put") owned by the Theme Portfolio in order to protect
against an anticipated decline in the value of the security or currency. Such
hedge protection is provided only during the life of the put option when the
Theme Portfolio, as the holder of the put option, is able to sell the underlying
security or currency at the put exercise price regardless of any decline in the
underlying security's market price or currency's exchange value. The premium
paid for the put option and any transaction costs would reduce any profit
otherwise available for distribution when the security or currency is eventually
sold.
 
  A Theme Portfolio may also purchase put options at a time when it does not own
the underlying security or currency. By purchasing put options on a security or
currency it does not own, that Theme Portfolio seeks to benefit from a decline
in the market price of the underlying security or currency. If the put option is
not sold when it has remaining value, and if the market price of the underlying
security or currency remains equal to or greater than the exercise price during
the life of the put option, the Theme Portfolio will lose its entire investment
in the put option. In order for the purchase of a put option to be profitable,
the market price of the underlying security or currency must decline
sufficiently below the exercise price to cover the premium and transaction
costs, unless the put option is sold in a closing sale transaction.
 
PURCHASING CALL OPTIONS
 
  Each Theme Portfolio may purchase call options on securities, indices and
currencies. As the holder of a call option, the Theme Portfolio would have the
right to purchase the underlying security or currency at the exercise price at
any time until (American style) or on (European style) the expiration date. A
Theme Portfolio may enter into closing sale transactions with respect to such
options, exercise such options or permit such options to expire.
 
  Call options may be purchased by a Theme Portfolio for the purpose of
acquiring the underlying security or currency for its portfolio. Utilized in
this fashion, the purchase of call options would enable a Theme Portfolio to
acquire the security or currency at the exercise price of the call option plus
the premium paid. At times, the net cost of acquiring the security or currency
in this manner may be less than the cost of acquiring the security or currency
directly. This technique may also be useful to a Theme Portfolio in purchasing a
large block of securities that would be more difficult to acquire by direct
market purchases. So long as it holds such a call option, rather than the
underlying security or currency itself, the Theme Portfolio is partially
protected from any unexpected decline in the market price of the underlying
security or currency and, in such event, could allow the call option to expire,
incurring a loss only to the extent of the premium paid for the option.
 
  A Theme Portfolio may also purchase call options on underlying securities or
currencies it owns to avoid realizing losses that would result in a reduction of
its current return. For example, where a Theme Portfolio has written a call
option on an underlying security or currency having a current market value below
the price at which it purchased the security or currency, an increase in the
market price could result in the exercise of the call option written by the
Theme Portfolio and the realization of a loss on the underlying security or
currency. Accordingly, the Theme Portfolio could purchase a call option on the
same underlying security or currency, which could be exercised to fulfill the
Theme
 
                                       11
<PAGE>   1606
 
Portfolio's delivery obligations under its written call (if it is exercised).
This strategy could allow the Theme Portfolio to avoid selling the portfolio
security or currency at a time when it has an unrealized loss; however, the
Theme Portfolio would have to pay a premium to purchase the call option plus
transaction costs.
 
  Aggregate premiums paid for put and call options will not exceed 5% of each
Theme Portfolio's total assets at the time of each purchase.
 
  A Theme Portfolio may attempt to accomplish objectives similar to those
involved in using Forward Contracts by purchasing put or call options on
currencies. A put option gives the Theme Portfolio as purchaser the right (but
not the obligation) to sell a specified amount of currency at the exercise price
at any time until (American style) or on (European style) the expiration date of
the option. A call option gives the Theme Portfolio as purchaser the right (but
not the obligation) to purchase a specified amount of currency at the exercise
price at any time until (American style) or on (European style) the expiration
date of the option. A Theme Portfolio might purchase a currency put option, for
example, to protect itself against a decline in the dollar value of a currency
in which it holds or anticipates holding securities. If the currency's value
should decline against the dollar, the loss in currency value should be offset,
in whole or in part, by an increase in the value of the put. If the value of the
currency instead should rise against the dollar, any gain to a Theme Portfolio
would be reduced by the premium it had paid for the put option. A currency call
option might be purchased, for example, in anticipation of, or to protect
against, a rise in the value against the dollar of a currency in which a Theme
Portfolio anticipates purchasing securities.
 
  Options may be either listed on an exchange or traded in over-the-counter
("OTC") markets. Listed options are third-party contracts (i.e., performance of
the obligations of the purchaser and seller is guaranteed by the exchange or
clearing corporation) and have standardized strike prices and expiration dates.
OTC options are two-party contracts with negotiated strike prices and expiration
dates. A Theme Portfolio will not purchase an OTC option unless it believes that
daily valuations for such options are readily obtainable. OTC options differ
from exchange-traded options in that OTC options are transacted with dealers
directly and not through a clearing corporation (which guarantees performance).
Consequently, there is a risk of non-performance by the dealer. Since no
exchange is involved, OTC options are valued on the basis of an average of the
last bid prices obtained from dealers, unless a quotation from only one dealer
is available, in which case only that dealer's price will be used. In the case
of OTC options, there can be no assurance that a liquid secondary market will
exist for any particular option at any specific time.
 
  The staff of the SEC considers purchased OTC options to be illiquid
securities. A Theme Portfolio may also sell OTC options and, in connection
therewith, segregate assets or cover its obligations with respect to OTC options
written by the Theme Portfolio. The assets used as cover for OTC options written
by a Theme Portfolio will be considered illiquid unless the OTC options are sold
to qualified dealers who agree that the Theme Portfolio may repurchase any OTC
option it writes at a maximum price to be calculated by a formula set forth in
the option agreement. The cover for an OTC option written subject to this
procedure would be considered illiquid only to the extent that the maximum
repurchase price under the formula exceeds the intrinsic value of the option.
 
  A Theme Portfolio's ability to establish and close out positions in
exchange-listed options depends on the existence of a liquid market. A Theme
Portfolio intends to purchase or write only those exchange-traded options for
which there appears to be a liquid secondary market. However, there can be no
assurance that such a market will exist at any particular time. Closing
transactions can be made for OTC options only by negotiating directly with the
contra party or by a transaction in the secondary market if any such market
exists. Although a Theme Portfolio will enter into OTC options only with contra
parties that are expected to be capable of entering into closing transactions
with the Theme Portfolio, there is no assurance that the Theme Portfolio will in
fact be able to close out an OTC option position at a favorable price prior to
expiration. In the event of insolvency of the contra party, the Theme Portfolio
might be unable to close out an OTC option position at any time prior to its
expiration.
 
INDEX OPTIONS
 
  Puts and calls on indices are similar to puts and calls on securities or
futures contracts except that all settlements are in cash and gain or loss
depends on changes in the index in question (and thus on price movements in the
securities market or a particular market sector generally) rather than on price
movements in individual securities or futures contracts. When a Theme Portfolio
writes a call on an index, it receives a premium and agrees that, prior to the
expiration date, the purchaser of the call, upon exercise of the call, will
receive from the Theme Portfolio an amount of cash if the closing level of the
index upon which the call is based is greater than the exercise price of the
call. The amount of cash is equal to the difference between the closing price of
the index and the exercise price of the call times a specified multiple (the
"multiplier"), which determines the total dollar value for each point of such
difference. When a Theme Portfolio buys a call on an index, it pays a premium
and has the same rights as to such call as are indicated above. When a Theme
Portfolio
 
                                       12
<PAGE>   1607
 
buys a put on an index, it pays a premium and has the right, prior to the
expiration date, to require the seller of the put, upon the Theme Portfolio's
exercise of the put, to deliver to the Theme Portfolio an amount of cash if the
closing level of the index upon which the put is based is less than the exercise
price of the put, which amount of cash is determined by the multiplier, as
described above for calls. When a Theme Portfolio writes a put on an index, it
receives a premium and the purchaser has the right, prior to the expiration
date, to require the Theme Portfolio to deliver to it an amount of cash equal to
the difference between the closing level of the index and the exercise price
times the multiplier, if the closing level is less than the exercise price.
 
  The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Theme Portfolio
writes a call on an index it cannot provide in advance for its potential
settlement obligations by acquiring and holding the underlying securities. A
Theme Portfolio can offset some of the risk of writing a call index option
position by holding a diversified portfolio of securities similar to those on
which the underlying index is based. However, a Theme Portfolio cannot, as a
practical matter, acquire and hold a portfolio containing exactly the same
securities as underlie the index and, as a result, bears a risk that the value
of the securities held will vary from the value of the index.
 
  Even if a Theme Portfolio could assemble a securities portfolio that exactly
reproduced the composition of the underlying index, it still would not be fully
covered from a risk standpoint because of the "timing risk" inherent in writing
index options. When an index option is exercised, the amount of cash that the
holder is entitled to receive is determined by the difference between the
exercise price and the closing index level on the date when the option is
exercised. As with other kinds of options, the Theme Portfolio, as the call
writer, will not know that it has been assigned until the next business day at
the earliest. The time lag between exercise and notice of assignment poses no
risk for the writer of a covered call on a specific underlying security, such as
common stock, because there the writer's obligation is to deliver the underlying
security, not to pay its value as of a fixed time in the past. So long as the
writer already owns the underlying security, it can satisfy its settlement
obligations by simply delivering it, and the risk that its value may have
declined since the exercise date is borne by the exercising holder. In contrast,
even if the writer of an index call holds securities that exactly match the
composition of the underlying index, it will not be able to satisfy its
assignment obligations by delivering those securities against payment of the
exercise price. Instead, it will be required to pay cash in an amount based on
the closing index value on the exercise date; and by the time it learns that it
has been assigned, the index may have declined, with a corresponding decline in
the value of its securities portfolio. This "timing risk" is an inherent
limitation on the ability of index call writers to cover their risk exposure by
holding securities positions.
 
  If a Theme Portfolio purchases an index option and exercises it before the
closing index value for that day is available, it runs the risk that the level
of the underlying index may subsequently change. If such a change causes the
exercised option to fall out-of-the-money, the Theme Portfolio will be required
to pay the difference between the closing index value and the exercise price of
the option (times the applicable multiplier) to the assigned writer.
 
INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES CONTRACTS
 
  Each Theme Portfolio may enter into interest rate or currency futures
contracts, and may enter into stock index futures contracts (collectively,
"Futures" or "Futures Contracts"), as a hedge against changes in prevailing
levels of interest rates, currency exchange rates or stock price levels in order
to establish more definitely the effective return on securities or currencies
held or intended to be acquired by the Theme Portfolio. A Theme Portfolio's
hedging may include sales of Futures as an offset against the effect of expected
increases in interest rates, and decreases in currency exchange rates and stock
prices, and purchases of Futures as an offset against the effect of expected
declines in interest rates, and increases in currency exchange rates or stock
prices.
 
  Each Theme Portfolio only will enter into Futures Contracts that are traded on
futures exchanges and are standardized as to maturity date and underlying
financial instrument. Futures exchanges and trading thereon in the United States
are regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC"). Futures are exchanged in London at the London International
Financial Futures Exchange.
 
  Although techniques other than sales and purchases of Futures Contracts could
be used to reduce a Theme Portfolio's exposure to interest rate, currency
exchange rate and stock market fluctuations, that Theme Portfolio may be able to
hedge its exposure more effectively and at a lower cost through using Futures
Contracts.
 
  A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument (security
or currency) for a specified price at a designated date, time and place. A stock
index Futures Contract provides for the delivery, at a designated date, time and
place, of an amount of cash equal to a specified dollar amount times the
difference between the stock index value at the close of trading on the contract
and the price at which the Futures Contract is originally struck; no physical
delivery of stocks comprising the index is made. Brokerage
 
                                       13
<PAGE>   1608
 
fees are incurred when a Futures Contract is bought or sold, and margin deposits
must be maintained at all times the Futures Contract is outstanding.
 
  Although Futures Contracts typically require future delivery of and payment
for financial instruments or currencies, Futures Contracts usually are closed
out before the delivery date. Closing out an open Futures Contract sale or
purchase is effected by entering into an offsetting Futures Contract purchase or
sale, respectively, for the same aggregate amount of the identical financial
instrument or currency and the same delivery date. If the offsetting purchase
price is less than the original sale price, the Theme Portfolio realizes a gain;
if it is more, the Theme Portfolio realizes a loss. Conversely, if the
offsetting sale price is more than the original purchase price, the Theme
Portfolio realizes a gain; if it is less, the Theme Portfolio realizes a loss.
The transaction costs must also be included in these calculations. There can be
no assurance, however, that a Theme Portfolio will be able to enter into an
offsetting transaction with respect to a particular Futures Contract at a
particular time. If a Theme Portfolio is not able to enter into an offsetting
transaction, that Theme Portfolio will continue to be required to maintain the
margin deposits on the Futures Contract.
 
  As an example of an offsetting transaction, the contractual obligations
arising from the sale of one Futures Contract of September Deutschemarks on an
exchange may be fulfilled at any time before delivery under the Futures Contract
is required (i.e., on a specified date in September, the "delivery month") by
the purchase of another Futures Contract of September Deutschemarks on the same
exchange. In such instance, the difference between the price at which the
Futures Contract was sold and the price paid for the offsetting purchase, after
allowance for transaction costs, represents the profit or loss to the Theme
Portfolio.
 
  Each Theme Portfolio's Futures transactions will be entered into for hedging
purposes only; that is, Futures Contracts will be sold to protect against a
decline in the price of securities or currencies that a Theme Portfolio owns, or
Futures Contracts will be purchased to protect a Theme Portfolio against an
increase in the price of securities or currencies it has committed to purchase
or expects to purchase.
 
  "Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by a Theme Portfolio in order to initiate Futures trading and maintain
the Theme Portfolio's open positions in Futures Contracts. A margin deposit made
when the Futures Contract is entered into ("initial margin") is intended to
ensure the Theme Portfolio's performance under the Futures Contract. The margin
required for a particular Futures Contract is set by the exchange on which the
Futures Contract is traded and may be significantly modified from time to time
by the exchange during the term of the Futures Contract.
 
  Subsequent payments, called "variation margin" to and from the futures
commission merchant through which the Theme Portfolio entered in the Futures
Contract will be made on a daily basis as the price of the underlying security,
currency or index fluctuates making the Futures Contract more or less valuable,
a process known as marking-to-market.
 
  Risks of Using Futures Contracts. The prices of Futures Contracts are volatile
and are influenced by, among other things, actual and anticipated changes in
interest rates and currency exchange rates, and in stock market movements, which
in turn are affected by fiscal and monetary policies and national and
international political and economic events.
 
  There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities or currencies in a Theme Portfolio's
portfolio being hedged. The degree of imperfection of correlation depends upon
circumstances such as variations in speculative market demand for Futures and
for securities or currencies, including technical influences in Futures trading;
and differences between the financial instruments being hedged and the
instruments underlying the standard Futures Contracts available for trading. A
decision of whether, when and how to hedge involves skill and judgment, and even
a well-conceived hedge may be unsuccessful to some degree because of unexpected
market behavior or interest or currency rate trends.
 
  Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
 
  Most U.S. Futures exchanges limit the amount of fluctuation permitted in
Futures Contract and options on Futures Contract prices during a single trading
day. The daily limit establishes the maximum amount that the price of a Futures
Contract or option may vary either up or down from the previous day's settlement
price at the end of a trading session. Once the daily limit has been reached in
a particular type of Futures Contract or option, no trades may be made on that
day at a price beyond that limit. The daily limit governs only price movement
during a particular trading day and therefore
 
                                       14
<PAGE>   1609
 
does not limit potential losses, because the limit may prevent the liquidation
of unfavorable positions. Futures Contract and option prices have occasionally
moved to the daily limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of positions and subjecting some
traders to substantial losses.
 
  If a Theme Portfolio were unable to liquidate a Futures or option on Futures
position due to the absence of a liquid secondary market or the imposition of
price limits, it could incur substantial losses. The Theme Portfolio would
continue to be subject to market risk with respect to the position. In addition,
except in the case of purchased options, the Theme Portfolio would continue to
be required to make daily variation margin payments and might be required to
maintain the position being hedged by the Future or option or to maintain cash
or securities in a segregated account.
 
  Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit requirements in the Futures market are less
onerous than margin requirements in the securities markets, there might be
increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
 
OPTIONS ON FUTURES CONTRACTS
 
  Options on Futures Contracts are similar to options on securities or
currencies except that options on Futures Contracts give the purchaser the
right, in return for the premium paid, to assume a position in a Futures
Contract (a long position if the option is a call and a short position if the
option is a put) at a specified exercise price at any time during the period of
the option. Upon exercise of the option, the delivery of the Futures position by
the writer of the option to the holder of the option will be accompanied by
delivery of the accumulated balance in the writer's Futures margin account,
which represents the amount by which the market price of the Futures Contract,
at exercise, exceeds (in the case of a call) or is less than (in the case of a
put) the exercise price of the option on the Futures Contract. If an option is
exercised on the last trading day prior to the expiration date of the option,
the settlement will be made entirely in cash equal to the difference between the
exercise price of the option and the closing level of the securities, currencies
or index upon which the Futures Contract is based on the expiration date.
Purchasers of options who fail to exercise their options prior to the exercise
date suffer a loss of the premium paid.
 
  The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities, foreign currencies or indices.
 
  If a Theme Portfolio writes an option on a Futures Contract, it will be
required to deposit initial and variation margin pursuant to requirements
similar to those applicable to Futures Contracts. Premiums received from the
writing of an option on a Futures Contract are included in the initial margin
deposit.
 
  A Theme Portfolio may seek to close out an option position by selling an
option covering the same Futures Contract and having the same exercise price and
expiration date. The ability to establish and close out positions on such
options is subject to the maintenance of a liquid secondary market.
 
LIMITATIONS ON USE OF FUTURES, OPTIONS ON FUTURES AND CERTAIN OPTIONS ON
CURRENCIES
 
  To the extent that a Theme Portfolio enters into Futures Contracts, options on
Futures Contracts, and options on foreign currencies traded on a CFTC-regulated
exchange, in each case other than for bona fide hedging purposes (as defined by
the CFTC), the aggregate initial margin and premiums required to establish those
positions (excluding the amount by which options are "in-the-money") will not
exceed 5% of the liquidation value of the Theme Portfolio, after taking into
account unrealized profits and unrealized losses on any contracts the Theme
Portfolio has entered into. In general, a call option on a Futures Contract is
"in-the-money" if the value of the underlying Futures Contract exceeds the
strike, i.e., exercise, price of the call; a put option on a Futures Contract is
"in-the-money" if the value of the underlying Futures Contract is exceeded by
the strike price of the put. This guideline may be modified by the Trust's Board
of Trustees and the Portfolios' Board of Trustees, as applicable, without a
shareholder vote. This limitation does not limit the percentage of a Theme
Portfolio's assets at risk to 5%.
 
                                       15
<PAGE>   1610
 
FORWARD CONTRACTS
 
  A Forward Contract is an obligation, usually arranged with a commercial bank
or other currency dealer, to purchase or sell a currency against another
currency at a future date and price as agreed upon by the parties. A Theme
Portfolio either may accept or make delivery of the currency at the maturity of
the Forward Contract. A Theme Portfolio may also, if its contra party agrees,
prior to maturity, enter into a closing transaction involving the purchase or
sale of an offsetting contract.
 
  A Theme Portfolio engages in forward currency transactions in anticipation of,
or to protect itself against, fluctuations in exchange rates. A Theme Portfolio
might sell a particular foreign currency forward, for example, when it holds
bonds denominated in a foreign currency but anticipates, and seeks to be
protected against, a decline in the currency against the U.S. dollar. Similarly,
a Theme Portfolio might sell the U.S. dollar forward when it holds bonds
denominated in U.S. dollars but anticipates, and seeks to be protected against,
a decline in the U.S. dollar relative to other currencies. Further, a Theme
Portfolio might purchase a currency forward to "lock in" the price of securities
denominated in that currency that it anticipates purchasing.
 
  Forward Contracts are traded in the interbank market conducted directly
between currency traders (usually large commercial banks) and their customers. A
Forward Contract generally has no deposit requirement, and no commissions are
charged at any stage for trades. Each Theme Portfolio will enter into such
Forward Contracts with major U.S. or foreign banks and securities or currency
dealers in accordance with guidelines approved by the Trust's or the Portfolios'
Board of Trustees, as applicable.
 
  A Theme Portfolio may enter into Forward Contracts either with respect to
specific transactions or with respect to overall investments of that Theme
Portfolio. The precise matching of the Forward Contract amounts and the value of
specific securities generally will not be possible because the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the Forward Contract
is entered into and the date it matures. Accordingly, it may be necessary for
that Theme Portfolio to purchase additional foreign currency on the spot (i.e.,
cash) market (and bear the expense of such purchase) if the market value of the
security is less than the amount of foreign currency the Theme Portfolio is
obligated to deliver and if a decision is made to sell the security and make
delivery of the foreign currency. Conversely, it may be necessary to sell on the
spot market some of the foreign currency the Theme Portfolio is obligated to
deliver. The projection of short-term currency market movements is extremely
difficult, and the successful execution of a short-term hedging strategy is
highly uncertain. Forward Contracts involve the risk that anticipated currency
movements will not be predicted accurately, causing a Theme Portfolio to sustain
losses on these contracts and transaction costs.
 
  At or before the maturity of a Forward Contract requiring a Theme Portfolio to
sell a currency, that Theme Portfolio either may sell a security and use the
sale proceeds to make delivery of the currency or retain the security and offset
its contractual obligation to deliver the currency by purchasing a second
contract pursuant to which the Theme Portfolio will obtain, on the same maturity
date, the same amount of the currency that it is obligated to deliver.
Similarly, a Theme Portfolio may close out a Forward Contract requiring it to
purchase a specified currency by entering into a second contract, if its contra
party agrees, entitling it to sell the same amount of the same currency on the
maturity date of the first contract. A Theme Portfolio would realize a gain or
loss as a result of entering into such an offsetting Forward Contract under
either circumstance to the extent the exchange rate or rates between the
currencies involved moved between the execution dates of the first contract and
the offsetting contract.
 
  The cost to a Theme Portfolio of engaging in Forward Contracts varies with
factors such as the currencies involved, the length of the contract period and
the market conditions then prevailing. Because Forward Contracts are usually
entered into on a principal basis, no fees or commissions are involved. The use
of Forward Contracts does not eliminate fluctuations in the prices of the
underlying securities a Theme Portfolio owns or intends to acquire, but it does
establish a rate of exchange in advance. In addition, while Forward Contract
sales limit the risk of loss due to a decline in the value of the hedged
currencies, they also limit any potential gain that might result should the
value of the currencies increase.
 
FOREIGN CURRENCY STRATEGIES -- SPECIAL CONSIDERATIONS
 
  A Theme Portfolio may use options on foreign currencies, Futures on foreign
currencies, options on Futures on foreign currencies and Forward Contracts, to
hedge against movements in the values of the foreign currencies in which the
Theme Portfolio's securities are denominated. Such currency hedges can protect
against price movements in a security that the Theme Portfolio owns or intends
to acquire that are attributable to changes in the value of the currency in
which it is denominated. Such hedges do not, however, protect against price
movements in the securities that are attributable to other causes.
 
                                       16
<PAGE>   1611
 
   
  A Theme Portfolio might seek to hedge against changes in the value of a
particular currency when no Futures Contract, Forward Contract or option
involving that currency is available or one of such contracts is more expensive
than certain other contracts. In such cases, the Theme Portfolio may hedge
against price movements in that currency by entering into a contract on another
currency or basket of currencies, the values of which the Sub-advisor believes
will have a positive correlation to the value of the currency being hedged. The
risk that movements in the price of the contract will not correlate perfectly
with movements in the price of the currency being hedged is magnified when this
strategy is used.
    
 
  The value of Futures Contracts, options on Futures Contracts, Forward
Contracts and options on foreign currencies depends on the value of the
underlying currency relative to the U.S. dollar. Because foreign currency
transactions occurring in the interbank market might involve substantially
larger amounts than those involved in the use of Futures Contracts, Forward
Contracts or options, a Theme Portfolio could be disadvantaged by dealing in the
odd lot market (generally consisting of transactions of less than $1 million)
for the underlying foreign currencies at prices that are less favorable than for
round lots.
 
  There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirements that quotations available through
dealers or other market sources be firm or revised on a timely basis. Quotation
information generally is representative of very large transactions in the
interbank market and thus might not reflect odd-lot transactions where rates
might be less favorable. The interbank market in foreign currencies is a global,
round-the-clock market. To the extent the U.S. options or Futures markets are
closed while the markets for the underlying currencies remain open, significant
price and rate movements might take place in the underlying markets that cannot
be reflected in the markets for the Futures contracts or options until they
reopen.
 
  Settlement of Futures Contracts, Forward Contracts and options involving
foreign currencies might be required to take place within the country issuing
the underlying currency. Thus, a Theme Portfolio might be required to accept or
make delivery of the underlying foreign currency in accordance with any U.S. or
foreign regulations regarding the maintenance of foreign banking arrangements by
U.S. residents and might be required to pay any fees, taxes and charges
associated with such delivery assessed in the issuing country.
 
COVER
 
  Transactions using Forward Contracts, Futures Contracts and options (other
than options purchased by a Theme Portfolio) expose the Theme Portfolio to an
obligation to another party. A Theme Portfolio will not enter into any such
transactions unless it owns either (1) an offsetting ("covered") position in
securities, currencies, or other options, Forward Contracts or Future Contracts,
or (2) cash, receivables and short-term debt securities with a value sufficient
at all times to cover its potential obligations not covered as provided in (1)
above. Each Theme Portfolio will comply with SEC guidelines regarding cover for
these instruments and, if the guidelines so require, set aside cash or liquid
securities.
 
  Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Forward Contract, Futures Contract or option is
open, unless they are replaced with other appropriate assets. If a large portion
of a Theme Portfolio's assets is used for cover or otherwise set aside, it could
affect portfolio management or the Theme Portfolio's ability to meet redemption
requests or other current obligations.
 
                                  RISK FACTORS
 
ILLIQUID SECURITIES
 
  Each Theme Portfolio may invest up to 15% of its net assets in illiquid
securities. Securities may be considered illiquid if a Theme Portfolio cannot
reasonably expect within seven days to sell the security for approximately the
amount at which that Theme Portfolio values such securities. See "Investment
Limitations." The sale of illiquid securities, if they can be sold at all,
generally will require more time and result in higher brokerage charges or
dealer discounts and other selling expenses than will the sale of liquid
securities such as securities eligible for trading on U.S. securities exchanges
or in OTC markets. Moreover, restricted securities, which may be illiquid for
purposes of this limitation, often sell, if at all, at a price lower than
similar securities that are not subject to restrictions on resale.
 
  Illiquid securities include those that are subject to restrictions contained
in the securities laws of other countries. However, securities that are freely
marketable in the country where they are principally traded, but would not be
freely marketable in the United States, will not be considered illiquid. Where
registration is required, a Theme Portfolio may be obligated to pay all or part
of the registration expenses and a considerable period may elapse between the
time of the decision to sell and the time the Theme Portfolio may be permitted
to sell a security under an effective registration
 
                                       17
<PAGE>   1612
 
statement. If, during such a period, adverse market conditions were to develop,
the Theme Portfolio might obtain a less favorable price than prevailed when it
decided to sell.
 
  Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the Securities Act of 1933, as amended ("1933 Act"), including
private placements, repurchase agreements, commercial paper, foreign securities
and corporate bonds and notes. These instruments are often restricted securities
because the securities are sold in transactions not requiring registration.
Institutional investors generally will not seek to sell these instruments to the
general public, but instead will often depend either on an efficient
institutional market in which such unregistered securities can be readily resold
or on an issuer's ability to honor a demand for repayment. Therefore, the fact
that there are contractual or legal restrictions on resale to the general public
or certain institutions is not dispositive of the liquidity of such investments.
 
  Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of unregistered securities of domestic and foreign
issuers, such as the PORTAL System sponsored by the National Association of
Securities Dealers, Inc. An insufficient number of qualified institutional
buyers interested in purchasing Rule 144A-eligible restricted securities held by
a Theme Portfolio, however, could affect adversely the marketability of such
portfolio securities and the Theme Portfolio might be unable to dispose of such
securities promptly or at favorable prices.
 
   
  With respect to liquidity determinations generally, the Trust's or the
Portfolios' Board of Trustees, as applicable, has the ultimate responsibility
for determining whether specific securities, including restricted securities
pursuant to Rule 144A under the 1933 Act, are liquid or illiquid. Each Board has
delegated the function of making day-to-day determinations of liquidity to the
Sub-advisor, in accordance with procedures approved by that Board. The
Sub-advisor takes into account a number of factors in reaching liquidity
decisions, including, but not limited to, (i) the frequency of trading in the
security; (ii) the number of dealers that make quotes for the security; (iii)
the number of dealers that have undertaken to make a market in the security;
(iv) the number of other potential purchasers; and (v) the nature of the
security and how trading is effected (e.g., the time needed to sell the
security, how offers are solicited and the mechanics of transfer). The Sub-
advisor monitors the liquidity of securities held by each Theme Portfolio and
periodically reports such determinations to the Trust's or the Portfolios' Board
of Trustees, as applicable. If the liquidity percentage restriction of a Theme
Portfolio is satisfied at the time of investment, a later increase in the
percentage of illiquid securities held by the Theme Portfolio resulting from a
change in market value or assets will not constitute a violation of that
restriction. If as a result of a change in market value or assets, the
percentage of illiquid securities held by the Theme Portfolio increases above
the applicable limit, the Sub-advisor will take appropriate steps to bring the
aggregate amount of illiquid assets back within the prescribed limitations as
soon as reasonably practicable, taking into account the effect of any
disposition on the Theme Portfolio.
    
 
FOREIGN SECURITIES
 
  Political, Social and Economic Risks. Investing in securities of non-U.S.
companies may entail additional risks due to the potential political, social and
economic instability of certain countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment convertibility of currencies into U.S. dollars and on repatriation of
capital invested. In the event of such expropriation, nationalization or other
confiscation by any country, a Theme Portfolio could lose its entire investment
in any such country.
 
  Religious, Political and Ethnic Instability. Certain countries in which a
Theme Portfolio may invest may have groups that advocate radical religious or
revolutionary philosophies or support ethnic independence. Any disturbance on
the part of such individuals could carry the potential for widespread
destruction or confiscation of property owned by individuals and entities
foreign to such country and could cause the loss of a Theme Portfolio's
investment in those countries. Instability may also result from, among other
things; (i) authoritarian governments or military involvement in political and
economic decision-making, including changes in government through
extra-constitutional means; (ii) popular unrest associated with demands for
improved political, economic and social conditions; and (iii) hostile relations
with neighboring or other countries. Such political, social and economic
instability could disrupt the principal financial markets in which a Theme
Portfolio invests and adversely affect the value of a Theme Portfolio's assets.
 
  Foreign Investment Restrictions. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as a Theme Portfolio. These
restrictions or controls may at times limit or preclude investment in certain
securities and may increase the cost and expenses of a
 
                                       18
<PAGE>   1613
 
Theme Portfolio. For example, certain countries require prior governmental
approval before investments by foreign persons may be made, or may limit the
amount of investment by foreign persons in a particular company or limit the
investment by foreign persons to only a specific class of securities of a
company that may have less advantageous terms than securities of the company
available for purchase by nationals. Moreover, the national policies of certain
countries may restrict investment opportunities in issuers or industries deemed
sensitive to national interests. In addition, some countries require
governmental approval for the repatriation of investment income, capital or the
proceeds of securities sales by foreign investors. In addition, if there is a
deterioration in a country's balance of payments of for other reasons, a country
may impose restrictions on foreign capital remittances abroad. A Theme Portfolio
could be adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation, as well as by the application to it of
other restrictions on investments.
 
   
  Non-Uniform Corporate Disclosure Standards and Governmental
Regulation. Foreign companies are subject to accounting, auditing and financial
standards and requirements that differ, in some cases significantly, from those
applicable to U.S. companies. In particular, the assets, liabilities and profits
appearing on the financial statements of such a company may not reflect its
financial position or results of operations in the way they would be reflected
had such financial statements been prepared in accordance with U.S. generally
accepted accounting principles. Most of the foreign securities held by a Theme
Portfolio will not be registered with the SEC or regulators of any foreign
country, nor will the issuers thereof be subject to the SEC's reporting
requirements. Thus, there will be less available information concerning most
foreign issuers of securities held by a Theme Portfolio than is available
concerning U.S. issuers. In instances where the financial statements of an
issuer are not deemed to reflect accurately the financial situation of the
issuer, the Sub-advisor will take appropriate steps to evaluate the proposed
investment, which may include on-site inspection of the issuer, interviews with
its management and consultations with accountants, bankers and other
specialists. There is substantially less publicly available information about
foreign companies than there are reports and ratings published about U.S.
companies and the U.S. government. In addition, where public information is
available, it may be less reliable than such information regarding U.S. issuers.
Issuers of securities in foreign jurisdictions are generally not subject to the
same degree of regulation as are U.S. issuers with respect to such matters as
restrictions on market manipulation, insider trading rules, shareholder proxy
requirements and timely disclosure of information.
    
 
  Currency Fluctuations. Because each Theme Portfolio, under normal
circumstances, will invest a substantial portion of its total assets in the
securities of foreign issuers which are denominated in foreign currencies, the
strength or weakness of the U.S. dollar against such foreign currencies will
account for part of a Theme Portfolio's investment performance. A decline in the
value of any particular currency against the U.S. dollar will cause a decline in
the U.S. dollar value of that Theme Portfolio's holdings of securities and cash
denominated in such currency and, therefore, will cause an overall decline in
the appropriate Fund's net asset value and any net investment income and capital
gains derived from such securities to be distributed in U.S. dollars to
shareholders of that Fund. Moreover, if the value of the foreign currencies in
which a Theme Portfolio receives its income falls relative to the U.S. dollar
between receipt of the income and the making of Theme Portfolio distributions,
the Theme Portfolio may be required to liquidate securities in order to make
distributions if the Theme Portfolio has insufficient cash in U.S. dollars to
meet distribution requirements.
 
  The rate of exchange between the U.S. dollar and other currencies is
determined by several factors, including the supply and demand for particular
currencies, central bank efforts to support particular currencies, the relative
movement of interest rates and the pace of business activity in the other
countries and the United States, and other economic and financial conditions
affecting the world economy.
 
  Although each Theme Portfolio values its assets daily in terms of U.S.
dollars, the Portfolios do not intend to convert their holdings of foreign
currencies into U.S. dollars on a daily basis. Each Portfolio will do so, from
time to time, and investors should be aware of the costs of currency conversion.
Although foreign exchange dealers do not charge a fee for conversion, they do
realize a profit based on the difference ("spread") between the prices at which
they buy and sell various currencies. Thus, a dealer may offer to sell a foreign
currency to a Portfolio at one rate, while offering a lesser rate of exchange
should a Portfolio desire to sell the currency to the dealer.
 
  Adverse Market Characteristics. Securities of many foreign issuers may be less
liquid and their prices more volatile than securities of comparable U.S.
issuers. In addition, foreign securities markets and brokers generally are
subject to less governmental supervision and regulation than in the United
States, and foreign securities transactions usually are subject to fixed
commissions, which generally are higher than negotiated commissions on U.S.
transactions. In addition, foreign securities transactions may be subject to
difficulties associated with the settlement of such transactions. Delays in
settlement could result in temporary periods when assets of a Theme Portfolio
are uninvested and no return is earned thereon. The inability of a Theme
Portfolio to make intended security purchases due to settlement problems could
cause that Theme Portfolio to miss attractive investment opportunities.
Inability to dispose of a portfolio security due to settlement problems either
could result in losses to that Theme Portfolio due to subsequent declines in
value of the
 
                                       19
<PAGE>   1614
 
   
portfolio security or, if that Theme Portfolio has entered into a contract to
sell the security, could result in possible liability to the purchaser. The
Sub-advisor will consider such difficulties when determining the allocation of a
Theme Portfolio's assets, although the Sub-advisor does not believe that such
difficulties will have a material adverse effect on a Theme Portfolio's
portfolio trading activities.
    
 
  Each Theme Portfolio may use foreign custodians, which may involve risks in
addition to those related to its use of U.S. custodians. Such risks include
uncertainties relating to determining and monitoring the foreign custodian's
financial strength, reputation and standing; maintaining appropriate safeguards
concerning that Theme Portfolio's investments; and possible difficulties in
obtaining and enforcing judgments against such custodians.
 
  Withholding Taxes. Each Theme Portfolio's net investment income from foreign
issuers may be subject to withholding taxes by the foreign issuer's country,
thereby reducing that income or delaying the receipt of income when those taxes
may be recaptured. See "Taxes."
 
  Concentration. To the extent a Theme Portfolio invests a significant portion
of its assets in securities of issuers located in a particular country or region
of the world, such Portfolio may be subject to greater risks and may experience
greater volatility than a fund that is more broadly diversified geographically.
 
   
  Special Considerations Affecting Western European Countries. The countries
that are members of the European Economic Community ("Common Market")
(Australia, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, Netherlands, Portugal, Spain, Sweden and the United Kingdom)
eliminated certain import tariffs and quotas and other trade barriers with
respect to one another over the past several years. The Sub-advisor believes
that this deregulation should improve the prospects for economic growth in many
Western European countries. Among other things, the deregulation could enable
companies domiciled in one country to avail themselves of lower labor costs
existing in other countries. In addition, this deregulation could benefit
companies domiciled in one country by opening additional markets for their goods
and services in other countries. Since, however, it is not clear what the exact
form or effect of these Common Market reforms will be on business in Western
Europe, it is impossible to predict the long-term impact of the implementation
of these programs on the securities owned by a Theme Portfolio.
    
 
  Special Considerations Affecting Russia and Eastern European
Countries. Investing in Russia and Eastern European countries involves a high
degree of risk and special considerations not typically associated with
investing in the United States securities markets, and should be considered
highly speculative. Such risks include: (1) delays in settling portfolio
transactions and risk of loss arising out of the system of share registration
and custody; (2) the risk that it may be impossible or more difficult than in
other countries to obtain and/or enforce a judgement; (3) pervasiveness of
corruption and crime in the economic system; (4) currency exchange rate
volatility and the lack of available currency hedging instruments; (5) higher
rates of inflation (including the risk of social unrest associated with periods
of hyper-inflation) and high unemployment; (6) controls on foreign investment
and local practices disfavoring foreign investors and limitations on
repatriation of invested capital, profits and dividends, and on a fund's ability
to exchange local currencies for U.S. dollars; (7) political instability and
social unrest and violence; (8) the risk that the governments of Russia and
Eastern European countries may decide not to continue to support the economic
reform programs implemented recently and could follow radically different
political and/or economic policies to the detriment of investors, including
non-market-oriented policies such as the support of certain industries at the
expense of other sectors or investors, or a return to the centrally planned
economy that existed when such countries had a communist form of government; (9)
the financial condition of companies in these countries, including large amounts
of inter-company debt which may create a payments crisis on a national scale;
(10) dependency on exports and the corresponding importance of international
trade; (11) the risk that the tax system in these countries will not be reformed
to prevent inconsistent, retroactive and/or exorbitant taxation; and (12) the
underdeveloped nature of the securities markets.
 
  Special Considerations Affecting Japan. Japan's economic growth has declined
significantly since 1990. The general government position has deteriorated as a
result of weakening economic growth and stimulative measures taken to support
economic activity and to restore financial stability. Although the decline in
interest rates and fiscal stimulation packages have helped to contain
recessionary forces, uncertainties remain. Japan is also heavily dependent upon
international trade, so its economy is especially sensitive to trade barriers
and disputes. Japan has had difficult relations with its trading partners,
particularly the United States, where the trade imbalance is the greatest. It is
possible that trade sanctions and other protectionist measures could impact
Japan adversely in both the short and the long term.
 
  The common stocks of many Japanese companies trade at high price-earnings
ratios. Differences in accounting methods make it difficult to compare the
earnings of Japanese companies with those of companies in other countries,
especially in the U.S. In general, however, reported net income in Japan is
understated relative to U.S. accounting standards and this is one reason why
price-earnings ratios of the stocks of Japanese companies have tended
historically to be higher than those for U.S. stocks. In addition, Japanese
companies have tended to have higher growth rates than U.S. companies and
 
                                       20
<PAGE>   1615
 
Japanese interest rates have generally been lower than in the U.S., both of
which factors tend to result in lower discount rates and higher price-earnings
ratios in Japan than in the U.S.
 
  The Japanese securities markets are less regulated than those in the United
States. Evidence has emerged from time to time of distortion of market prices to
serve political or other purposes. Shareholders' rights are not always equally
enforced. In addition, Japan's banking industry is undergoing problems related
to bad loans and declining values in real estate.
 
  Special Considerations Affecting Pacific Region Countries. Certain of the
risks associated with international investments are heightened for investments
in Pacific region countries. For example, some of the currencies of Pacific
region countries have experienced steady devaluations relative to the U.S.
dollar, and major adjustments have been made periodically in certain of such
currencies. Certain countries, such as India, face serious exchange constraints.
Jurisdictional disputes also exist between South Korea and North Korea. In
addition, the Theme Portfolios may invest in Hong Kong, which reverted to
Chinese Administration on July 1, 1997. Investments in Hong Kong may be subject
to expropriation, national, nationalization or confiscation, in which case a
Theme Portfolio could lose its entire investment in Hong Kong. In addition, the
reversion of Hong Kong also presents a risk that the Hong Kong dollar will be
devalued and a risk of possible loss of investor confidence in Hong Kong's
currency, stock market and assets.
 
  Special Considerations Affecting Latin American Countries. Most Latin American
countries have experienced substantial, and in some periods extremely high,
rates of inflation for many years. Inflation and rapid fluctuations in inflation
rates have had and may continue to have very negative effects on the economies
and securities markets of certain Latin American countries. Certain Latin
American countries are also among the largest debtors to commercial banks and
foreign governments. At times certain Latin American countries have declared
moratoria on the payment of principal and/or interest on external debt. In
addition, certain Latin American securities markets have experienced high
volatility in recent years.
 
  Latin American countries may also close certain sectors of their economies to
equity investments by foreigners. Further due to the absence of securities
markets and publicly owned corporations and due to restrictions on direct
investment by foreign entities, investments may only be made in certain Latin
American countries solely or primarily through governmentally approved
investment vehicles or companies.
 
  Certain Latin American countries may have managed currencies that are
maintained at artificial levels to the U.S. dollar rather than at levels
determined by the market. This type of system can lead to sudden and large
adjustments in the currency which, in turn, can have a disruptive and negative
effect on foreign investors. For example, in late 1994, the value of the Mexican
peso lost more than one-third of its value relative to the U.S. dollar.
 
  Special Considerations Affecting Emerging Markets. Investing in the securities
of companies in emerging markets may entail special risks relating to potential
political and economic instability and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility of currencies into U.S. dollars and on repatriation
of capital invested. In the event of such expropriation, nationalization or
other confiscation by any country, a Theme Portfolio could lose its entire
investment in any such country.
 
  Emerging securities markets are substantially smaller, less developed, less
liquid and more volatile than the major securities markets. The limited size of
emerging securities markets and limited trading volume in issuers compared to
the volume of trading in U.S. securities could cause prices to be erratic for
reasons apart from factors that affect the quality of the securities. For
example, limited market size may cause prices to be unduly influenced by traders
who control large positions. Adverse publicity and investors' perceptions,
whether or not based on fundamental analysis, may decrease the value and
liquidity of portfolio securities, especially in these markets. In addition,
securities traded in certain emerging markets may be subject to risks due to the
inexperience of financial intermediaries, a lack of modern technology, the lack
of a sufficient capital base to expand business operations, and the possibility
of permanent or temporary termination of trading.
 
  Settlement mechanisms in emerging securities markets may be less efficient and
reliable than in more developed markets. In such emerging securities markets
there may be share registration and delivery delays or failures.
 
  Many emerging market countries have experienced substantial, and in some
periods extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates and corresponding currency devaluations have had
and may continue to have negative effects on the economics and securities
markets of certain emerging market countries.
 
                                       21
<PAGE>   1616
 
                             INVESTMENT LIMITATIONS
 
FEEDER FUNDS
 
  The Financial Services Fund, Infrastructure Fund, Resources Fund and Consumer
Products and Services Fund each has the following fundamental investment policy
to enable it to invest in the Financial Services Portfolio, Infrastructure
Portfolio, Resources Portfolio and Consumer Products and Services Portfolio,
respectively:
 
  Notwithstanding any other investment policy of the Fund, the Fund may invest
all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
 
  All other fundamental investment policies, and the non-fundamental investment
policies, of each Feeder Fund and its corresponding Portfolio are identical.
Therefore, although the following discusses the investment policies of each
Portfolio and its Board of Trustees, it applies equally to each Feeder Fund and
its Board of Trustees.
 
  Each Portfolio has adopted the following investment limitations as fundamental
policies that (unless otherwise noted) may not be changed without approval by
the affirmative vote of a majority of the outstanding shares of the Portfolio.
Whenever a Feeder Fund is requested to vote on a change in the investment
limitations of its corresponding Portfolio, the Fund will hold a meeting of its
shareholders and will cast its votes as instructed by its shareholders.
 
  No Portfolio may:
 
          (1) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-backed securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that the Portfolio may exercise rights under agreements relating
     to such securities, including the right to enforce security interests and
     to hold real estate acquired by reason of such enforcement until that real
     estate can be liquidated in an orderly manner;
 
          (2) Purchase or sell physical commodities, but the Portfolio may
     purchase, sell or enter into financial options and futures, forward and
     spot currency contracts, swap transactions and other financial contracts or
     derivative instruments;
 
          (3) Engage in the business of underwriting securities of other
     issuers, except to the extent that the Portfolio might be considered an
     underwriter under the federal securities laws in connection with its
     disposition of portfolio securities;
 
          (4) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan;
 
          (5) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of the Portfolio's total
     assets (including the amount borrowed but reduced by any liabilities not
     constituting borrowings) at the time of the borrowing, except that the
     Portfolio may borrow up to an additional 5% of its total assets (not
     including the amount borrowed) for temporary or emergency purposes; or
 
          (6) Purchase securities of any one issuer if, as a result, more than
     5% of the Portfolio's total assets would be invested in securities of that
     issuer or the Portfolio would own or hold more than 10% of the outstanding
     voting securities of that issuer, except that up to 25% of the Portfolio's
     total assets may be invested without regard to this limitation, and except
     that this limitation does not apply to securities issued or guaranteed by
     the U.S. government, its agencies or instrumentalities or to securities
     issued by other investment companies.
 
  The following investment policies of each Portfolio are not fundamental
policies and may be changed by vote of the Portfolios' Board of Trustees without
shareholder approval.
 
  No Portfolio may:
 
          (1) Invest in securities of an issuer if the investment would cause
     the Portfolio to own more than 10% of any class of securities of any one
     issuer;
 
          (2) Invest in companies for the purpose of exercising control or
     management;
 
          (3) Invest more than 15% of its net assets in illiquid securities,
     including securities that are illiquid by virtue of the absence of a
     readily available market;
 
                                       22
<PAGE>   1617
 
          (4) Enter into a futures contract, an option on a futures contract, or
     an option on foreign currency traded on a CFTC-regulated exchange, in each
     case other than for bona fide hedging purposes (as defined by the CFTC), if
     the aggregate initial margin and premiums required to establish all of
     those positions (excluding the amount by which options are "in-the-money")
     exceeds 5% of the liquidation value of the Portfolio's portfolio, after
     taking into account unrealized profits and unrealized losses on any
     contracts the Portfolio has entered into;
 
          (5) Borrow money except for temporary or emergency purposes (other
     than to meet redemptions). While borrowings exceed 5% of the Portfolio's
     total assets, the Portfolio will not make any additional investments;
 
          (6) Invest more than 10% of its total assets in shares of other
     investment companies and may not invest more than 5% of its total assets in
     any one investment company or acquire more than 3% of the outstanding
     voting securities of any one investment company;
 
          (7) Purchase securities on margin, provided that each Portfolio may
     obtain short-term credits as may be necessary for the clearance of
     purchases and sales of securities, and further provided that the Portfolio
     may make margin deposits in connection with its use of financial options
     and futures, forward and spot currency contracts, swap transactions and
     other financial contracts or derivative instruments; or
 
          (8) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities.
 
   
  Investors should refer to the Prospectus for further information with respect
to the investment objective of each Feeder Fund, which may not be changed
without the approval of the Fund's shareholders, and its corresponding
Portfolio's investment objective, which may be changed without the approval of
the Portfolio's shareholders, and other investment policies, techniques and
limitations, which may or may not be changed without shareholder approval.
    
 
HEALTH CARE FUND
 
  The Health Care Fund has adopted the following investment limitations as
fundamental policies, which (unless otherwise noted) may not be changed without
approval by a majority of the outstanding shares of the Fund.
 
  The Health Care Fund may not:
 
          (1) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-backed securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that the Health Care Fund may exercise rights under agreements
     relating to such securities, including the right to enforce security
     interests and to hold real estate acquired by reason of such enforcement
     until that real estate can be liquidated in an orderly manner;
 
          (2) Engage in the business of underwriting securities of other
     issuers, except to the extent that the Health Care Fund might be considered
     an underwriter under the federal securities laws in connection with its
     disposition of portfolio securities;
 
          (3) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan;
 
          (4) Purchase or sell physical commodities, but the Health Care Fund
     may purchase, sell or enter into financial options and futures, forward and
     spot currency contracts, swap transactions and other financial contracts or
     derivative instruments;
 
          (5) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of the Health Care Fund's
     total assets (including the amount borrowed but reduced by any liabilities
     not constituting borrowings) at the time of the borrowing, except that the
     Health Care Fund may borrow up to an additional 5% of its total assets (not
     including the amount borrowed) for temporary or emergency purposes; or
 
          (6) Purchase securities of any one issuer if, as a result, more than
     5% of the Health Care Fund's total assets would be invested in securities
     of that issuer or the Health Care Fund would own or hold more than 10% of
     the outstanding voting securities of that issuer, except that up to 25% of
     the Health Care Fund's total assets may be invested without regard to this
     limitation, and except that this limitation does not apply to securities
     issued or
 
                                       23
<PAGE>   1618
 
     guaranteed by the U.S. government, its agencies or instrumentalities or to
     securities issued by other investment companies.
 
  Notwithstanding any other investment policy of the Health Care Fund, the
Health Care Fund may invest all of its investable assets (cash, securities and
receivables related to securities) in an open-end management investment company
having substantially the same investment objective, policies and limitations as
the Fund.
 
  The following investment policies of the Health Care Fund are not fundamental
policies and may be changed by vote of the Trust's Board of Trustees without
shareholder approval. The Health Care Fund will not:
 
          (1) Purchase securities for which there is no readily available
     market, or enter into repurchase agreements or purchase time deposits
     maturing in more than seven days, or purchase OTC options or hold assets
     set aside to cover OTC options written by the Health Care Fund, if
     immediately after and as a result, the value of such securities would
     exceed, in the aggregate, 15% of the Health Care Fund's net assets;
 
          (2) Purchase securities on margin, provided that the Health Care Fund
     may obtain short-term credits as may be necessary for the clearance of
     purchases and sales of securities, and further provided that the Health
     Care Fund may make margin deposits in connection with its use of financial
     options and futures, forward and spot currency contracts, swap transactions
     and other financial contracts or derivative instruments; or
 
          (3) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities; or
 
          (4) Borrow money except for temporary or emergency purposes (other
     than to meet redemptions). While borrowings exceed 5% of the Health Care
     Fund's total assets, it will not make any additional investments.
 
  Investors should refer to the Health Care Fund's Prospectus for further
information with respect to the Health Care Fund's investment objective, which
may not be changed without the approval of its shareholders, and other
investment policies, techniques and limitations, which may be changed without
shareholder approval.
 
TELECOMMUNICATIONS FUND
 
  The Telecommunications Fund has adopted the following investment limitations
as fundamental policies, which (unless otherwise noted) may not be changed
without approval by the affirmative vote of a majority of the outstanding shares
of the Fund.
 
  The Telecommunications Fund may not:
 
          (1) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-backed securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that the Telecommunications Fund may exercise rights under
     agreements relating to such securities, including the right to enforce
     security interests and to hold real estate acquired by reason of such
     enforcement until that real estate can be liquidated in an orderly manner;
 
          (2) Purchase or sell physical commodities, but the Telecommunications
     Fund may purchase, sell or enter into financial options and futures,
     forward and spot currency contracts, swap transactions and other financial
     contracts or derivative instruments;
 
          (3) Engage in the business of underwriting securities of other
     issuers, except to the extent that the Telecommunications Fund might be
     considered an underwriter under the federal securities laws in connection
     with its disposition of portfolio securities;
 
          (4) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan;
 
          (5) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of the Telecommunications
     Fund's total assets (including the amount borrowed but reduced by any
     liabilities not constituting borrowings) at the time of the borrowing,
     except that the Telecommunications Fund may borrow up to an additional 5%
     of its total assets (not including the amount borrowed) for temporary or
     emergency purposes; or
 
                                       24
<PAGE>   1619
 
          (6) Purchase securities of any one issuer if, as a result, more than
     5% of the Telecommunications Fund's total assets would be invested in
     securities of that issuer or the Telecommunications Fund would own or hold
     more than 10% of the outstanding voting securities of that issuer, except
     that up to 25% of the Telecommunications Fund's total assets may be
     invested without regard to this limitation, and except that this limitation
     does not apply to securities issued or guaranteed by the U.S. government,
     its agencies or instrumentalities or to securities issued by other
     investment companies.
 
  Notwithstanding any other investment policy of the Telecommunications Fund,
the Telecommunications Fund may invest all of its investable assets (cash,
securities and receivables related to securities) in an open-end management
investment company having substantially the same investment objective, policies
and limitations as the Fund.
 
  The following investment policies of the Telecommunications Fund are not
fundamental policies and may be changed by vote of the Trust's Board of Trustees
without shareholder approval.
 
  The Telecommunications Fund may not:
 
          (1) Invest in securities of an issuer if the investment would cause
     the Telecommunications Fund to own more than 10% of any class of securities
     of any one issuer;
 
          (2) Invest in companies for the purpose of exercising control or
     management;
 
          (3) Invest more than 15% of its net assets in illiquid securities,
     including securities that are illiquid by virtue of the absence of a
     readily available market;
 
          (4) Enter into a futures contract, an option on a futures contract, or
     an option on foreign currency traded on a CFTC-regulated exchange, in each
     case other than for bona fide hedging purposes (as defined by the CFTC), if
     the aggregate initial margin and premiums required to establish all of
     those positions (excluding the amount by which options are "in-the-money")
     exceeds 5% of the liquidation value of the Fund's portfolio, after taking
     into account unrealized profits and unrealized losses on any contracts the
     Fund has entered into;
 
          (5) Borrow money except for temporary or emergency purposes (other
     than to meet redemptions). While borrowings exceed 5% of the
     Telecommunications Fund's total assets, it will not make any additional
     investments;
 
          (6) Purchase securities on margin, provided that the
     Telecommunications Fund may obtain short-term credits as may be necessary
     for the clearance of purchases and sales of securities, and further
     provided that the Telecommunications Fund may make margin deposits in
     connection with its use of financial options and futures, forward and spot
     currency contracts, swap transactions and other financial contracts or
     derivative instruments; or
 
          (7) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities.
 
   
  Investors should refer to the Telecommunications Fund's Prospectus for further
information with respect to the Telecommunications Fund's investment objective,
which may not be changed without the approval of its shareholders, and other
investment policies, techniques and limitations, which may be changed without
shareholder approval.
    
 
  If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of a Fund's or Portfolio's investment policies or
restrictions. A Fund or Portfolio may exchange securities, exercise conversion
or subscription rights, warrants or other rights to purchase common stock or
other equity securities and may hold, except to the extent limited by the 1940
Act, any such securities so acquired without regard to the Fund's or Portfolio's
investment policies and restrictions. The original cost of the securities so
acquired will be included in any subsequent determination of a Fund's or
Portfolio's compliance with the investment percentage limitations referred to
above and in the Prospectus.
 
                                       25
<PAGE>   1620
 
                      EXECUTION OF PORTFOLIO TRANSACTIONS
 
   
  Subject to policies established by the Trust's and the Portfolios' Board of
Trustees, the Sub-advisor is responsible for the execution of each Theme
Portfolio's securities transactions and the selection of broker/dealers who
execute such transactions on behalf of each Theme Portfolio. In executing
transactions, the Sub-advisor seeks the best net results for each Theme
Portfolio, taking into account such factors as the price (including the
applicable brokerage commission or dealer spread), size of the order, difficulty
of execution and operational facilities of the firm involved. Although the Sub-
advisor generally seeks reasonably competitive commission rates and spreads,
payment of the lowest commission or spread is not necessarily consistent with
the best net results. While each Theme Portfolio may engage in soft dollar
arrangements for research services, as described below, it has no obligation to
deal with any broker/dealer or group of broker/dealers in the execution of
portfolio transactions.
    
 
   
  Consistent with the interests of each Theme Portfolio, the Sub-advisor may
select broker/dealers to execute that Theme Portfolio's portfolio transaction on
the basis of the research and brokerage services they provide to the Sub-advisor
for its use in managing that Theme Portfolio and its other advisory accounts.
Such services may include furnishing analyses, reports and information
concerning issuers, industries, securities, geographic regions, economic factors
and trends, portfolio strategy, and performance of accounts; and effecting
securities transactions and performing functions incidental thereto (such as
clearance and settlement). Research and brokerage services received from such
broker are in addition to, and not in lieu of, the services required to be
performed by the Sub-advisor under the applicable investment management and
administration contract. A commission paid to such broker may be higher than
that which another qualified broker would have charged for effecting the same
transaction, provided that the Sub-advisor determines in good faith that such
commission is reasonable in terms either of that particular transaction or the
overall responsibility of the Sub-advisor to that Theme Portfolio and its other
clients and that the total commissions paid by that Theme Portfolio will be
reasonable in relation to the benefits it received over the long term. Research
services may also be received from dealers who execute portfolio transactions in
OTC markets.
    
 
   
  The Sub-advisor may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by a Theme Portfolio toward payment of its expenses, such
as custodian fees.
    
 
   
  Investment decisions for a Theme Portfolio and for other investment accounts
managed by the Sub-advisor are made independently of each other in light of
differing conditions. However, the same investment decision occasionally may be
made for two or more of such accounts, including a Theme Portfolio. In such
cases, simultaneous transactions may occur. Purchases or sales are then
allocated as to price or amount in a manner deemed fair and equitable to all
accounts involved. While in some cases this practice could have a detrimental
effect upon the price or value of the security as far as a Theme Portfolio is
concerned, in other cases the Sub-advisor believes that coordination and the
ability to participate in volume transactions will be beneficial to that Theme
Portfolio.
    
 
   
  Under a policy adopted by the Trust's and the Portfolios' Board of Trustees,
and subject to the policy of obtaining the best net results, the Sub-advisor may
consider a broker/dealer's sale of the shares of the Theme Funds and the other
portfolios for which AIM or the Sub-advisor serves as investment manager or
administrator in selecting broker/dealers for the execution of portfolio
transactions. This policy does not imply a commitment to execute portfolio
transactions through all broker/dealers that sell shares of the Theme Funds and
such other portfolios.
    
 
  Each Theme Portfolio contemplates purchasing most foreign equity securities in
OTC markets or stock exchanges located in the countries in which the respective
principal offices of the issuers of the various securities are located, if that
is the best available market. The fixed commissions paid in connection with most
such foreign stock transactions generally are higher than negotiated commissions
on U.S. transactions. There generally is less government supervision and
regulation of foreign stock exchanges and brokers than in the United States.
Foreign security settlements may in some instances be subject to delays and
related administrative uncertainties.
 
  Foreign equity securities may be held by a Theme Portfolio in the form of
ADRs, ADSs, EDRs, CDRs or securities convertible into foreign equity securities.
ADRs, ADSs, EDRs and CDRs may be listed on stock exchanges, or traded in the OTC
markets in the United States or Europe, as the case may be. ADRs, like other
securities traded in the United States, will be subject to negotiated commission
rates. The foreign and domestic debt securities and money market instruments in
which a Theme Portfolio may invest are generally traded in the OTC markets.
 
   
  A Theme Portfolio does not have any obligation to deal with any broker/dealer
or group of broker/dealers in the execution of securities transactions. Each
Theme Portfolio contemplates that, consistent with the policy of obtaining the
best net results, brokerage transactions may be conducted through certain
companies that are affiliated with AIM or the Sub-advisor. The Trust's or the
Portfolios' Board of Trustees, as applicable, has adopted procedures in
conformity with
    
 
                                       26
<PAGE>   1621
 
Rule 17e-1 under the 1940 Act to ensure that all brokerage commissions paid to
such affiliates are reasonable and fair in the context of the market in which
they are operating. Any such transactions will be effected and related
compensation paid only in accordance with applicable SEC regulations.
 
   
  The Funds may engage in certain principal and agency transactions with banks
and their affiliates that own 5% or more of the outstanding voting securities of
a Fund, provided the conditions of an exemptive order received by the Funds from
the SEC are met. In addition, a Fund may purchase or sell a security from or to
another AIM Fund provided the Funds follow procedures adopted by the Boards of
Directors/Trustees of the various AIM Funds, including the Trust. These inter-
fund transactions do not generate brokerage commissions but may result in
custodial fees or taxes or other related expenses.
    
 
   
  For the fiscal years ended October 31, 1997, 1996 and 1995, the Health Care
Fund paid aggregate brokerage commissions of $1,150,118, $1,619,500 and
$545,743, respectively. For the fiscal years ended October 31, 1997, 1996 and
1995, the Telecommunications Fund paid aggregate brokerage commissions of
$2,254,069, $2,848,733 and $2,253,982, respectively. For the fiscal years ended
October 31, 1997, 1996 and 1995, the Financial Services Portfolio paid aggregate
brokerage commissions of $250,893, $77,822 and $38,814, respectively. For the
fiscal years ended October 31, 1997, 1996 and 1995, the Infrastructure Portfolio
paid aggregate brokerage commissions of $131,543, $124,164 and $122,399,
respectively. For the fiscal years ended October 31, 1997, 1996 and 1995, the
Resources Portfolio paid aggregate brokerage commissions of $1,281,212, $496,370
and $98,462, respectively. For the fiscal years ended October 31, 1997 and 1996
and for the fiscal period December 30, 1994 (commencement of operations) to
October 31, 1995, the Consumer Products and Services Portfolio paid aggregate
brokerage commissions of $1,454,348, $356,459 and $17,605, respectively. For the
fiscal years ended October 31, 1997 and 1996, the Health Care Fund paid to GT
Bank in Liechtenstein AG, which was an "affiliated" broker, aggregate brokerage
commissions of $23,081 and $32,898, respectively, for transactions involving
purchases and sales of portfolio securities which represented 2.01% and 2.03%,
respectively, of the total brokerage commissions paid by the Health Care Fund
and 1.61% and 1.71%, respectively, of the aggregate dollar amount of
transactions involving payment of commissions by the Health Care Fund. For
fiscal year ended October 31, 1997, the Telecommunications Fund paid to GT Bank
in Liechtenstein, AG, which was an "affiliated" broker, aggregate brokerage
commissions of $220,584 for transactions involving purchases and sales of
portfolio securities which represented 1.00% of the total brokerage commissions
paid by the Fund and 0.67% of the aggregate dollar amount of transactions
involving payment of commissions by the Fund.
    
 
PORTFOLIO TRADING AND TURNOVER
 
  Although each Theme Portfolio does not intend generally to trade for
short-term profits, the securities held by that Theme Portfolio will be sold
whenever management believes it is appropriate to do so, without regard to the
length of time a particular security may have been held. Portfolio turnover rate
is calculated by dividing the lesser of sales or purchases of portfolio
securities by each Theme Portfolio's average month-end portfolio value,
excluding short-term investments. The portfolio turnover rate will not be a
limiting factor when management deems portfolio changes appropriate. Higher
portfolio turnover involves correspondingly greater brokerage commissions and
other transaction costs that the Theme Portfolio will bear directly, and may
result in the realization of net capital gains that are taxable when distributed
to each Fund's shareholders. For the fiscal years ended October 31, 1996 and
1997, the Telecommunications Fund's portfolio turnover rates were 37% and 35%,
respectively. For the fiscal years ended October 31, 1996 and 1997, the Health
Care Fund's portfolio turnover rates were 157% and 149%, respectively. For the
fiscal years ended October 31, 1996 and 1997, the portfolio turnover rates for
the Financial Services Portfolio, Infrastructure Portfolio and Resources
Portfolio were 103% and 91%, 41% and 41%, and 94% and 321%, respectively. For
the fiscal years ended October 31, 1996 and 1997, the portfolio turnover rates
for the Consumer Products and Services Portfolio were 169% and 392%,
respectively.
 
                                       27
<PAGE>   1622
 
   
                                   MANAGEMENT
    
 
TRUSTEES AND EXECUTIVE OFFICERS
 
   
  The Trust's Trustees and Executive Officers and the Portfolios' Trustees and
Executive Officers are listed below. Unless otherwise indicated, the address of
each Executive Officer is 11 Greenway, Suite 100, Houston, Texas 77046.
    
   
    
 
   
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
                                 POSITIONS HELD
  NAME, ADDRESS AND AGE         WITH REGISTRANT            PRINCIPAL OCCUPATION DURING PAST 5 YEARS
  ---------------------         ---------------            ----------------------------------------
- ---------------------------------------------------------------------------------------------------------
<S>                         <C>                       <C>
 ROBERT H. GRAHAM (51)      Trustee, Chairman of the  Director, President and Chief Executive Officer,
                            Board and President       A I M Management Group Inc.; Director and
                                                      President, A I M Advisors, Inc.; Director and
                                                      Senior Vice President, A I M Capital Management,
                                                      Inc., A I M Distributors, Inc., A I M Fund
                                                      Services, Inc. and Fund Management Company; and
                                                      Director, AMVESCAP PLC.
- ---------------------------------------------------------------------------------------------------------
 C. DEREK ANDERSON (57)     Trustee                   President, Plantagenet Capital Management, LLC (an
 220 Sansome Street                                   investment partnership); Chief Executive Officer,
 Suite 400                                            Plantagenet Holdings, Ltd. (an investment banking
 San Francisco, CA 94104                              firm); Director, Anderson Capital Management, Inc.
                                                      since 1988; Director, PremiumWear, Inc. (formerly
                                                      Munsingwear, Inc.) (a casual apparel company);
                                                      Director, "R" Homes, Inc. and various other
                                                      companies; and Trustee, each of the other
                                                      investment companies registered under the 1940 Act
                                                      that is sub-advised or sub-administered by the Sub-
                                                      advisor.
- ---------------------------------------------------------------------------------------------------------
 FRANK S. BAYLEY (59)       Trustee                   Partner, law firm of Baker & McKenzie; Director and
 Two Embarcadero Center                               Chairman, C.D. Stimson Company (a private
 Suite 2400                                           investment company); and Trustee, each of the other
 San Francisco, CA 94111                              investment companies registered under the 1940 Act
                                                      that is sub-advised or sub-administered by the Sub-
                                                      advisor.
- ---------------------------------------------------------------------------------------------------------
 ARTHUR C. PATTERSON (54)   Trustee                   Managing Partner, Accel Partners (a venture capital
 428 University Avenue                                firm); Director, Viasoft and PageMart, Inc. (both
 Palo Alto, CA 94301                                  public software companies) and several other
                                                      privately held software and communications
                                                      companies; and Trustee, each of the other
                                                      investment companies registered under the 1940 Act
                                                      that is sub-advised or sub-administered by the Sub-
                                                      advisor.
- ---------------------------------------------------------------------------------------------------------
 RUTH H. QUIGLEY (63)       Trustee                   Private investor; President, Quigley Friedlander &
 1055 California Street                               Co., Inc. (a financial advisory services firm) from
 San Francisco, CA 94108                              1984 to 1986; and Trustee, each of the other
                                                      investment companies registered under the 1940 Act
                                                      that is sub-advised or sub-administered by the Sub-
                                                      advisor.
- ---------------------------------------------------------------------------------------------------------
 + JOHN J. ARTHUR (53)      Vice President            Director, Senior Vice President and Treasurer,
                                                      A I M Advisors, Inc.; Vice President and Treasurer,
                                                      A I M Management Group Inc., A I M Capital
                                                      Management, Inc., A I M Capital Management, Inc.,
                                                      A I M Distributors, Inc., A I M Fund Services, Inc.
                                                      and Fund Management Company.
- ---------------------------------------------------------------------------------------------------------
 KENNETH W. CHANCEY (53)    Vice President and        Senior Vice President -- Mutual Fund Accounting,
 50 California Street       Principal Accounting      the Sub-advisor since 1997; Vice
 San Francisco, CA 94111    Officer                   President -- Mutual Fund Accounting, the
                                                      Sub-advisor from 1992 to 1997.
- ---------------------------------------------------------------------------------------------------------
</TABLE>
    
 
- ---------------
 
   
<TABLE>
<S>                         <C>                       <C>
+ Mr. Arthur and Ms. Relihan are married to each other.
</TABLE>
    
 
                                       28
<PAGE>   1623
 
   
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
                                 POSITIONS HELD
  NAME, ADDRESS AND AGE         WITH REGISTRANT            PRINCIPAL OCCUPATION DURING PAST 5 YEARS
  ---------------------         ---------------            ----------------------------------------
- ---------------------------------------------------------------------------------------------------------
<S>                         <C>                       <C>
 MELVILLE B. COX (54)       Vice President            Vice President and Chief Compliance Officer, A I M
                                                      Advisors, Inc., A I M Capital Management, Inc.,
                                                      A I M Distributors, Inc., A I M Fund Services, Inc.
                                                      and Fund Management Company.
- ---------------------------------------------------------------------------------------------------------
 GARY T. CRUM (50)          Vice President            Director and President, A I M Capital Management,
                                                      Inc.; Director and Senior Vice President, A I M
                                                      Management Group Inc. and A I M Advisors, Inc.; and
                                                      Director, A I M Distributors, Inc. and AMVESCAP
                                                      PLC.
- ---------------------------------------------------------------------------------------------------------
 HELGE K. LEE (52)          Vice President and        Chief Legal and Compliance Officer -- North
 50 California Street       Secretary                 America, the Sub-advisor since October 1997;
 San Francisco, CA 94111                              Secretary and Chief Legal and Compliance Officer,
                                                      INVESCO (NY) Asset Management, Inc., INVESCO (NY),
                                                      Inc., GT Global Investor Services, Inc. and GT
                                                      Insurance Agency, Inc. since August 1997; Secretary
                                                      and Chief Legal and Compliance Officer, GT Global,
                                                      Inc. from August 1997 to April 1998; Executive Vice
                                                      President of the Asset Management Division of
                                                      Liechtenstein Global Trust AG, from October 1996 to
                                                      May 1998; Senior Vice President, General Counsel
                                                      and Secretary of INVESCO (NY) Asset Management,
                                                      Inc., INVESCO (NY), Inc., GT Global, GT Global
                                                      Investor Services, Inc. and G.T. Insurance from May
                                                      1994 to October 1996; and Senior Vice President,
                                                      General Counsel and Secretary of Strong/
                                                      Corneliuson Management, Inc. and Secretary of each
                                                      of the Strong Funds from October 1991 to May 1994.
- ---------------------------------------------------------------------------------------------------------
 + CAROL F. RELIHAN (43)    Vice President            Director, Senior Vice President, General Counsel
                                                      and Secretary, A I M Advisors, Inc.; Vice
                                                      President, General Counsel and Secretary, A I M
                                                      Management Group Inc.; Director, Vice President and
                                                      General Counsel, Fund Management Company; Vice
                                                      President and General Counsel, A I M Fund Services,
                                                      Inc.; and Vice President, A I M Capital Management,
                                                      Inc. and A I M Distributors, Inc.
- ---------------------------------------------------------------------------------------------------------
 DANA R. SUTTON (39)        Vice President and        Vice President and Fund Controller, A I M Advisors,
                            Assistant Treasurer       Inc.; and Assistant Vice President and Assistant
                                                      Treasurer, Fund Management Company.
- ---------------------------------------------------------------------------------------------------------
</TABLE>
    
 
- ---------------
 
   
+ Mr. Arthur and Ms. Relihan are married to each other.
    
 
   
  The Board of Trustees has a Nominating and Audit Committee, comprised of Miss
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Trust and its
funds and recommending firms to serve as independent auditors of the Trust. All
of the Trust's Trustees also serve as directors or trustees of some or all of
the other investment companies managed, administered or advised by AIM. All of
the Trust's Executive Officers hold similar offices with some or all of the
other investment companies managed, administered or advised by AIM. Each Trustee
who is not a director, officer or employee of the Sub-advisor or any affiliated
company is paid aggregate fees of $5,000 a year, plus $300 per Fund for each
meeting of the Board attended and reimbursed travel and other expenses incurred
in connection with attendance at such meetings. Other Trustees and Officers
receive no compensation or expense reimbursement from the Trust. For the fiscal
year ended October 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss
Quigley, who are not directors, officers or employees of the Sub-advisor or any
affiliated company, received total compensation of $38,650, $38,650, $27,850 and
$38,650, respectively, from the Trust for their services as Directors. For the
fiscal year ended October 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and
Miss Quigley who are not directors, officers or employees of the Sub-advisor or
any other affiliated company, received
    
 
                                       29
<PAGE>   1624
 
   
total compensation of $117,304, $114,386, $88,350 and $111,688, respectively,
from the investment companies managed or administered by AIM and sub-advised or
sub-administered by the Sub-advisor for which he or she serves as a Director or
Trustee. Fees and expenses disbursed to the Directors contained no exercised or
payable pension or retirement benefits. As of June 26, 1998, the Officers and
Trustees and their families as a group owned in the aggregate beneficially or of
record less than 1% of the outstanding shares of each Fund or of all the Trust's
series in the aggregate.
    
 
   
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES RELATING TO THE FEEDER FUNDS
AND THE PORTFOLIOS
    
 
   
  AIM serves as each Portfolio's investment manager and administrator under an
investment management and administration contract between each Portfolio and AIM
("Portfolio Management Contract"). The Sub-advisor serves as each Portfolio's
sub-advisor and sub-administrator under a sub-advisory and sub-administration
agreement between AIM and the Sub-advisor ("Portfolio Management Sub-Contract,"
and together with the Portfolio Management Contract, the "Portfolio Management
Contracts"). AIM serves as administrator to each Feeder Fund under an
administration contract between the Trust and AIM ("Administration Contract").
The Sub-advisor serves as sub-administrator to each Feeder Fund under a
sub-administration contract between AIM and the Sub-advisor ("Administration
Sub-Contract," and together with the Administration Contract, the
"Administration Contracts"). The Administration Contracts will not be deemed
advisory contracts, as defined under the 1940 Act. As investment managers and
administrators, AIM and the Sub-advisor make all investment decisions for each
Portfolio and, as administrators, administer each Portfolio's and each Feeder
Fund's affairs. Among other things, AIM and the Sub-advisor furnish the services
and pay the compensation and travel expenses of persons who perform the
executive, administrative, clerical and bookkeeping functions of each Portfolio
and each Feeder Fund and provide suitable office space, necessary small office
equipment and utilities.
    
 
   
  The Portfolio Management Contracts may be renewed with respect to a Portfolio
for additional one-year terms, provided that any such renewal has been
specifically approved at least annually by (i) the Portfolios' Board of Trustees
or the vote of a majority of the Portfolio's outstanding voting securities (as
defined in the 1940 Act) and (ii) a majority of Trustees who are not parties to
the Portfolio Management Contracts or "interested persons" of any such party (as
defined in the 1940 Act), cast in person at a meeting called for the specific
purpose of voting on such approval. The Portfolio Management Contracts provide
that with respect to each Portfolio, and the Administration Contracts provide
that with respect to each Feeder Fund, either the Trust, each Portfolio or the
Sub-advisor may terminate the Contracts without penalty upon sixty days' written
notice to the other party. The Portfolio Management Contracts terminate
automatically in the event of their assignment (as defined in the 1940 Act).
    
 
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES RELATING TO THE HEALTH CARE
FUND AND TELECOMMUNICATIONS FUND
 
   
  AIM serves as the investment manager and administrator to the Health Care Fund
and Telecommunications Fund under an investment management and administration
contract ("Management Contract") between the Trust and AIM. The Sub-advisor
serves as the sub-advisor and sub-administrator to the Health Care Fund and
Telecommunications Fund under a Sub-Advisory and Sub-Administration Contract
between AIM and the Sub-advisor ("Sub-Management Contract," and together with
the Management Contract, the "Management Contracts"). As investment managers and
administrators, AIM and the Sub-advisor make all investment decisions for the
Health Care Fund and Telecommunications Fund and administer the Health Care
Fund's and the Telecommunications Fund's affairs. Among other things, AIM and
the Sub-advisor furnish the services and pay the compensation and travel
expenses of persons who perform the executive, administrative, clerical and
bookkeeping functions of the Trust and the Health Care Fund and
Telecommunications Fund, and provide suitable office space, necessary small
office equipment and utilities.
    
 
   
  The Management Contracts may be renewed for additional one-year terms with
respect to the Health Care Fund and Telecommunications Fund, provided that any
such renewal has been specifically approved at least annually by: (i) the
Trust's Board of Trustees, or by the vote of a majority of the Health Care Fund
and Telecommunications Fund's outstanding voting securities (as defined in the
1940 Act), and (ii) a majority of Trustees who are not parties to the Management
Contracts or "interested persons" of any such party (as defined in the 1940
Act), cast in person at a meeting called for the specific purpose of voting on
such approval. The Management Contracts provide that with respect to the Health
Care Fund and Telecommunications Fund either the Trust or each of AIM or the
Sub-advisor may terminate the Contracts without penalty upon sixty days' written
notice to the other party. The Management Contracts terminate automatically in
the event of their assignment (as defined in the 1940 Act).
    
 
                                       30
<PAGE>   1625
 
   
  The following table discloses the amount of investment management and
administration fees paid by the Theme Portfolios to the Sub-advisor during the
periods shown:
    
 
                                HEALTH CARE FUND
 
<TABLE>
<CAPTION>
                         YEAR ENDED
                        OCTOBER 31,                           AMOUNT PAID
                        -----------                           -----------
<S>                                                           <C>
  1997......................................................  $ 5,820,067
  1996......................................................    5,495,494
  1995......................................................    4,453,857
</TABLE>
 
                            TELECOMMUNICATIONS FUND
 
<TABLE>
<CAPTION>
                         YEAR ENDED
                        OCTOBER 31,                           AMOUNT PAID
                        -----------                           -----------
<S>                                                           <C>
  1997......................................................  $17,999,111
  1996......................................................   23,119,601
  1995......................................................   23,861,460
</TABLE>
 
                          FINANCIAL SERVICES PORTFOLIO
 
<TABLE>
<CAPTION>
                         YEAR ENDED
                        OCTOBER 31,                           AMOUNT PAID
                        -----------                           -----------
<S>                                                           <C>
  1997......................................................  $   346,965
  1996......................................................       99,991
  1995......................................................       51,353
</TABLE>
 
                            INFRASTRUCTURE PORTFOLIO
 
<TABLE>
<CAPTION>
                         YEAR ENDED
                        OCTOBER 31,                           AMOUNT PAID
                        -----------                           -----------
<S>                                                           <C>
  1997......................................................  $   772,727
  1996......................................................      635,456
  1995......................................................      601,421
</TABLE>
 
                              RESOURCES PORTFOLIO
 
<TABLE>
<CAPTION>
                         YEAR ENDED
                        OCTOBER 31,                           AMOUNT PAID
                        -----------                           -----------
<S>                                                           <C>
  1997......................................................  $   979,215
  1996......................................................      425,745
  1995......................................................      213,856
</TABLE>
 
                    CONSUMER PRODUCTS AND SERVICES PORTFOLIO
 
<TABLE>
<CAPTION>
                         YEAR ENDED
                        OCTOBER 31,                           AMOUNT PAID
                        -----------                           -----------
<S>                                                           <C>
  1997......................................................  $ 1,207,854
  1996......................................................      422,640
  1995 (since Fund inception on Dec. 30, 1994)..............       16,284
</TABLE>
 
   
  For the fiscal years ended October 31, 1995 and 1996, the Sub-advisor
reimbursed the Financial Services Portfolio, Infrastructure Portfolio and
Resources Portfolio for their respective investment management and
administration fees in the amounts of $51,353 and $103,267; $0 and $0; and
$213,856 and $0, respectively. Each of these Portfolios had no reimbursement for
the fiscal year ended October 31, 1997. For the fiscal years ended October 31,
1995, 1996 and 1997, the Financial Services Fund, Infrastructure Fund and
Resources Fund paid administration fees of $18,756, $34,865 and $119,765;
$208,892, $218,735 and $266,025; and $74,485, $147,614 and $338,578,
respectively. However, the Sub-advisor reimbursed those Funds for such fees in
the amounts of $18,756, $34,865 and $0; $177,376, $0 and $0; and $74,485, $0 and
$0, respectively. For the fiscal period December 30, 1994 (commencement of
operations) to October 31, 1995, and for the fiscal years ended October 31, 1996
and 1997, the Sub-advisor reimbursed the Consumer Products and
    
 
                                       31
<PAGE>   1626
 
   
Services Portfolio for investment management and administration fees in the
amount of $16,284, $0 and $0, respectively. For the same periods, the Consumer
Products and Services Fund paid $5,933, $147,623 and $416,297, respectively, in
administration fees; however, the Sub-advisor reimbursed the Fund in the amounts
of $5,933, $0 and $0, respectively.
    
 
DISTRIBUTION SERVICES RELATING TO EACH FUND
 
  Each Fund's Advisor Class shares are offered continuously through each Fund's
principal underwriter and distributor, AIM Distributors, on a "best efforts"
basis pursuant to a distribution contract between the Trust and AIM Distributors
without a front-end sales charge or a contingent deferred sales charge.
 
   
EXPENSES OF THE FUNDS AND OF THE PORTFOLIOS
    
 
   
  Each Fund and each Portfolio pays all expenses not assumed by AIM, the
Sub-advisor, AIM Distributors and other agents. These expenses include, in
addition to the advisory, administration, distribution, transfer agency, pricing
and accounting agency and brokerage fees described above, legal and audit
expenses, custodian fees, trustees' fees, organizational fees, fidelity bond and
other insurance premiums, taxes, extraordinary expenses and expenses of reports
and prospectuses sent to existing investors. The allocation of general Company
expenses and expenses shared among the Funds and other funds organized as series
of the Company are allocated on a basis deemed fair and equitable, which may be
based on the relative net assets of the Funds or the nature of the service
performed and relative applicability to the Funds. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio securities, which
are capitalized in accordance with generally accepted accounting principles
applicable to investment companies, are accounted for as capital items and not
as expenses. The ratio of each Fund's expenses to its relative net assets can be
expected to be higher than the expense ratios of funds investing solely in
domestic securities, since the cost of maintaining the custody of foreign
securities and the rate of investment management fees paid by the Funds or the
Portfolios generally are higher than the comparable expenses of such other
funds.
    
 
   
                         NET ASSET VALUE DETERMINATION
    
 
   
  The net asset value per share of each Fund is normally determined daily as of
the close of trading of the New York Stock Exchange ("NYSE") (generally 4:00
p.m. Eastern time) on each business day of the Fund. In the event the NYSE
closes early (i.e., before 4:00 p.m. Eastern time) on a particular day, the net
asset value of a Fund is determined as of the close of the NYSE on such day. Net
asset value per share is determined by dividing the value of each Theme
Portfolio's securities, cash and other assets (including interest accrued but
not collected) attributable to a particular class, less all its liabilities
(including accrued expenses and dividends payable) attributable to that class,
by the total number of shares outstanding of that class. Determination of each
Theme Portfolio's net asset value per share is made in accordance with generally
accepted accounting principles.
    
 
  Each equity security held by a Theme Portfolio is valued at its last sales
price on the exchange where the security is principally traded or, lacking any
sales on a particular day, the security is valued at the mean between the
closing bid and asked prices on that day. Each security traded in the
over-the-counter market (but not including securities reported on the NASDAQ
National Market System) is valued at the mean between the last bid and asked
prices based upon quotes furnished by market makers for such securities. Each
security reported on the NASDAQ National Market System is valued at the last
sales price on the valuation date or absent a last sales price, at the mean
between the closing bid and asked prices on that day. Debt securities 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 institution-size
trading in similar groups of securities, developments related to special
securities, yield, quality, coupon rate, maturity, type of issue, individual
trading characteristics and other market data. 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 Trust's
officers in a manner specifically authorized by the Board of Trustees.
Short-term obligations having 60 days or less to maturity are valued on the
basis of amortized cost. For purposes of determining net asset value per share,
futures and options contracts generally will be valued 15 minutes after the
close of trading of the NYSE.
 
   
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of each Fund's shares are determined at such
times. Foreign currency exchange rates are also generally determined prior to
the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which such
values are determined and the close of the NYSE which will not be reflected in
the computation of a Fund's net asset value. If events materially affecting the
value of such
    
 
                                       32
<PAGE>   1627
 
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 Trustees of the Fund and the Portfolio.
 
                       HOW TO PURCHASE AND REDEEM SHARES
 
  A complete description of the manner in which shares of the Funds may be
purchased appears in the Funds' Prospectuses under the headings "How to Purchase
Shares," "Terms and Conditions of Purchase of the AIM Funds" and "Special
Plans."
 
   
  For purposes of a Letter of Intent entered into prior to June 1, 1998, any
registered investment advisor, trust company or bank trust department which
exercises investment discretion and which intends within thirteen months to
invest $500,000 or more can be treated as a single purchaser, provided further
that such entity places all purchases and redemption orders. Such entities
should be prepared to establish their qualifications for such treatment.
    
 
  Complete information concerning the method of exchanging shares of the Funds
for shares of the other AIM Funds is set forth in the Prospectuses under the
heading "Exchange Privilege."
 
   
  Information concerning redemption of the Funds' shares is set forth in the
Prospectuses under the heading "How to Redeem Shares." In addition to the Funds'
obligation to redeem shares, AIM Distributors may also repurchase shares as an
accommodation to shareholders. To effect a repurchase, those dealers who have
executed Selected Dealer Agreements with AIM Distributors must phone orders to
the order desk of the Funds at (800) 959-4246 and guarantee delivery of all
required documents in good order. A repurchase is effected at the net asset
value per share of the applicable Fund next determined after the repurchase
order is received. Such an arrangement is subject to timely receipt by A I M
Fund Services, Inc. ("AFS"), the Funds' transfer agent, of all required
documents in good order. If such documents are not received within a reasonable
time after the order is placed, the order is subject to cancellation. While
there is no charge imposed by a Fund or by AIM Distributors (other than any
applicable contingent deferred sales charge) when shares are redeemed or
repurchased, dealers may charge a fair service fee for handling the transaction.
    
 
  The right of redemption may be suspended or the date of payment postponed when
(a) trading on the NYSE is restricted, as determined by applicable rules and
regulations of the SEC, (b) the NYSE is closed for other than customary weekend
and holiday closings, (c) the SEC has by order permitted such suspension, or (d)
an emergency as determined by the SEC exists making disposition of portfolio
securities or the valuation of the net assets of a Fund not reasonably
practicable.
 
  A Fund's net asset value is calculated by dividing the number of outstanding
shares into the net assets of the Fund. Net assets are the excess of a Fund's
assets over its liabilities. A more detailed description of how each Fund's net
asset value is calculated appears in the Prospectuses under the heading
"Determination of Net Asset Value."
 
  PROGRAMS AND SERVICES FOR SHAREHOLDERS. The Funds provide certain services for
shareholders and certain investment or redemption programs. See "Exchange
Privilege" and "How to Redeem Shares" in the Prospectus. All inquiries
concerning these programs should be made directly to A I M Fund Services, Inc.,
P.O. Box 4739, Houston, Texas 77210-4739, toll free at (800) 959-4246.
 
  DIVIDEND ORDER. Dividends may be paid to someone other than the registered
owner, or sent to an address other than the address of record. (Please note that
signature guarantees are required to effect this option.) An investor also may
direct that his or her dividends be invested in one of the other AIM Funds and
there is no sales charge for these investments; initial investment minimums
apply. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions" in the Prospectus. To effect this option, please contact your
authorized dealer. For more information concerning AIM Funds other than the
Funds, please obtain a current prospectus by contacting your authorized dealer,
by writing to A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas
77210-4739, or by calling toll free (800) 959-4246.
 
                                     TAXES
 
TAXATION OF THE FUNDS
 
  Each Fund is treated as a separate corporation for federal income tax
purposes. To continue to qualify for treatment as a regulated investment company
("RIC") under the Code, each Fund must distribute to its shareholders for each
taxable year at least 90% of its investment company taxable income (consisting
generally of net investment income, net short-term capital gain and net gains
from certain foreign currency transactions) ("Distribution Requirement") and
must meet several additional requirements. With respect to each Fund, these
requirements include the following: (1) the Fund must derive at least 90% of its
gross income each taxable year from dividends, interest, payments with respect
to securities loans and gains from the sale or other disposition of securities
or foreign currencies, or other income (including gains from options, Futures or
Forward Contracts) derived with respect to its business of investing in
securities or those
 
                                       33
<PAGE>   1628
 
currencies ("Income Requirement"); and (2) the Diversification Requirements.
Each Feeder Fund, as an investor in its corresponding Portfolio, is deemed to
own a proportionate share of the Portfolio's assets, and to earn a proportionate
share of the Portfolio's income, for purposes of determining whether the Fund
satisfies the requirements described above to qualify as a RIC.
 
  Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to
the extent it fails to distribute by the end of any calendar year substantially
all of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
 
  See the next section for a discussion of the tax consequences to each Feeder
Fund of hedging transactions engaged in, and investments in passive foreign
investment companies ("PFICs") and other foreign securities, by its
corresponding Portfolio and to the Health Care Fund and Telecommunications Fund
of those transactions and investments.
 
TAXATION OF THE THEME PORTFOLIOS
 
  The Portfolios and their Relationship to the Feeder Funds. Each Portfolio is
treated as a separate partnership for federal income tax purposes and is not a
"publicly traded partnership." As a result, each Portfolio is not subject to
federal income tax; instead, each Feeder Fund, as an investor in its
corresponding Portfolio, is required to take into account in determining its
federal income tax liability its share of the Portfolio's income, gains, losses,
deductions and credits, without regard to whether it has received any cash
distributions from the Portfolio. Each Portfolio also is not subject to Delaware
income or franchise tax.
 
  Because, as noted above, each Feeder Fund is deemed to own a proportionate
share of its corresponding Portfolio's assets, and to earn a proportionate share
of its corresponding Portfolio's income, for purposes of determining whether the
Fund satisfies the requirements to qualify as a RIC, each Portfolio intends to
conduct its operations so that its corresponding Fund will be able to continue
to satisfy all those requirements.
 
  Distributions to each Feeder Fund from its corresponding Portfolio (whether
pursuant to a partial or complete withdrawal or otherwise) will not result in
the Fund's recognition of any gain or loss for federal income tax purposes,
except that (1) gain will be recognized to the extent any cash that is
distributed exceeds the Fund's basis for its interest in the Portfolio before
the distribution, (2) income or gain will be recognized if the distribution is
in liquidation of the Fund's entire interest in the Portfolio and includes a
disproportionate share of any unrealized receivables held by the Portfolio, and
(3) loss will be recognized if a liquidation distribution consists solely of
cash and/or unrealized receivables. Each Feeder Fund's basis for its interest in
its corresponding Portfolio generally will equal the amount of cash and the
basis of any property the Fund invests in the Portfolio, increased by the Fund's
share of the Portfolio's net income and gains and decreased by (a) the amount of
cash and the basis of any property the Portfolio distributes to the Fund and (b)
the Fund's share of the Portfolio's losses.
 
  Foreign Taxes. Dividends and interest received by a Theme Portfolio, and gains
realized thereby, may be subject to income, withholding or other taxes imposed
by foreign countries and U.S. possessions ("foreign taxes") that would reduce
the yield and/or total return on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate foreign taxes, however,
and many foreign countries do not impose taxes on capital gains in respect of
investments by foreign investors. If more than 50% of the value of a Fund's
total assets (taking into account, in the case of a Feeder Fund, its
proportionate share of its corresponding Portfolio's assets) at the close of its
taxable year consists of securities of foreign corporations, the Fund will be
eligible to, and may, file an election with the Internal Revenue Service that
will enable its shareholders, in effect, to receive the benefit of the foreign
tax credit with respect to any foreign taxes paid by it (taking into account, in
the case of a Feeder Fund, its proportionate share of any foreign taxes paid by
its corresponding Portfolio) (a "Fund's foreign taxes"). Pursuant to the
election, a Fund would treat those taxes as dividends paid to its shareholders
and each shareholder would be required to (1) include in gross income, and treat
as paid by him, his share of the Fund's foreign taxes, (2) treat his share of
those taxes and of any dividend paid by the Fund that represents its income from
foreign and U.S. possessions sources (taking into account, in the case of a
Feeder Fund, its proportionate share of its corresponding Portfolio's Income
from those sources) as his own income from those sources and (3) either deduct
the taxes deemed paid by him in computing his taxable income or, alternatively,
use the foregoing information in calculating the foreign tax credit against his
federal income tax. Each Fund will report to its shareholders shortly after each
taxable year their respective shares of the Fund's foreign taxes and income
(taking into account, in the case of a Feeder Fund, its proportionate share of
its corresponding Portfolio's income) from sources within foreign countries and
U.S. possessions if it makes this election. Pursuant to the Taxpayer Relief Act
of 1997 ("Tax Act"), individuals who have no more than $300 ($600 for married
persons filing jointly) of creditable foreign taxes included on Form 1099 and
all of whose foreign source of income is "qualified passive income" may elect
each year to be exempt
 
                                       34
<PAGE>   1629
 
from the extremely complicated foreign tax credit limitation and will be able to
claim a foreign tax credit without having to file the detailed Form 1116 that
otherwise is required.
 
   
  Passive Foreign Investment Companies. Each Theme Portfolio may invest in the
stock of PFICs. A PFIC is a foreign corporation -- other than a "controlled
foreign corporation" (i.e., a foreign corporation in which, on any day during
its taxable year, more than 50% of the total voting power of all voting stock
therein or the total value of all stock therein is owned, directly, indirectly
or constructively, by "U.S. shareholders," defined as U.S. persons that
individually own, directly, indirectly or constructively, at least 10% of that
voting power) as to which the Theme Portfolio is a U.S. shareholder (effective
with respect to each Fund for their taxable year beginning November 1,
1998) -- that, in general, meets either of the following tests: (1) at least 75%
of its gross income is passive or (2) an average of at least 50% of its assets
produce, or are held for the production of, passive income. Under certain
circumstances, a Fund will be subject to federal income tax on a part (or, in
the case of a Feeder Fund, its proportionate share of a part) of any "excess
distribution" received by it (or, in the case of a Feeder Fund, by its
corresponding Portfolio) on the stock of a PFIC or of any gain on the Fund's
(or, in the case of a Feeder Fund, its corresponding Portfolio's) disposition of
that stock (collectively "PFIC income"), plus interest thereon, even if the Fund
distributes the PFIC income as a taxable dividend to its shareholders. The
balance of the PFIC income will be included in the Fund's investment company
taxable income and, accordingly, will not be taxable to it to the extent it
distributes that income to its shareholders.
    
 
   
  If a Theme Portfolio invests in a PFIC and elects to treat the PFIC as a
"qualified electing fund" ("QEF"), then in lieu of the foregoing tax and
interest obligation, the Theme Portfolio (or, in the case of a Portfolio, its
corresponding Feeder Fund) would be required to include in income each year its
pro rata share (taking into account, in the case of a Feeder Fund, its
proportionate share of its corresponding Portfolio's pro rata share) of the
QEF's annual ordinary earnings and net capital gain (i.e., the excess of net
long-term capital gain over net short-term capital loss) -- which most likely
would have to be distributed by the Theme Portfolio (or, in the case of a
Portfolio, its corresponding Feeder Fund) to satisfy the Distribution
Requirement and avoid imposition of the Excise Tax -- even if those earnings and
gain were not received thereby from the QEF. In most instances it will be very
difficult, if not impossible, to make this election because of certain
requirements thereof.
    
 
  A holder of stock in any PFIC may elect to include in ordinary income for each
taxable year beginning after 1997, the excess, if any, of the fair market value
of the stock over the adjusted basis therein as of the end of that year.
Pursuant to the election, a deduction (as an ordinary, not capital, loss) also
will be allowed for the excess, if any, of the holder's adjusted basis in PFIC
stock over the fair market value thereof as of the taxable year-end, but only to
the extent of any net mark-to-market gains with respect to that stock included
in income for prior taxable years. The adjusted basis in each PFIC's stock
subject to the election will be adjusted to reflect the amounts of income
included and deductions taken thereunder. Regulations proposed in 1992 provided
a similar election with respect to the stock of certain PFICs.
 
  Options, Futures and Foreign Currency Transactions. The Theme Portfolios' use
of hedging transactions, such as selling (writing) and purchasing options and
Futures Contracts and entering into Forward Contracts, involves complex rules
that will determine, for federal income tax purposes, the amount, character and
timing of recognition of the gains and losses a Theme Portfolio realizes in
connection therewith. Gains from disposition of foreign currencies (except
certain gains that may be excluded by future regulations), and gains from the
options, Futures and Forward Contracts derived by a Theme Portfolio with respect
to its business of investing in securities or foreign currencies, will qualify
as permissible income under the Income Requirement for that Theme Portfolio (or,
in the case of a Portfolio, its corresponding Feeder Fund).
 
   
  Futures and Forward Contracts that are subject to section 1256 of the Code
(other than those that are part of a "mixed straddle") ("Section 1256
Contracts") and that are held by a Theme Portfolio at the end of its taxable
year generally will be deemed to have been sold at that time at market value for
federal income tax purposes. Sixty percent of any net gain or loss recognized on
these deemed sales, and 60% of any net gain or loss realized from any actual
sales of Section 1256 Contracts, will be treated as long-term capital gain or
loss, and the balance will be treated as short-term capital gain or loss. That
60% portion will qualify for the reduced maximum tax rates on non-corporate
taxpayers' net capital gain enacted by the Tax Act -- 20% (10% for taxpayers in
the 15% marginal tax bracket) for gain recognized on capital assets held for
more than 18 months -- instead of the 28% rate in effect before that
legislation, which now applies to gain recognized on capital assets held for
more than one year but not more than 18 months.
    
 
  Section 988 of the Code also may apply to gains and losses from transactions
in foreign currencies, foreign-currency-denominated debt securities and options,
Futures and Forward Contracts on foreign currencies ("Section 988" gains and
losses). Each Section 988 gain or loss generally is computed separately and
treated as ordinary income or loss. In the case of overlap between sections 1256
and 988, special provisions determine the character and timing of any income,
gain or loss. Each Theme Portfolio attempts to monitor section 988 transactions
to minimize any adverse tax impact.
 
                                       35
<PAGE>   1630
 
   
  If a Theme Portfolio has an "appreciated financial position" -- generally, an
interest (including an interest through an option, Futures or Forward Contract
or short sale) with respect to any stock, debt instrument (other than "straight
debt") or partnership interest the fair market value of which exceeds its
adjusted basis -- and enters into a "constructive sale" of the same or
substantially similar property, the Theme Portfolio will be treated as having
made an actual sale thereof, with the result that gain will be recognized at
that time. A constructive sale generally consists of a short sale, an offsetting
notional principal contract or Futures or Forward Contract entered into by a
Theme Portfolio or a related person with respect to the same or substantially
similar property. In addition, if the appreciated financial position is itself a
short sale or such a contract, acquisition of the underlying property or
substantially similar property will be deemed a constructive sale.
    
 
TAXATION OF THE FUNDS' SHAREHOLDERS
 
  Dividends and other distributions declared by a Fund in, and payable to
shareholders of record as of a date in, October, November or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during the following January. Accordingly, those distributions will be
taxed to shareholders for the year in which that December 31 falls.
 
  If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
 
  Dividends paid by a Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership ("foreign shareholder") generally
will be subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply, however, to a dividend paid by a Fund to a foreign
shareholder that is "effectively connected with the conduct of a U.S. trade or
business," in which case the reporting and withholding requirements applicable
to domestic shareholders will apply. A distribution of net capital gain by a
Fund to a foreign shareholder generally will be subject to U.S. federal income
tax (at the rates applicable to domestic persons) only if the distribution is
"effectively connected" or the foreign shareholder is treated as a resident
alien individual for federal income tax purposes.
 
   
  The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting the Funds, their shareholders and the Portfolios.
Investors are urged to consult their own tax advisors for more detailed
information and for information regarding any foreign, state and local taxes
applicable to distributions received from a Fund.
    
 
  Additional Information AIM was organized in 1976, and along with its
subsidiaries, manages or advises approximately 90 investment company portfolios
encompassing a broad range of investment objectives. AIM is a direct, wholly
owned subsidiary of A I M Management Group Inc. ("AIM Management"), a holding
company that has been engaged in the financial services business since 1976. AIM
is the sole shareholder of the Funds' principal underwriter, AIM Distributors.
AIM Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11
Devonshire Square, London, EC2M 4YR, England. AMVESCAP PLC and its subsidiaries
are an independent investment management group that has a significant presence
in the institutional and retail segment of the investment management industry in
North America and Europe, and a growing presence in Asia.
 
   
                           MISCELLANEOUS INFORMATION
    
 
   
  AIM was organized in 1976, and along with its subsidiaries, manages or advises
approximately 90 investment company portfolios encompassing a broad range of
investment objectives. AIM is a direct, wholly owned subsidiary of A I M
Management Group Inc. ("AIM Management"), a holding company that has been
engaged in the financial services business since 1976. AIM is the sole
shareholder of the Funds' principal underwriter, AIM Distributors. AIM
Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London, ECZM 4YR, England. AMVESCAP PLC and its subsidiaries are
independent investment management groups that have a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia.
    
 
CUSTODIAN
 
  State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, Massachusetts 02110, acts as custodian of the Funds' and Theme
Portfolios' assets. State Street is authorized to establish and has established
separate
 
                                       36
<PAGE>   1631
 
accounts in foreign currencies and to cause securities of the Theme Portfolios
to be held in separate accounts outside the United States in the custody of
non-U.S. banks.
 
   
TRANSFER AGENCY AND ACCOUNTING AGENCY SERVICES
    
 
   
  The Transfer Agency and Service Agreement between the Trust and AFS, a
registered transfer agent and wholly-owned subsidiary of AIM, provides that AFS
will perform certain shareholder services for the Funds for a fee per account
serviced. The Transfer Agency and Service Agreement provides that AFS will
receive a per account fee plus out-of-pocket expenses to process orders for
purchases, redemptions and exchanges of shares; prepare and transmit payments
for dividends and distributions declared by the Funds; maintain shareholder
accounts and provide shareholders with information regarding the Funds and their
accounts. The Transfer Agency and Service Agreement became effective on
September 8, 1998. See "Additional Information -- Special Servicing Agreement."
The Sub-advisor also serves as each Fund's pricing and accounting agent. For the
fiscal years ended October 31, 1995, 1996 and 1997 the accounting services fees
for the Health Care Fund, Telecommunications Fund, Financial Services Fund,
Infrastructure Fund, Resources Fund and Consumer Products and Services Fund were
$30,660, $141,582 and $153,780; $170,297, $621,480 and $493,322; $616, $3,493
and $12,292 ; $5,836, $21,910 and $27,303; $1,931, $14,761 and $34,698; and
$318, $14,778 and $43,330, respectively.
    
 
INDEPENDENT ACCOUNTANTS
 
   
  The Trust's and Theme Portfolios' independent accountants are
PricewaterhouseCoopers LLP. PricewaterhouseCoopers LLP conducts annual audits of
the Portfolios' and the Funds' financial statements, assists in the preparation
of each Portfolio's and each Fund's federal and state income tax returns and
consults with the Trust and Global Investment Portfolio as to matters of
accounting, regulatory filings, and federal and state income taxation.
    
 
   
  The audited financial statements of the Trust included in this Statement of
Additional Information have been examined by PricewaterhouseCoopers LLP, as
stated in their opinion appearing herein, and are included in reliance upon such
opinion given upon the authority of that firm as experts in accounting and
auditing.
    
 
SHAREHOLDER LIABILITY
 
   
  Under Delaware law, the shareholders of the Trust enjoy the same limitations
extended to shareholders of private, for-profit corporations. There is a remote
possibility, however, that under certain circumstances shareholders of the Trust
may be held personally liable for the Trust's obligations. However, the Trust
Agreement disclaims shareholder liability for acts or obligations of the Trust
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Trust or a trustee. If
a shareholder is held personally liable for the obligations of the Trust, the
Trust Agreement provides that the shareholder shall be entitled out of the
assets belonging to the applicable Fund (or allocable to the applicable Class),
to be held harmless from and indemnified against all loss and expense arising
from such liability in accordance with the Trust's Bylaws and applicable law.
Thus, the risk of a shareholder incurring financial loss on account of such
liability is limited to circumstances in which the Trust itself would be unable
to meet its obligations and where the other party was held not to be bound by
the disclaimer.
    
 
NAMES
 
  Prior to May 29, 1998, AIM Global Consumer Products and Services Fund operated
under the name of GT Global Consumer Products and Services Fund; AIM Global
Financial Services Fund operated under the name of GT Global Financial Services
Fund; AIM Global Health Care Fund operated under the name of GT Global Health
Care Fund; AIM Global Infrastructure Fund operated under the name of GT Global
Infrastructure Fund; AIM Global Resources Fund operated under the name of GT
Global Natural Resources Fund; and AIM Global Telecommunications Fund operated
under the name of GT Global Telecommunications Fund.
 
SPECIAL SERVICING AGREEMENT
 
   
  Subject to receipt of an exemptive order from the SEC, the Funds will be
parties to a Special Servicing Agreement ("Agreement") among the Trust on behalf
of the Funds, AIM Series Trust on behalf of its sole series, AIM Global Trends
Fund ("Global Trends Fund"), AIM, the Sub-advisor, and AFS. The Agreement will
provide that, if the Board of Trustees determines that a Fund's share of the
aggregate expenses of Global Trends Fund is less than the estimated savings to
the Fund from the operation of Global Trends Fund, the Fund will bear those
expenses in proportion to the average daily value of its shares owned by Global
Trends Fund, provided that no Fund will bear such expenses in excess of the
estimated savings to it. Those savings are expected to result primarily from the
elimination of numerous separate shareholder
    
 
                                       37
<PAGE>   1632
 
accounts which are or would have been invested directly in the Funds and the
resulting reduction in shareholder servicing costs. Although such cost savings
are not certain, the estimated savings to the Funds generated by the operation
of Global Trends Fund are expected to be sufficient to offset most, if not all,
of the expenses incurred by that Fund.
 
   
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITY
    
 
   
  As of August 10, 1998, the Trustees and officers of the Trust, as a group,
owned less than 1% of the outstanding shares of any class of the Trust.  To the
best knowledge of the Trust, the names and the holders of 5% or more of the
outstanding shares of any class of each Fund's equity securities as of August
10, 1998, and the percentage of the outstanding shares held by such holders are
set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                                 PERCENT
                                                                                  PERCENT        OWNED OF
                                                                                  OWNED OF      RECORD AND
                FUND                           NAME AND ADDRESS OF OWNER           RECORD      BENEFICIALLY
                ----                           -------------------------          --------     ------------
<S>                                    <C>                                        <C>          <C>
Consumer Products and Services         GT New Dimension Fund                       91.69%          -0-
  Fund -- Advisor Class                Theme Fund Omnibus Account
                                       2121 N. California Blvd. Ste. 395
                                       Walnut Creek, CA 94596-7305
Consumer Products and Services --      MLPF&S for the Sole Benefit of its           5.06%          -0-
  Class A                              Customers, Security #97DD9
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
Consumer Products and Services         MLPF&S for the Sole Benefit of its           8.12%          -0-
  Fund -- Class B                      Customers, Security #97F31
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
Financial Services Fund --             GT New Dimension Fund                       96.31%          -0-
  Advisor Class                        Theme Fund Omnibus Account
                                       2121 N. California Blvd. Ste. 395
                                       Walnut Creek, CA 94596-7305
Financial Services Fund -- Class A     MLPF&S for the Sole Benefit of its          11.45%          -0-
                                       Customers, Security #97D41
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
Financial Services Fund -- Class B     MLPF&S for the Sole Benefit of its          19.47%          -0-
                                       Customers, Security #97D30
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
Health Care Fund -- Advisor Class      GT New Dimension Fund                       88.44%          -0-
                                       Theme Fund Omnibus Account
                                       2121 N. California Blvd. Ste. 395
                                       Walnut Creek, CA 94596-7305
Health Care Fund -- Class A            MLPF&S for the Sole Benefit of its          13.75%          -0-
                                       Customers, Security #975M3
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
Health Care Fund -- Class B            MLPF&S for the Sole Benefit of its          12.94%          -0-
                                       Customers, Security #97BA1
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
Infrastructure Fund -- Advisor Class   GT New Dimension Fund                       96.84%          -0-
                                       Theme Fund Omnibus Account
                                       2121 N. California Blvd. Ste. 395
                                       Walnut Creek, CA 94596-7305
</TABLE>
    
 
                                       38
<PAGE>   1633
 
   
<TABLE>
<CAPTION>
                                                                                                 PERCENT
                                                                                  PERCENT        OWNED OF
                                                                                  OWNED OF      RECORD AND
                FUND                           NAME AND ADDRESS OF OWNER           RECORD      BENEFICIALLY
                ----                           -------------------------          --------     ------------
<S>                                    <C>                                        <C>          <C>
Infrastructure Fund -- Class B         MLPF&S for the Sole Benefit of its           7.69%          -0-
                                       Customers, Security #97HX6
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
Resources Fund -- Advisor Class        GT New Dimension Fund                       86.71%          -0-
                                       Theme Fund Omnibus Account
                                       2121 N. California Blvd. Ste. 395
                                       Walnut Creek, CA 94596-7305
Telecommunications Fund --             GT New Dimension Fund                       83.64%          -0-
  Advisor Class                        Theme Fund Omnibus Account
                                       2121 N. California Blvd. Ste. 395
                                       Walnut Creek, CA 94596-7305
Telecommunications Fund -- Class A     MLPF&S for the Sole Benefit of its          10.20%          -0-
                                       Customers, Security #979F7
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
Telecommunications Fund -- Class B     MLPF&S for the Sole Benefit of its          11.12%          -0-
                                       Customers, Security #97BA2
                                       Attn: Fund Administration
                                       4800 Deer Lake Drive East, 2nd Floor
                                       Jacksonville, FL 32246-6484
</TABLE>
    
 
- ---------------
 
   
* The Trust has no knowledge as to whether all or any portion of the shares
  owned of record are also owned beneficially.
    
 
                               INVESTMENT RESULTS
 
TOTAL RETURN QUOTATIONS
 
  The standard formula for calculating total return, as described in the
Prospectus, is as follows:

                                       (n)  
                                 P(1+T)   =ERV
 
<TABLE>
    <S>    <C>  <C>  <C>
    Where  P     =   a hypothetical initial payment of $1,000.
           T     =   average annual total return (assuming the applicable maximum
                     sales load is deducted at the beginning of the 1, 5, or 10
                     year periods.)
           n     =   number of years.
           ERV   =   ending redeemable value of a hypothetical $1,000 payment at
                     the end of the 1, 5, or 10 year periods (or fractional
                     portion of such period).
</TABLE>
 
  The standardized returns for the Class A and Advisor Class shares of the
Health Care Fund, stated as average annualized total returns for the periods
shown, were:
 
   
<TABLE>
<CAPTION>
                                                                HEALTH CARE
                                                                   FUND
                           PERIOD                             (ADVISOR CLASS)
                           ------                             ---------------
<S>                                                           <C>
Fiscal year ended Oct. 31, 1997.............................      29.00%
Oct. 31, 1992 through Oct. 31, 1997.........................         n/a
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................      29.35%
Aug. 7, 1989 (commencement of operation) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
                                       39
<PAGE>   1634
 
  The standardized returns for the Class A and Advisor Class shares of the
Telecommunications Fund, stated as average annualized total returns for the
periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                               TELECOMMUNI-
                                                               CATIONS FUND
                           PERIOD                             (ADVISOR CLASS)
                           ------                             ---------------
<S>                                                           <C>
Fiscal year ended Oct. 31, 1997.............................      18.33%
Oct. 31, 1992 through Oct. 31, 1997.........................         n/a
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................      13.56%
Jan. 27, 1992 (commencement of operations) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
  The standardized returns for the Class A and Advisor Class shares of the
Financial Services Fund, stated as average annualized total returns for the
periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                                 FINANCIAL
                                                               SERVICES FUND
                           PERIOD                             (ADVISOR CLASS)
                           ------                             ---------------
<S>                                                           <C>
Fiscal year ended Oct. 31, 1997.............................      30.52%
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................      24.52%
May 31, 1994 (commencement of operations) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
  The standardized returns for the Class A and Advisor Class shares of the
Infrastructure Fund, stated as average annualized total returns for the periods
shown, were:
 
   
<TABLE>
<CAPTION>
                                                              INFRASTRUCTURE
                                                                   FUND
                           PERIOD                             (ADVISOR CLASS)
                           ------                             ---------------
<S>                                                           <C>
Fiscal year ended Oct. 31, 1997.............................      10.10%
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................      12.41%
May 31, 1994 (commencement of operations) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
  The standardized returns for the Class A and Advisor Class shares of the
Resources Fund, stated as average annualized total returns for the periods
shown, were:
 
   
<TABLE>
<CAPTION>
                                                                 RESOURCES
                                                                   FUND
                           PERIOD                             (ADVISOR CLASS)
                           ------                             ---------------
<S>                                                           <C>
Fiscal year ended Oct. 31, 1997.............................      23.23%
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................      30.14%
May 31, 1994 (commencement of operations) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
  The standardized returns for the Class A and Advisor Class shares of the
Consumer Products and Services Fund, stated as average annualized total returns
for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                              CONSUMER PRODUCTS
                                                                     AND
                                                                SERVICES FUND
                           PERIOD                              (ADVISOR CLASS)
                           ------                             -----------------
<S>                                                           <C>
Fiscal year ended Oct. 31, 1997.............................       11.15%
June 1, 1995 (commencement of operations) to Oct. 31,
  1997......................................................       34.67%
Dec. 30, 1994 (commencement of operations) to Oct. 31,
  1997......................................................          n/a
</TABLE>
    
 
                                       40
<PAGE>   1635
 
  Standard total return quotes may be accompanied by total return figures
calculated by alternative methods. For example, average annual total return may
be calculated without assuming payment of the full sales load according to the
following formula:

                                       (n)
                                 P(1+U)   =ERV
 
<TABLE>
    <S>    <C>  <C>  <C>
    Where  P     =   a hypothetical initial payment of $1,000.
           U     =   average annual total return assuming payment of only a
                     stated portion of, or none of, the applicable maximum sales
                     load at the beginning of the stated period.
           n     =   number of years.
           ERV   =   ending redeemable value of a hypothetical $1,000 payment at
                     the end of the stated period.
</TABLE>
 
  Cumulative total return across a stated period may be calculated as follows:
                                       
                                       (n)
                                 P(1+V)   =ERV
 
<TABLE>
    <S>    <C>  <C>  <C>
    Where  P     =   a hypothetical initial payment of $1,000.
           V     =   cumulative total return assuming payment of all of, a stated
                     portion of, or none of, the applicable maximum sales load at
                     the beginning of the stated period.
           n     =   number of years.
           ERV   =   ending redeemable value of a hypothetical $1,000 payment at
                     the end of the stated period.
</TABLE>
 
  The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the Health Care Fund, stated as
aggregate total returns for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                                HEALTH CARE
                                                                   FUND
                           PERIOD                             (ADVISOR CLASS)
                           ------                             ---------------
<S>                                                           <C>
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................      87.25%
Aug. 7, 1989 (commencement of operations) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
  The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the Telecommunications Fund, stated
as aggregate total returns for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                               TELECOMMUNI-
                                                               CATIONS FUND
                           PERIOD                             (ADVISOR CLASS)
                           ------                             ---------------
<S>                                                           <C>
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................      35.96%
Jan. 27, 1992 (commencement of operations) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
  The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the Financial Services Fund, stated
as aggregate total returns for the period shown, were:
 
   
<TABLE>
<CAPTION>
                                                                 FINANCIAL
                                                               SERVICES FUND
                           PERIOD                             (ADVISOR CLASS)
                           ------                             ---------------
<S>                                                           <C>
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................      68.30%
May 31, 1994 (commencement of operations) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
  The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the Infrastructure Fund, stated as
aggregate total returns for the period shown, were:
 
   
<TABLE>
<CAPTION>
                                                              INFRASTRUCTURE
                                                                   FUND
                           PERIOD                             (ADVISOR CLASS)
                           ------                             ---------------
<S>                                                           <C>
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................      32.67%
May 31, 1994 (commencement of operations) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
                                       41
<PAGE>   1636
 
  The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the Resources Fund, stated as
aggregate total returns for the period shown, were:
 
   
<TABLE>
<CAPTION>
                                                                 RESOURCES
                                                                   FUND
                           PERIOD                             (ADVISOR CLASS)
                           ------                             ---------------
<S>                                                           <C>
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................      88.99%
May 31, 1994 (commencement of operations) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
  The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the Consumer Products and Services
Fund, stated as aggregate total returns for the period shown, were:
 
   
<TABLE>
<CAPTION>
                                                              CONSUMER PRODUCTS
                                                                     AND
                                                                SERVICES FUND
                           PERIOD                              (ADVISOR CLASS)
                           ------                             ------------------
<S>                                                           <C>
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................      105.30%
Dec. 30, 1994 (commencement of operations) through Oct. 31,
  1997......................................................          n/a
</TABLE>
    
 
   
  Each Fund's investment results will vary from time to time depending upon
market conditions, the composition of each Fund's portfolio and operating
expenses of each Fund, so that current or past yield or total return should not
be considered representative of what an investment in each Fund may earn in any
future period. These factors and possible differences in the methods used in
calculating investment results should be considered when comparing each Fund's
investment results with those published for other investment companies and other
investment vehicles. Each Fund's results also should be considered relative to
the risks associated with such Fund's investment objective and policies.
    
 
PERFORMANCE INFORMATION
 
  Total return and yield figures for the Funds are neither fixed nor guaranteed,
and no Fund's principal is insured. Performance quotations reflect historical
information and should not be considered representative of a Fund's performance
for any period in the future. Performance is a function of a number of factors
which can be expected to fluctuate. The Funds may provide performance
information in reports, sales literature and advertisements. The Funds may also,
from time to time, quote information about the Funds published or aired by
publications or other media entities which contain articles or segments relating
to investment results or other data about one or more of the Funds. Such
publications or media entities may include the following, among others:
   
    
 
   
     Advertising Age
    
     Barron's
     Best's Review
     Broker World
     Business Week
     Changing Times
     Christian Science Monitor
     Consumer Reports
     Economist
     EuroMoney
     FACS of the Week
     Financial Planning
     Financial Product News
     Financial World
     Forbes
     Fortune
     Global Finance
     Hartford Courant Inc.
     Institutional Investor
     Insurance Forum
     Insurance Week
     Investor's Daily
     Journal of the American
       Society of CLU & ChFC
     Kiplinger Letter
     Money
     Mutual Fund Forecaster
     Mutual Fund Magazine
     Nation's Business
     New York Times
     Pension World
   
     Pensions & Investments
    
     Personal Investor
     Financial Services Week
     Philadelphia Inquirer
     Smart Money
     USA Today
   
     U.S. News & World Report
    
     Wall Street Journal
   
     Washington Post
    
     CNN
     CNBC
     PBS
 
                                       42
<PAGE>   1637
 
   
  The Funds and AIM Distributors may from time to time, in advertisements, sales
literature and reports furnished to present or prospective shareholders, compare
each Fund with the following, or compare each Fund's performance to performance
data of similar mutual funds as published in the following, among others:
    
 
     Bank Rate National Monitor Index
     Bear Stearns Foreign Bond Index
     Bond Buyer Index
     CDA/Wiesenberger Investment Company Services
       (data and mutual fund rankings and
       comparisons)
     CNBC/Financial News Composite Index
     COFI
     Consumer Price Index
     Datastream
     Donoghue's
     Dow Jones Industrial Average
     EAFE Index
     First Boston High Yield Index
     Fitch (publications)
     Ibbotson Associates International Bond Index
     International Bank for Reconstruction and
       Development (publications)
     International Finance Corporation Emerging
       Markets Database
     International Financial Statistics
     Lehman Bond Indices
     Lipper Analytical Data Services, Inc. (data and
       mutual fund rankings and comparisons)
     Micropal, Inc. (data and mutual fund rankings
       and comparisons)
     Moody's Investors Service (publications)
     Morgan Stanley Capital International All
   
       Country (AC) World Index
    
     Morgan Stanley Capital International World
       Indices
     Morningstar, Inc. (data and mutual fund rankings
       and comparisons)
     NASDAQ
     Organization for Economic Cooperation and
       Development (publications)
     Salomon Brothers Global Telecommunications
       Index
     Salomon Brothers World Government Bond
   
       Index -- Non-U.S.
    
   
     Salomon Brothers World Government Bond Index
    
   
     Standard & Poor's (publications)
    
   
     Standard & Poor's 500 Composite Stock Price
    
       Index
     Stangar
     Wilshire Associates
     World Bank (publications and reports)
     The World Bank Publication of Trends in
       Developing Countries
     Worldscope
 
   
  Each Fund may also compare its performance to rates on Certificates of Deposit
and other fixed rate investments such as the following:
    
 
        10-year Treasuries
        30-year Treasuries
        30-day Treasury Bills
 
   
  Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable but may be subject
to revision and has not been independently verified by the Funds or AIM
Distributors. Advertising for the Funds may from time to time include
discussions of general economic conditions and interest rates. Advertising for
the Funds may also include reference to the use of those Funds as part of an
individual's overall retirement investment program. From time to time, sales
literature and/or advertisements for any of the Funds may disclose (i) the
largest holdings in the Fund's portfolio, (ii) certain selling group members
and/or (iii) certain institutional shareholders.
    
 
  From time to time, the Funds' sales literature and/or advertisements may
discuss generic topics pertaining to the mutual fund industry. This includes,
but is not limited to, literature addressing general information about mutual
funds, variable annuities, dollar-cost averaging, stocks, bonds, money markets,
certificates of deposit, retirement, retirement plans, asset allocation,
tax-free investing, college planning, and inflation.
 
  Although performance data may be useful to prospective investors when
comparing a Fund's performance with other funds and other potential investments,
investors should note that the methods of computing performance of other
potential investments are not necessarily comparable to the methods employed by
a Fund.
 
GENERAL INFORMATION ABOUT THE THEME FUNDS AND THEME PORTFOLIOS
 
  Each Theme Portfolio may invest worldwide across industries within the
Portfolio area of concentration without national or regional restrictions. The
ability of each Theme Portfolio to invest worldwide may allow the portfolio
managers to select industries in different economic cycles and varying stages of
development, though there is no assurance that the managers will be successful
in this selection.
 
                                       43
<PAGE>   1638
 
  Each Theme Portfolio's area of concentration reflects the underlying theme of
the Portfolio. AIM Distributors believes that there are certain social,
political and economic trends that may benefit one or more industries within a
Theme Portfolio's area of concentration. Of course, there is no assurance that
any of the Funds will benefit as a result.
 
HEALTH CARE FUND
 
  From time to time the Fund and AIM Distributors will quote information
including data regarding:
 
  - Trading volume, number of listed companies and the largest companies of the
    global health care industry
 
  - Expenditures by various countries, regions and age groups on health care
 
  - Population of countries, regions and age groups
 
  - Natality and mortality rates in various regions, countries and age groups
 
  - Life expectancy rates in various regions, countries and age groups
 
  - New health care products and products seeking approval
 
  - Health maintenance organizations (HMOs) and their enrollment growth
 
  - Studies from, but not limited to, the American Medical Association showing
    the effectiveness of using drugs to cure illness
 
  - Medical technology and devices in use or in development
 
  - Regulatory environment of health care industries
 
  - Consolidation in the health care industries
 
  The information quoted has not been independently verified by a Fund or AIM
Distributors and will be based on data provided that is believed to be reliable
and accurate from sources including the following:
 
  - Research firms such as Mehta and Isaly which publishes Pharmaceutical
    Portfolio Recommendations
 
  - OECD and its publications such as the OECD Health Data, as supplemented
    annually
 
  - Morgan Stanley Capital International stock market industry indices such as
    Health & Personal Care
 
  - The World Bank and its publications such as The World Development Report, as
    supplemented annually
 
  - IFC and publications such as the Emerging Stock Markets Factbook
 
INFORMATION ABOUT THE GLOBAL HEALTH CARE INDUSTRIES
 
   
  The Fund and the Sub-advisor believe that certain market and demographic
factors merit an investor's consideration when making a health care investment.
Worldwide standards of living and life expectancy have increased at a
substantial rate. The Sub-advisor expects this growth, which works to the
general benefit of the global health care industry, to continue at a roughly
comparable rate in the future, although no assurances can be given in this
regard. Moreover, according to the Sub-advisor, the health care industry
historically has proven to be a relatively non-cyclical industry that continues
to provide goods and services to the public in periods of economic weakness as
well as economic strength.
    
 
   
  The Sub-advisor believes that the anticipated increase in the world's elderly
population could increase demand for health care products and services. For
example, according to data compiled by the Sub-advisor, in Japan the number of
people age 65 and older is expected to grow over 100% by the year 2025; in
Germany, France and the U.S., the same age group should grow 40%. Similarly, the
U.S. Census Bureau predicts the number of Americans 85 and older to double in
the next 30 years. From time to time, the Fund and AIM Distributors will quote
information including, but not limited to, international data regarding
populations, birth rates, mortality rates, life expectancy, health care
expenditures, and gross domestic product vs. life expectancy. The information
quoted has not been independently verified by the Fund or AIM Distributors and
will be based on data that is believed to be reliable and accurate.
    
 
                                       44
<PAGE>   1639
 
TELECOMMUNICATIONS FUND
 
   
  From time to time the Fund and AIM Distributors will quote information
including data regarding:
    
 
   
  - Increased usage of new technologies such as, but not limited to, cellular
    and wireless communications in emerging and established countries around the
    world
    
 
   
  - Supply and demand of telephone equipment and services
    
 
   
  - Regulatory environment of telecommunications industries
    
 
   
  - Revenue, price and usage of telecommunications products and services
    
 
   
  - Privatization and/or deregulation of telecommunications companies
    
 
  The information quoted has not been independently verified by the Fund or AIM
Distributors and will be based on data provided that is believed to be reliable
and accurate from sources including the following:
 
   
  - Salomon Brothers World Equity Telecommunications Index, which includes stock
    market data about the telecommunications industry in established and
    developing markets
    
 
   
  - OECD and other publications from its subsidiaries such as the International
    Telecommunications Union
    
 
   
  - Morgan Stanley Capital International stock market industry indices such as
    Telecommunications, Broadcasting & Publishing and Data Processing &
    Reproduction
    
 
   
  - International Technology Consultants, a Washington D.C. based firm which
    publishes reports such as Eastern European & Soviet Telecom Report and Latin
    American Telecom Report
    
 
   
  - Telegeography and other publications
    
 
DEREGULATION IN THE UNITED STATES
 
   
  The United States has been the bellwether for deregulation of the telephone
industry. The divestiture of the Bell System from American Telephone and
Telegraph has produced competing companies in the United States. Such U.S.
market-driven competition has, for example, led to lower costs for consumers
which in turn led to greater consumer usage and to higher industrywide revenues.
The Sub-advisor expects this scenario to continue to benefit such companies in
the U.S. and similarly to be realized by the established telecommunications
companies in established economies, although no assurances can be made in this
regard.
    
 
CONSUMER PRODUCTS AND SERVICES FUND
 
   
  From time to time the Fund and AIM Distributors will quote information
including data regarding:
    
 
   
  - Trading volume, number of listed companies and the largest companies located
    around the world in the consumer products and services industries
    
 
   
  - Expenditures, demand and consumption by various countries, regions, income
    classes and age groups of consumer products and services
    
 
   
  - Population of countries, regions and age groups
    
 
   
  - Life expectancy rates in various regions, countries and age groups
    
 
   
  - New consumer products and services in the development or manufacturing
    stages
    
 
   
  - Income of various regions, countries and age groups
    
 
   
  - Sales and sales growth of consumer products and services companies in their
    own country and abroad
    
 
   
  - Sales, supply and demand of consumer products and services
    
 
   
  - Parent Companies and the products and services they distribute
    
 
   
  - Regulatory environment of consumer products industries
    
 
                                       45
<PAGE>   1640
 
  The information quoted will not be independently verified by the Fund or AIM
Distributors and will be based on data provided that is believed to be reliable
and accurate from sources including the following:
 
   
  - Consumer and trade groups
    
 
   
  - Fortune magazine and other periodicals
    
 
   
  - The World Bank and its publications
    
 
   
  - The International Monetary Fund (IMF) and its publications
    
 
   
  - IFC and its publications
    
 
   
  - OECD and its publications
    
 
INFRASTRUCTURE FUND
 
   
  From time to time the Fund and AIM Distributors may quote information
including:
    
 
   
  - Supply and demand of telephone equipment and services, electricity, water,
    transportation, construction materials and other infrastructure related
    products and services
    
 
   
  - Regulatory environment of infrastructure industries
    
 
   
  - Quantity and costs of current and projected infrastructure projects
    
 
   
  - Privatization of industries and companies
    
 
   
  - New technologies, products and services used in infrastructure industries
    
 
   
  - Infrastructure Finance magazine and other periodicals
    
 
FINANCIAL SERVICES FUND
 
   
  From time to time the Fund and AIM Distributors may quote information
including:
    
 
   
  - Supply and demand of financial services
    
 
   
  - Regulatory environment of financial service industries
    
 
   
  - Credit ratings of U.S. and non-U.S. banks
    
 
   
  - New technologies, products and services used in the financial services
    industries
    
 
   
  - Consolidation in the financial services industries
    
 
RESOURCES FUND
 
   
  From time to time the Fund and AIM Distributors may quote information
including:
    
 
   
  - Supply, demand and prices of natural resources
    
 
   
  - Regulatory environment of natural resources
    
 
   
  - Supply, demand and prices of products manufactured from natural resources
    
 
   
  - New technologies, products and services used in the natural resources
    industries
    
 
                                       46
<PAGE>   1641
 
   
                                    APPENDIX
    
 
   
                          DESCRIPTION OF BOND RATINGS
    
 
   
  Moody's Investors Service, Inc. ("Moody's") rates the debt securities issued
by various entities from "Aaa" to "C." Investment grade ratings are the first
four categories:
    
 
   
  Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues. Aa -- Bonds which are rated Aa
are judged to be of high quality by all standards. Together with the Aaa group
they comprise what are generally known as high grade bonds. They are rated lower
than the best bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long-term risk appear
somewhat larger than the Aaa securities. A -- Bonds which are rated A possess
many favorable investment attributes and are to be considered as
upper-medium-grade obligations. Factors giving security to principal and
interest are considered adequate, but elements may be present which suggest a
susceptibility to impairment some time in the future. Baa -- Bonds which are
rated Baa are considered as medium-grade obligations, (i.e., they are neither
highly protected nor poorly secured). Interest payments and principal security
appear adequate for the present but certain protective elements may be lacking
or may be characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have speculative
characteristics as well. Ba -- Bonds which are rated Ba are judged to have
speculative elements; their future cannot be considered well-assured. Often the
protection of interest and principal payments may be very moderate, and thereby
not well safeguarded during both good and bad times over the future. Uncertainty
of position characterizes bonds in this class. B -- Bonds which are rated B
generally lack characteristics of the desirable investment. Assurance of
interest and principal payments or of maintenance of other terms of the contract
over any long period of time may be small. Caa -- Bonds which are rated Caa are
of poor standing. Such issues may be in default or there may be present elements
of danger with respect to principal or interest. Ca -- Bonds which are rated Ca
represent obligations which are speculative in a high degree. Such issues are
often in default or have other marked shortcomings. C -- Bonds which are rated C
are the lowest rated class of bonds, and issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment standing.
    
 
  Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"),
rates the securities debt of various entities in categories ranging from "AAA"
to "D" according to quality. Investment grade ratings are the first four
categories: AAA -- An obligation rated "AAA" has the highest rating assigned by
S&P. The obligor's capacity to meet its financial commitment on the obligation
is extremely strong. AA -- An obligation rated "AA" differs from the highest
rated obligations only in a small degree. The obligor's capacity to meet its
financial commitment on the obligation is very strong. A -- An obligation rated
"A" is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than obligations in higher rated
categories. BBB -- An obligation rated "BBB" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation. BB, B, CCC, CC, C -- Obligations rated "BB," "B,"
"CCC," "CC," and "C" are regarded as having significant speculative
characteristics. "BB" indicates the least degree of speculation and "C" the
highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions. BB - An obligation rated "BB" is less
vulnerable to nonpayment than other speculative issues. However, it faces major
ongoing uncertainties or exposure to adverse business, financial, or economic
conditions which could lead to the obligor's inadequate capacity to meet its
financial commitment on the obligation. B -- An obligation rated "B" is more
vulnerable to nonpayment than obligations rated "BB," but the obligor currently
has the capacity to meet its financial commitment on the obligation. Adverse
business, financial, or economic conditions will likely impair the obligor's
capacity or willingness to meet its financial commitment on the obligation.
CCC -- An obligation rated "CCC" is currently vulnerable to nonpayment, and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.
CC -- An obligation rated "CC" is currently highly vulnerable to nonpayment.
C -- The "C" rating may be used to cover a situation where a bankruptcy petition
has been filed or similar action has been taken, but payments on this obligation
are being continued. D -- An obligation rated "D" is in payment default. The "D"
rating category is used when payments on an obligation are not made on the date
due even if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The "D" rating also
will be used upon the filing of a bankruptcy petition or the taking of a similar
action if payments on an obligation are jeopardized.
 
                                       47
<PAGE>   1642
 
  PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
 
  NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
 
                    DESCRIPTION OF COMMERCIAL PAPER RATINGS
 
  Moody's employs the designation "Prime-1" to indicate commercial paper having
a superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. Issues rated Prime-2 have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many of
the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
 
   
  S&P ratings of commercial paper are graded into several categories ranging
from "A-1" for the highest quality obligations to "D" for the lowest. Issues in
the "A" category are delineated with numbers 1, 2, and 3 to indicate the
relative degree of safety. A-1 -- This highest category indicates that the
degree of safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics will be denoted with a plus sign
(+) designation. A-2 -- Capacity for timely payments on issues with this
designation is satisfactory; however, the relative degree of safety is not as
high as for issues designated "A-1."
    
 
   
                               ABSENCE OF RATING
    
 
   
  Where no rating has been assigned or where a rating has been suspended or
withdrawn, it may be for reasons unrelated to the quality of the issue.
    
 
   
  Should no rating be assigned, the reason may be one of the following:
    
 
   
          1. An application for rating was not received or accepted.
    
 
   
          2. The issue or issuer belongs to a group of securities or companies
     that are not rated as a matter of policy.
    
 
   
          3. There is a lack of essential data pertaining to the issue or
     issuer.
    
 
   
          4. The issue was privately placed, in which case the rating is not
     published in Moody's publications.
    
 
   
  Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.
    
 
   
  Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the Company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the Company ranks in the
lower end of its generic rating category.
    
 
                                       48
<PAGE>   1643
 
                              FINANCIAL STATEMENTS
   
    
 
                                       FS
<PAGE>   1644

         AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
    (FORMERLY GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED)
 
                            PORTFOLIO OF INVESTMENTS
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (59.0%)
  Linens 'N Things, Inc.-/- .................................   US             86,500   $  5,211,625         2.7
    RETAILERS-APPAREL
  Fred Meyer, Inc.-/- .......................................   US            111,800      5,017,025         2.6
    RETAILERS-FOOD
  Lamar Advertising Co.-/- ..................................   US            143,100      4,936,950         2.5
    BROADCASTING & PUBLISHING
  New York Times Co. "A" ....................................   US             67,000      4,752,813         2.4
    BROADCASTING & PUBLISHING
  Brylane, Inc.-/- ..........................................   US             77,000      4,523,750         2.3
    RETAILERS-APPAREL
  Tandy Corp. ...............................................   US             90,500      4,502,375         2.3
    RETAILERS-OTHER
  Safeway, Inc.-/- ..........................................   US            115,800      4,429,350         2.3
    RETAILERS-FOOD
  Telecom Italia Mobile S.p.A. ..............................   ITLY          733,500      4,203,738         2.1
    WIRELESS COMMUNICATIONS
  Airborne Freight Corp. ....................................   US            101,200      4,010,050         2.0
    TRANSPORTATION - AIRLINES
  Outdoor Systems, Inc.-/- ..................................   US            126,000      4,000,500         2.0
    BROADCASTING & PUBLISHING
  Loblaw Cos., Ltd. .........................................   CAN           189,300      3,978,782         2.0
    RETAILERS-FOOD
  Pier 1 Imports, Inc. ......................................   US            150,400      3,966,800         2.0
    RETAILERS-OTHER
  CKE Restaurants, Inc. .....................................   US            112,000      3,878,000         2.0
    RESTAURANTS
  Sears Canada, Inc. ........................................   CAN           203,500      3,807,530         1.9
    RETAILERS-OTHER
  Dayton Hudson Corp. .......................................   US             42,000      3,667,125         1.9
    RETAILERS-APPAREL
  Pacific Sunwear of California-/- ..........................   US             80,000      3,530,000         1.8
    RETAILERS-APPAREL
  Family Dollar Stores, Inc. ................................   US            103,000      3,502,000         1.8
    RETAILERS-APPAREL
  The Neiman Marcus Group, Inc.-/- ..........................   US             88,600      3,250,513         1.7
    RETAILERS-APPAREL
  Ames Department Stores, Inc.-/- ...........................   US            132,600      3,248,700         1.7
    RETAILERS-OTHER
  Cinar Films, Inc. "B"-/- {\/} .............................   CAN           152,000      2,926,000         1.5
    BROADCASTING & PUBLISHING
  Duane Reade, Inc.-/- ......................................   US            115,700      2,747,875         1.4
    RETAILERS-OTHER
  Dress Barn, Inc.-/- .......................................   US             90,700      2,641,638         1.3
    RETAILERS-APPAREL
  Fred's, Inc. ..............................................   US            105,500      2,637,500         1.3
    RETAILERS-OTHER
  Clear Channel Communications, Inc.-/- .....................   US             25,200      2,375,100         1.2
    BROADCASTING & PUBLISHING
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-1
<PAGE>   1645
         AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
    (FORMERLY GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (Continued)
  Goody's Family Clothing, Inc.-/- ..........................   US             45,000   $  2,227,500         1.1
    RETAILERS-APPAREL
  Sonic Automotive, Inc.-/- .................................   US            125,300      2,192,750         1.1
    RETAILERS-OTHER
  Costco Companies, Inc.-/- .................................   US             39,000      2,179,125         1.1
    RETAILERS-FOOD
  Canadian Tire Corp. "A" ...................................   CAN            78,200      1,963,615         1.0
    RETAILERS-OTHER
  Cavanaughs Hospitality Corp.-/- ...........................   US            120,200      1,885,638         1.0
    LEISURE & TOURISM
  Chancellor Media Corp.-/- .................................   US             39,000      1,850,063         0.9
    BROADCASTING & PUBLISHING
  Southwest Airlines Co. ....................................   US             61,000      1,673,688         0.9
    TRANSPORTATION - AIRLINES
  Musicland Stores Corp.-/- .................................   US            127,800      1,565,550         0.8
    RETAILERS-OTHER
  Dollar Tree Stores, Inc.-/- ...............................   US             27,900      1,513,575         0.8
    RETAILERS-OTHER
  Imax Corp.-/- .............................................   CAN            50,000      1,355,179         0.7
    BROADCASTING & PUBLISHING
  99 Cents Only Stores-/- ...................................   US             35,200      1,342,000         0.7
    RETAILERS-OTHER
  Torstar Corp. "B" .........................................   CAN            39,220      1,330,468         0.7
    BROADCASTING & PUBLISHING
  General Cable PLC-/- ......................................   UK            420,000      1,278,261         0.7
    BROADCASTING & PUBLISHING
  Rite Aid Corp. ............................................   US             29,100        934,838         0.5
    RETAILERS-OTHER
  Southam, Inc. .............................................   CAN            28,000        509,198         0.3
    BROADCASTING & PUBLISHING
                                                                                        ------------
                                                                                         115,547,187
                                                                                        ------------
Consumer Non-Durables (25.5%)
  Heineken N.V. .............................................   NETH           22,500      5,220,583         2.7
    BEVERAGES - ALCOHOLIC
  Saputo Group, Inc. ........................................   CAN           197,800      5,208,904         2.7
    FOOD
  Nestle S.A. - Registered ..................................   SWTZ            2,670      5,180,145         2.6
    FOOD
  The Dial Corp. ............................................   US            191,400      4,665,375         2.4
    HOUSEHOLD PRODUCTS
  Clorox Co. ................................................   US             50,000      4,193,750         2.1
    HOUSEHOLD PRODUCTS
  Procter & Gamble Co. ......................................   US             49,500      4,068,281         2.1
    HOUSEHOLD PRODUCTS
  Ladbroke Group PLC-/- .....................................   UK            705,000      3,875,732         2.0
    RECREATION
  Coca-Cola Co. .............................................   US             51,000      3,869,625         2.0
    BEVERAGES - NON-ALCOHOLIC
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-2
<PAGE>   1646
         AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
    (FORMERLY GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Consumer Non-Durables (Continued)
  International Home Foods, Inc.-/- .........................   US            123,100   $  3,693,000         1.9
    FOOD
  Suiza Foods Corp.-/- ......................................   US             54,520      3,230,310         1.7
    FOOD
  Mail-Well, Inc.-/- ........................................   US             51,300      2,481,638         1.3
    OTHER CONSUMER GOODS
  Diageo PLC ................................................   UK            174,500      2,077,659         1.1
    BEVERAGES - ALCOHOLIC
  HON INDUSTRIES, Inc. ......................................   US             54,000      1,728,000         0.9
    OTHER CONSUMER GOODS
                                                                                        ------------
                                                                                          49,493,002
                                                                                        ------------
Finance (7.7%)
  Merita Ltd. "A" ...........................................   FIN           738,300      4,953,121         2.5
    BANKS-REGIONAL
  Fannie Mae ................................................   US             70,000      4,191,250         2.1
    OTHER FINANCIAL
  Axa - UAP .................................................   FR             18,850      2,214,326         1.1
    INSURANCE - MULTI-LINE
  H. F. Ahmanson & Co. ......................................   US             25,000      1,906,250         1.0
    BANKS-REGIONAL
  Green Tree Financial Corp. ................................   US             46,500      1,894,875         1.0
    CONSUMER FINANCE
                                                                                        ------------
                                                                                          15,159,822
                                                                                        ------------
Capital Goods (2.3%)
  Alcatel Alsthom Compagnie Generale d'Electricite ..........   FR             23,900      4,434,027         2.3
                                                                                        ------------
    TELECOM EQUIPMENT
Consumer Durables (1.5%)
  Budget Group, Inc. "A"-/- .................................   US             48,800      1,634,800         0.8
    AUTOMOBILES
  Dollar Thrifty Automotive Group, Inc.-/- ..................   US             77,000      1,453,375         0.7
    AUTOMOBILES
                                                                                        ------------
                                                                                           3,088,175
                                                                                        ------------
Technology (0.2%)
  Aspec Technology, Inc.-/- .................................   US             30,000        416,250         0.2
    COMPUTERS & PERIPHERALS
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $154,216,164) ................                            188,138,463        96.2
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-3
<PAGE>   1647
         AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
    (FORMERLY GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- -------------------------------------------------------------                           ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Dated April 30, 1998, with State Street Bank & Trust Co.,
   due May 1, 1998, for an effective yield of 5.44%,
   collateralized by $6,460,000 U.S. Treasury Bills, 6.125%
   due 8/31/98 (market value of collateral is $6,540,750,
   including accrued interest). (cost $6,409,000) ...........                           $  6,409,000         3.3
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $160,625,164)  * ....................                            194,547,463        99.5
Other Assets and Liabilities ................................                                975,779         0.5
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $195,523,242       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
          *  For Federal income tax purposes, cost is $160,852,352 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  34,939,576
                 Unrealized depreciation:            (1,244,465)
                                                  -------------
                 Net unrealized appreciation:     $  33,695,111
                                                  -------------
                                                  -------------
</TABLE>
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                         PERCENTAGE OF NET ASSETS {D}
                                        ------------------------------
                                                  SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY      & OTHER      TOTAL
- --------------------------------------  ------   -------------   -----
<S>                                     <C>      <C>             <C>
Canada (CAN/CAD) .....................   10.8                     10.8
Finland (FIN/FIM) ....................    2.5                      2.5
France (FR/FRF) ......................    3.4                      3.4
Italy (ITLY/ITL) .....................    2.1                      2.1
Netherlands (NETH/NLG) ...............    2.7                      2.7
Switzerland (SWTZ/CHF) ...............    2.6                      2.6
United Kingdom (UK/GBP) ..............    3.8                      3.8
United States (US/USD) ...............   68.3         3.8         72.1
                                        ------        ---        -----
Total  ...............................   96.2         3.8        100.0
                                        ------        ---        -----
                                        ------        ---        -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $195,523,242.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-4
<PAGE>   1648
               AIM GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
          (FORMERLY GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED)
 
                            PORTFOLIO OF INVESTMENTS
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Banks-Regional (46.7%)
  H. F. Ahmanson & Co. ......................................   US             30,000   $  2,287,500         2.0
  NationsBank Corp. .........................................   US             30,000      2,272,500         2.0
  City National Corp. .......................................   US             52,550      1,954,203         1.7
  Mellon Bank Corp. .........................................   US             26,800      1,929,600         1.7
  Royal Bank of Canada ......................................   CAN            30,000      1,791,984         1.6
  Lloyds TSB Group PLC ......................................   UK            115,086      1,723,403         1.5
  Merita Ltd. "A" ...........................................   FIN           247,000      1,657,078         1.4
  ABSA Group Ltd. ...........................................   SAFR          188,867      1,635,414         1.4
  GreenPoint Financial Corp. ................................   US             41,200      1,635,125         1.4
  First National Bank Holdings Ltd. .........................   SAFR          115,800      1,512,677         1.3
  National Australia Bank Ltd. ..............................   AUSL          106,500      1,511,425         1.3
  Bank of Nova Scotia .......................................   CAN            54,600      1,498,951         1.3
  Canadian Western Bank .....................................   CAN            84,000      1,492,341         1.3
  Bank of Ireland ...........................................   IRE            70,800      1,435,068         1.2
  BankBoston Corp. ..........................................   US             13,000      1,403,188         1.2
  Allied Irish Bank PLC{V} ..................................   IRE            98,797      1,365,480         1.2
  Nordbanken Holding AB .....................................   SWDN          182,800      1,346,724         1.2
  Anglo-Irish Bank Corp., PLC: ..............................   IRE                --             --         1.1
    Common{V} ...............................................   --            322,082        853,679          --
    Common ..................................................   --            184,026        490,461          --
  Crestar Financial Corp. ...................................   US             21,800      1,303,913         1.1
  Bank Hapoalim Ltd. ........................................   ISRL          483,000      1,297,249         1.1
  Banc One Corp. ............................................   US             21,700      1,276,231         1.1
  Commonwealth Bancorp, Inc. ................................   US             54,000      1,275,750         1.1
  Bayerische Vereinsbank ....................................   GER            16,070      1,222,717         1.1
  First Union Corp. (N.C.) ..................................   US             20,200      1,219,575         1.1
  Sovereign Bancorp, Inc. ...................................   US             63,840      1,204,980         1.0
  Norwest Corp. .............................................   US             30,000      1,190,625         1.0
  Christiania Bank Og Kreditkasse ...........................   NOR           257,900      1,186,439         1.0
  ForeningsSparbanken AB ....................................   SWDN           37,500      1,172,935         1.0
  Vermont Financial Services Corp. ..........................   US             40,000      1,170,000         1.0
  Westpac Banking Corp., Ltd. ...............................   AUSL          167,000      1,119,784         1.0
  Bank Leumi Le - Israel ....................................   ISRL          605,700      1,107,468         1.0
  St. George Bank Ltd. ......................................   AUSL          186,620      1,106,769         1.0
  Jyske Bank ................................................   DEN             9,000      1,045,930         0.9
  Demirbank T.A.S.: .........................................   TRKY               --             --         0.9
    Common ..................................................   --         37,896,000        834,547          --
    New-/- ..................................................   --         11,368,800        202,567          --
  Halifax PLC ...............................................   UK             76,800      1,025,498         0.9
  Cullen/Frost Bankers, Inc. ................................   US             17,500      1,023,750         0.9
  Akbank T.A.S. .............................................   TRKY        9,821,967        835,703         0.7
  Banco Commercial S.A.: ....................................   URGY               --             --         0.7
    Reg S GDR{c} {\/} .......................................   --             15,200        425,600          --
    144A GDR(::){\/}{.} .....................................   --             14,000        392,000          --
  BG Bank AS ................................................   DEN             9,500        555,491         0.5
  The Daishi Bank Ltd. ......................................   JPN           140,000        439,120         0.4
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-5
<PAGE>   1649
               AIM GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
          (FORMERLY GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Banks-Regional (Continued)
  Asahi Bank Ltd. ...........................................   JPN            83,000   $    319,930         0.3
  Mandamus AB Share Units-/- ................................   SWDN           75,000         67,856         0.1
                                                                                        ------------
                                                                                          53,819,228
                                                                                        ------------
Banks-Money Center (14.4%)
  BankAmerica Corp. .........................................   US             44,400      3,774,000         3.3
  HSBC Holdings PLC .........................................   HK             99,441      2,837,320         2.5
  ING Groep N.V. ............................................   NETH           29,500      1,917,880         1.7
  Credit Lyonnais CDI-/- ....................................   FR             18,900      1,871,131         1.6
  Citicorp ..................................................   US              9,450      1,422,225         1.2
  Chase Manhattan Corp. .....................................   US              9,750      1,350,984         1.2
  ABN AMRO Holdings N.V. ....................................   NETH           54,864      1,336,556         1.2
  Credit Suisse Group .......................................   SWTZ            5,610      1,234,282         1.1
  Fuji Bank Ltd. ............................................   JPN            67,000        377,258         0.3
  Sumitomo Bank .............................................   JPN            38,000        359,005         0.3
                                                                                        ------------
                                                                                          16,480,641
                                                                                        ------------
Consumer Finance (11.1%)
  The Money Store, Inc. .....................................   US            143,000      4,701,121         4.1
  Green Tree Financial Corp. ................................   US             70,000      2,852,500         2.5
  Beneficial Corp ...........................................   US             15,800      2,059,925         1.8
  Doral Financial Corp. .....................................   US             51,200      1,798,400         1.6
  Aeon Credit Service .......................................   HK          3,894,000        809,417         0.7
  Acom Co., Ltd. ............................................   JPN             9,000        475,474         0.4
                                                                                        ------------
                                                                                          12,696,837
                                                                                        ------------
Insurance - Multi-Line (9.2%)
  Travelers Group, Inc. .....................................   US             37,000      2,263,938         2.0
  Axa - UAP .................................................   FR             14,770      1,735,045         1.5
  SunAmerica, Inc. ..........................................   US             32,800      1,637,950         1.4
  Allstate Corp. ............................................   US             15,000      1,443,750         1.3
  American International Group, Inc. ........................   US              9,200      1,210,375         1.0
  Allianz AG ................................................   GER             3,788      1,165,538         1.0
  Fremont General Corp. .....................................   US             20,000      1,115,000         1.0
                                                                                        ------------
                                                                                          10,571,596
                                                                                        ------------
Other Financial (7.2%)
  Newcourt Credit Group, Inc. ...............................   CAN            63,200      3,103,196         2.7
  Providian Financial Corp. .................................   US             42,000      2,527,875         2.2
  Investors Financial Services Corp. ........................   US             25,500      1,373,813         1.2
  Heller Financial, Inc.-/- .................................   US             33,500        904,500         0.8
  Shohkoh Fund ..............................................   JPN             1,200        381,831         0.3
                                                                                        ------------
                                                                                           8,291,215
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-6
<PAGE>   1650
               AIM GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
          (FORMERLY GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Investment Management (3.0%)
  Alliance Capital Management L.P. ..........................   US             68,800   $  1,827,500         1.6
  Franklin Resources, Inc. ..................................   US             29,500      1,578,250         1.4
                                                                                        ------------
                                                                                           3,405,750
                                                                                        ------------
Securities Broker (2.5%)
  Morgan Stanley, Dean Witter & Co. .........................   US             22,200      1,751,025         1.5
  Hambrecht & Quist Group-/- ................................   US             36,000      1,203,750         1.0
  Peregrine Investment Holdings Ltd.(::) ....................   HK            532,000             --          --
                                                                                        ------------
                                                                                           2,954,775
                                                                                        ------------
Insurance-Life (1.4%)
  AEGON N.V. ................................................   NETH           12,080      1,567,122         1.4
                                                                                        ------------
Insurance - Property-Casualty (1.2%)
  Mercury General Corp. .....................................   US             22,000      1,424,500         1.2
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $86,172,363) .................                            111,211,664        96.7
                                                                                        ------------       -----
<CAPTION>
 
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- -------------------------------------------------------------                           ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Dated April 30, 1998, with State Street Bank & Trust Co.,
   due May 1, 1998, for an effective yield of 5.44%,
   collateralized by $4,995,000 U.S. Treasury Bills, 6.125%
   due 8/31/98 (market value of collateral is $5,057,438,
   including accrued interest). (cost $4,955,000) ...........                              4,955,000         4.3
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $91,127,363)  * .....................                            116,166,664       101.0
Other Assets and Liabilities ................................                             (1,111,733)       (1.0)
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $115,054,931       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (See Note 1 of Notes to Financial Statements).
        {V}  Security is denominated in GBP.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
       {\/}  U.S. currency denominated.
          *  For Federal income tax purposes, cost is $91,609,705 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  26,101,790
                 Unrealized depreciation:            (1,544,831)
                                                  -------------
                 Net unrealized appreciation:     $  24,556,959
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviation:
             GDR--Global Depositary Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-7
<PAGE>   1651
               AIM GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
          (FORMERLY GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                          PERCENTAGE OF NET
                                             ASSETS {D}
                                        ---------------------
                                                 SHORT-TERM
                                                   &
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY   OTHER  TOTAL
- --------------------------------------  ------   -----  -----
<S>                                     <C>      <C>    <C>
Australia (AUSL/AUD) .................    3.3             3.3
Canada (CAN/CAD) .....................    6.9             6.9
Denmark (DEN/DKK) ....................    1.4             1.4
Finland (FIN/FIM) ....................    1.4             1.4
France (FR/FRF) ......................    3.1             3.1
Germany (GER/DEM) ....................    2.1             2.1
Hong Kong (HK/HKD) ...................    3.2             3.2
Ireland (IRE/IEP) ....................    3.5             3.5
Israel (ISRL/ILS) ....................    2.1             2.1
Japan (JPN/JPY) ......................    2.0             2.0
Netherlands (NETH/NLG) ...............    4.3             4.3
Norway (NOR/NOK) .....................    1.0             1.0
South Africa (SAFR/ZAR) ..............    2.7             2.7
Sweden (SWDN/SEK) ....................    2.3             2.3
Switzerland (SWTZ/CHF) ...............    1.1             1.1
Turkey (TRKY/TRL) ....................    1.6             1.6
United Kingdom (UK/GBP) ..............    2.4             2.4
United States (US/USD) ...............   51.6    3.3     54.9
Uruguay (URGY/UYP) ...................    0.7             0.7
                                        ------   -----  -----
Total  ...............................   96.7    3.3    100.0
                                        ------   -----  -----
                                        ------   -----  -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $115,054,931.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                 APRIL 30, 1998
 
<TABLE>
<CAPTION>
                                           MARKET VALUE     CONTRACT    DELIVERY    UNREALIZED
CONTRACTS TO SELL:                        (U.S. DOLLARS)      PRICE       DATE     APPRECIATION
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Australian Dollars......................     2,018,779         1.48137   5/26/98   $    73,876
Australian Dollars......................       390,731         1.49191   5/26/98        11,437
Canadian Dollars........................     3,956,610         1.41430   6/24/98        38,299
Canadian Dollars........................       700,285         1.40700   6/24/98        10,447
Canadian Dollars........................       420,171         1.41500   6/24/98         3,857
Canadian Dollars........................       119,048         1.41500   6/24/98         1,093
Japanese Yen............................       642,431       122.80000   5/12/98        49,752
Japanese Yen............................       113,370       129.93000   5/12/98         2,077
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $8,552,263)...................     8,361,425                                 190,838
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS A
 PERCENTAGE OF NET ASSETS IS 7.27%.
  Total Open Forward Foreign Currency
   Contracts............................                                           $   190,838
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-8
<PAGE>   1652
                          AIM GLOBAL HEALTH CARE FUND
                     (FORMERLY GT GLOBAL HEALTH CARE FUND)
 
                            PORTFOLIO OF INVESTMENTS
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Medical Technology & Supplies (51.5%)
  Guidant Corp. .............................................   US            591,000   $ 39,523,117         7.1
  Visx, Inc.{::} -/- ........................................   US            866,200     38,221,075         6.8
  ATL Ultrasound, Inc.{::} -/- ..............................   US            745,500     36,063,563         6.4
  Physio-Control International Corp.{::} -/- ................   US          1,183,800     27,227,400         4.9
  Waters Corp.-/- ...........................................   US            381,100     20,388,850         3.6
  Dexter Corp. ..............................................   US            484,000     19,995,250         3.6
  Mentor Corp. ..............................................   US            621,900     16,907,906         3.0
  ESC Medical Systems Ltd.-/- {\/} ..........................   ISRL          393,100     12,775,750         2.3
  Sunrise Medical, Inc.-/- ..................................   US            710,000     10,516,875         1.9
  Endosonics Corp.{::} -/- ..................................   US          1,509,400      9,811,100         1.8
  Cardiac Pathways Corp.-/- .................................   US            929,300      8,828,350         1.6
  Baxter International, Inc. ................................   US            126,500      7,012,844         1.3
  Kensey Nash Corp.-/- ......................................   US            334,600      6,441,050         1.1
  Arterial Vascular Engineering, Inc.-/- ....................   US            153,000      5,412,375         1.0
  AVECOR Cardiovascular, Inc.{::} -/- .......................   US            580,000      4,060,000         0.7
  Becton, Dickinson & Co. ...................................   US             56,000      3,899,000         0.7
  CONMED Corp.-/- ...........................................   US            109,700      2,509,388         0.4
  Thoratec Laboratories Corp.-/- ............................   US            299,900      2,436,688         0.4
  Micro Therapeutics, Inc.-/- ...............................   US            200,000      2,137,500         0.4
  CardioGenesis Corp.-/- ....................................   US            310,000      1,976,250         0.3
  INAMED Corp.-/- ...........................................   US            275,000      1,925,000         0.3
  Angeion Corp.-/- ..........................................   US            670,000      1,842,500         0.3
  SonoSight, Inc.-/- ........................................   US            188,500      1,543,344         0.3
  Osteotech, Inc.-/- ........................................   US             58,000      1,279,625         0.2
  Medtronic, Inc. ...........................................   US             22,000      1,157,750         0.2
  Instrumentarium Group "A" .................................   FIN            16,000        970,481         0.2
  PolyMedica Corp.-/- .......................................   US             74,600        727,350         0.1
  Boston Scientific Corp.-/- ................................   US              9,800        708,663         0.1
  Innerdyne, Inc.-/- ........................................   US            193,000        579,000         0.1
  Conceptus, Inc.-/- ........................................   US            137,000        445,250         0.1
  Abaxis, Inc.-/- ...........................................   US            160,000        410,000         0.1
  Laserscope-/- .............................................   US            150,000        393,750         0.1
  Cardiovascular Dynamics, Inc.-/- ..........................   US             65,000        390,000         0.1
  Photoelectron Corp.-/- ....................................   US             22,800        152,475          --
  Lifecore Biomedical, Inc.-/- ..............................   US              3,000         58,875          --
                                                                                        ------------
                                                                                         288,728,394
                                                                                        ------------
Pharmaceuticals (20.0%)
  Warner-Lambert Co. ........................................   US            135,000     25,540,313         4.6
  Pfizer, Inc. ..............................................   US            155,000     17,640,938         3.2
  TheraTech, Inc.{::} -/- ...................................   US          1,935,000     15,721,875         2.8
  Zeneca Group PLC - ADR{\/} ................................   UK            324,300     14,228,663         2.5
  Bergen Brunswig Corp. "A" .................................   US            100,000      4,537,500         0.8
  NABI, Inc.-/- .............................................   US            820,000      3,228,750         0.6
  Schering-Plough Corp. .....................................   US             39,700      3,180,963         0.6
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-9
<PAGE>   1653
                          AIM GLOBAL HEALTH CARE FUND
                     (FORMERLY GT GLOBAL HEALTH CARE FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Pharmaceuticals (Continued)
  Roberts Pharmaceutical Corp.-/- ...........................   US            178,000   $  3,026,000         0.5
  Bristol Myers Squibb Co. ..................................   US             28,000      2,964,500         0.5
  American Home Products Corp. ..............................   US             28,000      2,607,500         0.5
  Abbott Laboratories .......................................   US             28,000      2,047,500         0.4
  Catalytica, Inc.-/- .......................................   US            138,866      2,013,557         0.4
  Johnson & Johnson .........................................   US             28,000      1,998,500         0.4
  SmithKline Beecham PLC - ADR{\/} ..........................   UK             29,000      1,727,313         0.3
  Glaxo Wellcome PLC - ADR{\/} ..............................   UK             29,000      1,640,313         0.3
  Merck & Co., Inc. .........................................   US             13,500      1,626,750         0.3
  Altana AG .................................................   GER            15,000      1,150,502         0.2
  Gedeon Richter-/- .........................................   HGRY            9,350      1,001,849         0.2
  Warner Chilcott Laboratories - ADR-/- {\/} ................   IRE            83,800        963,700         0.2
  Spiros Development Corporation II, Inc. - Units-/-+X+ .....   US             57,000        947,625         0.2
  Novartis AG ...............................................   SWTZ              561        927,582         0.2
  Elan Corp., PLC - ADR-/- {\/} .............................   IRE             7,000        434,875         0.1
  R.P. Scherer Corp.-/- .....................................   US              5,700        416,100         0.1
  Alpharma, Inc. "A" ........................................   US             16,700        379,925         0.1
  Life Medical Sciences, Inc.-/- ............................   US            200,000        275,000          --
  Astra AB - ADR{\/} ........................................   SWDN           12,000        246,750          --
  Watson Pharmaceuticals, Inc.-/- ...........................   US              5,700        245,100          --
  Schein Pharmaceutical, Inc.-/- ............................   US             10,000        245,000          --
  Medco Research, Inc. ......................................   US              5,700        116,138          --
  Unimed Pharmaceuticals, Inc.-/- ...........................   US              9,200         67,275          --
                                                                                        ------------
                                                                                         111,148,356
                                                                                        ------------
Biotechnology (12.4%)
  Agouron Pharmaceuticals, Inc.-/- ..........................   US            706,100     24,007,400         4.3
  Guilford Pharmaceuticals, Inc.-/- .........................   US            667,000     13,256,625         2.4
  COR Therapeutics, Inc.-/- .................................   US            550,000     10,381,250         1.9
  Amgen, Inc.-/- ............................................   US            139,800      8,335,575         1.5
  Protein Design Labs, Inc.-/- ..............................   US            260,000      8,320,000         1.5
  Genelabs Technologies, Inc.-/- ............................   US          1,090,000      3,951,250         0.7
  PathoGenesis Corp.-/- .....................................   US             16,400        649,850         0.1
  Enzon, Inc. Preferred-/- ..................................   US             16,000        217,920          --
  Human Genome Sciences, Inc.-/- ............................   US              1,000         36,375          --
                                                                                        ------------
                                                                                          69,156,245
                                                                                        ------------
Health Care Services (5.5%)
  Vencor, Inc.-/- ...........................................   US            513,000     13,915,125         2.5
  Tenet Healthcare Corp.-/- .................................   US            129,500      4,848,156         0.9
  Allegiance Corp. ..........................................   US            103,000      4,699,375         0.8
  Nationwide Health Properties, Inc. ........................   US             68,000      1,598,000         0.3
  SteriGenics International, Inc.-/- ........................   US             61,900      1,431,438         0.3
  Hanger Orthopedic Group, Inc.-/- ..........................   US             59,000      1,102,563         0.2
  Grupo Casa Autrey, S.A. de C.V. - ADR{\/} .................   MEX            79,100      1,048,075         0.2
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-10
<PAGE>   1654
                          AIM GLOBAL HEALTH CARE FUND
                     (FORMERLY GT GLOBAL HEALTH CARE FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Health Care Services (Continued)
  Parkway Holdings Ltd. .....................................   SING          300,000   $    648,751         0.1
  Health Management Associates, Inc. "A"-/- .................   US             14,000        441,000         0.1
  Quorum Health Group, Inc.-/- ..............................   US             12,500        401,563         0.1
  Quintiles Transnational Corp.-/- ..........................   US              5,000        247,500          --
  McKesson Corp. ............................................   US              2,500        176,719          --
  United Healthcare Corp. ...................................   US              2,500        175,625          --
  HEALTHSOUTH Corp.-/- ......................................   US              5,500        166,031          --
  Wellpoint Health Networks - New-/- ........................   US              1,000         72,125          --
                                                                                        ------------
                                                                                          30,972,046
                                                                                        ------------
Paper/Packaging (2.2%)
  Kimberly-Clark Corp. ......................................   US            240,618     12,211,364         2.2
                                                                                        ------------
Computers & Peripherals (0.4%)
  Hewlett-Packard Co. .......................................   US             27,000      2,033,438         0.4
                                                                                        ------------
Consumer Services (0.1%)
  Service Corporation International .........................   US             11,000        453,750         0.1
                                                                                        ------------
Personal Care/Cosmetics (0.0%)
  Gillette Co. ..............................................   US              2,000        230,875          --
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $453,759,253) ................                            514,934,468        92.1
                                                                                        ------------       -----
<CAPTION>
 
                                                                            NO. OF         VALUE         % OF NET
WARRANTS                                                       COUNTRY     WARRANTS       (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Rhone-Poulenc Warrants, expire 11/5/01 ....................   FR            190,736        920,357         0.2
    PHARMACEUTICALS
  ALZA Corp. Warrants, expire 12/31/99 ......................   US            100,000        109,375          --
    PHARMACEUTICALS
                                                                                        ------------       -----
 
TOTAL WARRANTS (cost $32,137) ...............................                              1,029,732         0.2
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-11
<PAGE>   1655
                          AIM GLOBAL HEALTH CARE FUND
                     (FORMERLY GT GLOBAL HEALTH CARE FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- -------------------------------------------------------------                           ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Dated April 30, 1998, with State Street Bank & Trust Co.,
   due May 1, 1998, for an effective yield of 5.44%,
   collateralized by $29,380,000 U.S. Treasury Bonds, 7.25%
   due 5/15/16 (market value of collateral is $34,111,844,
   including accrued interest). (cost $33,422,000) ..........                           $ 33,422,000         6.0
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $487,213,390)  * ....................                            549,386,200        98.3
Other Assets and Liabilities ................................                              9,348,090         1.7
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $558,734,290       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
       {::}  See Note 6 of Notes to Financial Statements.
        +X+  Each unit consists of one callable common share of Spiros
             Development Corporation II, Inc. and one warrant to purchase .25
             shares of Dura Pharmaceuticals, Inc.
          *  For Federal income tax purposes, cost is $489,315,001 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  90,649,808
                 Unrealized depreciation:           (30,578,609)
                                                  -------------
                 Net unrealized appreciation:     $  60,071,199
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviation:
             ADR--American Depositary Receipt
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {D}
                                        -------------------------------------------
                                                                 SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS       & OTHER     TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Finland (FIN/FIM) ....................    0.2                                   0.2
France (FR/FRF) ......................                0.2                       0.2
Germany (GER/DEM) ....................    0.2                                   0.2
Hungary (HGRY/HUF) ...................    0.2                                   0.2
Ireland (IRE/IEP) ....................    0.3                                   0.3
Israel (ISRL/ILS) ....................    2.3                                   2.3
Mexico (MEX/MXN) .....................    0.2                                   0.2
Singapore (SING/SGD) .................    0.1                                   0.1
Switzerland (SWTZ/CHF) ...............    0.2                                   0.2
United Kingdom (UK/GBP) ..............    3.1                                   3.1
United States (US/USD) ...............   85.3                        7.7       93.0
                                        ------      -----          -----      -----
Total  ...............................   92.1         0.2            7.7      100.0
                                        ------      -----          -----      -----
                                        ------      -----          -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $558,734,290.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-12
<PAGE>   1656
                 AIM GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
            (FORMERLY GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED)
 
                            PORTFOLIO OF INVESTMENTS
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Energy (36.6%)
  Enron Corp. ................................................   US             62,701   $ 3,084,102         3.4
    GAS PRODUCTION & DISTRIBUTION
  AES Corp.-/- ...............................................   US             55,264     3,049,882         3.4
    ELECTRICAL & GAS UTILITIES
  Light - Servicos de Electricidade S.A. .....................   BRZL        5,500,000     2,212,505         2.5
    ELECTRICAL & GAS UTILITIES
  EVN Energie-Versorgung Niederoesterreich AG ................   ASTRI          13,200     1,949,941         2.2
    ELECTRICAL & GAS UTILITIES
  Endesa S.A. - ADR{\/} ......................................   SPN            80,000     1,940,000         2.2
    ELECTRICAL & GAS UTILITIES
  Houston Industries, Inc. ...................................   US             59,000     1,714,688         1.9
    ELECTRICAL & GAS UTILITIES
  Viag AG ....................................................   GER             3,000     1,520,067         1.7
    ELECTRICAL & GAS UTILITIES
  Dominion Resources, Inc. ...................................   US             38,000     1,503,375         1.7
    ELECTRICAL & GAS UTILITIES
  Interstate Energy Corp. ....................................   US             46,740     1,475,231         1.6
    ELECTRICAL & GAS UTILITIES
  Pinnacle West Capital Corp. ................................   US             32,000     1,416,000         1.6
    ELECTRICAL & GAS UTILITIES
  Light - Participacoes S.A. .................................   BRZL        5,410,000     1,324,705         1.5
    ELECTRICAL & GAS UTILITIES
  VEBA AG ....................................................   GER            20,000     1,322,185         1.5
    ELECTRICAL & GAS UTILITIES
  MCN Energy Group, Inc. .....................................   US             35,000     1,321,250         1.5
    ELECTRICAL & GAS UTILITIES
  National Grid Group PLC ....................................   UK            200,000     1,290,970         1.4
    ELECTRICAL & GAS UTILITIES
  RWE AG .....................................................   GER            25,000     1,272,297         1.4
    ELECTRICAL & GAS UTILITIES
  Edison S.p.A. ..............................................   ITLY          150,000     1,248,235         1.4
    ELECTRICAL & GAS UTILITIES
  Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} .....   BRZL           24,900     1,207,650         1.3
    ELECTRICAL & GAS UTILITIES
  BSES Ltd. - 144A GDR{.} {\/} ...............................   IND            70,000     1,149,750         1.3
    ELECTRICAL & GAS UTILITIES
  EVI, Inc.-/- ...............................................   US             20,000     1,065,000         1.2
    ENERGY EQUIPMENT & SERVICES
  MetroGas S.A. - ADR{\/} ....................................   ARG            96,051       954,507         1.1
    ELECTRICAL & GAS UTILITIES
  Hub Power Co. ..............................................   PAK           700,000       713,507         0.8
    ELECTRICAL & GAS UTILITIES
                                                                                         -----------
                                                                                          32,735,847
                                                                                         -----------
Services (29.6%)
  Compagnie Generale des Eaux ................................   FR             13,982     2,600,978         2.9
    CONSUMER SERVICES
  Mannesmann AG ..............................................   GER             3,000     2,381,271         2.7
    WIRELESS COMMUNICATIONS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-13
<PAGE>   1657
                 AIM GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
            (FORMERLY GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Services (Continued)
  Telecom Italia SpA - Di Risp-/- ............................   ITLY          400,000   $ 2,109,674         2.3
    TELEPHONE NETWORKS
  Canadian National Railway Co. ..............................   CAN            30,900     2,011,083         2.2
    TRANSPORTATION - ROAD & RAIL
  Magyar Tavkozlesi Rt. - ADR-/- {\/} ........................   HGRY           66,800     1,970,600         2.2
    TELEPHONE NETWORKS
  Paging Network, Inc.-/- ....................................   US            125,000     1,757,813         2.0
    WIRELESS COMMUNICATIONS
  Portugal Telecom S.A. - ADR{\/} ............................   PORT           28,000     1,505,000         1.7
    TELEPHONE NETWORKS
  SPT Telecom-/- .............................................   CZCH           10,000     1,454,783         1.6
    TELEPHONE NETWORKS
  Tranz Rail Holdings Ltd. - ADR{\/} .........................   NZ            132,000     1,386,000         1.5
    TRANSPORTATION - ROAD & RAIL
  Alaska Air Group, Inc.-/- ..................................   US             24,000     1,347,000         1.5
    TRANSPORTATION - AIRLINES
  America West Holdings Corp. "B"-/- .........................   US             42,000     1,270,500         1.4
    TRANSPORTATION - AIRLINES
  Airborne Freight Corp. .....................................   US             32,000     1,268,000         1.4
    TRANSPORTATION - AIRLINES
  Comair Holdings, Inc. ......................................   US             46,000     1,256,375         1.4
    TRANSPORTATION - AIRLINES
  Swift Transportation Co., Inc.-/- ..........................   US             50,000     1,143,750         1.3
    TRANSPORTATION - ROAD & RAIL
  Navistar International Corp.-/- ............................   US             30,000       896,250         1.0
    TRANSPORTATION - ROAD & RAIL
  Brisa-Auto Estradas de Portugal S.A. .......................   PORT           16,000       709,274         0.8
    TRANSPORTATION - ROAD & RAIL
  Telecom Corporation of New Zealand - Installment
   Receipts-/- ...............................................   NZ            258,200       693,578         0.8
    TELEPHONE NETWORKS
  Aeroporti di Roma SpA ......................................   ITLY           48,000       674,255         0.7
    TRANSPORTATION - AIRLINES
  China Telecom (Hong Kong) Ltd.-/- ..........................   HK             80,000       151,830         0.2
    WIRELESS COMMUNICATIONS
  Illinois Central Corp. .....................................   US                611        24,287          --
    TRANSPORTATION - ROAD & RAIL
  Hellenic Telecommunications Organization S.A. ..............   GREC              100         2,864          --
    TELEPHONE NETWORKS
                                                                                         -----------
                                                                                          26,615,165
                                                                                         -----------
Materials/Basic Industry (12.9%)
  Masco Corp. ................................................   US             40,000     2,320,000         2.6
    BUILDING MATERIALS & COMPONENTS
  Lafarge S.A. ...............................................   FR             20,000     1,890,183         2.1
    CEMENT
  Giant Cement Holding, Inc.-/- ..............................   US             64,800     1,830,600         2.0
    CEMENT
  IPSCO, Inc. ................................................   CAN            56,265     1,706,014         1.9
    METALS - STEEL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-14
<PAGE>   1658
                 AIM GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
            (FORMERLY GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Materials/Basic Industry (Continued)
  Suez Cement Co. - Reg S GDR{c} {\/} ........................   EGPT           60,000   $ 1,224,000         1.4
    CEMENT
  La Cementos Nacional, C.A. - 144A GDR{.} {\/} ..............   ECDR            7,445     1,191,200         1.3
    CEMENT
  Martin Marietta Materials, Inc. ............................   US             25,000     1,173,438         1.3
    BUILDING MATERIALS & COMPONENTS
  Apasco, S.A. de C.V. .......................................   MEX            35,500       241,417         0.3
    CEMENT
                                                                                         -----------
                                                                                          11,576,852
                                                                                         -----------
Technology (6.2%)
  Cisco Systems, Inc.-/- .....................................   US             21,500     1,574,875         1.8
    NETWORKING
  Ascend Communications, Inc.-/- .............................   US             30,000     1,306,875         1.5
    NETWORKING
  Ciena Corp.-/- .............................................   US             20,000     1,115,000         1.2
    TELECOM TECHNOLOGY
  EMCORE Corp.-/- ............................................   US             58,000       833,750         0.9
    SEMICONDUCTORS
  Tadiran Telecommunications Ltd.{\/} ........................   ISRL           45,200       740,150         0.8
    TELECOM TECHNOLOGY
                                                                                         -----------
                                                                                           5,570,650
                                                                                         -----------
Capital Goods (3.3%)
  Doncasters PLC - ADR-/- {\/} ...............................   UK             49,600     1,525,200         1.7
    AEROSPACE/DEFENSE
  Gulfstream Aerospace Corp.-/- ..............................   US             35,000     1,467,813         1.6
    AEROSPACE/DEFENSE
                                                                                         -----------
                                                                                           2,993,013
                                                                                         -----------
Consumer Durables (2.9%)
  Kaufman and Broad Home Corp. ...............................   US             53,000     1,540,313         1.7
    HOUSING
  D.R. Horton, Inc. ..........................................   US             60,000     1,110,000         1.2
    HOUSING
                                                                                         -----------
                                                                                           2,650,313
                                                                                         -----------       -----
 
TOTAL EQUITY INVESTMENTS (cost $65,337,987) ..................                            82,141,840        91.5
                                                                                         -----------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-15
<PAGE>   1659
                 AIM GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
            (FORMERLY GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- --------------------------------------------------------------                           -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
  Dated April 30, 1998, with State Street Bank & Trust Co.,
   due May 1, 1998, for an effective yield of 5.44%,
   collateralized by $7,745,000 U.S. Treasury Bills, 6.125%
   due 8/31/98 (market value of collateral is $7,841,813,
   including accrued interest). (cost $7,688,000) ............                           $ 7,688,000         8.5
                                                                                         -----------       -----
 
TOTAL INVESTMENTS (cost $73,025,987)  * ......................                            89,829,840       100.0
Other Assets and Liabilities .................................                               (18,680)         --
                                                                                         -----------       -----
 
NET ASSETS ...................................................                           $89,811,160       100.0
                                                                                         -----------       -----
                                                                                         -----------       -----
</TABLE>
 
- --------------
 
       {\/}  U.S. currency denominated.
        -/-  Non-income producing security.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
          *  For Federal income tax purposes, cost is $73,025,987 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  18,343,020
                 Unrealized depreciation:            (1,539,167)
                                                  -------------
                 Net unrealized appreciation:     $  16,803,853
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviations:
             ADR--American Depositary Receipt
             GDR--Global Depositary Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-16
<PAGE>   1660
                 AIM GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
            (FORMERLY GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                                                               PERCENTAGE OF NET ASSETS {D}
                                                                          ---------------------------------------
                                                                                         SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)                                        EQUITY         & OTHER        TOTAL
- - ------------------------------------------------------------------------  -----------  ---------------  ---------
<S>                                                                       <C>          <C>              <C>
Argentina (ARG/ARS) ....................................................         1.1                          1.1
Austria (ASTRI/ATS) ....................................................         2.2                          2.2
Brazil (BRZL/BRL) ......................................................         5.3                          5.3
Canada (CAN/CAD) .......................................................         4.1                          4.1
Czech Republic (CZCH/CSK) ..............................................         1.6                          1.6
Ecuador (ECDR/ECS) .....................................................         1.3                          1.3
Egypt (EGPT) ...........................................................         1.4                          1.4
France (FR/FRF) ........................................................         5.0                          5.0
Germany (GER/DEM) ......................................................         7.3                          7.3
Hong Kong (HK/HKD) .....................................................         0.2                          0.2
Hungary (HGRY/HUF) .....................................................         2.2                          2.2
India (IND/INR) ........................................................         1.3                          1.3
Israel (ISRL/ILS) ......................................................         0.8                          0.8
Italy (ITLY/ITL) .......................................................         4.4                          4.4
Mexico (MEX/MXN) .......................................................         0.3                          0.3
New Zealand (NZ/NZD) ...................................................         2.3                          2.3
Pakistan (PAK/PKR) .....................................................         0.8                          0.8
Portugal (PORT/PTE) ....................................................         2.5                          2.5
Spain (SPN/ESP) ........................................................         2.2                          2.2
United Kingdom (UK/GBP) ................................................         3.1                          3.1
United States (US/USD) .................................................        42.1            8.5          50.6
                                                                          -----------         -----     ---------
Total  .................................................................        91.5            8.5         100.0
                                                                          -----------         -----     ---------
                                                                          -----------         -----     ---------
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $89,811,160.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                 APRIL 30, 1998
 
<TABLE>
<CAPTION>
                                          MARKET VALUE                            UNREALIZED
                                             (U.S.        CONTRACT   DELIVERY    APPRECIATION
CONTRACTS TO SELL:                          DOLLARS)       PRICE       DATE     (DEPRECIATION)
- ----------------------------------------  ------------   ----------  --------   --------------
<S>                                       <C>            <C>         <C>        <C>
Deutsche Marks..........................   3,571,432        1.79365   5/26/98      $(3,289)
French Francs...........................   1,996,672        5.99940    5/6/98        3,528
French Francs...........................     332,779        6.03550    5/6/98       (1,406)
Italian Lira............................   2,573,415     1768.80000   7/21/98       (1,050)
                                          ------------                          --------------
  Total Contracts to Sell (Receivable
   amount $8,472,081)...................   8,474,298                                (2,217)
                                          ------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 9.44%.
  Total Open Forward Foreign Currency
   Contracts............................                                           $(2,217)
                                                                                --------------
                                                                                --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-17
<PAGE>   1661
                    AIM GLOBAL RESOURCES FUND - CONSOLIDATED
           (FORMERLY GT GLOBAL NATURAL RESOURCES FUND - CONSOLIDATED)
 
                            PORTFOLIO OF INVESTMENTS
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Energy Equipment & Services (19.5%)
  Enerflex Systems Ltd. .....................................   CAN            83,600   $  2,514,374         2.5
  R&B Falcon Corp.-/- .......................................   US             76,900      2,465,606         2.4
  J. Ray McDermott S.A.-/- ..................................   US             51,400      2,280,875         2.2
  Cooper Cameron Corp.-/- ...................................   US             29,700      1,973,194         1.9
  EVI, Inc.-/- ..............................................   US             35,400      1,885,050         1.9
  Key Energy Group, Inc.-/- .................................   US             80,050      1,495,934         1.5
  Fred Olsen Energy ASA-/- ..................................   NOR            74,500      1,328,948         1.3
  Core Laboratories N.V.-/- {\/} ............................   NETH           42,500      1,205,938         1.2
  Smith International, Inc.-/- ..............................   US             18,500      1,086,875         1.1
  Bonus Resource Services Corp.-/- ..........................   CAN           282,284        977,342         1.0
  Transocean Offshore, Inc. .................................   US             15,750        880,031         0.9
  Mitcham Industries, Inc.-/- ...............................   US             54,500        636,969         0.6
  Bayard Drilling Technologies, Inc.-/- .....................   US             33,900        504,263         0.5
  Patterson Energy, Inc.-/- .................................   US             33,800        473,200         0.5
                                                                                        ------------
                                                                                          19,708,599
                                                                                        ------------
Oil (17.3%)
  Orogen Minerals Ltd. - 144A ADR{.} {\/} ...................   AUSL          111,200      2,396,149         2.4
  Total Compagnie Francaise des Petroles S.A. - ADR{\/} .....   FR             38,700      2,273,625         2.2
  Suncor Energy, Inc. .......................................   CAN            62,300      2,148,276         2.1
  Petro-Canada ..............................................   CAN           115,300      1,943,576         1.9
  Ultramar Diamond Shamrock Corp. ...........................   US             58,000      1,874,125         1.8
  Triton Energy Ltd.-/- .....................................   US             43,900      1,761,488         1.7
  ERG SpA-/- ................................................   ITLY          373,000      1,610,639         1.6
  Ente Nazionale Idrocarburi (ENI) S.p.A. - ADR{\/} .........   ITLY           20,300      1,342,338         1.3
  Canadian Fracmaster Ltd. ..................................   CAN           188,500      1,219,574         1.2
  British Petroleum Co., PLC - ADR{\/} ......................   UK             12,000      1,134,000         1.1
                                                                                        ------------
                                                                                          17,703,790
                                                                                        ------------
Chemicals (14.4%)
  NOVA Corp. ................................................   CAN           219,900      2,476,317         2.4
  Ciba Specialty Chemicals AG ...............................   SWTZ           19,360      2,342,716         2.3
  Potash Corporation of Saskatchewan, Inc.{\/} ..............   CAN            25,570      2,283,721         2.2
  Henkel KGaA Non-voting Preferred ..........................   GER            24,590      1,918,952         1.9
  Cabot Corp. ...............................................   US             45,500      1,635,156         1.6
  Crompton & Knowles Corp. ..................................   US             35,900      1,074,756         1.1
  E.I. du Pont de Nemours and Co. ...........................   US             13,900      1,012,094         1.0
  Solutia, Inc. .............................................   US             35,400      1,004,475         1.0
  Akzo Nobel N.V. ...........................................   NETH            4,690        954,441         0.9
                                                                                        ------------
                                                                                          14,702,628
                                                                                        ------------
Forest Products (13.7%)
  St Laurent Paperboard, Inc.-/- ............................   CAN           190,000      2,584,808         2.5
  Stone Container Corp.-/- ..................................   US            113,600      1,860,200         1.8
  MacMillan Bloedel Ltd. ....................................   CAN           112,442      1,600,472         1.6
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-18
<PAGE>   1662
                    AIM GLOBAL RESOURCES FUND - CONSOLIDATED
           (FORMERLY GT GLOBAL NATURAL RESOURCES FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Forest Products (Continued)
  Doman Industries Ltd. "B"-/- ..............................   CAN           246,830   $  1,234,409         1.2
  Noranda, Inc. .............................................   CAN            52,356      1,080,298         1.1
  Bowater, Inc. .............................................   US             18,900      1,057,219         1.0
  Tembec, Inc. "A"-/- .......................................   CAN           148,900        989,403         1.0
  Donohue, Inc. .............................................   CAN            41,151        935,446         0.9
  Champion International Corp. ..............................   US             17,200        925,575         0.9
  Noranda Forest, Inc. ......................................   CAN           136,459        916,281         0.9
  Alliance Forest Products, Inc.-/- .........................   CAN            36,400        767,616         0.8
                                                                                        ------------
                                                                                          13,951,727
                                                                                        ------------
Misc. Materials & Commodities (11.8%)
  American Disposal Services, Inc.-/- .......................   US             64,500      2,586,047         2.5
  USG Corp. .................................................   US             44,000      2,260,500         2.2
  Encore Wire Corp.-/- ......................................   US             56,950      2,206,813         2.2
  Valero Energy Corp. .......................................   US             65,000      2,104,375         2.1
  Medusa Corp. ..............................................   US             32,241      1,982,822         2.0
  EdperBrascan Corp. "A" ....................................   CAN            37,369        763,219         0.8
                                                                                        ------------
                                                                                          11,903,776
                                                                                        ------------
Construction (5.3%)
  Stolt Comex Seaway S.A.-/- ................................   US             79,000      2,567,500         2.5
  Coflexip - ADR{\/} ........................................   FR             27,300      1,945,125         1.9
  Global Industries Ltd.-/- .................................   US             40,850        926,784         0.9
                                                                                        ------------
                                                                                           5,439,409
                                                                                        ------------
Metals - Non-Ferrous (5.0%)
  Alumax, Inc. ..............................................   US             54,100      2,671,183         2.6
  Freeport-McMoRan Copper & Gold, Inc. "B" ..................   US             58,000      1,091,125         1.1
  Sutton Resources Ltd.-/- ..................................   CAN            69,113        536,584         0.5
  Western Copper Holdings Ltd.-/- ...........................   CAN            89,280        465,228         0.5
  Cominco Ltd. ..............................................   CAN            18,181        298,206         0.3
                                                                                        ------------
                                                                                           5,062,326
                                                                                        ------------
Gas Production & Distribution (5.0%)
  Comstock Resources, Inc.-/- ...............................   US            132,400      1,704,650         1.7
  Santa Fe Energy Resources, Inc.-/- ........................   US            163,700      1,688,156         1.7
  Poco Petroleums Ltd.-/- ...................................   CAN            72,069        821,658         0.8
  Berkley Petroleum Corp.-/- ................................   CAN            84,600        810,674         0.8
                                                                                        ------------
                                                                                           5,025,138
                                                                                        ------------
Metals - Steel (2.3%)
  IPSCO, Inc. ...............................................   CAN            78,700      2,386,266         2.3
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $89,332,125) .................                             95,883,659        94.3
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-19
<PAGE>   1663
                    AIM GLOBAL RESOURCES FUND - CONSOLIDATED
           (FORMERLY GT GLOBAL NATURAL RESOURCES FUND - CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- -------------------------------------------------------------                           ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Dated April 30, 1998, with State Street Bank & Trust Co.,
   due May 1, 1998, for an effective yield of 5.44%,
   collateralized by $5,130,000 U.S. Treasury Bills, 6.125%
   due 8/31/98 (market value of collateral is $5,194,125,
   including accrued interest). (cost $5,088,000) ...........                           $  5,088,000         5.0
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $94,420,125)  * .....................                            100,971,659        99.3
Other Assets and Liabilities ................................                                668,445         0.7
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $101,640,104       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        {.}  Security 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.
          *  For Federal income tax purposes, cost is $95,007,118 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $   8,390,497
                 Unrealized depreciation:            (2,425,956)
                                                  -------------
                 Net unrealized appreciation:     $   5,964,541
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviation:
    ADR--American Depositary Receipt
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                         PERCENTAGE OF NET ASSETS {D}
                                        ------------------------------
                                                  SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY      & OTHER      TOTAL
- --------------------------------------  ------   -------------   -----
<S>                                     <C>      <C>             <C>
Australia (AUSL/AUD) .................    2.4                      2.4
Canada (CAN/CAD) .....................   29.3                     29.3
France (FR/FRF) ......................    4.1                      4.1
Germany (GER/DEM) ....................    1.9                      1.9
Italy (ITLY/ITL) .....................    2.9                      2.9
Netherlands (NETH/NLG) ...............    2.1                      2.1
Norway (NOR/NOK) .....................    1.3                      1.3
Switzerland (SWTZ/CHF) ...............    2.3                      2.3
United Kingdom (UK/GBP) ..............    1.1                      1.1
United States (US/USD) ...............   46.9         5.7         52.6
                                        ------        ---        -----
Total  ...............................   94.3         5.7        100.0
                                        ------        ---        -----
                                        ------        ---        -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $101,640,104.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-20
<PAGE>   1664
                       AIM GLOBAL TELECOMMUNICATIONS FUND
                  (FORMERLY GT GLOBAL TELECOMMUNICATIONS FUND)
 
                            PORTFOLIO OF INVESTMENTS
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                          VALUE          % OF NET
EQUITY INVESTMENTS                                           COUNTRY      SHARES         (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
Wireless Communications (24.5%)
  Mannesmann AG ...........................................   GER           110,900   $   88,027,648         4.8
  Nextel Communications, Inc. "A"-/- ......................   US          1,695,700       48,645,394         2.7
  Millicom International Cellular S.A.-/- {\/} ............   LUX         1,217,000       47,615,125         2.6
  Grupo Iusacell S.A. "L" - ADR-/- {\/} ...................   MEX         1,663,700       32,234,188         1.8
  Paging Network, Inc.-/- .................................   US          2,165,000       30,445,313         1.7
  WinStar Communications, Inc.-/- .........................   US            667,700       25,956,838         1.4
  Vodafone Group PLC ......................................   UK          1,882,000       20,613,880         1.1
  Orange PLC-/- ...........................................   UK          2,660,800       19,099,472         1.1
  Bell Canada International, Inc.: ........................   CAN                --               --         1.1
    Common-/- .............................................   --            717,300       16,054,837          --
    Common - ADR-/- {\/} ..................................   --            132,500        2,981,250          --
  Smartone Telecommunications .............................   HK          6,729,000       17,679,317         1.0
  Clearnet Communications, Inc. "A"-/- ....................   CAN         1,138,100       15,761,614         0.9
  Western Wireless Corp. "A"-/- ...........................   US            750,300       14,630,850         0.8
  Advanced Info. Service - Foreign ........................   THAI        1,993,150       13,941,723         0.8
  Vimpel-Communications - ADR-/- {\/} .....................   RUS           250,000       13,500,000         0.7
  Champion Technology Holding Ltd.{::} ....................   HK        207,801,804       12,072,921         0.7
  Powertel, Inc.-/- .......................................   US            365,000        8,349,375         0.5
  China Telecom (Hong Kong) Ltd.-/- .......................   HK          4,360,000        8,274,740         0.5
  Microcell Telecommunications, Inc. "B"-/- {\/} ..........   CAN           596,400        4,696,650         0.3
                                                                                      --------------
                                                                                         440,581,135
                                                                                      --------------
Telecom Equipment (18.8%)
  Nokia AB "A" ............................................   FIN         1,348,320       90,456,347         5.0
  ECI Telecommunications Ltd.{\/} .........................   ISRL        2,309,500       70,439,750         3.9
  P-COM, Inc.-/- ..........................................   US          1,790,000       35,240,625         1.9
  Tekelec-/- ..............................................   US            648,900       32,607,225         1.8
  Alcatel Alsthom Compagnie Generale d'Electricite ........   FR            133,000       24,674,709         1.4
  Corning, Inc. ...........................................   US            600,000       24,000,000         1.3
  ANTEC Corp.-/- ..........................................   US          1,162,300       22,955,425         1.3
  Tellabs, Inc.-/- ........................................   US            240,000       17,010,000         0.9
  Tadiran Ltd. - ADR{\/} ..................................   ISRL          246,100        9,444,088         0.5
  Pairgain Technologies, Inc.-/- ..........................   US            428,800        7,906,000         0.4
  Netas Telekomunik-/- ....................................   TRKY       17,820,000        6,635,676         0.4
  Kantone Holding Ltd. ....................................   HK          6,256,868          306,967          --
                                                                                      --------------
                                                                                         341,676,812
                                                                                      --------------
Telephone Networks (16.6%)
  Telecom Italia S.p.A.: ..................................   ITLY               --               --         3.2
    Di Risp-/- ............................................   --          9,326,517       49,189,779          --
    Common ................................................   --          1,263,333        9,521,194          --
  SPT Telecom-/- ..........................................   CZCH          391,340       56,931,492         3.1
  WorldCom, Inc.-/- .......................................   US          1,065,000       45,562,031         2.5
  NTL, Inc.-/- {\/} .......................................   UK            700,000       27,300,000         1.5
  Carso Global Telecom "A1" ...............................   MEX         6,089,982       23,367,700         1.3
  Magyar Tavkozlesi Rt. - ADR-/- {\/} .....................   HGRY          625,450       18,450,775         1.0
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-21
<PAGE>   1665
                       AIM GLOBAL TELECOMMUNICATIONS FUND
                  (FORMERLY GT GLOBAL TELECOMMUNICATIONS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                          VALUE          % OF NET
EQUITY INVESTMENTS                                           COUNTRY      SHARES         (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
Telephone Networks (Continued)
  Telstra Corp. Ltd. - Installment Receipts ...............   AUSL        7,282,000   $   17,066,076         0.9
  Telecommunicacoes Brasileiras S.A. (Telebras) ...........   BRZL      139,700,000       13,866,157         0.8
  BCE, Inc. ...............................................   CAN           226,025        9,627,840         0.5
  Telecom Corporation of New Zealand Ltd. - Installment
   Receipts-/- ............................................   NZ          3,495,700        9,390,159         0.5
  Telefonica del Peru S.A. - ADR{\/} ......................   PERU          318,400        7,044,600         0.4
  Russian Telecommunications Development Corp.: ...........   RUS                --               --         0.3
    Non-Voting(.) -/- {\/} (::) ...........................   --            453,000        3,397,500          --
    Voting(.) -/- {\/} (::) ...............................   --            331,000        2,482,500          --
  PLD Telekon, Inc.-/- {\/} ...............................   RUS           510,000        4,143,750         0.2
  Emerging Communications, Inc.-/- ........................   US            468,100        2,984,138         0.2
  Atlantic Tele-Network, Inc.-/- ..........................   US            200,040        2,450,490         0.1
  Ionica Group PLC-/- .....................................   UK          1,456,400        2,094,481         0.1
                                                                                      --------------
                                                                                         304,870,662
                                                                                      --------------
Telephone - Regional/Local (9.5%)
  ICG Communications, Inc.-/- .............................   US          1,254,600       43,911,000         2.4
  GTE Corp. ...............................................   US            675,000       39,445,313         2.2
  Intermedia Communications of Florida, Inc.-/- ...........   US            454,800       33,193,294         1.8
  Teleport Communications Group, Inc. "A"-/- ..............   US            400,000       21,550,000         1.2
  SBC Communications ......................................   US            488,000       20,221,500         1.1
  ING Barings Russian Regional Telecommunications Basket
   Bridge Certificates-/- {=} {\/} ........................   RUS             1,749       14,161,443         0.8
                                                                                      --------------
                                                                                         172,482,550
                                                                                      --------------
Telephone - Long Distance (6.8%)
  Tel-Save Holdings, Inc.-/- ..............................   US          2,000,000       45,625,000         2.5
  Rostelecom - ADR-/- {\/} ................................   RUS         1,780,735       38,174,507         2.1
  MCI Communications Corp. ................................   US            400,000       20,125,000         1.1
  LCI International, Inc.-/- ..............................   US            500,000       19,875,000         1.1
                                                                                      --------------
                                                                                         123,799,507
                                                                                      --------------
Cable Television (4.7%)
  Cable & Wireless Communications - ADR-/- {\/} ...........   UK          1,470,413       53,118,670         2.9
  Comcast Corp. "A" .......................................   US            604,300       21,641,494         1.2
  United International Holdings, Inc. "A"-/- ..............   US            373,000        6,341,000         0.3
  Comcast UK Cable Partners Ltd. "A"-/- {\/} ..............   UK            415,000        5,317,188         0.3
                                                                                      --------------
                                                                                          86,418,352
                                                                                      --------------
Networking (3.5%)
  Cisco Systems, Inc.-/- ..................................   US            450,000       32,962,500         1.8
  Ascend Communications, Inc.-/- ..........................   US            700,000       30,493,750         1.7
                                                                                      --------------
                                                                                          63,456,250
                                                                                      --------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-22
<PAGE>   1666
                       AIM GLOBAL TELECOMMUNICATIONS FUND
                  (FORMERLY GT GLOBAL TELECOMMUNICATIONS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                          VALUE          % OF NET
EQUITY INVESTMENTS                                           COUNTRY      SHARES         (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
Telecom Technology (2.9%)
  Uniphase Corp.-/- .......................................   US            758,300   $   41,137,775         2.3
  Three-Five Systems, Inc.{::} -/- ........................   US            599,000       11,755,375         0.6
                                                                                      --------------
                                                                                          52,893,150
                                                                                      --------------
Broadcasting & Publishing (2.6%)
  Univision Communications, Inc.-/- .......................   US            463,900       17,773,169         1.0
  EchoStar Communications Corp. "A"-/- ....................   US            609,200       16,029,575         0.9
  Seat SpA-/- .............................................   ITLY       16,820,000        8,351,581         0.5
  Sistem Televisyen Malaysia Bhd. .........................   MAL         7,436,000        2,793,524         0.2
                                                                                      --------------
                                                                                          44,947,849
                                                                                      --------------
Aerospace/Defense (1.9%)
  Orbital Sciences Corp.-/- ...............................   US            785,500       34,954,750         1.9
                                                                                      --------------
Consumer Services (1.7%)
  Compagnie Generale des Eaux .............................   FR            168,500       31,344,925         1.7
                                                                                      --------------
Semiconductors (1.3%)
  VLSI Technology, Inc.-/- ................................   US            572,600       11,809,875         0.7
  DSP Communications, Inc.-/- .............................   US            624,000       10,413,000         0.6
                                                                                      --------------
                                                                                          22,222,875
                                                                                      --------------
Multi-Industry (1.1%)
  Grupo Carso, S.A. de C.V. "A1" ..........................   MEX         2,000,000       12,609,209         0.7
  Hutchison Whampoa .......................................   HK          1,302,000        8,051,875         0.4
                                                                                      --------------
                                                                                          20,661,084
                                                                                      --------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $1,173,173,527) ............                            1,740,309,901        95.9
                                                                                      --------------       -----
<CAPTION>
 
                                                                          NO. OF          VALUE          % OF NET
WARRANTS                                                     COUNTRY     WARRANTS        (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
  American Satellite Network Warrants, expire 1/1/99 (cost
   $0)(.) (::) ............................................   US             65,825               --          --
                                                                                      --------------       -----
    WIRELESS COMMUNICATIONS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-23
<PAGE>   1667
                       AIM GLOBAL TELECOMMUNICATIONS FUND
                  (FORMERLY GT GLOBAL TELECOMMUNICATIONS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                          VALUE          % OF NET
REPURCHASE AGREEMENTS                                                                    (NOTE 1)         ASSETS
- -----------------------------------------------------------                           --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
  Dated April 30, 1998, with State Street Bank & Trust Co.,
   due May 1, 1998, for an effective yield of 5.44%,
   collateralized by $61,530,000 U.S. Treasury Bonds, 7.25%
   due 5/15/16 (market value of collateral is $71,439,899,
   including accrued interest)  ...........................                           $   70,000,000         3.8
  Dated April 30, 1998, with State Street Bank & Trust Co.,
   due May 1, 1998, for an effective yield of 5.44%,
   collateralized by $950,000 U.S. Treasury Bonds, 8.125%
   due 8/15/19 (market value of collateral is $1,192,591,
   including accrued interest)  ...........................                                1,165,000         0.1
                                                                                      --------------       -----
 
TOTAL REPURCHASE AGREEMENTS (cost $71,165,000) ............                               71,165,000         3.9
                                                                                      --------------       -----
 
TOTAL INVESTMENTS (cost $1,244,338,527)  * ................                            1,811,474,901        99.8
Other Assets and Liabilities ..............................                                4,309,365         0.2
                                                                                      --------------       -----
 
NET ASSETS ................................................                           $1,815,784,266       100.0
                                                                                      --------------       -----
                                                                                      --------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        {=}  Issued by ING Barings, the value of which is linked to the
             underlying value of a basket of shares issued by Russian regional
             telephone companies.
       {::}  See Note 6 of Notes to Financial Statements.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (See Note 1 of Notes to Financial Statements).
        (.)  Restricted Securities: At April 30, 1998 the Fund owned the
             following restricted securities constituting .3% of net assets
             which may not be publicly sold without registration under the
             Securities Act of 1933 (Note 1). Additional information on the
             securities is as follows:
 
<TABLE>
<CAPTION>
                                                                                                       VALUE
                                                                                                        PER
                                                                                                       SHARE
                                                                                                       (NOTE
             DESCRIPTION                                      ACQUISITION DATE   SHARES     COST         1)
             -----------------------------------------------  -----------------  ------  -----------   ------
             <S>                                              <C>                <C>     <C>           <C>
             American Satellite Network Warrants, Expire
              1/1/99........................................      12/31/93       65,825  $        --   $--
             Russian Telecommunications Development Corp.:
               Non-voting...................................      12/22/93       453,000   4,530,000   7.50
               Voting.......................................      12/22/93       331,000   3,310,000   7.50
</TABLE>
 
          *  For Federal income tax purposes, cost is $1,244,874,015 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $ 612,812,855
                 Unrealized depreciation:           (46,211,969)
                                                  -------------
                 Net unrealized appreciation:     $ 566,600,886
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviation:
             ADR--American Depositary Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-24
<PAGE>   1668
                       AIM GLOBAL TELECOMMUNICATIONS FUND
                  (FORMERLY GT GLOBAL TELECOMMUNICATIONS FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                         PERCENTAGE OF NET ASSETS
                                                    {D}
                                        ---------------------------
                                                 SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY    & OTHER     TOTAL
- --------------------------------------  ------   ----------   -----
<S>                                     <C>      <C>          <C>
Australia (AUSL/AUD) .................    0.9                   0.9
Brazil (BRZL/BRL) ....................    0.8                   0.8
Canada (CAN/CAD) .....................    2.8                   2.8
Czech Republic (CZCH/CSK) ............    3.1                   3.1
Finland (FIN/FIM) ....................    5.0                   5.0
France (FR/FRF) ......................    3.1                   3.1
Germany (GER/DEM) ....................    4.8                   4.8
Hong Kong (HK/HKD) ...................    2.6                   2.6
Hungary (HGRY/HUF) ...................    1.0                   1.0
Israel (ISRL/ILS) ....................    4.4                   4.4
Italy (ITLY/ITL) .....................    3.7                   3.7
Luxembourg (LUX/LUF) .................    2.6                   2.6
Malaysia (MAL/MYR) ...................    0.2                   0.2
Mexico (MEX/MXN) .....................    3.8                   3.8
New Zealand (NZ/NZD) .................    0.5                   0.5
Peru (PERU/PES) ......................    0.4                   0.4
Russia (RUS/SUR) .....................    4.1                   4.1
Thailand (THAI/THB) ..................    0.8                   0.8
Turkey (TRKY/TRL) ....................    0.4                   0.4
United Kingdom (UK/GBP) ..............    7.0                   7.0
United States (US/USD) ...............   43.9        4.1       48.0
                                        ------     -----      -----
Total  ...............................   95.9        4.1      100.0
                                        ------     -----      -----
                                        ------     -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $1,815,784,266.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                 APRIL 30, 1998
 
<TABLE>
<CAPTION>
                                                                                    UNREALIZED
                                           MARKET VALUE     CONTRACT    DELIVERY   APPRECIATION
CONTRACTS TO BUY:                         (U.S. DOLLARS)      PRICE       DATE    (DEPRECIATION)
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Deutsche Marks..........................    12,834,836          1.8461   5/26/98   $   376,139
Italian Liras...........................    10,859,243         1763.55   7/21/98       (27,888)
                                          --------------                          --------------
  Total Contracts to Buy (Payable amount
   $23,345,828).........................    23,694,079                                 348,251
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO BUY AS A
 PERCENTAGE OF NET ASSETS IS 1.30%.
</TABLE>
 
<TABLE>
<CAPTION>
CONTRACTS TO SELL:
- ----------------------------------------
<S>                                       <C>              <C>          <C>       <C>
British Pounds..........................      41,362,104       0.59400   7/20/98       725,396
Deutsche Marks..........................      18,520,501       1.81400   5/26/98      (224,635)
Deutsche Marks..........................      15,066,981       1.81500   5/26/98      (190,948)
Deutsche Marks..........................      12,729,534       7.79365   5/26/98       (11,724)
Finnish Markka..........................      24,746,112       5.46000   7/21/98      (203,988)
Italian Liras...........................      40,071,738    1784.71000   7/21/98      (373,412)
Italian Liras...........................       8,116,153    1774.85000   7/21/98       (30,963)
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $160,302,849).................     160,613,123                              (310,274)
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS A
 PERCENTAGE OF NET ASSETS IS 8.85%.
  Total Open Forward Foreign Currency
   Contracts, Net.......................                                           $    37,977
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-25
<PAGE>   1669
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                      AIM GLOBAL{/\}
                                       -----------------------------------------------------------------------------
                                          CONSUMER
                                        PRODUCTS AND      FINANCIAL                    INFRASTRUCTURE    RESOURCES
                                       SERVICES FUND-   SERVICES FUND-      HEALTH         FUND-           FUND-
                                        CONSOLIDATED     CONSOLIDATED        CARE       CONSOLIDATED    CONSOLIDATED
                                          (NOTE 1)         (NOTE 1)          FUND         (NOTE 1)        (NOTE 1)
                                       --------------   --------------   ------------  --------------   ------------
<S>                                    <C>              <C>              <C>           <C>              <C>
Assets:
  Investments in securities: (Note 1)
    At identified cost...............   $160,625,164     $91,127,363     $487,213,390   $73,025,987     $ 94,420,125
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
    At value.........................   $194,547,463     $116,166,664    $549,386,200   $89,829,840     $100,971,659
  U.S. currency......................            957             148              625           944              923
  Foreign currencies (cost
   $3,262,600, $6,666, $116,
   $4,084,175, $574,226, and
   $38,012,099, respectively)........      3,264,957           6,699              120     4,084,175          574,161
  Dividends and dividend withholding
   tax reclaims receivable...........        213,234         293,292          233,561       103,025           44,335
  Interest receivable................            968             749            5,050         1,162              769
  Receivable for forward foreign
   currency contracts -- closed, net
   (Note 1)..........................             --              --               --        92,468               --
  Receivable for Fund shares sold....        215,386       1,042,626        5,213,987       140,038        1,292,050
  Receivable for open forward foreign
   currency contracts, net (Note
   1)................................             --         190,838               --            --               --
  Receivable for securities sold.....        805,431       1,328,983       11,760,191        99,627        1,964,959
  Receivable from Chancellor LGT
   Asset Management, Inc. (Note 2)...             --          13,505               --        62,569           74,218
  Unamortized organizational costs
   (Note 1)..........................         17,156          13,685               --        11,172           11,117
                                       --------------   --------------   ------------  --------------   ------------
    Total assets.....................    199,065,552     119,057,189      566,599,734    94,425,020      104,934,191
                                       --------------   --------------   ------------  --------------   ------------
Liabilities:
  Payable for custodian fees.........          4,311           5,076            8,079         6,473            9,760
  Payable for Directors' and
   Trustees' fees and expenses (Note
   2)................................          7,748           1,867            1,704         2,516              652
  Payable for fund accounting fees
   (Note 2)..........................          4,281           2,494           11,428         1,971            2,068
  Payable for Fund shares
   repurchased.......................        450,326         136,340        1,204,094       222,025          394,335
  Payable for investment management
   and administration fees (Note
   2)................................        158,974         104,848          435,270       110,495          126,214
  Payable for open forward foreign
   currency contracts (Note 1).......             --              --               --         2,217               --
  Payable for printing and postage
   expenses..........................         20,439          17,511           56,469        44,305           37,005
  Payable for professional fees......         17,379          13,698           27,249        18,478           18,472
  Payable for registration and filing
   fees..............................          5,980           3,204            8,448         9,720            7,417
  Payable for securities purchased...      2,666,126       3,630,414        5,701,866     4,084,175        2,586,961
  Payable for service and
   distribution expenses (Note 2)....        118,493          69,098          270,724        54,114           60,200
  Payable for transfer agent fees
   (Note 2)..........................         55,395           9,673          133,832        50,128           42,561
  Other accrued expenses.............         32,758           7,935            6,281         7,143            8,342
                                       --------------   --------------   ------------  --------------   ------------
    Total liabilities................      3,542,210       4,002,158        7,865,444     4,613,760        3,293,987
  Minority interest (Notes 1 & 2)....            100             100               --           100              100
                                       --------------   --------------   ------------  --------------   ------------
Net assets...........................   $195,523,242     $115,054,931    $558,734,290   $89,811,160     $101,640,104
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
 
<CAPTION>
 
                                          TELECOM-
                                         MUNICATIONS
                                            FUND
                                       ---------------
<S>                                    <C>
Assets:
  Investments in securities: (Note 1)
    At identified cost...............  $ 1,244,338,527
                                       ---------------
                                       ---------------
    At value.........................  $ 1,811,474,901
  U.S. currency......................          481,143
  Foreign currencies (cost
   $3,262,600, $6,666, $116,
   $4,084,175, $574,226, and
   $38,012,099, respectively)........       37,989,074
  Dividends and dividend withholding
   tax reclaims receivable...........        1,461,730
  Interest receivable................           10,754
  Receivable for forward foreign
   currency contracts -- closed, net
   (Note 1)..........................          169,870
  Receivable for Fund shares sold....        3,519,217
  Receivable for open forward foreign
   currency contracts, net (Note
   1)................................           37,977
  Receivable for securities sold.....       38,128,097
  Receivable from Chancellor LGT
   Asset Management, Inc. (Note 2)...               --
  Unamortized organizational costs
   (Note 1)..........................               --
                                       ---------------
    Total assets.....................    1,893,272,763
                                       ---------------
Liabilities:
  Payable for custodian fees.........          196,883
  Payable for Directors' and
   Trustees' fees and expenses (Note
   2)................................            3,634
  Payable for fund accounting fees
   (Note 2)..........................           39,086
  Payable for Fund shares
   repurchased.......................        6,626,277
  Payable for investment management
   and administration fees (Note
   2)................................        1,400,357
  Payable for open forward foreign
   currency contracts (Note 1).......               --
  Payable for printing and postage
   expenses..........................          126,767
  Payable for professional fees......           39,759
  Payable for registration and filing
   fees..............................           24,933
  Payable for securities purchased...       67,011,318
  Payable for service and
   distribution expenses (Note 2)....        1,091,628
  Payable for transfer agent fees
   (Note 2)..........................          894,937
  Other accrued expenses.............           32,918
                                       ---------------
    Total liabilities................       77,488,497
  Minority interest (Notes 1 & 2)....               --
                                       ---------------
Net assets...........................  $ 1,815,784,266
                                       ---------------
                                       ---------------
</TABLE>
 
- ----------------
 {/\} See Notes 1 and 7 of Notes to Financial Statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-26
<PAGE>   1670
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                              STATEMENT OF ASSETS
                            AND LIABILITIES  (cont'd)
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                      AIM GLOBAL{/\}
                                       -----------------------------------------------------------------------------
                                          CONSUMER
                                        PRODUCTS AND      FINANCIAL                    INFRASTRUCTURE    RESOURCES
                                       SERVICES FUND-   SERVICES FUND-      HEALTH         FUND-           FUND-
                                        CONSOLIDATED     CONSOLIDATED        CARE       CONSOLIDATED    CONSOLIDATED
Class A:                                  (NOTE 1)         (NOTE 1)          FUND         (NOTE 1)        (NOTE 1)
                                       --------------   --------------   ------------  --------------   ------------
<S>                                    <C>              <C>              <C>           <C>              <C>
  Net assets.........................   $ 70,546,554     $38,146,311     $427,300,000   $33,286,992     $ 42,092,882
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
  Shares outstanding.................      2,824,537       1,891,058       19,783,338     2,026,023        2,704,501
  Net asset value and redemption
   price per share...................   $      24.98     $     20.17     $      21.60   $     16.43     $      15.56
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
  Maximum offering price per share
   (100/95.25 of Class A net asset
   value) *..........................   $      26.23     $     21.18     $      22.68   $     17.25     $      16.34
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
Class B:+
  Net assets.........................   $106,835,715     $64,747,167     $121,735,496   $47,177,150     $ 52,210,289
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
  Shares outstanding.................      4,357,974       3,268,753        5,848,019     2,929,766        3,411,115
  Net asset value and offering price
   per share.........................   $      24.51     $     19.81     $      20.82   $     16.10     $      15.31
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
Advisor Class:
  Net assets.........................   $ 18,140,973     $12,161,453     $  9,698,794   $ 9,347,018     $  7,336,933
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
  Shares outstanding.................        713,803         595,404          440,494       559,425          467,314
  Net asset value, offering price per
   share, and redemption price per
   share.............................   $      25.41     $     20.43     $      22.02   $     16.71     $      15.70
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
Net assets consist of:
  Paid in capital (Note 4)...........   $151,024,282     $88,920,854     $487,685,110   $62,623,203     $103,332,054
  Undistributed/Accumulated net
   investment income (loss)..........     (1,114,025)          8,925       (3,241,309)      126,439         (795,676)
  Accumulated net realized gain
   (loss) on investments and foreign
   currency transactions.............     11,687,365         889,661       12,117,688    10,339,065       (7,454,066)
  Net unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies........................          3,321         196,190               (9)      (81,400)           6,258
  Net unrealized appreciation of
   investments.......................     33,922,299      25,039,301       62,172,810    16,803,853        6,551,534
                                       --------------   --------------   ------------  --------------   ------------
Total -- representing net assets
 applicable to capital shares
 outstanding.........................   $195,523,242     $115,054,931    $558,734,290   $89,811,160     $101,640,104
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
 
<CAPTION>
 
                                          TELECOM-
                                         MUNICATIONS
Class A:                                    FUND
                                       ---------------
<S>                                    <C>
  Net assets.........................  $   969,856,693
                                       ---------------
                                       ---------------
  Shares outstanding.................       48,380,775
  Net asset value and redemption
   price per share...................  $         20.05
                                       ---------------
                                       ---------------
  Maximum offering price per share
   (100/95.25 of Class A net asset
   value) *..........................  $         21.05
                                       ---------------
                                       ---------------
Class B:+
  Net assets.........................  $   837,576,106
                                       ---------------
                                       ---------------
  Shares outstanding.................       43,066,637
  Net asset value and offering price
   per share.........................  $         19.45
                                       ---------------
                                       ---------------
Advisor Class:
  Net assets.........................  $     8,351,467
                                       ---------------
                                       ---------------
  Shares outstanding.................          409,477
  Net asset value, offering price per
   share, and redemption price per
   share.............................  $         20.40
                                       ---------------
                                       ---------------
Net assets consist of:
  Paid in capital (Note 4)...........  $ 1,192,624,877
  Undistributed/Accumulated net
   investment income (loss)..........      (11,031,674)
  Accumulated net realized gain
   (loss) on investments and foreign
   currency transactions.............       67,631,904
  Net unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies........................         (577,215)
  Net unrealized appreciation of
   investments.......................      567,136,374
                                       ---------------
Total -- representing net assets
 applicable to capital shares
 outstanding.........................  $ 1,815,784,266
                                       ---------------
                                       ---------------
<FN>
- ----------------
    * On sales of $50,000 or more, the offering price is reduced.
    + Redemption price per share is equal to the net asset value per share less
      any applicable contingent deferred sales charge.
 {/\} See Notes 1 and 7 of Notes to Financial Statements.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-27
<PAGE>   1671
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                            STATEMENT OF OPERATIONS
 
                  Six months ended April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                  AIM GLOBAL{/\}
                                                     -------------------------------------------------------------------------
                                                      CONSUMER
                                                      PRODUCTS
                                                         AND       FINANCIAL
                                                      SERVICES     SERVICES     HEALTH    INFRASTRUCTURE  RESOURCES  TELECOM-
                                                        FUND-        FUND-       CARE        FUND-        FUND-     MUNICATIONS
                                                     CONSOLIDATED CONSOLIDATED   FUND     CONSOLIDATED CONSOLIDATED    FUND
                                                     -----------  -----------  ---------  -----------  -----------  ----------
<S>                                                  <C>          <C>          <C>        <C>          <C>          <C>
Investment income:
  Dividend income (net of foreign withholding tax
   of $58,439, $89,413, $2,069, $67,669, $37,565,
   and $182,685, respectively).....................   $ 631,492    $ 930,225   $ 738,020   $ 903,398    $ 335,385   $3,963,693
  Interest income..................................     173,161      113,943   1,275,652     227,045      142,904    2,012,264
  Securities lending income........................      17,942       34,910      55,507      18,515       11,469      609,824
                                                     -----------  -----------  ---------  -----------  -----------  ----------
    Total investment income........................     822,595    1,079,078   2,069,179   1,148,958      489,758    6,585,781
                                                     -----------  -----------  ---------  -----------  -----------  ----------
Expenses:
  Investment management and administration fees
   (Note 2)........................................     873,213      470,304   2,709,564     447,907      566,986    7,889,067
  Amortization of organization costs (Note 1)......       5,108        6,259          --       5,108        5,108           --
  Custodian Fees...................................      19,189       14,299       7,625      19,729       19,910      318,017
  Directors' and Trustees' fees and expenses (Note
   2)..............................................      11,510        8,964       6,074       6,878        7,240       11,100
  Fund accounting fees (Note 2)....................      22,980       12,779      73,483      12,109       15,269      221,052
  Printing and postage expenses....................      20,996        8,869     100,150      16,470       16,652      332,859
  Professional fees................................      52,434       54,449      62,182      43,983       41,087      155,725
  Registration and filing fees.....................      36,924       44,693      36,200      43,598       50,331       52,671
  Service and distribution expenses: (Note 2)
    Class A........................................     166,991       82,697   1,060,797      86,552      120,076    2,209,459
    Class B........................................     493,846      273,191     631,046     252,743      303,610    3,905,123
  Transfer agent fees (Note 2).....................     244,554      112,625     650,700     171,226      217,743    2,523,864
  Other expenses...................................       7,413        5,886      11,305       3,195       28,231       43,951
                                                     -----------  -----------  ---------  -----------  -----------  ----------
    Total expenses before reductions...............   1,955,158    1,095,015   5,349,126   1,109,498    1,392,243   17,662,888
                                                     -----------  -----------  ---------  -----------  -----------  ----------
      Expenses reimbursed by Chancellor LGT Asset
       Management, Inc. (Note 2)...................          --      (13,505)         --     (82,569)     (74,218)          --
      Expense reductions (Notes 5).................     (18,538)     (11,357)    (38,638)     (4,410)     (32,591)     (39,899)
                                                     -----------  -----------  ---------  -----------  -----------  ----------
    Total net expenses.............................   1,936,620    1,070,153   5,310,488   1,022,519    1,285,434   17,622,989
                                                     -----------  -----------  ---------  -----------  -----------  ----------
Net investment income (loss).......................  (1,114,025)       8,925   (3,241,309)    126,439    (795,676)  (11,037,208)
                                                     -----------  -----------  ---------  -----------  -----------  ----------
Net realized and unrealized gain (loss) on
  investments and foreign currencies: (Note 1)
  Net realized gain (loss) on investments..........  12,037,902    1,624,816   14,637,996 10,174,908   (6,823,307)  59,731,742
  Net realized gain (loss) on foreign currency
   transactions....................................     (59,417)    (171,425)   (374,206)    200,616      (45,557)   8,663,014
                                                     -----------  -----------  ---------  -----------  -----------  ----------
    Net realized gain (loss) during the period.....  11,978,485    1,453,391   14,263,790 10,375,524   (6,868,864)  68,394,756
                                                     -----------  -----------  ---------  -----------  -----------  ----------
  Net change in unrealized appreciation
   (depreciation) on translation of assets and
   liabilities in foreign currencies...............      (1,738)     130,285     257,003     (36,699)     115,162    2,170,571
  Net change in unrealized appreciation
   (depreciation) of investments...................  25,373,856   17,197,803   (1,277,554) (1,970,941) (27,822,535) 241,184,397
                                                     -----------  -----------  ---------  -----------  -----------  ----------
    Net unrealized appreciation (depreciation)
     during the period.............................  25,372,118   17,328,088   (1,020,551) (2,007,640) (27,707,373) 243,354,968
                                                     -----------  -----------  ---------  -----------  -----------  ----------
Net realized and unrealized gain (loss) on
 investments and foreign currencies................  37,350,603   18,781,479   13,243,239  8,367,884   (34,576,237) 311,749,724
                                                     -----------  -----------  ---------  -----------  -----------  ----------
Net increase (decrease) in net assets resulting
 from operations...................................  3$6,236,578  1$8,790,404  $10,001,930  $8,494,323 ($35,371,913) $300,712,516
                                                     -----------  -----------  ---------  -----------  -----------  ----------
                                                     -----------  -----------  ---------  -----------  -----------  ----------
<FN>
- ----------------
 {/\} See Notes 1 and 7 of Notes to Financial Statements.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-28
<PAGE>   1672
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                      STATEMENTS OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         AIM GLOBAL{/\}
                                          -----------------------------------------------------------------------------
                                             CONSUMER PRODUCTS
                                                AND SERVICES           FINANCIAL SERVICES            HEALTH CARE
                                             FUND-CONSOLIDATED         FUND-CONSOLIDATED                FUND
                                          ------------------------  ------------------------  -------------------------
                                          SIX MONTHS                SIX MONTHS                SIX MONTHS
                                             ENDED                     ENDED                     ENDED
                                           APRIL 30,   YEAR ENDED    APRIL 30,   YEAR ENDED    APRIL 30,    YEAR ENDED
                                             1998      OCTOBER 31,     1998      OCTOBER 31,     1998      OCTOBER 31,
                                          (UNAUDITED)     1997      (UNAUDITED)     1997      (UNAUDITED)      1997
                                          -----------  -----------  -----------  -----------  -----------  ------------
<S>                                       <C>          <C>          <C>          <C>          <C>          <C>
Increase (decrease) in net assets
Operations:
  Net investment income (loss)..........  ($1,114,025) $(1,662,851)  $   8,925   $   (31,012) $(3,241,309) $ (6,665,748)
  Net realized gain (loss) on
   investments and foreign currency
   transactions.........................  11,978,485    16,167,449   1,453,391     2,628,562   14,263,790   153,599,307
  Net change in unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies...........................      (1,738)        5,172     130,285        58,275      257,003      (569,426)
  Net change in unrealized appreciation
   (depreciation) of investments........  25,373,856      (714,518) 17,197,803     6,449,986   (1,277,554)    1,308,779
                                          -----------  -----------  -----------  -----------  -----------  ------------
    Net increase (decrease) in net
     assets resulting from operations...  36,236,578    13,795,252  18,790,404     9,105,811   10,001,930   147,672,912
                                          -----------  -----------  -----------  -----------  -----------  ------------
Class A:
Distributions to shareholders: (Note 1)
  From net realized gain on
   investments..........................  (5,574,484)   (3,424,902) (1,110,662)     (580,522) (111,031,908)  (34,613,411)
Class B:
Distributions to shareholders: (Note 1)
  From net realized gain on
   investments..........................  (8,128,583)   (4,055,905) (1,697,929)     (823,692) (34,132,136)   (8,701,491)
Advisor Class:
Distributions to shareholders: (Note 1)
  From net realized gain on
   investments..........................    (962,619)     (308,573)   (225,074)       (5,018)  (1,791,803)      (57,488)
                                          -----------  -----------  -----------  -----------  -----------  ------------
    Total distributions.................  (14,665,686)  (7,789,380) (3,033,665)   (1,409,232) (146,955,847)  (43,372,390)
                                          -----------  -----------  -----------  -----------  -----------  ------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and
   reinvested...........................  67,898,330   136,239,369  78,300,144   130,520,030  466,202,619  1,007,452,632
  Decrease from capital shares
   repurchased..........................  (56,608,293) (151,833,735) (59,963,586) (74,514,633) (396,856,529) (1,062,045,275)
                                          -----------  -----------  -----------  -----------  -----------  ------------
    Net increase (decrease) from capital
     share transactions.................  11,290,037   (15,594,366) 18,336,558    56,005,397   69,346,090   (54,592,643)
                                          -----------  -----------  -----------  -----------  -----------  ------------
Total increase (decrease) in net
 assets.................................  32,860,929    (9,588,494) 34,093,297    63,701,976  (67,607,827)   49,707,879
Net assets:
  Beginning of period...................  162,662,313  172,250,807  80,961,634    17,259,658  626,342,117   576,634,238
                                          -----------  -----------  -----------  -----------  -----------  ------------
  End of period *.......................  1$95,523,242 $162,662,313 1$15,054,931 $80,961,634  $558,734,290 $626,342,117
                                          -----------  -----------  -----------  -----------  -----------  ------------
                                          -----------  -----------  -----------  -----------  -----------  ------------
 * Includes undistributed/accumulated
   net investment income (loss).........  ($1,114,025) $        --   $   8,925   $        --  $(3,241,309) $         --
                                          -----------  -----------  -----------  -----------  -----------  ------------
                                          -----------  -----------  -----------  -----------  -----------  ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-29
<PAGE>   1673
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                  STATEMENTS OF CHANGES IN NET ASSETS (cont'd)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
 
                                                                         AIM GLOBAL{/\}
                                          -----------------------------------------------------------------------------
                                              INFRASTRUCTURE              RESOURCES              TELECOMMUNICATIONS
                                             FUND-CONSOLIDATED        FUND-CONSOLIDATED                 FUND
                                          -----------------------  ------------------------  --------------------------
                                          SIX MONTHS               SIX MONTHS                 SIX MONTHS
                                             ENDED     YEAR ENDED     ENDED                     ENDED
                                           APRIL 30,    OCTOBER     APRIL 30,   YEAR ENDED    APRIL 30,     YEAR ENDED
                                             1998         31,         1998      OCTOBER 31,      1998      OCTOBER 31,
                                          (UNAUDITED)     1997     (UNAUDITED)     1997      (UNAUDITED)       1997
                                          -----------  ----------  -----------  -----------  ------------  ------------
<S>                                       <C>          <C>         <C>          <C>          <C>           <C>
Increase (decrease) in net assets
Operations:
  Net investment income (loss)..........   $ 126,439   $ (405,469) $  (795,676) $(2,255,658) $(11,037,208) $(23,856,621)
  Net realized gain (loss) on
   investments and foreign currency
   transactions.........................  10,375,524      778,612   (6,868,864)   7,540,578    68,394,756   120,426,746
  Net change in unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies...........................     (36,699)    (116,926)     115,162     (125,779)    2,170,571    (7,132,389)
  Net change in unrealized appreciation
   (depreciation) of investments........  (1,970,941)   8,647,635  (27,822,535)  18,607,939   241,184,397   217,773,979
                                          -----------  ----------  -----------  -----------  ------------  ------------
    Net increase (decrease) in net
     assets resulting from operations...   8,494,323    8,903,852  (35,371,913)  23,767,080   300,712,516   307,211,715
                                          -----------  ----------  -----------  -----------  ------------  ------------
Class A:
Distributions to shareholders: (Note 1)
  From net realized gain on
   investments..........................    (275,162)  (1,943,050)  (2,006,260)  (1,915,988)  (59,979,475)  (95,676,425)
Class B:
Distributions to shareholders: (Note 1)
  From net realized gain on
   investments..........................    (454,424)  (2,733,339)  (2,974,905)  (2,369,395)  (54,057,207)  (83,596,023)
Advisor Class:
Distributions to shareholders: (Note 1)
  From net realized gain on
   investments..........................     (39,877)     (17,129)    (210,222)    (134,145)     (238,558)     (176,806)
                                          -----------  ----------  -----------  -----------  ------------  ------------
    Total distributions.................    (769,463)  (4,693,518)  (5,191,387)  (4,419,528) (114,275,240) (179,449,254)
                                          -----------  ----------  -----------  -----------  ------------  ------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and
   reinvested...........................  13,758,704   44,324,471  133,328,246  377,334,346   991,606,632  1,783,734,946
  Decrease from capital shares
   repurchased..........................  (29,691,463) (42,934,337) (162,798,415) (336,987,548) (1,083,378,701) (2,403,405,013)
                                          -----------  ----------  -----------  -----------  ------------  ------------
    Net increase (decrease) from capital
     share transactions.................  (15,932,759)  1,390,134  (29,470,169)  40,346,798   (91,772,069) (619,670,067)
                                          -----------  ----------  -----------  -----------  ------------  ------------
Total increase (decrease) in net
 assets.................................  (8,207,899)   5,600,468  (70,033,469)  59,694,350    94,665,207  (491,907,606)
Net assets:
  Beginning of period...................  98,019,059   92,418,591  171,673,573  111,979,223  1,721,119,059 2,213,026,665
                                          -----------  ----------  -----------  -----------  ------------  ------------
  End of period *.......................  8$9,811,160  $98,019,059 $101,640,104 $171,673,573 $1,815,784,266 $1,721,119,059
                                          -----------  ----------  -----------  -----------  ------------  ------------
                                          -----------  ----------  -----------  -----------  ------------  ------------
 * Includes undistributed/accumulated
   net investment income (loss).........   $ 126,439   $       --  $  (795,676) $        --  $(11,031,674) $      5,534
                                          -----------  ----------  -----------  -----------  ------------  ------------
                                          -----------  ----------  -----------  -----------  ------------  ------------
</TABLE>
 
- ----------------
 
{/\} See Notes 1 and 7 of Notes to Financial Statements.
 
                                      FS-30
<PAGE>   1674
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                     CONSUMER PRODUCTS AND SERVICES FUND
                                          ---------------------------------------------------------
                                                                   CLASS A
                                          ---------------------------------------------------------
                                           SIX MONTHS                            DECEMBER 30, 1994
                                              ENDED            YEAR ENDED         (COMMENCEMENT OF
                                            APRIL 30,         OCTOBER 31,          OPERATIONS) TO
                                              1998       ----------------------     OCTOBER 31,
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)        1995 (D)
                                          -------------  ----------  ----------  ------------------
<S>                                       <C>            <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   22.19    $   20.98   $   14.59       $   11.43
                                          -------------  ----------  ----------     ----------
Income from investment operations:
  Net investment income (loss)..........        (0.12)       (0.15)      (0.22)           0.02*
  Net realized and unrealized gain on
   investments..........................         4.80         2.27        7.13            3.14
                                          -------------  ----------  ----------     ----------
    Net increase from investment
     operations.........................         4.68         2.12        6.91            3.16
                                          -------------  ----------  ----------     ----------
Distributions to shareholders:
  From net realized gain on
   investments..........................        (1.89)       (0.91)      (0.52)             --
                                          -------------  ----------  ----------     ----------
    Total distributions.................        (1.89)       (0.91)      (0.52)             --
                                          -------------  ----------  ----------     ----------
Net asset value, end of period..........    $   24.98    $   22.19   $   20.98       $   14.59
                                          -------------  ----------  ----------     ----------
                                          -------------  ----------  ----------     ----------
 
Total investment return (c).............        22.48%(b)     10.55%     48.82%          27.65 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  70,547    $  62,637   $  76,900       $   4,082
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......        (1.00)%(a)     (0.72)%     (1.14)%          0.20 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (1.02)%(a)     (0.87)%     (1.24)%        (11.11)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.92%(a)      1.84%      2.24%           2.32 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         1.94%(a)      1.99%      2.34%          13.63 % (a)
Portfolio turnover rate++...............          169%(a)       392%       169%            240 % (a)
Average commission rate per share paid
 on portfolio transactions++............    $  0.0423    $  0.0319   $  0.0545             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., net
     investment income per share would have been reduced by $1.12, $1.04
     and $0.61 for Class A, Class B and Advisor Class, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-31
<PAGE>   1675
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                     CONSUMER PRODUCTS AND SERVICES FUND
                                          ---------------------------------------------------------
                                                                   CLASS B
                                          ---------------------------------------------------------
                                           SIX MONTHS                            DECEMBER 30, 1994
                                              ENDED            YEAR ENDED         (COMMENCEMENT OF
                                            APRIL 30,         OCTOBER 31,           OPERATIONS)
                                              1998       ----------------------     OCTOBER 31,
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)        1995 (D)
                                          -------------  ----------  ----------  ------------------
<S>                                       <C>            <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   21.86    $   20.79   $   14.53       $   11.43
                                          -------------  ----------  ----------     ----------
Income from investment operations:
  Net investment income (loss)..........        (0.17)       (0.24)      (0.31)          (0.04) *
  Net realized and unrealized gain on
   investments..........................         4.71         2.22        7.09            3.14
                                          -------------  ----------  ----------     ----------
    Net increase from investment
     operations.........................         4.54         1.98        6.78            3.10
                                          -------------  ----------  ----------     ----------
Distributions to shareholders:
  From net realized gain on
   investments..........................        (1.89)       (0.91)      (0.52)             --
                                          -------------  ----------  ----------     ----------
    Total distributions.................        (1.89)       (0.91)      (0.52)             --
                                          -------------  ----------  ----------     ----------
Net asset value, end of period..........    $   24.51    $   21.86   $   20.79       $   14.53
                                          -------------  ----------  ----------     ----------
                                          -------------  ----------  ----------     ----------
 
Total investment return (c).............        22.21%(b)      9.95%     48.11%          27.12 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $ 106,836    $  93,978   $  87,904       $   2,959
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......        (1.50)%(a)     (1.22)%     (1.64)%         (0.30)% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (1.52)%(a)     (1.37)%     (1.74)%        (11.61)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         2.42%(a)      2.34%      2.74%           2.82 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.44%(a)      2.49%      2.84%          14.13 % (a)
Portfolio turnover rate++...............          169%(a)       392%       169%            240 % (a)
Average commission rate per share paid
 on portfolio transactions++............    $  0.0423    $  0.0319   $  0.0545             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., net
     investment income per share would have been reduced by $1.12, $1.04
     and $0.61 for Class A, Class B and Advisor Class, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-32
<PAGE>   1676
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                     CONSUMER PRODUCTS AND SERVICES FUND
                                          ---------------------------------------------------------
                                                               ADVISOR CLASS+
                                          ---------------------------------------------------------
                                           SIX MONTHS
                                              ENDED            YEAR ENDED           JUNE 1, 1995
                                            APRIL 30,         OCTOBER 31,                TO
                                              1998       ----------------------     OCTOBER 31,
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)        1995 (D)
                                          -------------  ----------  ----------  ------------------
<S>                                       <C>            <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   22.50    $   21.15   $   14.64       $   11.84
                                          -------------  ----------  ----------     ----------
Income from investment operations:
  Net investment income (loss)..........        (0.06)       (0.04)      (0.13)           0.04*
  Net realized and unrealized gain on
   investments..........................         4.86         2.30        7.16            2.76
                                          -------------  ----------  ----------     ----------
    Net increase from investment
     operations.........................         4.80         2.26        7.03            2.80
                                          -------------  ----------  ----------     ----------
Distributions to shareholders:
  From net realized gain on
   investments..........................        (1.89)       (0.91)      (0.52)             --
                                          -------------  ----------  ----------     ----------
    Total distributions.................        (1.89)       (0.91)      (0.52)             --
                                          -------------  ----------  ----------     ----------
Net asset value, end of period..........    $   25.41    $   22.50   $   21.15       $   14.64
                                          -------------  ----------  ----------     ----------
                                          -------------  ----------  ----------     ----------
 
Total investment return (c).............        22.77%(b)     11.15%     49.50%          23.65 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  18,141    $   6,047   $   7,446       $     164
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......        (0.50)%(a)     (0.22)%     (0.64)%          0.70 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (0.52)%(a)     (0.37)%     (0.74)%        (10.61)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.42%(a)      1.34%      1.74%           1.82 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         1.44%(a)      1.49%      1.84%          13.13 % (a)
Portfolio turnover rate++...............          169%(a)       392%       169%            240 % (a)
Average commission rate per share paid
 on portfolio transactions++............    $  0.0423    $  0.0319   $  0.0545             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., net
     investment income per share would have been reduced by $1.12, $1.04
     and $0.61 for Class A, Class B and Advisor Class, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-33
<PAGE>   1677
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
 
<TABLE>
<CAPTION>
                                                                 FINANCIAL SERVICES FUND
                                          ----------------------------------------------------------------------
                                                                         CLASS A
                                          ----------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED                                              MAY 31, 1994
                                            APRIL 30,          YEAR ENDED OCTOBER 31,          (COMMENCEMENT OF
                                              1998       -----------------------------------    OPERATIONS) TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)    1995 (D)     OCTOBER 31, 1994
                                          -------------  ----------  ----------  -----------  ------------------
<S>                                       <C>            <C>         <C>         <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   17.22    $   14.20   $   11.92    $   11.62       $   11.43
                                          -------------  ----------  ----------  -----------       --------
Income from investment operations:
  Net investment income (loss)..........         0.02         0.04        0.05*        0.17* *          0.02* * *
  Net realized and unrealized gain on
   investments..........................         3.54         3.97        2.36         0.13            0.17
                                          -------------  ----------  ----------  -----------       --------
    Net increase from investment
     operations.........................         3.56         4.01        2.41         0.30            0.19
                                          -------------  ----------  ----------  -----------       --------
Distributions to shareholders:
  From net investment income............           --           --       (0.12)          --              --
  From net realized gain on
   investments..........................        (0.61)       (0.99)      (0.01)          --              --
                                          -------------  ----------  ----------  -----------       --------
    Total distributions.................        (0.61)       (0.99)      (0.13)          --              --
                                          -------------  ----------  ----------  -----------       --------
Net asset value, end of period..........    $   20.17    $   17.22   $   14.20    $   11.92       $   11.62
                                          -------------  ----------  ----------  -----------       --------
                                          -------------  ----------  ----------  -----------       --------
 
Total investment return (c).............        21.29%(b)     29.91%     20.21%        2.58%           1.66 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  38,146    $  29,639   $   7,302    $   5,687       $   3,175
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         0.25%(a)      0.23%      0.41%        1.46%           0.66 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         0.20%(a)      0.16%     (0.66)%      (5.34)%         (7.26)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.98%(a)      2.29%      2.32%        2.34%           2.40 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.03%(a)      2.36%      3.39%        9.14%          10.32 % (a)
Portfolio turnover rate++...............          106%(a)        91%       103%         170%             53 % (a)
Average commission rate per share paid
 on portfolio transactions++............    $  0.0015    $  0.0014   $  0.0080          N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.13 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.59, $0.59
     and $0.30 for Class A, Class B and Advisor Class, respectively.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.23 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-34
<PAGE>   1678
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
 
<TABLE>
<CAPTION>
                                                                 FINANCIAL SERVICES FUND
                                          ---------------------------------------------------------------------
                                                                         CLASS B
                                          ---------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED                                             MAY 31, 1994
                                            APRIL 30,          YEAR ENDED OCTOBER 31,         (COMMENCEMENT OF
                                              1998       -----------------------------------   OPERATIONS) TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)    1995 (D)    OCTOBER 31, 1994
                                          -------------  ----------  ----------  -----------  -----------------
<S>                                       <C>            <C>         <C>         <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   16.97    $   14.06   $   11.83    $   11.60       $   11.43
                                          -------------  ----------  ----------  -----------  -----------------
Income from investment operations:
  Net investment income (loss)..........        (0.02)       (0.04)      (0.01) *       0.11* *          0.00* * *
  Net realized and unrealized gain on
   investments..........................         3.47         3.94        2.34         0.12            0.17
                                          -------------  ----------  ----------  -----------  -----------------
    Net increase from investment
     operations.........................         3.45         3.90        2.33         0.23            0.17
                                          -------------  ----------  ----------  -----------  -----------------
Distributions to shareholders:
  From net investment income............           --           --       (0.09)          --              --
  From net realized gain on
   investments..........................        (0.61)       (0.99)      (0.01)          --              --
                                          -------------  ----------  ----------  -----------  -----------------
    Total distributions.................        (0.61)       (0.99)      (0.10)          --              --
                                          -------------  ----------  ----------  -----------  -----------------
Net asset value, end of period..........    $   19.81    $   16.97   $   14.06    $   11.83       $   11.60
                                          -------------  ----------  ----------  -----------  -----------------
                                          -------------  ----------  ----------  -----------  -----------------
 
Total investment return (c).............        21.02%(b)     29.13%     19.81%        1.98%           1.49% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  64,747    $  47,585   $   9,886    $   4,548       $   2,235
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......        (0.25)%(a)     (0.27)%     (0.09)%       0.96%          0.16% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (0.30)%(a)     (0.34)%     (1.16)%      (5.84)%         (7.76)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         2.48%(a)      2.79%      2.82%        2.84%           2.90% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.53%(a)      2.86%      3.89%        9.64%          10.82% (a)
Portfolio turnover rate++...............          106%(a)        91%       103%         170%             53% (a)
Average commission rate per share paid
 on portfolio transactions++............    $  0.0015    $  0.0014   $  0.0080          N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.13 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.59, $0.59
     and $0.30 for Class A, Class B and Advisor Class, respectively.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.23 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-35
<PAGE>   1679
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
 
<TABLE>
<CAPTION>
                                                           FINANCIAL SERVICES FUND
                                          ---------------------------------------------------------
                                                               ADVISOR CLASS+
                                          ---------------------------------------------------------
                                           SIX MONTHS
                                              ENDED      YEAR ENDED OCTOBER 31,     JUNE 1, 1995
                                            APRIL 30,                                    TO
                                              1998       ----------------------     OCTOBER 31,
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)        1995 (D)
                                          -------------  ----------  ----------  ------------------
<S>                                       <C>            <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   17.40    $   14.26   $   11.95       $   11.09
                                          -------------  ----------  ----------       --------
Income from investment operations:
  Net investment income (loss)..........         0.07         0.12        0.12*           0.09* *
  Net realized and unrealized gain on
   investments..........................         3.57         4.01        2.36            0.77
                                          -------------  ----------  ----------       --------
    Net increase from investment
     operations.........................         3.64         4.13        2.48            0.86
                                          -------------  ----------  ----------       --------
Distributions to shareholders:
  From net investment income............           --           --       (0.16)             --
  From net realized gain on
   investments..........................        (0.61)       (0.99)      (0.01)             --
                                          -------------  ----------  ----------       --------
    Total distributions.................        (0.61)       (0.99)      (0.17)             --
                                          -------------  ----------  ----------       --------
Net asset value, end of period..........    $   20.43    $   17.40   $   14.26       $   11.95
                                          -------------  ----------  ----------       --------
                                          -------------  ----------  ----------       --------
 
Total investment return (c).............        21.55%(b)     30.52%     20.87%           7.75 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  12,161    $   3,738   $      72       $      31
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         0.75%(a)      0.73%      0.91%           1.96 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         0.70%(a)      0.66%     (0.16)%         (4.84)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.48%(a)      1.79%      1.82%           1.84 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         1.53%(a)      1.86%      2.89%           8.64 % (a)
Portfolio turnover rate++...............          106%(a)        91%       103%            170 %
Average commission rate per share paid
 on portfolio transactions++............    $  0.0015    $  0.0014   $  0.0080             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.13 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.59, $0.59
     and $0.30 for Class A, Class B and Advisor Class, respectively.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.23 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-36
<PAGE>   1680
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
 
<TABLE>
<CAPTION>
                                                                      HEALTH CARE FUND
                                          -------------------------------------------------------------------------
                                                                          CLASS A+
                                          -------------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED
                                            APRIL 30,                      YEAR ENDED OCTOBER 31,
                                              1998       ----------------------------------------------------------
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)      1995      1994 (D)    1993 (D)
                                          -------------  ----------  ----------  ----------  ----------  ----------
<S>                                       <C>            <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   27.98    $   23.60   $   21.84   $   19.60   $   17.86   $   17.44
                                          -------------  ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment loss...................        (0.11)       (0.25)      (0.17)      (0.15)      (0.22)      (0.15)
  Net realized and unrealized gain on
   investments..........................         0.44         6.48        4.79        3.73        2.02        0.57
                                          -------------  ----------  ----------  ----------  ----------  ----------
    Net increase from investment
     operations.........................         0.33         6.23        4.62        3.58        1.80        0.42
                                          -------------  ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net realized gain on
   investments..........................        (6.71)       (1.85)      (2.86)      (1.34)         --          --
  In excess of net realized gain on
   investments..........................           --           --          --          --       (0.06)         --
                                          -------------  ----------  ----------  ----------  ----------  ----------
    Total distributions.................        (6.71)       (1.85)      (2.86)      (1.34)      (0.06)         --
                                          -------------  ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........    $   21.60    $   27.98   $   23.60   $   21.84   $   19.60   $   17.86
                                          -------------  ----------  ----------  ----------  ----------  ----------
                                          -------------  ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............         2.15%(b)     28.36%     23.14%      19.79%      10.11%        2.4%
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $ 427,300    $ 472,083   $ 467,861   $ 426,380   $ 438,940   $ 461,113
Ratio of net investment loss to average
 net assets:
  With expense reductions (Notes 1 &
   5)...................................        (1.06)%(a)     (1.00)%     (0.71)%     (0.72)%     (1.23)%      (0.9)%
  Without expense reductions............        (1.07)%(a)     (1.03)%     (0.75)%     (0.78)%       N/A       N/A
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         1.80%(a)      1.77%      1.80%       1.85%       1.98%        2.0%
  Without expense reductions............         1.81%(a)      1.80%      1.84%       1.91%        N/A         N/A
Portfolio turnover rate++++.............          156%(a)       149%       157%         99%         64%         61%
Average commission rate per share paid
 on portfolio transactions++++..........    $  0.0561    $  0.0490   $  0.0548         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  All capital shares issued and outstanding as of March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-37
<PAGE>   1681
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
 
<TABLE>
<CAPTION>
                                                                          HEALTH CARE FUND
                                          --------------------------------------------------------------------------------
                                                                             CLASS B++
                                          --------------------------------------------------------------------------------
                                           SIX MONTHS
                                             ENDED                                                        APRIL 1, 1993
                                           APRIL 30,                YEAR ENDED OCTOBER 31,                      TO
                                              1998      ----------------------------------------------     OCTOBER 31,
                                          (UNAUDITED)    1997 (D)    1996 (D)      1995      1994 (D)        1993 (D)
                                          ------------  ----------  ----------  ----------  ----------  ------------------
<S>                                       <C>           <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $   27.27    $   23.15   $   21.56   $   19.46   $   17.80       $   15.59
                                          ------------  ----------  ----------  ----------  ----------       --------
Income from investment operations:
  Net investment loss...................       (0.16)       (0.37)      (0.27)      (0.25)      (0.32)          (0.14)
  Net realized and unrealized gain on
   investments..........................        0.42         6.34        4.72        3.69        2.02            2.35
                                          ------------  ----------  ----------  ----------  ----------       --------
    Net increase from investment
     operations.........................        0.26         5.97        4.45        3.44        1.70            2.21
                                          ------------  ----------  ----------  ----------  ----------       --------
Distributions to shareholders:
  From net realized gain on
   investments..........................       (6.71)       (1.85)      (2.86)      (1.34)         --              --
  In excess of net realized gain on
   investments..........................          --           --          --          --       (0.04)             --
                                          ------------  ----------  ----------  ----------  ----------       --------
    Total distributions.................       (6.71)       (1.85)      (2.86)      (1.34)      (0.04)             --
                                          ------------  ----------  ----------  ----------  ----------       --------
Net asset value, end of period..........   $   20.82    $   27.27   $   23.15   $   21.56   $   19.46       $   17.80
                                          ------------  ----------  ----------  ----------  ----------       --------
                                          ------------  ----------  ----------  ----------  ----------       --------
 
Total investment return (c).............        1.89 %(b)     27.75%     22.59%     19.17%       9.55%           14.2 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $ 121,735    $ 147,440   $ 107,622   $  70,740   $  39,100       $   8,604
Ratio of net investment loss to average
 net assets:
  With expense reductions (Notes 1 &
   5)...................................       (1.56)%(a)     (1.50)%     (1.21)%     (1.22)%     (1.73)%          (1.4)% (a)
  Without expense reductions............       (1.57)%(a)     (1.53)%     (1.25)%     (1.28)%       N/A           N/A
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................        2.30 %(a)      2.27%      2.30%      2.35%       2.48%           2.50 % (a)
  Without expense reductions............        2.31 %(a)      2.30%      2.34%      2.41%        N/A             N/A
Portfolio turnover rate++++.............         156 %(a)       149%       157%        99%         64%             61 %
Average commission rate per share paid
 on portfolio transactions++++..........   $  0.0561    $  0.0490   $  0.0548         N/A         N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  All capital shares issued and outstanding as of March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-38
<PAGE>   1682
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
 
<TABLE>
<CAPTION>
                                                             HEALTH CARE FUND
                                          -------------------------------------------------------
                                                             ADVISOR CLASS+++
                                          -------------------------------------------------------
                                           SIX MONTHS
                                              ENDED            YEAR ENDED
                                            APRIL 30,         OCTOBER 31,          JUNE 1, 1995
                                              1998       ----------------------         TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)   OCTOBER 31, 1995
                                          -------------  ----------  ----------  ----------------
<S>                                       <C>            <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   28.34    $   23.77   $   21.88      $   18.66
                                          -------------  ----------  ----------      --------
Income from investment operations:
  Net investment loss...................        (0.05)       (0.12)      (0.05)         (0.02)
  Net realized and unrealized gain on
   investments..........................         0.44         6.54        4.80           3.24
                                          -------------  ----------  ----------      --------
    Net increase from investment
     operations.........................         0.39         6.42        4.75           3.22
                                          -------------  ----------  ----------      --------
Distributions to shareholders:
  From net realized gain on
   investments..........................        (6.71)       (1.85)      (2.86)            --
  In excess of net realized gain on
   investments..........................           --           --          --             --
                                          -------------  ----------  ----------      --------
    Total distributions.................        (6.71)       (1.85)      (2.86)            --
                                          -------------  ----------  ----------      --------
Net asset value, end of period..........    $   22.02    $   28.34   $   23.77      $   21.88
                                          -------------  ----------  ----------      --------
                                          -------------  ----------  ----------      --------
 
Total investment return (c).............         2.37%(b)     29.00%     23.82%         17.10 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $   9,699    $   6,819   $   1,152      $     539
Ratio of net investment loss to average
 net assets:
  With expense reductions (Notes 1 &
   5)...................................        (0.56)%(a)     (0.50)%     (0.21)%        (0.22)% (a)
  Without expense reductions............        (0.57)%(a)     (0.53)%     (0.25)%        (0.28)% (a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         1.30%(a)      1.27%      1.30%          1.35 % (a)
  Without expense reductions............         1.31%(a)      1.30%      1.34%          1.41 % (a)
Portfolio turnover rate++++.............          156%(a)       149%       157%            99 % (a)
Average commission rate per share paid
 on portfolio transactions++++..........    $  0.0561    $  0.0490   $  0.0548            N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  All capital shares issued and outstanding as of March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-39
<PAGE>   1683
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                  INFRASTRUCTURE FUND
                                          --------------------------------------------------------------------
                                                                        CLASS A
                                          --------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED                                            MAY 31, 1994
                                            APRIL 30,          YEAR ENDED OCTOBER 31,        (COMMENCEMENT OF
                                              1998       ----------------------------------   OPERATIONS) TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)      1995     OCTOBER 31, 1994
                                          -------------  ----------  ----------  ----------  -----------------
<S>                                       <C>            <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   15.01    $   14.42   $   12.11   $   12.47       $   11.43
                                          -------------  ----------  ----------  ----------  -----------------
Income from investment operations:
  Net investment income (loss)..........         0.03*       (0.01)      (0.03)      (0.03) **          0.01* * *
  Net realized and unrealized gain
   (loss) on investments................         1.50         1.32        2.34       (0.33)           1.03
                                          -------------  ----------  ----------  ----------  -----------------
    Net increase (decrease) from
     investment operations..............         1.53         1.31        2.31       (0.36)           1.04
                                          -------------  ----------  ----------  ----------  -----------------
Distributions to shareholders:
  From net realized gain on
   investments..........................        (0.11)       (0.72)         --          --              --
                                          -------------  ----------  ----------  ----------  -----------------
    Total distributions.................        (0.11)       (0.72)         --          --              --
                                          -------------  ----------  ----------  ----------  -----------------
Net asset value, end of period..........    $   16.43    $   15.01   $   14.42   $   12.11       $   12.47
                                          -------------  ----------  ----------  ----------  -----------------
                                          -------------  ----------  ----------  ----------  -----------------
 
Total investment return (c).............        10.29%(b)      9.38%     19.08%      (2.89)%          9.10% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  33,287    $  38,281   $  38,397   $  36,241       $  23,615
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         0.51%(a)     (0.09)%     (0.19)%     (0.32)%          0.41% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         0.32%(a)     (0.17)%     (0.30)%     (0.58)%         (0.47)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.99%(a)      2.00%      2.14%       2.36%           2.40% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.18%(a)      2.08%      2.25%       2.62%           3.28% (a)
Portfolio turnover rate++...............           95%(a)        41%        41%         45%             18%
Average commission rate per share paid
 on portfolio transactions..............    $  0.0148    $  0.0046   $  0.0109         N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.01 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.03 for Class
     A shares, $0.03 for Class B shares, and $0.02 for Advisor Class
     shares.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.02 for Class
     A and Class B from May 31, 1994 to October 31, 1994.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-40
<PAGE>   1684
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                  INFRASTRUCTURE FUND
                                          --------------------------------------------------------------------
                                                                        CLASS B
                                          --------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED                                            MAY 31, 1994
                                            APRIL 30,          YEAR ENDED OCTOBER 31,        (COMMENCEMENT OF
                                              1998       ----------------------------------   OPERATIONS) TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)      1995     OCTOBER 31, 1994
                                          -------------  ----------  ----------  ----------  -----------------
<S>                                       <C>            <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   14.75    $   14.24   $   12.03   $   12.45       $   11.43
                                          -------------  ----------  ----------  ----------  -----------------
Income from investment operations:
  Net investment income (loss)..........           --*       (0.09)      (0.09)      (0.09) **         (0.01) * * *
  Net realized and unrealized gain
   (loss) on investments................         1.46         1.32        2.30       (0.33)           1.03
                                          -------------  ----------  ----------  ----------  -----------------
    Net increase (decrease) from
     investment operations..............         1.46         1.23        2.21       (0.42)           1.02
                                          -------------  ----------  ----------  ----------  -----------------
Distributions to shareholders:
  From net realized gain on
   investments..........................        (0.11)       (0.72)         --          --              --
                                          -------------  ----------  ----------  ----------  -----------------
    Total distributions.................        (0.11)       (0.72)         --          --              --
                                          -------------  ----------  ----------  ----------  -----------------
Net asset value, end of period..........    $   16.10    $   14.75   $   14.24   $   12.03       $   12.45
                                          -------------  ----------  ----------  ----------  -----------------
                                          -------------  ----------  ----------  ----------  -----------------
 
Total investment return (c).............         9.99%(b)      8.83%     18.37%      (3.37)%          8.92% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  47,177    $  57,199   $  53,678   $  50,181       $  30,954
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         0.01%(a)     (0.59)%     (0.69)%     (0.82)%         (0.09)% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (0.18)%(a)     (0.67)%     (0.80)%     (1.08)%         (0.97)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         2.49%(a)      2.50%      2.64%       2.86%           2.90% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.68%(a)      2.58%      2.75%       3.12%           3.78% (a)
Portfolio turnover rate++...............           95%(a)        41%        41%         45%             18%
Average commission rate per share paid
 on portfolio transactions..............    $  0.0148    $  0.0046   $  0.0109         N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.01 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.03 for Class
     A shares, $0.03 for Class B shares, and $0.02 for Advisor Class
     shares.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.02 for Class
     A and Class B from May 31, 1994 to October 31, 1994.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-41
<PAGE>   1685
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)

- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                            INFRASTRUCTURE FUND
                                          -------------------------------------------------------
                                                              ADVISOR CLASS+
                                          -------------------------------------------------------
                                           SIX MONTHS
                                              ENDED      YEAR ENDED OCTOBER 31,
                                            APRIL 30,                              JUNE 1, 1995
                                              1998       ----------------------         TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)   OCTOBER 31, 1995
                                          -------------  ----------  ----------  ----------------
<S>                                       <C>            <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   15.23    $   14.52   $   12.14      $   12.00
                                          -------------  ----------  ----------      --------
Income from investment operations:
  Net investment income (loss)..........         0.08*        0.05        0.04           0.02* *
  Net realized and unrealized gain
   (loss) on investments................         1.51         1.38        2.34           0.12
                                          -------------  ----------  ----------      --------
    Net increase (decrease) from
     investment operations..............         1.59         1.43        2.38           0.14
                                          -------------  ----------  ----------      --------
Distributions to shareholders:
  From net realized gain on
   investments..........................        (0.11)       (0.72)         --             --
                                          -------------  ----------  ----------      --------
    Total distributions.................        (0.11)       (0.72)         --             --
                                          -------------  ----------  ----------      --------
Net asset value, end of period..........    $   16.71    $   15.23   $   14.52      $   12.14
                                          -------------  ----------  ----------      --------
                                          -------------  ----------  ----------      --------
 
Total investment return (c).............        10.53%(b)     10.10%     19.60%          1.17 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $   9,347    $   2,539   $     344      $     216
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.01%(a)      0.41%      0.31%          0.18 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         0.82%(a)      0.33%      0.20%         (0.08)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.49%(a)      1.50%      1.64%          1.86 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         1.68%(a)      1.58%      1.75%          2.12 % (a)
Portfolio turnover rate++...............           95%(a)        41%        41%            45 %
Average commission rate per share paid
 on portfolio transactions..............    $  0.0148    $  0.0046   $  0.0109            N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.01 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.03 for Class
     A shares, $0.03 for Class B shares, and $0.02 for Advisor Class
     shares.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.02 for Class
     A and Class B from May 31, 1994 to October 31, 1994.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-42
<PAGE>   1686
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                     RESOURCES FUND
                                          --------------------------------------------------------------------
                                                                        CLASS A
                                          --------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED                                            MAY 31, 1994
                                            APRIL 30,          YEAR ENDED OCTOBER 31,        (COMMENCEMENT OF
                                              1998       ----------------------------------   OPERATIONS) TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)      1995     OCTOBER 31, 1994
                                          -------------  ----------  ----------  ----------  -----------------
<S>                                       <C>            <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   20.65    $   17.43   $   11.44   $   12.41       $   11.43
                                          -------------  ----------  ----------  ----------  -----------------
Income from investment operations:
  Net investment income (loss)..........        (0.10) *     (0.25)      (0.24)       0.04* *          0.06* * *
  Net realized and unrealized gain
   (loss) on investments................        (4.31)        4.08        6.28       (0.98)           0.92
                                          -------------  ----------  ----------  ----------  -----------------
    Net increase (decrease) from
     investment operations..............        (4.41)        3.83        6.04       (0.94)           0.98
                                          -------------  ----------  ----------  ----------  -----------------
Distributions to shareholders:
  From net investment income............           --           --       (0.04)      (0.03)             --
  From net realized gain on
   investments..........................        (0.68)       (0.61)      (0.01)         --              --
                                          -------------  ----------  ----------  ----------  -----------------
    Total distributions.................        (0.68)       (0.61)      (0.05)      (0.03)             --
                                          -------------  ----------  ----------  ----------  -----------------
Net asset value, end of period..........    $   15.56    $   20.65   $   17.43   $   11.44       $   12.41
                                          -------------  ----------  ----------  ----------  -----------------
                                          -------------  ----------  ----------  ----------  -----------------
 
Total investment return (c).............       (21.88)%(b)     22.64%     53.04%     (7.58)%          8.57% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  42,093    $  69,975   $  48,729   $  12,598       $  14,797
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......        (1.14)%(a)     (1.41)%     (1.55)%      0.41%          2.63% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (1.32)%(a)     (1.51)%     (1.65)%     (0.69)%          0.65% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.99%(a)      2.03%      2.20%       2.37%           2.40% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.17%(a)      2.13%      2.30%       3.47%           4.38% (a)
Portfolio turnover rate++...............          197%(a)       321%        94%         87%            137%
Average commission rate per share paid
 on portfolio transactions++............    $  0.0245    $  0.0112   $  0.0243         N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.01 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income (loss) per share would have been reduced (increased)
     by $0.14, $0.13, and $0.12 for Class A, Class B, and Advisor Class,
     respectively.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.04 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-43
<PAGE>   1687
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                     RESOURCES FUND
                                          --------------------------------------------------------------------
                                                                        CLASS B
                                          --------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED                                            MAY 31, 1994
                                            APRIL 30,          YEAR ENDED OCTOBER 31,        (COMMENCEMENT OF
                                              1998       ----------------------------------   OPERATIONS) TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)      1995     OCTOBER 31, 1994
                                          -------------  ----------  ----------  ----------  -----------------
<S>                                       <C>            <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   20.37    $   17.29   $   11.36   $   12.38       $   11.43
                                          -------------  ----------  ----------  ----------  -----------------
Income from investment operations:
  Net investment income (loss)..........        (0.14) *     (0.33)      (0.31)      (0.02) **          0.03* * *
  Net realized and unrealized gain
   (loss) on investments................        (4.24)        4.02        6.25       (0.98)           0.92
                                          -------------  ----------  ----------  ----------  -----------------
    Net increase (decrease) from
     investment operations..............        (4.38)        3.69        5.94       (1.00)           0.95
                                          -------------  ----------  ----------  ----------  -----------------
Distributions to shareholders:
  From net investment income............           --           --          --       (0.02)             --
  From net realized gain on
   investments..........................        (0.68)       (0.61)      (0.01)         --              --
                                          -------------  ----------  ----------  ----------  -----------------
    Total distributions.................        (0.68)       (0.61)      (0.01)      (0.02)             --
                                          -------------  ----------  ----------  ----------  -----------------
Net asset value, end of period..........    $   15.31    $   20.37   $   17.29   $   11.36       $   12.38
                                          -------------  ----------  ----------  ----------  -----------------
                                          -------------  ----------  ----------  ----------  -----------------
 
Total investment return (c).............       (22.03)%(b)     21.99%     52.39%     (8.05)%          8.31% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $  52,210    $  86,812   $  57,749   $  13,978       $  13,404
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......        (1.64)%(a)     (1.91)%     (2.05)%     (0.09)%          2.13% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (1.82)%(a)     (2.01)%     (2.15)%     (1.19)%          0.15% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         2.49%(a)      2.53%      2.70%       2.87%           2.90% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.67%(a)      2.63%      2.80%       3.97%           4.88% (a)
Portfolio turnover rate++...............          197%(a)       321%        94%         87%            137%
Average commission rate per share paid
 on portfolio transactions++............    $  0.0245    $  0.0112   $  0.0243         N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.01 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income (loss) per share would have been reduced (increased)
     by $0.14, $0.13, and $0.12 for Class A, Class B, and Advisor Class,
     respectively.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.04 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-44
<PAGE>   1688
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                              RESOURCES FUND
                                          -------------------------------------------------------
                                                              ADVISOR CLASS+
                                          -------------------------------------------------------
                                           SIX MONTHS
                                              ENDED      YEAR ENDED OCTOBER 31,
                                            APRIL 30,                              JUNE 1, 1995
                                              1998       ----------------------         TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)   OCTOBER 31, 1995
                                          -------------  ----------  ----------  ----------------
<S>                                       <C>            <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   20.80    $   17.47   $   11.47      $   11.45
                                          -------------  ----------  ----------      --------
Income from investment operations:
  Net investment income (loss)..........        (0.06) *     (0.14)      (0.17)          0.11* *
  Net realized and unrealized gain
   (loss) on investments................        (4.36)        4.08        6.28          (0.09)
                                          -------------  ----------  ----------      --------
    Net increase (decrease) from
     investment operations..............        (4.42)        3.94        6.11           0.02
                                          -------------  ----------  ----------      --------
Distributions to shareholders:
  From net investment income............           --           --       (0.10)            --
  From net realized gain on
   investments..........................        (0.68)       (0.61)      (0.01)            --
                                          -------------  ----------  ----------      --------
    Total distributions.................        (0.68)       (0.61)      (0.11)            --
                                          -------------  ----------  ----------      --------
Net asset value, end of period..........    $   15.70    $   20.80   $   17.47      $   11.47
                                          -------------  ----------  ----------      --------
                                          -------------  ----------  ----------      --------
 
Total investment return (c).............       (21.76)%(b)     23.23%     53.76%         0.17 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $   7,337    $  14,886   $   5,502      $      95
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......        (0.64)%(a)     (0.91)%     (1.05)%         0.91 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (0.82)%(a)     (1.01)%     (1.15)%        (0.19)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.49%(a)      1.53%      1.70%          1.87 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         1.67%(a)      1.63%      1.80%          2.97 % (a)
Portfolio turnover rate++...............          197%(a)       321%        94%            87 %
Average commission rate per share paid
 on portfolio transactions++............    $  0.0245    $  0.0112   $  0.0243            N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.01 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income (loss) per share would have been reduced (increased)
     by $0.14, $0.13, and $0.12 for Class A, Class B, and Advisor Class,
     respectively.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.04 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-45
<PAGE>   1689
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                   TELECOMMUNICATIONS FUND
                                          -------------------------------------------------------------------------
                                                                          CLASS A+
                                          -------------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED
                                            APRIL 30,                      YEAR ENDED OCTOBER 31,
                                              1998       ----------------------------------------------------------
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)      1995      1994 (D)      1993
                                          -------------  ----------  ----------  ----------  ----------  ----------
<S>                                       <C>            <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   18.04    $   16.69   $   16.42   $   17.80   $   16.92   $   11.16
                                          -------------  ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income (loss)..........        (0.09)       (0.17)      (0.13)      (0.09)      (0.01)       0.08
  Net realized and unrealized gain
   (loss) on investments................         3.30         2.93        1.22       (0.43)       1.17        5.83
                                          -------------  ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............         3.21         2.76        1.09       (0.52)       1.16        5.91
                                          -------------  ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............           --           --          --          --       (0.01)      (0.15)
  From net realized gain on
   investments..........................        (1.20)       (1.41)      (0.82)      (0.86)      (0.27)         --
                                          -------------  ----------  ----------  ----------  ----------  ----------
    Total distributions.................        (1.20)       (1.41)      (0.82)      (0.86)      (0.28)      (0.15)
                                          -------------  ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........    $   20.05    $   18.04   $   16.69   $   16.42   $   17.80   $   16.92
                                          -------------  ----------  ----------  ----------  ----------  ----------
                                          -------------  ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............        19.19%(b)     17.70%      7.00%      (2.88)%      7.02%      53.60%
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $ 969,857    $ 910,801   $1,204,428  $1,353,722  $1,644,402  $1,223,340
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions (Notes 1 &
   5)...................................        (1.08)%(a)     (1.01)%     (0.84)%     (0.49)%     (0.02)%      0.80%
  Without expense reductions............        (1.09)%(a)     (1.06)%     (0.89)%     (0.55)%       N/A       N/A
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         1.87%(a)      1.79%      1.74%       1.77%       1.80%        2.0%
  Without expense reductions............         1.88%(a)      1.84%      1.79%       1.83%        N/A         N/A
Portfolio turnover rate++++.............           56%(a)        35%        37%         62%         57%         41%
Average commission rate per share paid
 on portfolio transactions++++..........    $  0.0045    $  0.0085   $  0.0165         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charge.
 (d) These selected per share data were calculated based upon the average
     shares outstanding during the period.
  +  All capital shares issued and outstanding March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-46
<PAGE>   1690
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                     TELECOMMUNICATIONS FUND
                                          -----------------------------------------------------------------------------
                                                                            CLASS B++
                                          -----------------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED                                                      APRIL 1, 1993
                                            APRIL 30,                YEAR ENDED OCTOBER 31,                    TO
                                              1998       ----------------------------------------------   OCTOBER 31,
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)      1995      1994 (D)        1993
                                          -------------  ----------  ----------  ----------  ----------  --------------
<S>                                       <C>            <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   17.58    $   16.37   $   16.20   $   17.66   $   16.87     $   12.68
                                          -------------  ----------  ----------  ----------  ----------  --------------
Income from investment operations:
  Net investment income (loss)..........        (0.13)       (0.25)      (0.23)      (0.17)      (0.10)         0.01
  Net realized and unrealized gain
   (loss) on investments................         3.20         2.87        1.22       (0.43)       1.17          4.18
                                          -------------  ----------  ----------  ----------  ----------  --------------
    Net increase (decrease) from
     investment operations..............         3.07         2.62        0.99       (0.60)       1.07          4.19
                                          -------------  ----------  ----------  ----------  ----------  --------------
Distributions to shareholders:
  From net investment income............           --           --          --          --       (0.01)           --
  From net realized gain on
   investments..........................        (1.20)       (1.41)      (0.82)      (0.86)      (0.27)           --
                                          -------------  ----------  ----------  ----------  ----------  --------------
    Total distributions.................        (1.20)       (1.41)      (0.82)      (0.86)      (0.28)           --
                                          -------------  ----------  ----------  ----------  ----------  --------------
Net asset value, end of period..........    $   19.45    $   17.58   $   16.37   $   16.20   $   17.66     $   16.87
                                          -------------  ----------  ----------  ----------  ----------  --------------
                                          -------------  ----------  ----------  ----------  ----------  --------------
 
Total investment return (c).............        18.88%(b)     17.15%      6.46%      (3.37)%      6.50%         33.0 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $ 837,576    $ 805,535   $1,007,654  $1,111,520  $1,184,081    $ 455,335
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions (Notes 1 &
   5)...................................        (1.58)%(a)     (1.51)%     (1.34)%     (0.99)%     (0.52)%         0.3 %(a)
  Without expense reductions............        (1.59)%(a)     (1.56)%     (1.39)%     (1.05)%       N/A         N/A
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         2.37%(a)      2.29%      2.24%       2.27%       2.30%         2.50 %(a)
  Without expense reductions............         2.38%(a)      2.34%      2.29%       2.33%        N/A           N/A
Portfolio turnover rate++++.............           56%(a)        35%        37%         62%         57%           41 %
Average commission rate per share paid
 on portfolio transactions++++..........    $  0.0045    $  0.0085   $  0.0165         N/A         N/A           N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charge.
 (d) These selected per share data were calculated based upon the average
     shares outstanding during the period.
  +  All capital shares issued and outstanding March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-47
<PAGE>   1691
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                          TELECOMMUNICATIONS FUND
                                          -------------------------------------------------------
                                                             ADVISOR CLASS+++
                                          -------------------------------------------------------
                                           SIX MONTHS
                                              ENDED      YEAR ENDED OCTOBER 31,
                                            APRIL 30,                              JUNE 1, 1995
                                              1998       ----------------------         TO
                                          (UNAUDITED) (D)  1997 (D)   1996 (D)   OCTOBER 31, 1995
                                          -------------  ----------  ----------  ----------------
<S>                                       <C>            <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   18.28    $   16.81   $   16.46      $   15.24
                                          -------------  ----------  ----------      --------
Income from investment operations:
  Net investment income (loss)..........        (0.04)       (0.09)      (0.05)            --
  Net realized and unrealized gain
   (loss) on investments................         3.36         2.97        1.22           1.22
                                          -------------  ----------  ----------      --------
    Net increase (decrease) from
     investment operations..............         3.32         2.88        1.17           1.22
                                          -------------  ----------  ----------      --------
Distributions to shareholders:
  From net investment income............           --           --          --             --
  From net realized gain on
   investments..........................        (1.20)       (1.41)      (0.82)            --
                                          -------------  ----------  ----------      --------
    Total distributions.................        (1.20)       (1.41)      (0.82)            --
                                          -------------  ----------  ----------      --------
Net asset value, end of period..........    $   20.40    $   18.28   $   16.81      $   16.46
                                          -------------  ----------  ----------      --------
                                          -------------  ----------  ----------      --------
 
Total investment return (c).............        19.56%(b)     18.33%      7.49%          7.94 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $   8,351    $   4,783   $     945      $     681
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions (Notes 1 &
   5)...................................        (0.58)%(a)     (0.51)%     (0.34)%         0.01 % (a)
  Without expense reductions............        (0.59)%(a)     (0.56)%     (0.39)%         0.07 % (a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         1.37%(a)      1.29%      1.24%          1.27 % (a)
  Without expense reductions............         1.38%(a)      1.34%      1.29%          1.33 % (a)
Portfolio turnover rate++++.............           56%(a)        35%        37%            62 %
Average commission rate per share paid
 on portfolio transactions++++..........    $  0.0045    $  0.0085   $  0.0165            N/A
</TABLE>
 
- - ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charge.
 (d) These selected per share data were calculated based upon the average
     shares outstanding during the period.
  +  All capital shares issued and outstanding March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-48
<PAGE>   1692
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
The following Notes to Financial Statements are for the period ending April 30,
1998, and unless otherwise indicated reflect facts as of that date. Please see
"Note 7 -- Subsequent Events" for a discussion of certain changes which took
place after April 30, 1998.
 
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 7)
GT Global Consumer Products and Services Fund, GT Global Financial Services
Fund, GT Global Health Care Fund, GT Global Infrastructure Fund, GT Global
Natural Resources Fund and GT Global Telecommunications Fund ("Funds") are
separate series of G.T. Investment Funds, Inc. ("Company"). Effective June 1,
1998, the Company was renamed AIM Investment Funds, Inc. and these six separate
series were renamed as follows: AIM Global Consumer Products and Services Fund,
AIM Global Financial Services Fund, AIM Global Health Care Fund, AIM Global
Infrastructure Fund, AIM Global Resources Fund and AIM Global Telecommunications
Fund, respectively. Collectively, these Funds are now known as the "AIM Global
Theme Funds." The Company is organized as a Maryland corporation and is
registered under the Investment Company Act of 1940, as amended ("1940 Act"), as
an open-end management investment company. The Company has thirteen series of
shares in operation, each series corresponding to a distinct portfolio of
investments.
 
The GT Global Consumer Products and Services Fund, GT Global Financial Services
Fund, GT Global Infrastructure Fund, and GT Global Natural Resources Fund each
invests substantially all of its investable assets in Global Consumer Products
and Services Portfolio, Global Financial Services Portfolio, Global
Infrastructure Portfolio, and Global Natural Resources Portfolio ("Portfolios"),
respectively. Each Portfolio is organized as a subtrust of a New York common law
trust ("Trust") and is registered under the 1940 Act as an open-end management
investment company.
 
The Portfolios have investment objectives, policies, and limitations
substantially identical to those of their corresponding Funds. Therefore, the
financial statements of the aformentioned Funds and their respective Portfolios
have been presented on a consolidated basis, and represent all activities of
both the respective Funds and Portfolios. Through April 30, 1998, all of the
shares of beneficial interest of each Portfolio were owned by either its
respective Fund or Chancellor LGT Asset Management, Inc. (the "Manager"), which
has a nominal ($100) investment in each Portfolio.
 
The Funds offer Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges except that Class A and Class B
each has exclusive voting rights with respect to its distribution plan.
Investment income, realized and unrealized capital gains and losses, and the
common expenses of each Fund are allocated on a pro rata basis to each class
based on the relative net assets of each class to the total net assets of the
Fund. Each class of shares differs in its respective service and distribution
expenses, and may differ in its transfer agent, registration, and certain other
class-specific fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
 
(A) PORTFOLIO VALUATION
The Funds calculate the net asset value of and complete orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by the Manager to be the
primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments are valued at
amortized cost adjusted for foreign exchange translation and market fluctuation,
if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors or the Trust's Board of Trustees.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors or
the Trusts's Board of Trustees.
 
                                      FS-49
<PAGE>   1693
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of each Fund and Portfolio are maintained in U.S.
dollars. The market values of foreign securities, currency holdings, and other
assets and liabilities are recorded in the books and records of the Funds or
Portfolios (the phrase "Fund or Portfolio" hereinafter includes the GT Global
Health Care Fund, The GT Global Telecommunications Fund, and the four
Portfolios) after translation to U.S. dollars based on the exchange rates on
that day. The cost of each security is determined using historical exchange
rates. Income and withholding taxes are translated at prevailing exchange rates
when earned or incurred.
 
A Fund or Portfolio does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from 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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's or Portfolio's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains or losses arise
from changes in the value of assets and liabilities other than investments in
securities at year end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by a Fund or Portfolio, it is
the Fund's or Portfolio's policy to always receive, as collateral, United States
government securities or other high quality debt securities of which the value,
including accrued interest, is at least equal to the amount to be repaid to the
Fund or Portfolio under each agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund or Portfolio as an unrealized gain or loss.
When the Forward Contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference between the value at the time it was opened
and the value at the time it was closed. Forward Contracts involve market risk
in excess of the amount shown in the Fund's or Portfolio's "Statement of Assets
and Liabilities". A Fund or Portfolio could be exposed to risk if a counterparty
is unable to meet the terms of the contract or if the value of the currency
changes unfavorably. A Fund or Portfolio may enter into Forward Contracts in
connection with planned purchases or sales of securities, or to hedge against
adverse fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When a Fund or Portfolio writes a call or put option, an amount equal to the
premium received is included in the Fund's or Portfolio's "Statement of Assets
and Liabilities" as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market value
of the option. The current market value of an option listed on an exchange is
valued at its last bid price, or, in the case of an over-the-counter option, is
valued at the average of the last bid prices obtained from brokers, unless a
quotation from only one broker is available, in which case only that broker's
price will be used. If an option expires on its stipulated expiration date or if
the Fund or Portfolio enters into a closing purchase transaction, a gain or loss
is realized without regard to any unrealized gain or loss on the underlying
security and the liability related to such option is extinguished. If a written
call option is exercised, a gain or loss is realized from the sale of the
underlying security and the proceeds of the sale are increased by the premium
originally received. If a written put option is exercised, the cost of the
underlying security purchased would be decreased by the premium originally
received. The Fund or Portfolio can write options only on a covered basis,
which, for a call, requires that the Fund or Portfolio hold the underlying
security and, for a put, requires the Fund or Portfolio to set aside cash, U.S.
government securities or other liquid securities in an amount not less than the
exercise price, or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund or Portfolio may use options to manage its
exposure to the stock market and to fluctuations in currency values or interest
rates.
 
The premium paid by the Fund or Portfolio for the purchase of a call or put
option is included in the Fund's or Portfolio's "Statement of Assets and
Liabilities" as an investment and subsequently "marked-to-market" to reflect the
current market value of the option. If an option which the Fund or Portfolio has
purchased expires on the stipulated expiration date, the Fund or Portfolio
realizes a loss in the amount of the cost of the option. If the Fund or
Portfolio enters into a closing sale transaction, the Fund or Portfolio realizes
a gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund or Portfolio
exercises a call option, the cost of the securities acquired by exercising the
call is increased by the premium paid to buy the call. If the Fund or Portfolio
exercises a put option, it realizes a gain or loss from the sale of the
underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund or Portfolio may forego
the opportunity of profit if the market value of the underlying security or
index increases and the option is exercised. The risk in writing a put option is
that the Fund or Portfolio may incur a loss if the market value of the
underlying security or index decreases and the option is exercised. In addition,
there is the risk the Fund or Portfolio may not be able to enter into a closing
transaction because of an illiquid secondary market.
 
                                      FS-50
<PAGE>   1694
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract a
Fund or Portfolio is required to pledge to the broker an amount of cash or
securities equal to the minimum "initial margin" requirements of the exchange on
which the contract is traded. Pursuant to the contract, the Fund or Portfolio
agrees to receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known as
"variation margin" and are recorded by the Fund or Portfolio as unrealized gains
or losses. When the contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed. The potential risk
to the Fund or Portfolio is that the change in value of the underlying
securities may not correlate to the change in value of the contracts. A Fund or
Portfolio may use futures contracts to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out-basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. A Fund or Portfolio may
trade securities on other than normal settlement terms. This may increase the
risk if the other party to the transaction fails to deliver and causes the Fund
or Portfolio to subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At April 30, 1998, stocks with an aggregate value listed below were on loan to
brokers. The loans were secured by cash collateral received by the Funds or
Portfolios:
 
<TABLE>
<CAPTION>
                                                   APRIL 30, 1998             PERIOD ENDED
                                          --------------------------------   APRIL 30, 1998
                                          AGGREGATE VALUE        CASH        --------------
                                              ON LOAN         COLLATERAL     FEES RECEIVED
                                          ---------------   --------------   --------------
<S>                                       <C>               <C>              <C>
Global Consumer Products and Services
 Portfolio..............................   $ 13,868,204      $  14,143,909      $ 17,942
Global Financial Services Portfolio.....      5,524,535          5,830,915        34,910
GT Global Health Care Fund..............     42,191,546         43,020,709        55,507
Global Infrastructure Portfolio.........      2,588,399          2,614,825        18,515
Global Natural Resources Portfolio......      4,703,950          4,758,300        11,469
GT Global Telecommunications Fund.......    252,579,366        258,744,228       609,824
</TABLE>
 
For international securities, cash collateral is received by a Fund or Portfolio
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by a Fund or Portfolio against loaned securities in the
amount at least equal to 102% of the market value of the loaned securities at
the inception of each loan. This collateral must be maintained at not less than
100% of the market value of the loaned securities during the period of the loan.
The cash collateral is invested in a securities lending trust which consists of
a portfolio of high quality short duration securities whose average effective
duration is restricted to 120 days or less.
 
(I) TAXES
It is the intended policy of the Funds and Portfolios to meet the requirements
for qualification as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended ("Code"). It is also the intention of the Funds to make
distributions sufficient to avoid imposition of any excise tax under Section
4982 of the Code. Therefore, no provision has been made for Federal taxes on
income, capital gains, unrealized appreciation of securities held, or exise tax
on income and capital gains.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by each Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 Funds or Portfolios and timing
differences.
 
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the GT Global Consumer Products and Services Fund, GT
Global Financial Services Fund, GT Global Infrastructure Fund, and GT Global
Natural Resources Fund in connection with their organizations, their initial
registration with the Securities and Exchange Commission and with various states
and the initial public offering of its shares aggregated $51,500, $63,100,
$51,500, and $51,500, respectively. These expenses are being amortized on a
straightline basis over a five-year period.
 
(L) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's or Portfolio's investment in emerging
market countries may involve greater risks than investments in more developed
markets and the price of such investments may be volatile. These risks of
investing in foreign and
 
                                      FS-51
<PAGE>   1695
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
emerging markets may include foreign currency exchange rate fluctuations,
perceived credit risk, adverse political and economic developments and possible
adverse foreign government intervention.
 
In addition, each Fund or Portfolio may focus its investments in certain related
consumer products and services, financial services, health care, infrastructure,
natural resources, or telecommunications industries, subjecting the Fund or
Portfolio to greater risk than a fund that is more diversified.
 
(M) INDEXED SECURITIES
A Fund or Portfolio may invest in indexed securities whose value is linked
either directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
 
(N) RESTRICTED SECURITIES
A Fund or Portfolio is permitted to invest in privately placed restricted
securities. These securities may be resold in transactions exempt from
registration or to the public if the securities are registered. Disposal of
these securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) are shown at the end of the Fund's
or Portfolio's Portfolio of Investments.
 
(O) LINE OF CREDIT
Each of the Funds, along with certain other funds ("GT Funds") advised and/or
administered by the Manager, has a line of credit with each of BankBoston and
State Street Bank & Trust Company. The arrangements with the banks allow the GT
Funds to borrow an aggregate maximum amount of $250,000,000. Each of these funds
is limited to borrowing up to 33 1/3% of the value of each Fund's total assets.
On April 30, 1998, there were no outstanding loans.
 
For the period ended April 30, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for GT Global Consumer Products Fund, GT Global Financial Services Fund, GT
Global Health Care Fund, GT Global Natural Resources Fund and GT Global
Telecommunications Fund was $1,170,000, $1,290,000, $746,750, $2,468,082, and
$7,805,222 respectively, with a weighted average interest rate of 6.31%, 6.19%,
6.45%, 6.29%, and 6.22%, respectively. Interest expense for the GT Global
Consumer Products Fund, GT Global Financial Services Fund, GT Global Health Care
Fund, GT Global Natural Resources Fund and GT Global Telecommunications Fund for
the period ended April 30, 1998 was $7,383, $2,214, $536, $21,125 and $24,291,
respectively, and is included in "Other Expenses" on the Statement of
Operations.
 
2. RELATED PARTIES (SEE ALSO NOTE 7)
For the period ended April 30, 1998, Chancellor LGT Asset Management, Inc. was
the Funds' and Portfolios' investment manager and administrator. GT Global
Consumer Products and Services Fund, GT Global Financial Services Fund, GT
Global Infrastructure Fund, and GT Global Natural Resources Fund each pays the
Manager administration fees at the annualized rate of 0.25% of such Fund's
average daily net assets. Each of the Portfolios pays investment management and
administration fees to the Manager at the annualized rate of 0.725% on the first
$500 million of average daily net assets of the Portfolio; 0.70% on the next
$500 million; 0.675% on the next $500 million; and 0.65% on amounts thereafter.
GT Global Health Care Fund and GT Global Telecommunications Fund each pays
investment management and administration fees to the Manager at the annualized
rate of 0.975% on the first $500 million of average daily net assets of the
Fund; 0.95% on the next $500 million; 0.925% on the next $500 million and 0.90%
on amounts thereafter. These fees are computed daily and paid monthly.
 
For the period ended April 30, 1998, GT Global, Inc. ("GT Global"), an affiliate
of the Manager, serves as the Funds' distributor. The Funds offer Class A, Class
B, and Advisor Class shares for purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Funds' current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the period ended April 30, 1998, GT Global retained the
following sales charges: $10,253 for the GT Global Consumer Products and
Services Fund, $7,958 for the GT Global Financial Services Fund, $13,964 for the
GT Global Health Care Fund, $3,173 for the GT Global Infrastructure Fund,
$12,051 for the GT Global Natural Resources Fund, and $38,922 for the GT Global
Telecommunications Fund. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Funds' current prospectus. GT Global collected CDSCs for the
period ended April 30, 1998, as follows: $207 for the GT Global Health Care
Fund, $1,704 for the GT Global Natural Resources Fund, and $28,868 for the GT
Global Telecommunications Fund. GT Global also makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class A
shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global, from its own resources, pays commissions to dealers through
which the sales are made. Certain redemptions of Class B shares made within six
years of purchase are subject to CDSCs, in accordance with the Funds' current
prospectus. For the period ended April 30, 1998, GT Global collected CDSCs in
the amount of: $219,642 for the GT Global Consumer Products and Services Fund,
$114,176 for the GT Global Financial Services Fund, $297,817 for the GT Global
Health Care Fund, $227,499 for the GT Global Infrastructure Fund, $205,833 for
the GT Global Natural Resources Fund, and $1,825,382 for the GT Global
Telecommunications Fund. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
 
Pursuant to the then effective separate distribution plans adopted under 1940
Act Rule 12b-1 by the Company's Board of Directors with
 
                                      FS-52
<PAGE>   1696
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
respect to the Funds' Class A shares ("Class A Plan") and Class B shares ("Class
B Plan"), a Fund reimbursed GT Global for a portion of its shareholder servicing
and distributions expenses. Under that Class A Plan, a Fund was permitted to pay
GT Global a service fee at the annualized rate of up to 0.25% of the average
daily net assets of the Fund's Class A shares for GT Global's expenditures
incurred in servicing and maintaining shareholder accounts, and was permitted to
pay GT Global a distribution fee at the annualized rate of up to 0.50% of the
average daily net assets of the Fund's Class A shares, less any amounts paid by
the Fund as the aforementioned service fee, for GT Global's expenditures
incurred in providing services as distributor. All expenses for which GT Global
was reimbursed under the Class A Plan would have been incurred within one year
of such reimbursement.
 
For the period ended April 30, 1998, pursuant to that Class B Plan, a Fund was
permitted to pay GT Global a service fee at the annualized rate of up to 0.25%
of the average daily net assets of the Fund's Class B shares for GT Global's
expenditures incurred in servicing and maintaining shareholder accounts, and was
permitted to pay GT Global a distribution fee at the annualized rate of up to
0.75% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually were permitted to be
carried forward for reimbursement in subsequent years as long as that Plan
continued in effect.
 
The Manager and GT Global voluntarily undertook to limit each Fund's expenses
(exclusive of brokerage commissions, taxes, interest, and extraordinary expense)
to the maximum annual rate of 2.00%, 2.50%, and 1.50% of the average daily net
assets of the Fund's Class A, Class B, and Advisor Class shares, respectively.
If necessary, this limitation will be effected by waivers by the Manager of
investment management fees, waivers by GT Global of payments under the Class A
Plan and/or Class B Plan and/or reimbursements by the Manager or GT Global of
portions of the Fund's other operating expenses.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Funds. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Funds for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
The Manager is the pricing and accounting agent for the Funds and Portfolios.
The monthly fee for these services to the Manager is a percentage, not to exceed
0.03% annually, of a Fund or Portfolio's average daily net assets. The annual
fee rate is derived by applying 0.03% to the first $5 billion of assets of all
registered mutual funds advised by the Manager and 0.02% to the assets in excess
of $5 billion and allocating the result according to each Fund's average daily
net assets.
 
The Company pays each Director who is not an employee, officer or director of
the Manager, or any other affiliated company $5,000 per year plus $300 for each
meeting of the board or any committee thereof attended by the Director. Each
Portfolio pays each of its Trustees who is not an employee, officer, or director
of the Manager, GT Global or GT Services $500 per year plus $150 for each
meeting of the board or any committee thereof attended by the Trustee.
 
3. PURCHASES AND SALES OF SECURITIES
The following summarizes purchases and sales of investment securities, other
than short-term investments, by each Fund or Portfolio for the period ended
April 30, 1998:
 
                       PURCHASES AND SALES OF SECURITIES
 
<TABLE>
<CAPTION>
                                                                                            PURCHASES
                                                                                  ------------------------------
PORTFOLIO                                                                         U.S. GOVERNMENT   OTHER ISSUES
- --------------------------------------------------------------------------------  ---------------   ------------
<S>                                                                               <C>               <C>
Global Consumer Products and Services Portfolio.................................   $  4,199,510     $155,523,280
Global Financial Services Portfolio.............................................             --       63,728,759
GT Global Health Care Fund......................................................             --      399,958,793
Global Infrastructure Portfolio.................................................             --       39,969,524
Global Natural Resources Portfolio..............................................             --      110,713,591
GT Global Telecommunications Fund...............................................             --      448,227,983
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                              SALES
                                                                                  ------------------------------
PORTFOLIO                                                                         U.S. GOVERNMENT   OTHER ISSUES
- --------------------------------------------------------------------------------  ---------------   ------------
<S>                                                                               <C>               <C>
Global Consumer Products and Services Portfolio.................................   $         --     $141,592,098
Global Financial Services Portfolio.............................................             --       48,272,178
GT Global Health Care Fund......................................................             --      444,982,304
Global Infrastructure Portfolio.................................................             --       60,993,159
Global Natural Resources Portfolio..............................................             --      151,337,444
GT Global Telecommunications Fund...............................................             --      610,121,125
</TABLE>
 
                                      FS-53
<PAGE>   1697
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
4. CAPITAL SHARES
At April 30, 1998, there were 6,000,000,000 shares of the Company's common stock
authorized, at $0.0001 par value. Of this amount, 400,000,000 were classified as
shares of the GT Global Telecommunications Fund; 400,000,000 were classified as
shares of GT Global Government Income Fund; 200,000,000 were classified as
shares of GT Global Health Care Fund; 200,000,000 were classified as shares of
GT Global Strategic Income Fund; 200,000,000 were classified as shares of GT
Global Developing Markets Fund; 200,000,000 were classified as shares of GT
Global Currency Fund (inactive); 200,000,000 were classified as shares of GT
Global Growth & Income Fund; 200,000,000 were classified as shares of GT Global
Small Companies Fund (inactive); 200,000,000 were classified as shares of GT
Global Latin America Growth Fund; 200,000,000 were classified as shares of GT
Global Emerging Markets Fund; 200,000,000 were classified as shares of GT Global
High Income Fund; 200,000,000 were classified as shares of GT Global Financial
Services Fund; 200,000,000 were classified as shares of GT Global Natural
Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; 200,000,000 were classified as shares of GT Global Consumer
Products and Services Fund. The shares of each of the foregoing series of the
Company were divided equally into two classes, designated Class A and Class B
common stock. With respect to the issuance of Advisor Class shares, 100,000,000
shares were classified as shares of each of the fifteen series of the Company
and designated as Advisor Class common stock. 1,100,000,000 shares remain
unclassified. Transactions in capital shares of the Fund were as follows:
 
                           CAPITAL SHARE TRANSACTIONS
 
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED
                                                          APRIL 30, 1998                 YEAR ENDED
                                                           (UNAUDITED)                OCTOBER 31, 1997
                                                    --------------------------  ----------------------------
CLASS A                                               SHARES        AMOUNT        SHARES         AMOUNT
- --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    1,112,259  $  25,614,280    3,438,964  $    69,880,587
Shares issued in connection with reinvestment of
  distributions...................................      232,566      5,000,187      143,274        2,884,089
                                                    -----------  -------------  -----------  ---------------
                                                      1,344,825     30,614,467    3,582,238       72,764,676
Shares repurchased................................   (1,343,578)   (30,694,267)  (4,424,828)     (88,957,730)
                                                    -----------  -------------  -----------  ---------------
Net increase (decrease)...........................        1,247  $     (79,800)    (842,590) $   (16,193,054)
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
 
<CAPTION>
 
CLASS B
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................      723,496  $  16,399,597    2,703,434  $    53,329,784
Shares issued in connection with reinvestment of
  distributions...................................      327,557      6,925,053      168,859        3,364,713
                                                    -----------  -------------  -----------  ---------------
                                                      1,051,053     23,324,650    2,872,293       56,694,497
Shares repurchased................................     (991,653)   (22,264,517)  (2,802,820)     (55,171,454)
                                                    -----------  -------------  -----------  ---------------
Net increase......................................       59,400  $   1,060,133       69,473  $     1,523,043
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
<CAPTION>
 
ADVISOR CLASS
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................      566,015  $  12,996,998      287,832  $     6,471,623
Shares issued in connection with reinvestment of
  distributions...................................       44,078        962,215       15,186          308,573
                                                    -----------  -------------  -----------  ---------------
                                                        610,093     13,959,213      303,018        6,780,196
Shares repurchased................................     (165,014)    (3,649,509)    (386,341)      (7,704,551)
                                                    -----------  -------------  -----------  ---------------
Net increase (decrease)...........................      445,079  $  10,309,704      (83,323) $      (924,355)
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
</TABLE>
 
                                      FS-54
<PAGE>   1698
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
GT GLOBAL FINANCIAL SERVICES FUND
<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED
                                                          APRIL 30, 1998                 YEAR ENDED
                                                           (UNAUDITED)                OCTOBER 31, 1997
                                                    --------------------------  ----------------------------
CLASS A                                               SHARES        AMOUNT        SHARES         AMOUNT
- --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    2,072,253  $  37,752,666    3,783,353  $    60,418,186
Shares issued in connection with reinvestment of
  distributions...................................       54,738        960,105       35,121          488,531
                                                    -----------  -------------  -----------  ---------------
                                                      2,126,991     38,712,771    3,818,474       60,906,717
Shares repurchased................................   (1,956,651)   (35,515,655)  (2,611,893)     (41,931,634)
                                                    -----------  -------------  -----------  ---------------
Net increase......................................      170,340  $   3,197,116    1,206,581  $    18,975,083
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
 
<CAPTION>
 
CLASS B
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    1,623,641  $  28,918,053    4,102,099  $    64,968,183
Shares issued in connection with reinvestment of
  distributions...................................       76,614      1,322,358       44,922          618,563
                                                    -----------  -------------  -----------  ---------------
                                                      1,700,255     30,240,411    4,147,021       65,586,746
Shares repurchased................................   (1,235,482)   (21,955,270)  (2,045,933)     (32,384,709)
                                                    -----------  -------------  -----------  ---------------
Net increase......................................      464,773  $   8,285,141    2,101,088  $    33,202,037
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
<CAPTION>
 
ADVISOR CLASS
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................      511,558  $   9,122,009      220,956  $     4,021,549
Shares issued in connection with reinvestment of
  distributions...................................       12,688        224,953          359            5,018
                                                    -----------  -------------  -----------  ---------------
                                                        524,246      9,346,962      221,315        4,026,567
Shares repurchased................................     (143,620)    (2,492,661)     (11,568)        (198,290)
                                                    -----------  -------------  -----------  ---------------
Net increase......................................      380,626  $   6,854,301      209,747  $     3,828,277
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
</TABLE>
 
GT GLOBAL HEALTH CARE FUND
<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED
                                                          APRIL 30, 1998                 YEAR ENDED
                                                           (UNAUDITED)                OCTOBER 31, 1997
                                                    --------------------------  ----------------------------
CLASS A                                               SHARES        AMOUNT        SHARES         AMOUNT
- --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................   12,159,063  $ 262,335,545   31,631,342  $   772,292,073
Shares issued in connection with reinvestment of
  distributions...................................    4,211,990     87,483,074    1,208,813       27,043,227
                                                    -----------  -------------  -----------  ---------------
                                                     16,371,053    349,818,619   32,840,155      799,335,300
Shares repurchased................................  (13,457,648)  (291,455,802) (35,792,763)    (876,621,319)
                                                    -----------  -------------  -----------  ---------------
Net increase (decrease)...........................    2,913,405  $  58,362,817   (2,952,608) $   (77,286,019)
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
 
<CAPTION>
 
CLASS B
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    2,458,046  $  52,390,051    6,206,431  $   152,327,079
Shares issued in connection with reinvestment of
  distributions...................................    1,393,867     27,960,984      321,688        7,045,104
                                                    -----------  -------------  -----------  ---------------
                                                      3,851,913     80,351,035    6,528,119      159,372,183
Shares repurchased................................   (3,410,161)   (73,670,320)  (5,770,947)    (142,017,878)
                                                    -----------  -------------  -----------  ---------------
Net increase......................................      441,752  $   6,680,715      757,172  $    17,354,305
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
<CAPTION>
 
ADVISOR CLASS
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    1,545,283  $  34,253,905    1,865,809  $    48,687,774
Shares issued in connection with reinvestment of
  distributions...................................       84,156      1,779,060        2,543           57,375
                                                    -----------  -------------  -----------  ---------------
                                                      1,629,439     36,032,965    1,868,352       48,745,149
Shares repurchased................................   (1,429,554)   (31,730,407)  (1,676,189)     (43,406,078)
                                                    -----------  -------------  -----------  ---------------
Net increase......................................      199,885  $   4,302,558      192,163  $     5,339,071
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
</TABLE>
 
                                      FS-55
<PAGE>   1699
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
GT GLOBAL INFRASTRUCTURE FUND
<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED
                                                          APRIL 30, 1998                 YEAR ENDED
                                                           (UNAUDITED)                OCTOBER 31, 1997
                                                    --------------------------  ----------------------------
CLASS A                                               SHARES        AMOUNT        SHARES         AMOUNT
- --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................      104,931  $   1,616,314    1,282,535  $    19,272,428
Shares issued in connection with reinvestment of
  distributions...................................       16,842        254,490      123,795        1,776,449
                                                    -----------  -------------  -----------  ---------------
                                                        121,773      1,870,804    1,406,330       21,048,877
Shares repurchased................................     (646,612)    (9,883,646)  (1,518,962)     (23,157,570)
                                                    -----------  -------------  -----------  ---------------
Net decrease......................................     (524,839) $  (8,012,842)    (112,632) $    (2,108,693)
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
 
<CAPTION>
 
CLASS B
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................      349,600  $   5,216,141    1,233,796  $    18,394,879
Shares issued in connection with reinvestment of
  distributions...................................       24,609        365,217      164,966        2,337,575
                                                    -----------  -------------  -----------  ---------------
                                                        374,209      5,581,358    1,398,762       20,732,454
Shares repurchased................................   (1,323,411)   (19,560,006)  (1,288,192)     (19,574,097)
                                                    -----------  -------------  -----------  ---------------
Net increase (decrease)...........................     (949,202) $ (13,978,648)     110,570  $     1,158,357
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
<CAPTION>
 
ADVISOR CLASS
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................      406,514  $   6,266,773      154,643  $     2,526,548
Shares issued in connection with reinvestment of
  distributions...................................        2,592         39,769        1,147           16,592
                                                    -----------  -------------  -----------  ---------------
                                                        409,106      6,306,542      155,790        2,543,140
Shares repurchased................................      (16,383)      (247,811)     (12,773)        (202,670)
                                                    -----------  -------------  -----------  ---------------
Net increase......................................      392,723  $   6,058,731      143,017  $     2,340,470
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
</TABLE>
 
GT GLOBAL NATURAL RESOURCES FUND
<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED
                                                          APRIL 30, 1998                 YEAR ENDED
                                                           (UNAUDITED)                OCTOBER 31, 1997
                                                    --------------------------  ----------------------------
CLASS A                                               SHARES        AMOUNT        SHARES         AMOUNT
- --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    5,934,812  $  94,206,870   14,008,426  $   250,536,207
Shares issued in connection with reinvestment of
  distributions...................................      107,234      1,988,098       97,424        1,671,792
                                                    -----------  -------------  -----------  ---------------
                                                      6,042,046     96,194,968   14,105,850      252,207,999
Shares repurchased................................   (6,725,769)  (107,268,558) (13,512,928)    (239,425,288)
                                                    -----------  -------------  -----------  ---------------
Net increase (decrease)...........................     (683,723) $ (11,073,590)     592,922  $    12,782,711
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
 
<CAPTION>
 
CLASS B
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    1,115,632  $  18,339,082    5,227,207  $    91,103,073
Shares issued in connection with reinvestment of
  distributions...................................      132,618      2,421,604      120,229        2,044,194
                                                    -----------  -------------  -----------  ---------------
                                                      1,248,250     20,760,686    5,347,436       93,147,267
Shares repurchased................................   (2,099,147)   (33,861,073)  (4,425,914)     (75,084,090)
                                                    -----------  -------------  -----------  ---------------
Net increase (decrease)...........................     (850,897) $ (13,100,387)     921,522  $    18,063,177
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
<CAPTION>
 
ADVISOR CLASS
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................      964,441  $  16,163,437    1,573,656  $    31,848,691
Shares issued in connection with reinvestment of
  distributions...................................       11,197        209,155        7,576          130,389
                                                    -----------  -------------  -----------  ---------------
                                                        975,638     16,372,592    1,581,232       31,979,080
Shares repurchased................................   (1,223,931)   (21,668,784)  (1,180,622)     (22,478,170)
                                                    -----------  -------------  -----------  ---------------
Net increase (decrease)...........................     (248,293) $  (5,296,192)     400,610  $     9,500,910
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
</TABLE>
 
                                      FS-56
<PAGE>   1700
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
GT GLOBAL TELECOMMUNICATIONS FUND
<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED
                                                          APRIL 30, 1998                 YEAR ENDED
                                                           (UNAUDITED)                OCTOBER 31, 1997
                                                    --------------------------  ----------------------------
CLASS A                                               SHARES        AMOUNT        SHARES         AMOUNT
- --------------------------------------------------  -----------  -------------  -----------  ---------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................   42,237,756  $ 761,922,475   86,491,272  $ 1,449,735,933
Shares issued in connection with reinvestment of
  distributions...................................    3,004,037     49,839,444    4,872,560       77,134,577
                                                    -----------  -------------  -----------  ---------------
                                                     45,241,793    811,761,919   91,363,832    1,526,870,510
Shares repurchased................................  (47,343,286)  (854,782,831) (113,032,156)  (1,893,258,359)
                                                    -----------  -------------  -----------  ---------------
Net decrease......................................   (2,101,493) $ (43,020,912) (21,668,324) $  (366,387,849)
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
 
<CAPTION>
 
CLASS B
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    5,605,682  $  97,608,327    9,249,969  $   152,245,081
Shares issued in connection with reinvestment of
  distributions...................................    2,786,130     44,943,239    4,413,826       68,371,781
                                                    -----------  -------------  -----------  ---------------
                                                      8,391,812    142,551,566   13,663,795      220,616,862
Shares repurchased................................  (11,156,504)  (193,567,924) (29,383,147)    (477,593,385)
                                                    -----------  -------------  -----------  ---------------
Net decrease......................................   (2,764,692) $ (51,016,358) (15,719,352) $  (256,976,523)
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
<CAPTION>
 
ADVISOR CLASS
- --------------------------------------------------
<S>                                                 <C>          <C>            <C>          <C>
Shares sold.......................................    2,089,008  $  37,055,709    2,029,510  $    36,070,768
Shares issued in connection with reinvestment of
  distributions...................................       14,099        237,438       11,071          176,806
                                                    -----------  -------------  -----------  ---------------
                                                      2,103,107     37,293,147    2,040,581       36,247,574
Shares repurchased................................   (1,955,252)   (35,027,946)  (1,835,151)     (32,553,269)
                                                    -----------  -------------  -----------  ---------------
Net increase......................................      147,855  $   2,265,201      205,430  $     3,694,305
                                                    -----------  -------------  -----------  ---------------
                                                    -----------  -------------  -----------  ---------------
</TABLE>
 
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who then paid a
portion of a Fund's or Portfolio's expenses. For the period ended April 30,
1998, the Funds' or Portfolios' expenses were reduced by the following amounts
under these arrangements:
 
<TABLE>
<CAPTION>
                                            EXPENSE
                                           REDUCTION
                                          ------------
<S>                                       <C>
Global Consumer Products and Services
 Portfolio..............................   $   18,538
Global Financial Services Portfolio.....       11,357
GT Global Health Care Fund..............       38,638
Global Infrastructure Portfolio.........        4,410
Global Natural Resources Portfolio......       32,591
GT Global Telecommunications Fund.......       39,899
</TABLE>
 
                                      FS-57
<PAGE>   1701
                             AIM GLOBAL THEME FUNDS
                        (FORMERLY GT GLOBAL THEME FUNDS)
 
6. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
Investments of 5% or more of an issuer's outstanding voting securities by a Fund
or Portfolio are defined in the Investment Company Act of 1940 as an affiliated
company. Investments in affiliated companies by GT Global Health Care Fund and
GT Global Telecommunications Fund at April 30, 1998 amounted to $131,105,013 and
$23,828,296, respectively, at value.
 
Transactions with affiliated companies are as follows:
 
GT GLOBAL CONSUMER PRODUCTS PORTFOLIO:
 
<TABLE>
<CAPTION>
                                                                                      NET REALIZED     DIVIDEND
                                                    PURCHASES COST  SALES PROCEEDS     GAIN (LOSS)      INCOME
                                                    --------------  ---------------  ---------------  -----------
<S>                                                 <C>             <C>              <C>              <C>
O & Y Properties, Inc. Sp Wts.....................  $    1,996,065  $     2,376,836  $       380,771   $      --
</TABLE>
 
GT GLOBAL HEALTH CARE FUND:
 
<TABLE>
<CAPTION>
                                                                                      NET REALIZED     DIVIDEND
                                                    PURCHASES COST  SALES PROCEEDS     GAIN (LOSS)      INCOME
                                                    --------------  ---------------  ---------------  -----------
<S>                                                 <C>             <C>              <C>              <C>
ATL Ultrasound, Inc...............................  $      606,750  $     1,099,963  $       371,288   $      --
AVECOR Cardiovascular, Inc........................         250,716          749,318         (458,188)         --
Endosonics Corp...................................              --          337,211         (127,186)         --
Physio Control Holding Corp.......................       3,336,633        1,489,734          551,699          --
TheraTech, Inc....................................              --        1,941,548       (1,140,909)         --
Visx, Inc.........................................       1,134,100        9,215,798        2,010,019          --
</TABLE>
 
GT GLOBAL TELECOMMUNICATIONS FUND:
 
<TABLE>
<CAPTION>
                                                                                      NET REALIZED     DIVIDEND
                                                    PURCHASES COST  SALES PROCEEDS     GAIN (LOSS)      INCOME
                                                    --------------  ---------------  ---------------  -----------
<S>                                                 <C>             <C>              <C>              <C>
Champion Technology Holding Ltd...................  $    3,431,305  $            --  $            --   $  55,129
Echostar Communications Corp. "A".................              --               --               --          --
Millicom International Cellular S.A...............       5,887,008               --               --          --
Orbital Sciences Corp.............................              --       33,829,243       16,094,363          --
Three-Five Systems, Inc...........................              --               --               --          --
</TABLE>
 
7. SUBSEQUENT EVENTS
On May 29, 1998, Liechtenstein Global Trust ("LGT"), the former indirect parent
organization of Chancellor LGT Asset Management, Inc. ("Chancellor LGT"),
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included Chancellor LGT and
certain other affiliates. As a result of this transaction, Chancellor LGT was
renamed INVESCO (NY), Inc. and is now an indirect wholly-owned subsidiary of
AMVESCAP PLC. In connection with this transaction, A I M Advisors, Inc. ("AIM"),
an indirect wholly-owned subsidiary of AMVESCAP PLC, became the investment
adviser and administrator of the Funds and INVESCO (NY), Inc. became the
sub-adviser and sub-administrator of the Funds. In addition, A I M Distributors,
Inc. replaced GT Global, Inc. as the Funds' principal underwriter, and the Funds
became subject to compensation-type Rule 12b-1 plans of distribution, which
replaced the Funds' former reimbursement-type Rule 12b-1 plans of distribution.
All of the changes became effective as of the close of business on May 29, 1998.
 
                                      F58
<PAGE>   1702

                             GT GLOBAL THEME FUNDS
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
ANNUAL REPORT
To the Shareholders and Board of Directors of
G.T. Investment Funds, Inc.:
 
We have audited the accompanying statements of assets and liabilities of GT
Global Consumer Products & Services Fund - Consolidated, GT Global Financial
Services Fund - Consolidated, GT Global Health Care Fund, GT Global
Infrastructure Fund - Consolidated, GT Global Natural Resources Fund -
Consolidated, and GT Global Telecommunications Fund, six series of G.T.
Investment Funds, Inc., including the portfolios of investments, as of October
31, 1997, the related statements of operations for the year then ended, and the
related statements of changes in net assets and financial highlights for each of
the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial positions of
the aforementioned series of G.T. Investments Funds, Inc. as of October 31,
1997, the results of their operations, changes in their net assets and their
financial highlights for each of the periods indicated therein, in conformity
with generally accepted accounting principles.
 

                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
DECEMBER 15, 1997
 
                                       FS-59
<PAGE>   1703
          GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (56.3%)
  CVS Corp. .................................................   US             97,900   $  6,002,494         3.7
    RETAILERS-OTHER
  Airborne Freight Corp. ....................................   US             80,600      5,108,025         3.1
    TRANSPORTATION - AIRLINES
  Brylane, Inc.-/- ..........................................   US            115,000      4,995,313         3.1
    RETAILERS-APPAREL
  New York Times Co. "A" ....................................   US             90,000      4,927,500         3.0
    BROADCASTING & PUBLISHING
  Jones Apparel Group, Inc.-/- ..............................   US             89,200      4,538,050         2.8
    RETAILERS-APPAREL
  Pacific Sunwear of California-/- ..........................   US            150,000      4,143,750         2.5
    RETAILERS-APPAREL
  Loblaw Cos., Ltd. .........................................   CAN           251,800      3,663,000         2.2
    RETAILERS-FOOD
  Nordstrom, Inc. ...........................................   US             56,000      3,430,000         2.1
    RETAILERS-APPAREL
  Yogen Fruz World-Wide, Inc.-/- ............................   CAN           583,900      3,314,789         2.0
    RETAILERS-FOOD
  Central Newspapers, Inc. "A" ..............................   US             50,000      3,284,375         2.0
    BROADCASTING & PUBLISHING
  Cinar Films, Inc. "B"{\/} .................................   CAN            76,000      2,954,500         1.8
    LEISURE & TOURISM
  Chapters, Inc.: ...........................................   CAN                --             --         1.8
    RETAILERS-OTHER
    Common-/- ...............................................   --             83,500      1,747,978          --
    Special Warrants(::) -/- ................................   --             66,200      1,204,960          --
  Sears Canada, Inc. ........................................   CAN           170,500      2,825,131         1.7
    RETAILERS-OTHER
  Gap, Inc. .................................................   US             50,000      2,659,375         1.6
    RETAILERS-APPAREL
  Outdoor Systems, Inc.-/- ..................................   US             84,000      2,583,000         1.6
    BUSINESS & PUBLIC SERVICES
  Universal Outdoor Holdings, Inc.-/- .......................   US             60,000      2,535,000         1.6
    BUSINESS & PUBLIC SERVICES
  Avis Rent A Car, Inc. .....................................   US             90,000      2,469,375         1.5
    TRANSPORTATION - ROAD & RAIL
  Consolidated Stores Corp.-/- ..............................   US             61,300      2,444,338         1.5
    RETAILERS-OTHER
  Family Dollar Stores, Inc. ................................   US            103,000      2,420,500         1.5
    RETAILERS-APPAREL
  Bed Bath & Beyond-/- ......................................   US             76,000      2,413,000         1.5
    RETAILERS-OTHER
  Stage Stores, Inc.-/- .....................................   US             65,000      2,372,500         1.5
    RETAILERS-APPAREL
  Transat A.T., Inc.-/- .....................................   CAN           270,200      2,320,054         1.4
    TRANSPORTATION - AIRLINES
  Dress Barn, Inc.-/- .......................................   US             90,700      2,301,513         1.4
    RETAILERS-APPAREL
  Abercrombie & Fitch Co.-/- ................................   US             80,000      2,080,000         1.3
    RETAILERS-APPAREL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-60
<PAGE>   1704
          GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Services (Continued)
  Ames Department Stores, Inc.-/- ...........................   US            132,600   $  2,063,588         1.3
    RETAILERS-OTHER
  Valassis Communications, Inc.-/- ..........................   US             60,000      1,770,000         1.1
    BROADCASTING & PUBLISHING
  Air Canada ................................................   CAN           150,000      1,495,529         0.9
    TRANSPORTATION - AIRLINES
  The Bombay Co., Inc. ......................................   US            244,100      1,479,856         0.9
    RETAILERS-OTHER
  Budget Group, Inc. "A"-/- .................................   US             41,800      1,463,000         0.9
    TRANSPORTATION - ROAD & RAIL
  Tuesday Morning Corp.-/- ..................................   US             50,050      1,213,713         0.7
    RETAILERS-APPAREL
  Ryanair Holdings PLC - ADR-/- {\/} ........................   IRE            42,500      1,062,500         0.7
    TRANSPORTATION - AIRLINES
  Star Choice Communications, Inc.-/- .......................   CAN           293,500        916,406         0.6
    BROADCASTING & PUBLISHING
  Hospitality Worldwide Services-/- .........................   US             66,000        767,250         0.5
    LEISURE & TOURISM
  Dayton Hudson Corp. .......................................   US             10,000        628,125         0.4
    RETAILERS-APPAREL
  N2K, Inc.-/- ..............................................   US              8,300        218,394         0.1
    LEISURE & TOURISM
  Hudson's Bay Co. ..........................................   CAN               300          6,866          --
    RETAILERS-APPAREL
                                                                                        ------------
                                                                                          91,823,747
                                                                                        ------------
Consumer Non-Durables (14.8%)
  Morningstar Group, Inc.-/- ................................   US            151,200      6,463,796         4.0
    FOOD
  Tabacalera S.A. "A" .......................................   SPN            74,000      5,332,967         3.3
    TOBACCO
  Interstate Bakeries Corp. .................................   US             70,600      4,509,575         2.8
    FOOD
  Foodmaker, Inc.-/- ........................................   US            208,400      3,425,575         2.1
    FOOD
  General Cigar Holdings, Inc.-/- ...........................   US             62,800      1,817,275         1.1
    TOBACCO
  Saputo Group, Inc.-/- .....................................   CAN           114,400      1,753,506         1.1
    FOOD
  American Italian Pasta Co. "A"-/- .........................   US             30,000        630,000         0.4
    FOOD
                                                                                        ------------
                                                                                          23,932,694
                                                                                        ------------
Finance (6.5%)
  BankAmerica Corp. .........................................   US             71,000      5,076,500         3.1
    BANKS-MONEY CENTER
  Merita Ltd. "A" ...........................................   FIN           738,300      3,608,281         2.2
    BANKS-MONEY CENTER
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-61
<PAGE>   1705
          GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Finance (Continued)
  O&Y Properties Corp. Special Warrants(::) -/- {::} ........   CAN           342,400   $  1,943,798         1.2
    REAL ESTATE
                                                                                        ------------
                                                                                          10,628,579
                                                                                        ------------
Technology (2.6%)
  CHS Electronics, Inc.-/- ..................................   US            164,500      4,019,969         2.5
    COMPUTERS & PERIPHERALS
  Concord Communications, Inc.-/- ...........................   US              7,100        126,025         0.1
    SOFTWARE
                                                                                        ------------
                                                                                           4,145,994
                                                                                        ------------
Capital Goods (1.3%)
  HON INDUSTRIES, Inc. ......................................   US             40,000      2,065,000         1.3
    OFFICE EQUIPMENT
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $124,047,571) ................                            132,596,014        81.5
                                                                                        ------------       -----
<CAPTION>
 
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- -------------------------------------------------------------                           ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Dated October 31, 1997, with State Street Bank & Trust Co.,
   due November 3, 1997, for an effective yield of 5.57%,
   collateralized by $4,435,000 U.S. Treasury Bond, 8.875%
   due 8/15/17 (market value of collateral is $5,818,438,
   including accrued interest).
   (cost $5,697,881)  .......................................                              5,697,881         3.5
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $129,745,452)  * ....................                            138,293,895        85.0
Other Assets and Liabilities ................................                             24,368,418        15.0
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $162,662,313       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- - --------------
 
        -/-  Non-income producing security.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (see Note 1 of Notes to Financial Statements).
       {\/}  U.S. currency denominated.
       {::}  Security was an affiliate at October 31, 1997 (see Note 6 of Notes
             to Financial Statements).
          *  For Federal income tax purposes, cost is $129,972,640 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  11,067,741
                 Unrealized depreciation:            (2,746,486)
                                                  -------------
                 Net unrealized appreciation:     $   8,321,255
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviation:
             ADR--American Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-62
<PAGE>   1706
          GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                         PERCENTAGE OF NET ASSETS
                                                    {D}
                                        ---------------------------
                                                 SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY    & OTHER     TOTAL
- --------------------------------------  ------   ----------   -----
<S>                                     <C>      <C>          <C>
Canada (CAN/CAD) .....................   14.7                  14.7
Finland (FIN/FIM) ....................    2.2                   2.2
Ireland (IRE/IEP) ....................    0.7                   0.7
Spain (SPN/ESP) ......................    3.3                   3.3
United States (US/USD) ...............   60.6       18.5       79.1
                                        ------     -----      -----
Total  ...............................   81.5       18.5      100.0
                                        ------     -----      -----
                                        ------     -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $162,662,313.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-63
<PAGE>   1707
                GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Banks - Regional (50.6%)
  Sparbanken Sverige AB "A" ..................................   SWDN           68,000   $ 1,543,927         1.9
  City National Corp. ........................................   US             50,550     1,525,978         1.9
  Lloyds TSB Group PLC .......................................   UK            113,600     1,419,524         1.8
  Royal Bank of Canada .......................................   CAN            26,000     1,390,221         1.7
  NationsBank Corp. ..........................................   US             20,000     1,197,500         1.5
  Mellon Bank Corp. ..........................................   US             21,800     1,124,063         1.4
  Bank of Montreal ...........................................   CAN            25,800     1,114,058         1.4
  Demirbank T.A.S. ...........................................   TRKY       37,896,000     1,084,691         1.3
  National Bank of Canada ....................................   CAN            75,600     1,080,996         1.3
  Hamilton Bancorp, Inc.-/- ..................................   US             35,000     1,067,500         1.3
  Crestar Financial Corp. ....................................   US             20,800       984,100         1.2
  GreenPoint Financial Corp. .................................   US             15,100       972,063         1.2
  Norbanken AB ...............................................   SWDN           30,400       954,136         1.2
  Christiania Bank Og Kreditkasse ............................   NOR           232,900       933,534         1.2
  Bayerische Vereinsbank .....................................   GER            16,070       931,864         1.2
  Bank Leumi Le - Israel .....................................   ISRL          605,700       930,012         1.1
  Jyske Bank .................................................   DEN             9,000       927,029         1.1
  Bank Hapoalim Ltd. .........................................   ISRL          383,000       906,460         1.1
  Bank of Ireland ............................................   IRE            70,800       895,906         1.1
  First Union Corp. (N.C.) ...................................   US             18,200       892,938         1.1
  H. F. Ahmanson & Co. .......................................   US             15,000       885,000         1.1
  Halifax PLC-/- .............................................   UK             76,800       869,507         1.1
  Nedcor Ltd. ................................................   SAFR           41,123       863,498         1.1
  Zagrebacka Banka - 144A GDR{.} {\/} ........................   CRT            27,000       860,625         1.1
  Sovereign Bancorp, Inc. ....................................   US             48,200       855,550         1.1
  First American Corp. .......................................   US             18,000       855,000         1.1
  Allied Irish Bank PLC{V} ...................................   IRE            97,644       826,256         1.0
  ABSA Group Ltd. ............................................   SAFR          138,867       822,809         1.0
  Anglo-Irish Bank Corp., PLC: ...............................   IRE                --            --         1.0
    Common{V} ................................................   --            315,036       515,196          --
    Common ...................................................   --            180,000       297,565          --
  Compagnie Financiere de Paribas S.A. .......................   FR             11,100       806,457         1.0
  First National Bank Holdings Ltd. ..........................   SAFR          105,800       799,549         1.0
  Yapi ve Kredi Bankasi A.S. .................................   TRKY       26,000,000       793,807         1.0
  Commercial International Bank - GDR{\/} ....................   EGPT           36,265       788,764         1.0
  National Australia Bank Ltd. ...............................   AUSL           56,500       772,531         1.0
  Ergo Bank S.A. .............................................   GREC           12,960       772,510         1.0
  Westpac Banking Corp., Ltd. ................................   AUSL          132,000       768,337         0.9
  Australia & New Zealand Banking Group Ltd. .................   AUSL          110,000       767,100         0.9
  Banco Totta & Acores S.A. "B" ..............................   PORT           39,300       760,068         0.9
  Wielkopolski Bank Kredytowy S.A. ...........................   POL           138,000       753,448         0.9
  Cullen/Frost Bankers, Inc. .................................   US             14,500       732,250         0.9
  Akbank T.A.S. ..............................................   TRKY        9,821,967       669,363         0.8
  Banco Commercial S.A. - 144A GDR{.} {\/} ...................   URGY           22,000       638,000         0.8
  BG Bank AS .................................................   DEN             9,500       610,308         0.8
  Banco Bradesco S.A. Preferred ..............................   BRZL       79,500,000       591,346         0.7
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-64
<PAGE>   1708
                GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Banks - Regional (Continued)
  Security Bank Corp.-/- .....................................   PHIL          688,900   $   363,095         0.4
                                                                                         -----------
                                                                                          40,914,439
                                                                                         -----------
Banks - Money Center (18.4%)
  BankAmerica Corp. ..........................................   US             43,400     3,103,091         3.8
  Citicorp ...................................................   US             15,050     1,882,191         2.3
  Chase Manhattan Corp. ......................................   US             14,750     1,701,781         2.1
  Merita Ltd. "A" ............................................   FIN           297,000     1,451,523         1.8
  HSBC Holdings PLC ..........................................   HK             55,800     1,263,260         1.6
  Barclays PLC ...............................................   UK             39,375       986,026         1.2
  Schweizerischer Bankverein (Swiss Bank Corp.)-/- ...........   SWTZ            3,330       895,532         1.1
  Unidanmark AS "A" ..........................................   DEN            13,200       891,009         1.1
  ABN AMRO Holdings N.V. .....................................   NETH           42,864       863,463         1.1
  Bank of Tokyo - Mitsubishi .................................   JPN            41,750       544,867         0.7
  Sumitomo Bank ..............................................   JPN            37,000       393,682         0.5
  Industrial Bank of Japan ...................................   JPN            26,000       257,190         0.3
  Fuji Bank Ltd. .............................................   JPN            29,000       250,707         0.3
  Sanwa Bank .................................................   JPN            24,000       241,397         0.3
  Dai-Ichi Kangyo Bank Ltd. ..................................   JPN            15,000       127,182         0.2
                                                                                         -----------
                                                                                          14,852,901
                                                                                         -----------
Insurance - Multi-Line (10.9%)
  Conseco, Inc. ..............................................   US             51,600     2,251,050         2.8
  Fremont General Corp. ......................................   US             30,000     1,398,750         1.7
  Allstate Corp. .............................................   US             15,000     1,244,063         1.5
  SunAmerica, Inc. ...........................................   US             29,800     1,070,938         1.3
  Axa Group ..................................................   FR             14,770     1,011,872         1.2
  Royal & Sun Alliance Insurance Group PLC ...................   UK             98,700       946,110         1.2
  American International Group, Inc. .........................   US              9,200       938,975         1.2
                                                                                         -----------
                                                                                           8,861,758
                                                                                         -----------
Consumer Finance (5.8%)
  The Money Store, Inc. ......................................   US             39,500     1,120,813         1.4
  Green Tree Financial Corp. .................................   US             24,600     1,036,275         1.3
  Doral Financial Corp. ......................................   US             45,200     1,000,050         1.2
  Aeon Credit Service ........................................   HK          2,964,000       747,710         0.9
  Acom Co., Ltd. .............................................   JPN             9,000       493,766         0.6
  Bankard, Inc.-/- ...........................................   PHIL        5,307,000       362,872         0.4
                                                                                         -----------
                                                                                           4,761,486
                                                                                         -----------
Other Financial (4.1%)
  Newcourt Credit Group, Inc. ................................   CAN            25,200       871,771         1.1
  Banco LatinoAmericano de Exportaciones S.A. (Bladex)
   "E"{\/} ...................................................   PAN            20,000       795,000         1.0
  Investors Financial Services Corp. .........................   US             16,500       726,000         0.9
  MoneyGram Payment Systems, Inc.-/- .........................   US             42,000       580,125         0.7
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-65
<PAGE>   1709
                GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Other Financial (Continued)
  Shohkoh Fund ...............................................   JPN             1,200   $   349,127         0.4
                                                                                         -----------
                                                                                           3,322,023
                                                                                         -----------
Securities Broker (2.8%)
  Hambrecht & Quist Group-/- .................................   US             30,000       945,000         1.2
  Morgan Stanley, Dean Witter, Discover and Co. ..............   US             13,200       652,575         0.8
  Peregrine Investment Holdings Ltd. .........................   HK            532,000       523,053         0.6
  Nomura Securities Co., Ltd. ................................   JPN            10,000       116,376         0.1
  Daiwa Securities Co., Ltd. .................................   JPN            14,000        84,722         0.1
                                                                                         -----------
                                                                                           2,321,726
                                                                                         -----------
Investment Management (2.4%)
  Alliance Capital Management L.P. ...........................   US             32,400     1,111,725         1.4
  Franklin Resources, Inc. ...................................   US              8,750       786,406         1.0
                                                                                         -----------
                                                                                           1,898,131
                                                                                         -----------       -----
 
TOTAL EQUITY INVESTMENTS (cost $69,090,966) ..................                            76,932,464        95.0
                                                                                         -----------       -----
<CAPTION>
 
                                                                                            VALUE        % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- --------------------------------------------------------------                           -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
  Dated October 31, 1997, with State Street Bank & Trust Co.,
   due November 3, 1997, for an effective yield of 5.57%,
   collateralized by $2,110,000 U.S. Treasury Bond, 8.875% due
   8/15/17 (market value of collateral is $2,768,185,
   including accrued interest). (cost $2,708,419)  ...........                             2,708,419         3.4
                                                                                         -----------       -----
 
TOTAL INVESTMENTS (cost $71,799,385)  * ......................                            79,640,883        98.4
Other Assets and Liabilities .................................                             1,320,751         1.6
                                                                                         -----------       -----
 
NET ASSETS ...................................................                           $80,961,634       100.0
                                                                                         -----------       -----
                                                                                         -----------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        {.}  Security 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.
        {V}  Security is denominated in GBP.
          *  For Federal income tax purposes, cost is $72,281,726 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  10,637,773
                 Unrealized depreciation:            (3,278,616)
                                                  -------------
                 Net unrealized appreciation:     $   7,359,157
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviation:
             GDR--Global Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-66
<PAGE>   1710
                GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                           PERCENTAGE OF NET ASSETS {D}
                                        -----------------------------------
                                                  SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY      & OTHER        TOTAL
- --------------------------------------  ------   -------------   ----------
<S>                                     <C>      <C>             <C>
Australia (AUSL/AUD) .................    2.8                           2.8
Brazil (BRZL/BRL) ....................    0.7                           0.7
Canada (CAN/CAD) .....................    5.5                           5.5
Croatia (CRT/HRK) ....................    1.1                           1.1
Denmark (DEN/DKK) ....................    3.0                           3.0
Egypt (EGPT/EGP) .....................    1.0                           1.0
Finland (FIN/FIM) ....................    1.8                           1.8
France (FR/FRF) ......................    2.2                           2.2
Germany (GER/DEM) ....................    1.2                           1.2
Greece (GREC/GRD) ....................    1.0                           1.0
Hong Kong (HK/HKD) ...................    3.1                           3.1
Ireland (IRE/IEP) ....................    3.1                           3.1
Israel (ISRL/ILS) ....................    2.2                           2.2
Japan (JPN/JPY) ......................    3.5                           3.5
Netherlands (NETH/NLG) ...............    1.1                           1.1
Norway (NOR/NOK) .....................    1.2                           1.2
Panama (PAN/PND) .....................    1.0                           1.0
Philippines (PHIL/PHP) ...............    0.8                           0.8
Poland (POL/PLZ) .....................    0.9                           0.9
Portugal (PORT/PTE) ..................    0.9                           0.9
South Africa (SAFR/ZAR) ..............    3.1                           3.1
Sweden (SWDN/SEK) ....................    3.1                           3.1
Switzerland (SWTZ/CHF) ...............    1.1                           1.1
Turkey (TRKY/TRL) ....................    3.1                           3.1
United Kingdom (UK/GBP) ..............    5.3                           5.3
United States (US/USD) ...............   40.4         5.0              45.4
Uruguay (URGY/UYP) ...................    0.8                           0.8
                                        ------        ---        ----------
Total  ...............................   95.0         5.0             100.0
                                        ------        ---        ----------
                                        ------        ---        ----------
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $80,961,634.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACT OUTSTANDING
                                OCTOBER 31, 1997
 
<TABLE>
<CAPTION>
                                           MARKET VALUE     CONTRACT    DELIVERY    UNREALIZED
CONTRACT TO SELL:                         (U.S. DOLLARS)      PRICE       DATE     APPRECIATION
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Japanese Yen............................     1,182,045       114.50000  11/12/97   $    59,877
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $1,241,922)...................     1,182,045                                  59,877
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS A
 PERCENTAGE OF NET ASSETS IS 1.46%.
  Total Open Forward Foreign Currency
   Contracts............................                                           $    59,877
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-67
<PAGE>   1711
                           GT GLOBAL HEALTH CARE FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Medical Technology & Supplies (37.8%)
  ATL Ultrasound, Inc.{::} -/- ..............................   US            755,500   $ 32,486,500         5.2
  Visx, Inc.{::} -/- ........................................   US          1,147,700     26,253,638         4.2
  Endosonics Corp.{::} -/- ..................................   US          1,546,000     17,779,000         2.8
  Physio-Control International Corp.{::} -/- ................   US          1,050,500     16,742,344         2.7
  Sunrise Medical, Inc.{::} -/- .............................   US          1,011,700     15,618,119         2.5
  Waters Corp.-/- ...........................................   US            345,000     15,158,438         2.4
  Dexter Corp. ..............................................   US            339,000     13,305,750         2.1
  TECNOL Medical Products, Inc.-/- ..........................   US            572,900     12,317,350         2.0
  Circon Corp.{::} -/- ......................................   US            686,486     10,812,155         1.7
  Cardiac Pathways Corp.{::} -/- ............................   US          1,002,400      9,522,800         1.5
  Lifecore Biomedical, Inc.-/- ..............................   US            361,900      7,509,425         1.2
  AVECOR Cardiovascular, Inc.{::} -/- .......................   US            658,700      6,751,675         1.1
  Mentor Corp. ..............................................   US            175,800      6,405,713         1.0
  CONMED Corp.-/- ...........................................   US            308,400      6,322,200         1.0
  Angeion Corp.-/- ..........................................   US          1,325,000      5,217,188         0.8
  Kensey Nash Corp.-/- ......................................   US            322,600      4,919,650         0.8
  Photoelectron Corp.-/- ....................................   US            338,300      3,721,300         0.6
  Cardiovascular Dynamics, Inc.{::} -/- .....................   US            515,675      3,480,806         0.6
  Innerdyne, Inc.-/- ........................................   US            824,600      2,886,100         0.5
  CardioGenesis Corp.-/- ....................................   US            307,000      2,763,000         0.4
  Laser Industries Ltd.-/- ..................................   US            130,500      2,593,688         0.4
  INAMED Corp.{::} -/- ......................................   US            628,900      2,515,600         0.4
  Heartstream, Inc.-/- ......................................   US            206,800      2,145,550         0.3
  Laserscope-/- .............................................   US            330,800      1,943,450         0.3
  ThermoTrex Corp.-/- .......................................   US             73,000      1,679,000         0.3
  Micro Therapeutics, Inc.-/- ...............................   US            290,000      1,558,750         0.2
  Abaxis, Inc.-/- ...........................................   US            462,400      1,445,000         0.2
  Lumisys, Inc.-/- ..........................................   US            211,400      1,294,825         0.2
  Interpore International-/- ................................   US             92,900        870,938         0.1
  Sulzer Medica AG - Registered-/- ..........................   SWTZ            3,130        849,571         0.1
  ESC Medical Systems Ltd.-/- {\/} ..........................   ISRL           19,200        753,600         0.1
  Thoratec Laboratories Corp.-/- ............................   US             60,000        412,500         0.1
  ATS Medical, Inc.-/- ......................................   US             31,250        195,313          --
  Conceptus, Inc.-/- ........................................   US             18,000        130,500          --
                                                                                        ------------
                                                                                         238,361,436
                                                                                        ------------
Biotechnology (26.6%)
  Protein Design Labs, Inc.{::} -/- .........................   US          1,017,600     50,752,795         8.1
  Amgen, Inc.-/- ............................................   US            539,000     26,545,750         4.2
  Guilford Pharmaceuticals, Inc.-/- .........................   US            896,600     21,854,625         3.5
  Cell Therapeutics, Inc.{::} -/- ...........................   US          1,141,000     18,256,000         2.9
  Regeneron Pharmaceuticals, Inc.{::} -/- ...................   US          1,414,900     14,768,019         2.4
  Human Genome Sciences, Inc.-/- ............................   US            260,900     10,696,900         1.7
  Genelabs Technologies, Inc.-/- ............................   US          1,642,800      6,365,850         1.0
  Interferon Sciences, Inc.-/- ..............................   US            552,500      5,110,625         0.8
  NABI, Inc.-/- .............................................   US            592,500      2,814,375         0.5
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-68
<PAGE>   1712
                           GT GLOBAL HEALTH CARE FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Biotechnology (Continued)
  PathoGenesis Corp.-/- .....................................   US             61,400   $  2,210,400         0.4
  Agouron Pharmaceuticals, Inc.-/- ..........................   US             46,400      2,117,000         0.3
  CytoTherapeutics, Inc.-/- .................................   US            396,900      2,083,725         0.3
  Pharmacyclics, Inc.-/- ....................................   US             75,000      1,912,500         0.3
  Coulter Pharmaceutical, Inc.-/- ...........................   US             73,700      1,059,438         0.2
  Enzon, Inc. Preferred-/- (.) ..............................   US             16,000        222,460          --
  Targeted Genetics Corp.-/- ................................   US             40,000        160,000          --
                                                                                        ------------
                                                                                         166,930,462
                                                                                        ------------
Pharmaceuticals (17.7%)
  TheraTech, Inc.{::} -/- ...................................   US          2,150,000     22,575,000         3.6
  American Home Products Corp. ..............................   US            145,600     10,792,600         1.7
  Perrigo Co.-/- ............................................   US            648,600      9,972,225         1.6
  Spiros Development Corp.(::) (.) -/- ......................   US            100,000      9,161,246         1.5
  Rhone-Poulenc "A" .........................................   FR            190,736      8,319,910         1.3
  Depotech Corp.-/- .........................................   US            549,300      7,621,538         1.2
  Magainin Pharmaceuticals, Inc.-/- .........................   US            895,100      7,608,350         1.2
  Bergen Brunswig Corp. "A" .................................   US            150,000      6,009,375         1.0
  Catalytica, Inc.-/- .......................................   US            437,866      5,473,325         0.9
  SEQUUS Pharmaceuticals, Inc.-/- ...........................   US            597,800      5,380,200         0.9
  IVAX Corp.-/- .............................................   US            700,000      5,293,750         0.8
  Altana AG .................................................   GER            50,000      3,632,937         0.6
  Life Medical Sciences, Inc.{::} -/- .......................   US            768,600      3,074,400         0.5
  Warner Chilcott Laboratories - ADR{\/} ....................   IRE           117,000      1,652,625         0.3
  Unimed Pharmaceuticals, Inc.-/- ...........................   US            147,200      1,048,800         0.2
  Intercardia, Inc.-/- ......................................   US             41,200        999,100         0.2
  Alpharma, Inc. "A" ........................................   US             21,700        478,756         0.1
  Aradigm Corp.-/- ..........................................   US             28,000        322,000         0.1
                                                                                        ------------
                                                                                         109,416,137
                                                                                        ------------
Health Care Services (5.2%)
  Vencor, Inc.-/- ...........................................   US            801,400     21,637,800         3.5
  Allegiance Corp. ..........................................   US            120,000      3,330,000         0.5
  Grupo Casa Autrey, S.A. de C.V. - ADR{\/} .................   MEX           135,100      2,313,588         0.4
  Parkway Holdings Ltd. .....................................   SING          900,000      2,277,177         0.4
  SteriGenics International, Inc.-/- ........................   US             61,900      1,392,750         0.2
  Cohr, Inc.-/- .............................................   US            129,100      1,355,550         0.2
                                                                                        ------------
                                                                                          32,306,865
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $484,175,220) ................                            547,014,900        87.3
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-69
<PAGE>   1713
                           GT GLOBAL HEALTH CARE FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                            NO. OF         VALUE         % OF NET
WARRANTS                                                       COUNTRY     WARRANTS       (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Rhone-Poulenc Warrants, expire 11/5/01 ....................   FR            190,736   $    603,731         0.1
    PHARMACEUTICALS
  ALZA Corp. Warrants, expire 12/31/99 ......................   US            100,000         18,750          --
    PHARMACEUTICALS
                                                                                        ------------       -----
 
TOTAL WARRANTS (cost $32,137) ...............................                                622,481         0.1
                                                                                        ------------       -----
<CAPTION>
 
                                                                            NO. OF
RIGHTS                                                                      RIGHTS
- -------------------------------------------------------------             -----------
<S>                                                            <C>        <C>           <C>            <C>
  Alpharma, Inc. Rights, expire 11/25/97 (cost $0) ..........   US              3,616         20,340          --
                                                                                        ------------       -----
    PHARMACEUTICALS
<CAPTION>
 
REPURCHASE AGREEMENT
- -------------------------------------------------------------
<S>                                                            <C>        <C>           <C>            <C>
  Dated October 31, 1997, with State Street Bank & Trust Co.,
   due November 3, 1997, for an effective yield of 5.57%,
   collateralized by $56,460,000 U.S. Treasury Bond, 8.875%
   due 8/15/17 (market value of collateral is $74,071,916,
   including accrued interest).
   (cost $72,617,234)  ......................................                             72,617,234        11.6
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $556,824,591)  * ....................                            620,274,955        99.0
Other Assets and Liabilities ................................                              6,067,162         1.0
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $626,342,117       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {::}  Security was an affiliate at October 31, 1997 (see Note 6 of Notes
             to Financial Statements).
       {\/}  U.S. currency denominated.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (see Note 1 of Notes to Financial Statements).
        (.)  Restricted securities: At October 31, 1997 the Fund owned the
             following restricted securities constituting less than 1.5% of net
             assets which may not be publicly sold without registration under
             the Securities Act of 1933 (Note 1). Additional information on the
             securities is as follows:
 
<TABLE>
<CAPTION>
                                                                                                       VALUE
                                                                                                        PER
                                                                                                       SHARE
                                                                                                       (NOTE
             DESCRIPTION                                      ACQUISITION DATE   SHARES     COST         1)
             -----------------------------------------------  -----------------  ------  -----------   ------
             <S>                                              <C>                <C>     <C>           <C>
             Enzon, Inc. Preferred..........................       3/22/90       16,000  $   400,000   $13.90
             Spiros Development Corp........................       1/3/96        100,000   3,000,000   91.61
</TABLE>
 
          *  For Federal income tax purposes, cost is $558,926,202 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  88,802,844
                 Unrealized depreciation:           (27,454,091)
                                                  -------------
                 Net unrealized appreciation:     $  61,348,753
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviation:
             ADR--American Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-70
<PAGE>   1714
                           GT GLOBAL HEALTH CARE FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                            PERCENTAGE OF NET ASSETS {D}
                                        -------------------------------------
                                                 FIXED INCOME,   SHORT-TERM
                                                   RIGHTS &        &
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS      OTHER  TOTAL
- --------------------------------------  ------   -------------   -----  -----
<S>                                     <C>      <C>             <C>    <C>
France (FR/FRF) ......................    1.3         0.1                 1.4
Germany (GER/DEM) ....................    0.6                             0.6
Ireland (IRE/IEP) ....................    0.3                             0.3
Israel (ISRL/ILS) ....................    0.1                             0.1
Mexico (MEX/MXN) .....................    0.4                             0.4
Singapore (SING/SGD) .................    0.4                             0.4
Switzerland (SWTZ/CHF) ...............    0.1                             0.1
United States (US/USD) ...............   84.1                    12.6    96.7
                                        ------        ---        -----  -----
Total  ...............................   87.3         0.1        12.6   100.0
                                        ------        ---        -----  -----
                                        ------        ---        -----  -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $626,342,117.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-71
<PAGE>   1715
                  GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Energy (31.2%)
  Hub Power Co.-/- ...........................................   PAK         2,400,000   $ 3,206,835         3.3
    ELECTRICAL & GAS UTILITIES
  Enron Global Power & Pipelines L.L.C. ......................   US             90,000     3,099,375         3.2
    ELECTRICAL & GAS UTILITIES
  Endesa S.A. - ADR{\/} ......................................   SPN           160,000     2,980,000         3.0
    ELECTRICAL & GAS UTILITIES
  Shaw Group, Inc.-/- ........................................   US            140,300     2,928,763         3.0
    ENERGY EQUIPMENT & SERVICES
  IES Industries, Inc. .......................................   US             81,000     2,612,250         2.7
    ELECTRICAL & GAS UTILITIES
  Light - Participacoes S.A. .................................   BRZL        9,910,000     2,535,033         2.6
    ELECTRICAL & GAS UTILITIES
  Edison S.p.A. ..............................................   ITLY          450,000     2,370,058         2.4
    ELECTRICAL & GAS UTILITIES
  Light - Servicos de Electricidade S.A. .....................   BRZL        7,000,000     2,324,020         2.4
    ELECTRICAL & GAS UTILITIES
  EVN Energie-Versorgung Niederoesterreich AG ................   ASTRI          16,800     1,948,628         2.0
    ELECTRICAL & GAS UTILITIES
  Giant Industries, Inc. .....................................   US            102,600     1,840,388         1.9
    OIL
  AES Corp.-/- ...............................................   US             45,264     1,793,586         1.8
    ELECTRICAL & GAS UTILITIES
  BSES Ltd. - 144A GDR{.} {\/} ...............................   IND            70,000     1,085,000         1.1
    ELECTRICAL & GAS UTILITIES
  Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} .....   BRZL           24,900       996,000         1.0
    ELECTRICAL & GAS UTILITIES
  MetroGas S.A. - ADR{\/} ....................................   ARG           111,051       805,120         0.8
    ELECTRICAL & GAS UTILITIES
                                                                                         -----------
                                                                                          30,525,056
                                                                                         -----------
Services (23.1%)
  Canadian National Railway Co. ..............................   CAN            60,900     3,284,415         3.3
    TRANSPORTATION - ROAD & RAIL
  Aeroporti di Roma SpA-/- ...................................   ITLY          286,600     2,606,270         2.7
    TRANSPORTATION - AIRLINES
  Hellenic Telecommunications Organization S.A. ..............   GREC          118,250     2,469,600         2.5
    TELEPHONE NETWORKS
  Telecom Italia SpA - Di Risp-/- ............................   ITLY          600,000     2,415,946         2.5
    TELEPHONE NETWORKS
  SPT Telecom-/- .............................................   CZCH           19,000     2,187,547         2.2
    TELEPHONE NETWORKS
  Tranz Rail Holdings Ltd. - ADR{\/} .........................   NZ            132,000     1,782,000         1.8
    TRANSPORTATION - ROAD & RAIL
  Portugal Telecom S.A. - ADR{\/} ............................   PORT           43,000     1,773,750         1.8
    TELEPHONE NETWORKS
  Paging Network, Inc.-/- ....................................   US            125,000     1,546,875         1.6
    WIRELESS COMMUNICATIONS
  Centennial Cellular Corp. "A"-/- ...........................   US             50,000     1,000,000         1.0
    WIRELESS COMMUNICATIONS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-72
<PAGE>   1716
                  GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Services (Continued)
  DDI Corp. ..................................................   JPN               295   $   985,786         1.0
    WIRELESS COMMUNICATIONS
  Telefonica del Peru S.A. - ADR{\/} .........................   PERU           40,900       807,775         0.8
    TELEPHONE NETWORKS
  Compania Anonima Nacional Telefonos de Venezuela (CANTV) -
   ADR{\/} ...................................................   VENZ           16,000       700,000         0.7
    TELEPHONE NETWORKS
  Pakistan Telecommunications Co., Ltd.: .....................   PAK                --            --         0.6
    TELEPHONE NETWORKS
    GDR{\/} ..................................................   --              4,892       396,252          --
    "A" ......................................................   --            280,000       235,741          --
  Philippine Long Distance Telephone Co. - ADR{\/} ...........   PHIL           20,000       485,000         0.5
    TELEPHONE NETWORKS
  China Telecom (Hong Kong) Ltd.-/- ..........................   HK             80,000       127,814         0.1
    WIRELESS COMMUNICATIONS
                                                                                         -----------
                                                                                          22,804,771
                                                                                         -----------
Materials/Basic Industry (20.8%)
  Giant Cement Holding, Inc.-/- ..............................   US            179,800     4,360,150         4.4
    CEMENT
  La Cementos Nacional, C.A. - 144A GDR{.} {\/} ..............   ECDR           15,060     3,162,600         3.2
    CEMENT
  Northwest Pipe Co.-/- ......................................   US            127,500     3,091,875         3.2
    METALS - STEEL
  IPSCO, Inc. ................................................   CAN            67,600     2,926,199         3.0
    METALS - STEEL
  Hylsamex, S.A. de C.V. - 144A ADR{.} {\/} ..................   MEX            75,000     2,896,875         3.0
    METALS - STEEL
  NS Group, Inc.-/- ..........................................   US             98,100     2,624,175         2.7
    METALS - STEEL
  Suez Cement Co. - Reg S GDR{c} {\/} ........................   EGPT           60,000     1,245,000         1.3
    CEMENT
                                                                                         -----------
                                                                                          20,306,874
                                                                                         -----------
Capital Goods (9.3%)
  Doncasters PLC - ADR-/- {\/} ...............................   UK            139,600     3,760,474         3.8
    AEROSPACE/DEFENSE
  Caterpillar, Inc. ..........................................   US             60,000     3,075,000         3.1
    MACHINERY & ENGINEERING
  KCI Konecranes International ...............................   FIN            42,660     1,664,636         1.7
    MACHINERY & ENGINEERING
  United Engineers Ltd. ......................................   MAL           270,000       640,733         0.7
    CONSTRUCTION
                                                                                         -----------
                                                                                           9,140,843
                                                                                         -----------
Technology (7.8%)
  Tadiran Telecommunications Ltd.{\/} ........................   ISRL          130,000     2,941,250         3.0
    TELECOM TECHNOLOGY
  Emcore Corp.-/- ............................................   US            123,000     2,367,750         2.4
    SEMICONDUCTORS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-73
<PAGE>   1717
                  GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Technology (Continued)
  Cisco Systems, Inc.-/- .....................................   US             21,000   $ 1,722,656         1.8
    NETWORKING
  Asia Pacific Wire & Cable Corporation Ltd.-/- {\/} .........   SING           59,400       549,450         0.6
    TELECOM TECHNOLOGY
                                                                                         -----------
                                                                                           7,581,106
                                                                                         -----------
Multi-Industry/Miscellaneous (4.7%)
  Mannesmann AG ..............................................   GER             7,500     3,166,135         3.2
    MULTI-INDUSTRY
  E.R.G. Ltd. ................................................   AUSL        1,689,040     1,436,723         1.5
    MULTI-INDUSTRY
                                                                                         -----------
                                                                                           4,602,858
                                                                                         -----------       -----
 
TOTAL EQUITY INVESTMENTS (cost $76,186,714) ..................                            94,961,508        96.9
                                                                                         -----------       -----
<CAPTION>
 
                                                                                            VALUE        % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- --------------------------------------------------------------                           -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
  Dated October 31, 1997, with State Street Bank & Trust Co.,
   due November 3, 1997, for an effective yield of 5.57%,
   collateralized by $1,680,000 U.S. Treasury Bond, 8.875% due
   8/15/17 (market value of collateral is $2,204,053,
   including accrued interest). (cost $2,156,334)  ...........                             2,156,334         2.2
                                                                                         -----------       -----
 
TOTAL INVESTMENTS (cost $78,343,048)  * ......................                            97,117,842        99.1
Other Assets and Liabilities .................................                               901,217         0.9
                                                                                         -----------       -----
 
NET ASSETS ...................................................                           $98,019,059       100.0
                                                                                         -----------       -----
                                                                                         -----------       -----
</TABLE>
 
- --------------
 
       {\/}  U.S. currency denominated.
        -/-  Non-income producing security.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
          *  For Federal income tax purposes, cost is $78,343,048 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  23,477,043
                 Unrealized depreciation:            (4,702,249)
                                                  -------------
                 Net unrealized appreciation:     $  18,774,794
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviations:
             ADR--American Depository Receipt
             GDR--Global Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-74
<PAGE>   1718
                  GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                         PERCENTAGE OF NET ASSETS
                                                    {D}
                                        ---------------------------
                                                 SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY    & OTHER     TOTAL
- --------------------------------------  ------   ----------   -----
<S>                                     <C>      <C>          <C>
Argentina (ARG/ARS) ..................    0.8                   0.8
Australia (AUSL/AUD) .................    1.5                   1.5
Austria (ASTRI/ATS) ..................    2.0                   2.0
Brazil (BRZL/BRL) ....................    6.0                   6.0
Canada (CAN/CAD) .....................    6.3                   6.3
Czech Republic (CZCH/CSK) ............    2.2                   2.2
Ecuador (ECDR/ECS) ...................    3.2                   3.2
Egypt (EGPT/EGP) .....................    1.3                   1.3
Finland (FIN/FIM) ....................    1.7                   1.7
Germany (GER/DEM) ....................    3.2                   3.2
Greece (GREC/GRD) ....................    2.5                   2.5
Hong Kong (HK/HKD) ...................    0.1                   0.1
India (IND/INR) ......................    1.1                   1.1
Israel (ISRL/ILS) ....................    3.0                   3.0
Italy (ITLY/ITL) .....................    7.6                   7.6
Japan (JPN/JPY) ......................    1.0                   1.0
Malaysia (MAL/MYR) ...................    0.7                   0.7
Mexico (MEX/MXN) .....................    3.0                   3.0
New Zealand (NZ/NZD) .................    1.8                   1.8
Pakistan (PAK/PKR) ...................    3.9                   3.9
Peru (PERU/PES) ......................    0.8                   0.8
Philippines (PHIL/PHP) ...............    0.5                   0.5
Portugal (PORT/PTE) ..................    1.8                   1.8
Singapore (SING/SGD) .................    0.6                   0.6
Spain (SPN/ESP) ......................    3.0                   3.0
United Kingdom (UK/GBP) ..............    3.8                   3.8
United States & Other (US/USD) .......   32.8        3.1       35.9
Venezuela (VENZ/VEB) .................    0.7                   0.7
                                        ------       ---      -----
Total  ...............................   96.9        3.1      100.0
                                        ------       ---      -----
                                        ------       ---      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $98,019,059.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                OCTOBER 31, 1997
 
<TABLE>
<CAPTION>
                                                                                    UNREALIZED
                                           MARKET VALUE     CONTRACT    DELIVERY   APPRECIATION
CONTRACTS TO SELL:                        (U.S. DOLLARS)      PRICE       DATE    (DEPRECIATION)
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Deutsche Marks..........................     1,509,823         1.80100  11/28/97   $   (66,180)
Japanese Yen............................       404,821       114.50000  11/12/97        20,506
Japanese Yen............................       368,245       120.70000  01/07/98        (4,948)
Japanese Yen............................        84,327       118.82300  02/04/98          (168)
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $2,316,426)...................     2,367,216                                 (50,790)
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS A
 PERCENTAGE OF NET ASSETS IS 2.42%.
  Total Open Forward Foreign Currency
   Contracts............................                                           $   (50,790)
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-75
<PAGE>   1719
                GT GLOBAL NATURAL RESOURCES FUND - CONSOLIDATED
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Energy Equipment & Services (53.2%)
  Schlumberger Ltd. .........................................   US             60,800   $  5,320,000         3.1
  Cliffs Drilling Co.-/- ....................................   US             73,100      5,313,456         3.1
  EVI, Inc.-/- ..............................................   US             81,000      5,199,188         3.0
  Varco International, Inc.-/- ..............................   US             85,000      5,179,688         3.0
  Cooper Cameron Corp.-/- ...................................   US             71,500      5,165,875         3.0
  Precision Drilling Corp.-/- ...............................   CAN           162,300      4,980,581         2.9
  Nabors Industries, Inc.-/- ................................   US            120,200      4,943,225         2.9
  Patterson Energy, Inc.-/- .................................   US             86,800      4,860,800         2.8
  UTI Energy Corp.-/- .......................................   US            107,700      4,806,113         2.8
  Key Energy Group, Inc.-/- .................................   US            147,600      4,630,950         2.7
  Pool Energy Services Co.-/- ...............................   US            133,600      4,534,050         2.6
  Diamond Offshore Drilling, Inc. ...........................   US             72,000      4,482,000         2.6
  Helmerich & Payne, Inc. ...................................   US             51,300      4,139,269         2.4
  BJ Services Co.-/- ........................................   US             43,600      3,695,100         2.1
  Santa Fe International Corp.-/- ...........................   US             71,700      3,526,744         2.1
  Falcon Drilling Co., Inc.-/- ..............................   US             96,900      3,524,738         2.0
  Smith International, Inc.-/- ..............................   US             41,900      3,194,875         1.9
  Bonus Resource Services Corp.-/- ..........................   CAN           482,284      2,361,453         1.4
  Veritas DGC, Inc.-/- ......................................   US             56,400      2,308,875         1.3
  Noble Drilling Corp.-/- ...................................   US             64,300      2,286,669         1.3
  Fred Olsen Energy ASA-/- ..................................   NOR            74,500      2,053,003         1.2
  Computalog Ltd.-/- ........................................   CAN            58,800      1,189,185         0.7
  Rowan Cos., Inc.-/- .......................................   US             30,000      1,166,250         0.7
  Enerflex Systems Ltd. .....................................   CAN            38,000      1,078,626         0.6
  Hanover Compressor Co.-/- .................................   US             42,100        910,413         0.5
  Dril-Quip, Inc.-/- ........................................   US             22,700        814,363         0.5
                                                                                        ------------
                                                                                          91,665,489
                                                                                        ------------
Metals - Steel (13.5%)
  IPSCO, Inc. ...............................................   CAN           111,700      4,835,155         2.8
  Tubos de Acero de Mexico S.A. - ADR{\/} -/- ...............   MEX           227,800      4,598,713         2.7
  Prudential Steel Ltd. .....................................   CAN           102,200      4,278,882         2.5
  NS Group, Inc.-/- .........................................   US            130,300      3,485,525         2.0
  Oregon Steel Mills, Inc. ..................................   US            146,800      3,091,975         1.8
  Maverick Tube Corp.-/- ....................................   US             81,600      2,876,400         1.7
                                                                                        ------------
                                                                                          23,166,650
                                                                                        ------------
Construction (10.8%)
  National-Oilwell, Inc.-/- .................................   US             71,501      5,474,292         3.2
  Global Industries Ltd.-/- .................................   US            248,800      5,007,100         2.9
  Cal Dive International, Inc.-/- ...........................   US             80,000      2,500,000         1.5
  Halter Marine Group, Inc.-/- ..............................   US             43,600      2,280,825         1.3
  Coflexip - ADR{\/} ........................................   FR             34,300      1,886,500         1.1
  Bouygues Offshore S.A. - ADR{\/} ..........................   FR             31,900        773,575         0.4
  TransCoastal Marine Services, Inc.-/- .....................   US             19,200        477,600         0.3
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-76
<PAGE>   1720
                GT GLOBAL NATURAL RESOURCES FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Construction (Continued)
  UNIFAB International, Inc.-/- .............................   US              4,200   $    134,400         0.1
                                                                                        ------------
                                                                                          18,534,292
                                                                                        ------------
Oil (10.0%)
  Giant Industries, Inc. ....................................   US            201,100      3,607,231         2.1
  Orogen Minerals Ltd. - 144A ADR{.} {\/} ...................   AUSL          111,200      3,030,200         1.8
  Canadian Fracmaster Ltd.-/- ...............................   CAN           261,500      2,597,928         1.5
  Ranger Oil Ltd. ...........................................   CAN           280,900      2,431,862         1.4
  Black Sea Energy Ltd.-/- ..................................   CAN         1,139,600      2,345,189         1.4
  ERG SpA-/- ................................................   ITLY          373,000      1,535,837         0.9
  Petroleo Brasileiro S.A. (Petrobras) Preferred ............   BRZL        7,900,000      1,469,067         0.9
                                                                                        ------------
                                                                                          17,017,314
                                                                                        ------------
Chemicals (2.5%)
  Ciba Specialty Chemicals AG-/- ............................   SWTZ           43,360      4,258,571         2.5
                                                                                        ------------
Paper/Packaging (2.4%)
  Fort James Corp. ..........................................   US             66,962      2,657,554         1.5
  Jefferson Smurfit Corp.-/- ................................   US            100,400      1,506,000         0.9
                                                                                        ------------
                                                                                           4,163,554
                                                                                        ------------
Gas Production & Distribution (2.4%)
  Comstock Resources, Inc.-/- ...............................   US            232,400      3,892,700         2.3
  Berkley Petroleum Corp.-/- ................................   CAN            20,400        233,792         0.1
                                                                                        ------------
                                                                                           4,126,492
                                                                                        ------------
Industrial Components (2.2%)
  Encore Wire Corp.-/- ......................................   US            132,950      3,755,838         2.2
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-77
<PAGE>   1721
                GT GLOBAL NATURAL RESOURCES FUND - CONSOLIDATED
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Consumer Services (2.0%)
  American Disposal Services, Inc.-/- .......................   US             95,500   $  3,366,375         2.0
                                                                                        ------------
Forest Products (0.7%)
  The TimberWest Timber Trust Special Warrants(.) (::) ......   CAN           422,700      1,124,840         0.7
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $136,805,346) ................                            171,179,415        99.7
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $136,805,346)  * ....................                            171,179,415        99.7
Other Assets and Liabilities ................................                                494,158         0.3
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $171,673,573       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        {.}  Security 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.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (see Note 1 of Notes to Financial Statements).
        (.)  Restricted securities: At October 31, 1997 the Fund owned the
             following restricted security constituting 0.7% of net assets which
             may not be publicly sold without registration under the Securities
             Act of 1933 (Note 1). Additional information on the security is as
             follows:
 
<TABLE>
<CAPTION>
                                                                                                       VALUE
                                                                                                        PER
                                                                                                       SHARE
                                                                                                       (NOTE
             DESCRIPTION                                      ACQUISITION DATE   SHARES     COST         1)
             -----------------------------------------------  -----------------  ------  -----------   ------
             <S>                                              <C>                <C>     <C>           <C>
             The TimberWest Timber Trust Special Warrants...       8/7/97        422,700 $ 1,142,844   $2.66
</TABLE>
 
          *  For Federal income tax purposes, cost is $137,392,339 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  37,982,563
                 Unrealized depreciation:            (4,195,487)
                                                  -------------
                 Net unrealized appreciation:     $  33,787,076
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviation:
    ADR--American Depository Receipt
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                         PERCENTAGE OF NET ASSETS
                                                    {D}
                                        ---------------------------
                                                 SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY    & OTHER     TOTAL
- - --------------------------------------  ------   ----------   -----
<S>                                     <C>      <C>          <C>
Australia (AUSL/AUD) .................    1.8                   1.8
Brazil (BRZL/BRL) ....................    0.9                   0.9
Canada (CAN/CAD) .....................   16.0                  16.0
France (FR/FRF) ......................    1.5                   1.5
Italy (ITLY/ITL) .....................    0.9                   0.9
Mexico (MEX/MXN) .....................    2.7                   2.7
Norway (NOR/NOK) .....................    1.2                   1.2
Switzerland (SWTZ/CHF) ...............    2.5                   2.5
United States (US/USD) ...............   72.2        0.3       72.5
                                        ------     -----      -----
Total  ...............................   99.7        0.3      100.0
                                        ------     -----      -----
                                        ------     -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $171,673,573.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-78
<PAGE>   1722
                       GT GLOBAL TELECOMMUNICATIONS FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                          VALUE          % OF NET
EQUITY INVESTMENTS                                           COUNTRY      SHARES         (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
Telecom Equipment (28.0%)
  Nokia AB "A" ............................................   FIN         1,059,160   $   92,479,819         5.4
  ECI Telecommunications Ltd.{\/} .........................   ISRL        2,609,500       72,087,438         4.2
  Newbridge Networks Corp.-/- .............................   CAN         1,332,300       71,049,067         4.1
  Telefonaktiebolaget LM Ericsson: ........................   SWDN               --               --         3.1
    "B" Free-/- ...........................................   --            871,200       38,397,307          --
    ADR{\/} ...............................................   --            350,480       15,508,740          --
  DSC Communications Corp.-/- .............................   US          1,220,100       29,739,938         1.7
  Corning, Inc. ...........................................   US            600,000       27,075,000         1.6
  P-COM, Inc.-/- ..........................................   US          1,200,000       24,150,000         1.4
  ANTEC Corp.-/- ..........................................   US          1,162,300       18,306,225         1.1
  Tekelec-/- ..............................................   US            428,900       17,960,188         1.0
  Tellabs, Inc.-/- ........................................   US            240,000       12,960,000         0.8
  Pairgain Technologies, Inc.-/- ..........................   US            428,800       12,113,600         0.7
  Tadiran Ltd. - ADR{\/} ..................................   ISRL          246,100        9,290,275         0.5
  Geotek Communications, Inc.-/- ..........................   US          2,471,100        8,957,738         0.5
  Champion Technology Holding Ltd. ........................   HK         67,154,902        8,166,314         0.5
  Teledata Communications Ltd.-/- {\/} ....................   ISRL          198,000        6,138,000         0.4
  Allen Telecom, Inc.-/- ..................................   US            300,000        5,662,500         0.3
  Netas Telekomunik-/- ....................................   TRKY       17,820,000        5,343,474         0.3
  Ascend Communications, Inc.-/- ..........................   US            160,000        4,330,000         0.3
  Himachal Futuristic Communications Ltd. - 144A GDR{.} -/-
   {\/} (.) (::) ..........................................   IND         1,248,000        2,184,000         0.1
  Sapura Telecommunications Bhd. ..........................   MAL         1,155,000          680,024          --
  Kantone Holding Ltd.-/- .................................   HK          6,256,868          639,447          --
                                                                                      --------------
                                                                                         483,219,094
                                                                                      --------------
Telephone Networks (22.4%)
  Telecom Italia S.p.A.: ..................................   ITLY               --               --         3.8
    Di Risp-/- ............................................   --         13,989,767       56,330,863          --
    Common ................................................   --          1,263,334        7,901,199          --
  Telecomunicacoes Brasileiras S.A. (Telebras) -
   ADR{\/} ................................................   BRZL          632,500       64,198,750         3.7
  WorldCom, Inc. ..........................................   US          1,644,290       55,289,251         3.2
  SPT Telecom-/- ..........................................   CZCH          391,340       45,056,567         2.6
  Cable & Wireless Communications - ADR-/- {\/} ...........   UK          1,670,250       30,377,672         1.8
  Hellenic Telecommunications Organization S.A. ...........   GREC        1,286,000       26,857,552         1.6
  NTL, Inc.-/- {\/} .......................................   UK            855,833       23,214,470         1.4
  Carso Global Telecom "A1" ...............................   MEX         7,036,683       23,090,433         1.3
  France Telecom S.A.: ....................................   FR                 --               --         0.9
    ADR-/- {\/} ...........................................   --            320,000       12,120,000          --
    Common-/- .............................................   --             85,500        3,237,187          --
  Ionica Group PLC-/- .....................................   UK          1,456,400        7,523,838         0.4
  Atlantic Tele-Network, Inc.-/- ..........................   US            500,100        6,313,763         0.4
  Telefonica del Peru S.A. - ADR{\/} ......................   PERU          318,400        6,288,400         0.4
  Russian Telecommunications Development Corp.: ...........   RUS                --               --         0.3
    Non-Voting(.) -/- {\/} (::) ...........................   --            453,000        3,397,500          --
    Voting(.) -/- {\/} (::) ...............................   --            331,000        2,482,500          --
  Compania Anonima Nacional Telefonos de Venezuela (CANTV)
   - ADR{\/} ..............................................   VENZ           96,000        4,200,000         0.2
  PLD Telekon, Inc.-/- {\/} (.) ...........................   RUS           510,000        4,016,250         0.2
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-79
<PAGE>   1723
                       GT GLOBAL TELECOMMUNICATIONS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                          VALUE          % OF NET
EQUITY INVESTMENTS                                           COUNTRY      SHARES         (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
Telephone Networks (Continued)
  TelecomAsia Corp. - Foreign-/- ..........................   THAI        6,622,652   $    2,965,367         0.2
                                                                                      --------------
                                                                                         384,861,562
                                                                                      --------------
Wireless Communications (17.3%)
  Nextel Communications, Inc. "A"-/- ......................   US          2,745,700       72,074,625         4.2
  Millicom International Cellular S.A.{::} -/- {\/} .......   LUX         1,057,000       44,394,000         2.6
  DDI Corp. ...............................................   JPN             9,320       31,144,140         1.8
  Grupo Iusacell S.A. "L" - ADR-/- {\/} ...................   MEX         1,672,100       30,097,800         1.8
  Paging Network, Inc.-/- .................................   US          2,165,000       26,791,875         1.6
  Clearnet Communications, Inc. "A"-/- ....................   CAN         1,138,100       17,848,432         1.0
  WinStar Communications, Inc.-/- .........................   US            667,700       15,273,638         0.9
  Western Wireless Corp. "A"-/- ...........................   US            750,300       13,411,613         0.8
  Telecom Italia Mobile S.p.A. - Di Risp ..................   ITLY        5,425,700       11,086,917         0.6
  Advanced Info. Service - Foreign ........................   THAI        1,993,150       10,709,463         0.6
  Vimpel-Communications - ADR-/- {\/} .....................   RUS           250,000        8,187,500         0.5
  Powertel, Inc.-/- .......................................   US            365,000        6,638,438         0.4
  Microcell Telecommunications, Inc. "B"-/- {\/} ..........   CAN           596,400        5,330,325         0.3
  China Telecom (Hong Kong) Ltd.-/- .......................   HK          1,452,000        2,319,819         0.1
  SK Telecom Co., Ltd. - ADR{\/} ..........................   KOR           289,900        1,594,450         0.1
                                                                                      --------------
                                                                                         296,903,035
                                                                                      --------------
Telephone - Long Distance (5.7%)
  Tel-Save Holdings, Inc.-/- ..............................   US          2,000,000       43,000,000         2.5
  Call-Net Enterprises, Inc.: .............................   CAN                --               --         2.2
    "B"-/- ................................................   --          1,036,700       20,966,470          --
    "A"-/- ................................................   --            519,400       10,688,760          --
    "B" - 144A{.} -/- .....................................   --            379,400        7,673,077          --
  Bell Canada International, Inc.: ........................   CAN                --               --         0.8
    Common-/- .............................................   --            717,300       12,165,392          --
    Common-/- {\/} ........................................   --            132,500        2,235,938          --
  RSL Communications Ltd. "A"-/- ..........................   US            136,000        3,196,000         0.2
                                                                                      --------------
                                                                                          99,925,637
                                                                                      --------------
Telephone - Regional/Local (5.6%)
  ICG Communications, Inc.-/- .............................   US          1,504,600       34,605,800         2.0
  Intermedia Communications of Florida, Inc.-/- ...........   US            613,900       27,855,713         1.6
  Teleport Communications Group, Inc. "A"-/- ..............   US            364,000       17,608,500         1.0
  ING Barings Russian Regional Telecommunications Basket
   Bridge Certificates-/- {\/} {=} ........................   RUS             1,749       14,383,024         0.8
  Brooks Fiber Properties, Inc.-/- ........................   US             41,400        2,302,875         0.1
  NEXTLINK Communications, Inc. "A"-/- ....................   US             78,000        1,764,750         0.1
                                                                                      --------------
                                                                                          98,520,662
                                                                                      --------------
Multi-Industry (4.7%)
  Mannesmann AG ...........................................   GER           140,900       59,481,125         3.5
  Grupo Carso, S.A. de C.V. "A1" ..........................   MEX         3,300,000       20,985,629         1.2
                                                                                      --------------
                                                                                          80,466,754
                                                                                      --------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-80
<PAGE>   1724
                       GT GLOBAL TELECOMMUNICATIONS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                          VALUE          % OF NET
EQUITY INVESTMENTS                                           COUNTRY      SHARES         (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
Aerospace/Defense (2.6%)
  Orbital Sciences Corp.{::} -/- ..........................   US          1,838,500   $   44,813,438         2.6
                                                                                      --------------
Telecom Technology (2.5%)
  Uniphase Corp.-/- .......................................   US            449,900       30,199,538         1.8
  Three-Five Systems, Inc.{::} -/- ........................   US            599,000       12,429,250         0.7
                                                                                      --------------
                                                                                          42,628,788
                                                                                      --------------
Cable Television (1.6%)
  Comcast Corp. "A" .......................................   US            604,300       16,618,250         1.0
  Comcast UK Cable Partners Ltd. "A"-/- ...................   UK            415,000        4,707,656         0.3
  United International Holdings, Inc. "A"-/- ..............   US            373,000        4,615,875         0.3
                                                                                      --------------
                                                                                          25,941,781
                                                                                      --------------
Broadcasting & Publishing (1.4%)
  EchoStar Communications Corp. "A"{::} ...................   US            609,200       11,574,800         0.7
  Sistem Televisyen Malaysia Bhd. .........................   MAL         7,436,000        7,549,919         0.4
  Seat SpA-/- .............................................   ITLY       16,820,000        4,413,481         0.3
                                                                                      --------------
                                                                                          23,538,200
                                                                                      --------------
Semiconductors (0.8%)
  DSP Communications, Inc.-/- .............................   US            624,000       11,544,000         0.7
  General Semiconductor, Inc.-/- ..........................   US            175,000        1,990,625         0.1
                                                                                      --------------
                                                                                          13,534,625
                                                                                      --------------
Retailers - Other (0.3%)
  Asia Food & Properties Ltd.-/- {\/} .....................   SING       14,192,000        4,328,560         0.3
  Gran Cadena de Almacenes Colombianos S.A. ...............   COL            66,560           82,032          --
                                                                                      --------------
                                                                                           4,410,592
                                                                                      --------------
Networking (0.2%)
  3Com Corp.-/- ...........................................   US             80,100        3,319,144         0.2
                                                                                      --------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $1,274,850,186) ............                            1,602,083,312        93.1
                                                                                      --------------       -----
<CAPTION>
 
                                                                         PRINCIPAL        VALUE          % OF NET
FIXED INCOME INVESTMENTS                                     CURRENCY     AMOUNT         (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
Structured Note (2.2%)
  Russia (2.2%)
    Credit Suisse Financial Products Russian Equity Linked
     Note, 3.3% due 4/29/98 (This is an equity linked note.
     The value of this note is linked to the underlying
     value of Rostelecom.)-/- (.) .........................   USD        38,000,000       37,012,000         2.2
                                                                                      --------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $38,000,000) .........                               37,012,000         2.2
                                                                                      --------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-81
<PAGE>   1725
                       GT GLOBAL TELECOMMUNICATIONS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                          NO. OF          VALUE          % OF NET
WARRANTS                                                     COUNTRY     WARRANTS        (NOTE 1)         ASSETS
- -----------------------------------------------------------  --------   -----------   --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
  Asia Food & Properties Ltd. Warrants, expire
   7/12/02{\/} ............................................   SING        1,064,400   $      191,592          --
    FOOD
  American Satellite Network Warrants, expire 1/1/99(::)
   (.) ....................................................   US             65,825               --          --
    WIRELESS COMMUNICATIONS
                                                                                      --------------       -----
 
TOTAL WARRANTS (cost $484,741) ............................                                  191,592          --
                                                                                      --------------       -----
<CAPTION>
 
                                                                                          VALUE          % OF NET
REPURCHASE AGREEMENT                                                                     (NOTE 1)         ASSETS
- -----------------------------------------------------------                           --------------   -------------
<S>                                                          <C>        <C>           <C>              <C>
  Dated October 31, 1997, with State Street Bank & Trust
   Co., due November 3, 1997, for an effective yield of
   5.57%, collateralized by $35,290,000 U.S. Treasury Bond,
   8.875% due 8/15/17 (market value of collateral is
   $46,298,227, including accrued interest).
   (cost $45,388,021)  ....................................                               45,388,021         2.6
                                                                                      --------------       -----
 
TOTAL INVESTMENTS (cost $1,358,722,948)  * ................                            1,684,674,925        97.9
Other Assets and Liabilities ..............................                               36,444,134         2.1
                                                                                      --------------       -----
 
NET ASSETS ................................................                           $1,721,119,059       100.0
                                                                                      --------------       -----
                                                                                      --------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {::}  Security was an affiliate at October 31, 1997 (see Note 6 of Notes
             to Financial Statements).
       {\/}  U.S. currency denominated.
        {.}  Security 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.
        {=}  Issued by ING Barings, the value of which is linked to the
             underlying value of a basket of shares issued by Russian regional
             telephone companies.
        (.)  Restricted securities: At October 31, 1997 the Fund owned the
             following restricted securities constituting 2.8% of net assets
             which may not be publicly sold without registration under the
             Securities Act of 1933 (Note 1). Additional information on the
             securities is as follows:
 
<TABLE>
<CAPTION>
                                                                                                       VALUE
                                                                                                        PER
                                                                                                       SHARE
                                                                                                       (NOTE
             DESCRIPTION                                      ACQUISITION DATE   SHARES     COST         1)
             -----------------------------------------------  -----------------  ------  -----------   ------
             <S>                                              <C>                <C>     <C>           <C>
             American Satellite Network Warrants, expire
              1/1/99........................................      12/31/93       65,825  $        --   $--
             Credit Suisse Financial Products Russian Equity
              Linked Note, 3.3% due 4/29/98.................       4/29/97       38,000,000  38,000,000 0.97
             Himachal Futuristic Communications Ltd. - 144A
              GDR...........................................       8/1/95        1,248,000   9,604,650 1.75
             PLD Telekon, Inc...............................       8/30/96       510,000   3,498,750   7.88
             Russian Telecommunications Development Corp.:
               Non-voting...................................      12/22/93       453,000   4,530,000   7.50
               Voting.......................................      12/22/93       331,000   3,310,000   7.50
</TABLE>
 
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (See Note 1 of Notes to Financial Statements).
          *  For Federal income tax purposes, cost is $1,359,258,436 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $ 519,851,820
                 Unrealized depreciation:          (194,435,331)
                                                  -------------
                 Net unrealized appreciation:     $ 325,416,489
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviations:
             ADR--American Depository Receipt
             GDR--Global Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-82
<PAGE>   1726
                       GT GLOBAL TELECOMMUNICATIONS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {D}
                                        -------------------------------------------
                                                 FIXED INCOME,
                                                   RIGHTS &      SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS       & OTHER     TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Brazil (BRZL/BRL) ....................    3.7                                   3.7
Canada (CAN/CAD) .....................    8.4                                   8.4
Czech Republic (CZCH/CSK) ............    2.6                                   2.6
Finland (FIN/FIM) ....................    5.4                                   5.4
France (FR/FRF) ......................    0.9                                   0.9
Germany (GER/DEM) ....................    3.5                                   3.5
Greece (GREC/GRD) ....................    1.6                                   1.6
Hong Kong (HK/HKD) ...................    0.6                                   0.6
India (IND/INR) ......................    0.1                                   0.1
Israel (ISRL/ILS) ....................    5.1                                   5.1
Italy (ITLY/ITL) .....................    4.7                                   4.7
Japan (JPN/JPY) ......................    1.8                                   1.8
Korea (KOR/KRW) ......................    0.1                                   0.1
Luxembourg (LUX/LUF) .................    2.6                                   2.6
Malaysia (MAL/MYR) ...................    0.4                                   0.4
Mexico (MEX/MXN) .....................    4.3                                   4.3
Peru (PERU/PES) ......................    0.4                                   0.4
Russia (RUS/SUR) .....................    1.8         2.2                       4.0
Singapore (SING/SGD) .................    0.3                                   0.3
Sweden (SWDN/SEK) ....................    3.1                                   3.1
Thailand (THAI/THB) ..................    0.8                                   0.8
Turkey (TRKY/TRL) ....................    0.3                                   0.3
United Kingdom (UK/GBP) ..............    3.9                                   3.9
United States (US/USD) ...............   36.5                        4.7       41.2
Venezuela (VENZ/VEB) .................    0.2                                   0.2
                                        ------      -----          -----      -----
Total  ...............................   93.1         2.2            4.7      100.0
                                        ------      -----          -----      -----
                                        ------      -----          -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $1,721,119,059.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-83
<PAGE>   1727
                       GT GLOBAL TELECOMMUNICATIONS FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                OCTOBER 31, 1997
<TABLE>
<CAPTION>
                                                                                    UNREALIZED
                                           MARKET VALUE     CONTRACT    DELIVERY   APPRECIATION
CONTRACTS TO BUY:                         (U.S. DOLLARS)      PRICE       DATE    (DEPRECIATION)
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Japanese Yen............................      13,280,549     118.50000  11/12/97   $  (201,730)
Japanese Yen............................         673,732     118.60000  11/12/97        (9,657)
                                          --------------                          --------------
  Total Contracts to Buy (Payable amount
   $14,165,668).........................      13,954,281                              (211,387)
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO BUY AS
 PERCENTAGE OF NET ASSETS IS 0.81%.
 
<CAPTION>
 
CONTRACTS TO SELL:
- ----------------------------------------
<S>                                       <C>              <C>          <C>       <C>
British Pounds..........................      41,535,139       0.60190   1/20/98    (1,170,888)
Deutsche Marks..........................      15,664,388       1.80000  11/21/97      (664,388)
Deutsche Marks..........................       7,948,226       1.72400  11/21/97        (1,591)
Finnish Markka..........................      38,825,761       5.28300   1/21/98      (968,483)
Italian Liras...........................      50,091,184    1730.40000   1/21/98      (969,594)
Japanese Yen............................      23,255,611     113.59900  11/12/97     1,371,807
Japanese Yen............................      17,298,836     114.50000  11/12/97       876,273
Swedish Kronor..........................      51,700,408       7.61030   1/21/98      (979,674)
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $243,813,015).................     246,319,553                            (2,506,538)
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 14.31%.
  Total Open Forward Foreign Currency
   Contracts, Net.......................                                           $(2,717,925)
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-84
<PAGE>   1728
                             GT GLOBAL THEME FUNDS
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                                October 31, 1997
<TABLE>
<S>                                    <C>              <C>              <C>           <C>              <C>
- --------------------------------------------------------------------------------
 
<CAPTION>
                                                                         GT GLOBAL
                                       -----------------------------------------------------------------------------
                                          CONSUMER                                                        NATURAL
                                        PRODUCTS AND      FINANCIAL                    INFRASTRUCTURE    RESOURCES
                                       SERVICES FUND-   SERVICES FUND-      HEALTH         FUND-           FUND-
                                        CONSOLIDATED     CONSOLIDATED        CARE       CONSOLIDATED    CONSOLIDATED
                                          (NOTE 1)         (NOTE 1)          FUND         (NOTE 1)        (NOTE 1)
                                       --------------   --------------   ------------  --------------   ------------
<S>                                    <C>              <C>              <C>           <C>              <C>
Assets:
  Investments in securities: (Note 1)
    At identified cost...............   $124,047,571     $69,090,966     $484,207,357   $76,186,714     $136,805,346
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
    At value.........................   $132,596,014     $76,932,464     $547,657,721   $94,961,508     $171,179,415
    Repurchase Agreement, at value
     and cost (Note 1)...............      5,697,881       2,708,419       72,617,234     2,156,334               --
  U.S. currency......................            303              --              390           128              705
  Foreign currencies (cost $249,434,
   $290,416, $32,405,
   $252,788, $2,016,446, and
   $938,200, respectively)...........        247,103         290,889           32,773       257,815        2,016,446
  Dividends and dividend withholding
   tax reclaims receivable...........         29,063          50,112           10,585        25,624           15,438
  Interest receivable................             --              --               --            --               --
  Receivable for forward foreign
   currency contracts -- closed, net
   (Note 1)..........................             --              --               --         5,096               --
  Receivable for Fund shares sold....        585,508       1,011,553       13,993,515       141,205        5,010,514
  Receivable for open forward foreign
   currency contracts (Note 1).......             --          59,877               --            --               --
  Receivable for securities sold.....     25,634,646       1,515,031        6,745,139     1,309,852        6,715,639
  Unamortized organizational costs
   (Note 1)..........................         22,264          19,944               --        16,280           16,225
  Miscellaneous receivable...........         91,501           4,131           36,371            --           33,585
                                       --------------   --------------   ------------  --------------   ------------
    Total assets.....................    164,904,283      82,592,420      641,093,728    98,873,842      184,987,967
                                       --------------   --------------   ------------  --------------   ------------
Liabilities:
  Payable for custodian fees.........            769          10,403            7,317         1,332            8,200
  Payable for Directors' and
   Trustees' fees and expenses
   (Note 2)..........................          4,859           4,446            9,136         7,921            5,237
  Payable for forward foreign
   currency contracts -- closed, net
   (Note 1)..........................             --              --               --            --               --
  Payable for fund accounting fees
   (Note 2)..........................          4,352           1,845           14,194         2,367            3,914
  Payable for Fund shares
   repurchased.......................        261,522         142,435          882,049       496,631        4,099,045
  Payable for investment management
   and administration fees (Note
   2)................................        139,166         180,741          536,273        89,949          147,355
  Payable for loan outstanding (Note
   1)................................             --              --               --            --        4,670,000
  Payable for open forward foreign
   currency contracts, net (Note
   1)................................             --              --               --        50,790               --
  Payable for printing and postage
   expenses..........................         33,464          23,148           73,457        51,926           45,104
  Payable for professional fees......         23,989          25,345           39,780        30,852           35,756
  Payable for registration and filing
   fees..............................          4,130           2,371           15,839         2,078           12,139
  Payable for securities purchased...      1,563,285       1,154,504       12,706,263            --        4,125,569
  Payable for service and
   distribution expenses (Note 2)....        114,540          57,009          346,611        74,426          113,980
  Payable for transfer agent fees
   (Note 2)..........................         55,435          20,911          111,824        38,302           39,544
  Other accrued expenses.............         36,359           7,528            8,868         8,109            8,451
                                       --------------   --------------   ------------  --------------   ------------
    Total liabilities................      2,241,870       1,630,686       14,751,611       854,683       13,314,294
  Minority interest (Notes 1 & 2)....            100             100               --           100              100
                                       --------------   --------------   ------------  --------------   ------------
Net assets...........................   $162,662,313     $80,961,634     $626,342,117   $98,019,059     $171,673,573
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
 
<CAPTION>
 
                                          TELECOM-
                                         MUNICATIONS
                                            FUND
                                       ---------------
<S>                                    <C>
Assets:
  Investments in securities: (Note 1)
    At identified cost...............  $ 1,313,334,927
                                       ---------------
                                       ---------------
    At value.........................  $ 1,639,286,904
    Repurchase Agreement, at value
     and cost (Note 1)...............       45,388,021
  U.S. currency......................        1,822,076
  Foreign currencies (cost $249,434,
   $290,416, $32,405,
   $252,788, $2,016,446, and
   $938,200, respectively)...........          944,514
  Dividends and dividend withholding
   tax reclaims receivable...........          403,424
  Interest receivable................          639,026
  Receivable for forward foreign
   currency contracts -- closed, net
   (Note 1)..........................               --
  Receivable for Fund shares sold....       15,407,247
  Receivable for open forward foreign
   currency contracts (Note 1).......               --
  Receivable for securities sold.....       28,894,370
  Unamortized organizational costs
   (Note 1)..........................               --
  Miscellaneous receivable...........           76,388
                                       ---------------
    Total assets.....................    1,732,861,970
                                       ---------------
Liabilities:
  Payable for custodian fees.........           84,942
  Payable for Directors' and
   Trustees' fees and expenses
   (Note 2)..........................           19,588
  Payable for forward foreign
   currency contracts -- closed, net
   (Note 1)..........................          518,821
  Payable for fund accounting fees
   (Note 2)..........................           42,359
  Payable for Fund shares
   repurchased.......................        3,902,530
  Payable for investment management
   and administration fees (Note
   2)................................        1,545,877
  Payable for loan outstanding (Note
   1)................................               --
  Payable for open forward foreign
   currency contracts, net (Note
   1)................................        2,717,925
  Payable for printing and postage
   expenses..........................          143,320
  Payable for professional fees......           42,564
  Payable for registration and filing
   fees..............................           21,199
  Payable for securities purchased...          824,693
  Payable for service and
   distribution expenses (Note 2)....        1,246,800
  Payable for transfer agent fees
   (Note 2)..........................          578,391
  Other accrued expenses.............           53,902
                                       ---------------
    Total liabilities................       11,742,911
  Minority interest (Notes 1 & 2)....               --
                                       ---------------
Net assets...........................  $ 1,721,119,059
                                       ---------------
                                       ---------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-85
<PAGE>   1729
                             GT GLOBAL THEME FUNDS
 
                              STATEMENT OF ASSETS
                            AND LIABILITIES  (cont'd)
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         GT GLOBAL
                                       -----------------------------------------------------------------------------
                                          CONSUMER                                                        NATURAL
                                        PRODUCTS AND      FINANCIAL                    INFRASTRUCTURE    RESOURCES
                                       SERVICES FUND-   SERVICES FUND-      HEALTH         FUND-           FUND-
                                        CONSOLIDATED     CONSOLIDATED        CARE       CONSOLIDATED    CONSOLIDATED
                                          (NOTE 1)         (NOTE 1)          FUND         (NOTE 1)        (NOTE 1)
                                       --------------   --------------   ------------  --------------   ------------
<S>                                    <C>              <C>              <C>           <C>              <C>
Class A:
  Net assets.........................   $ 62,637,424     $29,639,233     $472,082,753   $38,281,107     $ 69,975,533
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
  Shares outstanding.................      2,823,290       1,720,718       16,869,933     2,550,862        3,388,224
  Net asset value and redemption
   price per share...................   $      22.19     $     17.22     $      27.98   $     15.01     $      20.65
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
  Maximum offering price per share
   (100/95.25 of Class A net asset
   value) *..........................   $      23.30     $     18.08     $      29.38   $     15.76     $      21.68
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
Class B:+
  Net assets.........................   $ 93,978,324     $47,584,875     $147,440,444   $57,199,440     $ 86,812,455
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
  Shares outstanding.................      4,298,574       2,803,980        5,406,267     3,878,968        4,262,012
  Net asset value and offering price
   per share.........................   $      21.86     $     16.97     $      27.27   $     14.75     $      20.37
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
Advisor Class:
  Net assets.........................   $  6,046,565     $ 3,737,526     $  6,818,920   $ 2,538,512     $ 14,885,585
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
  Shares outstanding.................        268,724         214,778          240,609       166,702          715,607
  Net asset value, offering price per
   share, and redemption price per
   share.............................   $      22.50     $     17.40     $      28.34   $     15.23     $      20.80
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
Net assets consist of:
  Paid in capital (Note 4)...........   $139,734,245     $70,584,296     $418,339,020   $78,555,962     $132,802,223
  Undistributed net investment
   income............................             --              --               --            --               --
  Accumulated net realized gain on
   investments and foreign currency
   transactions......................     14,374,566       2,469,935      144,809,745       733,004        4,606,185
  Net unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies........................          5,059          65,905         (257,012)      (44,701)        (108,904)
  Net unrealized appreciation of
   investments.......................      8,548,443       7,841,498       63,450,364    18,774,794       34,374,069
                                       --------------   --------------   ------------  --------------   ------------
Total -- representing net assets
 applicable to capital shares
 outstanding.........................   $162,662,313     $80,961,634     $626,342,117   $98,019,059     $171,673,573
                                       --------------   --------------   ------------  --------------   ------------
                                       --------------   --------------   ------------  --------------   ------------
 
<CAPTION>
 
                                          TELECOM-
                                         MUNICATIONS
                                            FUND
                                       ---------------
<S>                                    <C>
Class A:
  Net assets.........................  $   910,801,431
                                       ---------------
                                       ---------------
  Shares outstanding.................       50,482,268
  Net asset value and redemption
   price per share...................  $         18.04
                                       ---------------
                                       ---------------
  Maximum offering price per share
   (100/95.25 of Class A net asset
   value) *..........................  $         18.94
                                       ---------------
                                       ---------------
Class B:+
  Net assets.........................  $   805,535,052
                                       ---------------
                                       ---------------
  Shares outstanding.................       45,831,329
  Net asset value and offering price
   per share.........................  $         17.58
                                       ---------------
                                       ---------------
Advisor Class:
  Net assets.........................  $     4,782,576
                                       ---------------
                                       ---------------
  Shares outstanding.................          261,622
  Net asset value, offering price per
   share, and redemption price per
   share.............................  $         18.28
                                       ---------------
                                       ---------------
Net assets consist of:
  Paid in capital (Note 4)...........  $ 1,284,396,946
  Undistributed net investment
   income............................            5,534
  Accumulated net realized gain on
   investments and foreign currency
   transactions......................      113,512,388
  Net unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies........................       (2,747,786)
  Net unrealized appreciation of
   investments.......................      325,951,977
                                       ---------------
Total -- representing net assets
 applicable to capital shares
 outstanding.........................  $ 1,721,119,059
                                       ---------------
                                       ---------------
<FN>
- ----------------
    * On sales of $50,000 or more, the offering price is reduced.
    + Redemption price per share is equal to the net asset value per share less
      any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-86
<PAGE>   1730
                             GT GLOBAL THEME FUNDS
 
                            STATEMENT OF OPERATIONS
 
                          Year ended October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                          GT GLOBAL
                                        -----------------------------------------------------------------------------
                                           CONSUMER                                                        NATURAL
                                         PRODUCTS AND      FINANCIAL         HEALTH     INFRASTRUCTURE    RESOURCES
                                        SERVICES FUND-   SERVICES FUND-       CARE          FUND-           FUND-
                                         CONSOLIDATED     CONSOLIDATED        FUND       CONSOLIDATED    CONSOLIDATED
                                        --------------   --------------   ------------  --------------   ------------
<S>                                     <C>              <C>              <C>           <C>              <C>
Investment income:
  Dividend income (net of foreign
   withholding tax of $116,237,
   $77,681, $47,010, $134,900,
   $37,547, and $1,130,922,
   respectively)......................   $ 1,313,121       $  984,532     $  1,039,797    $1,596,063     $   449,578
  Interest income.....................       547,671          222,469        3,553,024       438,660         389,867
  Other income........................            --               --           10,693            --              --
                                        --------------   --------------   ------------  --------------   ------------
    Total investment income...........     1,860,792        1,207,001        4,603,514     2,034,723         839,445
                                        --------------   --------------   ------------  --------------   ------------
Expenses:
  Investment management and
   administration fees (Note 2).......     1,624,151          466,730        5,820,067     1,038,752       1,317,793
  Amortization of organization costs
   (Note 1)...........................        10,300           12,622               --        10,300          10,300
  Custodian fees (Note 1).............        37,548           43,877           41,984        32,117          46,437
  Directors' and Trustees' fees and
   expenses (Note 2)..................        10,068           15,695           13,505        16,060          16,464
  Fund accounting fees (Note 2).......        43,330           12,292          153,780        27,303          34,698
  Professional fees...................        62,925           77,090           73,277        74,770          86,956
  Printing and postage expenses.......        53,290           27,560          239,520        49,065          54,239
  Registration and filing fees........        75,895           50,741           80,092        54,967          80,810
  Service and distribution expenses:
   (Note 2)
    Class A...........................       351,953           97,454        2,327,631       218,486         291,788
    Class B...........................       941,035          280,650        1,316,284       621,768         733,200
  Transfer agent fees (Note 2)........       547,348          177,473        1,346,860       364,416         478,946
  Other expenses......................        10,567            7,531           34,305        17,058          81,546
                                        --------------   --------------   ------------  --------------   ------------
    Total expenses before
     reductions.......................     3,768,410        1,269,715       11,447,305     2,525,062       3,233,177
                                        --------------   --------------   ------------  --------------   ------------
    Expense reductions (Notes 1 &
     5)...............................      (244,767)         (31,702)        (178,043)      (84,870)       (138,074)
                                        --------------   --------------   ------------  --------------   ------------
  Total net expenses..................     3,523,643        1,238,013       11,269,262     2,440,192       3,095,103
                                        --------------   --------------   ------------  --------------   ------------
Net investment loss...................    (1,662,851)         (31,012)      (6,665,748)     (405,469)     (2,255,658)
                                        --------------   --------------   ------------  --------------   ------------
Net realized and unrealized gain on
  investments and foreign currencies:
  (Note 1)
  Net realized gain on investments....    16,725,116        2,648,364      153,144,761       380,153       7,635,020
  Net realized gain (loss) on foreign
   currency transactions..............      (557,667)         (19,802)         454,546       398,459         (94,442)
                                        --------------   --------------   ------------  --------------   ------------
    Net realized gain during the
     year.............................    16,167,449        2,628,562      153,599,307       778,612       7,540,578
                                        --------------   --------------   ------------  --------------   ------------
  Net change in unrealized
   appreciation (depreciation) on
   translation of assets and
   liabilities in foreign
   currencies.........................         5,172           58,275         (569,426)     (116,926)       (125,779)
  Net change in unrealized
   appreciation (depreciation) of
   investments........................      (714,518)       6,449,986        1,308,779     8,647,635      18,607,939
                                        --------------   --------------   ------------  --------------   ------------
    Net unrealized appreciation
     (depreciation) during the period
     .................................      (709,346)       6,508,261          739,353     8,530,709      18,482,160
                                        --------------   --------------   ------------  --------------   ------------
Net realized and unrealized gain on
 investments and foreign currencies...    15,458,103        9,136,823      154,338,660     9,309,321      26,022,738
                                        --------------   --------------   ------------  --------------   ------------
Net increase in net assets resulting
 from operations......................   $13,795,252       $9,105,811     $147,672,912    $8,903,852     $23,767,080
                                        --------------   --------------   ------------  --------------   ------------
                                        --------------   --------------   ------------  --------------   ------------
 
<CAPTION>
 
                                          TELECOM-
                                         MUNICATIONS
                                            FUND
                                        -------------
<S>                                     <C>
Investment income:
  Dividend income (net of foreign
   withholding tax of $116,237,
   $77,681, $47,010, $134,900,
   $37,547, and $1,130,922,
   respectively)......................  $  12,312,099
  Interest income.....................      2,451,921
  Other income........................        100,726
                                        -------------
    Total investment income...........     14,864,746
                                        -------------
Expenses:
  Investment management and
   administration fees (Note 2).......     17,999,111
  Amortization of organization costs
   (Note 1)...........................             --
  Custodian fees (Note 1).............        744,400
  Directors' and Trustees' fees and
   expenses (Note 2)..................         27,375
  Fund accounting fees (Note 2).......        493,322
  Professional fees...................         89,205
  Printing and postage expenses.......        421,575
  Registration and filing fees........        110,230
  Service and distribution expenses:
   (Note 2)
    Class A...........................      5,105,842
    Class B...........................      8,933,516
  Transfer agent fees (Note 2)........      5,229,276
  Other expenses......................        619,413
                                        -------------
    Total expenses before
     reductions.......................     39,773,265
                                        -------------
    Expense reductions (Notes 1 &
     5)...............................     (1,051,898)
                                        -------------
  Total net expenses..................     38,721,367
                                        -------------
Net investment loss...................    (23,856,621)
                                        -------------
Net realized and unrealized gain on
  investments and foreign currencies:
  (Note 1)
  Net realized gain on investments....    101,709,075
  Net realized gain (loss) on foreign
   currency transactions..............     18,717,671
                                        -------------
    Net realized gain during the
     year.............................    120,426,746
                                        -------------
  Net change in unrealized
   appreciation (depreciation) on
   translation of assets and
   liabilities in foreign
   currencies.........................     (7,132,389)
  Net change in unrealized
   appreciation (depreciation) of
   investments........................    217,773,979
                                        -------------
    Net unrealized appreciation
     (depreciation) during the period
     .................................    210,641,590
                                        -------------
Net realized and unrealized gain on
 investments and foreign currencies...    331,068,336
                                        -------------
Net increase in net assets resulting
 from operations......................  $ 307,211,715
                                        -------------
                                        -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-87
<PAGE>   1731
                             GT GLOBAL THEME FUNDS
 
                      STATEMENTS OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                  GT GLOBAL
                                -----------------------------------------------------------------------------
                                 CONSUMER PRODUCTS AND      FINANCIAL SERVICES
                                        SERVICES             FUND-CONSOLIDATED            HEALTH CARE
                                   FUND-CONSOLIDATED      -----------------------             FUND
                                ------------------------               YEAR ENDED  --------------------------
                                YEAR ENDED   YEAR ENDED   YEAR ENDED    OCTOBER     YEAR ENDED    YEAR ENDED
                                OCTOBER 31,  OCTOBER 31,  OCTOBER 31,     31,      OCTOBER 31,   OCTOBER 31,
                                   1997         1996         1997         1996         1997          1996
                                -----------  -----------  -----------  ----------  ------------  ------------
<S>                             <C>          <C>          <C>          <C>         <C>           <C>
Increase (decrease) in net
assets
Operations:
  Net investment income
   (loss).....................  $(1,662,851) $  (806,945) $   (31,012) $   18,823  $ (6,665,748) $ (4,508,835)
  Net realized gain on
   investments and foreign
   currency transactions......   16,167,449    8,472,742    2,628,562   1,764,380   153,599,307   176,889,538
  Net change in unrealized
   appreciation (depreciation)
   on translation of assets
   and liabilities in foreign
   currencies.................        5,172       (7,034)      58,275      (6,352)     (569,426)     (547,070)
  Net change in unrealized
   appreciation (depreciation)
   of investments.............     (714,518)   8,880,649    6,449,986     615,083     1,308,779   (53,392,951)
                                -----------  -----------  -----------  ----------  ------------  ------------
    Net increase in net assets
     resulting from
     operations...............   13,795,252   16,539,412    9,105,811   2,391,934   147,672,912   118,440,682
                                -----------  -----------  -----------  ----------  ------------  ------------
Class A:
Distributions to shareholders:
 (Note 1)
  From net investment
   income.....................           --           --           --     (56,390)           --            --
  From net realized gain on
   investments................   (3,424,902)    (217,050)    (580,522)     (8,739)  (34,613,411)  (54,405,334)
Class B:
Distributions to shareholders:
 (Note 1)
  From net investment
   income.....................           --           --           --     (37,999)           --            --
  From net realized gain on
   investments................   (4,055,905)    (180,431)    (823,692)     (7,991)   (8,701,491)   (9,956,648)
Advisor Class:
Distributions to shareholders:
 (Note 1)
  From net investment
   income.....................           --           --           --        (377)           --            --
  From net realized gain on
   investments................     (308,573)      (5,969)      (5,018)        (43)      (57,488)      (69,184)
                                -----------  -----------  -----------  ----------  ------------  ------------
    Total distributions.......   (7,789,380)    (403,450)  (1,409,232)   (111,539)  (43,372,390)  (64,431,166)
                                -----------  -----------  -----------  ----------  ------------  ------------
Capital share transactions:
(Note 4)
  Increase from capital shares
   sold and reinvested........  136,239,369  241,650,741  130,520,030  19,900,814  1,007,452,632 2,138,295,778
  Decrease from capital shares
   repurchased................  (151,833,735) (92,740,871) (74,514,633) (15,187,336) (1,062,045,275) (2,113,330,083)
                                -----------  -----------  -----------  ----------  ------------  ------------
    Net increase (decrease)
     from capital share
     transactions.............  (15,594,366) 148,909,870   56,005,397   4,713,478   (54,592,643)   24,965,695
                                -----------  -----------  -----------  ----------  ------------  ------------
Total increase (decrease) in
 net assets...................   (9,588,494) 165,045,832   63,701,976   6,993,873    49,707,879    78,975,211
Net assets:
  Beginning of year...........  172,250,807    7,204,975   17,259,658  10,265,785   576,634,238   497,659,027
                                -----------  -----------  -----------  ----------  ------------  ------------
  End of year *...............  $162,662,313 $172,250,807 $80,961,634  $17,259,658 $626,342,117  $576,634,238
                                -----------  -----------  -----------  ----------  ------------  ------------
                                -----------  -----------  -----------  ----------  ------------  ------------
 * Includes accumulated net
   investment income/(loss)...  $        --  $        --  $        --  $       --  $         --  $         --
                                -----------  -----------  -----------  ----------  ------------  ------------
                                -----------  -----------  -----------  ----------  ------------  ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-88
<PAGE>   1732
                             GT GLOBAL THEME FUNDS
 
                  STATEMENTS OF CHANGES IN NET ASSETS (cont'd)
 
<TABLE>
<CAPTION>
                                                                 GT GLOBAL
                                ----------------------------------------------------------------------------
                                    INFRASTRUCTURE
                                  FUND-CONSOLIDATED        NATURAL RESOURCES          TELECOMMUNICATIONS
                                ----------------------     FUND-CONSOLIDATED                 FUND
                                YEAR ENDED  YEAR ENDED  ------------------------  --------------------------
                                 OCTOBER     OCTOBER    YEAR ENDED   YEAR ENDED    YEAR ENDED    YEAR ENDED
                                   31,         31,      OCTOBER 31,  OCTOBER 31,  OCTOBER 31,   OCTOBER 31,
                                   1997        1996        1997         1996          1997          1996
                                ----------  ----------  -----------  -----------  ------------  ------------
<S>                             <C>          <C>          <C>          <C>         <C>           <C>
Increase (decrease) in net
assets
Operations:
  Net investment income
   (loss).....................  $ (405,469) $ (421,987) $(2,255,658) $(1,055,526) $(23,856,621) $(26,498,477)
  Net realized gain on
   investments and foreign
   currency transactions......     778,612   5,308,138    7,540,578    7,316,705   120,426,746   230,489,793
  Net change in unrealized
   appreciation (depreciation)
   on translation of assets
   and liabilities in foreign
   currencies.................    (116,926)    (86,155)    (125,779)      65,378    (7,132,389)  (21,852,465)
  Net change in unrealized
   appreciation (depreciation)
   of investments.............   8,647,635   9,582,726   18,607,939   14,910,009   217,773,979    (5,766,662)
                                ----------  ----------  -----------  -----------  ------------  ------------
    Net increase in net assets
     resulting from
     operations...............   8,903,852  14,382,722   23,767,080   21,236,566   307,211,715   176,372,189
                                ----------  ----------  -----------  -----------  ------------  ------------
Class A:
Distributions to shareholders:
 (Note 1)
  From net investment
   income.....................          --          --           --      (46,497)           --            --
  From net realized gain on
   investments................  (1,943,050)         --   (1,915,988)      (9,643)  (95,676,425)  (64,901,484)
Class B:
Distributions to shareholders:
 (Note 1)
  From net investment
   income.....................          --          --           --           --            --            --
  From net realized gain on
   investments................  (2,733,339)         --   (2,369,395)     (10,136)  (83,596,023)  (54,643,650)
Advisor Class:
Distributions to shareholders:
 (Note 1)
  From net investment
   income.....................          --          --           --         (853)           --            --
  From net realized gain on
   investments................     (17,129)         --     (134,145)         (69)     (176,806)      (33,321)
                                ----------  ----------  -----------  -----------  ------------  ------------
    Total distributions.......  (4,693,518)         --   (4,419,528)     (67,198) (179,449,254) (119,578,455)
                                ----------  ----------  -----------  -----------  ------------  ------------
Capital share transactions:
(Note 4)
  Increase from capital shares
   sold and reinvested........  44,324,471  42,853,853  377,334,346  219,606,793  1,783,734,946 3,156,330,159
  Decrease from capital shares
   repurchased................  (42,934,337) (51,456,466) (336,987,548) (155,468,156) (2,403,405,013) (3,466,020,319)
                                ----------  ----------  -----------  -----------  ------------  ------------
    Net increase (decrease)
     from capital share
     transactions.............   1,390,134  (8,602,613)  40,346,798   64,138,637  (619,670,067) (309,690,160)
                                ----------  ----------  -----------  -----------  ------------  ------------
Total increase (decrease) in
 net assets...................   5,600,468   5,780,109   59,694,350   85,308,005  (491,907,606) (252,896,426)
Net assets:
  Beginning of year...........  92,418,591  86,638,482  111,979,223   26,671,218  2,213,026,665 2,465,923,091
                                ----------  ----------  -----------  -----------  ------------  ------------
  End of year *...............  $98,019,059 $92,418,591 $171,673,573 $111,979,223 $1,721,119,059 $2,213,026,665
                                ----------  ----------  -----------  -----------  ------------  ------------
                                ----------  ----------  -----------  -----------  ------------  ------------
 * Includes accumulated net
   investment income/(loss)...  $       --  $       --  $        --  $        --  $      5,534  $      5,534
                                ----------  ----------  -----------  -----------  ------------  ------------
                                ----------  ----------  -----------  -----------  ------------  ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-89
<PAGE>   1733
                             GT GLOBAL THEME FUNDS
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
 
<TABLE>
<S>                                       <C>         <C>         <C>
statements.
<CAPTION>
<S>                                       <C>         <C>         <C>
<CAPTION>
                                             CONSUMER PRODUCTS AND SERVICES FUND
                                          ------------------------------------------
                                                           CLASS A
                                          ------------------------------------------
                                                                  DECEMBER 30, 1994
                                          YEAR ENDED OCTOBER 31,   (COMMENCEMENT OF
                                                                    OPERATIONS) TO
                                          ----------------------     OCTOBER 31,
                                           1997 (D)    1996 (D)        1995 (D)
                                          ----------  ----------  ------------------
<S>                                       <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   20.98   $   14.59       $   11.43
                                          ----------  ----------       --------
Income from investment operations:
  Net investment income (loss)..........      (0.15)      (0.22)           0.02*
  Net realized and unrealized gain on
   investments..........................       2.27        7.13            3.14
                                          ----------  ----------       --------
    Net increase from investment
     operations.........................       2.12        6.91            3.16
                                          ----------  ----------       --------
Distributions to shareholders:
  From net realized gain on
   investments..........................      (0.91)      (0.52)             --
                                          ----------  ----------       --------
    Total distributions.................      (0.91)      (0.52)             --
                                          ----------  ----------       --------
Net asset value, end of period..........  $   22.19   $   20.98       $   14.59
                                          ----------  ----------       --------
                                          ----------  ----------       --------
 
Total investment return (c).............      10.55%      48.82%          27.65 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  62,637   $  76,900       $   4,082
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      (0.72)%     (1.14)%          0.20 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      (0.87)%     (1.24)%        (11.11)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       1.84%       2.24%           2.32 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       1.99%       2.34%          13.63 % (a)
Portfolio turnover rate++...............        392%        169%            240 % (a)
Average commission rate per share paid
 on portfolio transactions++............  $  0.0319   $  0.0545             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., net
     investment income per share would have been reduced by $1.12, $1.04
     and $0.61 for Class A, Class B and Advisor Class, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-90
<PAGE>   1734
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                 CONSUMER PRODUCTS AND SERVICES FUND
                                          ---------------------------------------------------------------------------------
                                                           CLASS B
                                          ------------------------------------------             ADVISOR CLASS+
                                                                                      -------------------------------------
                                                                  DECEMBER 30, 1994
                                          YEAR ENDED OCTOBER 31,   (COMMENCEMENT OF   YEAR ENDED OCTOBER 31,  JUNE 1, 1995
                                                                    OPERATIONS) TO                                 TO
                                          ----------------------     OCTOBER 31,      ----------------------   OCTOBER 31,
                                           1997 (D)    1996 (D)        1995 (D)        1997 (D)    1996 (D)     1995 (D)
                                          ----------  ----------  ------------------  ----------  ----------  -------------
<S>                                       <C>         <C>         <C>                 <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   20.79   $   14.53       $   11.43       $   21.15   $   14.64     $   11.84
                                          ----------  ----------       --------       ----------  ----------  -------------
Income from investment operations:
  Net investment income (loss)..........      (0.24)      (0.31)          (0.04) *        (0.04)      (0.13)         0.04*
  Net realized and unrealized gain on
   investments..........................       2.22        7.09            3.14            2.30        7.16          2.76
                                          ----------  ----------       --------       ----------  ----------  -------------
    Net increase from investment
     operations.........................       1.98        6.78            3.10            2.26        7.03          2.80
                                          ----------  ----------       --------       ----------  ----------  -------------
Distributions to shareholders:
  From net realized gain on
   investments..........................      (0.91)      (0.52)             --           (0.91)      (0.52)           --
                                          ----------  ----------       --------       ----------  ----------  -------------
    Total distributions.................      (0.91)      (0.52)             --           (0.91)      (0.52)           --
                                          ----------  ----------       --------       ----------  ----------  -------------
Net asset value, end of period..........  $   21.86   $   20.79       $   14.53       $   22.50   $   21.15     $   14.64
                                          ----------  ----------       --------       ----------  ----------  -------------
                                          ----------  ----------       --------       ----------  ----------  -------------
 
Total investment return (c).............       9.95%      48.11%          27.12 % (b)     11.15%      49.50%        23.65%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  93,978   $  87,904       $   2,959       $   6,047   $   7,446     $     164
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      (1.22)%     (1.64)%         (0.30)% (a)     (0.22)%     (0.64)%        0.70%(a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      (1.37)%     (1.74)%        (11.61)% (a)     (0.37)%     (0.74)%      (10.61)%(a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       2.34%       2.74%           2.82 % (a)      1.34%       1.74%         1.82%(a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       2.49%       2.84%          14.13 % (a)      1.49%       1.84%        13.13%(a)
Portfolio turnover rate++...............        392%        169%            240 % (a)       392%        169%          240%(a)
Average commission rate per share paid
 on portfolio transactions++............  $  0.0319   $  0.0545             N/A       $  0.0319   $  0.0545           N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., net
     investment income per share would have been reduced by $1.12, $1.04
     and $0.61 for Class A, Class B and Advisor Class, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-91
<PAGE>   1735
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
 
<TABLE>
<S>                                       <C>         <C>         <C>          <C>
derived from information provided in the financial statements.
<CAPTION>
<S>                                       <C>         <C>         <C>          <C>
<CAPTION>
                                                          FINANCIAL SERVICES FUND
                                          -------------------------------------------------------
                                                                  CLASS A
                                          -------------------------------------------------------
                                                                                  MAY 31, 1994
                                                YEAR ENDED OCTOBER 31,          (COMMENCEMENT OF
                                          -----------------------------------    OPERATIONS) TO
                                           1997 (D)    1996 (D)    1995 (D)     OCTOBER 31, 1994
                                          ----------  ----------  -----------  ------------------
<S>                                       <C>         <C>         <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   14.20   $   11.92    $   11.62       $   11.43
                                          ----------  ----------  -----------       --------
Income from investment operations:
  Net investment income (loss)..........       0.04        0.05*        0.17* *          0.02* * *
  Net realized and unrealized gain on
   investments..........................       3.97        2.36         0.13            0.17
                                          ----------  ----------  -----------       --------
    Net increase from investment
     operations.........................       4.01        2.41         0.30            0.19
                                          ----------  ----------  -----------       --------
Distributions to shareholders:
  From net investment income............         --       (0.12)          --              --
  From net realized gain on
   investments..........................      (0.99)      (0.01)          --              --
                                          ----------  ----------  -----------       --------
    Total distributions.................      (0.99)      (0.13)          --              --
                                          ----------  ----------  -----------       --------
Net asset value, end of period..........  $   17.22   $   14.20    $   11.92       $   11.62
                                          ----------  ----------  -----------       --------
                                          ----------  ----------  -----------       --------
 
Total investment return (c).............      29.91%      20.21%        2.58%           1.66 % (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  29,639   $   7,302    $   5,687       $   3,175
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       0.23%       0.41%        1.46%           0.66 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       0.16%      (0.66)%      (5.34)%         (7.26)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       2.29%       2.32%        2.34%           2.40 % (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       2.36%       3.39%        9.14%          10.32 % (a)
Portfolio turnover rate++...............         91%        103%         170%             53 % (a)
Average commission rate per share paid
 on portfolio transactions++............  $  0.0014   $  0.0080          N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.13 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.59, $0.59
     and $0.30 for Class A, Class B and Advisor Class, respectively.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.23 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-92
<PAGE>   1736
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
<TABLE>
<CAPTION>
                                                                      FINANCIAL SERVICES FUND
                                          -------------------------------------------------------------------------------
                                                                                                       ADVISOR CLASS+
                                                                  CLASS B                          ----------------------
                                          -------------------------------------------------------
                                                                                  MAY 31, 1994     YEAR ENDED OCTOBER 31,
                                                YEAR ENDED OCTOBER 31,          (COMMENCEMENT OF
                                          -----------------------------------    OPERATIONS) TO    ----------------------
                                           1997 (D)    1996 (D)    1995 (D)     OCTOBER 31, 1994    1997 (D)    1996 (D)
                                          ----------  ----------  -----------  ------------------  ----------  ----------
<S>                                       <C>         <C>         <C>          <C>                 <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   14.06   $   11.83    $   11.60       $   11.43       $   14.26   $   11.95
                                          ----------  ----------  -----------       --------       ----------  ----------
Income from investment operations:
  Net investment income (loss)..........      (0.04)      (0.01) *       0.11* *          0.00 * *      0.12        0.12*
  Net realized and unrealized gain on
   investments..........................       3.94        2.34         0.12            0.17            4.01        2.36
                                          ----------  ----------  -----------       --------       ----------  ----------
    Net increase from investment
     operations.........................       3.90        2.33         0.23            0.17            4.13        2.48
                                          ----------  ----------  -----------       --------       ----------  ----------
Distributions to shareholders:
  From net investment income............         --       (0.09)          --              --              --       (0.16)
  From net realized gain on
   investments..........................      (0.99)      (0.01)          --              --           (0.99)      (0.01)
                                          ----------  ----------  -----------       --------       ----------  ----------
    Total distributions.................      (0.99)      (0.10)          --              --           (0.99)      (0.17)
                                          ----------  ----------  -----------       --------       ----------  ----------
Net asset value, end of period..........  $   16.97   $   14.06    $   11.83       $   11.60       $   17.40   $   14.26
                                          ----------  ----------  -----------       --------       ----------  ----------
                                          ----------  ----------  -----------       --------       ----------  ----------
 
Total investment return (c).............      29.13%      19.81%        1.98%           1.49 % (b)     30.52%      20.87%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  47,585   $   9,886    $   4,548       $   2,235       $   3,738   $      72
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      (0.27)%     (0.09)%       0.96%           0.16 % (a)      0.73%       0.91%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      (0.34)%     (1.16)%      (5.84)%         (7.76)% (a)      0.66%(a)     (0.16)%
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       2.79%       2.82%        2.84%           2.90 % (a)      1.79%       1.82%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       2.86%       3.89%        9.64%          10.82 % (a)      1.86%       2.89%
Portfolio turnover rate++...............         91%        103%         170%             53 % (a)        91%        103%
Average commission rate per share paid
 on portfolio transactions++............  $  0.0014   $  0.0080          N/A             N/A       $  0.0014   $  0.0080
 
<CAPTION>
 
                                          JUNE 1, 1995
                                               TO
                                           OCTOBER 31,
                                            1995 (D)
                                          -------------
<S>                                       <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   11.09
                                          -------------
Income from investment operations:
  Net investment income (loss)..........         0.09* *
  Net realized and unrealized gain on
   investments..........................         0.77
                                          -------------
    Net increase from investment
     operations.........................         0.86
                                          -------------
Distributions to shareholders:
  From net investment income............           --
  From net realized gain on
   investments..........................           --
                                          -------------
    Total distributions.................           --
                                          -------------
Net asset value, end of period..........    $   11.95
                                          -------------
                                          -------------
Total investment return (c).............         7.75%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $      31
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.96%(a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (4.84)%(a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.84%(a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         8.64%(a)
Portfolio turnover rate++...............          170%
Average commission rate per share paid
 on portfolio transactions++............          N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.13 for each
     of the three classes.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.59, $0.59
     and $0.30 for Class A, Class B and Advisor Class, respectively.
 * * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.23 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-93
<PAGE>   1737
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
<TABLE>
<CAPTION>
 
                                                               HEALTH CARE FUND
                                          ----------------------------------------------------------
                                                                   CLASS A+
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)    1996 (D)      1995      1994 (D)    1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   23.60   $   21.84   $   19.60   $   17.86   $   17.44
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment loss...................      (0.25)      (0.17)      (0.15)      (0.22)      (0.15)
  Net realized and unrealized gain on
   investments..........................       6.48        4.79        3.73        2.02        0.57
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       6.23        4.62        3.58        1.80        0.42
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net realized gain on
   investments..........................      (1.85)      (2.86)      (1.34)         --          --
  In excess of net realized gain on
   investments..........................         --          --          --       (0.06)         --
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (1.85)      (2.86)      (1.34)      (0.06)         --
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $   27.98   $   23.60   $   21.84   $   19.60   $   17.86
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............      28.36%      23.14%      19.79%      10.11%        2.4%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 472,083   $ 467,861   $ 426,380   $ 438,940   $ 461,113
Ratio of net investment loss to average
 net assets:
  With expense reductions (Notes 1 &
   5)...................................      (1.00)%     (0.71)%     (0.72)%     (1.23)%      (0.9)%
  Without expense reductions............      (1.03)%     (0.75)%     (0.78)%       N/A         N/A
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................       1.77%       1.80%       1.85%       1.98%        2.0%
  Without expense reductions............       1.80%       1.84%       1.91%        N/A         N/A
Portfolio turnover rate++++.............        149%        157%         99%         64%         61%
Average commission rate per share paid
 on portfolio transactions++++..........  $  0.0490   $  0.0548         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charge.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  All capital shares issued and outstanding as of March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-94
<PAGE>   1738
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
<TABLE>
<CAPTION>
                                                                            HEALTH CARE FUND
                                          -------------------------------------------------------------------------------------
                                                                                                            ADVISOR CLASS+++
                                                                    CLASS B++                            ----------------------
                                          -------------------------------------------------------------
                                                                                          APRIL 1, 1993  YEAR ENDED OCTOBER 31,
                                                      YEAR ENDED OCTOBER 31,                   TO
                                          ----------------------------------------------   OCTOBER 31,   ----------------------
                                           1997 (D)    1996 (D)      1995      1994 (D)     1993 (D)      1997 (D)    1996 (D)
                                          ----------  ----------  ----------  ----------  -------------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>            <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   23.15   $   21.56   $   19.46   $   17.80     $   15.59    $   23.77   $   21.88
                                          ----------  ----------  ----------  ----------  -------------  ----------  ----------
Income from investment operations:
  Net investment loss...................      (0.37)      (0.27)      (0.25)      (0.32)        (0.14)       (0.12)      (0.05)
  Net realized and unrealized gain on
   investments..........................       6.34        4.72        3.69        2.02          2.35         6.54        4.80
                                          ----------  ----------  ----------  ----------  -------------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       5.97        4.45        3.44        1.70          2.21         6.42        4.75
                                          ----------  ----------  ----------  ----------  -------------  ----------  ----------
Distributions to shareholders:
  From net realized gain on
   investments..........................      (1.85)      (2.86)      (1.34)         --            --        (1.85)      (2.86)
  In excess of net realized gain on
   investments..........................         --          --          --       (0.04)           --           --          --
                                          ----------  ----------  ----------  ----------  -------------  ----------  ----------
    Total distributions.................      (1.85)      (2.86)      (1.34)      (0.04)           --        (1.85)      (2.86)
                                          ----------  ----------  ----------  ----------  -------------  ----------  ----------
Net asset value, end of period..........  $   27.27   $   23.15   $   21.56   $   19.46     $   17.80    $   28.34   $   23.77
                                          ----------  ----------  ----------  ----------  -------------  ----------  ----------
                                          ----------  ----------  ----------  ----------  -------------  ----------  ----------
 
Total investment return (c).............      27.75%      22.59%      19.17%       9.55%         14.2%(b)     29.00%     23.82%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 147,440   $ 107,622   $  70,740   $  39,100     $   8,604    $   6,819   $   1,152
Ratio of net investment loss to average
 net assets:
  With expense reductions (Notes 1 &
   5)...................................      (1.50)%     (1.21)%     (1.22)%     (1.73)%        (1.4)%(a)     (0.50)%     (0.21)%
  Without expense reductions............      (1.53)%     (1.25)%     (1.28)%       N/A           N/A        (0.53)%     (0.25)%
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................       2.27%       2.30%       2.35%       2.48%         2.50%(a)      1.27%      1.30%
  Without expense reductions............       2.30%       2.34%       2.41%        N/A           N/A         1.30%       1.34%
Portfolio turnover rate++++.............        149%        157%         99%         64%           61%         149%        157%
Average commission rate per share paid
 on portfolio transactions++++..........  $  0.0490   $  0.0548         N/A         N/A           N/A    $  0.0490   $  0.0548
 
<CAPTION>
 
                                          JUNE 1, 1995
                                               TO
                                           OCTOBER 31,
                                              1995
                                          -------------
<S>                                       <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   18.66
                                          -------------
Income from investment operations:
  Net investment loss...................        (0.02)
  Net realized and unrealized gain on
   investments..........................         3.24
                                          -------------
    Net increase (decrease) from
     investment operations..............         3.22
                                          -------------
Distributions to shareholders:
  From net realized gain on
   investments..........................           --
  In excess of net realized gain on
   investments..........................           --
                                          -------------
    Total distributions.................           --
                                          -------------
Net asset value, end of period..........    $   21.88
                                          -------------
                                          -------------
Total investment return (c).............        17.10%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $     539
Ratio of net investment loss to average
 net assets:
  With expense reductions (Notes 1 &
   5)...................................        (0.22)%(a)
  Without expense reductions............        (0.28)%(a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         1.35%(a)
  Without expense reductions............         1.41%(a)
Portfolio turnover rate++++.............           99%
Average commission rate per share paid
 on portfolio transactions++++..........          N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not annualized.
 (c) Total investment return does not include sales charge.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  All capital shares issued and outstanding as of March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-95
<PAGE>   1739
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
 
<TABLE>
<S>                                       <C>         <C>         <C>         <C>
statements.
<CAPTION>
<S>                                       <C>         <C>         <C>         <C>
<CAPTION>
                                                           INFRASTRUCTURE FUND
                                          -----------------------------------------------------
                                                                 CLASS A
                                          -----------------------------------------------------
                                                                                MAY 31, 1994
                                                YEAR ENDED OCTOBER 31,        (COMMENCEMENT OF
                                          ----------------------------------   OPERATIONS) TO
                                           1997 (D)    1996 (D)      1995     OCTOBER 31, 1994
                                          ----------  ----------  ----------  -----------------
<S>                                       <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   14.42   $   12.11   $   12.47       $   11.43
                                          ----------  ----------  ----------  -----------------
Income from investment operations:
  Net investment income (loss)..........      (0.01)      (0.03)      (0.03) *          0.01* *
  Net realized and unrealized gain
   (loss) on investments................       1.32        2.34       (0.33)           1.03
                                          ----------  ----------  ----------  -----------------
    Net increase (decrease) from
     investment operations..............       1.31        2.31       (0.36)           1.04
                                          ----------  ----------  ----------  -----------------
Distributions to shareholders:
  From net realized gain on
   investments..........................      (0.72)         --          --              --
                                          ----------  ----------  ----------  -----------------
    Total distributions.................      (0.72)         --          --              --
                                          ----------  ----------  ----------  -----------------
Net asset value, end of period..........  $   15.01   $   14.42   $   12.11       $   12.47
                                          ----------  ----------  ----------  -----------------
                                          ----------  ----------  ----------  -----------------
 
Total investment return (c).............       9.38%      19.08%      (2.89)%          9.10% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  38,281   $  38,397   $  36,241       $  23,615
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      (0.09)%     (0.19)%     (0.32)%          0.41% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      (0.17)%     (0.30)%     (0.58)%         (0.47)% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       2.00%       2.14%       2.36%           2.40% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       2.08%       2.25%       2.62%           3.28% (a)
Portfolio turnover rate++...............         41%         41%         45%             18%
Average commission rate per share paid
 on portfolio transactions++............  $  0.0046   $  0.0109         N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not Annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.03 for Class
     A shares, $0.03 for Class B shares, and $0.02 for Advisor Class
     shares.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.02 for Class
     A and Class B from May 31, 1994 to October 31, 1994.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-96
<PAGE>   1740
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
                                                                       INFRASTRUCTURE FUND
                                          -----------------------------------------------------------------------------
                                                                                                     ADVISOR CLASS+
                                                                 CLASS B                         ----------------------
                                          -----------------------------------------------------
                                                                                MAY 31, 1994     YEAR ENDED OCTOBER 31,
                                                YEAR ENDED OCTOBER 31,        (COMMENCEMENT OF
                                          ----------------------------------   OPERATIONS) TO    ----------------------
                                           1997 (D)    1996 (D)      1995     OCTOBER 31, 1994    1997 (D)    1996 (D)
                                          ----------  ----------  ----------  -----------------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>                <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   14.24   $   12.03   $   12.45       $   11.43      $   14.52   $   12.14
                                          ----------  ----------  ----------  -----------------  ----------  ----------
Income from investment operations:
  Net investment income (loss)..........      (0.09)      (0.09)      (0.09) *         (0.01) * *      0.05       0.04
  Net realized and unrealized gain
   (loss) on investments................       1.32        2.30       (0.33)           1.03           1.38        2.34
                                          ----------  ----------  ----------  -----------------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       1.23        2.21       (0.42)           1.02           1.43        2.38
                                          ----------  ----------  ----------  -----------------  ----------  ----------
Distributions to shareholders:
  From net realized gain on
   investments..........................      (0.72)         --          --              --          (0.72)         --
                                          ----------  ----------  ----------  -----------------  ----------  ----------
    Total distributions.................      (0.72)         --          --              --          (0.72)         --
                                          ----------  ----------  ----------  -----------------  ----------  ----------
Net asset value, end of period..........  $   14.75   $   14.24   $   12.03       $   12.45      $   15.23   $   14.52
                                          ----------  ----------  ----------  -----------------  ----------  ----------
                                          ----------  ----------  ----------  -----------------  ----------  ----------
 
Total investment return (c).............       8.83%      18.37%      (3.37)%          8.92% (b)     10.10%      19.60%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  57,199   $  53,678   $  50,181       $  30,954      $   2,539   $     344
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      (0.59)%     (0.69)%     (0.82)%         (0.09)% (a)      0.41%      0.31%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      (0.67)%     (0.80)%     (1.08)%         (0.97)% (a)      0.33%      0.20%
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       2.50%       2.64%       2.86%           2.90% (a)      1.50%       1.64%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       2.58%       2.75%       3.12%           3.78% (a)      1.58%       1.75%
Portfolio turnover rate++...............         41%         41%         45%             18%            41%         41%
Average commission rate per share paid
 on portfolio transactions++............  $  0.0046   $  0.0109         N/A             N/A      $  0.0046   $  0.0109
 
<CAPTION>
 
                                          JUNE 1, 1995
                                               TO
                                           OCTOBER 31,
                                              1995
                                          -------------
<S>                                       <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   12.00
                                          -------------
Income from investment operations:
  Net investment income (loss)..........         0.02*
  Net realized and unrealized gain
   (loss) on investments................         0.12
                                          -------------
    Net increase (decrease) from
     investment operations..............         0.14
                                          -------------
Distributions to shareholders:
  From net realized gain on
   investments..........................           --
                                          -------------
    Total distributions.................           --
                                          -------------
Net asset value, end of period..........    $   12.14
                                          -------------
                                          -------------
Total investment return (c).............         1.17%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $     216
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         0.18%(a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (0.08)%(a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.86%(a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.12%(a)
Portfolio turnover rate++...............           45%
Average commission rate per share paid
 on portfolio transactions++............          N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not Annualized.
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.03 for Class
     A shares, $0.03 for Class B shares, and $0.02 for Advisor Class
     shares.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.02 for Class
     A and Class B from May 31, 1994 to October 31, 1994.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-97
<PAGE>   1741
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
 
<TABLE>
<S>                                       <C>         <C>         <C>         <C>
statements.
<CAPTION>
<S>                                       <C>         <C>         <C>         <C>
<CAPTION>
                                                         NATURAL RESOURCES FUND
                                          -----------------------------------------------------
                                                                 CLASS A
                                          -----------------------------------------------------
                                                                                MAY 31, 1994
                                                YEAR ENDED OCTOBER 31,        (COMMENCEMENT OF
                                          ----------------------------------   OPERATIONS) TO
                                           1997 (D)    1996 (D)      1995     OCTOBER 31, 1994
                                          ----------  ----------  ----------  -----------------
<S>                                       <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   17.43   $   11.44   $   12.41       $   11.43
                                          ----------  ----------  ----------  -----------------
Income from investment operations:
  Net investment income (loss)..........      (0.25)      (0.24)       0.04*           0.06* *
  Net realized and unrealized gain
   (loss) on investments................       4.08        6.28       (0.98)           0.92
                                          ----------  ----------  ----------  -----------------
    Net increase (decrease) from
     investment operations..............       3.83        6.04       (0.94)           0.98
                                          ----------  ----------  ----------  -----------------
Distributions to shareholders:
  From net investment income............         --       (0.04)      (0.03)             --
  From net realized gain on
   investments..........................      (0.61)      (0.01)         --              --
                                          ----------  ----------  ----------  -----------------
    Total distributions.................      (0.61)      (0.05)      (0.03)             --
                                          ----------  ----------  ----------  -----------------
Net asset value, end of period..........  $   20.65   $   17.43   $   11.44       $   12.41
                                          ----------  ----------  ----------  -----------------
                                          ----------  ----------  ----------  -----------------
 
Total investment return (c).............      22.64%      53.04%      (7.58)%          8.57% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  69,975   $  48,729   $  12,598       $  14,797
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      (1.41)%     (1.55)%      0.41%           2.63% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      (1.51)%     (1.65)%     (0.69)%          0.65% (a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       2.03%       2.20%       2.37%           2.40% (a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       2.13%       2.30%       3.47%           4.38% (a)
Portfolio turnover rate++...............        321%         94%         87%            137%
Average commission rate per share paid
 on portfolio transactions++............  $  0.0112   $  0.0243         N/A             N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income (loss) per share would have been reduced (increased)
     by $0.14, $0.13, and $0.12 for Class A, Class B, and Advisor Class,
     respectively.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.04 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-98
<PAGE>   1742
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
                                                                     NATURAL RESOURCES FUND
                                          -----------------------------------------------------------------------------
                                                                                                     ADVISOR CLASS+
                                                                 CLASS B                         ----------------------
                                          -----------------------------------------------------
                                                                                MAY 31, 1994     YEAR ENDED OCTOBER 31,
                                                YEAR ENDED OCTOBER 31,        (COMMENCEMENT OF
                                          ----------------------------------   OPERATIONS) TO    ----------------------
                                           1997 (D)    1996 (D)      1995     OCTOBER 31, 1994    1997 (D)    1996 (D)
                                          ----------  ----------  ----------  -----------------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>                <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   17.29   $   11.36   $   12.38       $   11.43      $   17.47   $   11.47
                                          ----------  ----------  ----------  -----------------  ----------  ----------
Income from investment operations:
  Net investment income (loss)..........      (0.33)      (0.31)      (0.02) *          0.03* *      (0.14)      (0.17)
  Net realized and unrealized gain
   (loss) on investments................       4.02        6.25       (0.98)           0.92           4.08        6.28
                                          ----------  ----------  ----------  -----------------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       3.69        5.94       (1.00)           0.95           3.94        6.11
                                          ----------  ----------  ----------  -----------------  ----------  ----------
Distributions to shareholders:
  From net investment income............         --          --       (0.02)             --             --       (0.10)
  From net realized gain on
   investments..........................      (0.61)      (0.01)         --              --          (0.61)      (0.01)
                                          ----------  ----------  ----------  -----------------  ----------  ----------
    Total distributions.................      (0.61)      (0.01)      (0.02)             --          (0.61)      (0.11)
                                          ----------  ----------  ----------  -----------------  ----------  ----------
Net asset value, end of period..........  $   20.37   $   17.29   $   11.36       $   12.38      $   20.80   $   17.47
                                          ----------  ----------  ----------  -----------------  ----------  ----------
                                          ----------  ----------  ----------  -----------------  ----------  ----------
 
Total investment return (c).............      21.99%      52.39%      (8.05)%          8.31% (b)     23.23%      53.76%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  86,812   $  57,749   $  13,978       $  13,404      $  14,886   $   5,502
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......      (1.91)%     (2.05)%     (0.09)%          2.13% (a)     (0.91)%     (1.05)%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................      (2.01)%     (2.15)%     (1.19)%          0.15% (a)     (1.01)%     (1.15)%
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......       2.53%       2.70%       2.87%           2.90% (a)      1.53%       1.70%
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................       2.63%       2.80%       3.97%           4.88% (a)      1.63%       1.80%
Portfolio turnover rate++...............        321%         94%         87%            137%           321%         94%
Average commission rate per share paid
 on portfolio transactions++............  $  0.0112   $  0.0243         N/A             N/A      $  0.0112   $  0.0243
 
<CAPTION>
 
                                          JUNE 1, 1995
                                               TO
                                           OCTOBER 31,
                                              1995
                                          -------------
<S>                                       <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   11.45
                                          -------------
Income from investment operations:
  Net investment income (loss)..........         0.11*
  Net realized and unrealized gain
   (loss) on investments................        (0.09)
                                          -------------
    Net increase (decrease) from
     investment operations..............         0.02
                                          -------------
Distributions to shareholders:
  From net investment income............           --
  From net realized gain on
   investments..........................           --
                                          -------------
    Total distributions.................           --
                                          -------------
Net asset value, end of period..........    $   11.47
                                          -------------
                                          -------------
Total investment return (c).............         0.17%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $      95
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         0.91%(a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................        (0.19)%(a)
Ratio of expenses to average net assets:
  With expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc. (Notes 1 & 5).......         1.87%(a)
  Without expense reductions and
   reimbursement by Chancellor LGT Asset
   Management, Inc......................         2.97%(a)
Portfolio turnover rate++...............           87%
Average commission rate per share paid
 on portfolio transactions++............          N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income (loss) per share would have been reduced (increased)
     by $0.14, $0.13, and $0.12 for Class A, Class B, and Advisor Class,
     respectively.
 * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
     investment income per share would have been reduced by $0.04 for Class
     A and Class B.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover and average commission rates are calculated on the
     basis of the Portfolio as a whole without distinguishing between the
     classes of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-99
<PAGE>   1743
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
 
<TABLE>
<S>                                       <C>         <C>         <C>         <C>         <C>
statements.
<CAPTION>
<S>                                       <C>         <C>         <C>         <C>         <C>
<CAPTION>
 
                                                           TELECOMMUNICATIONS FUND
                                          ----------------------------------------------------------
                                                                   CLASS A+
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)    1996 (D)      1995      1994 (D)      1993
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   16.69   $   16.42   $   17.80   $   16.92   $   11.16
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income (loss)..........      (0.17)      (0.13)      (0.09)      (0.01)       0.08
  Net realized and unrealized gain
   (loss) on investments................       2.93        1.22       (0.43)       1.17        5.83
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       2.76        1.09       (0.52)       1.16        5.91
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............         --          --          --       (0.01)      (0.15)
  From net realized gain on
   investments..........................      (1.41)      (0.82)      (0.86)      (0.27)         --
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (1.41)      (0.82)      (0.86)      (0.28)      (0.15)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $   18.04   $   16.69   $   16.42   $   17.80   $   16.92
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............      17.70%       7.00%      (2.88)%      7.02%      53.60%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 910,801   $1,204,428  $1,353,722  $1,644,402  $1,223,340
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions (Notes 1 &
   5)...................................      (1.01)%     (0.84)%     (0.49)%     (0.02)%      0.80%
  Without expense reductions............      (1.06)%     (0.89)%     (0.55)%       N/A         N/A
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................       1.79%       1.74%       1.77%       1.80%        2.0%
  Without expense reductions............       1.84%       1.79%       1.83%        N/A         N/A
Portfolio turnover rate++++.............         35%         37%         62%         57%         41%
Average commission rate per share paid
 on portfolio transactions++++..........  $  0.0085   $  0.0165         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not Annualized.
 (c) Total investment return does not include sales charge.
 (d) These selected per share data were calculated based upon the average
     shares outstanding during the period.
  +  All capital shares issued and outstanding March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as whole without distinguishing between the classes
     of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-100
<PAGE>   1744
                             GT GLOBAL THEME FUNDS
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
                                                                        TELECOMMUNICATIONS FUND
                                          -----------------------------------------------------------------------------------
                                                                   CLASS B++                              ADVISOR CLASS+++
                                          -----------------------------------------------------------  ----------------------
                                                                                           APRIL 1,
                                                                                             1993      YEAR ENDED OCTOBER 31,
                                                      YEAR ENDED OCTOBER 31,                  TO
                                          ----------------------------------------------  OCTOBER 31,  ----------------------
                                           1997 (D)    1996 (D)      1995      1994 (D)      1993       1997 (D)    1996 (D)
                                          ----------  ----------  ----------  ----------  -----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>          <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   16.37   $   16.20   $   17.66   $   16.87    $   12.68   $   16.81   $   16.46
                                          ----------  ----------  ----------  ----------  -----------  ----------  ----------
Income from investment operations:
  Net investment income (loss)..........      (0.25)      (0.23)      (0.17)      (0.10)        0.01       (0.09)      (0.05)
  Net realized and unrealized gain
   (loss) on investments................       2.87        1.22       (0.43)       1.17         4.18        2.97        1.22
                                          ----------  ----------  ----------  ----------  -----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       2.62        0.99       (0.60)       1.07         4.19        2.88        1.17
                                          ----------  ----------  ----------  ----------  -----------  ----------  ----------
Distributions to shareholders:
  From net investment income............         --          --          --       (0.01)          --          --          --
  From net realized gain on
   investments..........................      (1.41)      (0.82)      (0.86)      (0.27)          --       (1.41)      (0.82)
                                          ----------  ----------  ----------  ----------  -----------  ----------  ----------
    Total distributions.................      (1.41)      (0.82)      (0.86)      (0.28)          --       (1.41)      (0.82)
                                          ----------  ----------  ----------  ----------  -----------  ----------  ----------
Net asset value, end of period..........  $   17.58   $   16.37   $   16.20   $   17.66    $   16.87   $   18.28   $   16.81
                                          ----------  ----------  ----------  ----------  -----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  -----------  ----------  ----------
 
Total investment return (c).............      17.15%       6.46%      (3.37)%      6.50%        33.0%(b)     18.33%      7.49%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 805,535   $1,007,654  $1,111,520  $1,184,081   $ 455,335   $   4,783   $     945
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions (Notes 1 &
   5)...................................      (1.51)%     (1.34)%     (0.99)%     (0.52)%        0.3%(a)     (0.51)%     (0.34)%
  Without expense reductions............      (1.56)%     (1.39)%     (1.05)%       N/A          N/A       (0.56)%     (0.39)%
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................       2.29%       2.24%       2.27%       2.30%         2.5%(a)      1.29%      1.24%
  Without expense reductions............       2.34%       2.29%       2.33%        N/A          N/A        1.34%       1.29%
Portfolio turnover rate++++.............         35%         37%         62%         57%          41%         35%         37%
Average commission rate per share paid
 on portfolio transactions++++..........  $  0.0085   $  0.0165         N/A         N/A          N/A   $  0.0085   $  0.0165
 
<CAPTION>
 
                                          JUNE 1, 1995
                                               TO
                                           OCTOBER 31,
                                              1995
                                          -------------
<S>                                       <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   15.24
                                          -------------
Income from investment operations:
  Net investment income (loss)..........           --
  Net realized and unrealized gain
   (loss) on investments................         1.22
                                          -------------
    Net increase (decrease) from
     investment operations..............         1.22
                                          -------------
Distributions to shareholders:
  From net investment income............           --
  From net realized gain on
   investments..........................           --
                                          -------------
    Total distributions.................           --
                                          -------------
Net asset value, end of period..........    $   16.46
                                          -------------
                                          -------------
Total investment return (c).............         7.94%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $     681
Ratio of net investment income (loss) to
 average net assets:
  With expense reductions (Notes 1 &
   5)...................................         0.01%(a)
  Without expense reductions............         0.07%(a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         1.27%(a)
  Without expense reductions............         1.33%(a)
Portfolio turnover rate++++.............           62%
Average commission rate per share paid
 on portfolio transactions++++..........          N/A
</TABLE>
 
- ----------------
 
 (a) Annualized.
 (b) Not Annualized.
 (c) Total investment return does not include sales charge.
 (d) These selected per share data were calculated based upon the average
     shares outstanding during the period.
  +  All capital shares issued and outstanding March 31, 1993 were
     reclassified as Class A shares.
 ++  Commencing April 1, 1993, the Fund began offering Class B shares.
+++  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
     basis of the Fund as whole without distinguishing between the classes
     of shares issued.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-101
<PAGE>   1745
                             GT GLOBAL THEME FUNDS
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Consumer Products and Services Fund, GT Global Financial Services
Fund, GT Global Health Care Fund, GT Global Infrastructure Fund, GT Global
Natural Resources Fund and GT Global Telecommunications Fund ("Funds") are
separate series of G.T. Investment Funds, Inc. ("Company"). Collectively, these
Funds are known as the "GT Global Theme Funds". The Company is organized as a
Maryland corporation and is registered under the Investment Company Act of 1940,
as amended ("1940 Act"), as an open-end management investment company. The
Company has thirteen series of shares in operation, each series corresponding to
a distinct portfolio of investments.
 
The GT Global Consumer Products and Services Fund, GT Global Financial Services
Fund, GT Global Infrastructure Fund, and GT Global Natural Resources Fund each
invests substantially all of its investable assets in Global Consumer Products
and Services Portfolio, Global Financial Services Portfolio, Global
Infrastructure Portfolio, and Global Natural Resources Portfolio ("Portfolios"),
respectively. Each Portfolio is organized as a subtrust of a New York common law
trust ("Trust") and is registered under the 1940 Act as an open-end management
investment company.
 
The Portfolios have investment objectives, policies, and limitations
substantially identical to those of their corresponding Funds. Therefore, the
financial statements of the aforementioned Funds and their respective Portfolios
have been presented on a consolidated basis, and represent all activities of
both the respective Funds and Portfolios. Through October 31, 1997, all of the
shares of beneficial interest of each Portfolio were owned by either its
respective Fund or Chancellor LGT Asset Management, Inc. (the "Manager"), which
has a nominal ($100) investment in each Portfolio.
 
The Funds offer Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges except that Class A and Class B
each has exclusive voting rights with respect to its distribution plan.
Investment income, realized and unrealized capital gains and losses, and the
common expenses of each Fund are allocated on a pro rata basis to each class
based on the relative net assets of each class to the total net assets of the
Fund. Each class of shares differs in its respective service and distribution
expenses, and may differ in its transfer agent, registration, and certain other
class-specific fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds and Portfolios in the preparation
of the financial statements.
 
(A) PORTFOLIO VALUATION
The Funds calculate the net asset value of and complete orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by the Manager to be the
primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments are valued at
amortized cost adjusted for foreign exchange translation and market fluctuation,
if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors or the Trusts' Board of Trustees.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors or
the Trusts' Board of Trustees.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of each Fund and Portfolio are maintained in U.S.
dollars. The market values of foreign securities, currency holdings, and other
assets and liabilities are recorded in the books and records of the Funds or
Portfolios (the phrase "Fund or Portfolio" hereinafter includes the GT Global
Health Care Fund, the GT Global Telecommunications Fund, and the four
Portfolios) after translation to U.S. dollars based on the exchange rates on
that day. The cost of each security is determined using historical exchange
rates. Income and withholding taxes are translated at prevailing exchange rates
when earned or incurred.
 
                                      FS-102
<PAGE>   1746
                             GT GLOBAL THEME FUNDS
 
A Fund or Portfolio does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from 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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's or Portfolio's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains or losses arise
from changes in the value of assets and liabilities other than investments in
securities at year end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by a Fund or Portfolio, it is
the Fund's or Portfolio's policy to always receive, as collateral, United States
government securities or other high quality debt securities of which the value,
including accrued interest, is at least equal to the amount to be repaid to the
Fund or Portfolio under each agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund or Portfolio as an unrealized gain or loss.
When the Forward Contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference between the value at the time it was opened
and the value at the time it was closed. Forward Contracts involve market risk
in excess of the amount shown in the Fund's or Portfolio's "Statement of Assets
and Liabilities". A Fund or Portfolio could be exposed to risk if a counterparty
is unable to meet the terms of the contract or if the value of the currency
changes unfavorably. A Fund or Portfolio may enter into Forward Contracts in
connection with planned purchases or sales of securities, or to hedge against
adverse fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When a Fund or Portfolio writes a call or put option, an amount equal to the
premium received is included in the Fund's or Portfolio's "Statement of Assets
and Liabilities" as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market value
of the option. The current market value of an option listed on a traded exchange
is valued at its last bid price, or, in the case of an over-the-counter option,
is valued at the average of the last bid prices obtained from brokers, unless a
quotation from only one broker is available, in which case only that broker's
price will be used. If an option expires on its stipulated expiration date or if
the Fund or Portfolio enters into a closing purchase transaction, a gain or loss
is realized without regard to any unrealized gain or loss on the underlying
security and the liability related to such option is extinguished. If a written
call option is exercised, a gain or loss is realized from the sale of the
underlying security and the proceeds of the sale are increased by the premium
originally received. If a written put option is exercised, the cost of the
underlying security purchased would be decreased by the premium originally
received. The Fund or Portfolio can write options only on a covered basis,
which, for a call, requires that the Fund or Portfolio hold the underlying
security and, for a put, requires the Fund or Portfolio to set aside cash, U.S.
government securities or other liquid securities in an amount not less than the
exercise price, or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund or Portfolio may use options to manage its
exposure to the stock market and to fluctuations in currency values or interest
rates.
 
The premium paid by the Fund or Portfolio for the purchase of a call or put
option is included in the Fund's or Portfolio's "Statement of Assets and
Liabilities" as an investment and subsequently "marked-to-market" to reflect the
current market value of the option. If an option which the Fund or Portfolio has
purchased expires on the stipulated expiration date, the Fund or Portfolio
realizes a loss in the amount of the cost of the option. If the Fund or
Portfolio enters into a closing sale transaction, the Fund or Portfolio realizes
a gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund or Portfolio
exercises a call option, the cost of the securities acquired by exercising the
call is increased by the premium paid to buy the call. If the Fund or Portfolio
exercises a put option, it realizes a gain or loss from the sale of the
underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund or Portfolio may forego
the opportunity of profit if the market value of the underlying security or
index increases and the option is exercised. The risk in writing a put option is
that the Fund or Portfolio may incur a loss if the market value of the
underlying security or index decreases and the option is exercised. In addition,
there is the risk the Fund or Portfolio may not be able to enter into a closing
transaction because of an illiquid secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract a
Fund or Portfolio is required to pledge to the broker an amount of cash or
securities equal to the minimum "initial margin" requirements of the exchange on
which the contract is traded. Pursuant to the contract, the Fund or Portfolio
agrees to receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known as
"variation margin" and are recorded by the Fund or Portfolio as unrealized gains
or losses. When the contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference
 
                                      FS-103
<PAGE>   1747
                             GT GLOBAL THEME FUNDS
 
between the value of the contract at the time it was opened and the value at the
time it was closed. The potential risk to the Fund or Portfolio is that the
change in value of the underlying securities may not correlate to the change in
value of the contracts. A Fund or Portfolio may use futures contracts to manage
its exposure to the stock market and to fluctuations in currency values or
interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out-basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. A Fund or Portfolio may
trade securities on other than normal settlement terms. This may increase the
risk if the other party to the transaction fails to deliver and causes the Fund
or Portfolio to subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1997, stocks with an aggregate value listed below were on loan to
brokers. The loans were secured by cash collateral received by the Funds or
Portfolios:
 
<TABLE>
<CAPTION>
                                                                               YEAR ENDED
                                                  OCTOBER 31, 1997            OCTOBER 31,
                                          --------------------------------        1997
                                          AGGREGATE VALUE        CASH        --------------
                                              ON LOAN         COLLATERAL     FEES RECEIVED
                                          ---------------   --------------   --------------
<S>                                       <C>               <C>              <C>
Global Consumer Products and Services
 Portfolio..............................   $  4,385,800      $   4,476,600      $121,197
Global Financial Services Portfolio.....      1,715,052          1,813,650        18,080
GT Global Health Care Fund..............     33,287,031         33,773,900        96,689
Global Infrastructure Portfolio.........      3,149,538          3,301,300        84,150
Global Natural Resources Portfolio......     12,448,138         12,910,000        66,945
GT Global Telecommunications Fund.......    132,935,037        137,795,261       888,654
</TABLE>
 
For international securities, cash collateral is received by a Fund or Portfolio
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by a Fund or Portfolio against loaned securities in the
amount at least equal to 102% of the market value of the loaned securities at
the inception of each loan. This collateral must be maintained at not less than
100% of the market value of the loaned securities during the period of the loan.
Fees received from securities loaned were used to reduce the Funds' or
Portfolios' custodian and other administrative expenses.
 
(I) TAXES
It is the intended policy of the Funds and Portfolios to meet the requirements
for qualification as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended ("Code"). It is also the intention of the Funds to make
distributions sufficient to avoid imposition of any excise tax under Section
4982 of the Code. Therefore, no provision has been made for Federal taxes on
income, capital gains, unrealized appreciation of securities held, or excise tax
on income and capital gains.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by each Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 Funds or Portfolios and timing
differences.
 
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the GT Global Consumer Products and Services Fund, GT
Global Financial Services Fund, GT Global Infrastructure Fund, and GT Global
Natural Resources Fund in connection with their organizations, their initial
registration with the Securities and Exchange Commission and with various states
and the initial public offering of its shares aggregated $51,500, $63,100,
$51,500, and $51,500, respectively. These expenses are being amortized on a
straightline basis over a five-year period.
 
(L) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's or Portfolio's investments in
emerging market countries may involve greater risks than investments in more
developed markets and the price of such investments may be volatile. These risks
of investing in foreign and emerging markets may include foreign currency
exchange rate fluctuations, perceived credit risk, adverse political and
economic developments and possible adverse foreign government intervention.
 
In addition, each Fund or Portfolio may focus its investments in certain related
consumer products and services, financial services, health care, infrastructure,
natural resources, or telecommunications industries, subjecting the Fund or
Portfolio to greater risk than a fund that is more diversified.
 
(M) INDEXED SECURITIES
A Fund or Portfolio may invest in indexed securities whose value is linked
either directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
 
                                      FS-104
<PAGE>   1748
                             GT GLOBAL THEME FUNDS
 
(N) RESTRICTED SECURITIES
A Fund or Portfolio is permitted to invest in privately placed restricted
securities. These securities may be resold in transactions exempt from
registration or to the public if the securities are registered. Disposal of
these securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) are shown at the end of the Fund's
or Portfolio's Portfolio of Investments.
 
(O) LINE OF CREDIT
Each of the Funds, along with certain other funds ("GT Funds") advised and/or
administered by the Manager, has a line of credit with each of BankBoston and
State Street Bank & Trust Company. The arrangements with the banks allow the GT
Funds to borrow an aggregate maximum amount of $200,000,000. Each Fund is
limited to borrowing up to 33 1/3% of the value of each Fund's total assets. On
October 31, 1997, GT Global Natural Resources Fund had $4,670,000 in loans
outstanding.
 
For the year ended October 31, 1997, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for GT Global Consumer Products Fund, GT Global Health Care Fund, GT Global
Natural Resources Fund and GT Global Telecommunications Fund was $2,217,765,
$4,916,667, $4,008,879 and $26,570,611, respectively, with a weighted average
interest rate of 6.14%, 6.61%, 6.32% and 6.32%, respectively. Interest expense
for the GT Global Consumer Products Fund, GT Global Health Care Fund, GT Global
Natural Resources Fund and GT Global Telecommunications Fund for the year ended
October 31, 1997 was $6,616, $21,656, $64,318 and $527,303, respectively.
Interest expense is included in "Other Expenses" on the Statement of Operations.
 
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc. is the Funds' and Portfolios' investment
manager and administrator. GT Global Consumer Products and Services Fund, GT
Global Financial Services Fund, GT Global Infrastructure Fund, and GT Global
Natural Resources Fund each pays the Manager administration fees at the
annualized rate of 0.25% of such Fund's average daily net assets. Each of the
Portfolios pays investment management and administration fees to the Manager at
the annualized rate of 0.725% on the first $500 million of average daily net
assets of the Portfolio; 0.70% on the next $500 million; 0.675% on the next $500
million; and 0.65% on amounts thereafter. GT Global Health Care Fund and GT
Global Telecommunications Fund each pays investment management and
administration fees to the Manager at the annualized rate of 0.975% on the first
$500 million of average daily net assets of the Fund; 0.95% on the next $500
million; 0.925% on the next $500 million and 0.90% on amounts thereafter. These
fees are computed daily and paid monthly.
 
GT Global, Inc. ("GT Global"), an affiliate of the Manager, serves as the Funds'
distributor. The Funds offer Class A, Class B, and Advisor Class shares for
purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Funds' current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the year ended October 31, 1997, GT Global retained the
following sales charges: $85,990 for the GT Global Consumer Products and
Services Fund, $22,263 for the GT Global Financial Services Fund, $54,971 for
the GT Global Health Care Fund, $24,983 for the GT Global Infrastructure Fund,
$63,915 for the GT Global Natural Resources Fund, and $131,495 for the GT Global
Telecommunications Fund. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Funds' current prospectus. GT Global collected CDSCs for the
year ended October 31, 1997, as follows: $5,032 for the GT Global Consumer
Products and Services Fund, $0 for the GT Global Financial Services Fund,
$15,375 for the GT Global Health Care Fund, $115 for the GT Global
Infrastructure Fund, $12,885 for the GT Global Natural Resources Fund, and
$11,930 for the GT Global Telecommunications Fund. GT Global also makes ongoing
shareholder servicing and trail commission payments to dealers whose clients
hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global, from its own resources, pays commissions to dealers through
which the sales are made. Certain redemptions of Class B shares made within six
years of purchase are subject to CDSCs, in accordance with the Funds' current
prospectus. For the year ended October 31, 1997, GT Global collected CDSCs in
the amount of: $503,378 for the GT Global Consumer Products and Services Fund,
$81,031 for the GT Global Financial Services Fund, $530,383 for the GT Global
Health Care Fund, $261,504 for the GT Global Infrastructure Fund, $404,993 for
the GT Global Natural Resources Fund, and $7,104,939 for the GT Global
Telecommunications Fund. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
 
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Funds' Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which a Fund
reimburses GT Global for a portion of its shareholder servicing and
distributions expenses. Under the Class A Plan, a Fund may pay GT Global a
service fee at the annualized rate of up to 0.25% of the average daily net
assets of the Fund's Class A shares for GT Global's expenditures incurred in
servicing and maintaining shareholder accounts, and may pay GT Global a
distribution fee at the annualized rate of up to 0.50% of the average daily net
assets of the Fund's Class A shares, less any amounts paid by the Fund as the
aforementioned service fee, for GT Global's expenditures incurred in providing
services as distributor. All expenses for which GT Global is reimbursed under
the Class A Plan will have been incurred within one year of such reimbursement.
 
Pursuant to the Class B Plan, a Fund may pay GT Global a service fee at the
annualized rate of up to 0.25% of the average daily net assets
 
                                      FS-105
<PAGE>   1749
                             GT GLOBAL THEME FUNDS
 
of the Fund's Class B shares for GT Global's expenditures incurred in servicing
and maintaining shareholder accounts, and may pay GT Global a distribution fee
at the annualized rate of up to 0.75% of the average daily net assets of the
Fund's Class B shares for GT Global's expenditures incurred in providing
services as distributor. Expenses incurred under the Class B Plan in excess of
1.00% annually may be carried forward for reimbursement in subsequent years as
long as that Plan continues in effect.
 
The Manager and GT Global voluntarily have undertaken to limit each Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expense) to the maximum annual rate of 2.40%, 2.90%, and 1.90% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management fees, waivers by GT Global of payments under
the Class A Plan and/or Class B Plan and/or reimbursements by the Manager or GT
Global of portions of the Fund's other operating expenses.
 
Effective November 1, 1997, the Manager and GT Global have undertaken to limit
each Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expenses) to the annual rate of 2.00%, 2.50%, and 1.50% of the
average daily net assets of the Fund's Class A, Class B and Advisor Class
shares, respectively. This undertaking may be changed or eliminated in the
future.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Funds. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Funds for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the Funds and Portfolios.
The monthly fee for these services to the Manager is a percentage, not to exceed
0.03% annually, of a Fund or Portfolio's average daily net assets. The annual
fee rate is derived by applying 0.03% to the first $5 billion of assets of all
registered mutual funds advised by the Manager and 0.02% to the assets in excess
of $5 billion and allocating the result according to each Fund's average daily
net assets.
 
The Company pays each Director who is not an employee, officer or director of
the Manager, or any other affiliated company $5,000 per year plus $300 for each
meeting of the board or any committee thereof attended by the Director. Each
Portfolio pays each of its Trustees who is not an employee, officer, or director
of the Manager, GT Global or GT Services $500 per year plus $150 for each
meeting of the board or any committee thereof attended by the Trustee.
 
3. PURCHASES AND SALES OF SECURITIES
The following summarizes purchases and sales of investment securities, other
than short-term investments, by each Fund or Portfolio for the year ended
October 31, 1997:
 
                       PURCHASES AND SALES OF SECURITIES
<TABLE>
<CAPTION>
PORTFOLIO                                                                                                 PURCHASES
- ----------------------------------------------------------------------------------------------------  -----------------
<S>                                                                                                   <C>
Global Consumer Products and Services Portfolio.....................................................  $     612,647,861
Global Financial Services Portfolio.................................................................         92,386,002
GT Global Health Care Fund..........................................................................        787,196,366
Global Infrastructure Portfolio.....................................................................         39,949,012
Global Natural Resources Portfolio..................................................................        443,019,604
GT Global Telecommunications Fund...................................................................        645,313,904
 
<CAPTION>
PORTFOLIO                                                                                                    SALES
 
- ----------------------------------------------------------------------------------------------------  -------------------
 
<S>                                                                                                   <C>
Global Consumer Products and Services Portfolio.....................................................  $       664,389,208
 
Global Financial Services Portfolio.................................................................           40,245,074
 
GT Global Health Care Fund..........................................................................          891,939,099
 
Global Infrastructure Portfolio.....................................................................           39,409,094
 
Global Natural Resources Portfolio..................................................................          403,198,520
 
GT Global Telecommunications Fund...................................................................        1,492,219,852
 
</TABLE>
 
4. CAPITAL SHARES
At October 31, 1997, there were 6,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 400,000,000 were
classified as shares of the GT Global Telecommunications Fund; 400,000,000 were
classified as shares of GT Global Government Income Fund; 200,000,000 were
classified as shares of GT Global Developing Markets Fund; 200,000,000 were
classified as shares of GT Global Health Care Fund; 200,000,000 were classified
as shares of GT Global Strategic Income Fund; 200,000,000 were classified as
shares of GT Global Currency Fund (inactive); 200,000,000 were classified as
shares of GT Global Growth & Income Fund; 200,000,000 were classified as shares
of GT Global Small Companies Fund (inactive); 200,000,000 were classified as
shares of GT Global Latin America Growth Fund; 200,000,000 were classified as
shares of GT Global Emerging Markets Fund; 200,000,000 were classified as shares
of GT Global High Income Fund; 200,000,000 were classified as shares of GT
Global Financial Services Fund; 200,000,000 were classified as shares of GT
Global Natural Resources Fund; 200,000,000 were classified as shares of GT
Global Infrastructure Fund; 200,000,000 were classified as shares of GT Global
Consumer Products and Services Fund. The shares of each of the foregoing series
of the Company were divided equally into two classes, designated Class A and
Class B common stock. With respect to the issuance of Advisor Class shares,
100,000,000 shares were classified as shares of each of the fifteen series of
the Company and designated as Advisor Class common stock. 1,100,000,000 shares
remain unclassified. Transactions in capital shares of the Fund were as follows:
 
                                      FS-106
<PAGE>   1750
                             GT GLOBAL THEME FUNDS
 
                           CAPITAL SHARE TRANSACTIONS
 
GT GLOBAL CONSUMER PRODUCTS & SERVICES FUND
 
<TABLE>
<CAPTION>
                                                  YEAR ENDED                  YEAR ENDED
                                               OCTOBER 31, 1997            OCTOBER 31, 1996
                                          --------------------------  --------------------------
CLASS A                                     SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    3,438,964  $  69,880,587    6,142,401  $ 118,779,939
Shares issued in connection with
  reinvestment of distributions.........      143,274      2,884,089       13,656        202,166
                                          -----------  -------------  -----------  -------------
                                            3,582,238     72,764,676    6,156,057    118,982,105
Shares repurchased......................   (4,424,828)   (88,957,730)  (2,769,898)   (54,486,898)
                                          -----------  -------------  -----------  -------------
Net increase (decrease).................     (842,590) $ (16,193,054)   3,386,159  $  64,495,207
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
CLASS B
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    2,703,434  $  53,329,784    5,689,956  $ 110,105,123
Shares issued in connection with
  reinvestment of distributions.........      168,859      3,364,713       10,957        161,052
                                          -----------  -------------  -----------  -------------
                                            2,872,293     56,694,497    5,700,913    110,266,175
Shares repurchased......................   (2,802,820)   (55,171,454)  (1,675,446)   (32,960,366)
                                          -----------  -------------  -----------  -------------
Net increase............................       69,473  $   1,523,043    4,025,467  $  77,305,809
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
ADVISOR CLASS
- - ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................      287,832  $   6,471,623      589,226  $  12,396,492
Shares issued in connection with
  reinvestment of distributions.........       15,186        308,573          402          5,969
                                          -----------  -------------  -----------  -------------
                                              303,018      6,780,196      589,628     12,402,461
Shares repurchased......................     (386,341)    (7,704,551)    (248,775)    (5,293,607)
                                          -----------  -------------  -----------  -------------
Net increase (decrease).................      (83,323) $    (924,355)     340,853  $   7,108,854
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
GT GLOBAL FINANCIAL SERVICES FUND
 
<TABLE>
<CAPTION>
                                                  YEAR ENDED                  YEAR ENDED
                                               OCTOBER 31, 1997            OCTOBER 31, 1996
                                          --------------------------  --------------------------
CLASS A                                     SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    3,783,353  $  60,418,186      900,372  $  11,973,497
Shares issued in connection with
  reinvestment of distributions.........       35,121        488,531        3,997         50,562
                                          -----------  -------------  -----------  -------------
                                            3,818,474     60,906,717      904,369     12,024,059
Shares repurchased......................   (2,611,893)   (41,931,634)    (867,261)   (11,494,650)
                                          -----------  -------------  -----------  -------------
Net increase............................    1,206,581  $  18,975,083       37,108  $     529,409
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
CLASS B
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    4,102,099  $  64,968,183      596,980  $   7,792,181
Shares issued in connection with
  reinvestment of distributions.........       44,922        618,563        2,898         36,456
                                          -----------  -------------  -----------  -------------
                                            4,147,021     65,586,746      599,878      7,828,637
Shares repurchased......................   (2,045,933)   (32,384,709)    (281,339)    (3,677,982)
                                          -----------  -------------  -----------  -------------
Net increase............................    2,101,088  $  33,202,037      318,539  $   4,150,655
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................      220,956  $   4,021,549        3,500  $      47,698
Shares issued in connection with
  reinvestment of distributions.........          359          5,018           35            420
                                          -----------  -------------  -----------  -------------
                                              221,315      4,026,567        3,535         48,118
Shares repurchased......................      (11,568)      (198,290)      (1,103)       (14,704)
                                          -----------  -------------  -----------  -------------
Net increase............................      209,747  $   3,828,277        2,432  $      33,414
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
                                      FS-107
<PAGE>   1751
                             GT GLOBAL THEME FUNDS
 
GT GLOBAL HEALTH CARE FUND
 
<TABLE>
<CAPTION>
                                                  YEAR ENDED                  YEAR ENDED
                                               OCTOBER 31, 1997            OCTOBER 31, 1996
                                          --------------------------  --------------------------
CLASS A                                     SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................   31,631,342  $ 772,292,073   84,410,204  $1,903,687,570
Shares issued in connection with
  reinvestment of distributions.........    1,208,813     27,043,227    2,009,491     41,475,881
                                          -----------  -------------  -----------  -------------
                                           32,840,155    799,335,300   86,419,695  1,945,163,451
Shares repurchased......................  (35,792,763)  (876,621,319) (86,124,175) (1,957,478,015)
                                          -----------  -------------  -----------  -------------
Net increase (decrease).................   (2,952,608) $ (77,286,019)     295,520  $ (12,314,564)
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
CLASS B
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    6,206,431  $ 152,327,079    6,741,207  $ 157,453,975
Shares issued in connection with
  reinvestment of distributions.........      321,688      7,045,104      411,416      8,363,880
                                          -----------  -------------  -----------  -------------
                                            6,528,119    159,372,183    7,152,623    165,817,855
Shares repurchased......................   (5,770,947)  (142,017,878)  (5,784,194)  (129,761,569)
                                          -----------  -------------  -----------  -------------
Net increase............................      757,172  $  17,354,305    1,368,429  $  36,056,286
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    1,865,809  $  48,687,774    1,142,479  $  27,246,793
Shares issued in connection with
  reinvestment of distributions.........        2,543         57,375        3,280         67,679
                                          -----------  -------------  -----------  -------------
                                            1,868,352     48,745,149    1,145,759     27,314,472
Shares repurchased......................   (1,676,189)   (43,406,078)  (1,121,971)   (26,090,499)
                                          -----------  -------------  -----------  -------------
Net increase............................      192,163  $   5,339,071       23,788  $   1,223,973
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
GT GLOBAL INFRASTRUCTURE FUND
 
<TABLE>
<CAPTION>
                                                  YEAR ENDED                  YEAR ENDED
                                               OCTOBER 31, 1997            OCTOBER 31, 1996
                                          --------------------------  --------------------------
CLASS A                                     SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
Shares sold.............................    1,282,535  $  19,272,428    2,175,475  $  30,275,819
<S>                                       <C>          <C>            <C>          <C>
Shares issued in connection with
  reinvestment of distributions.........      123,795      1,776,449           --             --
                                          -----------  -------------  -----------  -------------
                                            1,406,330     21,048,877    2,175,475     30,275,819
Shares repurchased......................   (1,518,962)   (23,157,570)  (2,503,715)   (33,964,432)
                                          -----------  -------------  -----------  -------------
Net decrease............................     (112,632) $  (2,108,693)    (328,240) $  (3,688,613)
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
CLASS B
- - ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    1,233,796  $  18,394,879      903,064  $  12,423,925
Shares issued in connection with
  reinvestment of distributions.........      164,966      2,337,575           --             --
                                          -----------  -------------  -----------  -------------
                                            1,398,762     20,732,454      903,064     12,423,925
Shares repurchased......................   (1,288,192)   (19,574,097)  (1,306,101)   (17,421,173)
                                          -----------  -------------  -----------  -------------
Net increase (decrease).................      110,570  $   1,158,357     (403,037) $  (4,997,248)
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................      154,643  $   2,526,548       11,122  $     154,109
Shares issued in connection with
  reinvestment of distributions.........        1,147         16,592           --             --
                                          -----------  -------------  -----------  -------------
                                              155,790      2,543,140       11,122        154,109
Shares repurchased......................      (12,773)      (202,670)      (5,256)       (70,861)
                                          -----------  -------------  -----------  -------------
Net increase............................      143,017  $   2,340,470        5,866  $      83,248
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
                                      FS-108
<PAGE>   1752
                             GT GLOBAL THEME FUNDS
 
GT GLOBAL NATURAL RESOURCES FUND
 
<TABLE>
<CAPTION>
                                                  YEAR ENDED                  YEAR ENDED
                                               OCTOBER 31, 1997            OCTOBER 31, 1996
                                          --------------------------  --------------------------
CLASS A                                     SHARES        AMOUNT        SHARES        AMOUNT
- ----------------------------------------  -----------  -------------  -----------  -------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................   14,008,426  $ 250,536,207    9,220,103  $ 142,385,816
Shares issued in connection with
  reinvestment of distributions.........       97,424      1,671,792        3,977         47,892
                                          -----------  -------------  -----------  -------------
                                           14,105,850    252,207,999    9,224,080    142,433,708
Shares repurchased......................  (13,512,928)  (239,425,288)  (7,529,884)  (116,812,100)
                                          -----------  -------------  -----------  -------------
Net increase............................      592,922  $  12,782,711    1,694,196  $  25,621,608
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
CLASS B
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    5,227,207  $  91,103,073    4,288,540  $  66,460,658
Shares issued in connection with
  reinvestment of distributions.........      120,229      2,044,194          709          8,495
                                          -----------  -------------  -----------  -------------
                                            5,347,436     93,147,267    4,289,249     66,469,153
Shares repurchased......................   (4,425,914)   (75,084,090)  (2,178,862)   (33,276,553)
                                          -----------  -------------  -----------  -------------
Net increase............................      921,522  $  18,063,177    2,110,387  $  33,192,600
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
<TABLE>
<CAPTION>
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>          <C>            <C>          <C>
Shares sold.............................    1,573,656  $  31,848,691      663,037  $  10,703,010
Shares issued in connection with
  reinvestment of distributions.........        7,576        130,389           77            922
                                          -----------  -------------  -----------  -------------
                                            1,581,232     31,979,080      663,114     10,703,932
Shares repurchased......................   (1,180,622)   (22,478,170)    (356,384)    (5,379,503)
                                          -----------  -------------  -----------  -------------
Net increase............................      400,610  $   9,500,910      306,730  $   5,324,429
                                          -----------  -------------  -----------  -------------
                                          -----------  -------------  -----------  -------------
</TABLE>
 
GT GLOBAL TELECOMMUNICATIONS FUND
 
<TABLE>
<CAPTION>
                                                   YEAR ENDED                     YEAR ENDED
                                                OCTOBER 31, 1997               OCTOBER 31, 1996
                                          -----------------------------  -----------------------------
CLASS A                                      SHARES         AMOUNT          SHARES         AMOUNT
- ----------------------------------------  ------------  ---------------  ------------  ---------------
<S>                                       <C>           <C>              <C>           <C>
Shares sold.............................    86,491,272  $ 1,449,735,933   161,134,594  $ 2,777,197,821
Shares issued in connection with
  reinvestment of distributions.........     4,872,560       77,134,577     3,376,395       52,886,360
                                          ------------  ---------------  ------------  ---------------
                                            91,363,832    1,526,870,510   164,510,989    2,830,084,181
Shares repurchased......................  (113,032,156)  (1,893,258,359) (174,818,005)  (3,017,740,549)
                                          ------------  ---------------  ------------  ---------------
Net decrease............................   (21,668,324) $  (366,387,849)  (10,307,016) $  (187,656,368)
                                          ------------  ---------------  ------------  ---------------
                                          ------------  ---------------  ------------  ---------------
</TABLE>
 
<TABLE>
<CAPTION>
CLASS B
- ----------------------------------------
<S>                                       <C>           <C>              <C>           <C>
Shares sold.............................     9,249,969  $   152,245,081    15,365,874  $   260,167,785
Shares issued in connection with
  reinvestment of distributions.........     4,413,826       68,371,781     2,882,770       44,452,585
                                          ------------  ---------------  ------------  ---------------
                                            13,663,795      220,616,862    18,248,644      304,620,370
Shares repurchased......................   (29,383,147)    (477,593,385)  (25,319,583)    (426,829,324)
                                          ------------  ---------------  ------------  ---------------
Net decrease............................   (15,719,352) $  (256,976,523)   (7,070,939) $  (122,208,954)
                                          ------------  ---------------  ------------  ---------------
                                          ------------  ---------------  ------------  ---------------
</TABLE>
 
<TABLE>
<CAPTION>
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>           <C>              <C>           <C>
Shares sold.............................     2,029,510  $    36,070,768     1,229,487  $    21,592,338
Shares issued in connection with
  reinvestment of distributions.........        11,071          176,806         2,119           33,270
                                          ------------  ---------------  ------------  ---------------
                                             2,040,581       36,247,574     1,231,606       21,625,608
Shares repurchased......................    (1,835,151)     (32,553,269)   (1,216,785)     (21,450,446)
                                          ------------  ---------------  ------------  ---------------
Net increase............................       205,430  $     3,694,305        14,821  $       175,162
                                          ------------  ---------------  ------------  ---------------
                                          ------------  ---------------  ------------  ---------------
</TABLE>
 
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of a Fund's or Portfolio's expenses. For the year ended October 31, 1997, the
Funds' or Portfolios' expenses were reduced by the following amounts under these
arrangements:
 
<TABLE>
<CAPTION>
                                                                                                                            EXPENSE
                                                                                                                           REDUCTION
                                                                                                                           ---------
<S>                                                                                                                        <C>
Global Consumer Products and Services Portfolio..........................................................................  $ 123,570
Global Financial Services Portfolio......................................................................................     13,622
GT Global Health Care Fund...............................................................................................     81,354
Global Infrastructure Portfolio..........................................................................................        720
Global Natural Resources Portfolio.......................................................................................     71,129
GT Global Telecommunications Fund........................................................................................    163,244
</TABLE>
 
                                      FS-109
<PAGE>   1753
                             GT GLOBAL THEME FUNDS
 
6. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
Investments of 5% or more of an issuer's outstanding voting securities by a Fund
or Portfolio are defined in the Investment Company Act of 1940 as an affiliated
company. Investments in affiliated companies by Global Consumer Products
Portfolio, GT Global Health Care Fund, and GT Global Telecommunications Fund at
October 31, 1997 amounted to $1,943,798, $251,388,855, and $113,211,488,
respectively, at value.
 
Transactions during the period with companies that are or were affiliates are as
follows:
 
GLOBAL CONSUMER PRODUCTS PORTFOLIO
 
<TABLE>
<CAPTION>
                                                                          SALES        NET REALIZED      DIVIDEND
                                                    PURCHASES COST      PROCEEDS        GAIN (LOSS)       INCOME
                                                    ---------------  ---------------  ---------------  ------------
<S>                                                 <C>              <C>              <C>              <C>
O & Y Properties Inc. Sp Wts......................  $     1,996,065  $            --  $            --  $         --
</TABLE>
 
GT GLOBAL HEALTH CARE FUND
 
<TABLE>
<CAPTION>
                                                       PURCHASES          SALES        NET REALIZED      DIVIDEND
                                                         COST           PROCEEDS        GAIN (LOSS)       INCOME
                                                    ---------------  ---------------  ---------------  ------------
<S>                                                 <C>              <C>              <C>              <C>
ATL Ultrasound, Inc...............................  $    22,092,644  $     7,075,476  $     1,636,015  $         --
AVECOR Cardiovascular, Inc........................        1,034,472               --               --            --
Cardiac Pathways Corp.............................        8,400,212               --               --            --
Cardiovascular Dynamics Inc.......................        3,500,454               --               --            --
Catalytica, Inc...................................       10,691,833       16,327,767        8,539,392            --
Cell Therapeutics Inc.............................       12,018,948               --               --            --
Circon Corp.......................................               --        2,739,253          568,655            --
Depotech Corp.....................................       12,202,500        5,683,922          896,972            --
Endosonics Corp...................................       20,775,778        4,411,500         (979,619)           --
INAMED Corp.......................................        3,033,798           90,000         (108,753)           --
Interferon........................................        5,870,743        3,085,840          839,277
Kensey Nash Corp..................................        5,159,335        1,561,197        1,266,168            --
Life Medical Sciences, Inc........................        2,096,223          442,500         (352,500)           --
Micro Therapeutics, Inc...........................        1,800,000           66,248            6,248            --
Photoelectron Corp................................        2,822,805               --               --            --
Physio-Control International Corp.................       16,172,912        1,542,063           65,018            --
Protein Design Labs, Inc..........................       12,029,386       22,123,118           40,261            --
Regeneron Pharmaceuticals, Inc....................       15,114,745        2,161,577          277,371            --
Sunrise Medical, Inc..............................        3,237,927               --               --            --
TheraTech, Inc....................................        7,797,057               --               --            --
Visx, Inc.........................................       12,660,684        8,329,268         (295,181)           --
</TABLE>
 
GT GLOBAL TELECOMMUNICATIONS FUND
 
<TABLE>
<CAPTION>
                                                                          SALES         NET REALIZED      DIVIDEND
                                                    PURCHASES COST      PROCEEDS        GAIN (LOSS)        INCOME
                                                    ---------------  ---------------  ----------------  ------------
<S>                                                 <C>              <C>              <C>               <C>
ANTEC Corp........................................  $            --  $     8,346,027  $    (10,335,549) $         --
Atlantic Tele-Network, Inc........................               --        1,368,992           (86,633)           --
DSP Communications, Inc...........................       22,490,263       10,010,074       (10,387,819)           --
Echostar Communications Corp. "A".................               --               --                --            --
Gandalf Technologies, Inc.........................               --        4,316,779       (27,050,916)           --
Grupo Mexicano de Video - 144A ADR................               --               --                --            --
Himachal Futuristic Communications Ltd. - 144A
  GDR.............................................               --        1,643,750        (7,656,250)           --
Intermedia Communications of Florida, Inc.........          508,750               --                --            --
International Engineering PLC - Foreign...........               --        3,181,312       (15,784,033)      305,427
Millicom International Cellular S.A...............               --               --                --            --
Orbital Sciences Corp.............................          430,000        6,351,505         1,003,380            --
PT Kabelindo Murni - Foreign......................               --        1,394,687        (5,501,277)           --
Spectrian Corp....................................               --       10,450,207        (9,831,404)           --
Tekelec...........................................          292,878       43,271,004        31,126,430            --
Tele 2000 S.A.....................................               --       10,524,931        (2,848,177)           --
Three-Five Systems, Inc...........................               --        1,862,340        (1,738,353)           --
</TABLE>
 
                                      FS-110
<PAGE>   1754
                             GT GLOBAL THEME FUNDS
 
FEDERAL TAX INFORMATION (UNAUDITED): Listed below is the amount of income
received by the Funds from sources within foreign countries and possessions of
the United States and the amount of taxes paid by the Funds to such countries
for the fiscal year ended October 31, 1997:
 
<TABLE>
<CAPTION>
                                                   FOREIGN                    FOREIGN
                                          -------------------------   -----------------------
FUND                                      SOURCE INCOME   PER SHARE    TAXES PAID   PER SHARE
- ----------------------------------------  -------------   ---------   ------------  ---------
<S>                                       <C>             <C>         <C>           <C>
GT Global Consumer Products and Services
  Fund..................................          --            --             --         --
GT Global Financial Services Fund.......     $699,745      $0.1412    $    77,681    $0.0157
GT Global Health Care Fund..............          --            --             --         --
GT Global Infrastructure Fund...........          --            --             --         --
GT Global Natural Resources Fund........          --            --             --         --
GT Global Telecommunications Fund.......          --            --             --         --
</TABLE>
 
Pursuant to Section 852 of the Internal Revenue Code, the Funds designate the
following amounts as capital gain dividends for the fiscal year ended October
31, 1997:
 
<TABLE>
<CAPTION>
                                          CAPITAL GAIN
FUND                                        DIVIDEND
- ----------------------------------------  ------------
<S>                                       <C>
GT Global Consumer Products and Services
  Fund..................................  $    330,657
GT Global Financial Services Fund.......       740,650
GT Global Health Care Fund..............            --
GT Global Infrastructure Fund...........     3,083,268
GT Global Natural Resources Fund........     2,673,826
GT Global Telecommunications Fund.......   166,632,944
</TABLE>
 
Pursuant to Section 854 of the Internal Revenue Code, the Funds designate the
following percentage amounts of ordinary income dividends paid (including
short-term capital gain distributions, if any) by the Funds as income qualifying
for the dividends received deduction for corporations for the fiscal year ended
October 31, 1997:
 
<TABLE>
<CAPTION>
FUND
- ----------------------------------------
<S>                                       <C>
GT Global Consumer Products and Services
  Fund..................................      2.57%
GT Global Financial Services Fund.......     13.12%
GT Global Health Care Fund..............         --
GT Global Infrastructure Fund...........         --
GT Global Natural Resources Fund........      2.48%
GT Global Telecommunications Fund.......         --
</TABLE>
 
                                      FS-111
<PAGE>   1755
 
                                                                    STATEMENT OF
                                                          ADDITIONAL INFORMATION
 
                            ADVISOR CLASS SHARES OF
                       AIM GLOBAL GOVERNMENT INCOME FUND
                           AIM STRATEGIC INCOME FUND
   
                         AIM EMERGING MARKETS DEBT FUND
    
                        AIM GLOBAL GROWTH & INCOME FUND
 
                             (SERIES PORTFOLIOS OF
                             AIM INVESTMENT FUNDS)
 
                               11 GREENWAY PLAZA
                                   SUITE 100
                             HOUSTON, TX 77046-1173
                                 (713) 626-1919
 
                             ---------------------
 
        THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND
           IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS OF THE
            ABOVE-NAMED FUNDS, A COPY OF WHICH MAY BE OBTAINED FREE
                OF CHARGE FROM AUTHORIZED DEALERS OR BY WRITING
                           A I M DISTRIBUTORS, INC.,
                      P.O. BOX 4739, HOUSTON TX 77210-4739
                         OR BY CALLING (800) 347-4246.
 
                             ---------------------
 
          STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 8, 1998
   
RELATING TO THE AIM GLOBAL GOVERNMENT INCOME FUND PROSPECTUS, THE AIM STRATEGIC
 INCOME FUND PROSPECTUS, THE AIM EMERGING MARKETS DEBT FUND PROSPECTUS AND THE
    AIM GLOBAL GROWTH & INCOME FUND PROSPECTUS EACH DATED SEPTEMBER 8, 1998
    
<PAGE>   1756
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
INTRODUCTION................................................  4
GENERAL INFORMATION ABOUT THE FUNDS.........................  4
  The Trust and Its Shares..................................  4
INVESTMENT OBJECTIVES AND POLICIES..........................  5
  Investment Objectives.....................................  5
  Investment in Emerging Markets............................  5
  Selection of Debt Investments.............................  5
  Selection of Equity Investments...........................  6
  Investments in Other Investment Companies.................  6
  Depositary Receipts.......................................  6
  Samurai and Yankee Bonds..................................  7
  Warrants or Rights........................................  7
  Lending of Portfolio Securities...........................  7
  Commercial Bank Obligations...............................  7
  Repurchase Agreements.....................................  8
  Borrowing, Reverse Repurchase Agreements and "Roll"
     Transactions...........................................  8
  Short Sales...............................................  9
OPTIONS, FUTURES AND CURRENCY STRATEGIES....................  9
  Special Risks of Options, Futures and Currency
     Strategies.............................................  9
  Writing Call Options......................................  10
  Writing Put Options.......................................  11
  Purchasing Put Options....................................  12
  Purchasing Call Options...................................  12
  Index Options.............................................  13
  Interest Rate, Currency and Stock Index Futures
     Contracts..............................................  14
  Options on Futures Contracts..............................  16
  Limitations on Use of Futures, Options on Futures and
     Certain Options on Currencies..........................  16
  Forward Contracts.........................................  17
  Foreign Currency Strategies -- Special Considerations.....  17
  Cover.....................................................  18
  Interest Rate and Currency Swaps..........................  18
RISK FACTORS................................................  19
  Illiquid Securities.......................................  19
  Foreign Securities........................................  20
INVESTMENT LIMITATIONS......................................  23
  Government Income Fund....................................  23
  Strategic Income Fund.....................................  24
  Emerging Markets Debt Fund and the Portfolio..............  25
  Growth and Income Fund....................................  26
EXECUTION OF PORTFOLIO TRANSACTIONS.........................  28
  Portfolio Trading and Turnover............................  29
MANAGEMENT..................................................  30
  Trustees and Executive Officers...........................  30
  Investment Management and Administration Services.........  32
  Distribution Services.....................................  33
  Expenses of the Funds and the Portfolio...................  33
NET ASSET VALUE DETERMINATION...............................  34
</TABLE>
    
 
                                        2
<PAGE>   1757
 
   
<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
HOW TO PURCHASE AND REDEEM SHARES...........................  34
  Programs and Services for Shareholders....................  35
  Dividend Order............................................  35
TAXES.......................................................  35
  Taxation of the Funds.....................................  35
  Taxation of the Portfolio -- General......................  35
  Taxation of Certain Investment Activities.................  36
  Taxation of the Funds' Shareholders.......................  38
MISCELLANEOUS INFORMATION...................................  38
  Custodian.................................................  38
  Transfer Agency and Accounting Agency Services............  39
  Independent Accountants...................................  39
  Shareholders Liability....................................  39
  Names.....................................................  39
  Control Persons and Principal Holders of Securities.......  40
INVESTMENT RESULTS..........................................  41
  Total Return Quotations...................................  41
  Non-Standardized Returns..................................  42
  Yield Quotations..........................................  43
  Performance Information...................................  43
APPENDIX....................................................  45
  Description of Bond Ratings...............................  45
  Description of Commercial Paper Ratings...................  46
  Absence of Rating.........................................  46
FINANCIAL STATEMENTS........................................  FS
</TABLE>
    
 
                                        3
<PAGE>   1758
 
                                  INTRODUCTION
 
   
  This Statement of Additional Information relates to the Advisor Class shares
of AIM Global Government Income Fund ("Government Income Fund"), AIM Strategic
Income Fund ("Strategic Income Fund"), AIM Emerging Markets Debt Fund formerly
known as AIM Global High Income Fund ("Emerging Markets Debt Fund"), and AIM
Global Growth & Income Fund ("Growth & Income Fund") (each, a "Fund," and
collectively, the "Funds"). Each Fund is a non-diversified series of AIM
Investment Funds (the "Company"), a registered open-end management investment
company organized as a Delaware business trust. The Emerging Markets Debt Fund
invests all its investable assets in AIM Emerging Markets Debt Portfolio
("Portfolio").
    
 
   
  A I M Advisors, Inc. ("AIM") serves as the investment manager of and
administrator for, and INVESCO (NY), Inc. (the "Sub-advisor") serves as the
investment sub-advisor and sub-administrator for the Government Income Fund, the
Strategic Income Fund, the Growth & Income Fund and the Emerging Markets Debt
Portfolio (formerly known as the Global High Income Portfolio) (the
"Portfolio"). AIM and the Sub-advisor also serve as the administrator and
sub-administrator, respectively, of the Emerging Markets Debt Fund.
    
 
   
  The Trust is a series mutual fund. The rules and regulations of the Securities
and Exchange Commission (the "SEC") require all mutual funds to furnish
prospective investors certain information concerning the activities of the fund
being considered for investment. This information for Government Income Fund is
included in a Prospectus dated September 8, 1998, for Strategic Income Fund is
included in a separate Prospectus dated September 8, 1998, for Emerging Markets
Debt Fund is included in a separate Prospectus dated September 8, 1998, and for
Growth & Income Fund is included in a separate Prospectus dated September 8,
1998. Additional copies of the Prospectuses and this Statement of Additional
Information may be obtained without charge by writing the principal distributor
of the Funds' shares, A I M Distributors, Inc. ("AIM Distributors"), P.O. Box
4739, Houston, TX 77210-4739 or by calling (800) 347-4246. Investors must
receive a Prospectus before they invest.
    
 
  This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Funds. Some of the
information required to be in this Statement of Additional Information is also
included in the Prospectus; and, in order to avoid repetition, reference will be
made to sections of the Prospectus. Additionally, the Prospectus and this
Statement of Additional Information omit certain information contained in the
Registration Statement filed with the SEC. Copies of the Registration Statement,
including items omitted from the Prospectus and this Statement of Additional
Information, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
 
                      GENERAL INFORMATION ABOUT THE FUNDS
 
THE TRUST AND ITS SHARES
 
   
  The Trust previously operated under the name G.T. Investment Funds, Inc.,
which was organized as a Maryland corporation on October 29, 1987. The Trust was
reorganized on September 8, 1998 as a Delaware business trust, and is registered
with the SEC as a diversified open-end series management investment company. The
Trust currently consists of the following portfolios: AIM Global Financial
Services Fund, AIM Global Infrastructure Fund, AIM Global Resources Fund, AIM
Global Consumer Products and Services Fund, AIM Global Health Care Fund, AIM
Global Telecommunications Fund, AIM Global Government Income Fund, AIM Emerging
Markets Debt Fund, AIM Strategic Income Fund, AIM Global Growth and Income Fund,
AIM Emerging Markets Fund, AIM Developing Markets Fund, and AIM Latin American
Growth Fund. Each of these funds has three separate classes: Class A, Class B
and Advisor Class shares. All historical financial and other information
contained in this Statement of Additional Information for periods prior to
September 8, 1998, is that of the series G.T. Investment Funds, Inc.
    
 
  This Statement of Additional Information relates solely to the Advisor Class
shares of the Funds.
 
  The term "majority of the outstanding shares" of the Trust, a particular Fund,
or a particular class of a Fund means, respectively, the vote of the lesser of
(a) 67% or more of the shares of the Trust, such Fund or such class present at a
meeting of the Trust's shareholders, if the holders of more than 50% of the
outstanding shares of the Trust, such Fund or such class are present or
represented by proxy, or (b) more than 50% of the outstanding shares of the
Trust, such Fund or such class.
 
  Class A, and Class B and Advisor Class shares of each Fund have equal rights
and privileges. Each share of a particular class is entitled to one vote, to
participate equally in dividends and distributions declared by the Trust's Board
of Trustees with respect to the class of such Fund and, upon liquidation of the
Fund, to participate proportionately in the net assets of the Fund allocable to
such class remaining after satisfaction of outstanding liabilities of the Fund
allocable to such class.
 
                                        4
<PAGE>   1759
 
Fund shares are fully paid, non-assessable and fully transferable when issued
and have no preemptive rights and have such conversion and exchange rights as
set forth in the Prospectus and this Statement of Additional Information.
Fractional shares have proportionately the same rights, including voting rights,
as are provided for a full share.
 
   
  Shareholders of the Funds do not have cumulative voting rights, and therefore
the holders of more than 50% of the outstanding shares of all Funds voting
together for election of trustees may elect all of the members of the Board of
Trustees of the Trust. In such event, the remaining holders cannot elect any
trustees of the Trust.
    
 
                       INVESTMENT OBJECTIVES AND POLICIES
 
INVESTMENT OBJECTIVES
 
   
  The Government Income Fund primarily seeks high current income and secondarily
seeks capital appreciation and protection of principal through active management
of the maturity structure and currency exposure of its portfolio. The Strategic
Income Fund and the Emerging Markets Debt Fund primarily seek high current
income and secondarily seek capital appreciation. The Emerging Markets Debt Fund
seeks to achieve its investment objectives by investing all of its investable
assets in the Portfolio, which is a non-diversified open-end management
investment company with investment objectives identical to those of the Fund.
Whenever the phrase "all of the Emerging Markets Debt Fund's investable assets"
is used herein and in the Prospectus, it means that the only investment
securities held by the Emerging Markets Debt Fund will be its interest in the
Portfolio. The Emerging Markets Debt Fund may withdraw its investment in the
Portfolio at any time, if the Board of Trustees of the Trust determines that it
is in the best interests of the Fund and its shareholders to do so. Upon any
such withdrawal, the Emerging Markets Debt Fund's assets would be invested in
accordance with the investment policies of the Portfolio described below and in
the Prospectus. The investment objective of the Growth & Income Fund is
long-term capital appreciation together with current income. The Growth & Income
Fund seeks its objective by investing in a global portfolio of both equity
securities and debt obligations allocated among diverse international markets.
    
 
INVESTMENT IN EMERGING MARKETS
 
  The Portfolio seeks its objectives by investing, under normal circumstances,
at least 65% of its total assets in debt securities of issuers in emerging
markets. The Strategic Income Fund may invest up to 50% of its assets in debt
securities of issuers in emerging markets. The Strategic Income Fund and the
Portfolio do not consider the following countries to be emerging markets:
Australia, Austria, Belgium, Canada, Denmark, France, Germany, Ireland, Italy,
Japan, the Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland, United
Kingdom, and United States.
 
   
  In addition to the factors set forth in the Prospectus, the Sub-advisor will
also consider, when determining what countries constitute emerging markets,
data, analysis, and classification of countries published or disseminated by the
International Bank for Reconstruction and Development (commonly known as the
World Bank) and the International Finance Corporation.
    
 
   
SELECTION OF DEBT INVESTMENTS
    
 
   
  In determining the appropriate distribution of investments among various
countries and geographic regions for the Government Income Fund, the Strategic
Income Fund, the Growth & Income Fund, and the Portfolio, the Sub-advisor
ordinarily considers the following factors: prospects for relative economic
growth among the different countries in which the Government Income Fund, the
Strategic Income Fund, the Growth & Income Fund, and the Portfolio may invest;
expected levels of inflation; government policies influencing business
conditions; the outlook for currency relationships; and the range of the
individual investment opportunities available to international investors.
    
 
   
  The Government Income Fund, the Strategic Income Fund and the Portfolio may
invest in the following types of money market instruments (i.e., debt
instruments with less than 12 months remaining until maturity) denominated in
U.S. dollars or other currencies: (a) obligations issued or guaranteed by the
U.S. or foreign governments, their agencies, instrumentalities or
municipalities; (b) obligations of international organizations designed or
supported by multiple foreign governmental entities to promote economic
reconstruction or development; (c) finance company obligations, corporate
commercial paper and other short-term commercial obligations; (d) bank
obligations (including certificates of deposit, time deposits, demand deposits
and bankers' acceptances), subject to the restriction that the Government Income
Fund, the Strategic Income Fund and the Portfolio may not invest more than 25%
of their respective total assets in bank securities; (e) repurchase agreements
with respect to the foregoing; and (f) other substantially similar short-term
debt securities with comparable characteristics. Money market instruments in
which the Growth & Income Fund may invest
    
 
                                        5
<PAGE>   1760
 
   
include U.S. government securities, high-grade commercial paper, bank
certificates of deposit, bankers' acceptances and repurchase agreements related
to any of the foregoing. "High-grade commercial paper" refers to commercial
paper rated A-1 by Standard & Poor's, a division of The McGraw-Hill Companies,
Inc. ("S&P"), or P-1 by Moody's Investors Service, Inc. ("Moody's") or, if not
rated, determined by the Sub-advisor to be of comparable quality.
    
 
   
SELECTION OF EQUITY INVESTMENTS
    
 
   
  With respect to Growth & Income Fund, for investment purposes, an issuer is
typically considered as located in a particular country if it (a) is
incorporated under the laws of or has its principal office in that country, or
(b) it normally derives 50% or more of its total revenue from business in that
country. However, these are not absolute requirements, and certain companies
incorporated in a particular country and considered by the Sub-advisor to be
located in that country may have substantial off-shore operations or
subsidiaries and/or export sales exceeding in size the assets or sales in that
country.
    
 
   
INVESTMENTS IN OTHER INVESTMENT COMPANIES
    
 
   
  With respect to certain countries, investments by the Government Income Fund,
the Strategic Income Fund, the Growth & Income Fund and the Portfolio presently
may be made only by acquiring shares of other investment companies (including
investment vehicles or companies advised by the Sub-advisor or its affiliates
("Affiliated Funds")) with local governmental approval to invest in those
countries. At such time as direct investment in these countries is allowed, the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund and
the Portfolio anticipate investing directly in these markets. The Government
Income Fund, the Strategic Income Fund, the Growth & Income Fund and the
Portfolio may also invest in the securities of closed-end investment companies
within the limits of the Investment Company Act of 1940, as amended ("1940
Act"). These limitations currently provide that, in part, a Fund or the
Portfolio may purchase shares of another investment company unless (a) such a
purchase would cause the Government Income Fund, the Strategic Income Fund, the
Growth & Income Fund or the Portfolio to own in the aggregate more than 3% of
the total outstanding voting securities of the investment company or (b) such a
purchase would cause the Government Income Fund, the Strategic Income Fund, the
Growth & Income Fund or the Portfolio to have more than 5% of its total assets
invested in the investment company or more than 10% of its aggregate assets
invested in an aggregate of all such investment companies. The foregoing
limitations do not apply to the investment by the Emerging Markets Debt Fund in
the Portfolio. Investment in investment companies may involve the payment of
substantial premiums above the value of such companies' portfolio securities.
The Government Income Fund, the Strategic Income Fund, the Growth & Income Fund
and the Portfolio do not intend to invest in such investment companies unless,
in the judgment of the Sub-advisor, the potential benefits of such investments
justify the payment of any applicable premiums. The return on such securities
will be reduced by operating expenses of such companies including payments to
the investment managers of those investment companies. With respect to
investments in Affiliated Funds, the Sub-advisor waives its advisory fee to the
extent that such fees are based on assets of a Fund invested in Affiliated
Funds.
    
 
   
DEPOSITARY RECEIPTS
    
 
  The Growth & Income Fund may hold equity securities of foreign issuers in the
form of American Depositary Receipts ("ADRs"), American Depositary Shares
("ADSs"), Global Depositary Receipts ("GDRs") and European Depositary Receipts
("EDRs"), or other securities convertible into securities of eligible issuers.
These securities may not necessarily be denominated in the same currency as the
securities for which they may be exchanged. ADRs and ADSs typically are issued
by an American bank or trust company and evidence ownership of underlying
securities issued by a foreign corporation. EDRs, which are sometimes referred
to as Continental Depositary Receipts ("CDRs"), are issued in Europe typically
by foreign banks and trust companies and evidence ownership of either foreign or
domestic securities. GDRs are similar to EDRs and are designed for use in
several international financial markets. Generally, ADRs and ADSs in registered
form are designed for use in United States securities markets and EDRs in bearer
form are designed for use in European securities markets. For purposes of the
Fund's investment policies, the Fund's investments in ADRs, ADSs, GDRs and EDRs
will be deemed to be investments in the equity securities representing
securities of foreign issuers into which they may be converted.
 
  ADR facilities may be established as either "unsponsored" or "sponsored."
While ADRs issued under these two types of facilities are in some respects
similar, there are distinctions between them relating to the rights and
obligations of ADR holders and the practices of market participants. A
depository may establish an unsponsored facility without participation by (or
even necessarily the acquiescence of) the issuer of the deposited securities,
although typically the depository requests a letter of non-objection from such
issuer prior to the establishment of the facility. Holders of unsponsored ADRs
generally bear all the costs of such facilities. The depository usually charges
fees upon the deposit and withdrawal of the deposited securities, the conversion
of dividends into U.S. dollars, the disposition of non-cash distributions, and
the performance of other services. The depository of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited securities or to pass-through voting
rights to ADR
 
                                        6
<PAGE>   1761
 
holders in respect of the deposited securities. Sponsored ADR facilities are
created in generally the same manner as unsponsored facilities, except that the
issuer of the deposited securities enters into a deposit agreement with the
depository. The deposit agreement sets out the rights and responsibilities of
the issuer, the depository and the ADR holders. With sponsored facilities, the
issuer of the deposited securities generally will bear some of the costs
relating to the facility (such as dividend payment fees of the depository),
although ADR holders continue to bear certain other costs (such as deposit and
withdrawal fees). Under the terms of most sponsored arrangements, depositories
agree to distribute notices of shareholder meetings and voting instructions, and
to provide shareholder communications and other information to the ADR holders
at the request of the issuer of the deposited securities. The Fund may invest in
both sponsored and unsponsored ADRs.
 
   
SAMURAI AND YANKEE BONDS
    
 
  The Government Income Fund, the Strategic Income Fund and the Portfolio may
invest in yen-denominated bonds sold in Japan by non-Japanese issuers ("Samurai
bonds"), and may invest in dollar-denominated bonds sold in the United States by
non-U.S. issuers ("Yankee bonds"). It is the policy of the Government Income
Fund, the Strategic Income Fund and the Portfolio to invest in Samurai or Yankee
bond issues only after taking into account considerations of quality and
liquidity, as well as yield.
 
   
WARRANTS OR RIGHTS
    
 
   
  Warrants or rights may be acquired by the Government Income Fund, the
Strategic Income Fund, the Growth & Income Fund or the Portfolio in connection
with other securities or separately and provide a Fund or the Portfolio with the
right to purchase at a later date other securities of the issuer. Warrants are
securities permitting, but not obligating, their holder to subscribe for other
securities or commodities. Warrants do not carry with them the right to
dividends or voting rights with respect to the securities that they entitle
their holder to purchase, and they do not represent any rights in the assets of
the issuer. As a result, warrants may be considered more speculative than
certain other types of investments. In addition, the value of a warrant does not
necessarily change with the value of the underlying securities and a warrant
ceases to have value if it is not exercised prior to its expiration date.
    
 
   
LENDING OF PORTFOLIO SECURITIES
    
 
   
  For the purpose of realizing additional income, the Government Income Fund,
the Strategic Income Fund, the Growth & Income Fund or the Portfolio may make
secured loans of portfolio securities amounting to not more than 30% of its
total assets. Securities loans are made to broker/dealers or institutional
investors pursuant to agreements requiring that the loans continuously be
secured by collateral at least equal at all times to the value of the securities
lent plus any accrued interest, "marked to market" on a daily basis. The
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund, and
the Portfolio may pay reasonable administrative and custodial fees in connection
with loans of its securities. While the securities loan is outstanding, the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund and
the Portfolio will continue to receive the equivalent of the interest or
dividends paid by the issuer on the securities, as well as interest on the
investment of the collateral or a fee from the borrower. The Government Income
Fund, the Strategic Income Fund, the Growth & Income Fund and the Portfolio each
will have a right to call each loan and obtain the securities within the stated
settlement period. The Government Income Fund, the Strategic Income Fund, the
Growth & Income Fund and the Portfolio will not have the right to vote equity
securities while they are lent, but each may call in a loan in anticipation of
any important vote. Loans will be made only to firms deemed by the Sub-advisor
to be of good standing and will not be made unless, in the judgment of the
Sub-advisor, the consideration to be earned from such loans would justify the
risk.
    
 
   
COMMERCIAL BANK OBLIGATIONS
    
 
  For the purposes of the Strategic Income Fund's, the Growth & Income Fund's
and the Portfolio's investment policies with respect to bank obligations,
obligations of foreign branches of U.S. banks and of foreign banks are
obligations of the issuing bank and may be general obligations of the parent
bank. Such obligations, however, may be limited by the terms of a specific
obligation and by government regulation. As with investment in non-U.S.
securities in general, investments in the obligations of foreign branches of
U.S. banks and of foreign banks may subject the Strategic Income Fund, the
Growth & Income Fund and the Portfolio to investment risks that are different in
some respects from those of investments in obligations of domestic issuers.
Although the Strategic Income Fund, the Growth & Income Fund and the Portfolio
typically will acquire obligations issued and supported by the credit of U.S. or
foreign banks having total assets at the time of purchase in excess of $1
billion, this $1 billion figure is not an investment policy or restriction of
the Strategic Income
 
                                        7
<PAGE>   1762
 
Fund, the Growth & Income Funds or the Portfolio. For the purposes of
calculation with respect to the $1 billion figure, the assets of a bank will be
deemed to include the assets of its U.S. and non-U.S. branches.
 
   
REPURCHASE AGREEMENTS
    
 
   
  A repurchase agreement is a transaction in which the Government Income Fund,
the Strategic Income Fund, the Growth & Income Fund, or the Portfolio buys a
security from a bank or recognized securities dealer and simultaneously commits
to resell that security to the bank or dealer at an agreed upon price, date and
market rate of interest unrelated to the coupon rate or maturity of the
purchased security. Although repurchase agreements carry certain risks not
associated with direct investments in securities, including possible decline in
the market value of the underlying securities and delays and costs to the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund or
Portfolio if the other party to the repurchase agreement becomes bankrupt, the
Government Income Fund, the Strategic Income Fund, Growth & Income Fund and the
Portfolio intend to enter into repurchase agreements only with banks and
broker/dealers believed by the Sub-advisor to present minimal credit risks in
accordance with guidelines approved by the Board of Trustees. The Sub-advisor
reviews and monitors the creditworthiness of such institutions under the Board's
general supervision.
    
 
  The Government Income Fund, the Strategic Income Fund, Growth & Income Fund
and the Portfolio will invest only in repurchase agreements collateralized at
all times in an amount at least equal to the repurchase price plus accrued
interest. There is no limitation on the amount of the Growth & Income Fund's
assets that may be subject to repurchase agreements at any time. To the extent
that the proceeds from any sale of such collateral upon a default in the
obligation to repurchase were less than the repurchase price, the Government
Income Fund, the Strategic Income Fund, Growth & Income Fund or the Portfolio
would suffer a loss. If the financial institution which is party to the
repurchase agreement petitions for bankruptcy or otherwise becomes subject to
bankruptcy or other liquidation proceedings there may be restrictions on the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund's or
the Portfolio's ability to sell the collateral and the Government Income Fund,
the Strategic Income Fund, Growth & Income Fund or the Portfolio could suffer a
loss. However, with respect to financial institutions whose bankruptcy or
liquidation proceedings are subject to the U.S. Bankruptcy Code, the Government
Income Fund, the Strategic Income Fund Growth & Income Fund and the Portfolio
intend to comply with provisions under such Code that would allow the immediate
resale of such collateral. The Government Income Fund and the Growth & Income
Fund will not enter into a repurchase agreement with a maturity of more than
seven days if, as a result, more than 10% of the value of each Fund's total
assets would be invested in such repurchase agreements and other illiquid
investments and securities for which no readily available market exists.
 
   
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
    
 
   
  The Government Income Fund's, the Strategic Income Fund's, the Growth & Income
Fund's and the Portfolio's borrowings will not exceed 30% of the Fund's or the
Portfolio's respective total assets, i.e., the Government Income Fund's, the
Strategic Income Fund's, the Growth & Income Fund's and the Portfolio's
respective total assets at all times will equal at least 300% of the amount of
its outstanding borrowings. If market fluctuations in the value of the
Government Income Fund's, the Strategic Income Fund's, the Growth & Income
Fund's or the Portfolio's total assets to outstanding borrowings to fall below
300%, within three days (excluding Sundays and holidays) of such event the
respective Fund or the Portfolio may be required to sell portfolio securities to
restore the 300% asset coverage, even though from an investment standpoint such
sales might be disadvantageous. The Government Income Fund, the Strategic Income
Fund, the Growth & Income Fund and the Portfolio each may borrow up to 5% of its
respective total assets for temporary or emergency purposes other than to meet
redemptions. Any borrowing by the Government Income Fund, the Strategic Income
Fund, the Growth & Income Fund or the Portfolio may cause greater fluctuation in
the value of its shares than would be the case if the Fund or the Portfolio did
not borrow.
    
 
  The Government Income Fund's, the Strategic Income Fund's, the Growth & Income
Fund's and the Portfolio's fundamental investment limitations permit them to
borrow money for leveraging purposes. The Government Income Fund and the Growth
& Income Fund, however, currently are prohibited, pursuant to a non-fundamental
investment policy, from borrowing money in order to purchase securities.
Nevertheless, this policy may be changed in the future by a vote of a majority
of the Trust's Board of Trustees. The Strategic Income Fund and the Portfolio
may borrow for leveraging purposes. If the Strategic Income Fund or the
Portfolio employs leverage, it would be subject to certain additional risks. Use
of leverage creates an opportunity for greater growth of capital but would
exaggerate any increases or decreases in the Strategic Income Fund's or the
Portfolio's net asset value. When the income and gains on securities purchased
with the proceeds of borrowings exceed the costs of such borrowings, the
Government Income Fund's, the Strategic Income Fund's, the Growth & Income
Fund's or the Portfolio's earnings or net asset value will increase faster than
otherwise would be the case; conversely, if such income and gains fail to exceed
such costs, the Fund's or the Portfolio's earnings or net asset value would
decline faster than would otherwise be the case.
 
                                        8
<PAGE>   1763
 
   
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio may enter into reverse repurchase agreements. A reverse
repurchase agreement is a borrowing transaction in which a Fund or the Portfolio
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash, and agrees to repurchase the security in the
future at an agreed upon price, which includes an interest component. The
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund and
the Portfolio also may engage in "roll" borrowing transactions which involve a
Fund's or the Portfolio's sale of Government National Mortgage Association
certificates or other securities together with a commitment (for which a Fund or
the Portfolio may receive a fee) to purchase similar, but not identical,
securities at a future date. The Government Income Fund, the Strategic Income
Fund, the Growth & Income Fund and the Portfolio will segregate with a custodian
liquid assets in an amount sufficient to cover its obligations under "roll"
transactions and reverse repurchase agreements with broker/dealers. No
segregation is required for reverse repurchase agreements with banks.
    
 
   
SHORT SALES
    
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio may make short sales of securities, although they have no
current intention of doing so. A short sale is a transaction in which a Fund or
the Portfolio sells a security in anticipation that the market price of that
security will decline. The Government Income Fund, the Strategic Income Fund,
the Growth & Income Fund and the Portfolio may make short sales as a form of
hedging to offset potential declines in long positions in securities it owns, or
anticipates acquiring, and in order to maintain portfolio flexibility. The
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund and
the Portfolio only may make short sales "against the box." In this type of short
sale, at the time of the sale, the Fund or the Portfolio owns the security it
has sold short or has the immediate and unconditional right to acquire the
identical security at no additional cost.
 
  In a short sale, the seller does not immediately deliver the securities sold
and does not receive the proceeds from the sale. To make delivery to the
purchaser, the executing broker borrows the securities being sold short on
behalf of the seller. The seller is said to have a short position in the
securities sold until it delivers the securities sold, at which time it receives
the proceeds of the sale. To secure its obligation to deliver securities sold
short, the Government Income Fund, the Strategic Income Fund, the Growth &
Income Fund or the Portfolio will deposit in a separate account with its
custodian an equal amount of the securities sold short or securities convertible
into or exchangeable for such securities at no cost. The Government Income Fund,
the Strategic Income Fund, the Growth & Income Fund or the Portfolio could close
out a short position by purchasing and delivering an equal amount of the
securities sold short, rather than by delivering securities already held by the
Fund or the Portfolio, because the Fund or the Portfolio might want to continue
to receive interest and dividend payments on securities in its portfolio that
are convertible into the securities sold short.
 
   
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio might make a short sale "against the box" in order to
hedge against market risks when the Sub-advisor believes that the price of a
security may decline, causing a decline in the value of a security owned by the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund or
the Portfolio or a security convertible into or exchangeable for such security.
In such case, any future losses in the Government Income Fund's, the Strategic
Income Fund's, the Growth & Income Fund's or the Portfolio's long position
should be reduced by a gain in the short position. Conversely, any gain in the
long position should be reduced by a loss in the short position. The extent to
which such gains or losses in the long position are reduced will depend upon the
amount of the securities sold short relative to the amount of the securities the
Fund or the Portfolio owns, either directly or indirectly, and, in the case
where a Fund or the Portfolio owns convertible securities, changes in the
investment values or conversion premiums of such securities. There will be
certain additional transaction costs associated with short sales "against the
box," but a Fund or the Portfolio will endeavor to offset these costs with
income from the investment of the cash proceeds of short sales.
    
 
                    OPTIONS, FUTURES AND CURRENCY STRATEGIES
 
SPECIAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES
 
  The use of options, futures contracts and forward currency contracts ("Forward
Contracts") involves special considerations and risks, as described below. Risks
pertaining to particular instruments are described in the sections that follow.
 
   
          (1) Successful use of most of these instruments depends upon the
     Sub-advisor's ability to predict movements of the overall securities and
     currency markets, which requires different skills than predicting changes
     in the prices of
    
 
                                        9
<PAGE>   1764
 
   
     individual securities. While the Sub-advisor is experienced in the use of
     these instruments, there can be no assurance that any particular strategy
     adopted will succeed.
    
 
          (2) There might be imperfect correlation, or even no correlation,
     between price movements of an instrument and price movements of the
     investments being hedged. For example, if the value of an instrument used
     in a short hedge increased by less than the decline in value of the hedged
     investment, the hedge would not be fully successful. Such a lack of
     correlation might occur due to factors unrelated to the value of the
     investments being hedged, such as speculative or other pressures on the
     markets in which the hedging instrument is traded. The effectiveness of
     hedges using hedging instruments on indices will depend on the degree of
     correlation between price movements in the index and price movements in the
     investments being hedged.
 
   
          (3) Hedging strategies, if successful, can reduce risk of loss by
     wholly or partially offsetting the negative effect of unfavorable price
     movements in the investments being hedged. However, hedging strategies can
     also reduce opportunity for gain by offsetting the positive effect of
     favorable price movements in the hedged investments. For example, if the
     Government Income Fund, the Strategic Income Fund, the Growth & Income Fund
     or the Portfolio entered into a short hedge because the Sub-advisor
     projected a decline in the price of a security in the Fund's or the
     Portfolio's portfolio, and the price of that security increased instead,
     the gain from that increase might by wholly or partially offset by a
     decline in the price of the hedging instrument. Moreover, if the price of
     the hedging instrument declined by more than the increase in the price of
     the security, the Government Income Fund, the Strategic Income Fund, the
     Growth & Income Fund or the Portfolio could suffer a loss. In either such
     case, the Government Income Fund, the Strategic Income Fund, the Growth &
     Income Fund or the Portfolio would have been in a better position had it
     not hedged at all.
    
 
          (4) As described below, the Government Income Fund, the Strategic
     Income Fund, the Growth & Income Fund or the Portfolio might be required to
     maintain assets as "cover," maintain segregated accounts or make margin
     payments when it takes positions in instruments involving obligations to
     third parties (i.e., instruments other than purchased options). If a Fund
     or the Portfolio were unable to close out its positions in such
     instruments, it might be required to continue to maintain such assets or
     accounts or make such payments until the position expired or matured. The
     requirements might impair the Fund's ability or the Portfolio's ability to
     sell a portfolio security or make an investment at a time when it would
     otherwise be favorable to do so, or require that the Fund or the Portfolio
     sell a portfolio security at a disadvantageous time. The Fund's or the
     Portfolio's ability to close out a position in an instrument prior to
     expiration or maturity depends on the existence of a liquid secondary
     market or, in the absence of such a market, the ability and willingness of
     the other party to the transaction ("contra party") to enter into a
     transaction closing out the position. Therefore, there is no assurance that
     any position can be closed out at a time and price that is favorable to the
     Fund or the Portfolio.
 
WRITING CALL OPTIONS
 
   
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio may write (sell) call options on securities, indices and
currencies. Call options generally will be written on securities and currencies
that, in the opinion of the Sub-advisor are not expected to make any major price
moves in the near future but that, over the long term, are deemed to be
attractive investments for the Government Income Fund, the Strategic Income
Fund, the Growth & Income Fund and the Portfolio.
    
 
  A call option gives the holder (buyer) the right to purchase a security or
currency at a specified price (the exercise price) at any time until (American
Style) or on (European Style) a certain date (the expiration date). So long as
the obligation of the writer of a call option continues, he may be assigned an
exercise notice, requiring him to deliver the underlying security or currency
against payment of the exercise price. This obligation terminates upon the
expiration of the call option, or such earlier time at which the writer effects
a closing purchase transaction by purchasing an option identical to that
previously sold.
 
  Portfolio securities or currencies on which call options may be written will
be purchased solely on the basis of investment considerations consistent with a
Fund's or the Portfolio's investment objectives. When writing a call option, the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund or
the Portfolio, in return for the premium, gives up the opportunity for profit
from a price increase in the underlying security or currency above the exercise
price, and retains the risk of loss should the price of the security or currency
decline. Unlike one who owns securities or currencies not subject to an option,
a Fund or the Portfolio has no control over when it may be required to sell the
underlying securities or currencies, since most options may be exercised at any
time prior to the option's expiration. If a call option that a Fund or the
Portfolio has written expires, the Fund or the Portfolio will realize a gain in
the amount of the premium; however, such gain may be offset by a decline in the
market value of the underlying security
 
                                       10
<PAGE>   1765
 
or currency during the option period. If the call option is exercised, the Fund
or the Portfolio will realize a gain or loss from the sale of the underlying
security or currency, which will be increased or offset by the premium received.
The Government Income Fund, the Strategic Income Fund, the Growth & Income Fund
and the Portfolio do not consider a security or currency covered by a call
option to be "pledged" as that term is used in the Government Income Fund's, the
Strategic Income Fund's, the Growth & Income Fund's and the Portfolio's
fundamental investment policies that limit the pledging or mortgaging of their
assets.
 
  Writing call options can serve as a limited short hedge because declines in
the value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
appreciates to a price higher than the exercise price of the call option, it can
be expected that the option will be exercised and a Fund or the Portfolio will
be obligated to sell the security or currency at less than its market value.
 
   
  The premium that the Government Income Fund, the Strategic Income Fund, the
Growth & Income Fund or the Portfolio receives for writing a call option is
deemed to constitute the market value of an option. The premium a Fund or the
Portfolio will receive from writing a call option will reflect, among other
things, the current market price of the underlying investment, the relationship
of the exercise price to such market price, the historical price volatility of
the underlying investment, and the length of the option period. In determining
whether a particular call option should be written, the Sub-advisor will
consider the reasonableness of the anticipated premium and the likelihood that a
liquid secondary market will exist for those options.
    
 
  Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security or currency from
being called, or to permit the sale of the underlying security or currency.
Furthermore, effecting a closing transaction will permit the Government Income
Fund, the Strategic Income Fund, the Growth & Income Fund or the Portfolio to
write another call option on the underlying security or currency with either a
different exercise price, expiration date or both.
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio will pay transaction costs in connection with the writing
of options and in entering into closing purchase contracts. Transaction costs
relating to options activity normally are higher than those applicable to
purchases and sales of portfolio securities.
 
  The exercise price of the options may be below, equal to or above the current
market values of the underlying securities or currencies at the time the options
are written. From time to time, a Fund or the Portfolio may purchase an
underlying security or currency for delivery in accordance with the exercise of
an option, rather than delivering such security or currency from its portfolio.
In such cases, additional costs will be incurred.
 
  A Fund or the Portfolio will realize a profit or loss from a closing purchase
transaction if the cost of the transaction is less or more, respectively, than
the premium received from writing the option. Because increases in the market
price of a call option generally will reflect increases in the market price of
the underlying security or currency, any loss resulting from the repurchase of a
call option is likely to be offset in whole or in part by appreciation of the
underlying security or currency owned by a Fund or the Portfolio.
 
WRITING PUT OPTIONS
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio may write put options on securities, indices and
currencies. A put option gives the purchaser of the option the right to sell,
and the writer (seller) the obligation to buy, the underlying security or
currency at the exercise price at anytime until (American Style) or on (European
Style) the expiration date. The operation of put options in other respects,
including their related risks and rewards, is substantially identical to that of
call options.
 
   
  A Fund or the Portfolio generally would write put options in circumstances
where the Sub-advisor wishes to purchase the underlying security or currency for
the Fund's or the Portfolio's portfolio at a price lower than the current market
price of the security or currency. In such event, the Fund or the Portfolio
would write a put option at an exercise price that, reduced by the premium
received on the option, reflects the lower price it is willing to pay. Since the
Fund or the Portfolio also would receive interest on debt securities or
currencies maintained to cover the exercise price of the option, this technique
could be used to enhance current return during periods of market uncertainty.
The risk in such a transaction would be that the market price of the underlying
security or currency would decline below the exercise price less the premium
received.
    
 
  Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
depreciates to a price lower than the exercise price of the put option, it can
be expected that the put option will be exercised and a Fund or the Portfolio
will be obligated to purchase the security or currency at greater than its
market value.
                                       11
<PAGE>   1766
 
PURCHASING PUT OPTIONS
 
   
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio may purchase put options on securities, indices and
currencies. As the holder of a put option, the Government Income Fund, the
Strategic Income Fund, the Growth & Income Fund or the Portfolio would have the
right to sell the underlying security or currency at the exercise price at any
time until (American Style), or on (European Style) the expiration date. The
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund or
the Portfolio may enter into closing sale transactions with respect to such
options, exercise them or permit them to expire.
    
 
  A Fund or the Portfolio may purchase a put option on an underlying security or
currency ("protective put") owned by the Fund or the Portfolio as a hedging
technique in order to protect against an anticipated decline in the value of the
security or currency. Such hedge protection is provided only during the life of
the put option when the Fund or the Portfolio, as the holder of the put option,
is able to sell the underlying security or currency at the put exercise price
regardless of any decline in the underlying security's market price or
currency's exchange value. The premium paid for the put option and any
transaction costs would reduce any profit otherwise available for distribution
when the security or currency eventually is sold.
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio also may purchase put options at a time when that Fund or
the Portfolio does not own the underlying security or currency. By purchasing
put options on a security or currency it does not own, a Fund or the Portfolio
seeks to benefit from a decline in the market price of the underlying security
or currency. If the put option is not sold when it has remaining value, and if
the market price of the underlying security or currency remains equal to or
greater than the exercise price during the life of the put option, the Fund or
the Portfolio will lose its entire investment in the put option. In order for
the purchase of a put option to be profitable, the market price of the
underlying security or currency must decline sufficiently below the exercise
price to cover the premium and transaction costs, unless the put option is sold
in a closing sale transaction.
 
PURCHASING CALL OPTIONS
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund or the Portfolio may purchase call options on securities, indices and
currencies. As the holder of a call option, a Fund or the Portfolio would have
the right to purchase the underlying security or currency at the exercise price
at any time until (American Style) or on (European Style) the expiration date. A
Fund or the Portfolio may enter into closing sale transactions with respect to
such options, exercise them or permit them to expire.
 
  Call options may be purchased by a Fund or the Portfolio for the purpose of
acquiring the underlying security or currency for its portfolio. Utilized in
this fashion, the purchase of call options would enable the Fund or the
Portfolio to acquire the security or currency at the exercise price of the call
option plus the premium paid. At times, the net cost of acquiring the security
or currency in this manner may be less than the cost of acquiring the security
or currency directly. This technique also may be useful to a Fund or the
Portfolio in purchasing a large block of securities that would be more difficult
to acquire by direct market purchases. So long as it holds such a call option,
rather than the underlying security or currency itself, a Fund or the Portfolio
is partially protected from any unexpected decline in the market price of the
underlying security or currency and, in such event, could allow the call option
to expire, incurring a loss only to the extent of the premium paid for the
option.
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio also may purchase call options on underlying securities
or currencies it owns to avoid realizing losses that would result in a reduction
of a Fund's or the Portfolio's current return. For example, where a Fund or the
Portfolio has written a call option on an underlying security or currency having
a current market value below the price at which it purchased the security or
currency, an increase in the market price could result in the exercise of the
call option written by the Fund or the Portfolio and the realization of a loss
on the underlying security or currency. Accordingly, the Fund or the Portfolio
could purchase a call option on the same underlying security or currency, which
could be exercised to fulfill the Fund's or the Portfolio's delivery obligations
under its written call (if it is exercised). This strategy could allow the Fund
or the Portfolio to avoid selling the portfolio security or currency at a time
when it has an unrealized loss; however, the Fund or the Portfolio would have to
pay a premium to purchase the call option plus transaction costs.
 
  Aggregate premiums paid for put and call options will not exceed 5% of the
Government Income Fund, the Strategic Income Fund, the Growth & Income's Fund's
or the Portfolio's total assets at the time of purchase.
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund or the Portfolio may attempt to accomplish objectives similar to those
involved in using Forward Contracts by purchasing put or call options on
currencies. A put option gives a Fund or the Portfolio as purchaser the right
(but not the obligation) to sell a specified amount of
 
                                       12
<PAGE>   1767
 
currency at the exercise price at any time until (American Style) or on
(European Style) the expiration of the option. A call option gives a Fund or the
Portfolio as purchaser the right (but not the obligation) to purchase a
specified amount of currency at the exercise price at any time until (American
Style) or on (European Style) the expiration of the option. A Fund or the
Portfolio might purchase a currency put option, for example, to protect itself
against a decline in the dollar value of a currency in which it holds or
anticipates holding securities. If the currency's value should decline against
the dollar, the loss in currency value should be offset, in whole or in part, by
an increase in the value of the put. If the value of the currency instead should
rise against the dollar, any gain to the Fund or the Portfolio would be reduced
by the premium it had paid for the put option. A currency call option might be
purchased, for example, in anticipation of, or to protect against, a rise in the
value against the dollar of a currency in which the Fund or the Portfolio
anticipates purchasing securities.
 
  Options may be either listed on an exchange or traded in over-the-counter
("OTC") markets. Listed options are third-party contracts (i.e., performance of
the obligations of the purchaser and seller is guaranteed by the exchange or
clearing corporation), and have standardized strike prices and expiration dates.
OTC options are two-party contracts with negotiated strike prices and expiration
dates. The Funds and the Portfolio will not purchase an OTC option unless the
Fund or the Portfolio believes that daily valuations for such options are
readily obtainable. OTC options differ from exchange-traded options in that OTC
options are transacted with dealers directly and not through a clearing
corporation (which guarantees performance). Consequently, there is a risk of
non-performance by the dealer. Since no exchange is involved, OTC options are
valued on the basis of the average of the last bid prices obtained from dealers,
unless a quotation from only one dealer is available, in which case only that
dealer's price will be used. In the case of OTC options, there can be no
assurance that a liquid secondary market will exist for any particular option at
any specific time.
 
  The staff of the SEC considers purchased OTC options to be illiquid
securities. A Fund or the Portfolio may also sell OTC options and, in connection
therewith, segregate assets or cover its obligations with respect to OTC options
written by the Fund or the Portfolio. The assets used as cover for OTC options
written by a Fund or the Portfolio will be considered illiquid unless the OTC
options are sold to qualified dealers who agree that the Fund or the Portfolio
may repurchase any OTC option it writes at a maximum price to be calculated by a
formula set forth in the option agreement. The cover for an OTC option written
subject to this procedure would be considered illiquid only to the extent that
the maximum repurchase price under the formula exceeds the intrinsic value of
the option.
 
  A Fund's or the Portfolio's ability to establish and close out positions in
exchange-listed options depends on the existence of a liquid market. Each Fund
and the Portfolio intends to purchase or write only those exchange-traded
options for which there appears to be a liquid secondary market. However, there
can be no assurance that such a market will exist at any particular time.
Closing transactions can be made for OTC options only by negotiating directly
with the contra party or by a transaction in the secondary market if any such
market exists. Although each Fund and the Portfolio will enter into OTC options
only with contra parties that are expected to be capable of entering into
closing transactions with the Fund or the Portfolio, there is no assurance that
the Fund or the Portfolio will in fact be able to close out an OTC option
position at a favorable price prior to expiration. In the extent of insolvency
of the contra party, the Fund or the Portfolio might be unable to close out an
OTC option position at any time prior to its expiration.
 
INDEX OPTIONS
 
  Puts and calls on indices are similar to puts and calls on securities or
futures contracts except that all settlements are in cash and gain or loss
depends on changes in the index in question (and thus on price movements in the
securities market or a particular market sector generally) rather than on price
movements in individual securities or futures contracts. When a Fund or the
Portfolio writes a call on an index, it receives a premium and agrees that,
prior to the expiration date, the purchaser of the call, upon exercise of the
call, will receive from the Fund or the Portfolio an amount of cash if the
closing level of the index upon which the call is based is greater than the
exercise price of the call. The amount of cash is equal to the difference
between the closing price of the index and the exercise price of the call times
a specified multiple (the "multiplier"), which determines the total dollar value
for each point of such difference. When a Fund or the Portfolio buys a call on
an index, it pays a premium and has the same rights as to such call as are
indicated above. When a Fund or the Portfolio buys a put on an index, it pays a
premium and has the right, prior to the expiration date, to require the seller
of the put, upon the Fund's or the Portfolio's exercise of the put, to deliver
to the Fund or the Portfolio an amount of cash if the closing level of the index
upon which the put is based is less than the exercise price of the put, which
amount of cash is determined by the multiplier, as described above for calls.
When a Fund or the Portfolio writes a put on an index, it receives a premium and
the purchaser has the right, prior to the expiration date, to require the Fund
or the Portfolio to deliver to it an amount of cash equal to the difference
between the closing level of the index and the exercise price times the
multiplier, if the closing level is less than the exercise price.
 
                                       13
<PAGE>   1768
 
  The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Fund or the
Portfolio writes a call on an index it cannot provide in advance for its
potential settlement obligations by acquiring and holding the underlying
securities. A Fund or the Portfolio can offset some of the risk of writing a
call index option position by holding a diversified portfolio of securities
similar to those on which the underlying index is based. However, a Fund or the
Portfolio cannot, as a practical matter, acquire and hold a portfolio containing
exactly the same securities as underlie the index and, as a result, bears a risk
that the value of the securities held will vary from the value of the index.
 
  Even if a Fund or the Portfolio could assemble a securities portfolio that
exactly reproduced the composition of the underlying index, it still would not
be fully covered from a risk standpoint because of the "timing risk" inherent in
writing index options. When an index option is exercised, the amount of cash
that the holder is entitled to receive is determined by the difference between
the exercise price and the closing index level on the date when the option is
exercised. As with other kinds of options, the Fund or the Portfolio, as the
call writer, will not know that it has been assigned until the next business day
at the earliest. The time lag between exercise and notice of assignment poses no
risk for the writer of a covered call on a specific underlying security, such as
common stock, because there the writer's obligation is to deliver the underlying
security, not to pay its value as of a fixed time in the past. So long as the
writer already owns the underlying security, it can satisfy its settlement
obligations by simply delivering it, and the risk that its value may have
declined since the exercise date is borne by the exercising holder. In contrast,
even if the writer of an index call holds securities that exactly match the
composition of the underlying index, it will not be able to satisfy its
assignment obligations by delivering those securities against payment of the
exercise price. Instead, it will be required to pay cash in an amount based on
the closing index value on the exercise date; and by the time it learns that it
has been assigned, the index may have declined, with a corresponding decline in
the value of its securities portfolio. This "timing risk" is an inherent
limitation on the ability of index call writers to cover their risk exposure by
holding securities positions.
 
  If a Fund or the Portfolio purchases an index option and exercises it before
the closing index value for that day is available, it runs the risk that the
level of the underlying index may subsequently change. If such a change causes
the exercised option to fall out-of-the-money, the Fund or the Portfolio will be
required to pay the difference between the closing index value and the exercise
price of the option (times the applicable multiplier) to the assigned writer.
 
INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES CONTRACTS
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund or the Portfolio may enter into interest rate or currency futures
contracts, including futures contracts on indices of debt securities, ("Futures"
or "Futures Contracts"), as a hedge against changes in prevailing levels of
interest rates or currency exchange rates in order to establish more definitely
the effective return on securities or currencies held or intended to be acquired
by the Fund or the Portfolio. The Government Income Fund's, the Strategic Income
Fund's, the Growth & Income Fund's or the Portfolio's hedging may include sales
of Futures as an offset against the effect of expected increases in interest
rates or decreases in currency exchange rates, and purchases of Futures as an
offset against the effect of expected declines in interest rates or increases in
currency exchange rates. The Growth & Income Fund may also enter into stock
index Futures Contracts as a hedge against changes in stock prices.
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio only will enter into Futures Contracts that are traded on
futures exchanges and are standardized as to maturity date and underlying
financial instrument. Futures exchanges and trading thereon in the United States
are regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC"). Futures are exchanged in London at the London International
Financial Futures Exchange.
 
  Although techniques other than sales and purchases of Futures Contracts could
be used to reduce a Fund's or the Portfolio's exposure to interest rate and
currency exchange rate fluctuations, a Fund or the Portfolio may be able to
hedge exposure more effectively and at a lower cost through using Futures
Contracts.
 
  A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument (debt
security or currency) for a specified price at a designated date, time and
place. An index Futures Contract provides for the delivery, at a designated
date, time and place, of an amount of cash equal to a specified dollar amount
times the difference between the index value at the close of trading on the
contract and the price at which the Futures Contract is originally struck; no
physical delivery of the securities comprising the index is made. Brokerage fees
are incurred when a Futures Contract is bought or sold, and margin deposits must
be maintained at all times the Futures Contract is outstanding.
 
  Although Futures Contracts typically require future delivery of and payment
for financial instruments or currencies, Futures Contracts usually are closed
out before the delivery date. Closing out an open Futures Contract sale or
purchase is
 
                                       14
<PAGE>   1769
 
effected by entering into an offsetting Futures Contract purchase or sale,
respectively, for the same aggregate amount of the identical financial
instrument or currency and the same delivery date. If the offsetting purchase
price is less than the original sale price, the Government Income Fund, the
Strategic Income Fund, the Growth & Income Fund or the Portfolio realizes a
gain; if it is more, the Government Income Fund, the Strategic Income Fund, the
Growth & Income Fund or the Portfolio realizes a loss. Conversely, if the
offsetting sale price is more than the original purchase price, the Government
Income Fund, the Strategic Income Fund, the Growth & Income Fund or the
Portfolio realizes a gain; if it is less, the Government Income Fund, the
Strategic Income Fund, the Growth & Income Fund or the Portfolio realizes a
loss. The transaction costs also must be included in these calculations. There
can be no assurance, however, that a Fund or the Portfolio will be able to enter
into an offsetting transaction with respect to a particular Futures Contract at
a particular time. If a Fund or the Portfolio is not able to enter into an
offsetting transaction, the Fund or the Portfolio will continue to be required
to maintain the margin deposits on the Futures Contract.
 
  As an example of an offsetting transaction, the contractual obligations
arising from the sale of one Futures Contract of September Deutschemarks on an
exchange may be fulfilled at any time before delivery under the Futures Contract
is required (i.e., on a specified date in September, the "delivery month") by
the purchase of another Futures Contract of September Deutschemarks on the same
exchange. In such instance, the difference between the price at which the
Futures Contract was sold and the price paid for the offsetting purchase, after
allowance for transaction costs, represents the profit or loss to the Government
Income Fund, the Strategic Income Fund, the Growth & Income Fund or the
Portfolio.
 
  The Government Income Fund's, the Strategic Income Fund's, the Growth & Income
Fund's and the Portfolio's Futures transactions will be entered into for hedging
purposes only; that is, Futures Contracts will be sold to protect against a
decline in the price of securities or currencies that the Fund or the Portfolio
owns, or Futures Contracts will be purchased to protect the Fund or the
Portfolio against an increase in the price of securities or currencies it has
committed to purchase or expects to purchase.
 
  "Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by the Government Income Fund, the Strategic Income Fund, the Growth &
Income Fund or the Portfolio in order to initiate Futures trading and to
maintain the Fund's or the Portfolio's open positions in Futures Contracts. A
margin deposit made when the Futures Contract is entered into ("initial margin")
is intended to assure a Fund's or the Portfolio's performance under the Futures
Contract. The margin required for a particular Futures Contract is set by the
exchange on which the Futures Contract is traded, and may be modified
significantly from time to time by the exchange during the term of the Futures
Contract.
 
  Subsequent payments, called "variation margin," to and from the futures
commission merchant through which the Fund or the Portfolio entered into the
Futures Contract will be made on a daily basis as the price of the underlying
security, currency or index fluctuates making the Futures Contract more or less
valuable, a process known as marking-to-market.
 
  Risks of Using Futures Contracts. The prices of Futures Contracts are volatile
and are influenced, among other things, by actual and anticipated changes in
interest and currency rates, which in turn are affected by fiscal and monetary
policies and national and international political and economic events.
 
  There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities or currencies in a Fund's or the
Portfolio's portfolio being hedged. The degree of imperfection of correlation
depends upon circumstances such as: variations in speculative market demand for
Futures and for securities or currencies, including technical influences in
Futures trading; and differences between the financial instruments being hedged
and the instruments underlying the standard Futures Contracts available for
trading. A decision of whether, when, and how to hedge involves skill and
judgment, and even a well-conceived hedge may be unsuccessful to some degree
because of unexpected market behavior or interest or currency rate trends.
 
  Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
 
  Most U.S. Futures exchanges limit the amount of fluctuation permitted in
Futures Contract and option on Futures Contract prices during a single trading
day. The daily limit establishes the maximum amount that the price of a Futures
Contract or option may vary either up or down from the previous day's settlement
price at the end of a trading session. Once the daily limit has been reached in
a particular type of Futures Contract or option, no trades may be made on that
day at a price beyond that limit. The daily limit governs only price movement
during a particular trading day and therefore
 
                                       15
<PAGE>   1770
 
does not limit potential losses, because the limit may prevent the liquidation
of unfavorable positions. Futures Contract and option prices occasionally have
moved to the daily limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of positions and subjecting some
traders to substantial losses.
 
  If a Fund or the Portfolio were unable to liquidate a Futures or option on
Futures position due to the absence of a liquid secondary market or the
imposition of price limits, it could incur substantial losses. The Fund or the
Portfolio would continue to be subject to market risk with respect to the
position. In addition, except in the case of purchased options, the Fund or the
Portfolio would continue to be required to make daily variation margin payments
and might be required to maintain the position being hedged by the Future or
option or to maintain cash or securities in a segregated account.
 
  Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit requirements in the Futures market are less
onerous than margin requirements in the securities markets, there might be
increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
 
OPTIONS ON FUTURES CONTRACTS
 
  Options on Futures Contracts are similar to options on securities or
currencies except that options on Futures Contracts give the purchaser the
right, in return for the premium paid, to assume a position in a Futures
Contract (a long position if the option is a call and a short position if the
option is a put) at a specified exercise price at any time during the period of
the option. Upon exercise of the option, the delivery of the Futures position by
the writer of the option to the holder of the option will be accompanied by
delivery of the accumulated balance in the writer's Futures margin account,
which represents the amount by which the market price of the Futures Contract,
at exercise, exceeds (in the case of a call) or is less than (in the case of a
put) the exercise price of the option on the Futures Contract. If an option is
exercised on the last trading day prior to the expiration date of the option,
the settlement will be made entirely in cash equal to the difference between the
exercise price of the option and the closing level of the securities, currencies
or index upon which the Futures Contract is based on the expiration date.
Purchasers of options who fail to exercise their options prior to the exercise
date suffer a loss of the premium paid.
 
  The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities, foreign currencies or indices.
 
  If a Fund or the Portfolio writes an option on a Futures Contract, it will be
required to deposit initial and variation margin pursuant to requirements
similar to those applicable to Futures Contracts. Premiums received from the
writing of an option on a Futures Contract are included in the initial margin
deposit.
 
  A Fund or the Portfolio may seek to close out an option position by selling an
option covering the same Futures Contract and having the same exercise price and
expiration date. The ability to establish and close out positions on such
options is subject to the maintenance of a liquid secondary market.
 
LIMITATIONS ON USE OF FUTURES, OPTIONS ON FUTURES AND CERTAIN OPTIONS ON
CURRENCIES
 
  To the extent that a Fund or the Portfolio enters into Futures Contracts,
options on Futures Contracts and options on foreign currencies traded on a
CFTC-regulated exchange, in each case other than for bona fide hedging purposes
(as defined by the CFTC), the aggregate initial margin and premiums required to
establish those positions (excluding the amount by which options are
"in-the-money") will not exceed 5% of the liquidation value of a Fund's or the
Portfolio's portfolio, after taking into account unrealized profits and
unrealized losses on any contracts the Fund or the Portfolio has entered into.
In general, a call option on a Futures Contract is "in-the-money" if the value
of the underlying Futures Contract exceeds the strike, i.e., exercise, price of
the call; a put option on a Futures Contract is "in-the-money" if the value of
the underlying Futures Contract is exceeded by the strike price of the put. This
guideline may be modified by the Trust's or the Portfolio's Board of Trustees,
as applicable, without a shareholder vote. This limitation does not limit the
percentage of a Fund's or the Portfolio's assets at risk to 5%.
 
                                       16
<PAGE>   1771
 
FORWARD CONTRACTS
 
  A Forward Contract is an obligation, generally arranged with a commercial bank
or other currency dealer, to purchase or sell a currency against another
currency at a future date and price as agreed upon by the parties. The
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund and
the Portfolio either may accept or make delivery of the currency at the maturity
of the Forward Contract. A Fund or the Portfolio may also, if its contra party
agrees, prior to maturity, enter into a closing transaction involving the
purchase or sale of an offsetting contract.
 
  A Fund or the Portfolio engages in forward currency transactions in
anticipation of, or to protect itself against, fluctuations in exchange rates. A
Fund or the Portfolio might sell a particular foreign currency forward, for
example, when it holds bonds denominated in a foreign currency but anticipates,
and seeks to be protected against, a decline in the currency against the U.S.
dollar. Similarly, a Fund or the Portfolio might sell the U.S. dollar forward
when it holds bonds denominated in U.S. dollars but anticipates, and seeks to be
protected against, a decline in the U.S. dollar relative to other currencies.
Further, the Funds or the Portfolio might purchase a currency forward to "lock
in" the price of securities denominated in that currency that it anticipates
purchasing.
 
  Forward Contracts are traded in the interbank market conducted directly
between currency traders (usually large commercial banks) and their customers. A
Forward Contract generally has no deposit requirement, and no commissions are
charged at any stage for trades. The Government Income Fund, the Strategic
Income Fund, the Growth & Income Fund or the Portfolio will enter into such
Forward Contracts with major U.S. or foreign banks and securities or currency
dealers in accordance with guidelines approved by the Trust's or the Portfolio's
Board of Trustees, as applicable.
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund or the Portfolio may enter into Forward Contracts either with respect to
specific transactions or with respect to the overall investment of the Fund or
the Portfolio. The precise matching of the Forward Contract amounts and the
value of specific securities generally will not be possible because the future
value of such securities in foreign currencies will change as a consequence of
market movements in the value of those securities between the date the Forward
Contract is entered into and the date it matures. Accordingly, it may be
necessary for the Fund or the Portfolio to purchase additional foreign currency
on the spot (i.e., cash) market (and bear the expense of such purchase) if the
market value of the security is less than the amount of foreign currency the
Fund or the Portfolio is obligated to deliver and if a decision is made to sell
the security and make delivery of the foreign currency. Conversely, it may be
necessary to sell on the spot market some of the foreign currency the Fund or
the Portfolio is obligated to deliver. The projection of short-term currency
market movements is extremely difficult, and the successful execution of a
short-term hedging strategy is highly uncertain. Forward Contracts involve the
risk that anticipated currency movements will not be predicted accurately,
causing the Fund or the Portfolio to sustain losses on these contracts and
transaction costs.
 
  At or before the maturity of a Forward Contract requiring the Fund or the
Portfolio to sell a currency, the Fund or the Portfolio either may sell a
portfolio security and use the sale proceeds to make delivery of the currency or
retain the security and offset its contractual obligation to deliver the
currency by purchasing a second contract pursuant to which the Fund or the
Portfolio will obtain, on the same maturity date, the same amount of the
currency that it is obligated to deliver. Similarly, the Fund or the Portfolio
may close out a Forward Contract requiring it to purchase a specified currency
by entering into a second contract, if its contra party agrees, entitling it to
sell the same amount of the same currency on the maturity date of the first
contract. The Fund or the Portfolio would realize a gain or loss as a result of
entering into such an offsetting Forward Contract under either circumstance to
the extent the exchange rate or rates between the currencies involved moved
between the execution dates of the first contract and the offsetting contract.
 
  The cost to a Fund or the Portfolio of engaging in Forward Contracts varies
with factors such as the currencies involved, the length of the contract period
and the market conditions then prevailing. Because Forward Contracts usually are
entered into on a principal basis, no fees or commissions are involved. The use
of Forward Contracts does not eliminate fluctuations in the prices of the
underlying securities the Fund or the Portfolio owns or intends to acquire, but
it does establish a rate of exchange in advance. In addition, while Forward
Contracts limit the risk of loss due to a decline in the value of the hedged
currencies, they also limit any potential gain that might result should the
value of the currencies increase.
 
FOREIGN CURRENCY STRATEGIES -- SPECIAL CONSIDERATIONS
 
  A Fund or the Portfolio may use options on foreign currencies, Futures on
foreign currencies, options on Futures on foreign currencies and Forward
Contracts to hedge against movements in the values of the foreign currencies in
which the Fund's or the Portfolio's securities are denominated. Such currency
hedges can protect against price movements in a security that a Fund or the
Portfolio owns or intends to acquire that are attributable to changes in the
value of the
 
                                       17
<PAGE>   1772
 
currency in which it is denominated. Such hedges do not, however, protect
against price movements in the securities that are attributable to other causes.
 
   
  A Fund or the Portfolio might seek to hedge against changes in the value of a
particular currency when no Futures Contract, Forward Contract or option
involving that currency is available or one of such contracts is more expensive
than certain other contracts. In such cases, the Fund or the Portfolio may hedge
against price movements in that currency by entering into a contract on another
currency or basket of currencies, the values of which the Sub-advisor believes
will have a positive correlation to the value of the currency being hedged. The
risk that movements in the price of the contract will not correlate perfectly
with movements in the price of the currency being hedged is magnified when this
strategy is used.
    
 
  The value of Futures Contracts, options on Futures Contracts, Forward
Contracts and options on foreign currencies depends on the value of the
underlying currency relative to the U.S. dollar. Because foreign currency
transactions occurring in the interbank market might involve substantially
larger amounts than those involved in the use of Futures Contracts, Forward
Contracts or options, a Fund or the Portfolio could be disadvantaged by dealing
in the odd lot market (generally consisting of transactions of less than $1
million) for the underlying foreign currencies at prices that are less favorable
than for round lots.
 
  There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirements that quotations available through
dealers or other market sources be firm or revised on a timely basis. Quotation
information generally is representative of very large transactions in the
interbank market and thus might not reflect odd-lot transactions where rates
might be less favorable. The interbank market in foreign currencies is a global,
round-the-clock market. To the extent the U.S. options or Futures markets are
closed while the markets for the underlying currencies remain open, significant
price and rate movements might take place in the underlying markets that cannot
be reflected in the markets for the Futures contracts or options until they
reopen.
 
  Settlement of Futures Contracts, Forward Contracts and options involving
foreign currencies might be required to take place within the country issuing
the underlying currency. Thus, a Fund or the Portfolio might be required to
accept or make delivery of the underlying foreign currency in accordance with
any U.S. or foreign regulations regarding the maintenance of foreign banking
arrangements by U.S. residents and might be required to pay any fees, taxes and
charges associated with such delivery assessed in the issuing country.
 
COVER
 
  Transactions using Forward Contracts, Futures Contracts and options (other
than options purchased by a Fund or the Portfolio) expose the Fund or the
Portfolio to an obligation to another party. A Fund or the Portfolio will not
enter into any such transactions unless it owns either (1) an offsetting
("covered") position in securities, currencies, or other options, Forward
Contracts or Futures Contracts, or (2) cash, receivables and short-term debt
securities with a value sufficient at all times to cover its potential
obligations not covered as provided in (1) above. Each Fund and the Portfolio
will comply with SEC guidelines regarding cover for these instruments and, if
the guidelines so require, set aside cash or liquid securities.
 
  Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Forward Contract, Futures Contract or option is
open, unless they are replaced with other appropriate assets. If a large portion
of a Fund's or the Portfolio's assets are used for cover or segregated accounts,
it could affect portfolio management or the Fund's or the Portfolio's ability to
meet redemption requests or other current obligations.
 
INTEREST RATE AND CURRENCY SWAPS
 
   
  The Strategic Income Fund and the Portfolio usually will enter into interest
rate swaps on a net basis, that is, the two payment streams are netted out in a
cash settlement on the payment date or dates specified in the instrument, with
the Strategic Income Fund or the Portfolio receiving or paying, as the case may
be, only the net amount of the two payments. The net amount of the excess, if
any, of each of the Strategic Income Fund's and the Portfolio's obligations over
its entitlements with respect to each swap will be accrued on a daily basis and
an amount of cash or liquid securities having an aggregate net asset value at
least equal to the accrued excess will be maintained in an account by a
custodian that satisfies the requirements of the 1940 Act. The Strategic Income
Fund and the Portfolio will also establish and maintain such segregated accounts
with respect to its total obligations under any swaps that are not entered into
on a net basis and with respect to any caps or floors that are written by that
Fund or the Portfolio. The Sub-advisor, the Strategic Income Fund and the
Portfolio believe that swaps, caps and floors do not constitute senior
securities under the 1940 Act and, accordingly, will not treat them as being
subject to the Fund's and the Portfolio's borrowing restrictions. The Strategic
Income Fund and the Portfolio will not enter into any swap, cap, floor, collar
or other derivative transaction unless, at the time of entering into the
transaction, the unsecured long-term debt rating of the counterparty combined
with any credit
    
                                       18
<PAGE>   1773
 
   
enhancements is rated at least A by Moody's or S&P, or has an equivalent rating
from a nationally recognized statistical rating organization or is determined to
be of equivalent credit quality by the Sub-advisor. If a counterparty defaults,
the Strategic Income Fund or the Portfolio may have contractual remedies
pursuant to the agreements related to the transactions. The swap market has
grown substantially in recent years, with a large number of banks and investment
banking firms acting both as principals and as agents utilizing standardized
swap documentation. As a result, the swap market has become relatively liquid.
Caps, floors and collars are more recent innovations for which standardized
documentation has not yet been fully developed and, for that reason, they are
less liquid than swaps.
    
 
                                  RISK FACTORS
 
ILLIQUID SECURITIES
 
  The Government Income Fund, the Strategic Income Fund, the Growth & Income
Fund and the Portfolio each may invest up to 15% of net assets in illiquid
securities. Securities may be considered illiquid if a Fund or the Portfolio
cannot reasonably expect within seven days to receive approximately the amount
at which the Fund or the Portfolio values such securities. The sale of illiquid
securities, if they can be sold at all, generally will require more time and
result in higher brokerage charges or dealer discounts and other selling
expenses than will the sale of liquid securities, such as securities eligible
for trading on U.S. securities exchanges or in the over-the-counter markets.
Moreover, restricted securities, which may be illiquid for purposes of this
limitation often sell, if at all, at a price lower than similar securities that
are not subject to restrictions on resale.
 
  Illiquid securities include those that are subject to restrictions contained
in the securities laws of other countries. However, securities that are freely
marketable in the country where they are principally traded, but would not be
freely marketable in the United States, will not be considered illiquid. Where
registration is required, each Fund and the Portfolio may be obligated to pay
all or part of the registration expenses and a considerable period may elapse
between the time of the decision to sell and the time a Fund or the Portfolio
may be permitted to sell a security under an effective registration statement.
If, during such a period, adverse market conditions were to develop, a Fund or
the Portfolio might obtain a less favorable price than prevailed when it decided
to sell.
 
  Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the Securities Act of 1933, as amended ("1933 Act"), including
private placements, repurchase agreements, commercial paper, foreign securities
and corporate bonds and notes. These instruments are often restricted securities
because the securities are sold in transactions not requiring registration.
Institutional investors generally will not seek to sell these instruments to the
general public, but instead will often depend either on an efficient
institutional market in which such unregistered securities can be readily resold
or on an issuer's ability to honor a demand for repayment. Therefore, the fact
that there are contractual or legal restrictions on resale to the general public
or certain institutions is not dispositive of the liquidity of such investments.
 
  Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of unregistered securities of domestic and foreign
issuers, such as the PORTAL System sponsored by the National Association of
Securities Dealers, Inc. An insufficient number of qualified institutional
buyers interested in purchasing Rule 144A-eligible restricted securities held by
a Fund or the Portfolio, however, could affect adversely the marketability of
such portfolio securities and a Fund or the Portfolio might be unable to dispose
of such securities promptly or at favorable prices.
 
   
  With respect to liquidity determinations generally, the Trust's or the
Portfolio's Board of Trustees has the ultimate responsibility for determining
whether specific securities, including restricted securities eligible for resale
to qualified institutional buyers pursuant to Rule 144A under the 1933 Act, are
liquid or illiquid. The Board has delegated the function of making day-to-day
determinations of liquidity to the Sub-advisor in accordance with procedures
approved by the Board. The Sub-advisor takes into account a number of factors in
reaching liquidity decisions, including: (i) the frequency of trading in the
security; (ii) the number of dealers that make quotes for the security; (iii)
the number of dealers that have undertaken to make a market in the security;
(iv) the number of other potential purchasers; and (v) the nature of the
security and how trading is effected (e.g., the time needed to sell the
security, how offers are solicited and the mechanics of transfer). The
Sub-advisor will monitor the liquidity of securities held by each Fund and the
Portfolio and report periodically on such decisions to the Trust's or the
Portfolio's Board of Trustees. Moreover, as noted in the Prospectus, certain
securities, such as those subject to registration restrictions of more than
seven days, will generally be treated as
    
 
                                       19
<PAGE>   1774
 
   
illiquid. If the liquidity percentage restriction of a Fund or the Portfolio is
satisfied at the time of investment, a later increase in the percentage of
illiquid securities held by a Fund or the Portfolio resulting from a change in
market value or assets will not constitute a violation of that restriction. If
as a result of a change in market value or assets, the percentage of illiquid
securities held by the Fund or Portfolio increases above the applicable limit,
the Sub-advisor will take appropriate steps to bring the aggregate amount of
illiquid assets back within the prescribed limitations as soon as reasonably
practicable, taking into account the effect of any disposition on the Fund or
the Portfolio.
    
 
FOREIGN SECURITIES
 
  Political, Social and Economic Risks. Investing in securities of non-U.S.
companies may entail additional risks due to the potential political, social and
economic instability of certain countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility of currencies into U.S. dollars and on repatriation
of capital invested. In the event of such expropriation, nationalization or
other confiscation by any country, either a Fund or the Portfolio could lose its
entire investment in any such country.
 
  Religious, Political and Ethnic Instability. Certain countries in which a Fund
or the Portfolio may invest may have groups that advocate radical religious or
revolutionary philosophies or support ethnic independence. Any disturbance on
the part of such individuals could carry the potential for widespread
destruction or confiscation of property owned by individuals and entities
foreign to such country and could cause the loss of a Fund's or the Portfolio's
investment in those countries. Instability may also result from, among other
things: (i) authoritarian governments or military involvement in political and
economic decision-making, including changes in government through
extra-constitutional means; (ii) popular unrest associated with demands for
improved political, economic and social conditions; and (iii) hostile relations
with neighboring or other countries. Such political, social and economic
instability could disrupt the principal financial markets in which a Fund or the
Portfolio invests and adversely affect the value of the Fund's or the
Portfolio's assets.
 
  Foreign Investment Restrictions. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as the Government Income Fund,
the Strategic Income Fund, the Growth & Income Fund or the Portfolio. These
restrictions or controls may at times limit or preclude investment in certain
securities and may increase the cost and expenses of a Fund or the Portfolio.
For example, certain countries require prior governmental approval before
investments by foreign persons may be made, or may limit the amount of
investment by foreign persons in a particular company, or limit the investment
by foreign persons to only a specific class of securities of a company that may
have less advantageous terms than securities of the company available for
purchase by nationals. Moreover, the national policies of certain countries may
restrict investment opportunities in issuers or industries deemed sensitive to
national interests. In addition, some countries require governmental approval
for the repatriation of investment income, capital or the proceeds of securities
sales by foreign investors. In addition, if there is a deterioration in a
country's balance of payments or for other reasons, a country may impose
restrictions on foreign capital remittances abroad. The Government Income Fund,
the Strategic Income Fund, the Growth & Income Fund or the Portfolio could be
adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation, as well as by the application to it of
other restrictions on investments.
 
   
  Non-Uniform Corporate Disclosure Standards and Governmental
Regulation. Foreign companies are subject to accounting, auditing and financial
standards and requirements that differ, in some cases significantly, from those
applicable to U.S. companies. In particular, the assets, liabilities and profits
appearing on the financial statements of such a company may not reflect its
financial position or results of operations in the way they would be reflected
had such financial statements been prepared in accordance with U.S. generally
accepted accounting principles. Most of the foreign securities held by the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund or
the Portfolio will not be registered with the SEC or regulators of any foreign
country, nor will the issuers thereof be subject to the SEC's reporting
requirements. Thus, there will be less available information concerning most
foreign issuers of securities held by the Government Income Fund, the Strategic
Income Fund, the Growth & Income Fund and the Portfolio than is available
concerning U.S. issuers. In instances where the financial statements of an
issuer are not deemed to reflect accurately the financial situation of the
issuer, the Sub-advisor will take appropriate steps to evaluate the proposed
investment, which may include on-site inspection of the issuer, interviews with
its management and consultations with accountants, bankers and other
specialists. There is substantially less publicly available information about
foreign companies than there are reports and ratings published about U.S.
companies and the U.S. Government. In addition, where public information is
available, it may be less reliable than such information regarding U.S. issuers.
Issuers of securities in foreign jurisdictions are generally not subject to the
same degree of regulation as are U.S. issuers with respect to such matters as
restrictions on market manipulation, insider trading rules, shareholder proxy
requirements and timely disclosure of information.
    
 
                                       20
<PAGE>   1775
 
  Currency Fluctuations. Because the Funds and the Portfolio, under normal
circumstances, will invest substantial portions of their total assets in the
securities of foreign issuers which are denominated in foreign currencies, the
strength or weakness of the U.S. dollar against such foreign currencies will
account for part of each Fund's and the Portfolio's investment performance. A
decline in the value of any particular currency against the U.S. dollar will
cause a decline in the U.S. dollar value of each Fund's and the Portfolio's
holdings of securities and cash denominated in such currency and, therefore,
will cause an overall decline in their respective net asset values and any net
investment income and capital gains derived from such securities to be
distributed in U.S. dollars to shareholders of the Funds. Moreover, if the value
of the foreign currencies in which a Fund or the Portfolio receives its income
declines relative to the U.S. dollar between the receipt of the income and the
making of Fund distributions, the Fund or the Portfolio may be required to
liquidate securities in order to make distributions if the Fund or the Portfolio
has insufficient cash in U.S. dollars to meet distribution requirements.
 
  The rate of exchange between the U.S. dollar and other currencies is
determined by several factors including the supply and demand for particular
currencies, central bank efforts to support particular currencies, the relative
movement of interest rates and the pace of business activity in the other
countries, and the United States, and other economic and financial conditions
affecting the world economy.
 
  Although the Funds and the Portfolio value their assets daily in terms of U.S.
dollars, they do not intend to convert holdings of foreign currencies into U.S.
dollars on a daily basis. The Funds and the Portfolio will do so from time to
time, and investors should be aware of the costs of currency conversion.
Although foreign exchange dealers do not charge a fee for conversion, they do
realize a profit based on the difference ("spread") between the prices at which
they are buying and selling various currencies. Thus, a dealer may offer to sell
a foreign currency to a Fund at one rate, while offering a lesser rate of
exchange should the Fund desire to sell that currency to the dealer.
 
   
  Adverse Market Characteristics. Securities of many foreign issuers may be less
liquid and their prices more volatile than securities of comparable U.S.
issuers. In addition, foreign securities markets and brokers generally are
subject to less governmental supervision and regulation than in the U.S., and
foreign securities transactions usually are subject to fixed commissions, which
generally are higher than negotiated commissions on U.S. transactions. In
addition, foreign securities transactions may be subject to difficulties
associated with the settlement of such transactions. Delays in settlement could
result in temporary periods when assets of a Fund or the Portfolio are
uninvested and no return is earned thereon. The inability of a Fund or the
Portfolio to make intended security purchases due to settlement problems could
cause it to miss attractive opportunities. Inability to dispose of a portfolio
security due to settlement problems either could result in losses to a Fund or
the Portfolio due to subsequent declines in value of the portfolio security or,
if the Fund or the Portfolio has entered into a contract to sell the security,
could result in possible liability to the purchaser. The Sub-advisor will
consider such difficulties when determining the allocation of each Fund's or the
Portfolio's assets, although the Sub-advisor does not believe that such
difficulties will have a material adverse effect on the Funds' or the
Portfolio's portfolio trading activities.
    
 
  The Funds and the Portfolio may use foreign custodians, which may involve
risks in addition to those related to the use of U.S. custodians. Such risks
include uncertainties relating to: (i) determining and monitoring the financial
strength, reputation and standing of the foreign custodian; (ii) maintaining
appropriate safeguards to protect the Funds' and the Portfolio's investments and
(iii) possible difficulties in obtaining and enforcing judgments against such
custodians.
 
   
  Withholding Taxes. Each Fund's and the Portfolio's net investment income from
foreign issuers may be subject to withholding taxes by the foreign issuer's
country, thereby reducing the Fund's and the Portfolio's income or delaying the
receipt of income where those taxes may be recaptured. See "Taxes" herein.
    
 
  Concentration. To the extent a Fund invests a significant portion of its
assets in securities of issuers located in a particular country or region of the
world, such Portfolio may be subject to greater risks and may experience greater
volatility than a fund that is more broadly diversified geographically.
 
   
  Special Considerations Affecting Western European Countries. The countries
that are members of the European Economic Community ("Common Market")
(Australia, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, Netherlands, Portugal, Spain, Sweden and the United Kingdom)
eliminated certain import tariffs and quotas and other trade barriers with
respect to one another over the past several years. The Sub-advisor believes
that this deregulation should improve the prospects for economic growth in many
Western European countries. Among other things, the deregulation could enable
companies domiciled in one country to avail themselves of lower labor costs
existing in other countries. In addition, this deregulation could benefit
companies domiciled in one country by opening additional markets for their goods
and services in other countries. Since, however, it is not clear what the exact
form or effect of these Common Market reforms will be on business in Western
Europe, it is impossible to predict the long-term impact of the implementation
of these programs on the securities owned by a Fund.
    
 
                                       21
<PAGE>   1776
 
  Special Considerations Affecting Russia and Eastern European
Countries. Investing in Russia and Eastern European countries involves a high
degree of risk and special considerations not typically associated with
investing in the United States securities markets, and should be considered
highly speculative. Such risks include: (1) delays in settling portfolio
transactions and risk of loss arising out of the system of share registration
and custody; (2) the risk that it may be impossible or more difficult than in
other countries to obtain and/or enforce a judgement; (3) pervasiveness of
corruption and crime in the economic system; (4) currency exchange rate
volatility and the lack of available currency hedging instruments; (5) higher
rates of inflation (including the risk of social unrest associated with periods
of hyper-inflation) and high unemployment; (6) controls on foreign investment
and local practices disfavoring foreign investors and limitations on
repatriation of invested capital, profits and dividends, and on a fund's ability
to exchange local currencies for U.S. dollars; (7) political instability and
social unrest and violence; (8) the risk that the governments of Russia and
Eastern European countries may decide not to continue to support the economic
reform programs implemented recently and could follow radically different
political and/or economic policies to the detriment of investors, including
non-market-oriented policies such as the support of certain industries at the
expense of other sectors or investors, or a return to the centrally planned
economy that existed when such countries had a communist form of government; (9)
the financial condition of companies in these countries, including large amounts
of inter-company debt which may create a payments crisis on a national scale;
(10) dependency on exports and the corresponding importance of international
trade; (11) the risk that the tax system in these countries will not be reformed
to prevent inconsistent, retroactive and/or exorbitant taxation; and (12) the
underdeveloped nature of the securities markets.
 
  Special Considerations Affecting Japan. Japan's economic growth has declined
significantly since 1990. The general government position has deteriorated as a
result of weakening economic growth and stimulative measures taken to support
economic activity and to restore financial stability. Although the decline in
interest rates and fiscal stimulation packages have helped to contain
recessionary forces, uncertainties remain. Japan is also heavily dependent upon
international trade, so its economy is especially sensitive to trade barriers
and disputes. Japan has had difficult relations with its trading partners,
particularly the United States, where the trade imbalance is the greatest. It is
possible that trade sanctions and other protectionist measures could impact
Japan adversely in both the short and the long term.
 
  The common stocks of many Japanese companies trade at high price-earnings
ratios. Differences in accounting methods make it difficult to compare the
earnings of Japanese companies with those of companies in other countries,
especially in the U.S. In general, however, reported net income in Japan is
understated relative to U.S. accounting standards and this is one reason why
price-earnings ratios of the stocks of Japanese companies have tended
historically to be higher than those for U.S. stocks. In addition, Japanese
companies have tended to have higher growth rates than U.S. companies and
Japanese interest rates have generally been lower than in the U.S., both of
which factors tend to result in lower discount rates and higher price-earnings
ratios in Japan than in the U.S.
 
  The Japanese securities markets are less regulated than those in the United
States. Evidence has emerged from time to time of distortion of market prices to
serve political or other purposes. Shareholders' rights are not always equally
enforced. In addition, Japan's banking industry is undergoing problems related
to bad loans and declining values in real estate.
 
  Special Considerations Affecting Pacific Region Countries. Certain of the
risks associated with international investments are heightened for investments
in Pacific region countries. For example, some of the currencies of Pacific
region countries have experienced steady devaluations relative to the U.S.
dollar, and major adjustments have been made periodically in certain of such
currencies. Certain countries, such as India, face serious exchange constraints.
Jurisdictional disputes also exist between South Korea and North Korea. In
addition, the Funds may invest in Hong Kong, which reverted to Chinese
Administration on July 1, 1997. Investments in Hong Kong may be subject to
expropriation, national, nationalization or confiscation, in which case a Fund
could lose its entire investment in Hong Kong. In addition, the reversion of
Hong Kong also presents a risk that the Hong Kong dollar will be devalued and a
risk of possible loss of investor confidence in Hong Kong's currency, stock
market and assets.
 
  Special Considerations Affecting Latin American Countries. Most Latin American
countries have experienced substantial, and in some periods extremely high,
rates of inflation for many years. Inflation and rapid fluctuations in inflation
rates have had and may continue to have very negative effects on the economies
and securities markets of certain Latin American countries. Certain Latin
American countries are also among the largest debtors to commercial banks and
foreign governments. At times certain Latin American countries have declared
moratoria on the payment of principal and/or interest on external debt. In
addition, certain Latin American securities markets have experienced high
volatility in recent years.
 
  Latin American countries may also close certain sectors of their economies to
equity investments by foreigners. Further due to the absence of securities
markets and publicly owned corporations and due to restrictions on direct
investment by
 
                                       22
<PAGE>   1777
 
foreign entities, investments may only be made in certain Latin American
countries solely or primarily through governmentally approved investment
vehicles or companies.
 
  Certain Latin American countries may have managed currencies that are
maintained at artificial levels to the U.S. dollar rather than at levels
determined by the market. This type of system can lead to sudden and large
adjustments in the currency which, in turn, can have a disruptive and negative
effect on foreign investors. For example, in late 1994, the value of the Mexican
peso lost more than one-third of its value relative to the U.S. dollar.
 
  Special Considerations Affecting Emerging Markets. The Strategic Income Fund,
the Growth & Income Fund and the Portfolio may invest in debt securities in
emerging markets. Investing in securities in emerging countries may entail
greater risks than investing in debt securities in developed countries.
Similarly, for Growth & Income Fund, investing in the equity securities of
companies in emerging markets entails additional risks. These risks affecting
debt and equity investments in emerging markets include (i) less social,
political and economic stability; (ii) the small current size of the markets for
such securities and the currently low or nonexistent volume of trading, which
result in a lack of liquidity and in greater price volatility; (iii) certain
national policies which may restrict the Funds' and the Portfolio's investment
opportunities, including restrictions on investment in issuers or industries
deemed sensitive to national interests; (iv) foreign taxation; and (v) the
absence of developed structures governing private or foreign investment or
allowing for judicial redress for injury to private property.
 
  Settlement mechanisms in emerging securities markets may be less efficient and
reliable than in more developed markets. In such emerging securities markets
there may be share registration and delivery delays or failures.
 
  Many emerging market countries have experienced substantial, and in some
periods extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates and corresponding currency devaluations have had
and may continue to have negative effects on the economies and securities
markets of certain emerging market countries.
 
                             INVESTMENT LIMITATIONS
 
   
  Each Fund and the Portfolio has adopted the following investment limitations
as fundamental policies which may not be changed without approval by the holders
of a majority of the outstanding shares of the Fund or Portfolio, as applicable.
Whenever the Emerging Markets Debt Fund is requested to vote on a change in the
investment limitations of the Portfolio, the Fund will hold a meeting of its
shareholders and will cast its votes as instructed by its shareholders.
    
 
   
GOVERNMENT INCOME FUND
    
 
  The Government Income Fund may not:
 
          (1) Purchase any security if, as a result of that purchase, 25% or
     more of the Fund's total assets would be invested in securities of issuers
     having their principal business activities in the same industry, except
     that this limitation does not apply to securities issued or guaranteed by
     the U.S. government, its agencies or instrumentalities;
 
          (2) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-based securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that the Fund may exercise rights under agreements relating to
     such securities, including the right to enforce security interests and to
     hold real estate acquired by reason of such enforcement until that real
     estate can be liquidated in an orderly manner;
 
          (3) Engage in the business of underwriting securities of other
     issuers, except to the extent that the Fund might be considered an
     underwriter under the federal securities laws in connection with its
     disposition of portfolio securities;
 
          (4) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan;
 
          (5) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of the Fund's total assets
     (including the amount borrowed but reduced by any liabilities not
     constituting borrowings) at the time of the borrowing, except that the Fund
     may borrow up to an additional 5% of its total assets (not including the
     amount borrowed) for temporary or emergency purposes; or
 
                                       23
<PAGE>   1778
 
          (6) Purchase or sell physical commodities, but the Fund may purchase,
     sell or enter into financial options and futures, forward and spot currency
     contracts, swap transactions and other financial contracts or derivative
     instruments.
 
  Notwithstanding any other investment policy of the Fund, the Fund may invest
all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
 
  For purposes of the Fund's concentration policy contained in limitation (1)
above, the Fund intends to comply with the SEC staff positions that securities
issued or guaranteed as to principal and interest by any single foreign
government or any supranational organizations in the aggregate are considered to
be securities of issuers in the same industry.
 
  The following investment policies of the Government Income Fund are not
fundamental policies and may be changed by vote of the Company's Board of
Trustees without shareholder approval. The Fund may not:
 
          (1) Borrow money to purchase securities or borrow money except for
     temporary or emergency purposes. While borrowings exceed 5% of the Fund's
     total assets, the Fund will not make any additional investments;
 
          (2) Invest in securities of an issuer if the investment would cause
     the Fund to own more than 10% of any class of securities of any one issuer;
 
          (3) Purchase securities on margin, provided that the Fund may obtain
     short-term credits as may be necessary for the clearance of purchases and
     sales of securities, and further provided that the Fund may make margin
     deposits in connection with its use of financial options and futures,
     forward and spot currency contracts, swap transactions and other financial
     contracts or derivative instruments;
 
          (4) Enter into a futures contract, if, as a result thereof, more than
     5% of the Fund's total assets (taken at market value at the time of
     entering into the contract) would be committed to margin on such futures
     contracts;
 
          (5) Purchase securities for which there is no readily available
     market, or enter into repurchase agreements or purchase time deposits
     maturing in more than seven days, or purchase OTC options or hold assets
     set aside to cover OTC options written by the Fund, if immediately after
     and as a result, the value of such securities would exceed, in the
     aggregate, 15% of the Fund's net assets; or
 
          (6) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities.
 
   
STRATEGIC INCOME FUND
    
 
  The Strategic Income Fund may not:
 
          (1) Purchase any security if, as a result of that purchase, 25% or
     more of the Fund's total assets would be invested in securities of issuers
     having their principal business activities in the same industry, except
     that this limitation does not apply to securities issued or guaranteed by
     the U.S. government, its agencies or instrumentalities;
 
          (2) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-based securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that the Fund may exercise rights under agreements relating to
     such securities, including the right to enforce security interests and to
     hold real estate acquired by reason of such enforcement until that real
     estate can be liquidated in an orderly manner;
 
          (3) Engage in the business of underwriting securities of other
     issuers, except to the extent that the Fund might be considered an
     underwriter under the federal securities laws in connection with its
     disposition of portfolio securities;
 
          (4) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan;
 
          (5) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of the Fund's total assets
     (including the amount borrowed but reduced by any liabilities not
     constituting
 
                                       24
<PAGE>   1779
 
     borrowings) at the time of the borrowing, except that the Fund may borrow
     up to an additional 5% of its total assets (not including the amount
     borrowed) for temporary or emergency purposes; or
 
          (6) Purchase or sell physical commodities, but the Fund may purchase,
     sell or enter into financial options and futures, forward and spot currency
     contracts, swap transactions and other financial contracts or derivative
     instruments.
 
  Notwithstanding any other investment policy of the Fund, the Fund may invest
all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
 
  For purposes of the Fund's concentration policy contained in limitation (1)
above, the Fund intends to comply with the SEC staff positions that securities
issued or guaranteed as to principal and interest by any single foreign
government or any supranational organizations in the aggregate are considered to
be securities of issuers in the same industry.
 
  The following investment policies of the Strategic Income Fund are not
fundamental policies and may be changed by vote of the Company's Board of
Trustees without shareholder approval. The Fund may not:
 
          (1) Invest more than 15% of its total assets in illiquid securities;
 
          (2) Borrow money to purchase securities and will not invest in
     securities of an issuer if the investment would cause the Fund to own more
     than 10% of any class of securities of any one issuer (provided, however,
     that the Fund may invest all of its investable assets in an open-end
     management investment company with substantially the same investment
     objectives, policies, and limitations as the Fund.);
 
          (3) Invest more than 10% of its total assets in shares of other
     investment companies and invest more than 5% of its total assets in any one
     investment company or acquire more than 3% of the outstanding voting
     securities of any one investment company (provided, however, that the Fund
     may invest all of its investable assets in an open-end management
     investment company with substantially the same investment objectives,
     policies, and limitations as the Fund);
 
          (4) Purchase securities on margin, provided that the Fund may obtain
     short-term credits as may be necessary for the clearance of purchases and
     sales of securities, and further provided that the Fund may make margin
     deposits in connection with its use of financial options and futures,
     forward and spot currency contracts, swap transactions and other financial
     contracts or derivative instruments;
 
          (5) Enter into a futures contract, if, as a result thereof, more than
     5% of the Fund's total assets (taken at market value at the time of
     entering into the contract) would be committed to margin on such futures
     contracts; or
 
          (6) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities.
 
   
EMERGING MARKETS DEBT FUND AND THE PORTFOLIO
    
 
   
  The Emerging Markets Debt Fund and the Portfolio each may not:
    
 
          (1) Purchase any security if, as a result of that purchase, 25% or
     more of the Fund's total assets would be invested in securities of issuers
     having their principal business activities in the same industry, except
     that this limitation does not apply to securities issued or guaranteed by
     the U.S. government, its agencies or instrumentalities;
 
          (2) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-based securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that the Fund may exercise rights under agreements relating to
     such securities, including the right to enforce security interests and to
     hold real estate acquired by reason of such enforcement until that real
     estate can be liquidated in an orderly manner;
 
          (3) Purchase or sell physical commodities, but the Fund may purchase,
     sell or enter into financial options and futures, forward and spot currency
     contracts, swap transactions and other financial contracts or derivative
     instruments;
 
          (4) Engage in the business of underwriting securities of other
     issuers, except to the extent that the Fund might be considered an
     underwriter under the federal securities laws in connection with its
     disposition of portfolio securities;
 
                                       25
<PAGE>   1780
 
          (5) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan; or
 
          (6) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 1/3% of the Fund's total assets
     (including the amount borrowed but reduced by any liabilities not
     constituting borrowings) at the time of the borrowing, except that the Fund
     may borrow up to an additional 5% of its total assets (not including the
     amount borrowed) for temporary or emergency purposes.
 
  For purposes of the Fund's and the Portfolio's concentration policy contained
in limitation (1) above, they intend to comply with the SEC staff positions that
securities issued or guaranteed as to principal and interest by any single
foreign government or any supranational organizations in the aggregate are
considered to be securities of issuers in the same industry.
 
   
  The following investment policies of the Emerging Markets Debt Fund and the
Portfolio are not fundamental policies and may be changed by vote of the Trust's
or the Portfolio's Board of Trustees without shareholder approval. The Fund and
the Portfolio each may not:
    
 
          (1) Invest in securities of an issuer if the investment would cause
     the Fund or the Portfolio to own more than 10% of any class of securities
     of any one issuer (provided, however, that the Fund may invest all of its
     investable assets in an open-end management investment company with
     substantially the same investment objectives as the Fund);
 
          (2) Invest in companies for the purpose of exercising control or
     management (provided, however, that the Fund may invest all of its
     investable assets in an open-end management investment company with
     substantially the same investment objectives as the Fund);
 
          (3) Enter into a futures contract, an option on a futures contract or
     an option on foreign currency traded on a CFTC-regulated exchange, in each
     case other than for bona fide hedging purposes (as defined by the CFTC), if
     the aggregate initial margin and premiums required to establish all of
     those positions (excluding the amount by which options are "in-the-money")
     exceeds 5% of the liquidation value of the Fund's or the Portfolio's
     portfolio, after taking into account unrealized profits and unrealized
     losses on any contracts the Fund or the Portfolio has entered into;
 
          (4) Invest more than 10% of its total assets in shares of other
     investment companies and invest more than 5% of its total assets in any one
     investment company or acquire more than 3% of the outstanding voting
     securities of any one investment company (provided, however, that the Fund
     may invest all of its investable assets in an open-end management
     investment company with substantially the same investment objectives as the
     Fund);
 
          (5) Purchase securities on margin, provided that the Fund may obtain
     short-term credits as may be necessary for the clearance of purchases and
     sales of securities, and further provided that the Fund may make margin
     deposits in connection with its use of financial options and futures,
     forward and spot currency contracts, swap transactions and other financial
     contracts or derivative instruments; or
 
          (6) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities.
 
GROWTH & INCOME FUND
 
  Growth & Income Fund may not:
 
          (1) Purchase any security if, as a result of that purchase, 25% or
     more of the Fund's total assets would be invested in securities of issuers
     having their principal business activities in the same industry, except
     that this limitation does not apply to securities issued or guaranteed by
     the U.S. government, its agencies or instrumentalities;
 
          (2) Purchase or sell real estate, except that investments in
     securities of issuers that invest in real estate and investments in
     mortgage-based securities, mortgage participations or other instruments
     supported by interests in real estate are not subject to this limitation,
     and except that the Fund may exercise rights under agreements relating to
     such securities, including the right to enforce security interests and to
     hold real estate acquired by reason of such enforcement until that real
     estate can be liquidated in an orderly manner;
 
                                       26
<PAGE>   1781
 
          (3) Engage in the business of underwriting securities of other
     issuers, except to the extent that the Fund might be considered an
     underwriter under the federal securities laws in connection with its
     disposition of portfolio securities;
 
          (4) Make loans, except through loans of portfolio securities or
     through repurchase agreements, provided that for purposes of this
     limitation, the acquisition of bonds, debentures, other debt securities or
     instruments, or participations or other interests therein and investments
     in government obligations, commercial paper, certificates of deposit,
     bankers' acceptances or similar instruments will not be considered the
     making of a loan;
 
          (5) Issue senior securities or borrow money, except as permitted under
     the 1940 Act and then not in excess of 33 3/4% of the Fund's total assets
     (including the amount borrowed but reduced by any liabilities not
     constituting borrowings) at the time of the borrowing, except that the Fund
     may borrow up to an additional 5% of its total assets (not including the
     amount borrowed) for temporary or emergency purposes; or
 
          (6) Purchase or sell physical commodities, but the Fund may purchase,
     sell or enter into financial operations and futures, forward and spot
     currency contracts, swap transactions and other financial contracts or
     derivative instruments.
 
  Notwithstanding any other investment policy of the Fund, the Fund may invest
all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
 
  For purposes of the Fund's concentration policy contained in limitation (1)
above, the Fund intends to comply with the SEC staff position that securities
issued or guaranteed as to principal and interest by any single foreign
government or any supranational organizations in the aggregate are considered to
be securities of issuers in the same industry.
 
  The following operating policies of the Growth & Income Fund are not
fundamental policies and may be changed by vote of the Company's Board of
Trustees without shareholder approval. The Fund may not:
 
          (1) Invest in securities of an issuer if the investment would cause
     the Fund to own more than 10% of any class of securities of any one issuer;
 
          (2) Sell securities short, except to the extent that the Fund
     contemporaneously owns or has the right to acquire at no additional cost
     securities identical to those sold short;
 
          (3) Enter into a futures contract, an option on a futures contract, or
     an option on foreign currency traded on a CFTC-regulated exchange, in each
     case other than for bona fide hedging purposes (as defined by the CFTC), if
     the aggregate initial margin and premiums required to establish all of
     those positions (excluding the amount by which options are "in-the-money")
     exceeds 5% of the liquidation value of the Fund's portfolio, after taking
     into account unrealized profits and unrealized losses on any contracts the
     Fund has entered into;
 
          (4) Borrow money except for temporary or emergency purposes (other
     than to meet redemptions). While borrowings exceed 5% of the Fund's total
     assets, the Fund will not make any additional investments;
 
          (5) Purchase securities on margin, provided that the Fund may obtain
     short-term credits as may be necessary for the clearance of purchases and
     sales of securities, and further provided that the Fund may make margin
     deposits in connection with its use of financial options and futures,
     forward and spot currency contracts, swap transactions and other financial
     contracts or derivative instruments;
 
          (6) Purchase securities for which there is no readily available
     market, or enter into repurchase agreements or purchase time deposits
     maturing in more than seven days, or purchase OTC options or hold assets
     set aside to cover OTC options written by the Fund, if immediately after
     and as a result, the value of such securities would exceed, in the
     aggregate, 15% of the Fund's net assets; or
 
          (7) Mortgage, pledge, or hypothecate any of its assets, provided that
     this shall not apply to the transfer of securities in connection with any
     permissible borrowing or to collateral arrangements in connection with
     permissible activities.
 
   
  Investors should refer to each Fund's Prospectus for further information about
each Fund's respective investment objectives, which may not be changed without
the approval of the Fund's shareholders and its corresponding Portfolio's
investment objective, which may be changed without the approval of the
Portfolio's shareholders, and other investment policies and techniques, which
may be changed without shareholder approval.
    
 
                                       27
<PAGE>   1782
 
   
  Investors should refer to each Fund's prospectus for further information with
respect to that particular Fund's investment objective, which may not be changed
without the approval of its shareholders, and other investment policies,
techniques and limitations, which may be changed without shareholder approval.
    
 
                      EXECUTION OF PORTFOLIO TRANSACTIONS
 
   
  Subject to policies established by the Trust's and the Portfolio's Board of
Trustees, the Sub-advisor is responsible for the execution of the Government
Income Fund's, the Strategic Income Fund's, the Growth & Income Fund's and the
Portfolio's portfolio transactions and the selection of broker/dealers that
execute such transactions on behalf of these Funds and the Portfolio. In
executing transactions, the Sub-advisor seeks the best net results for the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund and
the Portfolio, taking into account such factors as the price (including the
applicable brokerage commission or dealer spread), size of the order, difficulty
of execution and operational facilities of the firm involved. Although the
Sub-advisor generally seeks reasonably competitive commission rates and spreads,
payment of the lowest commission or spread is not necessarily consistent with
the best net results. While the Funds and the Portfolio may engage in soft
dollar arrangements for research services, as described below, neither the Funds
nor the Portfolio has any obligation to deal with any broker/dealer or group of
broker/dealers in the execution of portfolio transactions.
    
 
  Debt securities generally are traded on a "net" basis with a dealer acting as
principal for its own account without a stated commission, although the price of
the security usually includes a profit to the dealer. U.S. and foreign
government securities and money market instruments generally are traded in the
OTC markets. In underwritten offerings, securities usually are purchased at a
fixed price which includes an amount of compensation to the underwriter. On
occasion, securities may be purchased directly from an issuer, in which case no
commissions or discounts are paid. Broker/dealers may receive commissions on
futures, currency and options transactions.
 
   
  Consistent with the interests of the Funds and the Portfolio, the Sub-advisor
may select brokers to execute the Funds' and the Portfolio's portfolio
transactions on the basis of the research and brokerage services they provide to
the Sub-advisor for its use in managing the Funds and the Portfolio and its
other advisory accounts. Such services may include furnishing analyses, reports
and information concerning issuers, industries, securities, geographic regions,
economic factors and trends, portfolio strategy, and performance of accounts;
and effecting securities transactions and performing functions incidental
thereto (such as clearance and settlement). Research and brokerage services
received from such brokers are in addition to, and not in lieu of, the services
required to be performed by the Sub-advisor under investment management and
administration contracts. A commission paid to such brokers may be higher than
that which another qualified broker would have charged for effecting the same
transaction, provided that the Sub-advisor determines in good faith that such
commission is reasonable in terms either of that particular transaction or the
overall responsibility of the Sub-advisor to the Funds and the Portfolio and its
other clients and that the total commissions paid by the Funds and the Portfolio
will be reasonable in relation to the benefits received by the Funds and the
Portfolio over the long term. Research services may also be received from
dealers who execute Fund transactions in OTC markets.
    
 
   
  The Sub-advisor may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by the Funds or the Portfolio toward payment of the Funds'
or the Portfolio's expenses, such as transfer agent and custodian fees.
    
 
   
  Investment decisions for each Fund and the Portfolio and for other investment
accounts managed by the Sub-advisor are made independently of each other in
light of differing conditions. However, the same investment decision
occasionally may be made for two or more of such accounts, including one or both
Funds and the Portfolio. In such cases, simultaneous transactions may occur.
Purchases or sales are then allocated as to price or amount in a manner deemed
fair and equitable to all accounts involved. While in some cases this practice
could have a detrimental effect upon the price or value of the security as far
as the Funds and the Portfolio are concerned, in other cases the Sub-advisor
believes that coordination and the ability to participate in volume transactions
will be beneficial to the Funds and the Portfolio.
    
 
   
  Under a policy adopted by the Trust's and the Portfolio's Board of Trustees,
and subject to the policy of obtaining the best net results, the Sub-advisor may
consider a broker/dealer's sale of the shares of the Funds and the other funds
for which AIM or the Sub-advisor serves as investment manager in selecting
brokers and dealers for the execution of portfolio transactions. This policy
does not imply a commitment to execute portfolio transactions through all
broker/dealers that sell shares of the Funds and such other funds.
    
 
  Each Fund and the Portfolio contemplates purchasing most foreign equity
securities in over-the-counter markets or stock exchanges located in the
countries in which the respective principal offices of the issuers of the
various securities are located, if that is the best available market. The fixed
commissions paid in connection with most such foreign stock
 
                                       28
<PAGE>   1783
 
transactions generally are higher than negotiated commissions on United States
transactions. There generally is less government supervision and regulation of
foreign stock exchanges and brokers than in the United States. Foreign security
settlements may in some instances be subject to delays and related
administrative uncertainties.
 
   
  Foreign equity securities may be held by a Fund and the Portfolio in the form
of American Depositary Receipts ("ADRs"), American Depositary Shares ("ADSs"),
Continental Depositary Receipts ("CDRs") or European Depositary Receipts
("EDRs") or securities convertible into foreign equity securities. ADRs, ADSs,
CDRs and EDRs may be listed on stock exchanges, or traded in the OTC markets in
the United States or Europe, as the case may be. ADRs, like other securities
traded in the United States, will be subject to negotiated commission rates. The
foreign and domestic debt securities and money market instruments in which the
Funds and the Portfolio may invest generally are traded in the OTC markets.
    
 
   
  The Funds and the Portfolio contemplate that, consistent with the policy of
obtaining the best net results, brokerage transactions may be conducted through
certain companies that are affiliates of AIM and the Sub-advisor. The Company's
Board of Trustees has adopted procedures in conformity with Rule 17e-1 under the
1940 Act to ensure that all brokerage commissions paid to such affiliates are
reasonable and fair in the context of the market in which they are operating.
Any such transactions will be effected and related compensation paid only in
accordance with applicable SEC regulations.
    
 
   
  The Funds may engage in certain principal and agency transactions with banks
and their affiliates that own 5% or more of the outstanding voting securities of
a Fund, provided the conditions of an exemptive order received by the Funds from
the SEC are met. In addition, a Fund may purchase or sell a security from or to
another AIM Fund provided the funds follow procedures adopted by the Boards of
Directors/Trustees of the various AIM Funds, including the Trust. These inter-
fund transactions do not generate brokerage commissions but may result in
custodial fees or taxes or other related expenses.
    
 
  For the fiscal years ended October 31, 1997, 1996 and 1995, the Portfolio paid
aggregate brokerage commissions of $0, $86,600 and $0, respectively. For the
fiscal years ended October 31, 1997, 1996 and 1995, the Government Income Fund
paid aggregate brokerage commissions of $4,987, $24,663 and $0, respectively.
For the fiscal years ended October 31, 1997, 1996 and 1995, the Strategic Income
Fund paid aggregate brokerage commissions of $6,177, $85,404 and $0,
respectively. For the fiscal years ended October 31, 1997, 1996, and 1995, the
Growth & Income Fund paid aggregate brokerage commissions of $463,307, $257,953
and $318,958, respectively. For the fiscal years ended October 31, 1996 and
1997, the Growth & Income Fund paid to LGT Bank in Liechtenstein, AG, which was
an "affiliated" broker, aggregate brokerage commissions of $16,898 and $12,262,
respectively, for transactions involving purchases and sales of portfolio
securities which represented 6.55% and 2.65%, respectively, of the total
brokerage commissions paid by the Fund and 5.69% and 2.94%, respectively, of the
aggregate dollar amount of transactions involving payment of commissions by the
Fund.
 
PORTFOLIO TRADING AND TURNOVER
 
   
  Each Fund and the Portfolio engages in portfolio trading when the Sub-advisor
concludes that the sale of a security owned by a Fund and the Portfolio and/or
the purchase of another security of better value can enhance principal and/or
increase income. A security may be sold to avoid any prospective decline in
market value, or a security may be purchased in anticipation of a market rise.
Consistent with each Fund's and the Portfolio's investment objectives, a
security also may be sold and a comparable security purchased coincidentally in
order to take advantage of what is believed to be a disparity in the normal
yield and price relationship between the two securities. Although the Funds and
the Portfolio generally do not intend to trade for short-term profits, the
securities in each Fund's and the Portfolio's portfolio will be sold whenever
the Sub-advisor believes it is appropriate to do so, without regard to the
length of time a particular security may have been held. Portfolio turnover is
calculated by dividing the lesser of sales or purchases of portfolio securities
by each Fund's or the Portfolio's average month-end portfolio value, excluding
short-term investments. Higher portfolio turnover involves correspondingly
greater brokerage commissions and other transaction costs that a Fund or the
Portfolio will bear directly, and could result in the realization of net capital
gains that would be taxable when distributed to shareholders. The portfolio
turnover rates for the Government Income Fund, Strategic Income Fund, Growth &
Income Fund and the Portfolio the last two fiscal years were as follows:
    
 
   
<TABLE>
<CAPTION>
                                                               YEAR ENDED      YEAR ENDED
                                                              OCT. 31, 1997   OCT. 31, 1996
                                                              -------------   -------------
<S>                                                           <C>             <C>
Government Income Fund......................................       241%            268%
Strategic Income Fund.......................................       149%            177%
Emerging Markets Debt Portfolio.............................       214%            290%
Growth & Income Fund........................................        50%             39%
</TABLE>
    
 
                                       29
<PAGE>   1784
 
                                   MANAGEMENT
 
TRUSTEES AND EXECUTIVE OFFICERS
 
  The Trust and the Portfolio's Trustees and Executive Officers are listed
below. Unless otherwise indicated, the address of each Executive Officer is 11
Greenway Plaza, Suite 100, Houston, Texas 77046.
 
   
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
   NAME, ADDRESS AND AGE      POSITIONS HELD WITH REGISTRANT   PRINCIPAL OCCUPATION WITH REGISTRANT
- ----------------------------------------------------------------------------------------------------
<S>                           <C>                             <C>
 ROBERT H. GRAHAM (51)        Trustee, Chairman of the Board  Director, President and Chief
                              and President                   Executive Officer, A I M Management
                                                              Group Inc.; Director and President,
                                                              A I M Advisors, Inc.; Director and
                                                              Senior Vice President, A I M Capital
                                                              Management, Inc., A I M Distributors,
                                                              Inc., A I M Fund Services, Inc. and
                                                              Fund Management Company; and Director,
                                                              AMVESCAP PLC.
- ----------------------------------------------------------------------------------------------------
 C. DEREK ANDERSON (57)       Trustee                         President, Plantagenet Capital
 220 Sansome Street                                           Management, LLC (an investment
 Suite 400                                                    partnership); Chief Executive Officer,
 San Francisco, CA 94104                                      Plantagenet Holdings, Ltd. (an
                                                              investment banking firm); Director,
                                                              Anderson Capital Management, Inc.
                                                              since 1988; Director, PremiumWear,
                                                              Inc. (formerly Munsingwear, Inc.) (a
                                                              casual apparel company); Director, "R"
                                                              Homes, Inc. and various other
                                                              companies; and Trustee, each of the
                                                              other investment companies registered
                                                              under the 1940 Act that is sub-advised
                                                              or sub-administered by the Sub-
                                                              advisor.
- ----------------------------------------------------------------------------------------------------
 FRANK S. BAYLEY (59)         Trustee                         Partner, law firm of Baker & McKenzie;
 Two Embarcadero Center                                       Director and Chairman, C.D. Stimson
 Suite 2400                                                   Company (a private investment
 San Francisco, CA 94111                                      company); and Trustee, each of the
                                                              other investment companies registered
                                                              under the 1940 Act that is sub-advised
                                                              or sub-administered by the
                                                              Sub-advisor.
- ----------------------------------------------------------------------------------------------------
 ARTHUR C. PATTERSON (54)     Trustee                         Managing Partner, Accel Partners (a
 428 University Avenue                                        venture capital firm); Director,
 Palo Alto, CA 94301                                          Viasoft and PageMart, Inc. (both
                                                              public software companies) and several
                                                              other privately held software and
                                                              communications companies; and Trustee,
                                                              each of the other investment companies
                                                              registered under the 1940 Act that is
                                                              sub-advised or sub-administered by the
                                                              Sub-advisor.
- ----------------------------------------------------------------------------------------------------
 RUTH H. QUIGLEY (63)         Trustee                         Private investor; President, Quigley
 1055 California Street                                       Friedlander & Co., Inc. (a financial
 San Francisco, CA 94108                                      advisory services firm) from 1984 to
                                                              1986; and Trustee, each of the other
                                                              investment companies registered under
                                                              the 1940 Act that is sub-advised or
                                                              sub-administered by the Sub-advisor.
- ----------------------------------------------------------------------------------------------------
 +JOHN J. ARTHUR (53)         Vice President                  Director, Senior Vice President and
                                                              Treasurer, A I M Advisors, Inc.; Vice
                                                              President and Treasurer, A I M
                                                              Management Group Inc., A I M Capital
                                                              Management, Inc., A I M Distributors,
                                                              Inc., A I M Fund Services, Inc. and
                                                              Fund Management Company.
- ----------------------------------------------------------------------------------------------------
</TABLE>
    
 
- ---------------
 
+ Mr. Arthur and Ms. Relihan are married to each other.
                                       30
<PAGE>   1785
 
   
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
   NAME, ADDRESS AND AGE      POSITIONS HELD WITH REGISTRANT   PRINCIPAL OCCUPATION WITH REGISTRANT
- ----------------------------------------------------------------------------------------------------
<S>                           <C>                             <C>
 KENNETH W. CHANCEY (53)      Vice President and Principal    Senior Vice President -- Mutual Fund
 50 California Street         Accounting Officer              Accounting, the Sub-advisor since
 San Francisco, CA 94111                                      1997; Vice President -- Mutual Fund
                                                              Accounting, the Sub-advisor from 1992
                                                              to 1997.
- ----------------------------------------------------------------------------------------------------
 MELVILLE B. COX (54)         Vice President                  Vice President and Chief Compliance
                                                              Officer, A I M Advisors, Inc., A I M
                                                              Capital Management, Inc., A I M
                                                              Distributors, Inc., A I M Fund
                                                              Services, Inc. and Fund Management
                                                              Company.
- ----------------------------------------------------------------------------------------------------
 GARY T. CRUM (50)            Vice President                  Director and President, A I M Capital
                                                              Management, Inc.; Director and Senior
                                                              Vice President, A I M Management Group
                                                              Inc. and A I M Advisors, Inc.; and
                                                              Director, A I M Distributors, Inc. and
                                                              AMVESCAP PLC.
- ----------------------------------------------------------------------------------------------------
 HELGE K. LEE (52)            Vice President                  Chief Legal and Compliance
 50 California Street                                         Officer -- North America, the
 San Francisco, CA 94111                                      Sub-advisor since October 1997;
                                                              Secretary and Chief Legal and
                                                              Compliance Officer, INVESCO (NY) Asset
                                                              Management, Inc., INVESCO (NY), Inc.,
                                                              GT Global Investor Services, Inc. and
                                                              G.T. Insurance since August 1997;
                                                              Secretary and Chief Legal and
                                                              Compliance Officer, GT Global from
                                                              August 1997 to April 1998; Executive
                                                              Vice President of the Asset Management
                                                              Division of Liechtenstein Global Trust
                                                              AG, from October 1996 to May 1998;
                                                              Senior Vice President, General Counsel
                                                              and Secretary of INVESCO (NY) Asset
                                                              Management, Inc., INVESCO (NY), Inc.,
                                                              GT Global, GT Global Investor
                                                              Services, Inc. and G.T. Insurance from
                                                              May 1994 to October 1996; and Senior
                                                              Vice President, General Counsel and
                                                              Secretary of Strong/Corneliuson
                                                              Management, Inc. and Secretary of each
                                                              of the Strong Funds from October 1991
                                                              to May 1994.
- ----------------------------------------------------------------------------------------------------
 +Carol F. Relihan (43)       Vice President                  Director, Senior Vice President,
                                                              General Counsel and Secretary, A I M
                                                              Advisors, Inc.; Vice President,
                                                              General Counsel and Secretary, A I M
                                                              Management Group Inc.; Director, Vice
                                                              President and General Counsel, Fund
                                                              Management Company; Vice President and
                                                              General Counsel, A I M Fund Services,
                                                              Inc.; and Vice President, A I M
                                                              Capital Management, Inc. and A I M
                                                              Distributors, Inc.
- ----------------------------------------------------------------------------------------------------
 DANA R. SUTTON, (39)         Vice President and Assistant    Vice President and Fund Controller,
                              Treasurer                       A I M Advisors, Inc.; and Assistant
                                                              Vice President and Assistant
                                                              Treasurer, Fund Management Company.
- ----------------------------------------------------------------------------------------------------
</TABLE>
    
 
- ---------------
 
   
+ Mr. Arthur and Ms. Relihan are married to each other.
    
 
   
  The Board of Trustees has a Nominating and Audit Committee, composed of Miss
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Trust and its
funds and recommending firms to serve as independent auditors of the Trust. All
of the Trust's Trustees also serve as directors or trustees of some or all of
the other investment companies managed, administered or advised by AIM. All of
the Trust's Executive Officers held similar offices with some or all of the
other investment companies managed, administered or advised by AIM. Each Trustee
who is not a trustee, officer or employee of the Sub-advisor or any affiliated
company is paid
    
 
                                       31
<PAGE>   1786
 
   
aggregate fees of $5,000 a year, plus $300 per Fund for each meeting of the
Board attended, and reimbursed travel and other expenses incurred in connection
with attendance at such meetings. Other Trustees and Officers receive no
compensation or expense reimbursement from the Trust. For the fiscal year ended
October 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley, who
are not trustees, officers, or employees of the Sub-advisor or any affiliated
company, received total compensation of $38,650, $38,650, $27,850 and $38,650,
respectively, from the Trust for their services as Trustees. For the fiscal year
ended October 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss
Quigley, who are not trustees, officers or employees of the Sub-advisor or any
other affiliated company, received total compensation of $117,304, $114,386,
$88,350 and $111,688, respectively, from the investment companies managed or
administered by AIM and sub-advised or sub-advised by the Sub-advisor for which
he or she serves as a Trustee. Fees and expenses disbursed to the Trustees
contained no accrued or payable pension or retirement benefits. As of June 26,
1998, the Officers and Trustees and their families as a group owned in the
aggregate beneficially or of record less than 1% of the outstanding shares of
the Funds or of all the Trust's series in the aggregate.
    
 
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES
 
   
  AIM serves as the Government Income Fund's, the Strategic Income Fund's and
the Growth & Income Fund's investment manager and administrator under an
investment management and administration contract between the Trust and AIM
("Trust Management Contract"). The Sub-advisor serves as the Portfolio's
sub-advisor and sub-administrator under a sub-advisory and sub-administration
Agreement between AIM and the Sub-advisor ("Portfolio Management Sub-Contract,"
and together with the Portfolio Management Contract, the "Portfolio Management
Contracts"). AIM serves as the Portfolio's investment manager and administrator
under an Investment Management and Administration Contract between the Portfolio
and AIM ("Portfolio Management Contract") (collectively, "Management
Contracts"). The Sub-advisor serves as sub-administrator to each Feeder Fund
under a sub-administration contract between AIM and the Sub-advisor
("Administration Sub-Contract," and together with the Administration Contract,
the "Administration Contracts"). AIM serves as the Emerging Markets Debt Fund's
administrator under an Administration Contract ("Administration Contract")
between the Trust and AIM. The Sub-advisor serves as the sub-advisor and
sub-administrator to the Government Income Fund, the Strategic Income Fund and
the Growth & Income Fund under a sub-advisory and sub-administration Contract
between AIM and the Sub-advisor ("Sub-Management Contract," and together with
the Management Contract, the "Management Contracts"). The Administration
Contracts will not be deemed advisory contracts, as defined under the 1940 Act.
As investment managers and administrators, AIM and the Sub-advisor make all
investment decisions for the Government Income Fund, the Strategic Income Fund,
the Growth & Income Fund and the Portfolio and as administrators, AIM and the
Sub-advisor administer each Fund's and the Portfolio's affairs. Among other
things, AIM and the Sub-advisor furnish the services and pay the compensation
and travel expenses of persons who perform the executive, administrative,
clerical and bookkeeping functions of the Trust, the Funds, and the Portfolio
and provide suitable office space, necessary small office equipment and
utilities.
    
 
   
  The Management Contracts may be renewed for one-year terms, provided that any
such renewal has been specifically approved at least annually by: (i) the
Trust's or the Portfolio's Board of Trustees, as applicable, or by the vote of a
majority of the Fund's or the Portfolio's outstanding voting securities (as
defined in the 1940 Act), and (ii) a majority of Trustees who are not parties to
the Management Contracts or the Administration Contracts or "interested persons"
of any such party (as defined in the 1940 Act), cast in person at a meeting
called for the specific purpose of voting on such approval. The Management
Contracts provide that with respect to the Government Income Fund, the Strategic
Income Fund, the Growth & Income Fund and the Portfolio, and the Administration
Contracts provide that with respect to the Emerging Markets Debt Fund, either
the Trust, the Portfolio or each of AIM or the Sub-advisor may terminate the
Contracts without penalty upon sixty days' written notice to the other party.
The Management Contracts and the Administration Contracts terminate
automatically in the event of their assignment (as defined in the 1940 Act).
    
 
   
  In each of the last three fiscal years the Government Income Fund paid
investment management and administration fees to the Sub-advisor in the
following amounts:
    
 
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,                                         AMOUNT PAID
- ----------------------                                         -----------
<S>                                                            <C>
1997........................................................   $2,403,043
1996........................................................    3,672,503
1995........................................................    4,946,971
</TABLE>
 
                                       32
<PAGE>   1787
 
   
  In each of the last three fiscal years the Strategic Income Fund paid
investment management and administration fees to the Sub-advisor in the
following amounts:
    
 
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,                                         AMOUNT PAID
- ----------------------                                         -----------
<S>                                                            <C>
1997........................................................   $3,474,804
1996........................................................    3,807,689
1995........................................................    4,293,053
</TABLE>
 
   
  In each of the last three fiscal years the Growth & Income Fund paid
investment management and administration fees to the Sub-advisor in the
following amounts:
    
 
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,                                         AMOUNT PAID
- ----------------------                                         -----------
<S>                                                            <C>
1997........................................................   $6,900,695
1996........................................................    6,282,438
1995........................................................    6,301,399
</TABLE>
 
   
  In each of the last three fiscal years the Emerging Markets Debt Portfolio
paid investment management and administration fees to the Sub-advisor in the
following amounts:
    
 
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,                                         AMOUNT PAID
- ----------------------                                         -----------
<S>                                                            <C>
1997........................................................   $2,971,167
1996........................................................    3,014,924
1995........................................................    2,411,786
</TABLE>
 
   
  In each of the last three fiscal years the Emerging Markets Debt Fund paid
administration fees to the Sub-advisor in the following amounts:
    
 
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,                                         AMOUNT PAID
- ----------------------                                         -----------
<S>                                                            <C>
1997........................................................   $1,136,471
1996........................................................    1,015,220
1995........................................................      860,884
</TABLE>
 
DISTRIBUTION SERVICES
 
  Each Fund's Advisor Class shares are offered continuously through each Fund's
principal underwriter and distributor, AIM Distributors, on a "best efforts"
basis pursuant to a distribution contract between the Trust and AIM Distributors
without a sales charge or a contingent deferred sales charge.
 
   
EXPENSES OF THE FUNDS AND THE PORTFOLIO
    
 
   
  Each Fund and the Portfolio pays all expenses not assumed by AIM, the
Sub-advisor, AIM Distributors and other agents. These expenses include, in
addition to the advisory, distribution, transfer agency, pricing and accounting
agent and brokerage fees discussed above, legal and audit expenses, custodian
fees, trustees' fees, organizational fees, fidelity bond and other insurance
premiums, taxes, extraordinary expenses and the expenses of reports and
prospectuses sent to existing investors. The allocation of general Company
expenses and expenses shared by the Funds and other funds organized as series of
the Trust are allocated on a basis deemed fair and equitable, which may be based
on the relative net assets of the Funds or the nature of the services performed
and relative applicability to each Fund. Expenditures, including costs incurred
in connection with the purchase or sale of portfolio securities, which are
capitalized in accordance with generally accepted accounting principles
applicable to investment companies, are accounted for as capital items and not
as expenses. The ratio of each Fund's and the Portfolio's expenses to its
relative net assets can be expected to be higher than the expense ratios of
funds investing solely in domestic securities, since the cost of maintaining the
custody of foreign securities and the rate of investment management fees paid by
each Fund and the Portfolio generally are higher than the comparable expenses of
such other funds.
    
 
                                       33
<PAGE>   1788
 
   
                         NET ASSET VALUE DETERMINATION
    
 
  The net asset value per share of each Fund and Portfolio is normally
determined daily as of the close of trading of the New York Stock Exchange
("NYSE") (generally 4:00 p.m. Eastern time) on each business day of the Fund and
Portfolio. In the event the NYSE closes early (i.e., before 4:00 p.m. Eastern
time) on a particular day, the net asset value of a Fund or Portfolio is
determined as of the close of the NYSE on such day. Net asset value per share is
determined by dividing the value of a Fund's or the Portfolio's securities, cash
and other assets (including interest accrued but not collected) attributable to
a particular class, less all its liabilities (including accrued expenses and
dividends payable) attributable to that class, by the total number of shares
outstanding of that class. Determination of a Fund's or the Portfolio's net
asset value per share is made in accordance with generally accepted accounting
principles.
 
  Each equity security is valued at its last sales price on the exchange where
the security is principally traded or, lacking any sales on a particular day,
the security is valued at the mean between the closing bid and asked prices on
that day. Each security traded in the over-the-counter market (but not including
securities reported on the NASDAQ National Market System) is valued at the mean
between the last bid and asked prices based upon quotes furnished by market
makers for such securities. Each security reported on the NASDAQ National Market
System is valued at the last sales price on the valuation date or absent a last
sales price, at the mean between the closing bid and asked prices on that day.
Debt securities 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 institution-size trading in similar groups of securities, developments
related to special securities, yield, quality, coupon rate, maturity, type of
issue, individual trading characteristics and other market data. 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
Trust's officers in a manner specifically authorized by the Board of Trustees.
Short-term obligations having 60 days or less to maturity are valued on the
basis of amortized cost. For purposes of determining net asset value per share,
futures and options contracts generally will be valued 15 minutes after the
close of trading of the NYSE.
 
   
  Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of each Fund's or Portfolio's shares are
determined at such times. Foreign currency exchange rates are also generally
determined prior to the close of the NYSE. Occasionally, events affecting the
values of such securities and such exchange rates may occur between the times at
which such values are determined and the close of the NYSE which will not be
reflected in the computation of a Fund's or Portfolio'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 Trustees of the Fund.
    
 
                       HOW TO PURCHASE AND REDEEM SHARES
 
  A complete description of the manner in which shares of the Funds may be
purchased appears in the Funds' Prospectuses under the headings "How to Purchase
Shares," "Terms and Conditions of Purchase of the AIM Funds" and "Special
Plans."
 
   
  For purposes of a Letter of Intent entered into prior to June 1, 1998, any
registered investment advisor, trust company or bank trust department which
exercises investment discretion and which intends within thirteen months to
invest $500,000 or more can be treated as a single purchaser, provided further
that such entity places all purchases and redemption orders. Such entities
should be prepared to establish their qualifications for such treatment.
    
 
  Complete information concerning the method of exchanging shares of the Funds
for shares of the other AIM Funds is set forth in the Prospectuses under the
heading "Exchange Privilege."
 
   
  Information concerning redemption of the Funds' shares is set forth in the
Prospectuses under the heading "How to Redeem Shares." In addition to the Funds'
obligation to redeem shares, AIM Distributors may also repurchase shares as an
accommodation to shareholders. To effect a repurchase, those dealers who have
executed Selected Dealer Agreements with AIM Distributors must phone orders to
the order desk of the Funds at (800) 959-4246 and guarantee delivery of all
required documents in good order. A repurchase is effected at the net asset
value per share of the applicable Fund next determined after the repurchase
order is received. Such an arrangement is subject to timely receipt by A I M
Fund Services, Inc. ("AFS"), the Funds' transfer agent, of all required
documents in good order. If such documents are not received within a reasonable
time after the order is placed, the order is subject to cancellation. While
there is no charge imposed by a Fund or by AIM Distributors (other than any
applicable contingent deferred sales charge) when shares are redeemed or
repurchased, dealers may charge a fair service fee for handling the transaction.
    
 
                                       34
<PAGE>   1789
 
  The right of redemption may be suspended or the date of payment postponed when
(a) trading on the NYSE is restricted, as determined by applicable rules and
regulations of the SEC, (b) the NYSE is closed for other than customary weekend
and holiday closings, (c) the SEC has by order permitted such suspension, or (d)
an emergency as determined by the SEC exists making disposition of portfolio
securities or the valuation of the net assets of a Fund not reasonably
practicable.
 
   
PROGRAMS AND SERVICES FOR SHAREHOLDERS
    
 
  The Funds provide certain services for shareholders and certain investment or
redemption programs. See "Exchange Privilege" and "How to Redeem Shares" in the
Prospectus. All inquiries concerning these programs should be made directly to
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, toll free
at (800) 959-4246.
 
   
DIVIDEND ORDER
    
 
  Dividends may be paid to someone other than the registered owner, or sent to
an address other than the address of record. (Please note that signature
guarantees are required to effect this option.) An investor also may direct that
his or her dividends be invested in one of the other A I M Funds and there is no
sales charge for these investments; initial investment minimums apply. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" in the
Prospectus. To effect this option, please contact your authorized dealer. For
more information concerning AIM Funds other than the Funds, please obtain a
current prospectus by contacting your authorized dealer, by writing to A I M
Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, or by calling
toll free (800) 959-4246.
 
                                     TAXES
 
TAXATION OF THE FUNDS
 
   
  Each Fund is treated as a separate corporation for federal income tax
purposes. To continue to qualify for treatment as a regulated investment company
("RIC") under the Code, each Fund must distribute to its shareholders for each
taxable year at least 90% of its investment company taxable income (consisting
generally of net investment income, net short-term capital gain and net gains
from certain foreign currency transactions) ("Distribution Requirement") and
must meet several additional requirements. With respect to each Fund, these
requirements include the following: (1) the Fund must derive at least 90% of its
gross income each taxable year from dividends, interest, payments with respect
to securities loans and gains from the sale or other disposition of securities
or foreign currencies, or other income (including gains from options, Futures or
Forward Contracts) derived with respect to its business of investing in
securities or those currencies ("Income Requirement"); (2) at the close of each
quarter of the Fund's taxable year, at least 50% of the value of its total
assets must be represented by cash and cash items, U.S. government securities,
securities of other RICs and other securities, with these other securities
limited, in respect of any one issuer, to an amount that does not exceed 5% of
the value of the Fund's total assets and that does not represent more than 10%
of the issuer's outstanding voting securities; and (3) at the close of each
quarter of the Fund's taxable year, not more than 25% of the value of its total
assets may be invested in securities (other than U.S. government securities or
the securities of other RICs) of any one issuer. The Emerging Markets Debt Fund,
as an investor in the Portfolio, is deemed to own a proportionate share of the
Portfolio's assets, and to earn a proportionate share of the Portfolio's income,
for purposes of determining whether that Fund satisfies the requirements
described above to qualify as a RIC.
    
 
  Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to
the extent it fails to distribute by the end of any calendar year substantially
all of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
 
   
  See "Taxation of Certain Investment Activities" below for a discussion of the
tax consequences to the Emerging Markets Debt Fund of hedging transactions
engaged in, and investments in passive foreign investment companies ("PFICs")
and other foreign securities by, the Portfolio.
    
 
TAXATION OF THE PORTFOLIO -- GENERAL
 
   
  The Portfolio is treated as a partnership for federal income tax purposes and
is not a "publicly traded partnership." As a result, the Portfolio is not
subject to federal income tax; instead, the Emerging Markets Debt Fund, as an
investor in the Portfolio, is required to take into account in determining its
federal income tax liability its share of the Portfolio's income, gains, losses,
deductions and credits, without regard to whether it has received any cash
distributions from the Portfolio. The Portfolio also is not subject to Delaware
income or franchise tax.
    
 
                                       35
<PAGE>   1790
 
   
  Because, as noted above, the Emerging Markets Debt Fund is deemed to own a
proportionate share of the Portfolio's assets, and to earn a proportionate share
of the Portfolio's income, for purposes of determining whether that Fund
satisfies the requirements to qualify as a RIC, the Portfolio intends to conduct
its operations so that the Emerging Markets Debt Fund will be able to continue
to satisfy all those requirements.
    
 
   
  Distributions to the Emerging Markets Debt Fund from the Portfolio (whether
pursuant to a partial or complete withdrawal or otherwise) will not result in
that Fund's recognition of any gain or loss for federal income tax purposes,
except that (1) gain will be recognized to the extent any cash that is
distributed exceeds that Fund's basis for its interest in the Portfolio before
the distribution, (2) income or gain will be recognized if the distribution is
in liquidation of that Fund's entire interest in the Portfolio and includes a
disproportionate share of any unrealized receivables held by the Portfolio, and
(3) loss will be recognized if a liquidation distribution consists solely of
cash and/or unrealized receivables. The Emerging Markets Debt Fund's basis for
its interest in the Portfolio generally will equal the amount of cash and the
basis of any property that Fund invests in the Portfolio, increased by that
Fund's share of the Portfolio's net income and gains and decreased by (a) the
amount of cash and the basis of any property the Portfolio distributes to that
Fund and (b) that Fund's share of the Portfolio's losses.
    
 
TAXATION OF CERTAIN INVESTMENT ACTIVITIES
 
  For purposes of the following discussion, "Investor Funds" means the
Government Income Fund, the Strategic Income Fund, the Growth & Income Fund and
the Portfolio.
 
   
  Foreign Taxes. Interest and dividends received by an Investor Fund, and gains
realized thereby, may be subject to income, withholding or other taxes imposed
by foreign countries and U.S. possessions ("foreign taxes") that would reduce
the yield and/or total return on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate foreign taxes, however,
and many foreign countries do not impose taxes on capital gains in respect of
investments by foreign investors. If more than 50% of the value of an Investor
Fund's total assets (taking into account, in the case of the Emerging Markets
Debt Fund, its proportionate share of the Portfolio's assets) at the close of
its taxable year consists of securities of foreign corporations, the Fund will
be eligible to, and may, file an election with the Internal Revenue Service that
will enable its shareholders, in effect, to receive the benefit of the foreign
tax credit with respect to any foreign taxes paid by it (taking into account, in
the case of the Emerging Markets Debt Fund, its proportionate share of any
foreign taxes paid by the Portfolio) (a "Fund's foreign taxes"). Pursuant to the
election, an Investor Fund would treat those taxes as dividends paid to its
shareholders and each shareholder would be required to (1) include in gross
income, and treat as paid by him, his proportionate share of the Fund's foreign
taxes, (2) treat his share of those taxes and of any dividend paid by the Fund
that represents its income from foreign and U.S. possessions sources (taking
into account, in the case of the Emerging Markets Debt Fund, its proportionate
share of the Portfolio's income from those sources) as his own income from those
sources and (3) either deduct the taxes deemed paid by him in computing his
taxable income or, alternatively, use the foregoing information in calculating
the foreign tax credit against his federal income tax. Each Investor Fund will
report to its shareholders shortly after each taxable year their respective
shares of the Fund's foreign taxes and income (taking into account, in the case
of the Emerging Markets Debt Fund, its proportionate share of the Portfolio's
income) from sources within foreign countries and U.S. possessions if it makes
this election. Pursuant to the Taxpayer Relief Act of 1997 ("Tax Act"),
individuals who have no more than $300 ($600 for married persons filing jointly)
of creditable foreign taxes included on Form 1099 and all of whose foreign
source income is "qualified passive income" may elect each year to be exempt
from the extremely complicated foreign tax credit limitation and will be able to
claim a foreign tax credit without having to file the detailed Form 1116 that
otherwise is required.
    
 
   
  Passive Foreign Investment Companies. Each Investor Fund may invest in the
stock of PFICs. A PFIC is a foreign corporation -- other than a "controlled
foreign corporation" (i.e., a foreign corporation in which, on any day during
its taxable year, more than 50% of the total voting power of all voting stock
therein or the total value of all stock therein is owned, directly, indirectly
or constructively, by "U.S. shareholders," defined as U.S. persons that
individually own, directly, indirectly or constructively, at least 10% of that
voting power) as to which the Investor Fund is a U.S. shareholder (effective
with respect to each Investor Fund for its taxable year beginning November 1,
1998) -- that, in general, meets either of the following tests: (1) at least 75%
of its gross income is passive or (2) an average of at least 50% of its assets
produce, or are held for the production of, passive income. Under certain
circumstances, an Investor Fund will be subject to federal income tax on a part
(or, in the case of the Emerging Markets Debt Fund, its proportionate share of a
part) of any "excess distribution" received by it (or, in the case of the
Emerging Markets Debt Fund, by the Portfolio) on the stock of a PFIC or of any
gain on the Fund's (or, in the case of the Emerging Markets Debt Fund, the
Portfolio's) disposition of that stock (collectively "PFIC income"), plus
interest thereon, even if the Fund distributes the PFIC income as a taxable
dividend to its shareholders. The balance of the PFIC income will be included in
the Fund's
    
 
                                       36
<PAGE>   1791
 
investment company taxable income and, accordingly, will not be taxable to it to
the extent it distributes that income to its shareholders.
 
   
  If an Investor Fund invests in a PFIC and elects to treat the PFIC as a
"qualified electing fund" ("QEF"), then in lieu of the foregoing tax and
interest obligation, the Investor Fund (or, in the case of the Portfolio, the
Emerging Markets Debt Fund) would be required to include in income each year its
pro rata share (taking into account, in the case of the Emerging Markets Debt
Fund, its proportionate share of the Portfolio's pro rata share) of the QEF's
ordinary earnings and net capital gain (i.e., the excess of net long-term
capital gain over net short-term capital loss) -- which most likely would have
to be distributed by the Investor Fund (or, in the case of the Portfolio, the
Emerging Markets Debt Fund) to satisfy the Distribution Requirement and avoid
imposition of the Excise Tax -- even if those earnings and gain were not
received thereby from the QEF. In most instances it will be very difficult, if
not impossible, to make this election because of certain requirements thereof.
    
 
  Effective for its taxable year beginning November 1, 1998, each Investor Fund
may elect to "mark to market" its stock in any PFIC. "Marking-to-market," in
this context, means including in ordinary income each taxable year the excess,
if any, of the fair market value of the stock over an Investor Fund's adjusted
basis therein as of the end of that year. Pursuant to the election, an Investor
Fund also will be allowed to deduct (as an ordinary, not capital, loss) the
excess, if any, of its adjusted basis in PFIC stock over the fair market value
thereof as of the taxable year-end, but only to the extent of any net
mark-to-market gains with respect to that stock included in income by the Fund
for prior taxable years. An Investor Fund's adjusted basis in each PFIC's stock
subject to the election will be adjusted to reflect the amounts of income
included and deductions taken thereunder. Regulations proposed in 1992 provided
a similar election with respect to the stock of certain PFICs.
 
   
  Options, Futures and Foreign Currency Transactions. The Investors Funds' use
of hedging transactions, such as selling (writing) and purchasing options and
Futures Contracts and entering into Forward Contracts, involves complex rules
that will determine, for federal income tax purposes, the amount, character and
timing of recognition of the gains and losses an Investor Fund realizes in
connection therewith. Gains from the disposition of foreign currencies (except
certain gains that may be excluded by future regulations), and gains from
options, Futures and Forward Contracts derived by an Investor Fund with respect
to its business of investing in securities or foreign currencies, will qualify
as permissible income under the Income Requirement for that Investor Fund (or,
in the case of the Portfolio, the Emerging Markets Debt Fund).
    
 
  Futures and Forward Contracts that are subject to Section 1256 of the Code
(other than those that are part of a "mixed straddle") ("Section 1256
Contracts") and that are held by an Investor Fund at the end of its taxable year
generally will be deemed to have been sold at that time at market value for
federal income tax purposes. Sixty percent of any net gain or loss recognized on
these deemed sales, and 60% of any net gain or loss realized from any actual
sales of Section 1256 Contracts, will be treated as long-term capital gain or
loss, and the balance will be treated as short-term capital gain or loss. That
60% portion will qualify for the reduced maximum tax rates on noncorporate
taxpayers' net capital gain enacted by the Tax Act -- 20% (10% for taxpayers in
the 15% marginal tax bracket) for gain recognized on capital assets held for
more than 18 months -- instead of the 28% rate in effect before that
legislation, which now applies to gain recognized on capital assets held for
more than one year but not more than 18 months.
 
  Section 988 of the Code also may apply to gains and losses from transactions
in foreign currencies, foreign-currency-denominated debt securities and options,
Futures and Forward Contracts on foreign currencies ("Section 988" gains and
losses). Each Section 988 gain or loss generally is computed separately and
treated as ordinary income or loss. In the case of overlap between sections 1256
and 988, special provisions determine the character and timing of any income,
gain or loss. Each Investor Fund attempts to monitor section 988 transactions to
minimize any adverse tax impact.
 
  If an Investor Fund has an "appreciated financial position" -- generally, an
interest (including an interest through an option, Futures or Forward Contract
or short sale) with respect to any stock, debt instrument (other than "straight
debt") or partnership interest the fair market value of which exceeds its
adjusted basis -- and enters into a "constructive sale" of the same or
substantially similar property, the Fund will be treated as having made an
actual sale thereof, with the result that gain will be recognized at that time.
A constructive sale generally consists of a short sale, an offsetting notional
principal contract or Futures or Forward Contract entered into by an Investor
Fund or a related person with respect to the same or substantially similar
property. In addition, if the appreciated financial position is itself a short
sale or such a contract, acquisition of the underlying property or substantially
similar property will be deemed a constructive sale.
 
   
  The Strategic Income Fund and the Portfolio each may acquire zero coupon or
other securities issued with original issue discount ("OID"). As a holder of
those securities, that Fund and the Portfolio (and, through it, the Emerging
Markets Debt Fund) each must include in its income the portion of the OID that
accrues on the securities during the taxable year, even if no corresponding
payment on them is received during the year. Similarly, the Strategic Income
Fund and the
    
 
                                       37
<PAGE>   1792
 
   
Portfolio each must include in its gross income securities it receives as
"interest" on payment-in-kind securities. Because each Fund annually must
distribute substantially all of its investment company taxable income, including
any OID and other non-cash income, to satisfy the Distribution Requirement and
avoid imposition of the Excise Tax, the Strategic Income Fund or the Emerging
Markets Debt Fund, or both, may be required in a particular year to distribute
as a dividend an amount that is greater than the total amount of cash it
actually receives (or, in the case of the Emerging Markets Debt Fund, its share
of the total amount of cash the Portfolio actually receives). Those
distributions will be made from the Fund's (or, in the case of the Emerging
Markets Debt Fund, its, or its share of the Portfolio's) cash assets or, if
necessary, from the proceeds of sales of portfolio securities. A Fund may
(directly or through the Portfolio) realize capital gains or losses from those
sales, which would increase or decrease its investment company taxable income
and/or net capital gain.
    
 
TAXATION OF THE FUNDS' SHAREHOLDERS
 
  Dividends and other distributions declared by a Fund in, and payable to
shareholders of record as of a date in, October, November or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during the following January. Accordingly, those distributions will be
taxed to shareholders for the year in which that December 31 falls.
 
  A portion of the dividends from the Growth & Income Fund's investment company
taxable income (whether paid in cash or reinvested in additional shares) may be
eligible for the dividends-received deduction allowed to corporations. The
eligible portion may not exceed the aggregate dividends received by that Fund
from U.S. corporations. However, dividends received by a corporate shareholder
and deducted by it pursuant to the dividends-received deduction are subject
indirectly to the federal alternative minimum tax. The Funds other than the
Growth & Income Fund are not expected to pay dividends eligible for that
deduction.
 
  If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
 
  Dividends paid by a Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership ("foreign shareholder") generally
will be subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply, however, to a dividend paid by a Fund to a foreign
shareholder that is "effectively connected with the conduct of a U.S. trade or
business," in which case the reporting and withholding requirements applicable
to domestic shareholders will apply. A distribution of net capital gain by a
Fund to a foreign shareholder generally will be subject to U.S. federal income
tax (at the rates applicable to domestic persons) only if the distribution is
"effectively connected" or the foreign shareholder is treated as a resident
alien individual for federal income tax purposes.
 
   
  The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting the Funds, their shareholders and the Portfolio.
Investors are urged to consult their own tax advisors for more detailed
information and for information regarding any foreign, state and local taxes
applicable to distributions received from a Fund.
    
 
   
                           MISCELLANEOUS INFORMATION
    
 
   
  AIM was organized in 1976, and together with its subsidiaries, manages or
advises approximately 90 investment company portfolios encompassing a broad
range of investment objectives. AIM is a direct, wholly owned subsidiary of
A I M Management Group Inc. ("AIM Management"), a holding company that has been
engaged in the financial services business since 1976. AIM is the sole
shareholder of the Funds' principal underwriter, AIM Distributors. AIM
Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London, EC2M 4YR, England. AMVESCAP PLC and its subsidiaries are
independent investment management groups that have a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia.
    
 
CUSTODIAN
 
  State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, MA 02110, acts as custodian of each Fund's and the Portfolio's assets.
State Street is authorized to establish and has established separate accounts in
foreign currencies and to cause securities of the Funds and the Portfolio to be
held in separate accounts outside the United States in the custody of non-U.S.
banks.
 
                                       38
<PAGE>   1793
 
   
TRANSFER AGENCY AND ACCOUNTING AGENCY SERVICES
    
 
   
  The Transfer Agency and Service Agreement between the Trust and AFS, a
registered transfer agent and wholly-owned subsidiary of AIM, provides that AFS
will perform certain shareholder services for the Funds for a fee per account
serviced. The Transfer Agency and Service Agreement provides that AFS will
receive a per account fee plus out-of-pocket expenses to process orders for
purchases, redemptions and exchanges of shares; prepare and transmit payments
for dividends and distributions declared by the Funds; maintain shareholder
accounts and provide shareholders with information regarding the Funds and their
accounts.
    
 
   
  The Transfer Agency and Service Agreement became effective on September 8,
1998. The Sub-advisor also serves as each Fund's pricing and accounting agent.
As of October 31, 1997, October 31, 1996 and October 31, 1995, the Fund paid
accounting services fees to the Sub-advisor of Government Income Fund, Strategic
Income Fund, Emerging Markets Debt Fund and Growth & Income Fund of $85,149,
$127,205, $40,218 and $183,323; $123,309, $131,517, $34,980 and $162,035; and
$116,607, $101,697, $22,563 and $40,735, respectively.
    
 
INDEPENDENT ACCOUNTANTS
 
   
  The Funds' and the Portfolio's independent accountants are
PricewaterhouseCoopers LLP. PricewaterhouseCoopers LLP conducts audits of each
Fund's and the Portfolio's financial statements, assists in the preparation of
the Funds' and the Portfolio's federal and state income tax returns and consults
with the Trust, the Funds and the Portfolio as to matters of accounting,
regulatory filings, and federal and state income taxation.
    
 
   
  The audited financial statements of the Funds and the Portfolio included in
this Statement of Additional Information have been examined by
PricewaterhouseCoopers LLP, as stated in their opinion appearing herein and are
included in reliance upon such opinion given upon the authority of that firm as
experts in accounting and auditing.
    
 
SHAREHOLDER LIABILITY
 
   
  Under Delaware law, the shareholders of the Trust enjoy the same limitations
extended to shareholders of private, for-profit corporations. There is a remote
possibility, however, that under certain circumstances shareholders of the Trust
may be held personally liable for the Trust's obligations. However, the Trust
Agreement disclaims shareholder liability for acts or obligations of the Trust
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Trust or a trustee. If
a shareholder is held personally liable for the obligations of the Trust, the
Trust Agreement provides that the shareholder shall be entitled out of the
assets belonging to the applicable Fund (or allocable to the applicable Class),
to be held harmless from and indemnified against all loss and expense arising
from such liability in accordance with the Trust's Bylaws and applicable law.
Thus, the risk of a shareholder incurring financial loss on account of such
liability is limited to circumstances in which the Trust itself would be unable
to meet its obligations and where the other party was held not to be bound by
the disclaimer.
    
 
NAMES
 
   
  Prior to May 29, 1998, AIM Emerging Markets Debt Fund operated under the name
of GT Global High Income Fund; AIM Strategic Income Fund operated under the
name of GT Global Strategic Income Fund; AIM Global Government Income Fund
operated under the name of GT Global Government Income Fund; and AIM Global
Growth & Income Fund operated under the name of GT Global Growth & Income Fund.
    
 
                                       39
<PAGE>   1794
 
   
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
    
 
   
  As of August 10, 1998, the Trustees and officers of the Trust, as a group,
owned less than 1% of the outstanding shares of any class of the Trust. To the
best knowledge of the Trust, the names and addresses of the holders of 5% or
more of the outstanding shares of any class of each Fund's equity securities as
of August 10, 1998, and the percentage of the outstanding shares held by such
holders are set forth below:
    
 
   
<TABLE>
<CAPTION>
                                                                                        PERCENT
                                                                       PERCENT          OWNED OF
                                                                       OWNED OF        RECORD AND
FUND                                   NAME AND ADDRESS OF OWNER       RECORD*        BENEFICIALLY
- ----                                   -------------------------       --------       ------------
<S>                                <C>                                 <C>            <C>
Government Income Fund -- Advisor  NFSC FEBO #179-514144                10.09%            -0-
  Class                            FMT CO Cust IRA
                                   FBO Thomas Stanley Lipscomb
                                   Cook-Fort Worth Children's Med C
                                   801 7th Ave
                                   Fort Worth, TX 76104-2733
Government Income Fund -- Class A  MLPF&S for the Sole Benefit of        9.16%            -0-
                                   Its
                                   Customers, Security #
                                   Attn: Fund Administration
                                   4800 Deer Lake Drive East, 2nd
                                   Floor
                                   Jacksonville, FL 32246-6484
Government Income Fund -- Class B  MLPF&S for the Sole Benefit of       12.71%            -0-
                                   Its
                                   Customers, Security # 97AM9
                                   Attn: Fund Administration
                                   4800 Deer Lake Drive East, 2nd
                                   Floor
                                   Jacksonville, FL 32246-6484
Strategic Income Fund -- Advisor   FTC & CO                              9.67%            -0-
  Class                            Attn: Datalynx #089
                                   P.O. Box 173736
                                   Denver, CO 80217-3736
Strategic Income Fund -- Class A   MLPF&S for the Sole Benefit of        6.37%            -0-
                                   Its
                                   Customers, Security #974TI
                                   Attn: Fund Administration
                                   4800 Deer Lake Drive East, 2nd
                                   Floor
                                   Jacksonville, FL 32246-6484
Emerging Markets Debt              Charles Schwab & Co. Inc.            19.58%            -0-
  Fund -- Advisor Class            For the Excl Benef. of our Custs.
                                   Reinvest Account
                                   101 Montgomery St.
                                   San Francisco, California
                                   94104-4122
                                   Attn: Mutual Funds
                                   Wells Fargo Bank NA TTEE FBO         25.58%            -0-
                                   LGT Asset Management AC
                                   5000201000
                                   Serp Prft Shr Pln ###-##-####
                                   P.O. Box 9800 MAC 9139-027
                                   Calabasas, CA 91372-0800
Emerging Markets Debt              MLPF&S for the Sole Benefit of       10.74%            -0-
  Fund -- Class B                  Its
                                   Customers, Security #97AM8
                                   Attn: Fund Administration
                                   4800 Deer Lake Drive East, 2nd
                                   Floor
                                   Jacksonville, FL 32246-6484
Growth & Income Fund -- Advisor    Wells Fargo Bank NA TTEE FBO         28.32%            -0-
  Class                            LGT Asset Management AC
                                   5000201000
                                   Serp Prft Shr Pln ###-##-####
                                   P O Box 9800 MAC 9137-027
                                   Calabasas, CA 91372-0800
</TABLE>
    
 
- ---------------
 
   
* The Trust has no knowledge as to whether all or any portion of the shares
  owned of record are also owned beneficially.
    
 
                                       40
<PAGE>   1795
 
                               INVESTMENT RESULTS
 
TOTAL RETURN QUOTATIONS
 
  The standard formula for calculating total return, as described in the
Prospectus, is as follows:
 
   
                                       (n)
                                 P(1+T)   =ERV
    
 
<TABLE>
    <S>    <C>  <C>   <C>
    Where  P      =   a hypothetical initial payment of $1,000.
           T      =   average annual total return (assuming the applicable maximum
                      sales load is deducted at the beginning of the 1, 5, or 10
                      year periods).
           n      =   number of years.
           ERV    =   ending redeemable value of a hypothetical $1,000 payment at
                      the end of the 1, 5, or 10 year periods (or fractional
                      portions of such period).
</TABLE>
 
  The standardized returns for the [Class A and] Advisor Class shares of the
Strategic Income Fund, stated as average annualized total returns for the
periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                                 STRATEGIC
                                                                  INCOME
                                                                   FUND
PERIOD                                                        (ADVISOR CLASS)
- ------                                                        ---------------
<S>                                                           <C>
Fiscal year ended Oct. 31, 1997.............................        9.86%
October 31, 1992 through Oct. 31, 1997......................         n/a
May 31, 1995 (commencement of operations) through Oct. 31,
  1997......................................................       14.91%
March 29, 1988 (commencement of operations) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
   
  The standardized returns for the Advisor Class shares of the Government Income
Fund, stated as average annualized total returns for the periods shown, were:
    
 
   
<TABLE>
<CAPTION>
                                                                GOVERNMENT
                                                                  INCOME
                                                                   FUND
PERIOD                                                        (ADVISOR CLASS)
- ------                                                        ---------------
<S>                                                           <C>
Fiscal year ended Oct. 31, 1997.............................       5.15%
Oct. 31, 1992 through Oct. 31, 1997.........................        n/a
May 31, 1995 (commencement of operations) through Oct. 31,
  1997......................................................       5.51%
March 29, 1988 (commencement of operations) through Oct. 31,
  1997......................................................        n/a
</TABLE>
    
 
   
  The standardized returns for the [Class A and] Advisor Class shares of the
Emerging Markets Debt Fund, stated as average annualized total returns for the
periods shown, were:
    
 
   
<TABLE>
<CAPTION>
                                                                 EMERGING
                                                                  MARKETS
                                                                 DEBT FUND
PERIOD                                                        (ADVISOR CLASS)
- ------                                                        ---------------
<S>                                                           <C>
Fiscal year ended Oct. 31, 1997.............................       14.72%
May 31, 1995 (commencement of operations) through Oct. 31,
  1997......................................................       24.17%
Oct. 22, 1992 (commencement of operations) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
  The standardized returns for the [Class A and] Advisor Class shares of the
Growth & Income Fund, stated as average annualized total returns, for the
periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                                GROWTH AND
                                                                INCOME FUND
PERIOD                                                        (ADVISOR CLASS)
- ------                                                        ---------------
<S>                                                           <C>
Fiscal year ended Oct. 31, 1997.............................       19.23%
Oct. 31, 1992 through Oct. 31, 1997.........................         n/a
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................       16.34%
Sept. 25, 1990 (commencement of operations) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
                                       41
<PAGE>   1796
 
NON-STANDARDIZED RETURNS
 
  Standard total return quotes may be accompanied by total return figures
calculated by alternative methods. For example, average annual total return may
be calculated without assuming payment of the full sales load according to the
following formula:
 
   
                                       (n) 
                                 P(1+U)   =ERV
    
 
<TABLE>
    <S>    <C>  <C>   <C>
    Where  P      =   a hypothetical initial payment of $1,000.
           U      =   average annual total return assuming payment of only a
                      stated portion of, or none of, the applicable maximum sales
                      load at the beginning of the stated period.
           n      =   number of years.
           ERV    =   ending redeemable value of a hypothetical $1,000 payment at
                      the end of the stated period.
</TABLE>
 
  Cumulative total return across a stated period may be calculated as follows:
 
   
                                       (n)
                                 P(1+V)   =ERV
    
 
<TABLE>
    <S>    <C>  <C>   <C>
    Where  P      =   a hypothetical initial payment of $1,000.
           V      =   cumulative total return assuming payment of all of, a stated
                      portion of, or none of, the applicable maximum sales load at
                      the beginning of the stated period.
           n      =   number of years.
           ERV    =   ending redeemable value of a hypothetical $1,000 payment at
                      the end of the stated period.
</TABLE>
 
   
  The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Advisor Class shares of the Strategic Income Fund, stated as aggregate
total returns for the periods shown, were:
    
 
   
<TABLE>
<CAPTION>
                                                                 STRATEGIC
                                                                  INCOME
                                                                   FUND
PERIOD                                                        (ADVISOR CLASS)
- ------                                                        ---------------
<S>                                                           <C>
May 31, 1995 (commencement of operations) through Oct. 31,
  1997......................................................       39.92%
March 29, 1988 (commencement of operations) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
  The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the Government Income Fund, stated
as aggregate total returns for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                                GOVERNMENT
                                                                  INCOME
                                                                   FUND
PERIOD                                                        (ADVISOR CLASS)
- ------                                                        ---------------
<S>                                                           <C>
May 31, 1995 (commencement of operations) through Oct. 31,
  1997......................................................       13.83%
March 29, 1988 (commencement of operations) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
   
  The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the Emerging Markets Debt Fund,
stated as aggregate total returns for the periods shown, were:
    
 
   
<TABLE>
<CAPTION>
                                                                 EMERGING
                                                                  MARKETS
                                                                 DEBT FUND
PERIOD                                                        (ADVISOR CLASS)
- ------                                                        ---------------
<S>                                                           <C>
May 31, 1995 (commencement of operations) through Oct. 31,
  1997......................................................       68.73%
Oct. 22, 1992 (commencement of operations) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
  The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the Growth & Income Fund, stated as
aggregate total returns for the periods shown, were:
 
   
<TABLE>
<CAPTION>
                                                                GROWTH AND
                                                                INCOME FUND
PERIOD                                                        (ADVISOR CLASS)
- ------                                                        ---------------
<S>                                                           <C>
June 1, 1995 (commencement of operations) through Oct. 31,
  1997......................................................       44.16%
Sept. 25, 1990 (commencement of operations) through Oct. 31,
  1997......................................................         n/a
</TABLE>
    
 
                                       42
<PAGE>   1797
 
YIELD QUOTATIONS
 
  The standard formula for calculating yield for each Fund, as described in the
Prospectus, is as follows:
 
   
                                                 (6)
                      YIELD = 2[((a-b)/(c(x)d)+1)   -1]
    
 
<TABLE>
<S>    <C>  <C>  <C>
Where  a    =    dividends and interest earned during a stated 30-day period.
                 For purposes of this calculation, dividends are accrued
                 rather than recorded on the ex-dividend date. Interest
                 earned under this formula must generally be calculated based
                 on the yield to maturity of each obligation (or, if more
                 appropriate, based on yield to a call date).
       b    =    expenses accrued during period (net of reimbursement).
       c    =    the average daily number of shares outstanding during the
                 period.
       d    =    the maximum offering price per share on the last day of the
                 period.
</TABLE>
 
   
  The Yields of the Class A shares of the Strategic Income Fund, Government
Income Fund and the Emerging Markets Debt Fund for the one-month period ended
October 31, 1996 were 6.58%, 6.23% and 7.29%, respectively. The current yields
of the Class B shares of Strategic Income Fund, Government Income Fund and
Emerging Markets Debt Fund for the one-month period ended October 31, 1996 were
6.23%, 5.87% and 7.00%, respectively. The Yields of the Advisor Class shares of
the Strategic Income Fund, Government Income Fund and Emerging Markets Debt Fund
for the one-month period ended October 31, 1996 were 7.27%, 6.74% and 8.04%,
respectively.
    
 
PERFORMANCE INFORMATION
 
          Total return and yield figures for the Funds are neither fixed nor
     guaranteed, and no Fund's principal is insured. Performance quotations
     reflect historical information and should not be considered representative
     of a Fund's performance for any period in the future. Performance is a
     function of a number of factors which can be expected to fluctuate. The
     Funds may provide performance information in reports, sales literature and
     advertisements. The Funds may also, from time to time, quote information
     about the Funds published or aired by publications or other media entities
     which contain articles or segments relating to investment results or other
     data about one or more of the Funds. Such publications or media entities
     may include the following, among others:
 
     Advertising Age
     Barron's
     Best's Review
     Broker World
     Business Week
     Changing Times
     Christian Science Monitor
     Consumer Reports
     Economist
     EuroMoney
     FACS of the Week
     Financial Planning
     Financial Product News
     Financial World
     Forbes
     Fortune
     Global Finance
     Hartford Courant Inc.
     Institutional Investor
     Insurance Forum
     Insurance Week
     Investor's Daily
     Journal of the American
       Society of CLU & ChFC
     Kiplinger Letter
     Money
     Mutual Fund Forecaster
     Mutual Fund Magazine
     Nation's Business
     New York Times
     Pension World
     Pensions & Investments
     Personal Investor
     Financial Services Week
     Philadelphia Inquirer
     Smart Money
     USA Today
     U.S. News & World Report
     Wall Street Journal
     Washington Post
     CNN
     CNBC
     PBS
 
  The Funds and AIM Distributors may from time to time, in advertisements, sales
literature and reports furnished to present or prospective shareholders, compare
each Fund with the following, or compare each Fund's performance to performance
data of similar mutual funds as published in the following, among others:
 
     Bank Rate National Monitor Index
     Bear Stearns Foreign Bond Index
     Bond Buyer Index
     CDA/Wiesenberger Investment Company Services
       (data and mutual fund rankings and
       comparisons)
     CNBC/Financial News Composite Index
     COFI
     Consumer Price Index
     Datastream
     Donoghue's
     Dow Jones Industrial Average
     EAFE Index
     First Boston High Yield Index
 
                                       43
<PAGE>   1798
 
     Fitch (publications)
     Ibbotson Associates International Bond Index
     International Bank for Reconstruction and
       Development (publications)
     International Finance Corporation Emerging
       Markets Database
     International Financial Statistics
     Lehman Bond Indices
     Lipper Analytical Data Services, Inc. (data and
       mutual fund rankings and comparisons)
     Micropal, Inc. (data and mutual fund rankings
       and comparisons)
     Moody's Investors Service (publications)
     Morgan Stanley Capital International All Country
       (AC) World Index
     Morgan Stanley Capital International World
       Indices
     Morningstar, Inc. (data and mutual fund rankings
       and comparisons)
     NASDAQ
     Organization for Economic Cooperation and
       Development (publications)
     Salomon Brothers Global Telecommunications
       Index
     Salomon Brothers World Government Bond
       Index-Non-U.S.
     Salomon Brothers World Government Bond
       Index
     Standard & Poor's (publications)
     Standard & Poor's 500 Composite Stock Price
       Index
     Stangar
   
     Wilshire Associates
    
     World Bank (publications and reports)
     The World Bank Publication of Trends in
       Developing Countries
     Worldscope
 
  Each Fund may also compare its performance to rates on Certificates of Deposit
and other fixed rate investments such as the following:
 
          10-year Treasuries
          30-year Treasuries
          30-day Treasury Bills
 
  Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable but may be subject
to revision and has not been independently verified by the Funds or AIM
Distributors. Advertising for the Funds may from time to time include
discussions of general economic conditions and interest rates. Advertising for
the Funds may also include reference to the use of those Funds as part of an
individual's overall retirement investment program. From time to time, sales
literature and/or advertisements for any of the Funds may disclose (i) the
largest holdings in the Fund's portfolio, (ii) certain selling group members
and/or (iii) certain institutional shareholders.
 
  From time to time, the Funds' sales literature and/or advertisements may
discuss generic topics pertaining to the mutual fund industry. This includes,
but is not limited to, literature addressing general information about mutual
funds, variable annuities, dollar-cost averaging, stocks, bonds, money markets,
certificates of deposit, retirement, retirement plans, asset allocation,
tax-free investing, college planning, and inflation.
 
  Although performance data may be useful to prospective investors when
comparing a Fund's performance with other funds and other potential investments,
investors should note that the methods of computing performance of other
potential investments are not necessarily comparable to the methods employed by
a Fund.
 
                                       44
<PAGE>   1799
 
   
                                    APPENDIX
    
 
                          DESCRIPTION OF BOND RATINGS
 
   
  Moody's Investors Service, Inc. ("Moody's") rates the debt securities issued
by various entities from "Aaa" to "C". Investment grade ratings are the first
four categories: Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. Ba -- Bonds which are rated Ba
are judged to have speculative elements; their future cannot be considered as
well-assured. Often the protection of interest and principal payments may be
very moderate, and thereby not well safeguarded during both good and bad times
over the future. Uncertainty of position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest. Ca -- Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings. C -- Bonds which are rated C are the lowest rated class of
bonds, and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
    
 
   
  Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"),
rates the securities debt of various entities in categories ranging from "AAA"
to "D" according to quality. Investment grade ratings are the first four
categories: AAA -- An obligation rated "AAA" has the highest rating assigned by
S&P. The obligor's capacity to meet its financial commitment on the obligation
is extremely strong. AA -- An obligation rated "AA" differs from the highest
rated obligations only in a small degree. The obligor's capacity to meet its
financial commitment on the obligation is very strong. A -- An obligation rated
"A" is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than obligations in higher rated
categories. BBB -- An obligation rated "BBB" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation. BB, B, CCC, CC, C -- Obligations rated "BB," "B,"
"CCC," "CC," and "C" are regarded as having significant speculative
characteristics. "BB" indicates the least degree of speculation and "C" the
highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions. BB -- An obligation rated "BB" is less
vulnerable to nonpayment than other speculative issues. However, it faces major
ongoing uncertainties or exposure to adverse business, financial, or economic
conditions which could lead to the obligor's inadequate capacity to meet its
financial commitment on the obligation. B -- An obligation rated "B" is more
vulnerable to nonpayment than obligations rated "BB," but the obligor currently
has the capacity to meet its financial commitment on the obligation. Adverse
business, financial, or economic conditions will likely impair the obligor's
capacity or willingness to meet its financial commitment on the obligation.
CCC -- An obligation rated "CCC" is currently vulnerable to nonpayment, and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.
CC -- An obligation rated "CC" is currently highly vulnerable to nonpayment.
C -- The "C" rating may be used to cover a situation where a bankruptcy petition
has been filed or similar action has been taken, but payments on this obligation
are being continued. D -- An obligation rated "D" is in payment default. The "D"
rating category is used when payments on an obligation are not made on the date
due even if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The "D" rating also
will be used upon the filing of a bankruptcy petition or the taking of a similar
action if payments on an obligation are jeopardized.
    
 
                                       45
<PAGE>   1800
 
  PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
 
  NR: Indicates that no rating has been requested, that there is insufficient
information on which to base a rating, or that S&P does not rate a particular
type of obligation as a matter of policy.
 
DESCRIPTION OF COMMERCIAL PAPER RATINGS
 
  Moody's employs the designation "Prime-1" to indicate commercial paper having
a superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. Issues rated Prime-2 have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many of
the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
 
   
  S&P ratings of commercial paper are graded into several categories ranging
from "A-1" for the highest quality obligations to "D" for the lowest. Issues in
the "A" category are delineated with numbers 1, 2, and 3 to indicate the
relative degree of safety. A-1 -- This highest category indicates that the
degree of safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics will be denoted with a plus sign
(+) designation. A-2 -- Capacity for timely payments on issues with this
designation is satisfactory; however, the relative degree of safety is not as
high as for issues designated "A-1."
    
 
   
ABSENCE OF RATING
    
 
   
  Where no rating has been assigned or where a rating has been suspended or
withdrawn, it may be for reasons unrelated to the quality of the issue.
    
 
   
  Should no rating be assigned, the reason may be one of the following:
    
 
   
          1. An application for rating was not received or accepted.
    
 
   
          2. The issue or issuer belongs to a group of securities or companies
     that are not rated as a matter of policy.
    
 
   
          3. There is a lack of essential data pertaining to the issue or
     issuer.
    
 
   
          4. The issue was privately placed, in which case the rating is not
     published in Moody's publications.
    
 
   
  Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.
    
 
   
  Note: Moody's applies numerical modifiers, 1, 2, and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the Company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the Company ranks in the
lower end of its generic rating category.
    
 
                                       46
<PAGE>   1801
 
                              FINANCIAL STATEMENTS
 
                                       FS
<PAGE>   1802
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                            PORTFOLIO OF INVESTMENTS
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                          COUNTRY        SHARES         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Finance (32.7%)
  Schweizerischer Bankverein (Swiss Bank Corp.) ..........   SWTZ              74,750   $ 25,964,898         3.1
    BANKS-MONEY CENTER
  AEGON N.V. .............................................   NETH             187,875     24,372,772         2.9
    INSURANCE-LIFE
  Credit Suisse Group ....................................   SWTZ             108,300     23,827,589         2.8
    BANKS-MONEY CENTER
  Royal & Sun Alliance Insurance Group PLC ...............   UK             2,081,400     23,250,421         2.7
    INSURANCE - MULTI-LINE
  ABN AMRO Holding N.V. ..................................   NETH             891,296     21,713,093         2.5
    BANKS-MONEY CENTER
  Union Bank of Switzerland - Bearer .....................   SWTZ              11,752     18,929,817         2.2
    BANKS-MONEY CENTER
  ING Groep N.V. .........................................   NETH             264,262     17,180,432         2.0
    BANKS-MONEY CENTER
  First Tennessee National Corp. .........................   US               490,800     16,901,925         2.0
    BANKS-REGIONAL
  Fortis Amev N.V. .......................................   NETH             244,011     14,281,095         1.7
    OTHER FINANCIAL
  American General Corp. .................................   US               170,000     11,326,250         1.3
    INSURANCE-LIFE
  Lloyds TSB Group PLC ...................................   UK               688,428     10,309,152         1.2
    BANKS-REGIONAL
  National Westminster Bank PLC ..........................   UK               471,800      9,443,890         1.1
    BANKS-MONEY CENTER
  General Accident PLC ...................................   UK               400,000      9,404,682         1.1
    INSURANCE - PROPERTY-CASUALTY
  IKB Deutsche Industriebank AG ..........................   GER              394,000      8,620,123         1.0
    BANKS-REGIONAL
  Generale de Banque S.A.: ...............................   BEL                   --             --         1.0
    BANKS-MONEY CENTER
    Common ...............................................   --                14,762      8,534,275          --
    Strip VVPR-/- ........................................   --                 1,342            254          --
  Kredietbank N.V. .......................................   BEL               12,980      7,328,524         0.9
    BANKS-REGIONAL
  Commercial Union PLC ...................................   UK               361,550      6,765,459         0.8
    INSURANCE - MULTI-LINE
  Commonwealth Bank of Australia .........................   AUSL             526,000      6,304,056         0.7
    BANKS-SUPER REGIONAL
  M & G Group PLC ........................................   UK               155,000      4,762,751         0.6
    INVESTMENT MANAGEMENT
  General Property Trust .................................   AUSL           1,444,125      2,679,354         0.3
    REAL ESTATE
  Reinsurance Australia Corporation Ltd. .................   AUSL             846,250      2,357,887         0.3
    INSURANCE - MULTI-LINE
  Infrastructure Trust of Australia Group ................   AUSL           2,724,750      2,341,430         0.3
    OTHER FINANCIAL
  National Australia Bank Ltd. ...........................   AUSL             120,725      1,713,303         0.2
    BANKS-REGIONAL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-1
<PAGE>   1803
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                          COUNTRY        SHARES         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Finance (Continued)
  Realty Development Corp. "A" ...........................   HK                 5,000   $     11,168          --
    REAL ESTATE
                                                                                        ------------
                                                                                         278,324,600
                                                                                        ------------
Consumer Non-Durables (15.3%)
  Cadbury Schweppes PLC ..................................   UK             1,381,800     20,149,324         2.4
    BEVERAGES - NON-ALCOHOLIC
  Diageo PLC .............................................   UK             1,684,559     20,056,957         2.4
    BEVERAGES - ALCOHOLIC
  Reckitt & Colman PLC ...................................   UK               983,093     19,809,817         2.3
    HOUSEHOLD PRODUCTS
  Avon Products, Inc. ....................................   US               182,000     14,958,125         1.8
    PERSONAL CARE/COSMETICS
  Pernod Ricard ..........................................   FR               158,720     10,959,867         1.3
    BEVERAGES - ALCOHOLIC
  Philip Morris Cos., Inc. ...............................   US               255,000      9,514,688         1.1
    TOBACCO
  Kellogg Co. ............................................   US               219,513      9,054,911         1.1
    FOOD
  Clorox Co. .............................................   US               105,960      8,887,395         1.0
    HOUSEHOLD PRODUCTS
  Anheuser-Busch Cos., Inc. ..............................   US               188,371      8,629,746         1.0
    BEVERAGES - ALCOHOLIC
  Brown-Forman Corp. "B" .................................   US                93,600      5,300,100         0.6
    BEVERAGES - ALCOHOLIC
  Universal Corp. ........................................   US                62,075      2,323,933         0.3
    TOBACCO
                                                                                        ------------
                                                                                         129,644,863
                                                                                        ------------
Energy (12.5%)
  Royal Dutch Petroleum Co. ..............................   NETH             371,840     20,528,897         2.4
    OIL
  Exxon Corp. ............................................   US               182,600     13,318,388         1.6
    OIL
  VEBA AG ................................................   GER              170,200     11,251,795         1.3
    ELECTRICAL & GAS UTILITIES
  Mobil Corp. ............................................   US               127,600     10,080,400         1.2
    OIL
  Electrabel S.A. ........................................   BEL               34,760      9,241,630         1.1
    ELECTRICAL & GAS UTILITIES
  Shell Transport & Trading Co., PLC .....................   UK             1,121,700      8,347,099         1.0
    OIL
  PG&E Corp. .............................................   US               220,000      7,122,500         0.8
    ELECTRICAL & GAS UTILITIES
  Reunies Electrobel & Tractebel S.A. ....................   BEL               57,935      6,933,773         0.8
    ELECTRICAL & GAS UTILITIES
  Elf Aquitaine ..........................................   FR                52,475      6,888,981         0.8
    OIL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-2
<PAGE>   1804
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                          COUNTRY        SHARES         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Energy (Continued)
  RWE AG .................................................   GER              134,620   $  6,851,062         0.8
    ELECTRICAL & GAS UTILITIES
  Groupe Bruxelles Lambert S.A. ..........................   BEL               31,025      6,201,140         0.7
    OIL
                                                                                        ------------
                                                                                         106,765,665
                                                                                        ------------
Services (9.6%)
  Telecom Corporation of New Zealand Limited: ............   NZ                    --             --         1.7
    TELEPHONE NETWORKS
    Common ...............................................   --             2,614,200     12,405,045          --
    ADR{\/} ..............................................   --                38,000      1,455,875          --
  McGraw-Hill, Inc. ......................................   US               162,000     12,544,875         1.5
    BROADCASTING & PUBLISHING
  EMI Group PLC ..........................................   UK               887,600      9,017,007         1.1
    LEISURE & TOURISM
  Reuters Group PLC ......................................   UK               823,020      8,918,344         1.0
    BROADCASTING & PUBLISHING
  Elsevier N.V. ..........................................   NETH             557,255      8,415,665         1.0
    BROADCASTING & PUBLISHING
  Woolworths Ltd. ........................................   AUSL           2,021,925      6,949,915         0.8
    RETAILERS-OTHER
  Royal PTT Nederland N.V. ...............................   NETH             112,735      5,827,656         0.7
    TELEPHONE NETWORKS
  PMP Communications Ltd. ................................   AUSL           2,556,250      4,543,039         0.5
    BROADCASTING & PUBLISHING
  Qantas Airways Ltd. ....................................   AUSL           2,781,250      4,236,785         0.5
    TRANSPORTATION - AIRLINES
  Dun & Bradstreet Corp. .................................   US               109,800      3,897,893         0.5
    BROADCASTING & PUBLISHING
  Telstra Corp. Ltd. - Installment Receipts ..............   AUSL           1,262,200      2,958,089         0.3
    TELEPHONE NETWORKS
                                                                                        ------------
                                                                                          81,170,188
                                                                                        ------------
Health Care (4.5%)
  Bristol Myers Squibb Co. ...............................   US               277,400     29,369,725         3.5
    PHARMACEUTICALS
  Bayer AG ...............................................   GER              191,600      8,522,676         1.0
    PHARMACEUTICALS
                                                                                        ------------
                                                                                          37,892,401
                                                                                        ------------
Materials/Basic Industry (2.8%)
  BASF AG ................................................   GER              194,000      8,640,245         1.0
    CHEMICALS
  Akzo Nobel N.V. ........................................   NETH              41,450      8,435,309         1.0
    CHEMICALS
  Solvay S.A. "A" ........................................   BEL               58,770      4,426,864         0.5
    CHEMICALS
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-3
<PAGE>   1805
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                          COUNTRY        SHARES         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Materials/Basic Industry (Continued)
  Aberfoyle Ltd. .........................................   AUSL           1,116,300   $  2,180,132         0.3
    METALS - NON-FERROUS
                                                                                        ------------
                                                                                          23,682,550
                                                                                        ------------
Capital Goods (0.9%)
  Lockheed Martin Corp. ..................................   US                69,545      7,745,574         0.9
                                                                                        ------------
    AEROSPACE/DEFENSE
Multi-Industry/Miscellaneous (0.4%)
  ICI Australia Ltd. .....................................   AUSL             497,800      3,658,721         0.4
    MULTI-INDUSTRY
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $376,302,771) .............                               668,884,562        78.7
                                                                                        ------------       -----
<CAPTION>
 
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (19.4%)
  Canada (1.1%)
    Canadian Government, 8.75% due 12/1/05 ...............   CAD           10,620,000      8,989,525         1.1
  Denmark (0.6%)
    Kingdom of Denmark, 7% due 11/15/07 ..................   DKK           31,100,000      5,133,173         0.6
  Germany (2.4%)
    Deutschland Republic:
      6.25% due 1/4/24 ...................................   DEM           25,150,000     15,429,960         1.8
      6.25% due 4/26/06 ..................................   DEM            8,110,000      4,906,234         0.6
  Italy (1.2%)
    Italian Buoni Poliennali del Tesoro (BTPS), 6% due
     2/15/00 .............................................   ITL       18,365,000,000     10,621,560         1.2
  New Zealand (0.3%)
    New Zealand Government, 8% due 4/15/04 ...............   NZD            4,440,000      2,564,101         0.3
  United Kingdom (2.5%)
    United Kingdom Government Bond, 8% due 6/7/21 ........   GBP            9,800,000     21,017,559         2.5
  United States (11.3%)
    United States Treasury:
      6.5% due 8/15/05 ...................................   USD           52,130,000     54,437,159         6.4
      6% due 2/15/26 .....................................   USD           33,430,000     33,356,220         3.9
      5.625% due 2/28/01 .................................   USD            8,100,000      8,101,582         1.0
                                                                                        ------------
Total Government & Government Agency Obligations
 (cost $160,419,537) .....................................                               164,557,073
                                                                                        ------------
Corporate Bonds (1.6%)
  Germany (0.7%)
    Commerzbank AG, Convertible Bond, 8.4% due
     12/31/00+ ...........................................   DEM            3,274,000      5,935,722         0.7
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-4
<PAGE>   1806
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Corporate Bonds (Continued)
  United Kingdom (0.9%)
    Daily Mail & General Trust, Convertible Bond, 5.75%
     due 9/26/03 .........................................   GBP            3,405,000   $  7,544,523         0.9
                                                                                        ------------
Total Corporate Bonds (cost $8,756,515) ..................                                13,480,245
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $169,176,052) .......                               178,037,318        21.0
                                                                                        ------------       -----
 
<CAPTION>
 
                                                                           NO. OF          VALUE         % OF NET
WARRANTS                                                    COUNTRY       WARRANTS        (NOTE 1)        ASSETS
- - ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Societe Generale Banque put warrants due 11/15/99
   Tractebel (cost $0) ...................................   BEL               11,587          9,715          --
                                                                                        ------------       -----
    BANKS-MONEY CENTER
 
TOTAL INVESTMENTS (cost $545,478,823)  * .................                               846,931,595        99.7
Other Assets and Liabilities .............................                                 2,557,073         0.3
                                                                                        ------------       -----
 
NET ASSETS ...............................................                              $849,488,668       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
          *  For Federal income tax purposes, cost is $546,893,380 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $ 306,724,441
                 Unrealized depreciation:            (6,686,226)
                                                  -------------
                 Net unrealized appreciation:     $ 300,038,215
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviation:
    ADR--American Depositary Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-5
<PAGE>   1807
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at April 30, 1998, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {d}
                                        -------------------------------------------
                                                 FIXED INCOME
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY    & WARRANTS       OTHER      TOTAL
- - --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Australia (AUSL/AUD) .................    4.6                                   4.6
Belgium (BEL/BEF) ....................    5.0                                   5.0
Canada (CAN/CAD) .....................                1.1                       1.1
Denmark (DEN/DKK) ....................                0.6                       0.6
France (FR/FRF) ......................    2.1                                   2.1
Germany (GER/DEM) ....................    5.1         3.1                       8.2
Italy (ITLY/ITL) .....................                1.2                       1.2
Netherlands (NETH/NLG) ...............   14.2                                  14.2
New Zealand (NZ/NZD) .................    1.7         0.3                       2.0
Switzerland (SWTZ/CHF) ...............    8.1                                   8.1
United Kingdom (UK/GBP) ..............   17.7         3.4                      21.1
United States (US/USD) ...............   20.2        11.3            0.3       31.8
                                        ------      -----            ---      -----
Total  ...............................   78.7        21.0            0.3      100.0
                                        ------      -----            ---      -----
                                        ------      -----            ---      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $849,488,668.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-6
<PAGE>   1808
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                               <C>          <C>
Assets:
  Investments in securities, at value (cost $545,478,823) (Note 1)...........................  $846,931,595
  U.S. currency.................................................................  $       109
  Foreign currencies (cost $23,545,587).........................................   23,550,489    23,550,598
                                                                                  -----------
  Receivable for securities sold.............................................................    21,471,592
  Interest receivable........................................................................     2,781,260
  Dividends and dividend withholding tax reclaims receivable.................................     2,210,071
  Receivable for Fund shares sold............................................................     2,063,804
                                                                                               ------------
    Total assets.............................................................................   899,008,920
                                                                                               ------------
Liabilities:
  Payable for loan outstanding (Note 1)......................................................    31,902,000
  Payable for securities purchased...........................................................    14,891,346
  Payable for Fund shares repurchased........................................................     1,223,889
  Payable for investment management and administration fees (Note 2).........................       684,243
  Payable for service and distribution expenses (Note 2).....................................       512,776
  Payable for transfer agent fees (Note 2)...................................................        94,567
  Payable for custodian fees.................................................................        77,850
  Payable for printing and postage expenses..................................................        66,438
  Payable for professional fees..............................................................        23,257
  Payable for fund accounting fees (Note 2)..................................................        15,341
  Payable for registration and filing fees...................................................        10,508
  Payable for Directors' fees and expenses (Note 2)..........................................         2,022
  Other accrued expenses.....................................................................        16,015
                                                                                               ------------
    Total liabilities........................................................................    49,520,252
                                                                                               ------------
Net assets...................................................................................  $849,488,668
                                                                                               ------------
                                                                                               ------------
Class A:
Net asset value and redemption price per share ($324,300,291 DIVIDED BY 34,750,950 shares
 outstanding)................................................................................  $       9.33
                                                                                               ------------
                                                                                               ------------
Maximum offering price per share (100/95.25 of $9.33) *......................................  $       9.80
                                                                                               ------------
                                                                                               ------------
Class B:+
Net asset value and offering price per share ($517,679,095 DIVIDED BY 55,515,498 shares
 outstanding)................................................................................  $       9.32
                                                                                               ------------
                                                                                               ------------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($7,509,282 DIVIDED
 BY 805,076 shares outstanding)..............................................................  $       9.33
                                                                                               ------------
                                                                                               ------------
Net assets consist of:
  Paid in capital (Note 4)...................................................................  $514,353,897
  Distributions in excess of net investment income...........................................    (4,773,683)
  Accumulated net realized gain on investments and foreign currency transactions.............    38,431,162
  Net unrealized appreciation on translation of assets and liabilities in foreign
   currencies................................................................................        24,520
  Net unrealized appreciation of investments.................................................   301,452,772
                                                                                               ------------
Total -- representing net assets applicable to capital shares outstanding....................  $849,488,668
                                                                                               ------------
                                                                                               ------------
<FN>
- --------------
   * On sales of $50,000 or more, the offering price is reduced.
   + Redemption price per share is equal to the net asset value per share less
     any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-7
<PAGE>   1809
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                            STATEMENT OF OPERATIONS
 
                  Six months ended April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                               <C>          <C>
Investment income: (Note 1)
  Dividend income (net of foreign withholding tax of $607,655)...............................  $  6,272,680
  Interest income............................................................................     5,991,094
  Securities lending income..................................................................       371,976
                                                                                               ------------
    Total investment income..................................................................    12,635,750
                                                                                               ------------
Expenses:
  Investment management and administration fees (Note 2).....................................     3,831,231
  Service and distribution expenses: (Note 2)
    Class A.....................................................................  $   533,841
    Class B.....................................................................    2,412,218     2,946,059
                                                                                  -----------
  Transfer agent fees (Note 2)...............................................................       656,600
  Custodian fees.............................................................................       253,400
  Printing and postage expenses..............................................................       109,505
  Fund accounting fees (Note 2)..............................................................       101,780
  Professional fees..........................................................................        92,400
  Registration and filing fees...............................................................        25,227
  Directors' fees and expenses (Note 2)......................................................         9,110
  Other expenses (Note 1)....................................................................       126,324
                                                                                               ------------
    Total expenses before reductions.........................................................     8,151,636
                                                                                               ------------
      Expense reductions (Note 5)............................................................        (7,140)
                                                                                               ------------
    Total net expenses.......................................................................     8,144,496
                                                                                               ------------
Net investment income........................................................................     4,491,254
                                                                                               ------------
Net realized and unrealized gain (loss) on investments and foreign currencies:
  (Note 1)
  Net realized gain on investments..............................................   42,712,911
  Net realized loss on foreign currency transactions............................   (4,570,498)
                                                                                  -----------
    Net realized gain during the period......................................................    38,142,413
  Net change in unrealized appreciation on translation of assets and liabilities
   in foreign currencies........................................................    2,429,401
  Net change in unrealized appreciation of investments..........................   81,947,814
                                                                                  -----------
    Net unrealized appreciation during the period............................................    84,377,215
                                                                                               ------------
Net realized and unrealized gain on investments and foreign currencies.......................   122,519,628
                                                                                               ------------
Net increase in net assets resulting from operations.........................................  $127,010,882
                                                                                               ------------
                                                                                               ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-8
<PAGE>   1810
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                       STATEMENT OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                            SIX MONTHS ENDED
                                                                                             APRIL 30, 1998       YEAR ENDED
                                                                                              (UNAUDITED)      OCTOBER 31, 1997
                                                                                            ----------------   ----------------
<S>                                                                                         <C>                <C>
Increase in net assets
Operations:
  Net investment income...................................................................   $   4,491,254      $    16,790,846
  Net realized gain on investments and foreign currency transactions......................      38,142,413           24,005,528
  Net change in unrealized appreciation (depreciation) on translation of assets and
   liabilities in foreign currencies......................................................       2,429,401           (4,059,448)
  Net change in unrealized appreciation of investments....................................      81,947,814           84,674,909
                                                                                            ----------------   ----------------
    Net increase in net assets resulting from operations..................................     127,010,882          121,411,835
                                                                                            ----------------   ----------------
Class A:
Distributions to shareholders: (Note 1)
  From net investment income..............................................................      (1,971,816)          (7,733,156)
  From net realized gain on investments...................................................      (5,352,371)            (757,327)
  In excess of net investment income......................................................      (2,095,813)                  --
Class B:
Distributions to shareholders: (Note 1)
  From net investment income..............................................................      (2,483,340)          (9,266,887)
  From net realized gain on investments...................................................      (8,530,046)            (907,529)
  In excess of net investment income......................................................      (2,639,502)                  --
Advisor Class:
Distributions to shareholders: (Note 1)
  From net investment income..............................................................         (36,098)            (125,777)
  From net realized gain on investments...................................................         (62,701)             (12,318)
  In excess of net investment income......................................................         (38,368)                  --
                                                                                            ----------------   ----------------
    Total distributions...................................................................     (23,210,055)         (18,802,994)
                                                                                            ----------------   ----------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and reinvested........................................     299,960,697          426,976,337
  Decrease from capital shares repurchased................................................    (306,750,679)        (450,361,754)
                                                                                            ----------------   ----------------
    Net decrease from capital share transactions..........................................      (6,789,982)         (23,385,417)
                                                                                            ----------------   ----------------
Total increase in net assets..............................................................      97,010,845           79,223,424
Net assets:
  Beginning of period.....................................................................     752,477,823          673,254,399
                                                                                            ----------------   ----------------
  End of period...........................................................................   $ 849,488,668*     $   752,477,823*
                                                                                            ----------------   ----------------
                                                                                            ----------------   ----------------
 * Includes distributions in excess of net investment income of...........................   $  (4,773,683)     $            --
                                                                                            ----------------   ----------------
                                                                                            ----------------   ----------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-9
<PAGE>   1811
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                           CLASS A
                                          -------------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED
                                            APRIL 30,                      YEAR ENDED OCTOBER 31,
                                              1998       ----------------------------------------------------------
                                          (UNAUDITED) (d)  1997 (d)     1996        1995        1994      1993 (d)
                                          -------------  ----------  ----------  ----------  ----------  ----------
<S>                                       <C>            <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $    8.21    $    7.11   $    6.35   $    6.21   $    6.29   $    5.28
                                          -------------  ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................         0.07         0.21        0.22        0.24        0.22        0.24*
  Net realized and unrealized gain
   (loss) on investments................         1.32         1.12        0.82        0.13       (0.03)       1.05
                                          -------------  ----------  ----------  ----------  ----------  ----------
    Net increase from investment
     operations.........................         1.39         1.33        1.04        0.37        0.19        1.29
                                          -------------  ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............        (0.07)       (0.21)      (0.24)      (0.22)      (0.21)      (0.24)
  From net realized gain on
   investments..........................        (0.15)       (0.02)      (0.04)      (0.01)      (0.06)         --
  In excess of net investment income....        (0.05)          --          --          --          --          --
  From sources other than net investment
   income...............................           --           --          --          --          --       (0.04)
                                          -------------  ----------  ----------  ----------  ----------  ----------
    Total distributions.................        (0.27)       (0.23)      (0.28)      (0.23)      (0.27)      (0.28)
                                          -------------  ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........    $    9.33    $    8.21   $    7.11   $    6.35   $    6.21   $    6.29
                                          -------------  ----------  ----------  ----------  ----------  ----------
                                          -------------  ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............        17.41%(b)     19.01%     16.80%       6.27%       3.14%       25.1%
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $ 324,300    $ 292,528   $ 286,203   $ 284,069   $ 317,847   $ 251,428
Ratio of net investment income to
 average net assets.....................         1.52%(a)      2.74%      3.17%       3.85%       3.30%        3.3%*
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         1.66%(a)      1.50%      1.59%       1.70%       1.67%        1.8%*
  Without expense reductions............         1.66%(a)      1.64%      1.66%       1.74%        N/A         N/A
Portfolio turnover rate++...............           63%(a)        50%        39%         83%        117%         24%
Average commission rate per share paid
 on portfolio transactions++............    $  0.0131    $  0.0151   $  0.0139         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.005 for the year ended October 31, 1993.
     Without such reimbursement, the expense ratio would have been 1.9% and
     the ratio of net investment income to average net assets would have
     been 3.2%.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     class of shares issued.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-10
<PAGE>   1812
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                           CLASS B
                                          -------------------------------------------------------------------------
                                           SIX MONTHS
                                              ENDED
                                            APRIL 30,                      YEAR ENDED OCTOBER 31,
                                              1998       ----------------------------------------------------------
                                          (UNAUDITED) (d)  1997 (d)     1996        1995        1994      1993 (d)
                                          -------------  ----------  ----------  ----------  ----------  ----------
<S>                                       <C>            <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $    8.21    $    7.11   $    6.35   $    6.21   $    6.29   $    5.28
                                          -------------  ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................         0.04         0.16        0.17        0.20        0.18        0.20
  Net realized and unrealized gain
   (loss) on investments................         1.31         1.13        0.82        0.13       (0.03)       1.05
                                          -------------  ----------  ----------  ----------  ----------  ----------
    Net increase from investment
     operations.........................         1.35         1.29        0.99        0.33        0.15        1.25
                                          -------------  ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............        (0.04)       (0.17)      (0.20)      (0.18)      (0.17)      (0.20)
  From net realized gain on
   investments..........................        (0.15)       (0.02)      (0.03)      (0.01)      (0.06)         --
  In excess of net investment income....        (0.05)          --          --          --          --          --
  From sources other than net investment
   income...............................           --           --          --          --          --       (0.04)
                                          -------------  ----------  ----------  ----------  ----------  ----------
    Total distributions.................        (0.24)       (0.19)      (0.23)      (0.19)      (0.23)      (0.24)
                                          -------------  ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........    $    9.32    $    8.21   $    7.11   $    6.35   $    6.21   $    6.29
                                          -------------  ----------  ----------  ----------  ----------  ----------
                                          -------------  ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............        16.97%(b)     18.28%     16.06%       5.57%       2.48%       24.3%
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $ 517,679    $ 456,893   $ 383,966   $ 356,796   $ 359,242   $ 150,768
Ratio of net investment income to
 average net assets.....................         0.87%(a)      2.09%      2.52%       3.20%       2.65%        2.6%
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................         2.31%(a)      2.15%      2.24%       2.35%       2.32%        2.5%
  Without expense reductions............         2.31%(a)      2.29%      2.31%       2.39%        N/A         N/A
Portfolio turnover rate++...............           63%(a)        50%        39%         83%        117%         24%
Average commission rate per share paid
 on portfolio transactions++............    $  0.0131    $  0.0151   $  0.0139         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.005 for the year ended October 31, 1993.
     Without such reimbursement, the expense ratio would have been 1.9% and
     the ratio of net investment income to average net assets would have
     been 3.2%.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     class of shares issued.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-11
<PAGE>   1813
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                             ADVISOR CLASS+
                                          ----------------------------------------------------
                                            SIX MONTHS      YEAR ENDED OCTOBER    JUNE 1, 1995
                                               ENDED                31,                TO
                                          APRIL 30, 1998    -------------------   OCTOBER 31,
                                          (UNAUDITED) (d)   1997 (d)     1996         1995
                                          ---------------   --------   --------   ------------
<S>                                       <C>               <C>        <C>        <C>
Per Share Operating Performance:
Net asset value, beginning of period....     $  8.20        $  7.10    $  6.35      $ 6.24
                                          ---------------   --------   --------   ------------
Income from investment operations:
  Net investment income.................        0.08           0.23       0.23        0.11
  Net realized and unrealized gain
   (loss) on investments................        1.33           1.13       0.82        0.13
                                          ---------------   --------   --------   ------------
    Net increase from investment
     operations.........................        1.41           1.36       1.05        0.24
                                          ---------------   --------   --------   ------------
Distributions to shareholders:
  From net investment income............       (0.08)         (0.24)     (0.26)      (0.13)
  From net realized gain on
   investments..........................       (0.15)         (0.02)     (0.04)         --
  In excess of net investment income....       (0.05)            --         --          --
  From sources other than net investment
   income...............................          --             --         --          --
                                          ---------------   --------   --------   ------------
    Total distributions.................       (0.28)         (0.26)     (0.30)      (0.13)
                                          ---------------   --------   --------   ------------
Net asset value, end of period..........     $  9.33        $  8.20    $  7.10      $ 6.35
                                          ---------------   --------   --------   ------------
                                          ---------------   --------   --------   ------------
 
Total investment return (c).............       17.59% (b)     19.23%     17.19%       3.83% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....     $ 7,509        $ 3,057    $ 3,085      $  944
Ratio of net investment income to
 average net assets.....................        1.87% (a)      3.09%      3.52%       4.20% (a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................        1.31% (a)      1.15%      1.24%       1.35% (a)
  Without expense reductions............        1.31% (a)      1.29%      1.31%       1.39% (a)
Portfolio turnover rate++...............          63% (a)        50%        39%         83%
Average commission rate per share paid
 on portfolio transactions++............     $0.0131        $0.0151    $0.0139         N/A
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.005 for the year ended October 31, 1993.
     Without such reimbursement, the expense ratio would have been 1.9% and
     the ratio of net investment income to average net assets would have
     been 3.2%.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     class of shares issued.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-12
<PAGE>   1814
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
The following Notes to Financial Statements are for the period ending April 30,
1998, and unless otherwise indicated reflect facts as of that date. Please see
"Note 6 -- Subsequent Events" for a discussion of certain changes which took
place after April 30, 1998.
 
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 6)
GT Global Growth & Income Fund ("Fund") is a separate series of GT Investment
Funds, Inc. ("Company"). Effective June 1, 1998, the Company was renamed AIM
Investment Funds, Inc. and the Fund was renamed AIM Global Growth & Income Fund.
The Company is organized as a Maryland corporation and is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as a non-diversified,
open-end management investment company. The Company has thirteen series of
shares in operation, each series corresponding to a distinct portfolio of
investments.
 
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective service and distribution expenses, and
may differ in its transfer agent, registration, and certain other class-specific
fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
 
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. ("the Manager") to be the primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Fund deems it appropriate, prices obtained for the day of valuation from a bond
pricing service will be used. Short-term investments are valued at amortized
cost adjusted for foreign exchange translation and market fluctuations, if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, and other assets and
liabilities are recorded in the books and records of the Fund after translation
to U.S. dollars based on the exchange rates on that day. The cost of each
security is determined using historical exchange rates. Income and withholding
taxes are translated at prevailing exchange rates when earned or incurred.
 
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from 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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which
 
                                      FS-13
<PAGE>   1815
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
the value, including accrued interest, is at least equal to the amount to be
repaid to the Fund under each agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. Forward Contracts involve market risk in excess of the
amounts shown in the Fund's "Statement of Assets and Liabilities." The Fund
could be exposed to risk if a counter party is unable to meet the terms of the
contract or if the value of the currency changes unfavorably. The Fund may enter
into Forward Contracts in connection with planned purchases or sales of
securities, or to hedge against adverse fluctuations in exchange rates between
currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on an exchange is valued at its last bid price,
or, in the case of an over-the-counter option, is valued at the average of the
last bid prices obtained from brokers. If an option expires on its stipulated
expiration date or if the Fund enters into a closing purchase transaction, a
gain or loss is realized without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is extinguished.
If a written call option is exercised, a gain or loss is realized from the sale
of the underlying security and the proceeds of the sale are increased by the
premium originally received. If a written put option is exercised, the cost of
the underlying security purchased would be decreased by the premium originally
received. The Fund can write options only on a covered basis, which, for a call,
requires that the Fund hold the underlying security and, for a put, requires the
Fund to set aside cash, U.S. government securities, or other liquid securities
in an amount not less than the exercise price or otherwise provide adequate
cover at all times while the put option is outstanding. The Fund may use options
to manage its exposure to the stock or bond market and to fluctuations in
currency values or interest rates.
 
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock or bond
market and to fluctuations in currency values or interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund may trade
securities on other than normal settlement terms. This may increase the risk if
the other to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At April 30, 1998, stocks with an aggregate value of approximately $97,486,245
were on loan to brokers. The loans were secured by cash collateral of
$101,528,232. For international securities, cash collateral is received by the
Fund against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not
 
                                      FS-14
<PAGE>   1816
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
less than 103% of the market value of the loaned securities during the period of
the loan. For domestic securities, cash collateral is received by the Fund
against loaned securities in an amount at least equal to 102% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 100% of the market value of the loaned
securities during the period of the loan. The cash collateral is invested in a
securities lending trust which consists of a portfolio of high quality short
duration securities whose average effective duration is restricted to 120 days
or less. For the six months ended April 30, 1998, the Fund received $371,976 of
income from securities lending.
 
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 and timing differences.
 
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investment of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the price of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
 
(L) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
 
(M) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
 
(N) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised and/or
administered by the Manager, has a line of credit with each of BankBoston and
State Street Bank & Trust Company. The arrangements with the banks allow the
Fund and the GT Funds to borrow an aggregate maximum amount of $250,000,000. The
Fund is limited to borrowing up to 33 1/3% of the value of each Fund's total
assets. On April 30, 1998, the Fund had $31,902,000 in loans outstanding.
 
For the six months ended April 30, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $10,098,097, with a weighted average interest rate of 6.42%.
Interest expense for the Fund for the six months ended April 30, 1998, was
$111,735, and is included in "Other Expenses" on the Statement of Operations.
 
2. RELATED PARTIES (SEE ALSO NOTE 6)
For the period ended April 30, 1998, Chancellor LGT Asset Management, Inc., was
the Fund's investment manager and administrator. The Fund pays investment
management and administration fees to the Manager at the annualized rate of
0.975% on the first $500 million of average daily net assets of the Fund; 0.95%
on the next $500 million; 0.925% on the next $500 million and 0.90% on amounts
thereafter. These fees are computed daily and paid monthly.
 
For the period ended April 30, 1998, GT Global, Inc. ("GT Global"), an affiliate
of the Manager, serves as the Fund's distributor. The Fund offers Class A, Class
B, and Advisor Class shares for purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the six months ended April 30, 1998, GT Global retained
$26,174 of such sales charges. Purchases of Class A shares exceeding $500,000
may be subject to a contingent deferred sales charge ("CDSC") upon redemption,
in accordance with the Fund's current prospectus. GT Global collected CDSCs in
the amount of $1,692 for the period ended April 30, 1998. GT Global also makes
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the period ended April 30, 1998, GT Global collected CDSCs in
the amount of $627,678. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
 
                                      FS-15
<PAGE>   1817
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
Pursuant to the then effective separate distribution plans adopted under 1940
Act Rule 12b-1 by the Company's Board of Directors with respect to the Fund's
Class A shares ("Class A Plan") and Class B shares ("Class B Plan"), the Fund
reimbursed GT Global for a portion of its shareholder servicing and distribution
expenses. Under that Class A Plan, the Fund was permitted to pay GT Global a
service fee at the annualized rate of up to 0.25% of the average daily net
assets of the Fund's Class A shares for GT Global's expenditures incurred in
servicing and maintaining shareholder accounts, and was permitted to pay GT
Global a distribution fee at the annualized rate of up to 0.35% of the average
daily net assets of the Fund's Class A shares, less any amounts paid by the Fund
as the aforementioned service fee, for GT Global's expenditures incurred in
providing services as distributor. All expenses for which GT Global was
reimbursed under the Class A Plan would have been incurred within one year of
such reimbursement.
 
For the period ended April 30, 1998, pursuant to that Class B Plan, the Fund was
permitted to pay GT Global a service fee at the annualized rate of up to 0.25%
of the average daily net assets of the Fund's Class B shares for GT Global's
expenditures incurred in servicing and maintaining shareholder accounts, and was
permitted to pay GT Global a distribution fee at the annualized rate of up to
0.75% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually were permitted to be
carried forward for reimbursement in subsequent years as long as that Plan
continued in effect.
 
The Manager and GT Global voluntarily undertook to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 1.75%, 2.40%, and 1.40% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.
 
3. PURCHASES AND SALES OF SECURITIES
For the six months ended April 30, 1998, purchases and sales of investment
securities by the Fund, other than short-term investments and U.S. government
obligations, aggregated $164,691,801 and $228,001,192, respectively. Purchases
and sales of U.S. government obligations were $79,532,513 and $36,789,426,
respectively, for the six months ended April 30, 1998.
 
4. CAPITAL SHARES
At April 30, 1998, there were 6,000,000,000 shares of the Company's common stock
authorized, at $0.0001 par value. Of this amount, 200,000,000 were classified as
shares of the Fund; 400,000,000 were classified as shares of GT Global
Government Income Fund; 200,000,000 were classified as shares of GT Global
Developing Markets Fund; 200,000,000 were classified as shares of GT Global
Health Care Fund; 200,000,000 were classified as shares of GT Global Strategic
Income Fund; 200,000,000 were classified as shares of GT Global Currency Fund
(inactive); 200,000,000 were classified as shares of GT Global Latin America
Growth Fund; 200,000,000 were classified as shares of GT Global Small Companies
Fund (inactive); 400,000,000 were classified as shares of GT Global
Telecommunications Fund; 200,000,000 were classified as shares of GT Global
Emerging Markets Fund; 200,000,000 were classified as shares of GT Global
Financial Services Fund; 200,000,000 were classified as shares of GT Global
Natural Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; 200,000,000 were classified as shares of GT Global High
Income Fund; and 200,000,000 were classified as shares of GT Global Consumer
Products and Services Fund. The shares of each of the foregoing series of the
Company were divided equally into two classes, designated Class A and Class B
common stock. With respect to the issuance of Advisor Class shares, 100,000,000
shares were classified as shares of each of the fifteen series of the Company
and designated as Advisor Class common stock. 1,100,000,000 shares remain
unclassified. Transactions in capital shares of the Fund were as follows:
 
                                      FS-16
<PAGE>   1818
                        AIM GLOBAL GROWTH & INCOME FUND
                   (FORMERLY GT GLOBAL GROWTH & INCOME FUND)
 
                           CAPITAL SHARE TRANSACTIONS
 
<TABLE>
<CAPTION>
                                                   SIX MONTHS ENDED
                                                    APRIL 30, 1998                         YEAR ENDED
                                                      (UNAUDITED)                       OCTOBER 31, 1997
                                          -----------------------------------  -----------------------------------
CLASS A                                       SHARES             AMOUNT            SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       23,620,178  $      204,075,876       37,585,791  $      289,617,397
Shares issued in connection with
  reinvestment of distributions.........          962,992           8,160,319          935,467           7,161,559
                                          ---------------  ------------------  ---------------  ------------------
                                               24,583,170         212,236,195       38,521,258         296,778,956
Shares repurchased......................      (25,453,190)       (220,702,455)     (43,156,190)       (332,338,391)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................         (870,020) $       (8,466,260)      (4,634,932) $      (35,559,435)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
<TABLE>
<CAPTION>
                                                   SIX MONTHS ENDED
                                                    APRIL 30, 1998                         YEAR ENDED
                                                      (UNAUDITED)                       OCTOBER 31, 1997
                                          -----------------------------------  -----------------------------------
CLASS B                                       SHARES             AMOUNT            SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................        6,646,214  $       57,732,080       12,634,686  $       97,336,518
Shares issued in connection with
  reinvestment of distributions.........        1,363,410          11,516,364        1,087,287           8,343,350
                                          ---------------  ------------------  ---------------  ------------------
                                                8,009,624          69,248,444       13,721,973         105,679,868
Shares repurchased......................       (8,146,059)        (71,078,253)     (12,063,889)        (93,059,122)
                                          ---------------  ------------------  ---------------  ------------------
Net increase (decrease).................         (136,435) $       (1,829,809)       1,658,084  $       12,620,746
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
<TABLE>
<CAPTION>
                                                   SIX MONTHS ENDED
                                                    APRIL 30, 1998                         YEAR ENDED
                                                      (UNAUDITED)                       OCTOBER 31, 1997
                                          -----------------------------------  -----------------------------------
ADVISOR CLASS                                 SHARES             AMOUNT            SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................        2,118,403  $       18,340,399        3,177,501  $       24,442,634
Shares issued in connection with
  reinvestment of distributions.........           15,791             135,659            9,792              74,879
                                          ---------------  ------------------  ---------------  ------------------
                                                2,134,194          18,476,058        3,187,293          24,517,513
Shares repurchased......................       (1,701,823)        (14,969,971)      (3,248,879)        (24,964,241)
                                          ---------------  ------------------  ---------------  ------------------
Net increase (decrease).................          432,371  $        3,506,087          (61,586) $         (446,728)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
5. EXPENSE REDUCTIONS
The Manager directed certain portfolio trades to brokers who paid a portion of
the Fund's expenses. For the six months ended April 30, 1998, the Fund's
expenses were reduced by $7,140 under these arrangements.
 
6. SUBSEQUENT EVENTS
On May 29, 1998, Liechtenstein Global Trust ("LGT"), the former indirect parent
organization of Chancellor LGT Asset Management, Inc. ("Chancellor LGT"),
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included Chancellor LGT and
certain other affiliates. As a result of this transaction, Chancellor LGT was
renamed INVESCO (NY), Inc. and is now an indirect wholly-owned subsidiary of
AMVESCAP PLC. In connection with this transaction, A I M Advisors, Inc. ("AIM"),
an indirect wholly-owned subsidiary of AMVESCAP PLC, became the investment
adviser and administrator of the Fund and INVESCO (NY), Inc. became the
sub-adviser and sub-administrator of the Fund. In addition, A I M Distributors,
Inc. replaced GT Global, Inc. as the Fund's principal underwriter, and the Fund
became subject to compensation-type Rule 12b-1 plans of distribution, which
replaced the Fund's former reimbursement-type Rule 12b-1 plans of distribution.
All of the changes became effective as of the close of business on May 29, 1998.
 
                                      FS-17
<PAGE>   1819

                         GT GLOBAL GROWTH & INCOME FUND
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
ANNUAL REPORT
To the Shareholders of GT Global Growth & Income Fund and Board of Directors of
G.T. Investment Funds, Inc.:
 
We have audited the accompanying statement of assets and liabilities of GT
Global Growth & Income Fund, one of the funds organized as a series of G.T.
Investment Funds, Inc., including the portfolio of investments, as of October
31, 1997, the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global Growth & Income Fund as of October 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.



                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
DECEMBER 15, 1997
 
                                       FS-18
<PAGE>   1820
                         GT GLOBAL GROWTH & INCOME FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                          COUNTRY        SHARES         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Finance (28.4%)
  Schweizerischer Bankverein (Swiss Bank Corp.) ..........   SWTZ              74,750   $ 20,102,411         2.7
    BANKS-MONEY CENTER
  Royal & Sun Alliance Insurance Group PLC ...............   UK             2,081,400     19,951,696         2.6
    INSURANCE - MULTI-LINE
  CS Holding AG - Registered .............................   SWTZ             108,300     15,258,696         2.0
    BANKS-MONEY CENTER
  AEGON N.V. .............................................   NETH             187,875     14,809,312         2.0
    INSURANCE-LIFE
  First Tennessee National Corp. .........................   US               245,400     14,141,175         1.9
    BANKS-REGIONAL
  Union Bank of Switzerland - Bearer .....................   SWTZ              11,752     13,531,589         1.8
    BANKS-MONEY CENTER
  ABN AMRO Holding N.V. ..................................   NETH             667,296     13,442,181         1.8
    BANKS-MONEY CENTER
  ING Groep N.V. .........................................   NETH             264,262     11,096,009         1.5
    OTHER FINANCIAL
  Deutsche Bank AG .......................................   GER              134,150      8,774,787         1.2
    BANKS-MONEY CENTER
  American General Corp. .................................   US               170,000      8,670,000         1.1
    INSURANCE-LIFE
  IKB Deutsche Industriebank AG ..........................   GER              394,000      8,339,229         1.1
    BANKS-REGIONAL
  General Accident PLC ...................................   UK               400,000      6,806,441         0.9
    INSURANCE - PROPERTY-CASUALTY
  National Westminster Bank PLC ..........................   UK               471,800      6,781,828         0.9
    BANKS-MONEY CENTER
  Fortis Amev N.V. .......................................   NETH             164,542      6,468,086         0.9
    OTHER FINANCIAL
  Lloyds TSB Group PLC ...................................   UK               513,428      6,415,697         0.8
    BANKS-REGIONAL
  Commonwealth Bank of Australia .........................   AUSL             546,000      6,275,641         0.8
    BANKS-SUPER REGIONAL
  Generale de Banque S.A.: ...............................   BEL                   --             --         0.8
    BANKS-MONEY CENTER
    Common ...............................................   --                14,762      6,038,244          --
    Strip VVPR-/- ........................................   --                 1,342            567          --
  Kredietbank N.V. .......................................   BEL               12,980      5,446,409         0.7
    BANKS-REGIONAL
  Commercial Union PLC ...................................   UK               361,550      5,093,962         0.7
    INSURANCE - MULTI-LINE
  Mercury Asset Management Group PLC .....................   UK               196,698      4,272,457         0.6
    INVESTMENT MANAGEMENT
  M & G Group PLC ........................................   UK               155,000      3,139,257         0.4
    INVESTMENT MANAGEMENT
  General Property Trust .................................   AUSL           1,500,000      2,688,928         0.4
    REAL ESTATE
  Reinsurance Australia Corporation Ltd. .................   AUSL             880,000      2,276,555         0.3
    INSURANCE - MULTI-LINE
  Infrastructure Trust of Australia Group ................   AUSL           2,830,000      2,188,401         0.3
    OTHER FINANCIAL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-19
<PAGE>   1821
                         GT GLOBAL GROWTH & INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                          COUNTRY        SHARES         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Finance (Continued)
  National Australia Bank Ltd. ...........................   AUSL             125,000   $  1,709,139         0.2
    BANKS-REGIONAL
  Realty Development Corp., Ltd. "A" .....................   HK                 5,000         14,230          --
    REAL ESTATE
                                                                                        ------------
                                                                                         213,732,927
                                                                                        ------------
Energy (14.2%)
  Royal Dutch Petroleum Co. ..............................   NETH             371,840     19,674,378         2.6
    OIL
  Elektrowatt "B" AG .....................................   SWTZ              49,068     18,821,083         2.5
    ELECTRICAL & GAS UTILITIES
  Exxon Corp. ............................................   US               182,600     11,218,488         1.5
    OIL
  Mobil Corp. ............................................   US               127,600      9,290,875         1.2
    OIL
  Shell Transport & Trading Co., PLC .....................   UK             1,121,700      7,953,685         1.1
    OIL
  Electrabel S.A. ........................................   BEL               34,760      7,801,667         1.0
    ELECTRICAL & GAS UTILITIES
  Elf Aquitaine ..........................................   FR                52,475      6,498,283         0.9
    OIL
  RWE AG .................................................   GER              134,620      5,839,128         0.8
    ELECTRICAL & GAS UTILITIES
  PG&E Corp. .............................................   US               220,000      5,623,750         0.7
    ELECTRICAL & GAS UTILITIES
  Reunies Electrobel & Tractebel S.A. ....................   BEL               57,935      4,935,325         0.7
    ELECTRICAL & GAS UTILITIES
  Groupe Bruxelles Lambert S.A. ..........................   BEL               31,025      4,805,337         0.6
    OIL
  Santos Ltd. ............................................   AUSL             907,472      4,172,138         0.6
    OIL
                                                                                        ------------
                                                                                         106,634,137
                                                                                        ------------
Consumer Non-Durables (7.8%)
  Avon Products, Inc. ....................................   US               182,000     11,921,000         1.6
    PERSONAL CARE/COSMETICS
  Universal Corp. ........................................   US               280,500     10,501,219         1.4
    TOBACCO
  Philip Morris Cos., Inc. ...............................   US               255,000     10,104,375         1.3
    TOBACCO
  Guinness PLC ...........................................   UK               871,500      7,791,169         1.0
    BEVERAGES - ALCOHOLIC
  Pernod Ricard ..........................................   FR               158,720      7,358,318         1.0
    BEVERAGES - ALCOHOLIC
  Cadbury Schweppes PLC ..................................   UK               670,000      6,742,704         0.9
    BEVERAGES - NON-ALCOHOLIC
  Brown-Forman Corp. "B" .................................   US                93,600      4,603,950         0.6
    BEVERAGES - ALCOHOLIC
                                                                                        ------------
                                                                                          59,022,735
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-20
<PAGE>   1822
                         GT GLOBAL GROWTH & INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                          COUNTRY        SHARES         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Services (7.7%)
  Telecom Corporation of New Zealand Limited: ............   NZ                    --             --         1.9
    TELEPHONE NETWORKS
    Common ...............................................   --             2,614,200   $ 12,660,904          --
    ADR{\/} ..............................................   --                38,000      1,479,625          --
  McGraw-Hill, Inc. ......................................   US               162,000     10,590,750         1.4
    BROADCASTING & PUBLISHING
  Woolworths Ltd. ........................................   AUSL           2,100,000      6,776,098         0.9
    RETAILERS-OTHER
  PMP Communications Ltd. ................................   AUSL           2,656,500      5,509,086         0.7
    BROADCASTING & PUBLISHING
  Qantas Airways Ltd. ....................................   AUSL           2,890,000      5,180,668         0.7
    TRANSPORTATION - AIRLINES
  Royal PTT Nederland N.V. ...............................   NETH             112,735      4,309,602         0.6
    TELEPHONE NETWORKS
  Cognizant Corp. ........................................   US               109,800      4,302,788         0.6
    CONSUMER SERVICES
  Dun & Bradstreet Corp. .................................   US               109,800      3,136,163         0.4
    BROADCASTING & PUBLISHING
  EMI Group PLC ..........................................   UK               381,600      3,088,259         0.4
    LEISURE & TOURISM
  ACNielsen Corp.-/- .....................................   US                36,600        837,218         0.1
    CONSUMER SERVICES
                                                                                        ------------
                                                                                          57,871,161
                                                                                        ------------
Materials/Basic Industry (4.7%)
  Akzo Nobel N.V. ........................................   NETH              58,950     10,389,900         1.4
    CHEMICALS
  BASF AG ................................................   GER              234,000      7,937,953         1.1
    CHEMICALS
  Solvay S.A. "A" ........................................   BEL              117,540      7,083,515         0.9
    CHEMICALS
  Monsanto Co. ...........................................   US               160,500      6,861,375         0.9
    CHEMICALS
  Aberfoyle Ltd. .........................................   AUSL           1,160,000      2,324,077         0.3
    METALS - NON-FERROUS
  Solutia, Inc. ..........................................   US                32,100        710,213         0.1
    CHEMICALS
                                                                                        ------------
                                                                                          35,307,033
                                                                                        ------------
Health Care (4.4%)
  Bristol Myers Squibb Co. ...............................   US               277,400     24,341,850         3.2
    PHARMACEUTICALS
  Bayer AG ...............................................   GER              258,600      9,072,369         1.2
    PHARMACEUTICALS
                                                                                        ------------
                                                                                          33,414,219
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-21
<PAGE>   1823
                         GT GLOBAL GROWTH & INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                          COUNTRY        SHARES         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Capital Goods (2.7%)
  General Electric PLC ...................................   UK             1,473,000   $  9,406,990         1.2
    AEROSPACE/DEFENSE
  Lockheed Martin Corp. ..................................   US                69,545      6,611,122         0.9
    AEROSPACE/DEFENSE
  BICC PLC ...............................................   UK             1,559,172      4,354,279         0.6
    INDUSTRIAL COMPONENTS
                                                                                        ------------
                                                                                          20,372,391
                                                                                        ------------
Consumer Durables (1.4%)
  GKN PLC ................................................   UK               460,400     10,324,636         1.4
                                                                                        ------------
    AUTO PARTS
Multi-Industry/Miscellaneous (1.3%)
  VEBA AG ................................................   GER              170,200      9,484,616         1.3
    CONGLOMERATE
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $338,444,171) .............                               546,163,855        72.6
                                                                                        ------------       -----
<CAPTION>
 
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (20.6%)
  Australia (0.7%)
    Australian Government, 8.75% due 8/15/08 .............   AUD            5,774,000      4,934,994         0.7
  Canada (1.2%)
    Canadian Government, 8.75% due 12/1/05 ...............   CAD           10,620,000      9,179,080         1.2
  Denmark (0.7%)
    Kingdom of Denmark, 7% due 11/15/07 ..................   DKK           31,100,000      5,034,931         0.7
  Germany (3.8%)
    Deutschland Republic:
      6.75% due 4/22/03 ..................................   DEM           23,000,000     14,318,817         1.9
      6.25% due 1/4/24 ...................................   DEM            4,300,000      2,508,188         0.3
    Treuhandanstalt:
      6.625% due 7/9/03 ..................................   DEM           12,060,000      7,473,074         1.0
      6.375% due 7/1/99 ..................................   DEM            7,000,000      4,192,288         0.6
  Italy (1.8%)
    Italian Buoni Poliennali del Tesoro (BTPS):
      6% due 2/15/00 .....................................   ITL       18,365,000,000     10,984,835         1.5
      10.5% due 9/01/05 ..................................   ITL        2,725,000,000      2,039,827         0.3
  New Zealand (0.4%)
    New Zealand Government, 8% due 4/15/04 ...............   NZD            4,440,000      2,955,320         0.4
  Sweden (0.6%)
    Swedish Government, 8% due 8/15/07 ...................   SEK           30,000,000      4,469,072         0.6
  United Kingdom (4.0%)
    United Kingdom Treasury:
      8% due 6/10/03 .....................................   GBP           14,000,000     24,942,355         3.3
      7.5% due 12/7/06 ...................................   GBP            3,116,000      5,556,353         0.7
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-22
<PAGE>   1824
                         GT GLOBAL GROWTH & INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (Continued)
  United States (7.4%)
    United States Treasury Bonds:
      6% due 2/15/26 .....................................   USD           24,060,000   $ 23,404,459         3.1
      6.25% due 8/15/23 ..................................   USD            9,075,000      9,101,587         1.2
    United States Treasury Notes:
      7.5% due 2/15/05 ...................................   USD           15,460,000     16,928,096         2.2
      6.5% due 8/15/05 ...................................   USD            2,580,000      2,676,397         0.3
    Federal National Mortgage Association, 6.375% due
     8/15/07 .............................................   AUD            5,940,000      4,241,014         0.6
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $151,129,623) ...........................................                               154,940,687
                                                                                        ------------
Corporate Bonds (5.5%)
  Germany (2.5%)
    Siemens Capital Corp., 8% due 6/24/02+/+ .............   USD            4,710,000      7,985,805         1.1
    Commerzbank AG, Convertible Bond, 9.45% due
     12/31/00+ ...........................................   DEM            4,173,000      6,630,339         0.9
    Deutsche Bank AG, 9.00% due 12/31/02+/+ ..............   DEM            5,625,000      3,892,976         0.5
  United Kingdom (3.0%)
    Daily Mail & General Trust, Convertible Bond, 5.75%
     due 9/26/03 .........................................   GBP            3,405,000      7,795,748         1.0
    Land Securities PLC, Convertible Bond, 9.375% due
     7/31/04 .............................................   GBP            3,485,000      7,679,334         1.0
    MBNA Chester Asset Receivable #3, 6.6% due
     11/17/03+ ...........................................   GBP            4,500,000      7,568,182         1.0
                                                                                        ------------
Total Corporate Bonds (cost $33,669,644) .................                                41,552,384
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $184,799,267) .......                               196,493,071        26.1
                                                                                        ------------       -----
 
<CAPTION>
 
                                                                           NO. OF          VALUE         % OF NET
WARRANTS                                                    COUNTRY       WARRANTS        (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Societe Generale Banque put warrants due 11/15/99
   Tractebel (cost $0) ...................................   BEL               11,587         84,839          --
                                                                                        ------------       -----
    BANKS-MONEY CENTER
<CAPTION>
 
                                                                           NO. OF          VALUE         % OF NET
RIGHTS                                                      COUNTRY        RIGHTS         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Infrastructure Trust of Australia Group Rights, expire
   12/1/97 (cost $0) .....................................   AUSL             943,333          6,632          --
                                                                                        ------------       -----
    OTHER FINANCIAL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-23
<PAGE>   1825
                         GT GLOBAL GROWTH & INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- ----------------------------------------------------------                              ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Dated October 31, 1997, with State Street Bank & Trust
   Co., due November 3, 1997, for an effective yield of
   5.57%, collateralized by $1,935,000 U.S. Treasury
   Bonds, 8.875% due 8/15/17 (market value of collateral
   is $2,538,597, including accrued interest). (cost
   $2,485,384) ...........................................                              $  2,485,383         0.3
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $525,728,822)  * .................                               745,233,780        99.0
Other Assets and Liabilities .............................                                 7,244,043         1.0
                                                                                        ------------       -----
 
NET ASSETS ...............................................                              $752,477,823       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
        +/+  Issued with detachable warrants or value recovery rights. The
             current market value of each warrant or right is zero.
          *  For Federal income tax purposes, cost is $527,143,379 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $ 232,777,964
                 Unrealized depreciation:           (14,687,563)
                                                  -------------
                 Net unrealized appreciation:     $ 218,090,401
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviation:
    ADR--American Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-24
<PAGE>   1826
                         GT GLOBAL GROWTH & INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1997, was concentrated in the
following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {D}
                                        -------------------------------------------
                                                 FIXED INCOME,
                                                   RIGHTS &      SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS       & OTHER     TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Australia (AUSL/AUD) .................    5.2         0.7                       5.9
Belgium (BEL/BEF) ....................    4.7                                   4.7
Canada (CAN/CAD) .....................                1.2                       1.2
Denmark (DEN/DKK) ....................                0.7                       0.7
France (FR/FRF) ......................    1.9                                   1.9
Germany (GER/DEM) ....................    6.7         6.3                      13.0
Italy (ITLY/ITL) .....................                1.8                       1.8
Netherlands (NETH/NLG) ...............   10.8                                  10.8
New Zealand (NZ/NZD) .................    1.9         0.4                       2.3
Sweden (SWDN/SEK) ....................                0.6                       0.6
Switzerland (SWTZ/CHF) ...............    9.0                                   9.0
United Kingdom (UK/GBP) ..............   13.5         7.0                      20.5
United States & Other (US/USD) .......   18.9         7.4            1.3       27.6
                                        ------      -----            ---      -----
Total  ...............................   72.6        26.1            1.3      100.0
                                        ------      -----            ---      -----
                                        ------      -----            ---      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $752,477,823.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                OCTOBER 31, 1997
 
<TABLE>
<CAPTION>
                                          MARKET VALUE                        UNREALIZED
                                             (U.S.       CONTRACT  DELIVERY  APPRECIATION
CONTRACTS TO SELL:                          DOLLARS)      PRICE      DATE    (DEPRECIATION)
- ----------------------------------------  ------------   --------  --------  -------------
<S>                                       <C>            <C>       <C>       <C>
Deutsche Marks..........................    26,803,508    1.80000  11/21/97   $(1,136,841)
French Francs...........................     2,481,413    6.14000  11/21/97      (152,423)
French Francs...........................     1,238,580    5.72800  02/06/98           945
Netherland Guilders.....................    10,870,680    2.08800  11/14/97      (765,316)
Swiss Francs............................    12,639,800    1.44000  12/19/97      (417,578)
                                          ------------                       -------------
  Total Contracts to Sell (Receivable
   amount $51,562,768)..................    54,033,981                         (2,471,213)
                                          ------------                       -------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 7.18%.
  Total Open Forward Foreign Currency
   Contracts............................                                      $(2,471,213)
                                                                             -------------
                                                                             -------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-25
<PAGE>   1827
                         GT GLOBAL GROWTH & INCOME FUND
 
                              STATEMENT OF ASSETS
                                 AND LIABILITIES
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                                   <C>        <C>
Assets:
  Investments in securities, at value (cost $525,728,822) (Note 1).............................  $745,233,780
  U.S. currency.....................................................................  $     710
  Foreign currencies (cost $66,141).................................................     65,897       66,607
                                                                                      ---------
  Receivable for Fund shares sold..............................................................    6,808,910
  Interest and interest withholding tax reclaims receivable....................................    4,291,268
  Dividends and dividend withholding tax reclaims receivable...................................    1,596,979
                                                                                                 -----------
    Total assets...............................................................................  757,997,544
                                                                                                 -----------
Liabilities:
  Payable for open forward foreign currency contracts (Note 1).................................    2,471,213
  Payable for Fund shares repurchased (Note 2).................................................    1,507,330
  Payable for investment management and administration fees (Note 2)...........................      631,265
  Payable for service and distribution expenses (Note 2).......................................      484,947
  Payable for printing and postage expenses....................................................      124,328
  Payable for forward foreign currency contracts -- closed (Note 1)............................       97,836
  Payable for transfer agent fees (Note 2).....................................................       94,599
  Payable for custodian fees (Note 1)..........................................................       37,200
  Payable for professional fees................................................................       33,142
  Payable for fund accounting fees (Note 2)....................................................       16,751
  Payable for registration and filing fees.....................................................        9,540
  Payable for Directors' fees and expenses (Note 2)............................................        7,754
  Other accrued expenses.......................................................................        3,816
                                                                                                 -----------
    Total liabilities..........................................................................    5,519,721
                                                                                                 -----------
Net assets.....................................................................................  $752,477,823
                                                                                                 -----------
                                                                                                 -----------
Class A:
Net asset value and redemption price per share ($292,527,640 DIVIDED BY 35,620,970 shares
 outstanding)..................................................................................  $      8.21
                                                                                                 -----------
                                                                                                 -----------
Maximum offering price per share (100/95.25 of $8.21) *........................................  $      8.62
                                                                                                 -----------
                                                                                                 -----------
Class B:+
Net asset value and offering price per share ($456,893,047 DIVIDED BY 55,651,933 shares
 outstanding)..................................................................................  $      8.21
                                                                                                 -----------
                                                                                                 -----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($3,057,136 DIVIDED
 BY 372,705 shares outstanding)................................................................  $      8.20
                                                                                                 -----------
                                                                                                 -----------
Net assets consist of:
  Paid in capital (Note 4).....................................................................  $521,143,879
  Accumulated net realized gain on investments and foreign currency transactions...............   14,233,867
  Net unrealized depreciation on translation of assets and liabilities in foreign currencies...   (2,404,881)
  Net unrealized appreciation of investments...................................................  219,504,958
                                                                                                 -----------
Total -- representing net assets applicable to capital shares outstanding......................  $752,477,823
                                                                                                 -----------
                                                                                                 -----------
<FN>
- --------------
   * On sales of $50,000 or more, the offering price is reduced.
   + Redemption price per share is equal to the net asset value per share less
     any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-26
<PAGE>   1828
                         GT GLOBAL GROWTH & INCOME FUND
 
                            STATEMENT OF OPERATIONS
 
                          Year ended October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                               <C>         <C>
Investment income: (Note 1)
  Dividend income (net of foreign withholding tax of $1,854,546)............................  $16,116,249
  Interest income (net of foreign withholding tax of $3,879)................................   14,091,494
  Other income..............................................................................       43,134
                                                                                              -----------
    Total investment income.................................................................   30,250,877
                                                                                              -----------
Expenses:
  Investment management and administration fees (Note 2)....................................    6,900,695
  Service and distribution expenses: (Note 2)
    Class A.....................................................................  $  994,519
    Class B.....................................................................   4,233,024    5,227,543
                                                                                  ----------
  Transfer agent fees (Note 2)..............................................................    1,258,598
  Custodian fees (Note 1)...................................................................      472,449
  Printing and postage expenses.............................................................      230,825
  Fund accounting fees (Note 2).............................................................      183,323
  Registration and filing fees..............................................................       70,955
  Audit fees................................................................................       54,630
  Legal fees................................................................................       25,414
  Directors' fees and expenses (Note 2).....................................................       14,779
  Other expenses (Note 1)...................................................................       30,664
                                                                                              -----------
    Total expenses before reductions........................................................   14,469,875
                                                                                              -----------
      Expense reductions (Notes 1 & 5)......................................................   (1,009,844)
                                                                                              -----------
    Total net expenses......................................................................   13,460,031
                                                                                              -----------
Net investment income.......................................................................   16,790,846
                                                                                              -----------
Net realized and unrealized gain on investments and foreign currencies: (Note 1)
  Net realized gain on investments..............................................  11,255,273
  Net realized gain on foreign currency transactions............................  12,750,255
                                                                                  ----------
    Net realized gain during the year.......................................................   24,005,528
  Net change in unrealized depreciation on translation of assets and liabilities
   in foreign currencies........................................................  (4,059,448)
  Net change in unrealized appreciation of investments..........................  84,674,909
                                                                                  ----------
    Net unrealized appreciation during the year.............................................   80,615,461
                                                                                              -----------
Net realized and unrealized gain on investments and foreign currencies......................  104,620,989
                                                                                              -----------
Net increase in net assets resulting from operations........................................  $121,411,835
                                                                                              -----------
                                                                                              -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-27
<PAGE>   1829
                         GT GLOBAL GROWTH & INCOME FUND
 
                       STATEMENT OF CHANGES IN NET ASSETS
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                YEAR ENDED    YEAR ENDED
                                                                               OCTOBER 31,   OCTOBER 31,
                                                                                   1997          1996
                                                                               ------------  ------------
<S>                                                                            <C>           <C>
Increase in net assets
Operations:
  Net investment income......................................................  $ 16,790,846  $ 18,175,444
  Net realized gain on investments and foreign currency transactions.........    24,005,528    15,732,409
  Net change in unrealized appreciation (depreciation) on translation of
   assets and liabilities in foreign currencies..............................    (4,059,448)    1,957,055
  Net change in unrealized appreciation of investments.......................    84,674,909    62,236,320
                                                                               ------------  ------------
    Net increase in net assets resulting from operations.....................   121,411,835    98,101,228
                                                                               ------------  ------------
Class A:
Distributions to shareholders: (Note 1)
  From net investment income.................................................    (7,733,156)   (9,963,848)
  From net realized gain on investments......................................      (757,327)   (1,766,763)
Class B:
Distributions to shareholders: (Note 1)
  From net investment income.................................................    (9,266,887)  (10,894,963)
  From net realized gain on investments......................................      (907,529)   (2,225,842)
Advisor Class:
Distributions to shareholders: (Note 1)
  From net investment income.................................................      (125,777)      (65,132)
  From net realized gain on investments......................................       (12,318)       (5,890)
                                                                               ------------  ------------
    Total distributions......................................................   (18,802,994)  (24,922,438)
                                                                               ------------  ------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and reinvested...........................   426,976,337   237,835,679
  Decrease from capital shares repurchased...................................  (450,361,754) (279,569,655)
                                                                               ------------  ------------
    Net decrease from capital share transactions.............................   (23,385,417)  (41,733,976)
                                                                               ------------  ------------
Total increase in net assets.................................................    79,223,424    31,444,814
Net assets:
  Beginning of year..........................................................   673,254,399   641,809,585
                                                                               ------------  ------------
  End of year................................................................  $752,477,823* $673,254,399*
                                                                               ------------  ------------
                                                                               ------------  ------------
 * Includes undistributed net investment income of...........................  $         --  $    755,291
                                                                               ------------  ------------
                                                                               ------------  ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-28
<PAGE>   1830
                         GT GLOBAL GROWTH & INCOME FUND
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS A
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)      1996        1995        1994      1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $    7.11   $    6.35   $    6.21   $    6.29   $    5.28
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................       0.21        0.22        0.24        0.22        0.24*
  Net realized and unrealized gain
   (loss) on investments................       1.12        0.82        0.13       (0.03)       1.05
                                          ----------  ----------  ----------  ----------  ----------
    Net increase from investment
     operations.........................       1.33        1.04        0.37        0.19        1.29
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............      (0.21)      (0.24)      (0.22)      (0.21)      (0.24)
  From net realized gain on
   investments..........................      (0.02)      (0.04)      (0.01)      (0.06)         --
  From sources other than net investment
   income...............................         --          --          --          --       (0.04)
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (0.23)      (0.28)      (0.23)      (0.27)      (0.28)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $    8.21   $    7.11   $    6.35   $    6.21   $    6.29
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............      19.01%      16.80%       6.27%       3.14%       25.1%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 292,528   $ 286,203   $ 284,069   $ 317,847   $ 251,428
Ratio of net investment income to
 average net assets.....................       2.74%       3.17%       3.85%       3.30%        3.3%*
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................       1.50%       1.59%       1.70%       1.67%        1.8%*
  Without expense reductions............       1.64%       1.66%       1.74%        N/A         N/A
Portfolio turnover rate++...............         50%         39%         83%        117%         24%
Average commission rate per share paid
 on portfolio transactions++............  $  0.0151   $  0.0139         N/A         N/A         N/A
</TABLE>
 
- ----------------
 
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     class of shares issued.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.005 for the year ended October 31, 1993.
     Without such reimbursement, the expense ratio would have been 1.9% and
     the ratio of net investment income to average net assets would have
     been 3.2%.
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the year.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-29
<PAGE>   1831
                         GT GLOBAL GROWTH & INCOME FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
                                                                   CLASS B
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)      1996        1995        1994      1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $    7.11   $    6.35   $    6.21   $    6.29   $    5.28
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................       0.16        0.17        0.20        0.18        0.20
  Net realized and unrealized gain
   (loss) on investments................       1.13        0.82        0.13       (0.03)       1.05
                                          ----------  ----------  ----------  ----------  ----------
    Net increase from investment
     operations.........................       1.29        0.99        0.33        0.15        1.25
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............      (0.17)      (0.20)      (0.18)      (0.17)      (0.20)
  From net realized gain on
   investments..........................      (0.02)      (0.03)      (0.01)      (0.06)         --
  From sources other than net investment
   income...............................         --          --          --          --       (0.04)
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (0.19)      (0.23)      (0.19)      (0.23)      (0.24)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $    8.21   $    7.11   $    6.35   $    6.21   $    6.29
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............      18.28%      16.06%       5.57%       2.48%       24.3%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 456,893   $ 383,966   $ 356,796   $ 359,242   $ 150,768
Ratio of net investment income to
 average net assets.....................       2.09%       2.52%       3.20%       2.65%        2.6%
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................       2.15%       2.24%       2.35%       2.32%        2.5%
  Without expense reductions............       2.29%       2.31%       2.39%        N/A         N/A
Portfolio turnover rate++...............         50%         39%         83%        117%         24%
Average commission rate per share paid
 on portfolio transactions++............  $  0.0151   $  0.0139         N/A         N/A         N/A
 
<CAPTION>
                                                       ADVISOR CLASS+
                                          ----------------------------------------
                                             YEAR                    JUNE 1, 1995
                                             ENDED      YEAR ENDED        TO
                                          OCTOBER 31,   OCTOBER 31,   OCTOBER 31,
                                           1997 (D)        1996          1995
                                          -----------   -----------  -------------
<S>                                       <C>           <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $  7.10       $    6.35     $    6.24
                                          -----------   -----------  -------------
Income from investment operations:
  Net investment income.................      0.23            0.23          0.11
  Net realized and unrealized gain
   (loss) on investments................      1.13            0.82          0.13
                                          -----------   -----------  -------------
    Net increase from investment
     operations.........................      1.36            1.05          0.24
                                          -----------   -----------  -------------
Distributions to shareholders:
  From net investment income............     (0.24)          (0.26)        (0.13)
  From net realized gain on
   investments..........................     (0.02)          (0.04)           --
  From sources other than net investment
   income...............................        --              --            --
                                          -----------   -----------  -------------
    Total distributions.................     (0.26)          (0.30)        (0.13)
                                          -----------   -----------  -------------
Net asset value, end of period..........   $  8.20       $    7.10     $    6.35
                                          -----------   -----------  -------------
                                          -----------   -----------  -------------
Total investment return (c).............     19.23%          17.19%         3.83%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $ 3,057       $   3,085     $     944
Ratio of net investment income to
 average net assets.....................      3.09%           3.52%         4.20%(a)
Ratio of expenses to average net assets:
  With expense reductions (Notes 1 &
   5)...................................      1.15%           1.24%         1.35%(a)
  Without expense reductions............      1.29%           1.31%         1.39%(a)
Portfolio turnover rate++...............        50%             39%           83%
Average commission rate per share paid
 on portfolio transactions++............   $0.0151       $  0.0139           N/A
</TABLE>
 
- ----------------
 
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover rate and average commission rate are calculated on
     the basis of the Fund as a whole without distinguishing between the
     class of shares issued.
  *  Includes reimbursement by Chancellor LGT Asset Management, Inc. of
     Fund operating expenses of $0.005 for the year ended October 31, 1993.
     Without such reimbursement, the expense ratio would have been 1.9% and
     the ratio of net investment income to average net assets would have
     been 3.2%.
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the year.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-30
<PAGE>   1832
                         GT GLOBAL GROWTH & INCOME FUND
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Growth & Income Fund ("Fund") is a separate series of G.T. Investment
Funds, Inc. ("Company"). The Company is organized as a Maryland corporation and
is registered under the Investment Company Act of 1940, as amended ("1940 Act"),
as a non-diversified, open-end management investment company. The Company has
thirteen series of shares in operation, each series corresponding to a distinct
portfolio of investments.
 
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective service and distribution expenses, and
may differ in its transfer agent, registration, and certain other class-specific
fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
 
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by, Chancellor LGT Asset
Management, Inc. ("the Manager") to be the primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Fund deems it appropriate, prices obtained for the day of valuation from a bond
pricing service will be used. Short-term investments are valued at amortized
cost adjusted for foreign exchange translation and market fluctuations, if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, and other assets and
liabilities are recorded in the books and records of the Fund after translation
to U.S. dollars based on the exchange rates on that day. The cost of each
security is determined using historical exchange rates. Income and withholding
taxes are translated at prevailing exchange rates when earned or incurred.
 
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from 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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which the value, including accrued
interest, is at least equal to the amount to be repaid to the Fund under each
agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract
 
                                      FS-31
<PAGE>   1833
                         GT GLOBAL GROWTH & INCOME FUND
 
fluctuates with changes in currency exchange rates. The Forward Contract is
marked-to-market daily and the change in market value is recorded by the Fund as
an unrealized gain or loss. When the Forward Contract is closed, the Fund
records a realized gain or loss equal to the difference between the value at the
time it was opened and the value at the time it was closed. Forward Contracts
involve market risk in excess of the amounts shown in the Fund's "Statement of
Assets and Liabilities." The Fund could be exposed to risk if a counter party is
unable to meet the terms of the contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities, or to hedge against adverse
fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on a traded exchange is valued at its last bid
price, or, in the case of an over-the-counter option, is valued at the average
of the last bid prices obtained from brokers. If an option expires on its
stipulated expiration date or if the Fund enters into a closing purchase
transaction, a gain or loss is realized without regard to any unrealized gain or
loss on the underlying security, and the liability related to such option is
extinguished. If a written call option is exercised, a gain or loss is realized
from the sale of the underlying security and the proceeds of the sale are
increased by the premium originally received. If a written put option is
exercised, the cost of the underlying security purchased would be decreased by
the premium originally received. The Fund can write options only on a covered
basis, which, for a call, requires that the Fund hold the underlying security
and, for a put, requires the Fund to set aside cash, U.S. government securities,
or other liquid, high grade debt securities in an amount not less than the
exercise price or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund may use options to manage its exposure to the
stock or bond market and to fluctuations in currency values or interest rates.
 
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock or bond
market and to fluctuations in currency values or interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund may trade
securities on other than normal settlement terms. This may increase the risk if
the other to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1997, stocks with an aggregate value of approximately $51,986,675
were on loan to brokers. The loans were secured by cash collateral of
$54,846,747. For international securities, cash collateral is received by the
Fund against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by the Fund against loaned securities in an amount at
least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. For
the year ended October 31, 1997, the Fund
 
                                      FS-32
<PAGE>   1834
                         GT GLOBAL GROWTH & INCOME FUND
 
received $976,164 of income from securities lending which was used to offset the
Fund's custody and administrative expenses.
 
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 and timing differences.
 
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investment of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the price of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
 
(L) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
 
(M) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
 
(N) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised or administered by
the Manager, has a line of credit with each of BankBoston and State Street Bank
& Trust Company. The arrangements with the banks allow the Fund and the GT Funds
to borrow an aggregate maximum amount of $200,000,000. The Fund is limited to
borrowing up to 33 1/3% of the value of each Fund's total assets. On October 31,
1997, the Fund had no loan outstanding.
 
For the year ended October 31, 1997, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $2,560,909, with a weighted average interest rate of 6.41%.
Interest expense for the Fund for the year ended October 31, 1997 was $5,014,
included in "Other Expenses" on the Statement of Operations.
 
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc., is the Funds' investment manager and
administrator. The Fund pays investment management and administration fees to
the Manager at the annualized rate of 0.975% on the first $500 million of
average daily net assets of the Fund; 0.95% on the next $500 million; 0.925% on
the next $500 million and 0.90% on amounts thereafter. These fees are computed
daily and paid monthly.
 
GT Global , Inc. ("GT Global"), an affiliate of the Manager, serves as the
Fund's distributor. The Fund offers Class A, Class B, and Advisor Class shares
for purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the year ended October 31, 1997, GT Global retained $52,850
of such sales charges. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Fund's current prospectus. GT Global collected CDSCs in the
amount of $32 for the year ended October 31, 1997. GT Global also makes ongoing
shareholder servicing and trail commission payments to dealers whose clients
hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the year ended October 31, 1997 GT Global collected CDSCs in the
amount of $1,199,605. In addition, GT Global makes ongoing shareholder servicing
and trail commission payments to dealers whose clients hold Class B shares.
 
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.35% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global is reimbursed under the Class A Plan will have
been incurred within one year of such reimbursement.
 
                                      FS-33
<PAGE>   1835
                         GT GLOBAL GROWTH & INCOME FUND
 
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
 
The Manager and GT Global voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 1.85%, 2.50%, and 1.50% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.
 
Effective November 1, 1997, the Manager and GT Global have undertaken to limit
each Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expenses) to the annual rate of 1.75%, 2.40% and 1.40% of the
average daily net assets of the Fund's Class A, Class B and Advisor Class
shares, respectively. This undertaking may be changed or eliminated in the
future.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.
 
3. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1997, purchases and sales of investment
securities by the Fund, other than short-term investments and U.S. government
obligations, aggregated $322,737,917 and $326,736,141, respectively. Purchases
and sales of U.S. government obligations were $32,891,598 and $17,886,577,
respectively, for the year ended October 31, 1997.
 
4. CAPITAL SHARES
At October 31, 1997, there were 6,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 200,000,000 were
classified as shares of the Fund; 400,000,000 were classified as shares of GT
Global Government Income Fund; 200,000,000 were classified as shares of GT
Global Developing Markets Fund; 200,000,000 were classified as shares of GT
Global Health Care Fund; 200,000,000 were classified as shares of GT Global
Strategic Income Fund; 200,000,000 were classified as shares of GT Global
Currency Fund (inactive); 200,000,000 were classified as shares of GT Latin
America Growth Fund; 200,000,000 were classified as shares of GT Global Small
Companies Fund (inactive); 400,000,000 were classified as shares of GT Global
Telecommunications Fund; 200,000,000 were classified as shares of GT Global
Emerging Markets Fund; 200,000,000 were classified as shares of GT Global
Financial Services Fund; 200,000,000 were classified as shares of GT Global
Natural Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; 200,000,000 were classified as shares of GT Global High
Income Fund; and 200,000,000 were classified as shares of GT Global Consumer
Products and Services Fund. The shares of each of the foregoing series of the
Company were divided equally into two classes, designated Class A and Class B
common stock. With respect to the issuance of Advisor Class shares, 100,000,000
shares were classified as shares of each of the fifteen series of the Company
and designated as Advisor Class common stock. 1,100,000,000 shares remain
unclassified. Transactions in capital shares of the Fund were as follows:
 
                                      FS-34
<PAGE>   1836
                         GT GLOBAL GROWTH & INCOME FUND
 
                           CAPITAL SHARE TRANSACTIONS
 
<TABLE>
<CAPTION>
 
                                                                        YEAR ENDED                 YEAR ENDED
                                                                     OCTOBER 31, 1997           OCTOBER 31, 1996
                                                                 -------------------------  -------------------------
CLASS A                                                            SHARES        AMOUNT       SHARES        AMOUNT
- ---------------------------------------------------------------  -----------  ------------  -----------  ------------
<S>                                                              <C>          <C>           <C>          <C>
Shares sold....................................................   37,585,791  $289,617,397   21,196,018  $143,350,526
Shares issued in connection with reinvestment of
  distributions................................................      935,467     7,161,559    1,500,319     9,894,388
                                                                 -----------  ------------  -----------  ------------
                                                                  38,521,258   296,778,956   22,696,337   153,244,914
Shares repurchased.............................................  (43,156,190) (332,338,391) (27,157,086) (182,477,096)
                                                                 -----------  ------------  -----------  ------------
Net decrease...................................................   (4,634,932) $(35,559,435)  (4,460,749) $(29,232,182)
                                                                 -----------  ------------  -----------  ------------
                                                                 -----------  ------------  -----------  ------------
 
                                                                        YEAR ENDED                 YEAR ENDED
                                                                     OCTOBER 31, 1997           OCTOBER 31, 1996
                                                                 -------------------------  -------------------------
CLASS B                                                            SHARES        AMOUNT       SHARES        AMOUNT
- ---------------------------------------------------------------  -----------  ------------  -----------  ------------
Shares sold....................................................   12,634,686  $ 97,336,518    9,561,545  $ 63,970,280
Shares issued in connection with reinvestment of
  distributions................................................    1,087,287     8,343,350    1,656,409    10,934,244
                                                                 -----------  ------------  -----------  ------------
                                                                  13,721,973   105,679,868   11,217,954    74,904,524
Shares repurchased.............................................  (12,063,889)  (93,059,122) (13,373,837)  (89,395,191)
                                                                 -----------  ------------  -----------  ------------
Net increase (decrease)........................................    1,658,084  $ 12,620,746   (2,155,883) $(14,490,667)
                                                                 -----------  ------------  -----------  ------------
                                                                 -----------  ------------  -----------  ------------
 
                                                                        YEAR ENDED                 YEAR ENDED
                                                                     OCTOBER 31, 1997           OCTOBER 31, 1996
                                                                 -------------------------  -------------------------
ADVISOR CLASS                                                      SHARES        AMOUNT       SHARES        AMOUNT
- ---------------------------------------------------------------  -----------  ------------  -----------  ------------
Shares sold....................................................    3,177,501  $ 24,442,634    1,416,928  $  9,616,882
Shares issued in connection with reinvestment of
  distributions................................................        9,792        74,879       10,469        69,359
                                                                 -----------  ------------  -----------  ------------
                                                                   3,187,293    24,517,513    1,427,397     9,686,241
Shares repurchased.............................................   (3,248,879)  (24,964,241)  (1,141,817)   (7,697,368)
                                                                 -----------  ------------  -----------  ------------
Net increase (decrease)........................................      (61,586) $   (446,728)     285,580  $  1,988,873
                                                                 -----------  ------------  -----------  ------------
                                                                 -----------  ------------  -----------  ------------
</TABLE>
 
5. EXPENSE REDUCTIONS
The Manager directed certain portfolio trades to brokers who paid a portion of
the Fund's expenses. For the period ended October 31, 1997, the Fund's expenses
were reduced by $33,680 under these arrangements.
 
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$1,489,466 as a capital gain dividend for the fiscal year ended October 31,
1997.
 
Pursuant to Section 854 of the Internal Revenue Code, the Fund designates 76% of
the ordinary income dividends paid (including short-term capital gain
distributions, if any) as income qualifying for the corporate dividends received
deduction for the fiscal year ended October 31, 1997.
 
                                      FS-35
<PAGE>   1837
                          AIM GLOBAL HIGH INCOME FUND
                     (FORMERLY GT GLOBAL HIGH INCOME FUND)
                           AIM STRATEGIC INCOME FUND
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
 
                                   REPORT OF
                            INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
To the Board of Directors of AIM Investment Funds, Inc. and the Shareholders of
AIM Global High Income Fund (formerly GT Global High Income Fund) and AIM
Strategic Income Fund (formerly GT Global Strategic Income Fund):
 
We have audited the accompanying statement of assets and liabilities of AIM
Global High Income Fund-Consolidated and AIM Strategic Income Fund, including
the portfolios of investments, as of April 30, 1998, the related statement of
operations for the six months then ended, the statements of changes in net
assets for the six months then ended and for the year ended October 31, 1997,
and the financial highlights for the periods indicated herein. These financial
statements and the financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1998 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of AIM
Global High Income Fund-Consolidated and AIM Strategic Income Fund as of April
30, 1998, the results of their operations for the six months then ended, the
changes in their net assets for the six months then ended and for the year ended
October 31, 1997, and the financial highlights for the periods indicated herein,
in conformity with generally accepted accounting principles.



                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
JUNE 15, 1998
 
                                       FS-36
<PAGE>   1838
                       AIM GLOBAL GOVERNMENT INCOME FUND
                  (FORMERLY GT GLOBAL GOVERNMENT INCOME FUND)
 
                            PORTFOLIO OF INVESTMENTS
 
                           April 30, 1998 (Unaudited)
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (74.6%)
  Australia (1.9%)
    Commonwealth of Australia, 7.5% due 9/15/09 ..........   AUD            6,100,000   $  4,517,717         1.9
  Canada (2.4%)
    Canadian Government, 8% due 6/1/27 ...................   CAD            5,920,000      5,509,240         2.4
  Denmark (4.2%)
    Kingdom of Denmark, 7% due 11/10/24 ..................   DKK           56,700,000      9,736,506         4.2
  Germany (9.2%)
    Deutschland Republic:
      6% due 1/5/06 ......................................   DEM           22,050,000     13,124,298         5.6
      6.25% due 1/4/24 ...................................   DEM            9,500,000      5,828,414         2.5
      7.5% due 11/11/04 ..................................   DEM            4,100,000      2,620,435         1.1
  Italy (8.4%)
    Italian Buoni Poliennali del Tesoro (BTPS):
      8.5% due 1/1/04 ....................................   ITL       14,480,000,000      9,573,466         4.1
      7.25% due 11/1/26 ..................................   ITL       13,200,000,000      9,093,963         3.9
      9% due 11/1/23 .....................................   ITL        1,230,000,000      1,007,229         0.4
  South Africa (7.9%)
    Republic of South Africa, 12.5% due 1/15/02 ..........   ZAR           54,500,000     10,766,244         4.6
    Lesotho Highlands Water Authority, 12.5% due
     4/15/02 .............................................   ZAR           38,800,000      7,630,219         3.3
  Spain (1.8%)
    Spanish Government, 7.35% due 3/31/07 ................   ESP          550,000,000      4,179,545         1.8
  Sweden (3.6%)
    Swedish Government, 8% due 8/15/07 ...................   SEK           54,800,000      8,435,397         3.6
  United Kingdom (10.6%)
    United Kingdom Treasury:
      9.5% due 4/18/05 ...................................   GBP            6,730,000     13,505,017         5.8
      6.75% due 11/26/04 .................................   GBP            6,390,000     11,173,150         4.8
  United States (23.3%)
    United States Treasury:
      6.625% due 5/15/07 .................................   USD           20,800,000     22,059,981         9.5
      8% due 11/15/21 ....................................   USD           17,000,000     21,146,407         9.1
      6.125% due 11/15/27 ................................   USD            5,800,000      5,939,563         2.6
    Federal National Mortgage Association, 6.375% due
     8/15/07 .............................................   AUD            7,300,000      4,850,335         2.1
  Uruguay (1.3%)
    Republic of Uruguay, 7.875% due 7/15/27 - 144A{.} ....   USD            3,000,000      3,060,000         1.3
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $169,806,388) ...........................................                               173,757,126
                                                                                        ------------
Corporate Bonds (15.8%)
  Germany (0.9%)
    Kredit Fuer Wiederaufbau International Finance, 7.25%
     due 7/16/07 .........................................   AUD            3,100,000      2,161,887         0.9
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-37
<PAGE>   1839
                       AIM GLOBAL GOVERNMENT INCOME FUND
                  (FORMERLY GT GLOBAL GOVERNMENT INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Corporate Bonds (Continued)
  South Africa (5.3%)
    Eskom, 11% due 6/1/08 ................................   ZAR           68,500,000   $ 12,029,725         5.2
    Development Bank of South Africa, due 12/31/27{=} ....   ZAR           39,300,000        238,211         0.1
  Tunisia (2.0%)
    Banque Centrais de Tunisie, 8.25% due 9/19/27 ........   USD            4,750,000      4,552,695         2.0
  United Kingdom (6.6%)
    SBC Jersey, 8.75% due 6/20/05 ........................   GBP            8,200,000     15,293,137         6.6
  United States (1.0%)
    Ford Motor Credit Co., 14% due 11/13/02 ..............   ZAR            8,000,000      1,608,946         0.7
    Walt Disney Co., 14% due 10/24/02 ....................   ZAR            3,300,000        666,205         0.3
                                                                                        ------------
Total Corporate Bonds (cost $36,208,675) .................                                36,550,806
                                                                                        ------------
Mortgage Backed (14.1%)
  Denmark (6.5%)
    Realkredit Bank, 7% due 10/1/29 ......................   DKK          103,408,000     15,225,198         6.5
  United States (7.6%)
    Government National Mortgage Association:
      Pool #462363, 7% due 11/15/27 ......................   USD            8,572,002      8,675,132         3.7
      Pool #780515, 9.5% due 12/15/21 ....................   USD            4,240,952      4,616,014         2.0
    Federal Home Loan Mortgage Association Pool #E62449,
     8.5% due 3/1/10 .....................................   USD            2,188,891      2,304,664         1.0
    Salomon Brothers Mortgage Securities VII Series 1997 -
     HUD1 Class AWAC, 6.0867% due 12/25/30 ...............   USD            2,158,243      2,177,127         0.9
                                                                                        ------------
Total Mortgage Backed (cost $32,531,938) .................                                32,998,135
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $238,547,001) .......                               243,306,067       104.5
                                                                                        ------------       -----
<CAPTION>
 
                                                                         UNDERLYING        VALUE         % OF NET
OPTIONS                                                     CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Deutsche Marks Put Option: .............................   USD                   --             --          --
    CURRENCY OPTIONS
    Strike 1.82, expires 5/12/98 .........................                  2,550,000          3,680          --
    Strike 1.84, expires 5/7/98 ..........................                  4,500,000            441          --
                                                                                        ------------       -----
 
TOTAL OPTIONS (cost $26,535) .............................                                     4,121          --
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-38
<PAGE>   1840
                       AIM GLOBAL GOVERNMENT INCOME FUND
                  (FORMERLY GT GLOBAL GOVERNMENT INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
SHORT-TERM INVESTMENTS                                      CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (4.7%)
  Mexico (4.7%)
    Mexican Cetes: .......................................   MXN                   --             --         4.7
      due 5/7/98 current yield 17.62% ....................                 25,000,000   $  2,941,293          --
      due 6/11/98 current yield 17.95% ...................                 22,039,910      2,547,366          --
      due 11/19/98 current yield 19.52% ..................                 23,844,450      2,533,958          --
      due 5/28/98 current yield 17.76% ...................                 20,900,000      2,433,110          --
      due 12/17/98 current yield 19.77% ..................                  4,800,000        502,362          --
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $11,178,125) ............................................                                10,958,089
                                                                                        ------------       -----
 
TOTAL SHORT-TERM INVESTMENTS (cost $11,178,125) ..........                                10,958,089         4.7
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $249,751,661)  * .................                               254,268,277       109.2
Other Assets and Liabilities .............................                               (21,527,345)       (9.2)
                                                                                        ------------       -----
 
NET ASSETS ...............................................                              $232,740,932       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- -------------
 
        {.}  Security 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.
        {=}  Zero coupon bond.
          *  For Federal income tax purposes, cost is $250,105,125 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $   7,238,966
                 Unrealized depreciation:            (3,075,814)
                                                  -------------
                 Net unrealized appreciation:     $   4,163,152
                                                  -------------
                                                  -------------
</TABLE>
 
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-39
<PAGE>   1841
                       AIM GLOBAL GOVERNMENT INCOME FUND
                  (FORMERLY GT GLOBAL GOVERNMENT INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                           April 30, 1998 (Unaudited)
 
- -------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                 APRIL 30, 1998
<TABLE>
<CAPTION>
                                                                                     UNREALIZED
                                           MARKET VALUE      CONTRACT    DELIVERY   APPRECIATION
CONTRACTS TO BUY:                         (U.S. DOLLARS)      PRICE        DATE    (DEPRECIATION)
- ----------------------------------------  --------------   ------------  --------  --------------
<S>                                       <C>              <C>           <C>       <C>
Australian Dollars......................      12,589,578        1.53713   8/4/98    $    33,674
Australian Dollars......................       3,786,006        1.49887   8/4/98        (86,249)
Danish Kroner...........................       5,036,480        6.76600   8/4/98        (32,172)
Deutsche Marks..........................      12,092,282        1.78974   6/4/98         36,255
Deutsche Marks..........................       5,102,183        1.78923   8/4/98         13,847
Swedish Kronor..........................       5,350,910        7.97865   8/4/98        177,804
                                          --------------                           --------------
  Total Contracts to Buy (Payable amount
   $43,814,280).........................      43,957,439                                143,159
                                          --------------                           --------------
THE VALUE OF CONTRACTS TO BUY AS
 PERCENTAGE OF NET ASSETS IS 18.89%.
 
<CAPTION>
 
CONTRACTS TO SELL:
- ---------------------------------------
<S>                                       <C>              <C>           <C>       <C>
Australian Dollars......................      18,551,692        1.45560   8/4/98        986,590
Australian Dollars......................       6,564,845        1.48227   8/4/98        224,732
Australian Dollars......................       2,127,834        1.48862   8/4/98         63,460
British Pounds..........................      11,894,754        0.59966   8/4/98        115,301
Canadian Dollars........................       5,421,805        1.42760   8/4/98         (2,921)
Danish Kroner...........................       8,517,863        6.88800   8/4/98        (97,421)
Danish Kroner...........................       2,294,095        7.00000   8/4/98        (62,524)
Danish Kroner...........................       1,962,046        6.89100   8/4/98        (23,285)
Danish Kroner...........................       1,786,842        6.66600   8/4/98        (19,924)
Deutsche Marks..........................       6,078,770        1.80780   8/4/98        (78,770)
Deutsche Marks..........................       5,051,802        1.81740   8/4/98        (91,802)
Deutsche Marks..........................       4,954,746        1.80800   8/4/98        (64,746)
Deutsche Marks..........................       4,050,720        1.80700   8/4/98        (50,720)
Deutsche Marks..........................       1,849,388        1.83600   8/4/98        (52,002)
Deutsche Marks..........................         213,134        1.81100   8/4/98         (3,134)
Italian Liras...........................       1,980,375     1800.00000   8/4/98        (35,931)
Spanish Pesetas.........................         303,227      153.32000   8/4/98         (3,201)
Swedish Kronor..........................       7,778,540        8.03548   8/4/98       (311,655)
                                          --------------                           --------------
  Total Contracts to Sell (Receivable
   amount $91,874,525)..................      91,382,478                                492,047
                                          --------------                           --------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 39.26%.
  Total Open Forward Foreign Currency
   Contracts, Net.......................                                            $   635,206
                                                                                   --------------
                                                                                   --------------
</TABLE>
 
- ---------------
See Note 1 of Notes to the Financial Statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-40
<PAGE>   1842
                  AIM GLOBAL HIGH INCOME FUND -- CONSOLIDATED
             (FORMERLY GT GLOBAL HIGH INCOME FUND -- CONSOLIDATED)
 
                            PORTFOLIO OF INVESTMENTS
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (76.0%)
  Algeria (3.0%)
    Algeria Tranche 1 Loan Assignment, 6.625% due
     9/4/06+ .............................................   USD            9,250,000   $  7,261,250         2.1
    Algeria Tranche 3 Loan Assignment, 1.75% due
     3/4/10+ .............................................   JPY          700,000,000      3,293,402         0.9
  Argentina (12.9%)
    Republic of Argentina:
      Global Bond, 9.75% due 9/19/27 .....................   USD           26,462,000     25,515,984         7.2
      Global Bond, 11.375% due 1/30/17 ...................   USD           11,836,000     13,093,575         3.7
      Par Bond Series L, 5.75% (6% at 4/99) due
       3/31/23++ .........................................   USD            5,100,000      3,885,563         1.1
      Discount Bond, 6.625% due 3/31/23+ .................   USD            3,500,000      3,016,563         0.9
  Brazil (15.2%)
    Republic of Brazil:
      C Bond, 5%, (8% at 4/00) due 4/15/14 (Effective rate
       at year end is 8%, including "payment-in-kind"
       bonds.)[.] ++ .....................................   USD           54,633,129     45,277,203        12.8
      Par Z-L Bond, 5.50%, (5.75% at 4/99) due
       4/15/24++ .........................................   USD            6,359,000      4,749,378         1.3
    Debt Conversion Bond Series L, 6.6875% due
     4/15/12+ ............................................   USD            4,814,000      3,827,130         1.1
  Bulgaria (5.1%)
    Republic of Bulgaria:
      Front Loaded Interest Reduction Bond Series A, 2.25%
       (2.5% at 8/98) due 7/28/12++ ......................   USD           18,357,000     12,413,921         3.5
      Interest Arrears Bond, 6.625% due 7/28/11 -
       Euro+ .............................................   USD            7,000,000      5,534,375         1.6
  Croatia (1.8%)
    Croatian Government Series A, 6.625% due 7/31/10+ ....   USD            7,200,000      6,466,500         1.8
  Ecuador (2.6%)
    Ecuador, Past Due Interest Bond, 6.625% due
     2/27/15+ ............................................   USD           14,606,019      9,384,367         2.6
  Ivory Coast (1.0%)
    Ivory Coast Past Due Interest Bond, 1.9% due
     3/29/18 .............................................   FRF           55,000,000      3,683,444         1.0
  Jordan (1.0%)
    Kingdom of Jordan, 5% (5.5% at 12/98) due
     12/23/23++ ..........................................   USD            4,750,000      3,467,500         1.0
  Korea (4.1%)
    Republic of Korea, 8.875% due 4/15/08 ................   USD           12,600,000     12,424,230         3.5
    Korea Electric Power, 7% due 2/1/27 ..................   USD            2,510,000      2,154,200         0.6
  Mexico (3.2%)
    United Mexican States:
      Global Bond, 11.375% due 9/15/16{./} ...............   USD            5,859,000      6,885,790         1.9
      Global Bond, 11.5 due 5/15/26 ......................   USD            3,826,000      4,619,895         1.3
  Panama (1.7%)
    Republic of Panama:
      Interest Reduction Bond, 3.75% (4% at 7/98) due
       7/17/14++ .........................................   USD            4,704,000      3,695,580         1.0
      8.875% due 9/30/27 .................................   USD            2,689,000      2,633,876         0.7
  Peru (1.6%)
    Republic of Peru, Past Due Interest Bond, 4% (4.5% at
     7/98) due 3/7/17++ ..................................   USD            8,107,000      5,527,961         1.6
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-41
<PAGE>   1843
                  AIM GLOBAL HIGH INCOME FUND -- CONSOLIDATED
             (FORMERLY GT GLOBAL HIGH INCOME FUND -- CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (Continued)
  Philippines (1.6%)
    Republic of Philippines, 8.875% due 4/15/08 -
     144A{.} .............................................   USD            3,650,000   $  3,610,215         1.0
    Bangko Sentral Pilipinas, 8.6% due 6/15/27 ...........   USD            2,416,000      2,202,099         0.6
  Russia (16.6%)
    Bank for Foreign Economic Affairs (Vnesheconombank)
     Principal Loans, 6.72% due 12/15/20+ ................   USD           59,184,372     37,578,135        10.6
    Bank for Foreign Economic Affairs (Vnesheconombank)
     Interest Notes, 6.72% due 12/15/15+ .................   USD           29,559,031     21,319,451         6.0
  Venezuela (4.6%)
    Republic of Venezuela, 9.25% due 9/15/27{./} .........   USD           18,355,000     16,257,941         4.6
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $252,885,532) ...........................................                               269,779,528
                                                                                        ------------
Corporate Bonds (18.5%)
  Argentina (1.2%)
    Mastellone Hermanos S.A., 11.75% due 4/1/08 -
     144A{.} .............................................   USD            1,943,000      2,006,148         0.6
    Telefonica de Argentina, 9.125% due 5/7/08 -
     144A{.} .............................................   USD            1,983,000      1,992,241         0.6
  Brazil (3.8%)
    Banco Do Brasil (Cayman), 9.375% due 6/15/07 .........   USD            5,816,000      5,728,760         1.6
    Banco Hipotecario Espana, 10% due 4/17/03 -
     144A{.} .............................................   USD            3,679,000      3,720,389         1.1
    Comtel Brasileira Ltd. "A", 10.75% due 9/26/04 -
     144A{.} .............................................   USD            2,328,000      2,386,200         0.7
    RBS Participacoes S.A., 11% due 4/1/07 - 144A{.} .....   USD            1,378,000      1,384,890         0.4
  China (0.7%)
    Greater Beijing First, 9.5% due 6/15/07 - 144A{.} ....   USD            3,210,000      2,557,889         0.7
  Hong Kong (1.1%)
    GS Superhighway Holdings, 9.875% due 8/15/04 -
     144A{.} .............................................   USD            2,434,000      2,056,730         0.6
    Road King Infrastructure, 9.5% due 7/15/07 -
     144A{.} .............................................   USD            2,100,000      1,715,280         0.5
  Indonesia (0.3%)
    Polysindo International Finance, 8.750% due
     4/22/99(::) .........................................   IDR       27,500,000,000      1,037,736         0.3
  Jamaica (1.0%)
    Mechala Group Jamaica:
      12.75% due 12/30/99 - Series B .....................   USD            2,846,000      2,618,320         0.7
      12.75% due 12/30/99 - Reg S{c} .....................   USD            1,288,000      1,184,960         0.3
  Korea (2.5%)
    Pohang Iron & Steel Co., Ltd.:
      8.26% due 2/19/99 ..................................   USD            5,000,000      4,961,455         1.4
      2% due 10/9/00 .....................................   JPY          224,000,000      1,506,764         0.4
    L.G.-Caltex Oil Corp., 12.75% due 3/31/01 -
     144A{.} .............................................   USD            2,112,000      2,148,960         0.6
    Korea Development Bank, 4.35% due 5/25/99 ............   JPY           60,300,000        432,960         0.1
  Malaysia (1.9%)
    Petroliam Nasional Bhd.:
      7.125% due 8/15/05 - 144A{.} .......................   USD            3,547,000      3,143,529         0.9
      7.625% due 10/15/26 - 144A{.} ......................   USD            1,469,000      1,283,172         0.4
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-42
<PAGE>   1844
                  AIM GLOBAL HIGH INCOME FUND -- CONSOLIDATED
             (FORMERLY GT GLOBAL HIGH INCOME FUND -- CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Corporate Bonds (Continued)
    Tenaga Nasional Bhd., 7.875% due 6/15/04 - 144A{.} ...   USD            2,416,000      2,281,078         0.6
  Mexico (3.5%)
    Petroleos Mexicanos:
      9.25% due 3/30/18 - 144A{.} ........................   USD            8,697,000   $  8,501,318         2.4
      9.5% due 9/15/27 - 144A{.} .........................   USD            3,968,000      3,977,920         1.1
  Russia (1.9%)
    Mosenergo Finance BV, 8.375% due 10/9/02 - 144A{.} ...   USD            4,200,000      3,717,000         1.1
    Lukinter Finance BV Convertible, 3.5% due 5/6/02 -
     144A{.} .............................................   USD            2,283,000      2,751,015         0.8
  Singapore (0.6%)
    Krung Thai Bank (Singapore), 6.73% due 9/30/04 .......   USD            2,500,000      2,131,250         0.6
                                                                                        ------------
Total Corporate Bonds (cost $74,463,170) .................                                65,225,964
                                                                                        ------------
Structured Notes (1.4%)
  Korea (1.4%)
    Fixed Rate Trust Certificate 13.55% due 2/15/02[::]
      (Issued by a newly created Delaware Business Trust,
       collateralized by triple A paper. This trust
       certificate has a credit risk component linked to
       the value of a referenced security: Korean
       Development Bank 1.875% 2002.)
       (cost $5,050,000)  ................................   USD            5,050,000      5,024,750         1.4
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $332,398,702) .......                               340,030,242        95.9
                                                                                        ------------       -----
<CAPTION>
 
                                                                         PRINCIPAL         VALUE         % OF NET
SHORT-TERM INVESTMENTS                                      CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Structured Notes (3.7%)
  Indonesia (1.1%)
    Indonesia Credit Linked Unsecured Note due 5/27/98
      (Issued by Salomon Smith Barney Holdings, Inc. This
       note has a credit risk component linked to the
       value of referenced securities issued by the Bank
       of Indonesia and the Republic of Indonesia.)  .....   USD            3,985,151      3,938,126         1.1
  Korea (2.6%)
    Korean Credit Linked Unsecured Note due 4/27/99[::]
      (Issued by Salomon Smith Barney Holdings, Inc. This
       note has a currency and credit risk component
       linked to the value of referenced securities issued
       by the Korean Development Bank.)  .................   USD           10,937,647      9,375,751         2.6
                                                                                        ------------
Total Structured Notes (cost $13,133,663) ................                                13,313,877
                                                                                        ------------       -----
 
TOTAL SHORT-TERM INVESTMENTS (cost $13,133,663) ..........                                13,313,877         3.7
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-43
<PAGE>   1845
                  AIM GLOBAL HIGH INCOME FUND -- CONSOLIDATED
             (FORMERLY GT GLOBAL HIGH INCOME FUND -- CONSOLIDATED)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- ----------------------------------------------------------                              ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Dated April 30, 1998, with State Street Bank & Trust
   Co., due May 1, 1998, for an effective yield of 5.44%
   collateralized by $7,815,000 U.S. Treasury Bills,
   6.125% due 8/31/98 (market value of collateral is
   $7,912,688, including accrued interest). (cost
   $7,757,000)  ..........................................                              $  7,757,000         2.2
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $353,289,365)  * .................                               361,101,119       101.8
Other Assets and Liabilities .............................                                (6,411,126)       (1.8)
                                                                                        ------------       -----
 
NET ASSETS ...............................................                              $354,689,993       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- -------------
 
        {.}  Security 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.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (See Note 1 of Notes to Financial Statements).
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
         ++  The coupon rate shown on step-up coupon bond represents the rate at
             period end.
        [.]  Bond pays stated or additional interest with "payment-in-kind"
             (PIK) bonds.
       {./}  All or part of the Fund's holdings in this security is segregated
             as collateral for derivative instruments. (See Note 1 of Notes to
             Financial Statements.)
       [::]  Certain events may cause the contract to terminate prior to date
             shown.
          *  For Federal income tax purposes, cost is $353,438,753 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  19,507,848
                 Unrealized depreciation:           (11,845,482)
                                                  -------------
                 Net unrealized appreciation:     $   7,662,366
                                                  -------------
                                                  -------------
</TABLE>
 
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
 
                                 SWAP CONTRACT
                                 APRIL 30, 1998
 
<TABLE>
<CAPTION>
                                           TERMINATION                      NOTIONAL
DESCRIPTION                                    DATE         CURRENCY         AMOUNT          VALUE
- ----------------------------------------  --------------  -------------  ---------------  -----------
<S>                                       <C>             <C>            <C>              <C>
Mexico Credit Default Swap with
 semiannual payments (fixed rate payment
 1.72%).................................   3/31/2000[::]          USD    $    12,330,000  $   (58,987)
  Contract counterparty is J.P. Morgan
   Securities, Inc. The contract value
   is related to the credit quality of a
   referenced security: United Mexican
   States 11.5% Global Bond due May 15,
   2026.
</TABLE>
 
- -------------
 
       [::]  Certain events may cause the contract to terminate prior to date
             shown.
 
- -------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                 APRIL 30, 1998
 
<TABLE>
<CAPTION>
                                                                                    UNREALIZED
                                           MARKET VALUE     CONTRACT    DELIVERY   APPRECIATION
CONTRACTS TO SELL:                        (U.S. DOLLARS)      PRICE       DATE    (DEPRECIATION)
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
French Francs...........................     3,932,754         6.05000  10/15/98     $(62,400)
Japanese Yen............................     1,464,502       122.90000   7/31/98       91,202
Japanese Yen............................       440,309       121.90000   7/31/98       31,257
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $5,897,624)...................     5,837,565                                 60,059
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 1.65%.
  Total Open Forward Foreign Currency
   Contracts............................                                             $ 60,059
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ---------------
See Note 1 of Notes to the Financial Statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-44
<PAGE>   1846
                           AIM STRATEGIC INCOME FUND
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
 
                            PORTFOLIO OF INVESTMENTS
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (65.4%)
  Algeria (1.3%)
    Algeria Tranche 1 Loan Assignment, 6.625% due
     9/4/06+ .............................................   USD            5,500,000   $  4,317,500         1.1
    Algeria Tranche 3 Loan Assignment, 1.75% due
     3/4/10+ .............................................   JPY          150,000,000        705,729         0.2
  Argentina (4.3%)
    Republic of Argentina:
      Global Bond, 11.375% due 1/30/17 ...................   USD            7,575,000      8,379,844         2.2
      Global Bond, 9.75% due 9/19/27 .....................   USD            5,192,000      5,006,386         1.3
      Par Bond Series L, 5.75% (6% at 4/99) due
       3/31/23++ .........................................   USD            2,500,000      1,904,688         0.5
      Discount Bond, 6.625% due 3/31/23+ .................   USD            1,445,000      1,245,409         0.3
  Australia (2.4%)
    Commonwealth of Australia, 7.5% due 9/15/09 ..........   AUD           12,290,000      9,102,089         2.4
  Brazil (6.1%)
    Republic of Brazil:
      C Bond, 5% (8% at 4/00) due 4/15/14 (Effective rate
       at year end is 8%, including "payment-in-kind"
       bonds.)[.] ++ .....................................   USD           22,694,868     18,808,372         4.9
      Par Z-L Bond, 5.5% (5.75% at 4/99) due 4/15/24++ ...   USD            3,861,000      2,883,684         0.7
      Debt Conversion Bond Series L, 6.6875% due
       4/15/12+ ..........................................   USD            2,562,000      2,036,790         0.5
  Bulgaria (1.6%)
    Republic of Bulgaria:
      Front Loaded Interest Reduction Bond Series A, 2.25%
       (2.5% at 7/98)due 7/28/12++ .......................   USD            7,396,000      5,001,545         1.3
      Interest Arrears Bond, 6.625% due 7/28/11+ .........   USD            1,586,000      1,253,931         0.3
  Canada (1.0%)
    Canadian Government, 8% due 6/1/27 ...................   CAD            4,230,000      3,936,501         1.0
  Croatia (0.9%)
    Croatian Government Series A, 6.625% due 7/31/10+ ....   USD            3,700,000      3,323,063         0.9
  Denmark (1.7%)
    Kingdom of Denmark, 7% due 11/10/24 ..................   DKK           39,300,000      6,748,583         1.7
  Ecuador (0.8%)
    Ecuador, Past Due Interest Bond, 6.625% due
     2/27/15+ ............................................   USD            4,733,298      3,041,144         0.8
  Germany (7.5%)
    Deutschland Republic:
      6% due 1/5/06 ......................................   DEM           35,500,000     21,120,150         5.5
      6.25% due 1/4/24 ...................................   DEM           12,700,000      7,791,669         2.0
  Italy (2.5%)
    Italian Government, 7.25% due 11/1/26 ................   ITL       11,000,000,000      7,578,302         2.0
    Italian Buoni Poliennali Del Tesoro (BTPS), 8.5% due
     1/1/04 ..............................................   ITL        2,730,000,000      1,804,942         0.5
  Ivory Coast (0.2%)
    Ivory Coast Past Due Interest Bond, 1.9% due
     3/29/18 .............................................   FRF           12,000,000        803,661         0.2
  Jordan (0.6%)
    Kingdom of Jordan, 5% (5.5% at 12/98) due
     12/23/23++ ..........................................   USD            3,250,000      2,372,500         0.6
  Korea (1.8%)
    Republic of Korea, 8.875% due 4/15/08 ................   USD            4,570,000      4,506,249         1.2
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-45
<PAGE>   1847
                           AIM STRATEGIC INCOME FUND
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (Continued)
    Korea Electric Power, 7% due 2/1/27 ..................   USD            2,540,000   $  2,179,947         0.6
  Netherlands (0.8%)
    Netherlands Government Bond, 5.5% due 1/15/28 ........   NLG            6,000,000      2,934,641         0.8
  New Zealand (1.8%)
    New Zealand Government, 8% due 4/15/04 ...............   NZD           12,000,000      6,930,003         1.8
  Panama (0.9%)
    Republic of Panama:
      Interest Reduction Bond, 3.75% (4% at 7/98) due
       7/17/14++ .........................................   USD            2,917,000      2,291,668         0.6
      8.875% due 9/30/27 .................................   USD            1,373,000      1,344,854         0.3
  Peru (0.8%)
    Republic of Peru, Past Due Interest Bond, 4% (4.5% at
     7/98) due 3/7/17++ ..................................   USD            4,776,000      3,256,635         0.8
  Philippines (0.5%)
    Republic of Philippines, 8.875% due 4/15/08 -
     144A{.} .............................................   USD            1,330,000      1,315,503         0.3
    Bangko Sentral Pilipinas, 8.6% due 6/15/27 ...........   USD              933,000        850,397         0.2
  Russia (5.5%)
    Bank for Foreign Economic Affairs (Venesheconombank)
     Principal Loans, 6.72%due 12/15/20+ .................   USD           23,161,492     14,707,547         3.8
    Bank for Foreign Economic Affairs (Venesheconombank)
     Interest Notes, 6.72% due 12/15/15+ .................   USD            8,905,352      6,422,985         1.7
  South Africa (2.6%)
    Republic of South Africa, 12.5% due 1/15/02 ..........   ZAR           51,800,000     10,232,871         2.6
  Sweden (0.7%)
    Swedish Government, 8% due 8/15/07 ...................   SEK           19,000,000      2,924,681         0.7
  United Kingdom (7.6%)
    United Kingdom Conversion, 9.5% due 4/18/05 ..........   GBP            7,400,000     14,849,498         3.8
    United Kingdom Treasury, 7.5% due 12/7/06 ............   GBP            8,000,000     14,820,241         3.8
  United States (9.9%)
    United States Treasury:
      6.875% due 8/15/25{./} .............................   USD           14,500,000     16,127,851         4.2
      6.50% due 10/15/06{./} .............................   USD           13,170,000     13,808,179         3.6
      6.625% due 5/15/07 .................................   USD            3,900,000      4,136,895         1.1
    Federal National Mortgage Association, 7.25% due
     6/20/02 .............................................   NZD            7,000,000      3,804,876         1.0
  Venezuela (1.6%)
    Republic of Venezuela, 9.25% due 9/15/27 .............   USD            6,989,000      6,190,507         1.6
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $246,787,697) ...........................................                               252,802,510
                                                                                        ------------
Corporate Bonds (18.7%)
  Argentina (0.2%)
    Mastellone Hermanos S.A., 11.75% due 4/1/08 -
     144A{.} .............................................   USD              745,000        769,213         0.2
  Brazil (0.9%)
    Banco Hipotecario Espana, 10% due 4/17/03 -
     144A{.} .............................................   USD            1,675,000      1,693,844         0.4
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-46
<PAGE>   1848
                           AIM STRATEGIC INCOME FUND
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Corporate Bonds (Continued)
    Comtel Brasileira Ltd. "A", 10.75% due 9/26/04 -
     144A{.} .............................................   USD            1,171,000      1,200,275         0.3
    RBS Participacoes S.A., 11% due 4/1/07 - 144A{.} .....   USD              813,000   $    817,065         0.2
  Canada (0.2%)
    Trench Electric & Trench, Inc., 10.25% due 12/15/07 -
     144A{.} .............................................   USD              875,000        881,563         0.2
  China (0.4%)
    Greater Beijing First, 9.5% due 6/15/07 - 144A{.} ....   USD            1,720,000      1,370,582         0.4
  Hong Kong (0.5%)
    GS Superhighway Holdings, 9.875% due 8/15/04 -
     144A{.} .............................................   USD            1,210,000      1,022,450         0.3
    Road King Infrastructure, 9.5% due 7/15/07 -
     144A{.} .............................................   USD            1,100,000        898,480         0.2
  Jamaica (0.2%)
    Mechala Group Jamaica, 12.75% due 12/30/99 - Reg
     S{c} ................................................   USD              719,000        661,480         0.2
  Korea (0.6%)
    L.G.-Caltex Oil Corp., 12.75% due 3/31/01 -
     144A{.} .............................................   USD              902,000        917,785         0.3
    Pohang Iron & Steel, 2% due 10/9/00 ..................   JPY          119,000,000        800,469         0.2
    Korea Development Bank, 4.35% due 5/25/99 ............   JPY           32,000,000        229,763         0.1
  Malaysia (0.7%)
    Petroliam Nasional Bhd.:
      7.125% due 8/15/05 - 144A{.} .......................   USD            1,908,000      1,690,965         0.4
      7.875% due 6/15/04 - 144A{.} .......................   USD              933,000        880,897         0.2
    Petroliam Nasional Bhd., 7.625% due 10/15/26 -
     144A{.} .............................................   USD              575,000        502,263         0.1
  Mexico (2.8%)
    Petroleos Mexicanos:
      9.25% due 3/30/18 - 144A{.} ........................   USD            8,010,000      7,829,775         2.0
      9.5% due 9/15/27 - 144A{.} .........................   USD            2,028,000      2,033,070         0.5
    Monterrey Power, S.A. de C.V., 9.625% due 11/15/09 -
     144A{.} .............................................   USD            1,245,000      1,257,450         0.3
  Russia (0.7%)
    Lukinter Finance BV Convertible, 3.5% due 5/6/02 -
     144A{.} .............................................   USD            1,526,000      1,838,830         0.5
    Mosenergo Finance BV, 8.375% due 10/9/02 - 144A{.} ...   USD            1,040,000        920,400         0.2
  Singapore (0.2%)
    Krung Thai Bank (Singapore), 6.73% due 9/30/04 .......   USD            1,000,000        852,500         0.2
  United States (11.3%)
    Chase Manhattan Corp., 6.25% due 1/15/06 .............   USD            2,835,000      2,800,674         0.7
    General Motors Acceptance Corp., 6.625% due
     10/15/05 ............................................   USD            2,700,000      2,743,411         0.7
    Engle Homes, Inc., 9.25% due 2/1/08 ..................   USD            2,350,000      2,376,320         0.6
    Unisys Corp., 7.875% due 4/1/08 ......................   USD            2,350,000      2,355,875         0.6
    United Stationers Supply, 8.375% due 4/15/08 -
     144A{.} .............................................   USD            2,000,000      2,015,000         0.5
    Globalstar LP Capital, 11.375% due 2/15/04 ...........   USD            1,900,000      1,957,000         0.5
    Lenfest Communications, 8.25% due 2/15/08 -
     144A{.} .............................................   USD            1,850,000      1,884,040         0.5
    Hollywood Casino Corp., 12.75% due 11/1/03 ...........   USD            1,700,000      1,878,500         0.5
    Eagle Family Foods, 8.75% due 1/15/08 - 144A{.} ......   USD            1,875,000      1,856,250         0.5
    Riddell Sports, Inc., 10.5% due 7/15/07 ..............   USD            1,700,000      1,768,000         0.5
    Accuride Corp., 9.25% due 2/1/08 - 144A{.} ...........   USD            1,725,000      1,725,000         0.5
    Graham Packaging/GPC Capital, 8.75% due 1/15/08 -
     144A{.} .............................................   USD            1,725,000      1,725,000         0.5
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-47
<PAGE>   1849
                           AIM STRATEGIC INCOME FUND
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Corporate Bonds (Continued)
    Smithfield Foods, Inc., 7.625% due 2/15/08 -
     144A{.} .............................................   USD            1,725,000      1,712,063         0.5
    Trump Atlantic Association Funding, Inc., 11.25% due
     5/1/06 ..............................................   USD            1,700,000   $  1,702,125         0.4
    ACME Metal, Inc., 10.875% due 12/15/07 - 144A{.} .....   USD            1,500,000      1,517,580         0.4
    Lin Television Corp., 8.375% due 3/1/08 - 144A{.} ....   USD            1,500,000      1,492,668         0.4
    Drypers Corp. Series B, 10.25% due 6/15/07 ...........   USD            1,300,000      1,339,000         0.4
    Chancellor Media Corp., 8.125% due 12/15/07 -
     144A{.} .............................................   USD            1,300,000      1,303,250         0.4
    BTI Telecommunications Corp., 10.5% due 9/15/07 -
     144A{.} .............................................   USD              885,000        931,463         0.3
    Penn National Gaming, Inc., 10.625% due 12/15/04 -
     144A{.} .............................................   USD              875,000        918,750         0.2
    Norampac, Inc., 9.5% due 2/1/08 - 144A{.} ............   USD              885,000        915,975         0.2
    Hard Rock Hotel, Inc., 9.25% due 4/1/05 - 144A{.} ....   USD              880,000        900,350         0.2
    Revlon Consumer Products, 8.625% due 2/2/08 -
     144A{.} .............................................   USD              885,000        887,213         0.2
    Duane Reade, Inc., 9.25% due 2/15/08 .................   USD              885,000        884,706         0.2
    Allbritton Communication, 8.875% due 2/1/08 -
     144A{.} .............................................   USD              885,000        880,575         0.2
    Anker Coal Group, Inc., 9.75% due 10/1/07 -
     144A{.} .............................................   USD              875,000        855,313         0.2
    Syratech Corp., 11% due 4/15/07 ......................   USD              880,000        756,800         0.2
    Delco Remy International, Inc., 8.625% due
     12/15/07 ............................................   USD              650,000        659,484         0.2
    Pillowtex Corp., 9% due 12/15/07 - 144A{.} ...........   USD              435,000        453,488         0.1
                                                                                        ------------
Total Corporate Bonds (cost $72,365,567) .................                                72,264,992
                                                                                        ------------
Mortgage Backed (10.4%)
  Denmark (1.1%)
    Realkredit Danmark, 6% due 10/1/26 ...................   DKK           29,317,000      4,210,612         1.1
  United States (9.3%)
    Government National Mortgage Association:
      TBA Pass Thru Pool, 6.5% due 5/15/28{*} ............   USD           14,000,000     13,877,500         3.6
      TBA Pass Thru Pool, 6% due 5/15/28{*} ..............   USD           14,000,000     13,562,500         3.5
    Federal National Mortgage Association Pool #313439, 7%
     due 3/1/04 ..........................................   USD            8,313,847      8,451,549         2.2
                                                                                        ------------
Total Mortgage Backed (cost $39,883,101) .................                                40,102,161
                                                                                        ------------
Structured Notes (0.5%)
  Korea (0.5%)
    Fixed Rate Trust Certificate 13.55% due 2/15/02[::]
      (Issued by a newly created Delaware Business Trust,
       collateralized by triple A paper. This trust
       certificate has a credit risk component linked to
       the value of a referenced security: Korean
       Development Bank 1.875% 2002.)
       (cost $1,930,000)  ................................   USD            1,930,000      1,920,350         0.5
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $360,966,365) .......                               367,090,013        95.0
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-48
<PAGE>   1850
                           AIM STRATEGIC INCOME FUND
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         UNDERLYING        VALUE         % OF NET
OPTIONS                                                     CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Deutsche Marks Put Option: .............................   USD                   --             --          --
    CURRENCY OPTIONS
    Strike 1.82, expires 5/12/98 .........................                  2,320,000          3,348          --
    Strike 1.84, expires 5/7/98 ..........................                  4,100,000            402          --
                                                                                        ------------       -----
 
TOTAL OPTIONS (cost $24,164) .............................                                     3,750          --
                                                                                        ------------       -----
<CAPTION>
 
                                                                         PRINCIPAL         VALUE         % OF NET
SHORT-TERM INVESTMENTS                                      CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Commercial Paper - Discounted (7.2%)
  United States (7.2%)
    Ford Motor Credit Corp., effective yield 5.69%, due
     5/20/98{./} .........................................   USD           14,000,000   $ 13,959,361         3.6
    General Electric Co., effective yield 5.69%, due
     5/20/98{./} .........................................   USD           14,000,000     13,959,361         3.6
                                                                                        ------------
Total Commercial Paper - Discounted (cost $27,918,722) ...                                27,918,722
                                                                                        ------------
Government & Government Agency Obligations (1.5%)
  Mexico (1.5%)
    Mexican Cetes: .......................................   MXN                   --             --         1.5
      current yield 19.77% due 12/17/98 ..................                 29,250,000      3,061,270          --
      current yield 19.52% due 11/19/98 ..................                 23,350,000      2,481,413          --
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $5,517,534) .............................................                                 5,542,683
                                                                                        ------------
Structured Notes (1.3%)
  Indonesia (0.4%)
    Indonesia Credit Linked Unsecured Note due 5/27/98
      (Issued by Salomon Smith Barney Holdings, Inc. This
       note has a credit risk component linked to the
       value of referenced securities issued by the Bank
       of Indonesia and the Republic of
       Indonesia.)  ......................................   USD            1,600,000      1,581,120         0.4
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-49
<PAGE>   1851
                           AIM STRATEGIC INCOME FUND
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
SHORT-TERM INVESTMENTS                                      CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Structured Notes (Continued)
  Korea (0.9%)
    Korean Credit Linked Unsecured Note due 4/27/99[::]
      (Issued by Salomon Smith Barney Holdings, Inc. This
       note has a currency and credit risk component
       linked to the value of referenced securities issued
       by the Korean Development Bank.)  .................   USD            4,055,000      3,475,946         0.9
                                                                                        ------------
Total Structured Notes (cost $4,989,984) .................                                 5,057,066
                                                                                        ------------       -----
 
TOTAL SHORT-TERM INVESTMENTS (cost $38,426,240) ..........                                38,518,471        10.0
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $399,416,769)  * .................                               405,612,234       105.0
Other Assets and Liabilities .............................                               (19,242,576)       (5.0)
                                                                                        ------------       -----
 
NET ASSETS ...............................................                              $386,369,658       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- -------------
 
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
         ++  The coupon rate shown on step-up coupon bond represents the rate at
             period end.
        [.]  Bond pays stated or additional interest with "payment-in-kind"
             (PIK) bonds.
       {./}  All or part of the Fund's holdings in this security is segregated
             as collateral for derivative instruments. (See Note 1 of Notes to
             the Financial Statements.)
        {*}  Purchased on a forward commitment basis.
       [::]  Certain events may cause the contract to terminate prior to date
             shown.
          *  For Federal income tax purposes, cost is $400,141,188 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  11,468,208
                 Unrealized depreciation:            (5,997,162)
                                                  -------------
                 Net unrealized appreciation:     $   5,471,046
                                                  -------------
                                                  -------------
</TABLE>
 
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-50
<PAGE>   1852
                           AIM STRATEGIC INCOME FUND
                   (FORMERLY GT GLOBAL STRATEGIC INCOME FUND)
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
                                 SWAP CONTRACT
                                 APRIL 30, 1998
 
<TABLE>
<CAPTION>
                                           TERMINATION                      NOTIONAL
DESCRIPTION                                    DATE         CURRENCY         AMOUNT         VALUE
- ----------------------------------------  --------------  -------------  --------------  -----------
<S>                                       <C>             <C>            <C>             <C>
Mexico Credit Default Swap with
 semiannual payments (fixed rate payment
 1.72%).................................   3/31/2000[::]          USD    $    4,730,000  $   (22,628)
  Contract counterparty is J.P. Morgan
   Securities, Inc. The contract value
   is related to the credit quality of a
   referenced security: United Mexican
   States 11.5% Global Bond due May 15,
   2026.
</TABLE>
 
- -------------
 
       [::]  Certain events may cause the contract to terminate prior to date
             shown.
 
- -------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                 APRIL 30, 1998
<TABLE>
<CAPTION>
                                                                                    UNREALIZED
                                           MARKET VALUE     CONTRACT    DELIVERY   APPRECIATION
CONTRACTS TO BUY:                         (U.S. DOLLARS)      PRICE       DATE    (DEPRECIATION)
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Australian Dollars......................     2,139,576         1.59713    8/4/98     $  5,723
Canadian Dollars........................     5,121,354         1.41700    5/4/98      (45,901)
Canadian Dollars........................     2,222,844         1.43000    5/4/98          466
Deutsche Marks..........................    10,808,436         1.78974    8/4/98       32,406
Deutsche Marks..........................       965,153         1.78923    8/4/98        2,619
                                          --------------                          --------------
  Total Contracts to Buy (Payable amount
   $21,262,050).........................    21,257,363                                 (4,687)
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO BUY AS
 PERCENTAGE OF NET ASSETS IS 5.50%.
 
<CAPTION>
 
CONTRACTS TO SELL:
- ---------------------------------------
<S>                                       <C>              <C>          <C>       <C>
Australian Dollars......................     9,132,337         1.45560    8/4/98      485,663
Australian Dollars......................     1,696,005         1.48862    8/4/98       50,581
British Pounds..........................    10,672,577         0.59956    8/4/98      103,454
Canadian Dollars........................     5,245,856         1.45170    5/4/98      (79,499)
Canadian Dollars........................     2,098,342         1.43700    5/4/98      (10,660)
Canadian Dollars........................     2,227,314         1.42760    8/4/98       (1,200)
Danish Kroner...........................     1,679,928         7.00000    8/4/98      (45,785)
Deutsche Marks..........................    11,068,307         1.80715    8/4/98     (139,497)
Deutsche Marks..........................     3,306,482         1.83600    8/4/98      (92,974)
French Francs...........................       858,055         6.05000  10/15/98      (13,615)
Japanese Yen............................       779,174       122.90000   7/31/98       48,523
Japanese Yen............................       233,666       121.89988   7/31/98       16,588
New Zealand Dollars.....................    10,961,561         1.81159    8/4/98      (31,961)
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $60,249,222)..................    59,959,604                                289,618
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 15.52%.
  Total Open Forward Foreign Currency
   Contracts, Net.......................                                             $284,931
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ---------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-51
<PAGE>   1853
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                              STATEMENTS OF ASSETS
                                 AND LIABILITIES
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                              AIM
                                          -------------------------------------------
                                             GLOBAL
                                           GOVERNMENT     GLOBAL HIGH
                                             INCOME      INCOME FUND-     STRATEGIC
                                              FUND       CONSOLIDATED      INCOME
                                           (UNAUDITED)     (NOTE 1)         FUND
                                          -------------  -------------  -------------
<S>                                       <C>            <C>            <C>
Assets:
  Investments in securities, at value
   (cost $249,751,661; $353,289,365; and
   $399,416,769, respectively) (Note
   1)...................................  $ 254,268,277  $361,101,119   $ 405,612,234
  U.S. currency.........................            387           598         812,050
  Foreign currencies....................      4,288,644         4,140       4,446,776
  Interest receivable...................      6,347,624     5,445,023       6,216,285
  Receivable for forward foreign
   currency contracts -- closed (Note
   1)...................................        211,857            --         597,961
  Receivable for Fund shares sold.......      1,302,028     2,282,498       1,032,304
  Receivable for open forward foreign
   currency contracts, net (Note 1).....        635,206        60,059         284,931
  Receivable for securities sold........      3,909,049    33,894,448      23,058,652
                                          -------------  -------------  -------------
    Total assets........................    270,963,072   402,787,885     442,061,193
                                          -------------  -------------  -------------
Liabilities:
  Payable for custodian fees............         49,193        30,200          81,705
  Payable for Directors' and Trustees'
   fees and expenses (Note 2)...........          2,577         3,975             302
  Payable for fund accounting fees (Note
   2)...................................          5,186         7,573           8,223
  Payable for Fund shares repurchased
   (Note 2).............................      4,399,466     1,541,198       2,846,926
  Payable for investment management and
   administration fees (Note 2).........        147,478       273,226         259,083
  Payable for loan outstanding (Note
   1)...................................     21,178,000            --       1,000,000
  Payable for printing and postage
   expenses.............................         97,549        68,350          81,902
  Payable for professional fees.........         25,749        42,925          24,286
  Payable for registration and filing
   fees.................................         13,802        10,318           4,916
  Payable for securities purchased......     11,988,950    45,736,627      50,989,400
  Payable for service and distribution
   expenses (Note 2)....................        126,880       222,467         251,157
  Payable for transfer agent fees (Note
   2)...................................        143,845        72,177         108,413
  Swap contracts outstanding............             --        58,987          22,628
  Other accrued expenses................         43,465        29,769          12,594
                                          -------------  -------------  -------------
    Total liabilities...................     38,222,140    48,097,792      55,691,535
    Minority interest (Notes 1 & 2).....             --           100              --
                                          -------------  -------------  -------------
Net assets..............................  $ 232,740,932  $354,689,993   $ 386,369,658
                                          -------------  -------------  -------------
                                          -------------  -------------  -------------
Class A:
  Net asset value and redemption price
   per share ($130,245,759 DIVIDED BY
   14,942,768; $130,645,479 DIVIDED BY
   9,958,093; and $131,367,400 DIVIDED
   BY 10,690,444 shares outstanding,
   respectively)........................  $        8.72  $      13.12   $       12.29
                                          -------------  -------------  -------------
                                          -------------  -------------  -------------
  Maximum offering price per share
   (100/95.25 of $8.72; 100/95.25 of
   $13.12; and 100/95.25 of $12.29,
   respectively) *......................  $        9.15  $      13.77   $       12.90
                                          -------------  -------------  -------------
                                          -------------  -------------  -------------
Class B:+
  Net asset value and offering price per
   share ($102,299,230 DIVIDED BY
   11,735,659; $221,039,186 DIVIDED BY
   16,866,817; and $254,225,104 DIVIDED
   BY 20,671,013 shares outstanding,
   respectively)........................  $        8.72  $      13.10   $       12.30
                                          -------------  -------------  -------------
                                          -------------  -------------  -------------
Advisor Class:
  Net asset value, offering, and
   redemption price per share ($195,943
   DIVIDED BY 22,401; $3,005,328 DIVIDED
   BY 230,053; and $777,154 DIVIDED BY
   63,127 shares outstanding,
   respectively)........................  $        8.75  $      13.06   $       12.31
                                          -------------  -------------  -------------
                                          -------------  -------------  -------------
Net assets consist of:
  Paid in capital (Note 4)..............  $ 372,865,738  $337,218,506   $ 441,635,549
  Undistributed/Accumulated net
   investment income....................      1,018,033     1,361,701         165,400
  Accumulated net realized gain (loss)
   on investments.......................   (146,316,185)    8,330,019     (61,899,072)
  Net unrealized appreciation on
   translation of assets and
   liabilities..........................        656,730        27,000         294,944
  Net unrealized appreciation of
   investments..........................      4,516,616     7,752,767       6,172,837
                                          -------------  -------------  -------------
Total -- representing net assets
 applicable to capital shares
 outstanding............................  $ 232,740,932  $354,689,993   $ 386,369,658
                                          -------------  -------------  -------------
                                          -------------  -------------  -------------
<FN>
- ---------------
    * On sales of $50,000 or more, the offering price is reduced.
    + Redemption price per share is equal to the net asset value per share less
      any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-52
<PAGE>   1854
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                            STATEMENTS OF OPERATIONS
 
                        Six months ended April 30, 1998
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                         AIM
                                                                       ---------------------------------------
                                                                         GLOBAL
                                                                       GOVERNMENT   GLOBAL HIGH
                                                                         INCOME     INCOME FUND-    STRATEGIC
                                                                          FUND      CONSOLIDATED     INCOME
                                                                       (UNAUDITED)    (NOTE 1)        FUND
                                                                       -----------  ------------   -----------
<S>                                                                    <C>          <C>            <C>
Investment income: (Note 1)
  Interest income....................................................  $10,992,699  $ 24,460,748   $19,799,049
  Securities lending income..........................................      313,851       662,637       677,327
                                                                       -----------  ------------   -----------
    Total investment income..........................................   11,306,550    25,123,385    20,476,376
                                                                       -----------  ------------   -----------
Expenses:
  Investment management and administration fees (Note 2).............      961,579     1,764,370     1,460,302
  Amortization of organization costs (Note 1)........................           --           692            --
  Custodian Fees.....................................................       99,007        54,900       126,700
  Directors' and Trustees' fees and expenses (Note 2)................        4,525         9,326         6,430
  Fund accounting fees (Note 2)......................................       34,976        46,902        53,088
  Interest expense...................................................      425,956        17,282        11,355
  Printing and postage expenses......................................       33,485        66,985        72,401
  Professional fees..................................................       58,096        68,554        77,300
  Registration and filing fees (Note 1)..............................       29,322        16,675        27,150
  Service and distribution expenses: (Note 2)
    Class A..........................................................      264,969       228,195       235,253
    Class B..........................................................      567,064     1,109,235     1,338,087
  Transfer agent fees (Note 2).......................................      305,528       322,530       423,540
  Other expenses.....................................................        5,612         8,524         8,145
                                                                       -----------  ------------   -----------
  Total expenses.....................................................    2,790,119     3,714,170     3,839,751
                                                                       -----------  ------------   -----------
Net investment income................................................    8,516,431    21,409,215    16,636,625
                                                                       -----------  ------------   -----------
Net realized and unrealized gain on investments: (Note 1)
  Net realized gain (loss) on investments............................   (5,554,013)    8,329,245     3,769,467
  Net realized gain (loss) on foreign currency transactions..........    5,895,662    (2,059,452)    3,468,998
                                                                       -----------  ------------   -----------
    Net realized gain during the period..............................      341,649     6,269,793     7,238,465
                                                                       -----------  ------------   -----------
  Net change in unrealized appreciation (depreciation) on translation
   of assets and liabilities in foreign currencies...................   (3,252,473)      946,476    (1,450,607)
  Net change in unrealized appreciation of investments...............    4,464,608     3,389,849       158,475
                                                                       -----------  ------------   -----------
    Net unrealized appreciation (depreciation) during the period.....    1,212,135     4,336,325    (1,292,132)
                                                                       -----------  ------------   -----------
Net realized and unrealized gain on investments and foreign
 currencies..........................................................    1,553,784    10,606,118     5,946,333
                                                                       -----------  ------------   -----------
Net increase in net assets resulting from operations.................  $10,070,215  $ 32,015,333   $22,582,958
                                                                       -----------  ------------   -----------
                                                                       -----------  ------------   -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-53
<PAGE>   1855
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                      STATEMENTS OF CHANGES IN NET ASSETS
 
- -------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                  AIM
                                     ----------------------------------------------------------------------------------------------
                                     GLOBAL GOVERNMENT INCOME FUND         GLOBAL HIGH INCOME
                                     ------------------------------        FUND-CONSOLIDATED             STRATEGIC INCOME FUND
                                       SIX MONTHS                    ------------------------------  ------------------------------
                                         ENDED         YEAR ENDED      SIX MONTHS      YEAR ENDED      SIX MONTHS      YEAR ENDED
                                     APRIL 30, 1998    OCTOBER 31,       ENDED         OCTOBER 31,       ENDED         OCTOBER 31,
                                      (UNAUDITED)         1997       APRIL 30, 1998       1997       APRIL 30, 1998       1997
                                     --------------   -------------  --------------   -------------  --------------   -------------
<S>                                  <C>              <C>            <C>              <C>            <C>              <C>
Increase (decrease) in net assets
Operations:
  Net investment income............  $   8,516,431    $  19,128,003  $  21,409,215    $  31,937,784  $  16,636,625    $  27,580,494
  Net realized gain on investments
   and foreign currency
   transactions....................        341,649          246,114      6,269,793       69,702,746      7,238,465       39,498,013
  Net change in unrealized
   appreciation (depreciation) on
   translation of assets and
   liabilities in foreign
   currencies......................     (3,252,473)       5,553,094        946,476       (1,099,793)    (1,450,607)       2,627,595
  Net change in unrealized
   appreciation (depreciation) of
   investments.....................      4,464,608      (11,452,067)     3,389,849      (36,470,606)       158,475      (26,190,807)
                                     --------------   -------------  --------------   -------------  --------------   -------------
    Net increase in net assets
     resulting from operations.....     10,070,215       13,475,144     32,015,333       64,070,131     22,582,958       43,515,295
                                     --------------   -------------  --------------   -------------  --------------   -------------
Class A:
Distributions to shareholders:
 (Note 1)
  From net investment income.......     (4,583,533)      (6,827,721)    (7,715,585)     (12,555,399)    (4,692,291)     (10,228,265)
  From net realized gain on
   investments.....................             --               --    (24,244,657)      (2,751,509)            --               --
  In excess of net investment
   income..........................             --       (4,449,488)            --               --             --         (775,601)
Class B:
Distributions to shareholders:
 (Note 1)
  From net investment income.......     (2,902,894)      (4,503,257)   (12,421,981)     (17,789,317)    (8,398,431)     (18,434,103)
  From net realized gain on
   investments.....................             --               --    (40,998,478)      (3,911,565)            --               --
  In excess of net investment
   income..........................             --       (2,934,682)            --               --             --       (1,397,843)
Advisor Class:
Distributions to shareholders:
 (Note 1)
  From net investment income.......        (11,971)          (4,070)      (213,548)      (1,289,469)       (29,497)         (43,148)
  From net realized gain on
   investments.....................             --               --       (625,775)        (264,339)            --               --
  In excess of net investment
   income..........................             --           (2,653)            --               --             --           (3,272)
                                     --------------   -------------  --------------   -------------  --------------   -------------
      Total distributions..........     (7,498,398)     (18,721,871)   (86,220,024)     (38,561,598)   (13,120,219)     (30,882,232)
                                     --------------   -------------  --------------   -------------  --------------   -------------
Capital share transactions: (Note
4)
  Increase from capital shares sold
   and reinvested..................    591,892,734      667,541,828    173,649,654      561,523,639    109,089,465      335,031,026
  Decrease from capital shares
   repurchased.....................   (643,833,097)    (787,794,141)  (130,547,381)    (665,858,246)  (152,806,341)    (445,823,540)
                                     --------------   -------------  --------------   -------------  --------------   -------------
    Net decrease from capital share
     transactions..................    (51,940,363)    (120,252,313)    43,102,273     (104,334,607)   (43,716,876)    (110,792,514)
                                     --------------   -------------  --------------   -------------  --------------   -------------
Total increase (decrease) in net
 assets............................    (49,368,546)    (125,499,040)   (11,102,418)     (78,826,074)   (34,254,137)     (98,159,451)
Net assets:
  Beginning of period..............    282,109,478      407,608,518    365,792,411      444,618,485    420,623,795      518,783,246
                                     --------------   -------------  --------------   -------------  --------------   -------------
  End of period  *.................  $ 232,740,932    $ 282,109,478  $ 354,689,993    $ 365,792,411  $ 386,369,658    $ 420,623,795
                                     --------------   -------------  --------------   -------------  --------------   -------------
                                     --------------   -------------  --------------   -------------  --------------   -------------
 * Includes undistributed
   (distributions in excess of) net
   investment income...............  $   1,018,033    $          --  $   1,361,701    $     303,600  $     165,400    $  (3,351,006)
                                     --------------   -------------  --------------   -------------  --------------   -------------
                                     --------------   -------------  --------------   -------------  --------------   -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-54
<PAGE>   1856
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                              FINANCIAL HIGHLIGHTS
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                 Global Government Income Fund
                                          ----------------------------------------------------------------------------
                                                                            Class A
                                          ----------------------------------------------------------------------------
                                            SIX MONTHS
                                              ENDED                          Year ended October 31,
                                          APRIL 30, 1998   -----------------------------------------------------------
                                          (UNAUDITED)(d)     1997(d)      1996(d)     1995(d)     1994(d)     1993(d)
                                          --------------   -----------   ---------   ---------   ---------   ---------
<S>                                       <C>              <C>           <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   8.62         $   8.74    $   8.81    $   8.63    $  11.07    $   9.83
                                          --------------   -----------   ---------   ---------   ---------   ---------
Income from investment operations:
  Net investment income.................        0.29             0.52        0.57        0.62        0.65        0.74
  Net realized and unrealized gain
   (loss) on investments................        0.07            (0.13)       0.03        0.15       (1.52)       1.34
                                          --------------   -----------   ---------   ---------   ---------   ---------
    Net increase (decrease) from
     investment operations..............        0.36             0.39        0.60        0.77       (0.87)       2.08
                                          --------------   -----------   ---------   ---------   ---------   ---------
Distributions to shareholders:
  From net investment income............       (0.26)           (0.31)      (0.57)      (0.59)      (0.65)      (0.74)
  From net realized gain on
   investments..........................          --               --       (0.10)         --       (0.27)         --
  In excess of net investment income....          --            (0.20)         --          --          --          --
  In excess of net realized gain on
   investments..........................          --               --          --          --       (0.55)         --
  Return of capital.....................          --               --          --          --       (0.10)         --
  From sources other than net investment
   income...............................          --               --          --          --          --       (0.10)
                                          --------------   -----------   ---------   ---------   ---------   ---------
    Total distributions.................       (0.26)           (0.51)      (0.67)      (0.59)      (1.57)      (0.84)
                                          --------------   -----------   ---------   ---------   ---------   ---------
Net asset value, end of period..........    $   8.72         $   8.62    $   8.74    $   8.81    $   8.63    $  11.07
                                          --------------   -----------   ---------   ---------   ---------   ---------
                                          --------------   -----------   ---------   ---------   ---------   ---------
 
Total investment return (c).............        4.05% (b)        4.78%       7.11%       9.22%      (8.87)%      21.9%
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $130,246         $154,272    $240,945    $385,404    $502,094    $708,301
Ratio of net investment income to
 average net assets.....................        6.69% (a)        6.04%       6.52%       6.98%       6.87%        7.1%
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......        1.50% (a)        1.34%       1.34%       1.35%       1.33%        1.4%
  Without expense reductions............        1.50% (a)        1.51%       1.39%       1.38%        N/A         N/A
Ratio of interest expense to average net
 assets.................................        0.32% (a)         N/A         N/A         N/A         N/A         N/A
Portfolio turnover rate++...............         211% (a)         241%        268%        385%        625%        495%
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-55
<PAGE>   1857
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                  Global Government Income Fund
                                          -----------------------------------------------------------------------------
                                                                             Class B
                                          -----------------------------------------------------------------------------
                                            SIX MONTHS
                                              ENDED                           Year ended October 31,
                                          APRIL 30, 1998   ------------------------------------------------------------
                                          (UNAUDITED)(d)     1997(d)       1996(d)     1995(d)     1994(d)     1993(d)
                                          --------------   ------------   ---------   ---------   ---------   ---------
<S>                                       <C>              <C>            <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $   8.62         $   8.74     $   8.80    $   8.64    $  11.07    $   9.83
                                          --------------   ------------   ---------   ---------   ---------   ---------
Income from investment operations:
  Net investment income.................        0.26             0.46         0.51        0.55        0.59        0.67
  Net realized and unrealized gain
   (loss) on investments................        0.07            (0.12)        0.04        0.14       (1.52)       1.34
                                          --------------   ------------   ---------   ---------   ---------   ---------
    Net increase (decrease) from
     investment operations..............        0.33             0.34         0.55        0.69       (0.93)       2.01
                                          --------------   ------------   ---------   ---------   ---------   ---------
Distributions to shareholders:
  From net investment income............       (0.23)           (0.28)       (0.51)      (0.53)      (0.59)      (0.67)
  From net realized gain on
   investments..........................          --               --        (0.10)         --       (0.27)         --
  In excess of net investment income....          --            (0.18)          --          --          --          --
  In excess of net realized gain on
   investments..........................          --               --           --          --       (0.54)         --
  Return of capital.....................          --               --           --          --       (0.10)         --
  From sources other than net investment
   income...............................          --               --           --          --          --       (0.10)
                                          --------------   ------------   ---------   ---------   ---------   ---------
    Total distributions.................       (0.23)           (0.46)       (0.61)      (0.53)      (1.50)      (0.77)
                                          --------------   ------------   ---------   ---------   ---------   ---------
Net asset value, end of period..........    $   8.72         $   8.62     $   8.74    $   8.80    $   8.64    $  11.07
                                          --------------   ------------   ---------   ---------   ---------   ---------
                                          --------------   ------------   ---------   ---------   ---------   ---------
 
Total investment return (c).............        3.85% (b)        4.00%        6.54%       8.22%      (9.39)%      21.1%
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $102,299         $127,722     $166,577    $235,481    $262,405    $182,972
Ratio of net investment income to
 average net assets.....................        6.04% (a)        5.39%        5.87%       6.33%       6.22%        6.5%
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......        2.15% (a)        1.99%        1.99%       2.00%       1.98%        2.0%
  Without expense reductions............        2.15% (a)        2.16%        2.04%       2.03%        N/A         N/A
Ratio of interest expense to average net
 assets.................................        0.32% (a)         N/A          N/A         N/A         N/A         N/A
Portfolio turnover rate++...............         211% (a)         241%         268%        385%        625%        495%
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-56
<PAGE>   1858
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                 GLOBAL GOVERNMENT INCOME FUND
                                          -------------------------------------------
                                                        Advisor Class+
                                          -------------------------------------------
                                            SIX
                                          MONTHS                             June 1,
                                           ENDED                              1995
                                           APRIL          Year ended           to
                                            30,           October 31,        October
                                           1998       -------------------      31,
                                          (UNAUDITED)(d)  1997(d) 1996(d)    1995(d)
                                          -------     ---------   -------   ---------
<S>                                       <C>         <C>         <C>       <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $ 8.61        $ 8.73    $ 8.80      $ 8.98
                                          -------     ---------   -------   ---------
Income from investment operations:
  Net investment income.................    0.30          0.55      0.60        0.26
  Net realized and unrealized gain
   (loss) on investments................    0.11         (0.13)     0.03       (0.19)
                                          -------     ---------   -------   ---------
    Net increase (decrease) from
     investment operations..............    0.41          0.42      0.63        0.07
                                          -------     ---------   -------   ---------
Distributions to shareholders:
  From net investment income............   (0.27)        (0.33)    (0.60)      (0.25)
  From net realized gain on
   investments..........................      --            --     (0.10)         --
  In excess of net investment income....      --         (0.21)       --          --
  In excess of net realized gain on
   investments..........................      --            --        --          --
  Return of capital.....................                    --        --          --
  From sources other than net investment
   income...............................      --            --        --          --
                                          -------     ---------   -------   ---------
    Total distributions.................   (0.27)        (0.54)    (0.70)      (0.25)
                                          -------     ---------   -------   ---------
Net asset value, end of period..........  $ 8.75        $ 8.61    $ 8.73      $ 8.80
                                          -------     ---------   -------   ---------
                                          -------     ---------   -------   ---------
 
Total investment return (c).............    4.71%(b)      5.15%     7.49%       0.83%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $  196        $  116    $   86      $  131
Ratio of net investment income to
 average net assets.....................    7.04%(a)      6.39%     6.87%       7.33%(a)
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......    1.15%(a)      0.99%     0.99%       1.00%(a)
  Without expense reductions............    1.15%(a)      1.16%     1.04%       1.03%(a)
Ratio of interest expense to average net
 assets.................................    0.32%(a)       N/A       N/A         N/A
Portfolio turnover rate++...............     211%(a)       241%      268%        385%
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-57
<PAGE>   1859
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                              FINANCIAL HIGHLIGHTS
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                  Global High Income Fund
                                          ------------------------------------------------------------------------
                                                                          Class A
                                          ------------------------------------------------------------------------
                                          SIX MONTHS
                                            ENDED                         Year ended October 31,
                                          APRIL 30,      ---------------------------------------------------------
                                           1998(d)        1997(d)     1996(d)      1995       1994(d)     1993(d)
                                          ----------     ---------   ---------   ---------   ---------   ---------
<S>                                       <C>            <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $  15.56       $  14.85    $  11.70    $  12.56    $  14.92    $  11.43
                                          ----------     ---------   ---------   ---------   ---------   ---------
Income from investment operations:
  Net investment income.................      0.84*          1.19        1.27        1.35        0.94        0.78
  Net realized and unrealized gain
   (loss) on investments................      0.38           0.93        3.09       (1.09)      (1.87)       3.92
                                          ----------     ---------   ---------   ---------   ---------   ---------
    Net increase (decrease) from
     investment operations..............      1.22           2.12        4.36        0.26       (0.93)       4.70
                                          ----------     ---------   ---------   ---------   ---------   ---------
Distributions to shareholders:
  From net investment income............     (0.83)         (1.18)      (1.11)      (1.03)      (0.94)      (0.78)
  From net realized gain on
   investments..........................     (2.83)         (0.23)      (0.10)      (0.03)      (0.27)         --
  In excess of net realized gain on
   investments..........................        --             --          --          --       (0.22)         --
  Return of capital.....................        --             --          --       (0.06)         --          --
  From sources other than net investment
   income...............................        --             --          --          --          --       (0.43)
                                          ----------     ---------   ---------   ---------   ---------   ---------
    Total distributions.................     (3.66)         (1.41)      (1.21)      (1.12)      (1.43)      (1.21)
                                          ----------     ---------   ---------   ---------   ---------   ---------
Net asset value, end of period..........  $  13.12       $  15.56    $  14.85    $  11.70    $  12.56    $  14.92
                                          ----------     ---------   ---------   ---------   ---------   ---------
                                          ----------     ---------   ---------   ---------   ---------   ---------
 
Total investment return (c).............      9.73%(b)      14.46%      39.05%       2.81%      (6.45)%      43.6%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $130,645       $133,973    $178,318    $142,002    $167,974    $143,171
Ratio of net investment income to
 average net assets.....................     10.87%(a)       7.39%       9.52%      11.85%       7.00%       6.40%
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......      1.68%(a)       1.53%       1.69%       1.75%       1.57%       2.20%
  Without expense reductions............      1.68%(a)       1.58%       1.69%       1.75%       1.57%       2.20%
Ratio of interest expense to average net
 assets.................................      0.01%(a)        N/A        0.04%        N/A        0.22%        N/A
Portfolio turnover rate++...............       222%(a)        214%        290%        213%        178%        195%
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the period.
  *  Net investment income per share reflects an interest payment received
     from the conversion of Vnesheconombank loan agreements. Without such a
     payment net investment income would have been $0.63, $0.58 and $0.66
     per share for Class A, B and Advisor, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the fund as a whole
     without distinguishing among the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-58
<PAGE>   1860
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                  Global High Income Fund
                                          ------------------------------------------------------------------------
                                                                          Class B
                                          ------------------------------------------------------------------------
                                          SIX MONTHS
                                             ENDED                        Year ended October 31,
                                           APRIL 30,     ---------------------------------------------------------
                                            1998(d)       1997(d)     1996(d)      1995       1994(d)     1993(d)
                                          -----------    ---------   ---------   ---------   ---------   ---------
<S>                                       <C>            <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $  15.54       $  14.83    $  11.69    $  12.56    $  14.90    $  11.43
                                          -----------    ---------   ---------   ---------   ---------   ---------
Income from investment operations:
  Net investment income.................      0.79*          1.09        1.17        1.27        0.86        0.70
  Net realized and unrealized gain
   (loss) on investments................      0.39           0.93        3.09       (1.09)      (1.85)       3.90
                                          -----------    ---------   ---------   ---------   ---------   ---------
    Net increase (decrease) from
     investment operations..............      1.18           2.02        4.26        0.18       (0.99)       4.60
                                          -----------    ---------   ---------   ---------   ---------   ---------
Distributions to shareholders:
  From net investment income............     (0.79)         (1.08)      (1.03)      (0.96)      (0.86)      (0.70)
  From net realized gain on
   investments..........................     (2.83)         (0.23)      (0.09)      (0.03)      (0.27)         --
  In excess of net realized gain on
   investments..........................        --             --          --          --       (0.22)         --
  Return of capital.....................        --             --          --       (0.06)         --          --
  From sources other than net investment
   income...............................        --             --          --          --          --       (0.43)
                                          -----------    ---------   ---------   ---------   ---------   ---------
    Total distributions.................     (3.62)         (1.31)      (1.12)      (1.05)      (1.35)      (1.13)
                                          -----------    ---------   ---------   ---------   ---------   ---------
Net asset value, end of period..........  $  13.10       $  15.54    $  14.83    $  11.69    $  12.56    $  14.90
                                          -----------    ---------   ---------   ---------   ---------   ---------
                                          -----------    ---------   ---------   ---------   ---------   ---------
 
Total investment return (c).............      9.37% (b)     13.77%      38.16%       2.07%      (6.99)%      42.6%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $221,039       $228,101    $251,002    $214,897    $232,423    $127,035
Ratio of net investment income to
 average net assets.....................     10.22% (a)      6.74%       8.87%      11.20%       6.35%        5.8%
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......      2.33% (a)      2.18%       2.34%       2.40%       2.22%        2.8%
  Without expense reductions............      2.33% (a)      2.23%       2.34%       2.40%       2.22%        2.8%
Ratio of interest expense to average net
 assets.................................      0.01% (a)       N/A        0.04%        N/A        0.22%        N/A
Portfolio turnover rate++...............       222% (a)       214%        290%        213%        178%        195%
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the period.
  *  Net investment income per share reflects an interest payment received
     from the conversion of Vnesheconombank loan agreements. Without such a
     payment net investment income would have been $0.63, $0.58 and $0.66
     per share for Class A, B and Advisor, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the fund as a whole
     without distinguishing among the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-59
<PAGE>   1861
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                    Global High Income Fund
                                          --------------------------------------------
                                                         Advisor Class+
                                          --------------------------------------------
                                            SIX                              June 1,
                                           MONTHS                              1995
                                           ENDED           Year Ended           to
                                           APRIL          October 31,        October
                                            30,        ------------------      31,
                                          1998(d)      1997(d)   1996(d)       1995
                                          --------     -------   --------   ----------
<S>                                       <C>          <C>       <C>        <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $15.52      $14.83    $ 11.71      $11.44
                                          --------     -------   --------   ----------
Income from investment operations:
  Net investment income.................     0.87*       1.22       1.34        0.57
  Net realized and unrealized gain
   (loss) on investments................     0.36        0.93       3.05        0.17
                                          --------     -------   --------   ----------
    Net increase (decrease) from
     investment operations..............     1.23        2.15       4.39        0.74
                                          --------     -------   --------   ----------
Distributions to shareholders:
  From net investment income............    (0.86)      (1.23)     (1.16)      (0.44)
  From net realized gain on
   investments..........................    (2.83)      (0.23)     (0.11)         --
  In excess of net realized gain on
   investments..........................       --          --         --          --
  Return of capital.....................       --          --         --       (0.03)
  From sources other than net investment
   income...............................       --          --         --          --
                                          --------     -------   --------   ----------
    Total distributions.................    (3.69)      (1.46)     (1.27)      (0.47)
                                          --------     -------   --------   ----------
Net asset value, end of period..........   $13.06      $15.52    $ 14.83      $11.71
                                          --------     -------   --------   ----------
                                          --------     -------   --------   ----------
 
Total investment return (c).............     9.81%(b)   14.72%     39.38%       6.54%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $3,005      $3,719    $15,298      $1,463
Ratio of net investment income to
 average net assets.....................    11.22%(a)    7.74%      9.87%      12.20%(a)
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......     1.33%(a)    1.18%      1.34%       1.40%(a)
  Without expense reductions............     1.33%(a)    1.23%      1.34%       1.40%
Ratio of interest expense to average net
 assets.................................     0.01%(a)     N/A       0.04%        N/A
Portfolio turnover rate++...............      222%(a)     214%       290%        213%(a)
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the period.
  *  Net investment income per share reflects an interest payment received
     from the conversion of Vnesheconombank loan agreements. Without such a
     payment net investment income would have been $0.63, $0.58 and $0.66
     per share for Class A, B and Advisor, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the fund as a whole
     without distinguishing among the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-60
<PAGE>   1862
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                              FINANCIAL HIGHLIGHTS
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                         Strategic Income Fund
                                            --------------------------------------------------------------------------------
                                                                                Class A
                                            --------------------------------------------------------------------------------
                                            SIX MONTHS
                                              ENDED                             Year ended October 31,
                                            APRIL 30,      -----------------------------------------------------------------
                                             1998(d)         1997         1996(d)       1995(d)        1994         1993(d)
                                            ----------     ---------     ---------     ---------     ---------     ---------
<S>                                         <C>            <C>           <C>           <C>           <C>           <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $  12.00       $  11.76      $  10.32      $  10.88      $  13.61      $  11.25
                                            ----------     ---------     ---------     ---------     ---------     ---------
Income from investment operations:
  Net investment income.................        0.52*          0.74          0.89          0.97          0.79          0.96
  Net realized and unrealized gain
   (loss) on investments................        0.19           0.34          1.44         (0.69)        (2.14)         2.85
                                            ----------     ---------     ---------     ---------     ---------     ---------
    Net increase (decrease) from
     investment operations..............        0.71           1.08          2.33          0.28         (1.35)         3.81
                                            ----------     ---------     ---------     ---------     ---------     ---------
Distributions to shareholders:
  From net investment income............       (0.42)         (0.78)        (0.82)        (0.80)        (0.79)        (0.96)
  From net realized gain on
   investments..........................          --             --            --            --         (0.38)        (0.37)
  In excess of net investment income....          --          (0.06)        (0.07)           --            --            --
  Return of capital.....................          --             --            --         (0.04)        (0.21)           --
  From sources other than net investment
   income...............................          --             --            --            --            --         (0.12)
                                            ----------     ---------     ---------     ---------     ---------     ---------
    Total distributions.................       (0.42)         (0.84)        (0.89)        (0.84)        (1.38)        (1.45)
                                            ----------     ---------     ---------     ---------     ---------     ---------
Net asset value, end of period..........    $  12.29       $  12.00      $  11.76      $  10.32      $  10.88      $  13.61
                                            ----------     ---------     ---------     ---------     ---------     ---------
                                            ----------     ---------     ---------     ---------     ---------     ---------
 
Total investment return (c).............        5.92%(b)       9.40%        23.00%         3.06%       (10.44)%        37.0%
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $131,367       $138,715      $185,126      $188,165      $275,241      $287,870
Ratio of net investment income to
 average net assets.....................        7.78%(a)       6.18%         8.09%         9.64%         6.74%          7.2%
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......        1.46%(a)       1.35%         1.38%         1.42%         1.40%          1.7%
  Without expense reductions............        1.46%(a)       1.44%         1.40%         1.45%          N/A           N/A
Ratio of interest expense to average net
 assets.................................        0.01%(a)        N/A           N/A           N/A          0.10%          N/A
Portfolio turnover rate++...............         244%(a)        149%          177%          238%          583%          310%
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Net investment income per share reflects an interest payment received
     from the conversion of Vnesheconombank loan agreements. Without such a
     payment net investment income would have been $0.41, $0.37 and $0.44
     per share for Class A, B and Advisor, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-61
<PAGE>   1863
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                                         Strategic Income Fund
                                            --------------------------------------------------------------------------------
                                                                                Class B
                                            --------------------------------------------------------------------------------
                                            SIX MONTHS
                                              ENDED                             Year ended October 31,
                                            APRIL 30,      -----------------------------------------------------------------
                                             1998(d)         1997         1996(d)       1995(d)        1994         1993(d)
                                            ----------     ---------     ---------     ---------     ---------     ---------
<S>                                         <C>            <C>           <C>           <C>           <C>           <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $  12.01       $  11.77      $  10.33      $  10.88      $  13.60      $  11.24
                                            ----------     ---------     ---------     ---------     ---------     ---------
Income from investment operations:
  Net investment income.................        0.48*          0.67          0.82          0.91          0.73          0.89
  Net realized and unrealized gain
   (loss) on investments................        0.19           0.33          1.44         (0.69)        (2.14)         2.85
                                            ----------     ---------     ---------     ---------     ---------     ---------
    Net increase (decrease) from
     investment operations..............        0.67           1.00          2.26          0.22         (1.41)         3.74
                                            ----------     ---------     ---------     ---------     ---------     ---------
Distributions to shareholders:
  From net investment income............       (0.38)         (0.71)        (0.75)        (0.73)        (0.72)        (0.89)
  From net realized gain on
   investments..........................          --             --            --            --         (0.38)        (0.37)
  In excess of net investment income....          --          (0.05)        (0.07)           --            --            --
  Return of capital.....................          --             --            --         (0.04)        (0.21)           --
  From sources other than net investment
   income...............................          --             --            --            --            --         (0.12)
                                            ----------     ---------     ---------     ---------     ---------     ---------
    Total distributions.................       (0.38)         (0.76)        (0.82)        (0.77)        (1.31)        (1.38)
                                            ----------     ---------     ---------     ---------     ---------     ---------
Net asset value, end of period..........    $  12.30       $  12.01      $  11.77      $  10.33      $  10.88      $  13.60
                                            ----------     ---------     ---------     ---------     ---------     ---------
                                            ----------     ---------     ---------     ---------     ---------     ---------
 
Total investment return (c).............        5.58%(b)       8.70%        22.15%         2.48%       (11.02)%        36.2%
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $254,225       $281,376      $333,178      $357,852      $458,550      $310,431
Ratio of net investment income to
 average net assets.....................        7.13%(a)       5.53%         7.44%         8.99%         6.09%          6.5%
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......        2.11%(a)       2.00%         2.03%         2.07%         2.05%          2.4%
  Without expense reductions............        2.11%(a)       2.09%         2.05%         2.10%          N/A           N/A
Ratio of interest expense to average net
 assets.................................        0.01%(a)        N/A           N/A           N/A          0.10%          N/A
Portfolio turnover rate++...............         244%(a)        149%          177%          238%          583%          310%
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Net investment income per share reflects an interest payment received
     from the conversion of Vnesheconombank loan agreements. Without such a
     payment net investment income would have been $0.41, $0.37 and $0.44
     per share for Class A, B and Advisor, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-62
<PAGE>   1864
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- -------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                            Strategic Income Fund
                                            -----------------------------------------------------
                                                               Advisor Class+
                                            -----------------------------------------------------
                                            SIX MONTHS          Year Ended           June 1, 1995
                                              ENDED             October 31,               to
                                            APRIL 30,      ---------------------     October 31,
                                             1998(d)         1997       1996(d)        1995(d)
                                            ----------     --------     --------     ------------
<S>                                         <C>            <C>          <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....     $ 12.02       $ 11.77      $ 10.33        $ 10.32
                                            ----------     --------     --------     ------------
Income from investment operations:
  Net investment income.................        0.55*         0.79         0.93           0.41
  Net realized and unrealized gain
   (loss) on investments................        0.18          0.34         1.44          (0.04)
                                            ----------     --------     --------     ------------
    Net increase (decrease) from
     investment operations..............        0.73          1.13         2.37           0.37
                                            ----------     --------     --------     ------------
Distributions to shareholders:
  From net investment income............       (0.44)        (0.82)       (0.86)         (0.34)
  From net realized gain on
   investments..........................          --            --           --             --
  In excess of net investment income....          --         (0.06)       (0.07)            --
  Return of capital.....................          --            --           --          (0.02)
  From sources other than net investment
   income...............................          --            --           --             --
                                            ----------     --------     --------     ------------
    Total distributions.................       (0.44)        (0.88)       (0.93)         (0.36)
                                            ----------     --------     --------     ------------
Net asset value, end of period..........     $ 12.31       $ 12.02      $ 11.77        $ 10.33
                                            ----------     --------     --------     ------------
                                            ----------     --------     --------     ------------
 
Total investment return (c).............        6.09%(b)      9.86%       23.39%          3.72% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....     $   777       $   533      $   479        $   443
Ratio of net investment income to
 average net assets.....................        8.13%(a)      6.53%        8.44%          9.99% (a)
Ratio of operating expenses to average
 net assets:
  With expense reductions (Note 1)......        1.11%(a)      1.00%        1.03%          1.07% (a)
  Without expense reductions............        1.11%(a)      1.09%        1.05%          1.10% (a)
Ratio of interest expense to average net
 assets.................................        0.01%(a)       N/A          N/A            N/A
Portfolio turnover rate++...............         244%(a)       149%         177%           238%
</TABLE>
 
- ---------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  *  Net investment income per share reflects an interest payment received
     from the conversion of Vnesheconombank loan agreements. Without such a
     payment net investment income would have been $0.41, $0.37 and $0.44
     per share for Class A, B and Advisor, respectively.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-63
<PAGE>   1865
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                 April 30, 1998
 
- -------------------------------------------------------------------------------
 
The following Notes to Financial Statements are for the period ending April 30,
1998, and unless otherwise indicated, reflect facts as of that date. Please see
"Note 6 -- Subsequent Events" for a discussion of certain changes which took
place after April 30, 1998.
 
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 6)
GT Global Government Income Fund, GT Global High Income Fund and GT Global
Strategic Income Fund ("Funds") are non-diversified separate series of GT
Investment Funds, Inc. ("Company"). Effective June 1, 1998, the Company was
renamed AIM Investment Funds, Inc. and these separate series were renamed as
follows: AIM Global Government Income Fund, AIM Global High Income Fund and AIM
Strategic Income Fund, respectively. Collectively, these Funds are now known as
the "AIM Global Income Funds." The Company is organized as a Maryland
corporation and is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as an open-end management investment company. The Company
has thirteen series of shares in operation, each series corresponding to a
distinct portfolio of investments.
 
The GT Global High Income Fund invests substantially all of its investable
assets in Global High Income Portfolio ("Portfolio"). The Portfolio is organized
as a New York Trust and is registered under the 1940 Act as a non-diversified,
open-end management investment company.
 
The Portfolio has investment objectives, policies and limitations substantially
identical to those of its corresponding Fund. Therefore, the financial
statements of the Fund and its respective Portfolio have been presented on a
consolidated basis, and represent all activities of both the Fund and Portfolio.
Through April 30, 1998, all of the shares of beneficial interest of the
Portfolio were owned by either its Fund or Chancellor LGT Asset Management, Inc.
(the "Manager"), which has a nominal ($100) investment in the Portfolio.
 
The Funds offer Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective service and distribution expenses, and
may differ in its transfer agent, registration, and certain other class-specific
fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
 
(A) PORTFOLIO VALUATION
The Funds calculate the net asset value of and complete orders to purchase,
exchange, or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by the Manager to be the
primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments with a maturity of 60
days or less are valued at amortized cost adjusted for foreign exchange
translation and market fluctuation, if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors or the Trust's Board of Trustees.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors or
the Trust's Board of Trustees.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of each Fund and Portfolio are maintained in U.S.
dollars. The market values of foreign securities, currency holdings, and other
assets and liabilities are recorded in the books and records of the Funds or
Portfolio (the phrase "Funds or Portfolio" hereinafter refers to the GT Global
Government Income Fund, the GT Global Strategic Income Fund, and the Global High
Income Portfolio) after translation to U.S. dollars based on the exchange rates
on that day. The cost of each security is determined
 
                                      FS-64
<PAGE>   1866
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when earned or incurred.
 
A Fund or Portfolio does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from
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.
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on a
Fund's or Portfolio's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains or losses arise
from changes in the value of assets and liabilities other than investments in
securities at period end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by a Fund or Portfolio, it is
the Fund's or Portfolio's policy to always receive, as collateral, United States
government securities or other high quality debt securities of which the value,
including accrued interest, is at least equal to the amount to be repaid to the
Fund or Portfolio under each agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by a Fund or Portfolio as an unrealized gain or loss.
When the Forward Contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference between the value at the time it was opened
and the value at the time it was closed. Forward Contracts involve market risk
in excess of the amount shown in the Fund's or Portfolio's "Statement of Assets
and Liabilities." A Fund or Portfolio could be exposed to risk if a counterparty
is unable to meet the terms of the contract or if the value of the currency
changes unfavorably. A Fund or Portfolio may enter into Forward Contracts in
connection with planned purchases or sales of securities, or to hedge against
adverse fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When a Fund or Portfolio writes a call or put option, an amount equal to the
premium received is included in the Fund's or Portfolio's "Statement of Assets
and Liabilities" as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market value
of the option. The current market value of an option listed on an exchange is
valued at its last bid price, or, in the case of an over-the-counter option, is
valued at the average of the last bid prices obtained from brokers, unless a
quotation from only one broker is available, in which case only that broker's
price will be used. If an option expires on its stipulated expiration date or if
the Fund or Portfolio enters into a closing purchase transaction, a gain or loss
is realized without regard to any unrealized gain or loss on the underlying
security and the liability related to such option is extinguished. If a written
call option is exercised, a gain or loss is realized from the sale of the
underlying security and the proceeds of the sale are increased by the premium
originally received. If a written put option is exercised, the cost of the
underlying security purchased would be decreased by the premium originally
received. The Fund or Portfolio can write options only on a covered basis,
which, for a call, requires that the Fund or Portfolio hold the underlying
security and, for a put, requires the Fund or Portfolio to set aside cash, U.S.
government securities or other liquid securities in an amount not less than the
exercise price, or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund or Portfolio may use options to manage its
exposure to the stock market and to fluctuations in currency values or interest
rates.
 
The premium paid by the Fund or Portfolio for the purchase of a call or put
option is included in the Fund's or Portfolio's "Statement of Assets and
Liabilities" as an investment and subsequently "marked-to-market" to reflect the
current market value of the option. If an option which the Fund or Portfolio has
purchased expires on the stipulated expiration date, the Fund or Portfolio
realizes a loss in the amount of the cost of the option. If the Fund or
Portfolio enters into a closing sale transaction, the Fund or Portfolio realizes
a gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund or Portfolio
exercises a call option, the cost of the securities acquired by exercising the
call is increased by the premium paid to buy the call. If the Fund or Portfolio
exercises a put option, it realizes a gain or loss from the sale of the
underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund or Portfolio may forego
the opportunity of profit if the market value of the underlying security or
index increases and the option is exercised. The risk in writing a put option is
that the Portfolio may incur a loss if the market value of the underlying
security or index decreases and the option is exercised. In addition, there is
the risk the Fund or Portfolio may not be able to enter into a closing
transaction because of an illiquid secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract a
Fund or Portfolio is required to pledge to the broker an amount of cash or
securities equal to the minimum "initial margin" requirements of the exchange on
which the contract is traded. Pursuant to the contract, the Fund or Portfolio
agrees to receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known as
"variation margin" and are recorded by the Fund or Portfolio as
 
                                      FS-65
<PAGE>   1867
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
unrealized gains or losses. When the contract is closed, the Fund or Portfolio
records a realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed. The
potential risk to the Fund or Portfolio is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
A Fund or Portfolio may use futures contracts to manage its exposure to the
stock market and to fluctuations in currency values or interest rates.
 
(G) SWAP CONTRACTS AND OTHER DERIVATIVE INSTRUMENTS
Swap contracts involve the exchange by a Fund or Portfolio with a counterparty
of respective commitments to pay or receive, fixed or floating rates with
respect to a notional amount. A Fund or Portfolio may enter into these
transactions primarily to preserve a return or spread on a particular investment
or portion of its portfolio, to protect against currency fluctuations, as a
technique for managing the portfolio's duration or to protect against any
increase in the price of securities the Fund or Portfolio anticipates purchasing
at a later date. A Fund or Portfolio may be exposed to risk if a counterparty is
unable to meet the terms of the contract, the value of the contract changes
unfavorably, or the change in value of the underlying securities, indexes or
similar reference item does not correlate to the change in the value of the
contracts.
(H) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out-basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. A Fund or Portfolio may
trade securities on other than normal settlement terms. This may increase the
risk if the other party to the transaction fails to deliver and causes the Fund
or Portfolio to subsequently invest at less advantageous prices.
 
(I) PORTFOLIO SECURITIES LOANED
At April 30, 1998, stocks with an aggregate value listed below were on loan to
brokers. The loans were secured by cash collateral received by the Funds:
 
<TABLE>
<CAPTION>
                                                   APRIL 30, 1998             PERIOD ENDED
                                          --------------------------------   APRIL 30, 1998
                                          AGGREGATE VALUE        CASH        --------------
                                              ON LOAN         COLLATERAL     FEES RECEIVED
                                          ---------------   --------------   --------------
<S>                                       <C>               <C>              <C>
GT Global Government Income Fund........   $  5,105,020      $  7,410,000       $313,851
Global High Income Portfolio............   $ 41,346,275      $ 44,614,120       $662,637
GT Global Strategic Income Fund.........   $ 23,358,514      $ 25,208,069       $677,327
</TABLE>
 
For international securities, cash collateral is received by a Fund or Portfolio
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by a Fund or Portfolio against loaned securities in the
amount at least equal to 102% of the market value of the loaned securities at
the inception of each loan. This collateral must be maintained at not less than
100% of the market value of the loaned securities during the period of the loan.
The cash collateral is invested in a securities lending trust which consists of
a portfolio of high quality short duration securities whose average effective
duration is restricted to 120 days or less.
 
(J) TAXES
It is the intended policy of the Funds and Portfolios to meet the requirements
for qualification as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended ("Code"). It is also the intention of the Funds and
Portfolios to make distributions sufficient to avoid imposition of any excise
tax under Section 4982 of the Code. Therefore, no provision has been made for
Federal taxes on income, capital gains, or unrealized appreciation of securities
held, and excise tax on income and capital gains. The GT Global Government
Income Fund has a capital loss carryforward of $139,369,056 of which
$123,623,470 expires in 2002, and $15,745,586 expires in 2003. The GT Global
Strategic Income Fund has a capital loss carryforward of $65,749,433 which
expires in 2003.
 
(K) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by each Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 Funds or Portfolio and timing
differences.
 
(L) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the GT Global High Income Fund and the Portfolio in
connection with their organization, their initial registration with the
Securities and Exchange Commission and with various states and the initial
public offering of its shares aggregated $149,100 and $25,000, respectively.
These expenses are being amortized on a straightline basis over a five-year
period.
 
(M) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's or Portfolio's investment in emerging
market countries may involve greater risks than investments in more developed
markets and the price of such investments may be volatile. These risks of
investing in foreign and emerging markets may include foreign currency exchange
rate fluctuations, perceived credit risk, adverse political and economic
developments and possible adverse foreign government intervention.
 
                                      FS-66
<PAGE>   1868
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
(N) INDEXED SECURITIES
A Fund or Portfolio may invest in indexed securities whose value is linked
either directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
 
(O) RESTRICTED SECURITIES
A Fund or Portfolio is permitted to invest in privately placed restricted
securities. These securities may be resold in transactions exempt from
registration or to the public if the securities are registered. Disposal of
these securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) are shown at the end of the Fund's
or Portfolio's Portfolio of Investments.
 
(P) LINE OF CREDIT
Each of the Funds, along with certain other funds ("Funds") advised and/or
administered by the Manager, has a line of credit with BankBoston. GT Global
Government Income Fund, along with certain other funds ("GT Funds") advised
and/or administered by the Manager, has a line of credit with State Street Bank
& Trust Company. The arrangements with the banks allow all specified funds and
the GT Funds to borrow an aggregate maximum amount of $250,000,000. Each of
these funds is limited to borrowing up to 33 1/3% of the value of each Fund's
total assets. On April 30, 1998, GT Global Government Income Fund and GT Global
Strategic Income Fund had $21,178,000 and $1,000,000, respectively, in loans
outstanding.
 
For the period ended April 30, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for GT Global Government Income Fund, GT Global High Income Fund, and GT Global
Strategic Income Fund was $14,452,819, $5,000,000 and $4,538,462 respectively,
with a weighted average interest rate of 6.34%, 6.24% and 6.24%, respectively.
Interest expense for the GT Global Government Income Fund, GT Global High Income
Fund and GT Global Strategic Income Fund for the period ended April 30, 1998 was
$394,370, $15,597 and $10,231, respectively. Other interest expense charges
amounted to $31,586, $1,685, and $1,124, respectively.
 
(Q) SECURITIES PURCHASED ON A WHEN-ISSUED OR FORWARD COMMITMENT BASIS
A Fund or Portfolio may trade securities on a when-issued or forward commitment
basis, with payment and delivery scheduled for a future date. These transactions
are subject to market fluctuations and are subject to the risk that the value at
delivery may be more or less than the trade date purchase price. Although the
Fund or Portfolio will generally purchase these securities with the intention of
acquiring such securities, they may sell such securities before the settlement
date. These securities are identified on the accompanying Portfolio of
Investments. The Fund or Portfolio has set aside sufficient cash or liquid
securities as collateral for these purchase commitments.
 
2. RELATED PARTIES (SEE ALSO NOTE 6)
For the period ended April 30, 1998, Chancellor LGT Asset Management, Inc. was
the Funds' and Portfolios' investment manager and administrator. The GT Global
Government Income Fund and GT Global Strategic Income Fund each pays the Manager
investment management and administration fees at the annualized rate of 0.725%
on the first $500 million of the average daily net assets of the Fund; 0.70% on
the next $1 billion; 0.675% on the next $1 billion; and 0.65% on amounts
thereafter. The GT Global High Income Fund pays administration fees to the
Manager at the annualized rate of 0.25% of its average daily net assets. These
fees are computed daily and paid monthly.
 
The Global High Income Portfolio pays investment management and administration
fees to the Manager at the annualized rate of 0.475% on the first $500 million
of average daily net assets of the Portfolio; 0.45% on the next $1 billion;
0.425% on the next $1 billion; and 0.40% on amounts thereafter, plus 2% of the
Portfolio's total investment income calculated in accordance with generally
accepted accounting principles, adjusted daily for currency revaluations, on a
mark to market basis, of the Portfolio's assets; provided, however, that during
any fiscal year this amount shall not exceed 2% of the Portfolio's total
investment income calculated in accordance with generally accepted accounting
principles. These fees are computed daily and paid monthly.
 
For the period ended April 30, 1998, GT Global, Inc. ("GT Global"), an affiliate
of the Manager, serves as the Funds' distributor. The Funds offer Class A, Class
B, and Advisor Class shares for purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Funds' current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the period ended April 30, 1998, GT Global retained the
following sales charges: $1,501 for the GT Global Government Income Fund,
$30,238 for the GT Global High Income Fund, and $13,334 for the GT Global
Strategic Income Fund. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Funds' current prospectus. GT Global collected CDSCs for the
period ended April 30, 1998, as follows: $1,119 for the GT Global Strategic
Income Fund. GT Global also makes ongoing shareholder servicing and trail
commission payments to dealers whose clients hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Funds' current
prospectus. For the period ended April 30, 1998, GT Global collected CDSCs in
the amount of: $443,566 for the GT Global Government Income Fund, $520,304 for
the GT Global High Income Fund, and $815,729 for the GT Global Strategic Income
Fund. In addition, GT Global makes
 
                                      FS-67
<PAGE>   1869
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class B shares.
 
Pursuant to the then effective separate distribution plans adopted under 1940
Act Rule 12b-1 by the Company's Board of Directors with respect to the Funds'
Class A shares ("Class A Plan") and Class B shares ("Class B Plan"), a Fund
reimbursed GT Global for a portion of its shareholder servicing and
distributions expenses. Under that Class A Plan, a Fund was permitted to pay GT
Global a service fee at the annualized rate of up to 0.25% of the average daily
net assets of the Fund's Class A shares for GT Global's expenditures incurred in
servicing and maintaining shareholder accounts, and was permitted to pay GT
Global a distribution fee at the annualized rate of up to 0.35% of the average
daily net assets of the Fund's Class A shares, less any amounts paid by the Fund
as the aforementioned service fee, for GT Global's expenditures incurred in
providing services as distributor. All expenses for which GT Global was
reimbursed under the Class A Plan would have been incurred within one year of
such reimbursement.
 
For the period ended April 30, 1998, pursuant to that Fund's Class B Plan, a
Fund was permitted to pay GT Global a service fee at the annualized rate of up
to 0.25% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in servicing and maintaining shareholder
accounts, and was permitted to pay GT Global a distribution fee at the
annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually were permitted to be carried forward for reimbursement in subsequent
years as long as that Plan continued in effect.
 
The Manager and GT Global voluntarily undertook to limit each GT Global
Government Income Fund, GT Global High Income Fund and GT Global Strategic
Income Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expense) to the maximum annual rate of 1.75%, 2.40%, and 1.40% of
the average daily net assets of the Fund's Class A, Class B, and Advisor Class
shares, respectively. If necessary, this limitation will be effected by waivers
by the Manager of investment management and administration fees, waivers by GT
Global of payments under the Class A Plan and/or Class B Plan and/or
reimbursements by the Manager or GT Global of portions of the Fund's other
operating expenses.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and LGT and GT Global, is the transfer agent of the Funds. For performing
shareholder servicing, reporting, and general transfer agent services, GT
Services receives an annual maintenance fee of $17.50 per account, a new account
fee of $4.00 per account, a per transaction fee of $1.75 for all transactions
other than exchanges and per exchange fee of $2.25. GT Services also is
reimbursed by the Fund for its out-of-pocket expenses for such items as postage,
forms, telephone charges, stationery and office supplies.
 
The Manager is the pricing and accounting agent for the Funds and Portfolio. The
monthly fee for these services to the Manager is a percentage, not to exceed
0.03% annually, of a Fund or Portfolio's average daily net assets. The annual
fee rate is derived by applying 0.03% to the first $5 billion of assets of all
registered mutual funds advised by the Manager and 0.02% to the assets in excess
of $5 billion and allocating the result according to each Fund's average daily
net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager or any other affiliated company, $5,000 per year plus
$300 for each meeting of the board or any committee thereof attended by the
Director. Each Portfolio pays each of its Trustees who is not an employee,
officer, or director of the Manager, GT Global or GT Services $500 per year plus
$150 for each meeting of the board or any committee thereof attended by the
Trustees.
 
3. PURCHASES AND SALES OF SECURITIES
The following summarizes purchases and sales of investment securities, other
than short-term investments, by each Fund or Portfolio for the period ended
April 30, 1998:
 
                       PURCHASES AND SALES OF SECURITIES
 
<TABLE>
<CAPTION>
                                                           PURCHASES
                                          --------------------------------------------
                                             U.S. GOVERNMENT AND
PORTFOLIO                                    GOVERNMENT AGENCIES       OTHER ISSUES
- ----------------------------------------  -------------------------  -----------------
<S>                                       <C>                        <C>
GT Global Government Income Fund........     $       133,735,073     $     128,648,284
Global High Income Portfolio............                      --           379,500,657
GT Global Strategic Income Fund.........             187,793,767           270,132,637
</TABLE>
 
<TABLE>
<CAPTION>
                                                             SALES
                                          --------------------------------------------
                                             U.S. GOVERNMENT AND
PORTFOLIO                                    GOVERNMENT AGENCIES       OTHER ISSUES
- ----------------------------------------  -------------------------  -----------------
<S>                                       <C>                        <C>
GT Global Government Income Fund........     $       139,465,563     $     124,729,282
Global High Income Portfolio............              27,908,116           343,049,255
GT Global Strategic Income Fund.........             189,918,004           288,987,174
</TABLE>
 
                                      FS-68
<PAGE>   1870
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
4. CAPITAL SHARES
At April 30, 1998, there were 6,000,000,000 shares of the Company's common stock
authorized, at $0.0001 par value. Of this amount, 400,000,000 were classified as
shares of the GT Global Telecommunications Fund; 400,000,000 were classified as
shares of GT Global Government Income Fund; 200,000,000 were classified as
shares of GT Global Developing Markets Fund; 200,000,000 were classified as
shares of GT Global Health Care Fund; 200,000,000 were classified as shares of
GT Global Strategic Income Fund; 200,000,000 were classified as shares of GT
Global Currency Fund (inactive); 200,000,000 were classified as shares of GT
Global Growth & Income Fund; 200,000,000 were classified as shares of GT Global
Small Companies Fund (inactive); 200,000,000 were classified as shares of GT
Global Latin America Growth Fund; 200,000,000 were classified as shares of GT
Global Emerging Markets Fund; 200,000,000 were classified as shares of GT Global
High Income Fund; 200,000,000 were classified as shares of GT Global Financial
Services Fund; 200,000,000 were classified as shares of GT Global Natural
Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; 200,000,000 were classified as shares of GT Global Consumer
Products and Services Fund. The shares of each of the foregoing series of the
Company were divided equally into two classes, designated Class A and Class B
common stock. With respect to the issuance of Advisor Class shares, 100,000,000
shares were classified as shares of each of the fifteen series of the Company
and designated as Advisor Class common stock. 1,100,000,000 shares remain
unclassified. Transactions in capital shares of the Fund were as follows:
 
                           CAPITAL SHARE TRANSACTIONS
 
GT GLOBAL GOVERNMENT INCOME FUND
<TABLE>
<CAPTION>
                                                   SIX MONTHS ENDED
                                                    APRIL 30, 1998                         YEAR ENDED
                                                      (UNAUDITED)                       OCTOBER 31, 1997
                                          -----------------------------------  -----------------------------------
CLASS A                                       SHARES             AMOUNT            SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       49,640,287  $      429,719,475       48,767,558  $      419,503,866
Shares issued in connection with
  reinvestment of distributions.........          287,743           2,491,642          741,916           6,372,599
                                          ---------------  ------------------  ---------------  ------------------
                                               49,928,030         432,211,117       49,509,474         425,876,465
Shares repurchased......................      (52,874,140)       (457,771,262)     (59,180,268)       (509,133,563)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (2,946,110) $      (25,560,145)      (9,670,794) $      (83,257,098)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
 
<CAPTION>
 
CLASS B
- ---------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       17,961,751  $      155,476,178       27,713,479  $      237,734,254
Shares issued in connection with
  reinvestment of distributions.........          177,734           1,539,092          452,575           3,886,536
                                          ---------------  ------------------  ---------------  ------------------
                                               18,139,485         157,015,270       28,166,054         241,620,790
Shares repurchased......................      (21,223,134)       (183,485,262)     (32,406,087)       (278,645,805)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (3,083,649) $      (26,469,992)      (4,240,033) $      (37,025,015)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
<CAPTION>
 
ADVISOR CLASS
- ---------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................          306,611  $        2,655,164            4,551  $           38,769
Shares issued in connection with
  reinvestment of distributions.........            1,290              11,183              680               5,804
                                          ---------------  ------------------  ---------------  ------------------
                                                  307,901           2,666,347            5,231              44,573
Shares repurchased......................         (298,911)         (2,576,573)          (1,717)            (14,773)
                                          ---------------  ------------------  ---------------  ------------------
Net increase............................            8,990  $           89,774            3,514  $           29,800
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
                                      FS-69
<PAGE>   1871
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
GT GLOBAL HIGH INCOME FUND
<TABLE>
<CAPTION>
                                                 SIX MONTHS ENDED                      YEAR ENDED
                                                  APRIL 30, 1998                    OCTOBER 31, 1997
                                          -------------------------------  -----------------------------------
CLASS A                                      SHARES           AMOUNT           SHARES             AMOUNT
- ----------------------------------------  -------------  ----------------  ---------------  ------------------
<S>                                       <C>            <C>               <C>              <C>
Shares sold.............................      4,475,750  $     60,464,937       17,142,418  $      272,139,950
Shares issued in connection with
  reinvestment of distributions.........      1,842,696        23,121,404          574,707           9,164,383
                                          -------------  ----------------  ---------------  ------------------
                                              6,318,446        83,586,341       17,717,125         281,304,333
Shares repurchased......................     (4,970,234)      (66,962,848)     (21,118,898)       (335,756,037)
                                          -------------  ----------------  ---------------  ------------------
Net increase (decrease).................      1,348,212  $     16,623,493       (3,401,773) $      (54,451,704)
                                          -------------  ----------------  ---------------  ------------------
                                          -------------  ----------------  ---------------  ------------------
 
<CAPTION>
 
CLASS B
- ---------------------------------------
<S>                                       <C>            <C>               <C>              <C>
Shares sold.............................      3,832,158  $     51,750,586       13,848,218  $      221,702,040
Shares issued in connection with
  reinvestment of distributions.........      2,557,448        32,030,312          721,148          11,494,889
                                          -------------  ----------------  ---------------  ------------------
                                              6,389,606        83,780,898       14,569,366         233,196,929
Shares repurchased......................     (4,198,490)      (57,090,112)     (16,813,796)       (270,094,630)
                                          -------------  ----------------  ---------------  ------------------
Net increase (decrease).................      2,191,116  $     26,690,786       (2,244,430) $      (36,897,701)
                                          -------------  ----------------  ---------------  ------------------
                                          -------------  ----------------  ---------------  ------------------
<CAPTION>
 
ADVISOR CLASS
- ---------------------------------------
<S>                                       <C>            <C>               <C>              <C>
Shares sold.............................        422,054  $      5,476,786        2,868,282  $       45,874,009
Shares issued in connection with
  reinvestment of distributions.........         64,250           805,629           72,440           1,148,368
                                          -------------  ----------------  ---------------  ------------------
                                                486,304         6,282,415        2,940,722          47,022,377
Shares repurchased......................       (495,918)       (6,494,421)      (3,732,584)        (60,007,579)
                                          -------------  ----------------  ---------------  ------------------
Net decrease............................         (9,614) $       (212,006)        (791,862) $      (12,985,202)
                                          -------------  ----------------  ---------------  ------------------
                                          -------------  ----------------  ---------------  ------------------
</TABLE>
 
GT GLOBAL STRATEGIC INCOME FUND
<TABLE>
<CAPTION>
                                                   SIX MONTHS ENDED                        YEAR ENDED
                                                    APRIL 30, 1998                      OCTOBER 31, 1997
                                          -----------------------------------  -----------------------------------
CLASS A                                       SHARES             AMOUNT            SHARES             AMOUNT
- ---------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................        5,949,616  $       72,536,998       13,750,221  $      167,009,888
Shares issued in connection with
  reinvestment of distributions.........          262,369           3,187,409          615,860           7,488,021
                                          ---------------  ------------------  ---------------  ------------------
                                                6,211,985          75,724,407       14,366,081         174,497,909
Shares repurchased......................       (7,078,583)        (86,175,022)     (18,557,237)       (225,311,673)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................         (866,598) $      (10,450,615)      (4,191,156) $      (50,813,764)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
 
<CAPTION>
 
CLASS B
- ---------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................        2,051,347  $       24,855,354       11,499,580  $      140,731,511
Shares issued in connection with
  reinvestment of distributions.........          390,707           4,751,410          896,610          10,918,610
                                          ---------------  ------------------  ---------------  ------------------
                                                2,442,054          29,606,764       12,396,190         151,650,121
Shares repurchased......................       (5,194,373)        (63,078,359)     (17,287,235)       (211,600,543)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (2,752,319) $      (33,471,595)      (4,891,045) $      (59,950,422)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
<CAPTION>
 
ADVISOR CLASS
- ---------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................          304,802  $        3,731,180          712,165  $        8,839,212
Shares issued in connection with
  reinvestment of distributions.........            2,226              27,114            3,581              43,784
                                          ---------------  ------------------  ---------------  ------------------
                                                  307,028           3,758,294          715,746           8,882,996
Shares repurchased......................         (288,256)         (3,552,960)        (712,116)         (8,911,324)
                                          ---------------  ------------------  ---------------  ------------------
Net increase (decrease).................           18,772  $          205,334            3,630  $          (28,328)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
                                      FS-70
<PAGE>   1872
                            AIM GLOBAL INCOME FUNDS
                       (FORMERLY GT GLOBAL INCOME FUNDS)
 
5. WRITTEN OPTIONS:
The GT Global Government Income Fund's written options contract activity for the
six months ended April 30, 1998 was as follows:
 
                      COVERED CALL AND PUT OPTIONS WRITTEN
 
<TABLE>
<CAPTION>
                                          UNDERLYING
                                            NOMINAL
                                           AMOUNT IN
GT GLOBAL GOVERNMENT INCOME FUND              USD      PREMIUMS
- ----------------------------------------  -----------  ---------
<S>                                       <C>          <C>
Options outstanding at October 31,
  1997..................................  $4,840,000   $  44,673
Options written.........................  35,488,342     182,826
Options cancelled in closing purchase
  transactions..........................          --          --
Options expired prior to exercise.......  (40,328,342)  (227,499)
Options exercised.......................          --          --
                                          -----------  ---------
Options outstanding at April 30, 1998...  $       --   $      --
                                          -----------  ---------
                                          -----------  ---------
</TABLE>
 
6. SUBSEQUENT EVENTS
On May 29, 1998, Liechtenstein Global Trust ("LGT"), the former indirect parent
organization of Chancellor LGT Asset Management, Inc. ("Chancellor LGT"),
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included Chancellor LGT and
certain other affiliates. As a result of this transaction, Chancellor LGT was
renamed INVESCO (NY), Inc. and is now an indirect wholly-owned subsidiary of
AMVESCAP PLC. In connection with this transaction, A I M Advisors, Inc. ("AIM"),
an indirect wholly-owned subsidiary of AMVESCAP PLC, became the investment
adviser and administrator of the Funds and INVESCO (NY), Inc. became the
sub-adviser and sub-administrator of the Funds. In addition, A I M Distributors,
Inc. replaced GT Global, Inc. as the Fund's principal underwriter and the Funds
became subject to compensation-type Rule 12b-1 plans of distribution, which
replaced the Funds' former reimbursement-type Rule 12b-1 plans of distribution.
All of the changes became effective as of the close of business on May 29, 1998.
 
                                      FS-71
<PAGE>   1873
                             GT GLOBAL INCOME FUNDS
 
                                   REPORT OF
                            INDEPENDENT ACCOUNTANTS
 
- --------------------------------------------------------------------------------
 
ANNUAL REPORT
To the Shareholders and Board of Directors of
G.T. Investment Funds, Inc.:
 
We have audited the accompanying statement of assets and liabilities of GT
Global Government Income Fund, GT Global High Income Fund-Consolidated, and GT
Global Strategic Income Fund, including the portfolios of investments, as of
October 31, 1997, the related statements of operations for the year then ended,
the statements of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the periods indicated
herein. These financial statements and the financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial positions of GT
Global Government Income Fund, GT Global High Income Fund-Consolidated and GT
Global Strategic Income Fund as of October 31, 1997, the results of their
operations for the year then ended, the changes in their net assets for each of
the two years in the period then ended, and the financial highlights for each of
the periods indicated herein, in conformity with generally accepted accounting
principles.



                                                    /s/ COOPERS & LYBRAND L.L.P.
                                                    COOPERS & LYBRAND L.L.P.
 
BOSTON, MASSACHUSETTS
DECEMBER 15, 1997
 
                                       FS-72
<PAGE>   1874
                        GT GLOBAL GOVERNMENT INCOME FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (49.4%)
  Australia (3.0%)
    Commonwealth of Australia, 7.5% due 9/15/09 ..........   AUD           10,660,000   $  8,416,716         3.0
  Canada (2.0%)
    Canadian Government, 7.25% due 6/1/07 ................   CAD            6,920,000      5,548,964         2.0
  Germany (4.7%)
    Deutschland Republic, 6% due 1/5/06 ..................   DEM           22,050,000     13,180,133         4.7
  Italy (9.4%)
    Italian Buoni Poliennali del Tesoro (BTPS):
      9.50% due 1/1/05 ...................................   ITL       13,100,000,000      9,228,992         3.3
      9% due 11/1/23 .....................................   ITL       11,730,000,000      8,839,498         3.1
      7.25% due 11/1/26 ..................................   ITL       13,200,000,000      8,361,624         3.0
  New Zealand (4.4%)
    New Zealand Government, 8% due 4/15/04 ...............   NZD           18,570,000     12,360,425         4.4
  Spain (2.3%)
    Spain Government, 10.5% due 10/30/03 .................   ESP          770,000,000      6,581,165         2.3
  Sweden (2.9%)
    Swedish Government, 8% due 8/15/07 ...................   SEK           54,800,000      8,163,505         2.9
  United Kingdom (4.4%)
    United Kingdom Treasury:
      9.5% due 4/18/05 ...................................   GBP            5,000,000      9,775,453         3.5
      7.25% due 12/7/07 ..................................   GBP            1,420,000      2,503,816         0.9
  United States (15.3%)
    United States Treasury:
      8% due 11/15/21{./} {z} ............................   USD           17,000,000     20,683,023         7.3
      6.125% due 8/15/07 .................................   USD            9,750,000      9,958,711         3.5
      6.375% due 8/15/27 .................................   USD            6,250,000      6,431,641         2.3
      6.625% due 5/15/07 .................................   USD            5,800,000      6,106,992         2.2
  Uruguay (1.0%)
    Republic of Uruguay, 7.875% due 7/15/27 -
     144A{./}{.} .........................................   USD            3,000,000      2,898,000         1.0
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $136,776,126) ...........................................                               139,038,658
                                                                                        ------------
Corporate Bonds (23.5%)
  Denmark (5.4%)
    Realkredit Bank, 7% due 10/1/29 ......................   DKK          104,000,000     15,287,266         5.4
  Germany (2.0%)
    Commerzbank O/S Financial, 8.5% due 5/13/02 ..........   NZD            5,340,000      3,467,559         1.2
    Kredit Fuer Wiederaufbau International Finance, 7.25%
     due 7/16/07 .........................................   AUD            3,100,000      2,304,569         0.8
  New Zealand (3.8%)
    Transpower Finance Ltd., 8% due 3/15/02 ..............   NZD           16,500,000     10,590,896         3.8
  South Africa (5.5%)
    Eskom, 11% due 6/1/08{./} ............................   ZAR           68,500,000     11,346,106         4.0
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-73
<PAGE>   1875
                        GT GLOBAL GOVERNMENT INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Corporate Bonds (Continued)
    Transnet Ltd., 7.5% due 4/1/08 .......................   ZAR           28,140,000   $  3,612,816         1.3
    Development Bank of South Africa, due 12/31/27 .......   ZAR          124,000,000        580,042         0.2
  Tunisia (1.5%)
    Banque Centrals de Tunisie, 8.25% due 9/19/27 ........   USD            4,750,000      4,314,235         1.5
  United Kingdom (5.3%)
    SBC Jersey, 8.75% due 6/20/05 ........................   GBP            8,200,000     14,927,163         5.3
                                                                                        ------------
Total Corporate Bonds (cost $68,215,638) .................                                66,430,652
                                                                                        ------------
Mortgage Backed (12.0%)
  United States (12.0%)
    Federal National Mortgage Association:
      7.25% due 6/20/02 ..................................   NZD           15,050,000      9,421,474         3.3
      6.375% due 8/15/07 .................................   AUD            7,300,000      5,212,020         1.8
    Government National Mortgage Association:
      TBA Pool, 7% due 11/15/27{*} .......................   USD            8,725,000      8,774,078         3.1
      Pool #780515, 9.5% due 12/15/21 ....................   USD            5,026,270      5,475,493         1.9
    Federal Home Loan Mortgage Association Pool #E62449,
     8.5% due 3/1/10 .....................................   USD            2,595,424      2,769,195         1.0
    Salomon Brothers Mortgage Securities CMO, effective
     yield 6.0867% due 12/25/30 ..........................   USD            2,342,065      2,400,617         0.9
                                                                                        ------------
Total Mortgage Backed (cost $34,786,107) .................                                34,052,877
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $239,777,871) .......                               239,522,187        84.9
                                                                                        ------------       -----
<CAPTION>
 
                                                                         UNDERLYING        VALUE         % OF NET
OPTIONS                                                     CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Deutsche Marks Put Option, strike 1.7825, expires
   11/13/97
   (cost $80,102) ........................................   USD            4,840,000          3,896          --
                                                                                        ------------       -----
    CURRENCY OPTIONS
<CAPTION>
 
                                                                         PRINCIPAL         VALUE         % OF NET
SHORT-TERM INVESTMENTS                                      CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (14.9%)
  Egypt (1.1%)
    Egypt Treasury Bill, 0% due 11/25/97 .................   EGP           11,000,000      3,215,643         1.1
  Italy (7.1%)
    Italian Buoni Poliennali del Tesoro (BTPS), 10.5% due
     4/15/98 .............................................   ITL       33,520,000,000     20,073,397         7.1
  Mexico (1.6%)
    Mexican Cetes due 11/13/97 ...........................   MXN            3,732,000      4,445,773         1.6
  United Kingdom (5.1%)
    United Kingdom Treasury, 7.25% due 3/30/98 ...........   GBP            8,550,000     14,354,277         5.1
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $41,749,459) ............................................                                42,089,090
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-74
<PAGE>   1876
                        GT GLOBAL GOVERNMENT INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
SHORT-TERM INVESTMENTS                                      CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Commercial Paper - Discounted (3.1%)
  United States (3.1%)
    General Electric Capital Corp., effective yield 5.68%
     due 11/19/97 (cost $8,659,446){./} ..................   USD            8,725,000   $  8,659,446         3.1
                                                                                        ------------       -----
 
TOTAL SHORT-TERM INVESTMENTS (cost $50,408,905) ..........                                50,748,536        18.0
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $290,266,878)  * .................                               290,274,619       102.9
Other Assets and Liabilities .............................                                (8,165,141)       (2.9)
                                                                                        ------------       -----
 
NET ASSETS ...............................................                              $282,109,478       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
       {./}  All or part of the Fund's holdings in this security is segregated
             as collateral for when-issued securities or forward currency
             contracts. See Note 1 to the Financial Statements.
        {z}  All or part of the Fund's holdings in this security is segregated
             as collateral for written options. See Note 1 to the Financial
             Statements.
        {.}  Security 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.
        {*}  Purchased on a forward commitment basis.
          *  For Federal income tax purposes, cost is $290,620,342 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $   5,885,779
                 Unrealized depreciation:            (6,231,502)
                                                  -------------
                 Net unrealized depreciation:     $    (345,723)
                                                  -------------
                                                  -------------
</TABLE>
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                     WRITTEN OPTIONS CONTRACTS OUTSTANDING
                                OCTOBER 31, 1997
 
<TABLE>
<CAPTION>
                                            UNDERLYING     EXPIRATION  STRIKE      MARKET
PUT OPTIONS                                   AMOUNT         DATE     PRICE        VALUE
- ----------------------------------------  --------------   --------  --------  --------------
<S>                                       <C>              <C>       <C>       <C>
DEM.....................................     4,840,000     11/13/97   DEM1.82   $      (406)
                                                                                     ------
  Total outstanding written options
   (Premium received $44,673)...........                                               (406)
                                                                                     ------
                                                                                     ------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-75
<PAGE>   1877
                        GT GLOBAL GOVERNMENT INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                OCTOBER 31, 1997
<TABLE>
<CAPTION>
                                                                                 UNREALIZED
                                           MARKET VALUE    CONTRACT  DELIVERY   APPRECIATION
CONTRACTS TO BUY:                         (U.S. DOLLARS)    PRICE      DATE    (DEPRECIATION)
- ----------------------------------------  --------------   --------  --------  --------------
<S>                                       <C>              <C>       <C>       <C>
Australian Dollars......................      14,130,053    1.33485   11/6/97   $  (927,862)
Australian Dollars......................       2,108,963    1.37000   11/6/97       (80,812)
Australian Dollars......................       4,077,329    1.37155   11/6/97      (151,451)
Australian Dollars......................       8,168,717    1.36885   11/6/97      (320,158)
British Pounds..........................      17,545,780    0.62087    2/5/98       505,103
Canadian Dollars........................       1,412,149    1.37160   11/6/97       (38,712)
Danish Kroner...........................       5,263,096    6.67385   11/6/97        87,497
Deutsche Marks..........................       4,607,616    1.79770   11/6/97       187,616
Deutsche Marks..........................       7,647,020    1.72473   11/6/97         1,020
Deutsche Marks..........................       8,632,762    1.85468    2/5/98       650,345
Deutsche Marks..........................       9,831,529    1.86050    2/5/98       769,116
Deutsche Marks..........................       9,121,259    1.84900    2/5/98       661,259
Deutsche Marks..........................      10,320,977    1.82590    2/5/98       627,127
Deutsche Marks..........................      22,031,550    1.76970    2/5/98       681,550
Deutsche Marks..........................      15,399,073    1.74950    2/5/98       304,074
Deutsche Marks..........................       7,856,456    1.74980    2/5/98       156,456
Deutsche Marks..........................       7,924,376    1.74230    2/5/98       124,376
Italian Liras...........................       3,458,975   1,768.30000   2/5/98      138,837
Italian Liras...........................       8,545,464   1,747.52000   2/5/98      245,464
Italian Liras...........................       3,796,301   1,741.50000   2/5/98       96,301
Italian Liras...........................      15,238,110   1,732.32000   2/5/98      307,843
Italian Liras...........................       5,672,764   1,699.54000   2/5/98        7,399
Italian Liras...........................         996,994   1,697.70000   2/5/98          221
South African Rand......................         873,181    4.81550   11/6/97           997
Swedish Kronor..........................       8,468,638    7.57006   11/6/97        92,472
Swedish Kronor..........................       2,827,601    7.49385    2/5/98        11,645
                                          --------------                       --------------
  Total Contracts to Buy (Payable amount
   $201,819,010)........................     205,956,733                          4,137,723
                                          --------------                       --------------
THE VALUE OF CONTRACTS TO BUY AS
 PERCENTAGE OF NET ASSETS IS 73.01%.
 
<CAPTION>
 
CONTRACTS TO SELL:
- ----------------------------------------
<S>                                       <C>              <C>       <C>       <C>
Australian Dollars......................      35,852,373    1.34162   11/6/97     2,161,497
Australian Dollars......................       8,548,124    1.43055   11/6/97       (48,124)
British Pounds..........................       8,269,037    0.62724   11/6/97      (409,138)
British Pounds..........................       9,476,686    0.63291   11/6/97      (549,686)
British Pounds..........................       8,830,253    0.60165    2/5/98        19,747
Canadian Dollars........................       1,412,149    1.39136   11/6/97        36,705
Canadian Dollars........................       5,516,238    1.39136    2/5/98        43,762
Danish Kroner...........................       7,511,923    6.95000   11/6/97      (418,398)
Deutsche Marks..........................       4,699,886    1.83370   11/6/97      (279,886)
Deutsche Marks..........................       7,559,969    1.78347   11/6/97      (249,969)
Deutsche Marks..........................       8,548,334    1.71846    2/5/98       (17,440)
Deutsche Marks..........................       7,689,586    1.71600    2/5/98        (4,687)
Deutsche Marks..........................      57,287,100    1.71600    2/5/98       (34,920)
Deutsche Marks..........................      18,029,667    1.71800    2/5/98       (31,966)
Italian Lira............................      39,768,497   1,696.15000   2/5/98       27,512
New Zealand Dollars.....................      36,510,209    1.57878   11/6/97       638,701
South African Rand......................       8,879,420    4.83145  11/12/97       (39,420)
South African Rand......................       7,946,694    4.95150  11/28/97      (171,272)
Swedish Kronor..........................       4,273,847    7.94000   11/6/97      (243,620)
Swedish Kronor..........................       9,215,482    8.00000   11/6/97      (590,482)
                                          --------------                       --------------
  Total Contracts to Sell (Receivable
   amount $295,664,390).................     295,825,474                           (161,084)
                                          --------------                       --------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 104.86%.
  Total Open Forward Foreign Currency
   Contracts, Net.......................                                        $ 3,976,639
                                                                               --------------
                                                                               --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-76
<PAGE>   1878
                          GLOBAL HIGH INCOME PORTFOLIO
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (53.2%)
  Argentina (5.2%)
    Republic of Argentina:
      Global Bond, 11% due 10/9/06 .......................   USD           11,919,000   $ 11,814,709         3.2
      Par Bond Series L, 5.50% due 3/31/23++ .............   USD            6,610,000      4,498,931         1.2
      Global Bond, 11.375% due 1/30/17 ...................   USD            3,048,000      2,910,840         0.8
  Brazil (2.1%)
    Republic of Brazil, Par Z-L Bond, 5.25% due
     4/15/24++ ...........................................   USD           11,384,000      7,527,670         2.1
  Bulgaria (5.1%)
    Republic of Bulgaria:
      Front Loaded Interest Reduction Bond Series A, 2.25%
       due 7/28/12++ .....................................   USD           18,357,000     10,004,565         2.7
      Interest Arrears Bond, 6.6875% due 7/28/11 -
       Euro+ .............................................   USD           13,522,000      8,882,264         2.4
  Costa Rica (1.7%)
    Banco Central de Costa Rica:
      Interest Bond Series A, 6.5391% due 5/21/05
       (effective maturity date 8/21/02)+ ................   USD            4,270,656      4,270,656         1.2
      Principal Bond Series A, 6.25% due 5/21/10 .........   USD            1,900,000      1,653,000         0.5
  Ecuador (2.1%)
    Republic of Ecuador Discount Bond, 6.6875% due 2/28/25
     - EURO+ .............................................   USD           11,069,000      7,775,973         2.1
  Mexico (11.7%)
    United Mexican States:
      Discount Bond Series D, 6.8125% due 12/31/19+ ......   USD           24,328,000     22,032,045         6.0
      Global Bond, 11.5 due 5/15/26 ......................   USD            7,290,000      7,873,200         2.2
      Global Bond, 9.875% due 1/15/07 ....................   USD            6,430,000      6,502,338         1.8
      Global Bond, 11.375% due 9/15/16 ...................   USD            5,793,000      6,162,304         1.7
  Nigeria (3.4%)
    Central Bank of Nigeria, Par Bond, 6.25% due
     11/15/20+/+ .........................................   USD           18,750,000     12,281,250         3.4
  Panama (3.4%)
    Republic of Panama, Interest Reduction Bond, 3.75% due
     7/17/14++ ...........................................   USD           17,850,000     12,550,781         3.4
  Peru (1.6%)
    Republic of Peru, Past Due Interest Bond, 4% due
     3/7/17 - 144A{.} ....................................   USD           10,086,000      5,749,020         1.6
  South Africa (5.0%)
    Republic of South Africa, 13% due 8/31/10{./} ........   ZAR           97,113,000     18,329,766         5.0
  United States (7.5%)
    United States Treasury:
      6.375% due 8/15/27 .................................   USD           15,337,000     15,782,732         4.3
      5.875% due 9/30/02{./} .............................   USD           11,747,000     11,811,242         3.2
  Uruguay (2.1%)
    Banco Central del Uruguay:
      Debt Conversion Bond Series B, 6.8125% due
       2/18/07+ ..........................................   USD            4,000,000      4,000,000         1.1
      Par Bond Series A, 6.75% due 2/19/21+/+ ............   USD            2,290,000      2,129,700         0.6
      Par Bond Series B, 6.75% due 2/19/21+/+ ............   USD            1,500,000      1,395,000         0.4
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-77
<PAGE>   1879
                          GLOBAL HIGH INCOME PORTFOLIO
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (Continued)
  Venezuela (2.3%)
    Republic of Venezuela, Par Bond Series A, 6.75% due
     3/31/20+/+ ..........................................   USD           10,025,000   $  8,389,672         2.3
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $202,758,127) ...........................................                               194,327,658
                                                                                        ------------
Corporate Bonds (25.9%)
  Argentina (1.7%)
    Supermercados Norte, 10.875% due 2/9/04 - 144A{.} ....   USD            2,655,000      2,469,150         0.7
    Impsa Corp., 9.5% due 5/31/02 - 144A{.} ..............   USD            2,409,000      2,276,505         0.6
    Acindar Industrial Argentina, 11.25% due 2/15/04 .....   USD            1,497,000      1,482,030         0.4
  Brazil (0.6%)
    RBS Participacoes S.A., 11% due 4/1/07 - 144A{.} .....   USD            2,273,000      2,216,175         0.6
  Canada (0.8%)
    Pacalta Resources Ltd., 10.75% due 6/15/04 -
     144A{.} .............................................   USD            2,978,000      2,970,555         0.8
  China (2.9%)
    Panda Global Energy Co., 12.5% due 4/15/04 -
     144A{.} .............................................   USD            7,559,000      7,105,460         1.9
    Greater Beijing First, 9.5% due 6/15/07 - 144A{.} ....   USD            3,210,000      2,929,125         0.8
    Huaneng Power International PLC Convertible, 1.75% due
     5/21/04 .............................................   USD              790,000        743,390         0.2
  Dominican Republic (0.7%)
    Tricom S.A., 11.375% due 9/1/04 - 144A{.} ............   USD            2,628,000      2,601,720         0.7
  Hong Kong (1.1%)
    GS Superhighway Holdings, 9.875% due 8/15/04 -
     144A{.} .............................................   USD            2,434,000      2,281,875         0.6
    Road King Infrastructure, 9.5% due 7/15/07 -
     144A{.} .............................................   USD            2,100,000      1,958,250         0.5
  India (1.1%)
    Tata Electric Co., 8.5% due 8/19/17 - 144A{.} ........   USD            4,395,000      3,836,835         1.1
  Indonesia (3.9%)
    Polysindo International Finance, 8.9063%, due
     4/22/99 .............................................   IDR       27,500,000,000      5,114,793         1.4
    DGS International Finance Co., 10% due 6/1/07 -
     144A{.} .............................................   USD            4,961,000      4,564,120         1.3
    Tjiwi Kimia Financial Mauritius, 10% due 8/1/04 -
     144A{.} .............................................   USD            2,964,000      2,645,370         0.7
    Pratama Datakom Asia BV, 12.75% due 7/15/05 -
     144A{.} .............................................   USD            2,141,000      1,884,080         0.5
  Jamaica (1.1%)
    Mechala Group Jamaica Ltd.:
      12.75% due 12/30/99 - Series B .....................   USD            2,846,000      2,760,620         0.8
      12.75% due 12/30/99 - Reg S{c} .....................   USD            1,288,000      1,249,360         0.3
  Mexico (6.4%)
    Petroleos Mexicanos:
      9.5% due 9/15/27 - 144A{.} .........................   USD            8,768,000      8,044,640         2.2
      8.85% due 9/15/07 - 144A{.} ........................   USD            4,388,000      4,217,965         1.2
    Fideicomiso Petacalco Trust, 10.16% due 12/23/09 - Reg
     S{c} ................................................   USD            2,720,000      2,720,000         0.7
    TV Azteca, S.A. de C.V., 10.5% due 2/15/07 -
     144A{.} .............................................   USD            2,350,000      2,393,851         0.7
    Dine, S.A. de C.V., 8.75% due 10/15/07 - 144A{.} .....   USD            2,440,000      2,305,800         0.6
    Copamex Industrias S.A., 11.375% due 4/30/04 -
     144A{.} .............................................   USD            1,903,000      2,079,028         0.6
    Hylsa, S.A. de C.V., 9.25% due 9/15/07{.} ............   USD            1,560,000      1,497,600         0.4
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-78
<PAGE>   1880
                          GLOBAL HIGH INCOME PORTFOLIO
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Corporate Bonds (Continued)
  Russia (1.3%)
    Lukinter Finance BV Convertible, 3.5% due 5/6/02 -
     144A{.} .............................................   USD            2,283,000   $  3,070,635         0.8
    Mosenergo Finance BV, 8.375% due 10/9/02 - 144A{.} ...   USD            2,184,000      1,921,920         0.5
  South Africa (4.3%)
    Eskom, 11% due 6/1/08 ................................   ZAR           94,900,000     15,718,912         4.3
                                                                                        ------------
Total Corporate Bonds (cost $103,242,812) ................                                95,059,764
                                                                                        ------------
Sovereign Debt (12.8%)
  Russia (12.8%)
    Bank for Foreign Economic Affairs (Vnesheconombank)
     Loan Agreement:
      Assignment ** -/- ..................................   USD           46,757,000     41,583,888        11.4
      Participation ** -/- ...............................   DEM            9,819,000      5,224,084         1.4
                                                                                        ------------
Total Sovereign Debt (cost $25,217,395) ..................                                46,807,972
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $331,218,334) .......                               336,195,394        91.9
                                                                                        ------------       -----
<CAPTION>
 
                                                                         UNDERLYING        VALUE         % OF NET
OPTIONS                                                     CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Federal Republic of Brazil Debt Conversion Bond, Call
   Option, strike 82.25, expires 1/12/98 (cost
   $1,032,750) ...........................................   USD           57,375,000        418,608         0.1
                                                                                        ------------       -----
    GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS
<CAPTION>
 
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- ----------------------------------------------------------                              ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Dated October 31, 1997, with State Street Bank & Trust
   Co., due November 3, 1997, for an effective yield of
   5.57% collateralized by $8,950,000 U.S. Treasury Bonds,
   8.875% due 8/15/17 (market value of collateral is
   $11,741,829, including accrued interest).
   (cost $11,510,781)  ...................................                                11,510,781         3.2
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $343,761,865)  * .................                               348,124,783        95.2
Other Assets and Liabilities .............................                                17,667,628         4.8
                                                                                        ------------       -----
 
NET ASSETS ...............................................                              $365,792,411       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
         **  Underlying loan agreement currently in default.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
         ++  The coupon rate shown on step-up coupon bond represents the rate at
             period end.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
        +/+  Issued with detachable warrants or value recovery rights. The
             current market value of each warrant or right is zero.
       {./}  All or part of the Fund's holdings in this security is segregated
             as collateral for when-issued securities or forward currency
             contracts. See Note 1 to the Financial Statements.
          *  For Federal income tax purposes, cost is $343,911,253 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  26,533,602
                 Unrealized depreciation:           (22,320,072)
                                                  -------------
                 Net unrealized appreciation:     $   4,213,530
                                                  -------------
                                                  -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-79
<PAGE>   1881
                          GLOBAL HIGH INCOME PORTFOLIO
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
                 OUTSTANDING FORWARD FOREIGN CURRENCY CONTRACTS
                                OCTOBER 31, 1997
 
<TABLE>
<CAPTION>
                                                                                    UNREALIZED
                                           MARKET VALUE     CONTRACT    DELIVERY   APPRECIATION
CONTRACTS TO SELL:                        (U.S. DOLLARS)      PRICE       DATE    (DEPRECIATION)
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Deutsche Marks..........................     3,966,367         1.84950   11/6/97     $(268,070)
Indonesian Rupiah.......................    10,445,682     3,610.00000   11/5/97      (57,871)
South African Rand......................    24,288,532         5.04500   1/30/98     (535,715)
South African Rand......................       608,060         5.06350   1/30/98      (15,584)
                                          --------------                          --------------
  Total Contracts to Sell (Receivable
   amount $38,431,401)..................    39,308,641                               (877,240)
                                          --------------                          --------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 10.75%.
  Total Open Forward Foreign Currency
   Contracts............................                                             $(877,240)
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       FS-80
<PAGE>   1882
                        GT GLOBAL STRATEGIC INCOME FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (65.6%)
  Argentina (2.0%)
    Republic of Argentina:
      Global Bond, 11% due 10/9/06 .......................   USD            5,618,000   $  5,568,843         1.3
      Global Bond, 11.375% due 1/30/17 ...................   USD            3,177,000      3,034,035         0.7
      Par Bond Series L, 5.5% due 3/31/23++ ..............   USD               95,000         64,659          --
  Australia (2.3%)
    Commonwealth of Australia, 7.5% due 9/15/09 ..........   AUD           12,500,000      9,869,508         2.3
  Brazil (0.9%)
    Republic of Brazil, Par Z-L Bond, 5.25% due
     4/15/24{./} ++ ......................................   USD            5,856,000      3,872,280         0.9
  Bulgaria (2.0%)
    Republic of Bulgaria:
      Interest Arrears Bond, 6.6875% due 7/28/11 -
       Euro{./} + ........................................   USD            6,486,000      4,260,491         1.0
      Front Loaded Interest Reduction Bond Series A, 2.25%
       due 7/28/12{./} ++ ................................   USD            7,396,000      4,030,820         1.0
  Canada (2.2%)
    Canadian Government, 8.75% due 12/1/05 ...............   CAD           10,500,000      9,075,362         2.2
  Colombia (0.6%)
    Republic of Colombia, 8.7% due 2/15/16 ...............   USD            2,538,000      2,480,895         0.6
  Costa Rica (0.9%)
    Banco Central de Costa Rica:
      Interest Bond Series A, 6.5391% due 5/21/05
       (effective maturity date 8/21/02)+ ................   USD            1,918,176      1,918,176         0.5
      Principal Bond Series A, 6.25% due 5/21/10 .........   USD            1,900,000      1,653,000         0.4
  Ecuador (0.9%)
    Discount Bond, 6.6875% due 2/28/25 - Euro+ ...........   USD            5,485,000      3,853,213         0.9
  France (1.9%)
    France O.A.T., 7.25% due 4/25/06 .....................   FRF           40,000,000      7,779,107         1.9
  Germany (11.0%)
    Deutschland Republic:
      6% due 1/5/06 ......................................   DEM           35,500,000     21,219,716         5.0
      8.25% due 9/20/01 ..................................   DEM           24,000,000     15,532,850         3.7
    Treuhandanstalt, 7.125% due 1/29/03 ..................   DEM           15,000,000      9,474,050         2.3
  Italy (4.3%)
    Italian Buoni Poliennali del Tesoro (BTPS):
      9.5% due 2/1/99 ....................................   ITL       18,000,000,000     11,092,869         2.6
    Italian Government, 7.25% due 11/1/26 ................   ITL       11,000,000,000      6,968,020         1.7
  Mexico (5.8%)
    United Mexican States:
      Discount Bond Series A, 6.6925% due 12/31/19+
       +/+ ...............................................   USD           10,849,000      9,825,126         2.3
      Global Bond, 11.5% due 5/15/26 .....................   USD            7,755,000      8,375,400         2.0
      Global Bond, 9.875% due 1/15/07 ....................   USD            3,045,000      3,079,256         0.7
      Global Bond, 11.375% due 9/15/16 ...................   USD            2,744,000      2,918,930         0.7
      Discount Bond Series D, 6.8125% due 12/31/19+ ......   USD              672,000        608,580         0.1
  Netherlands (1.5%)
    Netherlands Government Bond, 5.75% due 2/15/07 .......   NLG           12,000,000      6,260,896         1.5
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-81
<PAGE>   1883
                        GT GLOBAL STRATEGIC INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Government & Government Agency Obligations (Continued)
  New Zealand (1.9%)
    New Zealand Government, 8% due 4/15/04 ...............   NZD           12,000,000   $  7,987,351         1.9
  Nigeria (1.7%)
    Central Bank of Nigeria, Par Bond, 6.25% due
     11/15/20{./} +/+ ....................................   USD           11,000,000      7,205,000         1.7
  Panama (3.6%)
    Republic of Panama:
      Interest Reduction Bond, 3.75% due 7/17/14++ .......   USD           16,705,000     11,745,703         2.8
      7.875% due 2/13/02 - 144A{.} .......................   USD            3,360,000      3,200,400         0.8
  Peru (0.6%)
    Republic of Peru, Past Due Interest Bond, 4% due
     3/7/17 - 144A++ {.} .................................   USD            4,776,000      2,722,320         0.6
  South Africa (2.2%)
    Republic of South Africa, 13% due 8/31/10 ............   ZAR           48,561,000      9,165,732         2.2
  Spain (2.0%)
    Spain Government, 10.5% due 10/30/03 .................   ESP        1,000,000,000      8,546,967         2.0
  Sweden (1.3%)
    Swedish Government, 8% due 8/15/07 ...................   SEK           37,000,000      5,511,856         1.3
  United Kingdom (6.6%)
    United Kingdom Treasury, 7% due 6/7/02 ...............   GBP           11,900,000     20,234,192         4.8
    United Kingdom Conversion, 9.5% due 4/18/05 ..........   GBP            3,800,000      7,429,344         1.8
  United States (8.1%)
    United States Treasury:
      5.875% due 9/30/02{./} .............................   USD           12,865,000     12,935,356         3.1
      6.875% due 8/15/25{./} {z} .........................   USD            8,000,000      8,686,250         2.1
      6.375% due 8/15/27 .................................   USD            8,293,000      8,534,015         2.0
      6.50% due 10/15/06{z} ..............................   USD            3,500,000      3,639,111         0.9
  Uruguay (0.3%)
    Banco Central del Uruguay, Par Bond Series A, 6.75%
     due2/19/21{./} +/+ ..................................   USD            1,370,000      1,274,100         0.3
  Venezuela (1.0%)
    Republic of Venezuela:
      Par Bond Series A, 6.75% due 3/31/20{./} +/+ .......   USD            4,880,000      4,083,950         1.0
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $281,695,109) ...........................................                               275,717,729
                                                                                        ------------
Corporate Bonds (10.5%)
  Argentina (0.5%)
    Impsa Corp., 9.5% due 5/31/02 - 144A{.} ..............   USD            1,377,000      1,301,265         0.3
    Acindar Industrial Argentina, 11.25% due 2/15/04 .....   USD              816,000        807,840         0.2
  Brazil (0.3%)
    RBS Participacoes S.A., 11% due 4/1/07 - 144A{.} .....   USD            1,278,000      1,246,050         0.3
  China (1.1%)
    Panda Global Energy Co., 12.5% due 4/15/04 -
     144A{.} .............................................   USD            3,145,000      2,956,300         0.7
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-82
<PAGE>   1884
                        GT GLOBAL STRATEGIC INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Corporate Bonds (Continued)
    Greater Beijing First, 9.5% due 6/15/07 - 144A{.} ....   USD            1,720,000   $  1,569,500         0.4
  Denmark (1.0%)
    Realkredit Danmark, 6% due 10/1/26 ...................   DKK           30,000,000      4,226,028         1.0
  Dominican Republic (0.3%)
    Tricom S.A., 11.375% due 9/1/04 - 144A{.} ............   USD            1,294,000      1,281,060         0.3
  Ecuador (0.4%)
    Pacalta Resources Ltd., 10.75% due 6/15/04 -
     144A{.} .............................................   USD            1,601,000      1,596,998         0.4
  Hong Kong (0.5%)
    GS Superhighway Holdings, 9.875% due 8/15/04 -
     144A{.} .............................................   USD            1,210,000      1,134,375         0.3
    Road King Infrastructure, 9.5% due 7/15/07 -
     144A{.} .............................................   USD            1,100,000      1,025,750         0.2
  India (0.4%)
    Tata Electric Co., 8.5% due 8/19/17 - 144A{.} ........   USD            2,151,000      1,877,823         0.4
  Indonesia (1.1%)
    DGS International Finance Co., 10% due 6/1/07 -
     144A{.} .............................................   USD            2,717,000      2,499,640         0.6
    Tjiwi Kimia Financial Mauritius, 10% due 8/1/04 -
     144A{.} .............................................   USD            1,471,000      1,312,868         0.3
    Pratama Datakom Asia BV, 12.75% due 7/15/05 -
     144A{.} .............................................   USD            1,134,000        997,920         0.2
  Jamaica (0.2%)
    Mechala Group Jamaica, 12.75% due 12/30/99 - Reg
     S{c} ................................................   USD              719,000        697,430         0.2
  Mexico (2.5%)
    Petroleos Mexicanos:
      9.5% due 9/15/27 - 144A{.} .........................   USD            4,224,000      3,875,520         0.9
      8.85% due 9/15/07 - 144A{.} ........................   USD            2,108,000      2,026,315         0.5
    TV Azteca, S.A. de C.V., 10.5% due 2/15/07 -
     144A{.} .............................................   USD            1,300,000      1,324,258         0.3
    Copamex Industrias S.A., 11.375% due 4/30/04 -
     144A{.} .............................................   USD            1,134,000      1,238,895         0.3
    Dine, S.A. de C.V., 8.75% due 10/15/07 - 144A{.} .....   USD            1,140,000      1,077,300         0.3
    Hylsa, S.A. de C.V., 9.25% due 9/15/07{.} ............   USD              760,000        729,600         0.2
  Russia (0.7%)
    Lukinter Finance BV Convertible, 3.5% due 5/6/02 -
     144A{.} .............................................   USD            1,526,000      2,052,470         0.5
    Mosenergo Finance BV, 8.375% due 10/9/02 - 144A{.} ...   USD            1,040,000        915,200         0.2
  South Africa (0.2%)
    Eskom, 11% due 6/1/08 ................................   ZAR            6,175,000      1,022,806         0.2
  United States (1.3%)
    Chase Manhattan Corp., 6.25% due 1/15/06{z} ..........   USD            2,835,000      2,774,864         0.7
    General Motors Acceptance Corp., 6.625% due
     10/15/05 ............................................   USD            2,700,000      2,719,405         0.6
                                                                                        ------------
Total Corporate Bonds (cost $45,203,836) .................                                44,287,480
                                                                                        ------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-83
<PAGE>   1885
                        GT GLOBAL STRATEGIC INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         PRINCIPAL         VALUE         % OF NET
FIXED INCOME INVESTMENTS                                    CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Mortgage Backed (9.9%)
  United States (9.9%)
    Government National Mortgage Association TBA Pass Thru
     Pool, 6.5% due11/15/27{*} ...........................   USD           28,000,000   $ 27,693,764         6.6
    Federal National Mortgage Association Pool:
      #313439, 7% due 3/1/04 .............................   USD            9,718,752      9,837,204         2.3
      7.25% due 6/20/02{./} ..............................   NZD            7,000,000      4,382,081         1.0
                                                                                        ------------
Total Mortgage Backed (cost $42,198,154) .................                                41,913,049
                                                                                        ------------
Sovereign Debt (7.3%)
  Russia (7.3%)
    Bank for Foreign Economic Affairs (Vnesheconombank)
     Loan Agreement:
      Assignment ** -/- ..................................   USD           31,585,000     28,090,723         6.7
      Participation ** -/- ...............................   DEM            4,566,000      2,429,287         0.6
                                                                                        ------------
Total Sovereign Debt (cost $16,899,775) ..................                                30,520,010
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $385,996,874) .......                               392,438,268        93.3
                                                                                        ------------       -----
<CAPTION>
 
                                                                         UNDERLYING        VALUE         % OF NET
OPTIONS                                                     CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Federal Republic of Brazil Debt Conversion Bond, Call
   Option, strike 82.25, expires 1/12/98 (cost
   $567,036) .............................................   USD           31,502,000        229,839         0.1
                                                                                        ------------       -----
    GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS
<CAPTION>
 
                                                                         PRINCIPAL         VALUE         % OF NET
SHORT-TERM INVESTMENTS                                      CURRENCY       AMOUNT         (NOTE 1)        ASSETS
- ----------------------------------------------------------  --------   --------------   ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
Commercial Paper - Discounted (6.6%)
  United States (6.6%)
    Ford Motor Credit Corp., effective yield 5.50%, due
     11/19/97{./} ........................................   USD           19,000,000     18,947,940         4.5
    General Electric Capital Corp., effective yield 5.50%,
     due 11/19/97{./} ....................................   USD            9,000,000      8,975,340         2.1
                                                                                        ------------
Total Commercial Paper - Discounted (cost $27,923,280) ...                                27,923,280
                                                                                        ------------       -----
 
TOTAL SHORT-TERM INVESTMENTS (cost $27,923,280) ..........                              $ 27,923,280         6.6
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-84
<PAGE>   1886
                        GT GLOBAL STRATEGIC INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- ----------------------------------------------------------                              ------------   -------------
<S>                                                         <C>        <C>              <C>            <C>
  Dated October 31, 1997, with State Street Bank & Trust
   Co., due November 3, 1997, for an effective yield of
   5.57%, collateralized by $7,860,000 U.S. Treasury
   Bonds, 8.875% due 8/15/17 (market value of collateral
   is $10,311,818, including accrued interest).
   (cost $10,107,564)  ...................................                              $ 10,107,564         2.4
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $424,594,754)  * .................                               430,698,951       102.4
Other Assets and Liabilities .............................                               (10,075,156)       (2.4)
                                                                                        ------------       -----
 
NET ASSETS ...............................................                              $420,623,795       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
         **  Underlying loan agreement currently in default.
        {.}  Security 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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
        {z}  All or part of the Fund's holdings in this security is segregated
             as collateral for written futures. See Note 1 to the Financial
             Statements.
         ++  The coupon rate shown on step-up coupon bond represents the rate at
             period end.
       {./}  All or part of the Fund's holdings in this security is segregated
             as collateral for when-issued securities or forward currency
             contracts. See Note 1 to the Financial Statements.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
        +/+  Issued with detachable warrants or value recovery rights. The
             current market value of each warrant or right is zero.
        {*}  Purchased on a forward commitment basis.
          *  For Federal income tax purposes, cost is $425,319,173 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  21,044,316
                 Unrealized depreciation:           (15,664,538)
                                                  -------------
                 Net unrealized appreciation:     $   5,379,778
                                                  -------------
                                                  -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-85
<PAGE>   1887
                        GT GLOBAL STRATEGIC INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS  (cont'd)
 
                                October 31, 1997
 
- --------------------------------------------------------------------------------
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                                OCTOBER 31, 1997
<TABLE>
<CAPTION>
                                          MARKET VALUE                           UNREALIZED
                                             (U.S.       CONTRACT    DELIVERY   APPRECIATION
CONTRACTS TO BUY:                           DOLLARS)       PRICE       DATE    (DEPRECIATION)
- ----------------------------------------  ------------  -----------  --------  --------------
<S>                                       <C>           <C>          <C>       <C>
Australian Dollars......................     3,022,847      1.37155   11/6/97    $(112,283)
British Pounds..........................    16,534,161      0.62123    2/5/98      485,452
British Pounds..........................    11,608,739      0.60397    2/5/98       18,839
Danish Kroner...........................     7,886,019      6.86340    2/5/98      382,449
Deutsche Marks..........................    25,918,384      1.77087    2/5/98      818,384
Deutsche Marks..........................    24,380,246      1.81000    2/5/98    1,280,246
Deutsche Marks..........................    11,573,533      1.74950    2/5/98      228,533
Deutsche Marks..........................     5,831,060      1.70250    2/5/98      (42,655)
Deutsche Marks..........................     4,932,669      1.82070    2/5/98      286,489
Deutsche Marks..........................     3,702,605      1.77285    2/5/98      120,916
Italian Liras...........................     6,451,334  1,697.68000    2/5/98        1,355
Italian Liras...........................     3,240,396  1,766.50000    2/5/98      126,895
Netherland Guilders.....................     6,358,320      1.97453    2/5/98      144,185
Spanish Pasetas.........................     8,955,096    148.86800    2/5/98      222,526
                                          ------------                         --------------
  Total Contracts to Buy (Payable amount
   $136,434,078)........................   140,395,409                           3,961,331
                                          ------------                         --------------
THE VALUE OF CONTRACTS TO BUY AS
 PERCENTAGE OF NET ASSETS IS 33.38%.
 
<CAPTION>
 
CONTRACTS TO SELL:
- ----------------------------------------
<S>                                       <C>           <C>          <C>       <C>
Australian Dollars......................     7,838,313      1.44611   11/6/97     (127,976)
Australian Dollars......................     4,674,868      1.36032   11/6/97      213,680
British Pounds..........................    11,858,437      0.61312   11/6/97     (327,267)
British Pounds..........................     4,864,140      0.63386   11/6/97     (289,013)
British Pounds..........................    11,724,826      0.62274    2/5/98     (371,820)
Canadian Dollars........................     1,774,056      1.38250   11/6/97       34,262
Danish Kroner...........................     7,847,141      6.95000   11/6/97     (437,069)
Deutsche Marks..........................    44,512,909      1.71600    2/5/98      (27,133)
Deutsche Marks..........................    16,981,429      1.72000    2/5/98      (49,819)
Deutsche Marks..........................    15,337,714      1.71800    2/5/98      (27,194)
Deutsche Marks..........................     3,280,903      1.71600    2/5/98       (2,000)
Italian Lira............................     9,691,730  1,696.15000    2/5/98        6,705
Netherland Guilders.....................     6,321,484      2.05140   11/6/97     (340,203)
New Zealand Dollars.....................    12,132,719      1.57878   11/6/97      212,247
South African Rand......................     7,285,042      5.04500   1/30/98     (160,681)
Spanish Pesetas.........................     8,939,623    154.70000   11/6/97     (536,262)
                                          ------------                         --------------
  Total Contracts to Sell (Receivable
   amount $172,835,791).................   175,065,334                          (2,229,543)
                                          ------------                         --------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 41.62%.
  Total Open Forward Foreign Currency
   Contracts, Net.......................                                         $1,731,788
                                                                               --------------
                                                                               --------------
</TABLE>
 
- --------------
See Note 1 to the financial statements.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                     WRITTEN FUTURES CONTRACTS OUTSTANDING
                                OCTOBER 31, 1997
 
<TABLE>
<CAPTION>
                                           MATURITY     NO. OF                  MARKET
DESCRIPTION                                  DATE      CONTRACTS   CURRENCY     VALUE
- ----------------------------------------  ----------   ---------   --------   ----------
<S>                                       <C>          <C>         <C>        <C>
U.S. 10-Year Bond Future (face
 $8,849,548)............................    12/19/97      80         USD      $8,902,400
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-86
<PAGE>   1888
                             GT GLOBAL INCOME FUNDS
 
                              STATEMENTS OF ASSETS
                                 AND LIABILITIES
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                               GT GLOBAL
                                                                                  ------------------------------------
                                                                                                  HIGH
                                                                                                 INCOME
                                                                                  GOVERNMENT      FUND-     STRATEGIC
                                                                                    INCOME     CONSOLIDATED   INCOME
                                                                                     FUND       (NOTE 1)       FUND
                                                                                  -----------  -----------  ----------
<S>                                                                               <C>          <C>          <C>
Assets:
  Investments in securities, at value (cost $290,266,878; $343,761,865; and
   $424,594,754, respectively) (Note 1).........................................  $290,274,619 3$48,124,783 $430,698,951
  U.S. currency.................................................................           63     598,195      906,033
  Foreign Currencies (Cost $562,392; $2,793,297; and $740,247, respectively)....      572,795   2,785,516      734,313
  Interest receivable...........................................................    5,620,712   6,748,730    7,672,126
  Receivable for Fund shares sold...............................................    1,790,045     757,060      523,422
  Receivable for open forward foreign currency contracts (Note 1)...............    3,976,639          --    1,731,788
  Receivable for securities sold................................................   12,795,967  21,411,490   16,967,090
  Miscellaneous receivable......................................................           --      17,246      105,000
                                                                                  -----------  -----------  ----------
    Total assets................................................................  315,030,840  380,443,020  459,338,723
                                                                                  -----------  -----------  ----------
Liabilities:
  Payable for custodian fees (Note 1)...........................................       13,985      19,132       31,825
  Payable for Directors' and Trustees' fees and expenses (Note 2)...............        7,943      10,881        5,472
  Payable for forward foreign currency contracts -- closed (Note 1).............    6,013,174          --    3,799,153
  Payable for fund accounting fees (Note 2).....................................        6,285       9,778        9,847
  Payable for Fund shares repurchased (Note 2)..................................   13,090,101   3,038,650    1,446,639
  Payable for investment management and administration fees (Note 2)............      177,596     341,976      278,408
  Payable for loan outstanding (Note 1).........................................    4,451,000          --           --
  Payable for open forward foreign currency contracts (Note 1)..................           --     877,240           --
  Payable for printing and postage expenses.....................................      109,344      79,859       85,448
  Payable for professional fees.................................................       37,427      52,845       28,107
  Payable for registration and filing fees......................................       16,015       5,502       14,782
  Payable for securities purchased..............................................    8,707,277   9,848,640   32,628,138
  Payable for service and distribution expenses (Note 2)........................      160,788     285,897      310,485
  Payable for transfer agent fees (Note 2)......................................      121,280      60,286       63,713
  Payable for variation margin..................................................           --          --        5,000
  Payable for written options, at value.........................................          406          --           --
  Other accrued expenses........................................................        8,741      19,823        7,911
                                                                                  -----------  -----------  ----------
    Total liabilities...........................................................   32,921,362  14,650,509   38,714,928
    Minority interest (Notes 1 & 2).............................................           --         100           --
                                                                                  -----------  -----------  ----------
Net assets......................................................................  $282,109,478 3$65,792,411 $420,623,795
                                                                                  -----------  -----------  ----------
                                                                                  -----------  -----------  ----------
Class A:
Net asset value and offering price per share ($154,272,250 DIVIDED BY
 17,888,878; $133,972,818 DIVIDED BY 8,609,881; and $138,714,970 DIVIDED BY
 11,557,042 shares outstanding, respectively)...................................  $      8.62   $   15.56   $    12.00
                                                                                  -----------  -----------  ----------
                                                                                  -----------  -----------  ----------
Maximum offering price per share (100/95.25 of $8.62; 100/95.25 of $15.56; and
 100/95.25 of $12.00, respectively) *...........................................  $      9.05   $   16.34   $    12.60
                                                                                  -----------  -----------  ----------
                                                                                  -----------  -----------  ----------
Class B:+
Net asset value and offering price per share ($127,721,696 DIVIDED BY
 14,819,308; $228,100,869 DIVIDED BY 14,675,701; and $281,375,602 DIVIDED BY
 23,423,332 shares outstanding, respectively)...................................  $      8.62   $   15.54   $    12.01
                                                                                  -----------  -----------  ----------
                                                                                  -----------  -----------  ----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share
 ($115,532 DIVIDED BY 13,411; $3,718,724 DIVIDED BY 239,667; and $533,223
 DIVIDED BY 44,355 shares outstanding, respectively)............................  $      8.61   $   15.52   $    12.02
                                                                                  -----------  -----------  ----------
                                                                                  -----------  -----------  ----------
Net assets consist of:
  Paid in capital (Note 4)......................................................  $424,806,101 2$94,116,233 $485,352,425
  Undistributed net investment income/(distribution in excess of income)........           --     303,600   (3,351,006)
  Accumulated net realized gain (loss) on investments...........................  (146,657,834) 67,929,136  (69,137,537)
  Net unrealized appreciation (depreciation) on translation of assets and
   liabilities in foreign currencies............................................    3,909,203    (919,476)   1,745,551
  Net unrealized appreciation of investments....................................       52,008   4,362,918    6,014,362
                                                                                  -----------  -----------  ----------
Total -- representing net assets applicable to capital shares outstanding.......  $282,109,478 3$65,792,411 $420,623,795
                                                                                  -----------  -----------  ----------
                                                                                  -----------  -----------  ----------
<FN>
- ----------------
    * On sales of $50,000 or more, the offering price is reduced.
    + Redemption price per share is equal to the net asset value per share less
      any applicable contingent deferred sales charge.
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-87
<PAGE>   1889
                             GT GLOBAL INCOME FUNDS
 
                            STATEMENTS OF OPERATIONS
 
                          Year ended October 31, 1997
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                  GT GLOBAL
                                                                    -------------------------------------
                                                                                    HIGH
                                                                                   INCOME
                                                                    GOVERNMENT      FUND-      STRATEGIC
                                                                      INCOME     CONSOLIDATED   INCOME
                                                                       FUND       (NOTE 1)       FUND
                                                                    -----------  -----------  -----------
<S>                                                                 <C>          <C>          <C>
Investment income:
  Interest income.................................................  $24,435,113  $40,562,334  $36,075,707
  Other income....................................................       51,190           --       26,003
                                                                    -----------  -----------  -----------
    Total investment income.......................................   24,486,303   40,562,334   36,101,710
                                                                    -----------  -----------  -----------
Expenses:
  Investment management and administration fees (Note 2)..........    2,403,043    4,107,638    3,474,804
  Amortization of organization costs (Note 1).....................           --       34,678           --
  Custodian Fees (Note 1).........................................      203,911      182,500      256,523
  Directors' and Trustees' fees and expenses (Note 2).............       14,600       19,345       13,962
  Fund accounting fees (Note 2)...................................       85,149      116,607      123,309
  Printing and postage expenses...................................      131,035       88,337      144,457
  Professional fees...............................................       79,570      119,674       81,841
  Registration and filing fees (Note 1)...........................       52,925       68,590       44,726
  Service and distribution expenses: (Note 2)
    Class A.......................................................      672,237      605,133      560,886
    Class B.......................................................    1,392,802    2,653,190    3,185,408
  Transfer agent fees (Note 2)....................................      734,235      676,490      831,440
  Other expenses (Note 1).........................................      132,382      187,152      264,542
                                                                    -----------  -----------  -----------
    Total expenses before reductions..............................    5,901,889    8,859,334    8,981,898
                                                                    -----------  -----------  -----------
    Expense reductions (Note 1)...................................     (543,589)    (234,784)    (460,682)
                                                                    -----------  -----------  -----------
  Total net expenses..............................................    5,358,300    8,624,550    8,521,216
                                                                    -----------  -----------  -----------
Net investment income.............................................   19,128,003   31,937,784   27,580,494
                                                                    -----------  -----------  -----------
Net realized and unrealized gain (loss) on investments: (Note 1)
  Net realized gain (loss) on investments.........................   (6,424,453)  65,778,885   35,321,536
  Net realized gain on foreign currency transactions..............    6,670,567    3,923,861    4,176,477
                                                                    -----------  -----------  -----------
    Net realized gain during the year.............................      246,114   69,702,746   39,498,013
                                                                    -----------  -----------  -----------
  Net change in unrealized appreciation(depreciation) on
   translation of assets and liabilities in foreign currencies....    5,553,094   (1,099,793)   2,627,595
  Net change in unrealized appreciation of investments............  (11,452,067) (36,470,606) (26,190,807)
                                                                    -----------  -----------  -----------
    Net unrealized depreciation during the year...................   (5,898,973) (37,570,399) (23,563,212)
                                                                    -----------  -----------  -----------
Net realized and unrealized gain (loss) on investments and foreign
 currencies.......................................................   (5,652,859)  32,132,347   15,934,801
                                                                    -----------  -----------  -----------
Net increase in net assets resulting from operations..............  $13,475,144  $64,070,131  $43,515,295
                                                                    -----------  -----------  -----------
                                                                    -----------  -----------  -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-88
<PAGE>   1890
                             GT GLOBAL INCOME FUNDS
 
                      STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<S>                                       <C>          <C>          <C>          <C>          <C>          <C>
- --------------------------------------------------------------------------------
 
<CAPTION>
<S>                                       <C>          <C>          <C>          <C>          <C>          <C>
<CAPTION>
                                                                           GT GLOBAL
                                          ----------------------------------------------------------------------------
                                                                          HIGH INCOME
                                           GOVERNMENT INCOME FUND      FUND-CONSOLIDATED       STRATEGIC INCOME FUND
                                          ------------------------  ------------------------  ------------------------
                                          YEAR ENDED   YEAR ENDED   YEAR ENDED   YEAR ENDED   YEAR ENDED   YEAR ENDED
                                          OCTOBER 31,  OCTOBER 31,  OCTOBER 31,  OCTOBER 31,  OCTOBER 31,  OCTOBER 31,
                                             1997         1996         1997         1996         1997         1996
                                          -----------  -----------  -----------  -----------  -----------  -----------
<S>                                       <C>          <C>          <C>          <C>          <C>          <C>
Increase (decrease) in net assets
Operations:
  Net investment income.................  $19,128,003  $31,802,934  $31,937,784  $37,117,017  $27,580,494  $40,286,756
  Net realized gain (loss) on
   investments and foreign currency
   transactions.........................      246,114   (1,896,895)  69,702,746   62,517,472   39,498,013   36,675,981
  Net change in unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies...........................    5,553,094    2,319,205   (1,099,793)     174,082    2,627,595    1,913,734
  Net change in unrealized appreciation
   (depreciation) of investments........  (11,452,067)  (1,121,083) (36,470,606)  31,730,913  (26,190,807)  27,794,834
                                          -----------  -----------  -----------  -----------  -----------  -----------
    Net increase in net assets resulting
     from operations....................   13,475,144   31,104,161   64,070,131  131,539,484   43,515,295  106,671,305
                                          -----------  -----------  -----------  -----------  -----------  -----------
Class A:
Distributions to shareholders: (Note 1)
  From net investment income............   (6,827,721) (15,504,590) (12,555,399) (13,418,057) (10,228,265) (12,520,881)
  From net realized gain on
   investments..........................           --   (8,183,323)  (2,751,509)  (1,230,117)          --           --
  In excess of net investment income....   (4,449,488)          --           --           --     (775,601)  (1,097,884)
Class B:
Distributions to shareholders: (Note 1)
  From net investment income............   (4,503,257)  (9,165,193) (17,789,317) (18,753,394) (18,434,103) (22,200,673)
  From net realized gain on
   investments..........................           --   (5,303,358)  (3,911,565)  (1,719,241)          --           --
  In excess of net investment income....   (2,934,682)          --           --           --   (1,397,843)  (1,946,649)
Advisor Class:
Distributions to shareholders: (Note 1)
  From net investment income............       (4,070)      (7,915)  (1,289,469)    (505,715)     (43,148)     (46,547)
  From net realized gain on
   investments..........................           --       (2,893)    (264,339)     (46,362)          --           --
  In excess of net investment income....       (2,653)          --           --           --       (3,272)      (4,081)
                                          -----------  -----------  -----------  -----------  -----------  -----------
    Total distributions.................  (18,721,871) (38,167,272) (38,561,598) (35,672,886) (30,882,232) (37,816,715)
                                          -----------  -----------  -----------  -----------  -----------  -----------
Capital share transactions: (Note 4)
  Increase from capital shares sold and
   reinvested...........................  667,541,828  386,482,407  561,523,639  583,133,415  335,031,026  335,665,174
  Decrease from capital shares
   repurchased..........................  (787,794,141) (592,826,606) (665,858,246) (592,743,855) (445,823,540) (432,196,117)
                                          -----------  -----------  -----------  -----------  -----------  -----------
    Net decrease from capital share
     transactions.......................  (120,252,313) (206,344,199) (104,334,607)  (9,610,440) (110,792,514) (96,530,943)
                                          -----------  -----------  -----------  -----------  -----------  -----------
Total increase (decrease) in net
 assets.................................  (125,499,040) (213,407,310) (78,826,074)  86,256,158 (98,159,451) (27,676,353)
Net assets:
  Beginning of year.....................  407,608,518  621,015,828  444,618,485  358,362,327  518,783,246  546,459,599
                                          -----------  -----------  -----------  -----------  -----------  -----------
  End of year  *........................  $282,109,478 $407,608,518 $365,792,411 $444,618,485 $420,623,795 $518,783,246
                                          -----------  -----------  -----------  -----------  -----------  -----------
                                          -----------  -----------  -----------  -----------  -----------  -----------
 * Includes undistributed (distributions
   in excess of) net investment income..  $        --  $   364,918  $   303,600  $        --  $(3,351,006) $        --
                                          -----------  -----------  -----------  -----------  -----------  -----------
                                          -----------  -----------  -----------  -----------  -----------  -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-89
<PAGE>   1891
                        GT GLOBAL GOVERNMENT INCOME FUND
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS A
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)    1996 (D)    1995 (D)    1994 (D)    1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $    8.74   $    8.81   $    8.63   $   11.07   $    9.83
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................       0.52        0.57        0.62        0.65        0.74
  Net realized and unrealized gain
   (loss) on investments................      (0.13)       0.03        0.15       (1.52)       1.34
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       0.39        0.60        0.77       (0.87)       2.08
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............      (0.31)      (0.57)      (0.59)      (0.65)      (0.74)
  From net realized gain on
   investments..........................         --       (0.10)         --       (0.27)         --
  In excess of net investment income....      (0.20)         --          --          --          --
  In excess of net realized gain on
   investments..........................         --          --          --       (0.55)         --
  Return of capital.....................         --          --          --       (0.10)         --
  From sources other than net investment
   income...............................         --          --          --          --       (0.10)
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (0.51)      (0.67)      (0.59)      (1.57)      (0.84)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $    8.62   $    8.74   $    8.81   $    8.63   $   11.07
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............       4.78%       7.11%       9.22%      (8.87)%      21.9%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 154,272   $ 240,945   $ 385,404   $ 502,094   $ 708,301
Ratio of net investment income to
 average net assets.....................       6.04%       6.52%       6.98%       6.87%        7.1%
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......       1.34%       1.34%       1.35%       1.33%        1.4%
  Without expense reductions............       1.51%       1.39%       1.38%        N/A         N/A
Portfolio turnover rate++...............        241%        268%        385%        625%        495%
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the year.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-90
<PAGE>   1892
                        GT GLOBAL GOVERNMENT INCOME FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS B
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)    1996 (D)    1995 (D)    1994 (D)    1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $    8.74   $    8.80   $    8.64   $   11.07   $    9.83
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................       0.46        0.51        0.55        0.59        0.67
  Net realized and unrealized gain
   (loss) on investments................      (0.12)       0.04        0.14       (1.52)       1.34
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       0.34        0.55        0.69       (0.93)       2.01
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............      (0.28)      (0.51)      (0.53)      (0.59)      (0.67)
  From net realized gain on
   investments..........................         --       (0.10)         --       (0.27)         --
  In excess of net investment income....      (0.18)         --          --          --          --
  In excess of net realized gain on
   investments..........................         --          --          --       (0.54)         --
  Return of capital.....................         --          --          --       (0.10)         --
  From sources other than net investment
   income...............................         --          --          --          --       (0.10)
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (0.46)      (0.61)      (0.53)      (1.50)      (0.77)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $    8.62   $    8.74   $    8.80   $    8.64   $   11.07
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............       4.00%       6.54%       8.22%      (9.39)%      21.1%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 127,722   $ 166,577   $ 235,481   $ 262,405   $ 182,972
Ratio of net investment income to
 average net assets.....................       5.39%       5.87%       6.33%       6.22%        6.5%
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......       1.99%       1.99%       2.00%       1.98%        2.0%
  Without expense reductions............       2.16%       2.04%       2.03%        N/A         N/A
Portfolio turnover rate++...............        241%        268%        385%        625%        495%
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the year.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-91
<PAGE>   1893
                        GT GLOBAL GOVERNMENT INCOME FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                       ADVISOR CLASS+
                                          -----------------------------------------
                                                                      JUNE 1, 1995
                                           YEAR ENDED    YEAR ENDED        TO
                                          OCTOBER 31,   OCTOBER 31,    OCTOBER 31,
                                            1997 (D)      1996 (D)      1995 (D)
                                          ------------  ------------  -------------
<S>                                       <C>           <C>           <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $    8.73     $    8.80      $    8.98
                                          ------------  ------------  -------------
Income from investment operations:
  Net investment income.................        0.55          0.60           0.26
  Net realized and unrealized gain
   (loss) on investments................       (0.13)         0.03          (0.19)
                                          ------------  ------------  -------------
    Net increase (decrease) from
     investment operations..............        0.42          0.63           0.07
                                          ------------  ------------  -------------
Distributions to shareholders:
  From net investment income............       (0.33)        (0.60)         (0.25)
  From net realized gain on
   investments..........................          --         (0.10)            --
  In excess of net investment income....       (0.21)           --             --
  In excess of net realized gain on
   investments..........................          --            --             --
  Return of capital.....................          --            --             --
  From sources other than net investment
   income...............................          --            --             --
                                          ------------  ------------  -------------
    Total distributions.................       (0.54)        (0.70)         (0.25)
                                          ------------  ------------  -------------
Net asset value, end of period..........   $    8.61     $    8.73      $    8.80
                                          ------------  ------------  -------------
                                          ------------  ------------  -------------
 
Total investment return (c).............        5.15 %        7.49 %         0.83%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $     116     $      86      $     131
Ratio of net investment income to
 average net assets.....................        6.39 %        6.87 %         7.33%(a)
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......        0.99 %        0.99 %         1.00%(a)
  Without expense reductions............        1.16 %        1.04 %         1.03%(a)
Portfolio turnover rate++...............         241 %         268 %          385%
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the year.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares.
N/A  Not Applicable.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-92
<PAGE>   1894
                           GT GLOBAL HIGH INCOME FUND
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS A
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)    1996 (D)      1995      1994 (D)    1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   14.85   $   11.70   $   12.56   $   14.92   $   11.43
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................       1.19        1.27        1.35        0.94        0.78
  Net realized and unrealized gain
   (loss) on investments................       0.93        3.09       (1.09)      (1.87)       3.92
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       2.12        4.36        0.26       (0.93)       4.70
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............      (1.18)      (1.11)      (1.03)      (0.94)      (0.78)
  From net realized gain on
   investments..........................      (0.23)      (0.10)      (0.03)      (0.27)         --
  In excess of net realized gain on
   investments..........................         --          --          --       (0.22)         --
  Return of capital.....................         --          --       (0.06)         --          --
  From sources other than net investment
   income...............................         --          --          --          --       (0.43)
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (1.41)      (1.21)      (1.12)      (1.43)      (1.21)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $   15.56   $   14.85   $   11.70   $   12.56   $   14.92
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............      14.46%      39.05%       2.81%      (6.45)%      43.6%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 133,973   $ 178,318   $ 142,002   $ 167,974   $ 143,171
Ratio of net investment income to
 average net assets.....................       7.39%       9.52%      11.85%       7.00%       6.40%
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......       1.53%       1.69%       1.75%       1.57%       2.20%
  Without expense reductions............       1.58%       1.69%       1.75%       1.57%       2.20%
Ratio of interest expense to average net
 assets.................................        N/A        0.04%        N/A        0.22%        N/A
Portfolio turnover rate++...............        214%        290%        213%        178%        195%
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the year.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the fund as a whole
     without distinguishing among the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-93
<PAGE>   1895
                           GT GLOBAL HIGH INCOME FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS B
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                           1997 (D)    1996 (D)      1995      1994 (D)    1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   14.83   $   11.69   $   12.56   $   14.90   $   11.43
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................       1.09        1.17        1.27        0.86        0.70
  Net realized and unrealized gain
   (loss) on investments................       0.93        3.09       (1.09)      (1.85)       3.90
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       2.02        4.26        0.18       (0.99)       4.60
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............      (1.08)      (1.03)      (0.96)      (0.86)      (0.70)
  From net realized gain on
   investments..........................      (0.23)      (0.09)      (0.03)      (0.27)         --
  In excess of net realized gain on
   investments..........................         --          --          --       (0.22)         --
  Return of capital.....................         --          --       (0.06)         --          --
  From sources other than net investment
   income...............................         --          --          --          --       (0.43)
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (1.31)      (1.12)      (1.05)      (1.35)      (1.13)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $   15.54   $   14.83   $   11.69   $   12.56   $   14.90
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............      13.77%      38.16%       2.07%      (6.99)%      42.6%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 228,101   $ 251,002   $ 214,897   $ 232,423   $ 127,035
Ratio of net investment income to
 average net assets.....................       6.74%       8.87%      11.20%       6.35%        5.8%
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......       2.18%       2.34%       2.40%       2.22%        2.8%
  Without expense reductions............       2.23%       2.34%       2.40%       2.22%        2.8%
Ratio of interest expense to average net
 assets.................................        N/A        0.04%        N/A        0.22%        N/A
Portfolio turnover rate++...............        214%        290%        213%        178%        195%
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the year.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the fund as a whole
     without distinguishing among the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-94
<PAGE>   1896
                           GT GLOBAL HIGH INCOME FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                      ADVISOR CLASS+
                                          --------------------------------------
                                                                    JUNE 1, 1995
                                          YEAR ENDED   YEAR ENDED        TO
                                          OCTOBER 31,  OCTOBER 31,  OCTOBER 31,
                                           1997 (D)     1996 (D)        1995
                                          -----------  -----------  ------------
<S>                                       <C>          <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $   14.83    $   11.71    $   11.44
                                          -----------  -----------  ------------
Income from investment operations:
  Net investment income.................        1.22         1.34         0.57
  Net realized and unrealized gain
   (loss) on investments................        0.93         3.05         0.17
                                          -----------  -----------  ------------
    Net increase (decrease) from
     investment operations..............        2.15         4.39         0.74
                                          -----------  -----------  ------------
Distributions to shareholders:
  From net investment income............       (1.23)       (1.16)       (0.44)
  From net realized gain on
   investments..........................       (0.23)       (0.11)          --
  In excess of net realized gain on
   investments..........................          --           --           --
  Return of capital.....................          --           --        (0.03)
  From sources other than net investment
   income...............................          --           --           --
                                          -----------  -----------  ------------
    Total distributions.................       (1.46)       (1.27)       (0.47)
                                          -----------  -----------  ------------
Net asset value, end of period..........   $   15.52    $   14.83    $   11.71
                                          -----------  -----------  ------------
                                          -----------  -----------  ------------
 
Total investment return (c).............       14.72%       39.38%        6.54 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $   3,719    $  15,298    $   1,463
Ratio of net investment income to
 average net assets.....................        7.74%        9.87%       12.20 %(a)
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......        1.18%        1.34%        1.40 %(a)
  Without expense reductions............        1.23%        1.34%        1.40 %
Ratio of interest expense to average net
 assets.................................         N/A         0.04%         N/A
Portfolio turnover rate++...............         214%         290%         213 %(a)
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share operating data were calculated based upon
     average shares outstanding during the year.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the fund as a whole
     without distinguishing among the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-95
<PAGE>   1897
                        GT GLOBAL STRATEGIC INCOME FUND
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS A
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                             1997      1996 (D)    1995 (D)      1994      1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   11.76   $   10.32   $   10.88   $   13.61   $   11.25
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................       0.74        0.89        0.97        0.79        0.96
  Net realized and unrealized gain
   (loss) on investments................       0.34        1.44       (0.69)      (2.14)       2.85
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       1.08        2.33        0.28       (1.35)       3.81
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............      (0.78)      (0.82)      (0.80)      (0.79)      (0.96)
  From net realized gain on
   investments..........................         --          --          --       (0.38)      (0.37)
  In excess of net investment income....      (0.06)      (0.07)         --          --          --
  Return of capital.....................         --          --       (0.04)      (0.21)         --
  From sources other than net investment
   income...............................         --          --          --          --       (0.12)
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (0.84)      (0.89)      (0.84)      (1.38)      (1.45)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $   12.00   $   11.76   $   10.32   $   10.88   $   13.61
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............       9.40%      23.00%       3.06%     (10.44)%      37.0%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 138,715   $ 185,126   $ 188,165   $ 275,241   $ 287,870
Ratio of net investment income to
 average net assets.....................       6.18%       8.09%       9.64%       6.74%        7.2%
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......       1.35%       1.38%       1.42%       1.40%        1.7%
  Without expense reductions............       1.44%       1.40%       1.45%        N/A         N/A
Ratio of interest expenses to average
 net assets.............................        N/A         N/A         N/A        0.10%        N/A
Portfolio turnover rate++...............        149%        177%        238%        583%        310%
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-96
<PAGE>   1898
                        GT GLOBAL STRATEGIC INCOME FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
 
                                                                   CLASS B
                                          ----------------------------------------------------------
                                                            YEAR ENDED OCTOBER 31,
                                          ----------------------------------------------------------
                                             1997      1996 (D)    1995 (D)      1994      1993 (D)
                                          ----------  ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $   11.77   $   10.33   $   10.88   $   13.60   $   11.24
                                          ----------  ----------  ----------  ----------  ----------
Income from investment operations:
  Net investment income.................       0.67        0.82        0.91        0.73        0.89
  Net realized and unrealized gain
   (loss) on investments................       0.33        1.44       (0.69)      (2.14)       2.85
                                          ----------  ----------  ----------  ----------  ----------
    Net increase (decrease) from
     investment operations..............       1.00        2.26        0.22       (1.41)       3.74
                                          ----------  ----------  ----------  ----------  ----------
Distributions to shareholders:
  From net investment income............      (0.71)      (0.75)      (0.73)      (0.72)      (0.89)
  From net realized gain on
   investments..........................         --          --          --       (0.38)      (0.37)
  In excess of net investment income....      (0.05)      (0.07)         --          --          --
  Return of capital.....................         --          --       (0.04)      (0.21)         --
  From sources other than net investment
   income...............................         --          --          --          --       (0.12)
                                          ----------  ----------  ----------  ----------  ----------
    Total distributions.................      (0.76)      (0.82)      (0.77)      (1.31)      (1.38)
                                          ----------  ----------  ----------  ----------  ----------
Net asset value, end of period..........  $   12.01   $   11.77   $   10.33   $   10.88   $   13.60
                                          ----------  ----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  ----------  ----------
 
Total investment return (c).............       8.70%      22.15%       2.48%     (11.02)%      36.2%
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $ 281,376   $ 333,178   $ 357,852   $ 458,550   $ 310,431
Ratio of net investment income to
 average net assets.....................       5.53%       7.44%       8.99%       6.09%        6.5%
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......       2.00%       2.03%       2.07%       2.05%        2.4%
  Without expense reductions............       2.09%       2.05%       2.10%        N/A         N/A
Ratio of interest expenses to average
 net assets.............................        N/A         N/A         N/A        0.10%        N/A
Portfolio turnover rate++...............        149%        177%        238%        583%        310%
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-97
<PAGE>   1899
                        GT GLOBAL STRATEGIC INCOME FUND
 
                         FINANCIAL HIGHLIGHTS  (cont'd)
 
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
 
<TABLE>
<CAPTION>
                                                       ADVISOR CLASS+
                                          -----------------------------------------
                                                                      JUNE 1, 1995
                                           YEAR ENDED    YEAR ENDED        TO
                                          OCTOBER 31,   OCTOBER 31,    OCTOBER 31,
                                              1997        1996 (D)      1995 (D)
                                          ------------  ------------  -------------
<S>                                       <C>           <C>           <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $   11.77     $   10.33      $   10.32
                                          ------------  ------------  -------------
Income from investment operations:
  Net investment income.................        0.79          0.93           0.41
  Net realized and unrealized gain
   (loss) on investments................        0.34          1.44          (0.04)
                                          ------------  ------------  -------------
    Net increase (decrease) from
     investment operations..............        1.13          2.37           0.37
                                          ------------  ------------  -------------
Distributions to shareholders:
  From net investment income............       (0.82)        (0.86)         (0.34)
  From net realized gain on
   investments..........................          --            --             --
  In excess of net investment income....       (0.06)        (0.07)            --
  Return of capital.....................          --            --          (0.02)
  From sources other than net investment
   income...............................          --            --             --
                                          ------------  ------------  -------------
    Total distributions.................       (0.88)        (0.93)         (0.36)
                                          ------------  ------------  -------------
Net asset value, end of period..........   $   12.02     $   11.77      $   10.33
                                          ------------  ------------  -------------
                                          ------------  ------------  -------------
 
Total investment return (c).............        9.86 %       23.39 %         3.72%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $     533     $     479      $     443
Ratio of net investment income to
 average net assets.....................        6.53 %        8.44 %         9.99%(a)
Ratio of expenses to average net assets:
  With expense reductions (Note 1)......        1.00 %        1.03 %         1.07%(a)
  Without expense reductions............        1.09 %        1.05 %         1.10%(a)
Ratio of interest expenses to average
 net assets.............................         N/A           N/A            N/A
Portfolio turnover rate++...............         149 %         177 %          238%
</TABLE>
 
- ----------------
 
 (a) Annualized
 (b) Not Annualized
 (c) Total investment return does not include sales charges.
 (d) These selected per share data were calculated based upon average
     shares outstanding during the period.
  +  Commencing June 1, 1995, the Fund began offering Advisor Class shares.
 ++  Portfolio turnover is calculated on the basis of the Fund as a whole
     without distinguishing between the classes of shares issued.
N/A  Not Applicable
 
    The accompanying notes are an integral part of the financial statements.
 
                                      FS-98
<PAGE>   1900
                             GT GLOBAL INCOME FUNDS
 
                                    NOTES TO
                              FINANCIAL STATEMENTS
                                October 31, 1997
 
- --------------------------------------------------------------------------------
 
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Government Income Fund, GT Global High Income Fund, GT Global
Strategic Income Fund ("Funds") are non-diversified separate series of G.T.
Investment Funds, Inc. ("Company"). Collectively, these Funds are known as the
"GT Global Income Funds". The Company is organized as a Maryland corporation and
is registered under the Investment Company Act of 1940, as amended ("1940 Act"),
as an open-end management investment company. The Company has thirteen series of
shares in operation, each series corresponding to a distinct portfolio of
investments.
 
The GT Global High Income Fund invests substantially all of its investable
assets in Global High Income Portfolio ("Portfolio"). The Portfolio is organized
as a New York Trust and is registered under the 1940 Act as a non-diversified,
open-end management investment company.
 
The Portfolio has investment objectives, policies and limitations substantially
identical to those of its corresponding Fund. Therefore, the financial
statements of the Fund and its respective Portfolio have been presented on a
consolidated basis, and represent all activities of both the Fund and Portfolio.
Through October 31, 1997, all of the shares of beneficial interest of the
Portfolio were owned by either its Fund or Chancellor LGT Asset Management, Inc.
(the "Manager"), which has a nominal ($100) investment in the Portfolio.
 
The Funds offer Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges except that Class A and Class B
each has exclusive voting rights with respect to its distribution plan.
Investment income, realized and unrealized capital gains and losses, and the
common expenses of the Funds are allocated on a pro rata basis to each class
based on the relative net assets of each class to the total net assets of the
Funds. Each class of shares differs in its respective service and distribution
expenses, and may differ in its transfer agent, registration, and certain other
class-specific fees and expenses.
 
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 reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
 
(A) PORTFOLIO VALUATION
 
The Funds calculate the net asset value of and complete orders to purchase,
exchange, or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
 
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by the Manager to be the
primary market.
 
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality, and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments are valued at
amortized cost adjusted for foreign exchange translation and market fluctuation,
if any.
 
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors or the Trust's Board of Trustees.
 
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors or
the Trust's Board of Trustees.
 
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of each Fund and Portfolio are maintained in U.S.
dollars. The market values of foreign securities, currency holdings, and other
assets and liabilities are recorded in the books and records of the Funds or
Portfolio (the phrase "Funds or Portfolio" hereinafter refers to the GT Global
Government Income Fund, the GT Global Strategic Income Fund, and the Global High
Income Portfolio) after translation to U.S. dollars based on the exchange rates
on that day. The cost of each security is determined using historical exchange
rates. Income and withholding taxes are translated at prevailing exchange rates
when earned or incurred.
 
A Fund or Portfolio does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from
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.
 
                                      FS-99
<PAGE>   1901
                             GT GLOBAL INCOME FUNDS
 
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on a
Fund's or Portfolio's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains or losses arise
from changes in the value of assets and liabilities other than investments in
securities at period end, resulting from changes in exchange rates.
 
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by a Fund or Portfolio, it is
the Fund's or Portfolio's policy to always receive, as collateral, United States
government securities or other high quality debt securities of which the value,
including accrued interest, is at least equal to the amount to be repaid to the
Fund or Portfolio under each agreement at its maturity.
 
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by a Fund or Portfolio as an unrealized gain or loss.
When the Forward Contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference between the value at the time it was opened
and the value at the time it was closed. Forward Contracts involve market risk
in excess of the amount shown in the Fund's or Portfolio's "Statement of Assets
and Liabilities". A Fund or Portfolio could be exposed to risk if a counterparty
is unable to meet the terms of the contract or if the value of the currency
changes unfavorably. A Fund or Portfolio may enter into Forward Contracts in
connection with planned purchases or sales of securities, or to hedge against
adverse fluctuations in exchange rates between currencies.
 
(E) OPTION ACCOUNTING PRINCIPLES
When a Fund or Portfolio writes a call or put option, an amount equal to the
premium received is included in the Fund's or Portfolio's "Statement of Assets
and Liabilities" as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market value
of the option. The current market value of an option listed on a traded exchange
is valued at its last bid price, or, in the case of an over-the-counter option,
is valued at the average of the last bid prices obtained from brokers, unless a
quotation from only one broker is available, in which case only that broker's
price will be used. If an option expires on its stipulated expiration date or if
the Fund or Portfolio enters into a closing purchase transaction, a gain or loss
is realized without regard to any unrealized gain or loss on the underlying
security and the liability related to such option is extinguished. If a written
call option is exercised, a gain or loss is realized from the sale of the
underlying security and the proceeds of the sale are increased by the premium
originally received. If a written put option is exercised, the cost of the
underlying security purchased would be decreased by the premium originally
received. The Fund or Portfolio can write options only on a covered basis,
which, for a call, requires that the Fund or Portfolio hold the underlying
security and, for a put, requires the Fund or Portfolio to set aside cash, U.S.
government securities or other liquid securities in an amount not less than the
exercise price, or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund or Portfolio may use options to manage its
exposure to the stock market and to fluctuations in currency values or interest
rates.
 
The premium paid by the Fund or Portfolio for the purchase of a call or put
option is included in the Fund's or Portfolio's "Statement of Assets and
Liabilities" as an investment and subsequently "marked-to-market" to reflect the
current market value of the option. If an option which the Fund or Portfolio has
purchased expires on the stipulated expiration date, the Fund or Portfolio
realizes a loss in the amount of the cost of the option. If the Fund or
Portfolio enters into a closing sale transaction, the Fund or Portfolio realizes
a gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund or Portfolio
exercises a call option, the cost of the securities acquired by exercising the
call is increased by the premium paid to buy the call. If the Fund or Portfolio
exercises a put option, it realizes a gain or loss from the sale of the
underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
 
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund or Portfolio may forego
the opportunity of profit if the market value of the underlying security or
index increases and the option is exercised. The risk in writing a put option is
that the Fund or Portfolio may incur a loss if the market value of the
underlying security or index decreases and the option is exercised. In addition,
there is the risk the Fund or Portfolio may not be able to enter into a closing
transaction because of an illiquid secondary market.
 
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract a
Fund or Portfolio is required to pledge to the broker an amount of cash or
securities equal to the minimum "initial margin" requirements of the exchange on
which the contract is traded. Pursuant to the contract, the Fund or Portfolio
agrees to receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known as
"variation margin" and are recorded by the Fund or Portfolio as unrealized gains
or losses. When the contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed. The potential risk
to the Fund or Portfolio is that the change in value of the underlying
securities may not correlate to the change in value of the contracts. A Fund or
 
                                      FS-100
<PAGE>   1902
                             GT GLOBAL INCOME FUNDS
 
Portfolio may use futures contracts to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
 
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out-basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. A Fund or Portfolio may
trade securities on other than normal settlement terms. This may increase the
risk if the other party to the transaction fails to deliver and causes the Fund
or Portfolio to subsequently invest at less advantageous prices.
 
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1997, stocks with an aggregate value listed below were on loan to
brokers. The loans were secured by cash collateral received by the Funds:
 
<TABLE>
<CAPTION>
                                                                               YEAR ENDED
                                                  OCTOBER 31, 1997            OCTOBER 31,
                                          --------------------------------        1997
                                          AGGREGATE VALUE        CASH        --------------
                                              ON LOAN         COLLATERAL     FEES RECEIVED
                                          ---------------   --------------   --------------
<S>                                       <C>               <C>              <C>
GT Global Government Income Fund........   $ 29,895,986      $  31,386,675      $543,589
Global High Income Portfolio............   $ 25,907,465      $  32,857,776      $234,784
GT Global Strategic Income Fund.........   $ 37,623,556      $  43,190,488      $460,682
</TABLE>
 
For international securities, cash collateral is received by a Fund or Portfolio
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by a Fund or Portfolio against loaned securities in the
amount at least equal to 102% of the market value of the loaned securities at
the inception of each loan. This collateral must be maintained at not less than
100% of the market value of the loaned securities during the period of the loan.
Fees received from securities loaned were used to reduce the Funds' or
Portfolios' custodian and other administrative expenses.
 
(I) TAXES
It is the intended policy of the Funds and Portfolios to meet the requirements
for qualification as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended ("Code"). It is also the intention of the Funds and
Portfolios to make distributions sufficient to avoid imposition of any excise
tax under Section 4982 of the Code. Therefore, no provision has been made for
Federal taxes on income, capital gains, or unrealized appreciation of securities
held, and excise tax on income and capital gains. The GT Global Government
Income Fund has a capital loss carryforward of $139,369,056 of which
$123,623,470 expires in 2002, and $15,745,586 expires in 2003. The GT Global
Strategic Income Fund has a capital loss carryforward of $65,749,433 which
expires in 2003.
 
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by each Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal 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 Funds or Portfolio and timing
differences.
 
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the GT Global High Income Fund and the Portfolio in
connection with their organization, their initial registration with the
Securities and Exchange Commission and with various states and the initial
public offering of its shares aggregated $149,100 and $25,000, respectively.
These expenses were amortized on a straightline basis over a five-year period.
 
(L) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's or Portfolio's investment in emerging
market countries may involve greater risks than investments in more developed
markets and the price of such investments may be volatile. These risks of
investing in foreign and emerging markets may include foreign currency exchange
rate fluctuations, perceived credit risk, adverse political and economic
developments and possible adverse foreign government intervention.
 
(M) INDEXED SECURITIES
A Fund or Portfolio may invest in indexed securities whose value is linked
either directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
 
(N) RESTRICTED SECURITIES
A Fund or Portfolio is permitted to invest in privately placed restricted
securities. These securities may be resold in transactions exempt from
registration or to the public if the securities are registered. Disposal of
these securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) are shown at the end of the Fund's
or Portfolio's Portfolio of Investments.
 
                                      FS-101
<PAGE>   1903
                             GT GLOBAL INCOME FUNDS
 
(O) LINE OF CREDIT
Each of the Funds, along with certain other funds ("GT Funds") advised or
administered by the Manager, has a line of credit with BankBoston. GT Global
Income Funds, along with certain other funds ("GT Funds") advised or
administered by the Manager, has a line of credit with State Street Bank & Trust
Company. The arrangements with the banks allow all specified funds and the GT
Funds to borrow an aggregate maximum amount of $200,000,000. Each Fund is
limited to borrowing up to 33 1/3% of the value of each Fund's total assets. On
October 31, 1997, GT Global Government Income Fund had $4,451,000 in loans
outstanding.
 
For the year ended October 31, 1997, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for GT Global Government Income Fund, GT Global High Income Fund, and GT Global
Strategic Income Fund was $7,107,892, $11,820,513 and $10,277,220 respectively,
with a weighted average interest rate of 6.33%, 6.47% and 6.38%, respectively.
Interest expense for the GT Global Government Income Fund, GT Global High Income
Fund and GT Global Strategic Income Fund for the year ended October 31, 1997 was
$103,696, $165,711 and $230,880, respectively, included in "Other Expenses" on
the Statement of Operations.
 
(P) SECURITIES PURCHASED ON A WHEN-ISSUED OR FORWARD COMMITMENT BASIS
A Fund or Portfolio may trade securities on a when-issued or forward commitment
basis, with payment and delivery scheduled for a future date. These transactions
are subject to market fluctuations and are subject to the risk that the value at
delivery may be more or less than the trade date purchase price. Although the
Fund or Portfolio will generally purchase these securities with the intention of
acquiring such securities, they may sell such securities before the settlement
date. These securities are identified on the accompanying Portfolio of
Investments. The Fund or Portfolio has set aside sufficient cash or liquid
securities as collateral for these purchase commitments.
 
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc. is the Funds' and Portfolio's investment
manager and administrator. The GT Global Government Income Fund and GT Global
Strategic Income Fund each pays the Manager investment management and
administration fees at the annualized rate of 0.725% on the first $500 million
of the average daily net assets of the Fund; 0.70% on the next $1 billion;
0.675% on the next $1 billion; and 0.65% on amounts thereafter. The GT Global
High Income Fund pays administration fees to the Manager at the annualized rate
of 0.25% of its average daily net assets. These fees are computed daily and paid
monthly.
 
The Global High Income Portfolio pays investment management and administration
fees to the Manager at the annualized rate of 0.475% on the first $500 million
of average daily net assets of the Portfolio; 0.45% on the next $1 billion;
0.425% on the next $1 billion; and 0.40% on amounts thereafter, plus 2% of the
Portfolio's total investment income calculated in accordance with generally
accepted accounting principles, adjusted daily for currency revaluations, on a
mark to market basis, of the Portfolio's assets; provided, however, that during
any fiscal year this amount shall not exceed 2% of the Portfolio's total
investment income calculated in accordance with generally accepted accounting
principles. These fees are computed daily and paid monthly.
 
GT Global, Inc. ("GT Global"), an affiliate of the Manager, serves as the Funds'
distributor. The Funds offer Class A, Class B, and Advisor Class shares for
purchase.
 
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Funds' current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the year ended October 31, 1997, GT Global retained the
following sales charges: $10,240 for the GT Global Government Income Fund,
$65,982 for the Global High Income Fund, and $29,451 for the GT Global Strategic
Income Fund. Purchases of Class A shares exceeding $500,000 may be subject to a
contingent deferred sales charge ("CDSC") upon redemption, in accordance with
the Funds' current prospectus. GT Global collected CDSCs for the year ended
October 31, 1997, as follows: $5,273 for the GT Global Government Income Fund,
$18,156 for the Global High Income Fund, and $0 for the GT Global Strategic
Income Fund. GT Global also makes ongoing shareholder servicing and trail
commission payments to dealers whose clients hold Class A shares.
 
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Funds' current
prospectus. For the year ended October 31, 1997, GT Global collected CDSCs in
the amount of: $1,118,343 for the GT Global Government Income Fund, $1,598,989
for the Global High Income Fund, and $1,750,253 for the GT Global Strategic
Income Fund. In addition, GT Global makes ongoing shareholder servicing and
trail commission payments to dealers whose clients hold Class B shares.
 
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Funds' Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which a Fund
reimburses GT Global for a portion of its shareholder servicing and
distributions expenses. Under the Class A Plan, a Fund may pay GT Global a
service fee at the annualized rate of up to 0.25% of the average daily net
assets of the Fund's Class A shares for GT Global's expenditures incurred in
servicing and maintaining shareholder accounts, and may pay GT Global a
distribution fee at the annualized rate of up to 0.35% of the average daily net
assets of the Fund's Class A shares, less any amounts paid by the Fund as the
aforementioned service fee, for GT Global's expenditures incurred in providing
services as distributor. All expenses for which GT Global is reimbursed under
the Class A Plan will have been incurred within one year of such reimbursement.
 
                                      FS-102
<PAGE>   1904
                             GT GLOBAL INCOME FUNDS
 
Pursuant to the Fund's Class B Plan, a Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
 
The Manager and GT Global voluntarily have undertaken to limit each GT Global
Government Income Fund's and GT Global Strategic Income Fund's expenses
(exclusive of brokerage commissions, taxes, interest, and extraordinary expense)
to the maximum annual rate of 1.85%, 2.50%, and 1.50% of the average daily net
assets of the Fund's Class A, Class B, and Advisor Class shares, respectively.
Similarly, they voluntarily have undertaken to limit GT Global High Income
Fund's expenses to the maximum annual rate of 2.20%, 2.85%, and 1.85% of the
average daily net assets of the Fund's Class A, Class B, and Advisor Class
shares, respectively. If necessary, this limitation will be effected by waivers
by the Manager of investment management and administration fees, waivers by GT
Global of payments under the Class A Plan and/or Class B Plan and/or
reimbursements by the Manager or GT Global of portions of the Fund's other
operating expenses.
 
Effective November 1, 1997, the Manager and GT Global have undertaken to limit
each Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expenses) to the annual rate of 1.75%, 2.40%, and 1.40% of the
average daily net assets of the Fund's Class A, Class B and Advisor Class
shares, respectively. This undertaking may be changed or eliminated in the
future.
 
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and LGT and GT Global, is the transfer agent of the Funds. For performing
shareholder servicing, reporting, and general transfer agent services, GT
Services receives an annual maintenance fee of $17.50 per account, a new account
fee of $4.00 per account, a per transaction fee of $1.75 for all transactions
other than exchanges and per exchange fee of $2.25. GT Services also is
reimbursed by the Fund for its out-of-pocket expenses for such items as postage,
forms, telephone charges, stationery and office supplies.
The Manager is the pricing and accounting agent for the Funds and Portfolio. The
monthly fee for these services to the Manager is a percentage, not to exceed
0.03% annually, of a Fund or Portfolio's average daily net assets. The annual
fee rate is derived by applying 0.03% to the first $5 billion of assets of all
registered mutual funds advised by the Manager and 0.02% to the assets in excess
of $5 billion and allocating the result according to each Fund's average daily
net assets.
 
The Company pays each of its Directors who is not an employee, officer or
director of the Manager or any other affiliated company, $5,000 per year plus
$300 for each meeting of the board or any committee thereof attended by the
Director. Each Portfolio pays each of its Trustees who is not an employee,
officer, or director of the Manager, GT Global or GT Services $500 per year plus
$150 for each meeting of the board or any committee thereof attended by the
Trustees.
 
3. PURCHASES AND SALES OF SECURITIES
The following summarizes purchases and sales of investment securities, other
than short-term investments, by each Fund or Portfolio for the year ended
October 31, 1997:
 
                        PURCHASE AND SALES OF SECURITIES
 
<TABLE>
<CAPTION>
                                                                                            PURCHASES
                                                                                  ------------------------------
                                                                                  U.S. GOVERNMENT
                                                                                  AND GOVERNMENT
                                                                                     AGENCIES       OTHER ISSUES
                                                                                  ---------------   ------------
<S>                                                                               <C>               <C>
GT Global Government Income Fund................................................   $133,075,601     $576,675,060
Global High Income Portfolio....................................................   $ 27,699,458     $829,268,070
GT Global Strategic Income Fund.................................................   $ 67,247,574     $607,924,472
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                              SALES
                                                                                  ------------------------------
                                                                                  U.S. GOVERNMENT
                                                                                  AND GOVERNMENT
                                                                                     AGENCIES       OTHER ISSUES
                                                                                  ---------------   ------------
<S>                                                                               <C>               <C>
GT Global Government Income Fund................................................   $118,888,065     $702,800,147
Global High Income Portfolio....................................................   $ 11,689,150     $933,111,597
GT Global Strategic Income Fund.................................................   $ 47,239,453     $728,047,126
</TABLE>
 
                                      FS-103
<PAGE>   1905
                             GT GLOBAL INCOME FUNDS
 
4. CAPITAL SHARES
At October 31, 1997, there were 6,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 400,000,000 were
classified as shares of the GT Global Telecommunications Fund; 400,000,000 were
classified as shares of GT Global Government Income Fund; 200,000,000 were
classified as shares of GT Global Developing Markets Fund; 200,000,000 were
classified as shares of GT Global Health Care Fund; 200,000,000 were classified
as shares of GT Global Strategic Income Fund; 200,000,000 were classified as
shares of GT Global Currency Fund (inactive); 200,000,000 were classified as
shares of GT Global Growth & Income Fund; 200,000,000 were classified as shares
of GT Global Small Companies Fund (inactive); 200,000,000 were classified as
shares of GT Global Latin America Growth Fund; 200,000,000 were classified as
shares of GT Global Emerging Markets Fund; 200,000,000 were classified as shares
of GT Global High Income Fund; 200,000,000 were classified as shares of GT
Global Financial Services Fund; 200,000,000 were classified as shares of GT
Global Natural Resources Fund; 200,000,000 were classified as shares of GT
Global Infrastructure Fund; 200,000,000 were classified as shares of GT Global
Consumer Products and Services Fund. The shares of each of the foregoing series
of the Company were divided equally into two classes, designated Class A and
Class B common stock. With respect to the issuance of Advisor Class shares,
100,000,000 shares were classified as shares of each of the fifteen series of
the Company and designated as Advisor Class common stock. 1,100,000,000 shares
remain unclassified. Transactions in capital shares of the Fund were as follows:
 
                           CAPITAL SHARE TRANSACTIONS
GT GLOBAL GOVERNMENT INCOME FUND
<TABLE>
<CAPTION>
                                                      YEAR ENDED                           YEAR ENDED
                                                   OCTOBER 31, 1997                     OCTOBER 31, 1996
                                          -----------------------------------  -----------------------------------
CLASS A                                       SHARES             AMOUNT            SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       48,767,558  $      419,503,866       19,126,586  $      164,293,090
Shares issued in connection with
  reinvestment of distributions.........          741,916           6,372,599        1,643,833          14,228,931
                                          ---------------  ------------------  ---------------  ------------------
                                               49,509,474         425,876,465       20,770,419         178,522,021
Shares repurchased......................      (59,180,268)       (509,133,563)     (36,969,597)       (318,856,283)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (9,670,794) $      (83,257,098)     (16,199,178) $     (140,334,262)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
 
<CAPTION>
 
CLASS B
- ----------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       27,713,479  $      237,734,254       23,047,364  $      198,774,141
Shares issued in connection with
  reinvestment of distributions.........          452,575           3,886,536          956,866           8,282,950
                                          ---------------  ------------------  ---------------  ------------------
                                               28,166,054         241,620,790       24,004,230         207,057,091
Shares repurchased......................      (32,406,087)       (278,645,805)     (31,688,935)       (273,022,079)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (4,240,033) $      (37,025,015)      (7,684,705) $      (65,964,988)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
<CAPTION>
 
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................            4,551  $           38,769          105,543             892,487
Shares issued in connection with
  reinvestment of distributions.........              680               5,804            1,345              10,808
                                          ---------------  ------------------  ---------------  ------------------
                                                    5,231              44,573          106,888             903,295
Shares repurchased......................           (1,717)            (14,773)        (111,905)           (948,244)
                                          ---------------  ------------------  ---------------  ------------------
Net increase (decrease).................            3,514  $           29,800           (5,017) $          (44,949)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
                                      FS-104
<PAGE>   1906
                             GT GLOBAL INCOME FUNDS
 
GT GLOBAL HIGH INCOME FUND
<TABLE>
<CAPTION>
                                                      YEAR ENDED                           YEAR ENDED
                                                   OCTOBER 31, 1997                     OCTOBER 31, 1996
                                          -----------------------------------  -----------------------------------
CLASS A                                       SHARES             AMOUNT            SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       17,142,418  $      272,139,950       25,694,335  $      346,426,450
Shares issued in connection with
  reinvestment of distributions.........          574,707           9,164,383          607,445           8,023,249
                                          ---------------  ------------------  ---------------  ------------------
                                               17,717,125         281,304,333       26,301,780         354,449,699
Shares repurchased......................      (21,118,898)       (335,756,037)     (26,422,858)       (355,715,247)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (3,401,773) $      (54,451,704)        (121,078) $       (1,265,548)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
 
<CAPTION>
 
CLASS B
- ----------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       13,848,218  $      221,702,040       14,568,804  $      194,636,619
Shares issued in connection with
  reinvestment of distributions.........          721,148          11,494,889          765,798          10,086,445
                                          ---------------  ------------------  ---------------  ------------------
                                               14,569,366         233,196,929       15,334,602         204,723,064
Shares repurchased......................      (16,813,796)       (270,094,630)     (16,793,522)       (225,719,415)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (2,244,430) $      (36,897,701)      (1,458,920) $      (20,996,351)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
<CAPTION>
 
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................        2,868,282  $       45,874,009        1,706,101  $       23,413,749
Shares issued in connection with
  reinvestment of distributions.........           72,440           1,148,368           40,101             546,903
                                          ---------------  ------------------  ---------------  ------------------
                                                2,940,722          47,022,377        1,746,202          23,960,652
Shares repurchased......................       (3,732,584)        (60,007,579)        (839,670)        (11,309,193)
                                          ---------------  ------------------  ---------------  ------------------
Net increase (decrease).................         (791,862) $      (12,985,202)         906,532  $       12,651,459
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
GT GLOBAL STRATEGIC INCOME FUND
<TABLE>
<CAPTION>
                                                      YEAR ENDED                           YEAR ENDED
                                                   OCTOBER 31, 1997                     OCTOBER 31, 1996
                                          -----------------------------------  -----------------------------------
CLASS A                                       SHARES             AMOUNT            SHARES             AMOUNT
- ----------------------------------------  ---------------  ------------------  ---------------  ------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       13,750,221  $      167,009,888       15,025,486  $      168,473,834
Shares issued in connection with
  reinvestment of distributions.........          615,860           7,488,021          829,046           9,085,802
                                          ---------------  ------------------  ---------------  ------------------
                                               14,366,081         174,497,909       15,854,532         177,559,636
Shares repurchased......................      (18,557,237)       (225,311,673)     (18,331,797)       (204,237,090)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (4,191,156) $      (50,813,764)      (2,477,265) $      (26,677,454)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
 
<CAPTION>
 
CLASS B
- ----------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................       11,499,580  $      140,731,511       12,778,909  $      141,835,937
Shares issued in connection with
  reinvestment of distributions.........          896,610          10,918,610        1,206,362          13,216,165
                                          ---------------  ------------------  ---------------  ------------------
                                               12,396,190         151,650,121       13,985,271         155,052,102
Shares repurchased......................      (17,287,235)       (211,600,543)     (20,318,197)       (224,904,917)
                                          ---------------  ------------------  ---------------  ------------------
Net decrease............................       (4,891,045) $      (59,950,422)      (6,332,926) $      (69,852,815)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
<CAPTION>
 
ADVISOR CLASS
- ----------------------------------------
<S>                                       <C>              <C>                 <C>              <C>
Shares sold.............................          712,165  $        8,839,212          278,551  $        3,010,280
Shares issued in connection with
  reinvestment of distributions.........            3,581              43,784            3,931              43,156
                                          ---------------  ------------------  ---------------  ------------------
                                                  715,746           8,882,996          282,482           3,053,436
Shares repurchased......................         (712,116)         (8,911,324)        (284,638)         (3,054,110)
                                          ---------------  ------------------  ---------------  ------------------
Net increase (decrease).................            3,630  $          (28,328)          (2,156) $             (674)
                                          ---------------  ------------------  ---------------  ------------------
                                          ---------------  ------------------  ---------------  ------------------
</TABLE>
 
                                      FS-105
<PAGE>   1907
                             GT GLOBAL INCOME FUNDS
 
5. WRITTEN OPTIONS:
The GT Global Government Income Fund's and the GT Global Strategic Income Fund's
written options contract activity for the year ended October 31, 1997 was as
follows:
 
                      COVERED CALL AND PUT OPTION WRITTEN
 
<TABLE>
<CAPTION>
                                                                                                          UNDERLYING
                                                                                                            NOMINAL
                                                                                                           AMOUNT IN
GT GLOBAL GOVERNMENT INCOME FUND                                                                              USD      PREMIUMS
- --------------------------------------------------------------------------------------------------------  -----------  ---------
<S>                                                                                                       <C>          <C>
Options outstanding at October 31, 1996.................................................................  $        --  $      --
Options written.........................................................................................  213,530,000  1,091,938
Options cancelled in closing purchase transactions......................................................  (14,700,000)   (93,163)
Options expired prior to exercise.......................................................................  (193,990,000)  (954,102)
Options exercised.......................................................................................           --         --
                                                                                                          -----------  ---------
Options outstanding at October 31, 1997.................................................................  $ 4,840,000  $  44,673
                                                                                                          -----------  ---------
                                                                                                          -----------  ---------
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                                          UNDERLYING
                                                                                                            NOMINAL
                                                                                                           AMOUNT IN
GT GLOBAL STRATEGIC INCOME FUND                                                                               USD      PREMIUMS
- --------------------------------------------------------------------------------------------------------  -----------  ---------
<S>                                                                                                       <C>          <C>
Options outstanding at October 31, 1996.................................................................  $        --  $      --
Options written.........................................................................................    5,208,000    301,543
Options cancelled in closing purchase transactions......................................................           --         --
Options expired prior to exercise.......................................................................           --         --
Options exercised.......................................................................................   (5,208,000)  (301,543)
                                                                                                          -----------  ---------
Options outstanding at October 31, 1997.................................................................  $        --  $      --
                                                                                                          -----------  ---------
                                                                                                          -----------  ---------
</TABLE>
 
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Funds designate the
following amounts as capital gain dividends for the fiscal year ended October
31, 1997:
 
<TABLE>
<CAPTION>
                                                                                                          CAPITAL GAIN
FUND                                                                                                        DIVIDEND
- --------------------------------------------------------------------------------------------------------  ------------
<S>                                                                                                       <C>
GT Global Government Income Fund........................................................................            --
GT Global High Income Fund..............................................................................   $ 6,927,413
GT Global Strategic Income Fund.........................................................................            --
</TABLE>
 
                                      FS-106
<PAGE>   1908
   
                                     PART C
                                OTHER INFORMATION

Item 24.    (a)  Financial Statements:

                 Class A, Class B and Advisor Class shares of the AIM Developing
                 Markets Fund, AIM Emerging Markets Fund, AIM Global Consumer
                 Products and Services Fund, AIM Global Financial Services Fund,
                 AIM Global Government Income Fund, AIM Global Growth & Income
                 Fund, AIM Global Health Care Fund, AIM Global High Income Fund,
                 AIM Global Infrastructure Fund, AIM Global Resources Fund, AIM
                 Global Telecommunications Fund, AIM Latin American Growth Fund
                 and AIM Strategic Income Fund

            (1)  AIM Emerging Markets Fund, AIM Global Consumer Products and
                 Services Fund, AIM Global Financial Services Fund, AIM Global
                 Government Income Fund, AIM Global Growth & Income Fund, AIM
                 Global Health Care Fund, AIM Global High Income Fund, AIM
                 Global Infrastructure Fund, AIM Global Resources Fund, AIM
                 Global Telecommunications Fund, AIM Latin American Growth Fund
                 and AIM Strategic Income Fund

                 In Part A:   Financial Highlights

                 In Part B:   (1)  Reports of Independent Accountants
                              (2)  Portfolios of Investments as of October 31, 
                                   1997, and April 30, 1998 (unaudited)
                              (3)  Statements of Assets and Liabilities as of 
                                   October 31, 1997, and April 30, 1998 
                                   (unaudited)
                              (4)  Statements of Operations for the year ended 
                                   October 31, 1997, and April 30, 1998 
                                   (unaudited)
                              (5)  Statements of Changes in Net Assets for the 
                                   years ended October 31, 1997 and 1996.

            (2)  AIM Emerging Markets Fund, AIM Global High Income Fund, AIM
                 Latin American Growth Fund

                 In Part A:   Financial Highlights

                 In Part B:   (1)  Reports of Independent Accountants
                              (2)  Portfolios of Investments as of October 31, 
                                   1997, and April 30, 1998 (audited)
                              (3)  Statements of Assets and Liabilities as of 
                                   October 31, 1997, and April 30, 1998 
                                   (audited)
                              (4)  Statements of Operations for the year ended 
                                   October 31, 1997, and April 30, 1998 
                                   (audited)
                              (5)  Statements of Changes in Net Assets for the 
                                   years ended October 31, 1997 and 1996.

            (3)  AIM Developing Markets Fund

                 In Part A:   Financial Highlights

                 In Part B:   (1)  Reports of Independent Accountants
                              (2)  Portfolios of Investments as of October 31, 
                                   1997, and April 30, 1998 (audited)
                              (3)  Statements of Assets and Liabilities as of 
                                   October 31, 1997, and April 30, 1998 
                                   (audited)
    

                                       C-1

<PAGE>   1909
   
                              (4)  Statements of Operations for the year ended 
                                   October 31, 1997, and April 30, 1998 
                                   (audited)
                              (5)  Statements of Changes in Net Assets for the 
                                   ten months ended October 31, 1997 and the 
                                   years ended December 31, 1996 and 1995.


            (b)  Exhibits:

Exhibit
Number              Description
- --------            -----------
          
 (1)           -    Agreement and Declaration of Trust of AIM Investment Funds 
                    is filed herewith electronically.

 (2)           -    By-Laws of AIM Investment Funds are filed herewith 
                    electronically.

 (3)           -    Voting Trust Agreements - None.

 (4)           -    Provisions of instruments defining the rights of holders of
                    Registrant's securities are contained in the Declaration of
                    Trust Articles II, VI, VII, VIII and IX and By-laws
                    Articles IV, V, VI, VII and VIII, which are included as part
                    of Exhibits (b)(1) and (2) of this Registration Statement.

 (5)    (a)    -    Investment Management and Administration Contract, dated 
                    May 29, 1998, between Registrant and A I M Advisors, Inc. is
                    filed herewith electronically.

        (b)    -    Investment Management and Administration Contract, dated
                    September 8, 1998, between AIM Investment Funds and A I M
                    Advisors, Inc. is filed herewith electronically.

        (c)    -    Administration Contract, dated May 29, 1998, between
                    Registrant and A I M Advisors, Inc. is filed herewith
                    electronically.

        (d)    -    Administration Contract, dated September 8, 1998, between
                    AIM Investment Funds and A I M Advisors, Inc. is filed
                    herewith electronically.

        (e)    -    Sub-Administration Contract, dated May 29, 1998, between 
                    A I M Advisors, Inc. and INVESCO (NY), Inc. with respect to
                    Registrant is filed herewith electronically.

        (f)    -    Sub-Administration Contract, dated September 8, 1998,
                    between A I M Advisors, Inc. and INVESCO (NY), Inc. with
                    respect to AIM Investment Funds is filed herewith
                    electronically.

        (g)    -    Sub-Advisory and Sub-Administration Contract, dated May 29, 
                    1998, between A I M Advisors, Inc. and INVESCO (NY), Inc.
                    with respect to Registrant is filed herewith electronically.

        (h)    -    Sub-Advisory and Sub-Administration Contract, dated 
                    September 8, 1998, between A I M Advisors, Inc. and INVESCO
                    (NY), INC. with respect to AIM Investment Funds is filed
                    herewith electronically.

        (i)    -    Investment Management and Administration Contract, dated 
                    May 29, 1998, between Global Investment Portfolio and 
                    A I M Advisors, Inc. is filed herewith electronically.

        (j)    -    Sub-Advisory and Sub-Administration Contract, dated May 29,
                    1998, between A I M Advisors, Inc. and INVESCO (NY), Inc.
                    with respect to Global Investment Portfolio is filed
                    herewith electronically.

        (k)    -    Investment Management and Administration Contract, dated
                    May 29, 1998, between Global High Income Portfolio and 
                    A I M Advisors, Inc. is filed herewith electronically.

        (l)    -    Sub-Advisory and Sub-Administration Contract, dated May 29,
                    1998, between A I M Advisors, Inc. and INVESCO (NY), Inc.
                    with respect to Global High Income Portfolio is filed 
                    herewith electronically.

    

                                       C-2

<PAGE>   1910
   
 (6)    (a)    -    Distribution Agreement, dated May 29, 1998, between 
                    Registrant and A I M Distributors, Inc. with respect to
                    Class A shares is filed herewith electronically.

        (b)    -    Distribution Agreement, dated September 8, 1998, between
                    AIM Investment Funds and A I M Distributors, Inc. with
                    respect to Class A shares is filed herewith electronically.

        (c)    -    Distribution Agreement, dated May 29, 1998, between
                    Registrant and A I M Distributors, Inc. with respect to
                    Class B shares is filed herewith electronically.

        (d)    -    Distribution Agreement, dated September 8, 1998, between
                    AIM Investment Funds and A I M Distributors, Inc. with
                    respect to Class B shares is filed herewith electronically.

        (e)    -    Distribution Agreement between, dated May 29, 1998,
                    Registrant and A I M Distributors, Inc. with respect to
                    Advisor Class shares is filed herewith electronically.

        (f)    -    Distribution Agreement, dated September 8, 1998, between
                    AIM Investment Funds and A I M Distributors, Inc. with
                    respect to Advisor Class shares is filed herewith
                    electronically.

(7)            -    Agreements Concerning Officers and Directors/Trustees 
                    Benefits - None.

(9)     (a)    -    (1) Form of Transfer Agency and Service Agreement between 
                    Registrant and A I M Fund Services, Inc. is filed herewith
                    electronically.

               -    (2) Remote Access and Related Services Agreement, dated as 
                    of December 23, 1994, between the Registrant and First Data
                    Investor Services Group, Inc. (formerly, The Shareholder
                    Services Group, Inc.) is filed herewith electronically.

               -    (3) Amendment No. 1, dated October 4, 1995, to the Remote 
                    Access and Related Services Agreement, dated as of December
                    23, 1994, between Registrant and First Data Investor
                    Services Group, Inc. (formerly, The Shareholder Services
                    Group, Inc.) is filed herewith electronically.

               -    (4) Addendum No. 2, dated October 12, 1995, to the Remote 
                    Access and Related Services Agreement, dated as of December
                    23, 1994, between Registrant and First Data Investor
                    Services Group, Inc. (formerly, The Shareholder Services
                    Group, Inc.) is filed herewith electronically.

               -    (5) Amendment No. 3, dated February 1, 1997, to the Remote 
                    Access and Related Services Agreement, dated December 23,
                    1994, between Registrant and First Data Investor Services 
                    Group, Inc. (formerly, The Shareholder Services Group, 
                    Inc.) is filed herewith electronically.

               -    (6) Exhibit 1, effective as of August 4, 1997, to the Remote
                    Access and Related Services Agreement, dated December 23,
                    1994, between Registrant and First Data Investor Services
                    Group, Inc. (formerly, The Shareholder Services Group, Inc.)
                    is filed herewith electronically.

    
                                       C-3

<PAGE>   1911
   
               -    (7) Preferred Registration Technology Escrow Agreement, 
                    dated September 10, 1997, between Registrant and First Data
                    Investor Services Group, Inc. (formerly, The Shareholder
                    Services Group, Inc.) is filed herewith electronically.

        (b)    -    Form of Fund Accounting and Pricing Agent Agreement 1998, 
                    between AIM Investment Funds and INVESCO (NY), Inc. is
                    filed herewith electronically.

        (c)    -    (1) Selected Dealer Agreement was filed as an Exhibit to
                    Post-Effective Amendment No. 53 to the Registration
                    Statement on Form N-1A, filed May 29, 1998, and is hereby
                    incorporated by reference.

               -    (2) Bank Sales Contract was filed as an Exhibit to
                    Post-Effective Amendment No. 53 to the Registration
                    Statement on Form N-1A, filed May 29, 1998, and is hereby
                    incorporated by reference.

               -    (3) Shareholder Service Agreement was filed as an Exhibit to
                    Post-Effective Amendment No. 53 to the Registration
                    Statement on Form N-1A, filed May 29, 1998, and is hereby
                    incorporated by reference.

               -    (4) Bank Shareholder Service Agreement was filed as an 
                    Exhibit to Post-Effective Amendment No. 53 to the
                    Registration Statement on Form N-1A, filed May 29, 1998, and
                    is hereby incorporated by reference.

               -    (5) Service Agreement for Bank Trust Department and for
                    Broker is filed herewith electronically.

(10)    (a)    -    Opinion and Consent of Kirkpatrick & Lockhart LLP is filed 
                    herewith electronically.

        (b)    -    Opinion and Consent of Delaware Counsel is filed herewith
                    electronically.

(11)           -    Consent of PricewaterhouseCoopers LLP is filed herewith 
                    electronically.

(12)           -    Financial Statements - None.

(13)           -    Agreements Concerning Initial Capitalization - None.

(14)    (a)    -    IRA Application was filed as an Exhibit to Post-Effective 
                    Amendment No. 53 to the Registration Statement on Form N-1A,
                    filed on May 29, 1998, and is hereby incorporated by
                    reference.

        (b)    -    SEP and SARSEP IRA Adoption Agreement was filed as an
                    Exhibit to Post-Effective Amendment No. 53 to the
                    Registration Statement on Form N-1A, filed on May 29, 1998,
                    and is hereby incorporated by reference.

        (c)    -    Profit Sharing/Money Purchase Pension Plan was filed as an
                    Exhibit to Post-Effective Amendment No. 53 to the
                    Registration Statement on Form N-1A, filed on May 29, 1998,
                    and is hereby incorporated by reference.

        (d)    -    403(b) Plan was filed as an Exhibit to Post-Effective
                    Amendment No. 53 to the Registration Statement on Form N-1A,
                    filed on May 29, 1998, and is hereby incorporated by
                    reference.

        (e)    -    SIMPLE IRA Application was filed as an Exhibit to 
                    Post-Effective Amendment No. 53 to the Registration
                    Statement on Form N-1A, filed on May 29, 1998, and is hereby
                    incorporated by reference.
    

                                       C-4

<PAGE>   1912
   
        (f)    -    Roth IRA Application was filed as an Exhibit to
                    Post-Effective Amendment No. 53 to the Registration
                    Statement on Form N-1A, filed on May 29, 1998, and is hereby
                    incorporated by reference.

(15)    (a)    -    Form of Distribution Plan adopted pursuant to Rule 12b-1 
                    with respect to Class A shares was filed as an Exhibit to
                    Post-Effective Amendment No. 53 to the Registration
                    Statement on Form N-1A, filed on May 29, 1998, and is hereby
                    incorporated by reference.

        (b)    -    Form of Distribution Plan adopted pursuant to Rule 12b-1
                    with respect to Class B shares was filed as an Exhibit to
                    Post-Effective Amendment No. 53 to the Registration
                    Statement on Form N-1A, filed on May 29, 1998, and is hereby
                    incorporated by reference.

(16)           -    (1) Computation of Performance Quotations relating to the 
                    Class A, Class B and Advisor Class shares of AIM Global
                    Government Income Fund, AIM Strategic Income Fund, AIM
                    Global Health Care Fund, AIM Latin American Growth Fund, AIM
                    Global Telecommunications Fund, AIM Emerging Markets Fund,
                    AIM Global High Income Fund, AIM Global Financial Services
                    Fund, AIM Global Infrastructure Fund, AIM Global Resources
                    Fund, and AIM Global Consumer Products and Services Fund was
                    filed as an Exhibit to Post-Effective Amendment No. 44 to
                    the Registration Statement on Form N-1A, filed on February
                    28, 1996, and is hereby incorporated by reference.

               -    (2) Computation of Performance Quotations relating to the
                    Class A, Class B and Advisor Class shares of AIM Developing
                    Markets Fund was filed as an Exhibit to Post-Effective
                    Amendment No. 49 to the Registration Statement on Form N-1A,
                    filed on October 30, 1997, and is hereby incorporated by
                    reference.

               -    (3) Computation of Performance Quotations relating to the
                    Class A, Class B and Advisor Class shares of AIM Global
                    Growth & Income Fund was filed as an Exhibit to
                    Post-Effective Amendment No. 53 to the Registration
                    Statement on Form N-1A, filed on May 29, 1998, and is hereby
                    incorporated by reference.

(18)           -    Rule 18f-3 Multiple Class Plan is filed herewith
                    electronically.

(27)           -    Financial Data Schedules were filed as Exhibits to 
                    Post-Effective Amendment No. 51 to Registration Statement on
                    Form N-1A, filed January 30, 1998, and are hereby
                    incorporated by reference.

Other Exhibits:

        (a)    -    Power of Attorney for Helge K. Lee and Michael A. Silver
                    for AIM Investment Funds, Inc. was filed as an Exhibit to
                    Post-Effective Amendment No. 49 to the Registration
                    Statement on Form N-1A, filed on October 30, 1997, and is
                    hereby incorporated by reference.

        (b)    -    Power of Attorney for Helge K. Lee and Michael A. Silver
                    for Global Investment Portfolio was filed as an Exhibit to
                    Post-Effective Amendment No. 53 to the Registration
                    Statement on Form N-1A, filed on May 29, 1998, and is hereby
                    incorporated by reference.

        (c)    -    Power of Attorney for Helge K. Lee and Michael A. Silver
                    for Global High Income Portfolio was filed as an Exhibit to
                    Post-Effective Amendment No. 53 to the Registration
                    Statement on Form N-1A, filed on May 29, 1998, and is hereby
                    incorporated by reference.
    

                                      C-5
<PAGE>   1913
   
Item 25.       Persons Controlled by or Under Common Control with Registrant

        Furnish a list or diagram of all persons directly or indirectly
controlled by or under common control with the Registrant and as to each such
person indicate (1) if a company, the state or other sovereign power under the
laws of which it is organized, and (2) the percentage of voting securities owned
or other basis of control by the person, if any, immediately controlling it.

        None.

Item 26.       Number of Holders of Securities

        State in substantially the tabular form indicated, as of a specified
date within 90 days prior to the date of filing, the number of record holders of
each class of securities of the Registrant.

<TABLE>
<CAPTION>

                                                                                                           Number of Record Holders
Title of Class                                                                                              as of August 13, 1998
- --------------                                                                                             ------------------------
<S>                                                                                                      <C>
Capital Stock, $0.01 par value, of:
AIM Global Growth & Income Fund Class A................................................................................19,650
AIM Global Growth & Income Fund Class B................................................................................31,425
AIM Global Growth & Income Fund Advisor Class.............................................................................357
AIM Strategic Income Fund Class A.......................................................................................8,835
AIM Strategic Income Fund Class B......................................................................................15,984
AIM Strategic Income Fund Advisor Class....................................................................................80
AIM Global Government Income Fund Class A...............................................................................9,606
AIM Global Government Income Fund Class B...............................................................................6,508
AIM Global Government Income Fund Advisor Class............................................................................37
AIM Global High Income Fund Class A.....................................................................................7,329
AIM Global High Income Fund Class B....................................................................................11,486
AIM Global High Income Fund Advisor Class.................................................................................259
AIM Global Health Care Fund Class A....................................................................................32,415
AIM Global Health Care Fund Class B....................................................................................11,047
AIM Global Health Care Fund Advisor Class.................................................................................162
AIM Latin American Growth Fund Class A.................................................................................16,195
AIM Latin American Growth Fund Class B.................................................................................13,478
AIM Latin American Growth Fund Advisor Class..............................................................................149
AIM Global Telecommunications Fund Class A.............................................................................81,018
AIM Global Telecommunications Fund Class B.............................................................................75,721
AIM Global Telecommunications Fund Advisor Class..........................................................................219
AIM Global Financial Services Fund Class A..............................................................................3,878
AIM Global Financial Services Fund Class B..............................................................................5,521
AIM Global Financial Services Fund Advisor Class..........................................................................139
AIM Global Infrastructure Fund Class A..................................................................................4,242
AIM Global Infrastructure Fund Class B..................................................................................5,467
AIM Global Infrastructure Fund Advisor Class...............................................................................95
AIM Global Resources Fund Class A.......................................................................................4,800
AIM Global Resources Fund Class B.......................................................................................5,924
AIM Global Resources Fund Advisor Class...................................................................................164
AIM Emerging Markets Fund Class A......................................................................................16,425
AIM Emerging Markets Fund Class B......................................................................................18,496
AIM Emerging Markets Fund Advisor Class...................................................................................190
AIM Global Consumer Products and Services Fund Class A..................................................................7,586
AIM Global Consumer Products and Services Fund Class B..................................................................9,739
</TABLE>
    

                                       C-6
<PAGE>   1914
   
<TABLE>
<S>                                                                                                                 <C>
AIM Global Consumer Products and Services Fund Advisor Class............................................................253
AIM Developing Markets Fund Class A..................................................................................16,784
AIM Developing Markets Fund Class B......................................................................................23
AIM Developing Markets Fund Advisor Class................................................................................13
</TABLE>

Item 27.       Indemnification

         State the general effect of any contract, arrangements or statute under
which any director, officer, underwriter or affiliated person of the Registrant
is insured or indemnified in any manner against any liability which may be
incurred in such capacity, other than insurance provided by any director,
officer, affiliated person or underwriter for their own protection.
    
         Article VII(g) of the Registrant's Articles of Incorporation provides
         for indemnification of certain persons acting on behalf of the
         Registrant.

         Insofar as indemnification for liabilities arising under the Securities
         Act of 1933, as amended ("1933 Act"), may be permitted to Directors,
         officers and controlling persons by the Registrant's Articles of
         Incorporation, By-Laws, or otherwise, the Registrant has been advised
         that in the opinion of the Securities and Exchange Commission such
         indemnification is against public policy as expressed in the 1933 Act,
         and is, therefore, unenforceable. In the event that a claim for
         indemnification against such liabilities (other than the payment by the
         Registrant of expenses incurred or paid by a Director, officer or
         controlling person of the Registrant in the successful defense of any
         action, suit or proceeding) is asserted by such Director, officer or
         controlling person in connection with the securities being registered,
         the Registrant will, unless in the opinion of its counsel the matter
         has been settled by controlling precedent, submit to a court of
         appropriate jurisdiction the question whether such indemnification by
         it is against public policy as expressed in the 1933 Act and will be
         governed by the final adjudication of such issues.
   
Item 28.       Business and Other Connections of Investment Advisor

         Describe any other business, profession, vocation or employment of a
substantial nature in which each investment advisor of the Registrant, and each
director, officer or partner of any such investment advisor, is or has been, at
any time during the past two fiscal years, engaged for his own account or in the
capacity of director, officer, employee, partner, or trustee.

         See the material under the heading "Management" included in Part A
         (Prospectus) of this Amendment and the material appearing under the
         headings "Trustees and Executive Officers" and "Management" included in
         Part B (Statement of Additional Information) of this Amendment.
         Information as to the Directors and Officers of A I M Advisors, Inc.
         and INVESCO (NY), Inc. is included in Schedule A and Schedule D of Part
         I of each entity's Form ADV (File No. 801- 12313 and File No.
         801-10254, respectively), filed with the Securities and Exchange
         Commission, which are incorporated herein by reference thereto.

Item 29.       Principal Underwriters

         (a)          A I M Distributors, Inc., the Registrant's principal
                      underwriter, also acts as a principal underwriter to
                      the following investment companies:

                      AIM Advisor Funds, Inc.
                      AIM Equity Funds, Inc. (Retail Classes)
                      AIM Funds Group
    


                                       C-7

<PAGE>   1915
   
                      AIM Growth Series
                      AIM International Funds, Inc.
                      AIM Investment Portfolios, Inc.
                      AIM Investment Securities Funds
                      AIM Series Trust
                      AIM Summit Fund, Inc.
                      AIM Tax-Exempt Funds, Inc.
                      AIM Variable Insurance Funds, Inc.
                      GT Global Floating Rate Fund, Inc. d/b/a AIM Floating 
                      Rate Fund

         (b)

<TABLE>
<CAPTION>


Name and Principal                 Position and Offices                              Position and Offices
Business Address*                with Principal Underwriter                            with Registrant
- ------------------               --------------------------                          --------------------
<S>                              <C>                                                 <C>
Charles T. Bauer                 Chairman of the Board of Directors                  None

Michael J. Cemo                  President & Director                                None

Gary T. Crum                     Director                                            Vice President

Robert H. Graham                 Senior Vice President & Director                    Vice President

William G. Littlepage            Senior Vice President & Director                    None

John Caldwell                    Senior Vice President                               None

Marilyn M. Miller                Senior Vice President                               None

James L. Salners                 Senior Vice President                               None

Gordon J. Sprague                Senior Vice President                               None

Michael C. Vessels               Senior Vice President                               None

B.J. Thompson                    First Vice President                                None

James R. Anderson                Vice President                                      None

John J. Arthur                   Vice President & Treasurer                          Vice President

Mary K. Coleman                  Vice President                                      None

Melville B. Cox                  Vice President & Chief                              Vice President
                                 Compliance Officer

Charles R. Dewey                 Vice President                                      None

Sidney M. Dilgren                Vice President                                      None

Tony D. Green                    Vice President                                      None

William H. Kleh                  Vice President                                      None

</TABLE>


- ------------------------------------
      * 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
    


                                      C-8


<PAGE>   1916
   
<TABLE>
<CAPTION>



Name and Principal                 Position and Offices                     Position and Offices
Business Address*                with Principal Underwriter                    with Registrant
- ------------------               --------------------------                 ---------------------
<S>                              <C>                                        <C>


Ofelia M. Mayo                   Vice President, General Counsel                     None
                                 & Assistant Secretary

Terri L. Ransdell                Vice President                                      None

Carol F. Relihan                 Vice President                                      Vice President

Kamala C. Sachidanandan          Vice President                                        None

Frank V. Serebrin                Vice President                                        None

Christopher T. Simutis           Vice President                                        None

Robert D. Van Sant, Jr.          Vice President                                        None

Gary K. Wendler                  Vice President                                        None

David E. Hessel                  Assistant Vice President,                             None
                                 Assistant Treasurer
                                 & Controller

Kathleen J. Pflueger             Secretary                                             None

Luke P. Beausoleil               Assistant Vice President                              None

Tisha B. Christopher             Assistant Vice President                              None

Glenda A. Dayton                 Assistant Vice President                              None

Kathleen M. Douglas              Assistant Vice President                              None

Terri N. Fiedler                 Assistant Vice President                              None

Mary E. Gentempo                 Assistant Vice President                              None

Jeffrey L. Horne                 Assistant Vice President                              None

Melissa E. Hudson                Assistant Vice President                              None

Jodie L. Johnson                 Assistant Vice President                              None

Kathryn A. Jordan                Assistant Vice President                              None

Wayne W. LaPlante                Assistant Vice President                              None

Kim T. Lankford                  Assistant Vice President                              None

Ivy B. McLemore                  Assistant Vice President                              None

</TABLE>


- ------------------------------------
      * 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
    
                                       C-9

<PAGE>   1917
   
<TABLE>
<CAPTION>



Name and Principal               Position and Offices                           Position and Offices
Business Address*                with Principal Underwriter                       with Registrant
- ------------------               --------------------------                     --------------------
<S>                              <C>                                            <C>
David B. O'Neil                  Assistant Vice President                              None

Patricia M. Shyman               Assistant Vice President                              None

Nicholas D. White                Assistant Vice President                              None

Norman W. Woodson                Assistant Vice President                              None

Nancy L. Martin                  Assistant General Counsel                              None
                                 & Assistant Secretary

Samuel D. Sirko                  Assistant General Counsel                              Assistant Secretary
                                 & Assistant Secretary

Stephen I. Winer                 Assistant Secretary                                    None

Dana S. Sutton                   None                                                   Vice President and
                                                                                        Assistant Treasurer

Mary Benson                      None                                                   Assistant Treasurer
</TABLE>



- ------------------------------------
      * 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173

            (c)      -        Not Applicable

Item 30.       Location of Accounts and Records

         With respect to each account, book or other document required to be
maintained by Section 31(a) of the 1940 Act and the Rules (17 CFR 270.31a-1 to
31a-3) promulgated thereunder, furnish the name and address of each person
maintaining physical possession of each such account, book or other document.
    
         Accounts, books and other records required by Rules 31a-1 and 31a-2
         under the Investment Company Act of 1940, as amended, are maintained
         and held in the offices of the Registrant and its sub-advisor, INVESCO
         (NY), Inc., 50 California Street, 27th Floor, San Francisco, CA 94111,
         and its custodian, State Street Bank and Trust Company, 225 Franklin
         Street, Boston, MA 02110.

         Records covering shareholder accounts and portfolio transactions are
         also maintained and kept by the Registrant's Transfer Agent, A I M Fund
         Services, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046, and
         by the Registrant's custodian, State Street Bank and Trust Company, 225
         Franklin Street, Boston, MA 02110.


                                       C-10

<PAGE>   1918
Item 31.       Management Services
   
         Furnish a summary of the substantive provisions of any
management-related service contract not discussed in Part A or Part B of this
Form (because the contract was not believed to be of interest to a purchaser of
securities of the Registrant) under which services are provided to the
Registrant, indicating the parties to the contract, the total dollars paid and
by whom, for the last three fiscal years.

         None.
    


Item 32.       Undertakings

   
         None.
    


                                      C-11
<PAGE>   1919

                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, the Registrant duly caused
this Post-Effective Amendment to this Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of San
Francisco, and State of California, on the 25th day of August, 1998.


                                            AIM INVESTMENT FUNDS

                                            By:    William J. Guilfoyle*
                                                   President


         Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement of AIM Investment Funds
has been signed below by the following persons in the capacities indicated on
the 25th day of August, 1998.


William J. Guilfoyle*                              President, Trustee and
                                                   Chairman of the Board
                                                   (Principal Executive Officer)


/s/ KENNETH W. CHANCEY
- --------------------------------------             Vice President and
Kenneth W. Chancey                                 Principal Accounting Officer



C. Derek Anderson*                                 Trustee
Arthur C. Patterson*                               Trustee
Frank S. Bayley*                                   Trustee
Ruth H. Quigley*                                   Trustee



*By: /s/ MICHAEL A. SILVER
    ----------------------------------
      Michael A. Silver
      Attorney-in-Fact, pursuant to
      Power of Attorney filed herewith



<PAGE>   1920

                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, the Registrant has duly
caused this Post-Effective Amendment to this Registration Statement to be signed
on its behalf by the undersigned, thereto duly authorized, in the City of San
Francisco, and State of California, on the 25th day of August, 1998.


                                            AIM INVESTMENT FUNDS, INC.


                                            By:    William J. Guilfoyle*

                                                   President

         Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement of AIM Investment Funds,
Inc. has been signed below by the following persons in the capacities indicated
on the 25th day of August, 1998.


William J. Guilfoyle*                              President, Director and
                                                   Chairman of the Board
                                                   (Principal Executive Officer)


/s/ KENNETH W. CHANCEY
- --------------------------------------             Vice President and
Kenneth W. Chancey                                 Principal Accounting Officer



C. Derek Anderson*                                 Director
Arthur C. Patterson*                               Director
Frank S. Bayley*                                   Director
Ruth H. Quigley*                                   Director





*By: /s/ MICHAEL A. SILVER
     ---------------------------------
      Michael A. Silver
      Attorney-in-Fact, pursuant to
      Power of Attorney filed herewith



<PAGE>   1921



                                   SIGNATURES

         Global Investment Portfolio has duly caused this Post-Effective
Amendment of AIM Investment Funds to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of San Francisco, and the State of 
California, on the 25th day of August, 1998.

                                            GLOBAL INVESTMENT PORTFOLIO

                                            By:    William J. Guilfoyle*
                                                   President

         This Post-Effective Amendment to the Registration Statement of AIM
Investment Funds has been signed below by the following persons in the
capacities indicated on the 25th day of August, 1998.

                      
                                                   President, Trustee and
William J. Guilfoyle*                              Chairman of the Board
                                                   (Principal Executive Officer)

/s/ KENNETH W. CHANCEY
- --------------------------------------             Vice President and
Kenneth W. Chancey                                 Principal Accounting Officer



C. Derek Anderson*                                 Trustee
Arthur C. Patterson*                               Trustee
Frank S. Bayley*                                   Trustee
Ruth H. Quigley*                                   Trustee


*By:  /s/ MICHAEL A. SILVER
     ---------------------------------
      Michael A. Silver
      Attorney-in-Fact, pursuant to
      Power of Attorney filed herewith



<PAGE>   1922



                                   SIGNATURES

         Global Investment Portfolio has duly caused this Post-Effective
Amendment of AIM Investment Funds, Inc. to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of San Francisco, and the
State of California, on the 25th day of August, 1998.

                                            GLOBAL INVESTMENT PORTFOLIO

                                            By:    William J. Guilfoyle*
                                                   President

         This Post-Effective Amendment to the Registration Statement of AIM
Investment Funds, Inc. has been signed below by the following persons in the
capacities indicated on the 25th day of August, 1998.


William J. Guilfoyle*                              President, Trustee and
                                                   Chairman of the Board
                                                   (Principal Executive Officer)


/s/ KENNETH W. CHANCEY
- --------------------------------------             Vice President and
Kenneth W. Chancey                                 Principal Accounting Officer



C. Derek Anderson*                                 Trustee
Arthur C. Patterson*                               Trustee
Frank S. Bayley*                                   Trustee
Ruth H. Quigley*                                   Trustee


*By:  /s/ MICHAEL A. SILVER
     ---------------------------------
      Michael A. Silver
      Attorney-in-Fact, pursuant to
      Power of Attorney filed herewith



<PAGE>   1923



                                   SIGNATURES

         Emerging Markets Debt Portfolio has duly caused this Post-Effective
Amendment of AIM Investment Funds to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of San Francisco, and the State of 
California, on the 25th day of August, 1998.

                                            GLOBAL HIGH INCOME PORTFOLIO

                                            By:    William J. Guilfoyle*
                                                   President

         This Post-Effective Amendment to the Registration Statement of AIM
Investment Funds has been signed below by the following persons in the
capacities indicated on the 25th day of August, 1998.


 William J. Guilfoyle*                             President, Trustee and
                                                   Chairman of the Board
                                                   (Principal Executive Officer)

                        
/s/ KENNETH W. CHANCEY
- --------------------------------------             Vice President and
Kenneth W. Chancey                                 Principal Accounting Officer


C. Derek Anderson*                                 Trustee
Arthur C. Patterson*                               Trustee
Frank S. Bayley*                                   Trustee
Ruth H. Quigley*                                   Trustee


*By: /s/ MICHAEL A. SILVER
     ---------------------------------
      Michael A. Silver
      Attorney-in-Fact, pursuant to
      Power of Attorney filed herewith



<PAGE>   1924



                                   SIGNATURES

         Emerging Markets Debt Portfolio has duly caused this Post-Effective
Amendment of AIM Investment Funds, Inc. to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of San Francisco, and the
State of California, on the 25th day of August, 1998.

                                            GLOBAL HIGH INCOME PORTFOLIO

                                            By:    William J. Guilfoyle*
                                                   President

         This Post-Effective Amendment has been signed below by the following
persons in the capacities indicated on the 25th day of August, 1998.

                                                   President, Trustee and
William J. Guilfoyle*                              Chairman of the Board
                                                   (Principal Executive Officer)

/s/ KENNETH W. CHANCEY
- --------------------------------------             Vice President and
Kenneth W. Chancey                                 Principal Accounting Officer


C. Derek Anderson*                                 Trustee
Arthur C. Patterson*                               Trustee
Frank S. Bayley*                                   Trustee
Ruth H. Quigley*                                   Trustee


*By: /s/ MICHAEL A. SILVER
     ---------------------------------
      Michael A. Silver
      Attorney-in-Fact, pursuant to
      Power of Attorney filed herewith



<PAGE>   1925



                                INDEX TO EXHIBITS

                           AIM INVESTMENT FUNDS, INC.

   
<TABLE>
<CAPTION>



Exhibit Number
- --------------
<S>            <C>
1               Agreement and Declaration of Trust of  AIM Investment Funds

2               By-Laws of AIM Investment Funds

5(a)            Investment Management and Administration Contract, dated May 29,
                1998, between Registrant and A I M Advisors, Inc.

5(b)            Investment Management and Administration Contract, dated
                September 8, 1998, between AIM Investment Funds and A I M
                Advisors, Inc.

5(c)            Administration Contract, dated May 29, 1998, between Registrant
                and A I M Advisors, Inc.

5(d)            Administration Contract, dated September 8, 1998, between AIM 
                Investment Funds and A I M Advisors, Inc.

5(e)            Sub-Administration Contract, dated May 29, 1998, between A I M 
                Advisors, Inc. and INVESCO (NY), Inc.

5(f)            Sub-Administration Contract, dated September 8, 1998, between 
                A I M Advisors, Inc. and INVESCO (NY), Inc.

5(g)            Sub-Advisory and Sub-Administration Contract, dated May 29, 
                1998, between A I M Advisors, Inc. and INVESCO (NY), Inc.

5(h)            Sub-Advisory and Sub-Administration Contract, dated September 
                8, 1998, between A I M Advisors, Inc. and INVESCO (NY), Inc.

5(i)            Investment Management and Administration Contract, dated
                May 29, 1998, between Global Investment Portfolio and
                A I M Advisors, Inc. is filed herewith electronically.

5(j)            Sub-Advisory and Sub-Administration Contract, dated 
                May 29, 1998, between A I M  Advisors, Inc. and INVESCO
                (NY), Inc. with respect to Global Investment Portfolio is
                filed herewith electronically.

5((k)           Investment Management and Administration Contract, dated
                May 29, 1998, between Global High Income Portfolio and
                A I M Advisors, Inc. is filed herewith electronically.

5(l)            Sub-Advisory and Sub-Administration Contract, dated
                May 29, 1998, between A I M Advisors, Inc. and INVESCO
                (NY), Inc. with respect to Global High Income Portfolio
                is filed herewith electronically.

6(a)            Distribution Agreement, dated May 29, 1998, between Registrant 
                and A I M Distributors, Inc. with respect to Class A shares

6(b)            Distribution Agreement, dated September 8, 1998, between AIM
                Investment Funds and A I M Distributors, Inc. with respect to
                Class A shares

6(c)            Distribution Agreement, dated May 29, 1998, between Registrant 
                and A I M Distributors, Inc. with respect to Class B shares

6(d)            Distribution Agreement, dated September 8, 1998, between AIM
                Investment Funds and A I M Distributors, Inc. with respect to
                Class B shares

6(e)            Distribution Agreement, dated May 29, 1998, between Registrant
                and A I M Distributors, Inc. with respect to Advisor Class
                shares

6(f)            Distribution Agreement, dated September 8, 1998, between AIM
                Investment Funds and A I M Distributors, Inc. with respect to
                Advisor Class shares

9(a)(1)         Form of Transfer Agency and Service Agreement between Registrant
                and A I M Fund Services, Inc.

9(a)(2)         Remote Access and Related Services Agreement, dated December 23,
                1994, between Registrant and First Data Investor Services Group,
                Inc.
</TABLE>
    


                                      
<PAGE>   1926

9(a)(3)         Amendment No. 1, dated October 4, 1995, to the Remote Access and
                Related Services Agreement, dated December 23, 1994, between
                Registrant and First Data Investor Services Group, Inc.

9(a)(4)         Addendum No. 2, dated October 12,1995, to the Remote Access and
                Related Services Agreement, dated December 23, 1994, between
                Registrant and First Data Investor Services Group, Inc.

9(a)(5)         Amendment No. 3, dated February 1, 1997, to the Remote Access
                and Related Services Agreement, dated December 23, 1994, between
                Registrant and First Data Investor Services Group, Inc.

9(a)(6)         Exhibit 1, effective as of August 4, 1997, to the Remote Access
                and Related Services Agreement, dated December 23, 1994, between
                the Registrant and First Data Investor Services Group, Inc.

9(a)(7)         Preferred Registration Technology Escrow Agreement, dated
                September 10, 1997, between the Registrant and First Data
                Investor Services Group, Inc.

9(b)            Form of Fund Accounting and Pricing Agent Agreement, between 
                AIM Investment Funds and INVESCO (NY), INC.

9(c)(5)         Service Agreement for Bank Trust Department and for Broker

10(a)           Opinion and Consent of Kirkpatrick & Lockhart LLP

10(b)           Opinion and Consent of Delaware Counsel

11              Consent of PricewaterhouseCoopers LLP

18              Multiple Class Plan (Rule 18f-3)




<PAGE>   1
                                                                       EXHIBIT 1




                       AGREEMENT AND DECLARATION OF TRUST
                                       OF
                              AIM INVESTMENT FUNDS



         WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is made and entered
into as of May 7, 1998, among William J.  Guilfoyle, C. Derek Anderson, Frank
S. Bayley, Arthur C. Patterson, and Ruth H. Quigley, as Trustees, and each
person who becomes a Shareholder in accordance with the terms hereinafter set
forth.

         WHEREAS, the parties hereto desire to create a business trust pursuant
to the Delaware Act for the investment and reinvestment of funds contributed
thereto;

         NOW, THEREFORE, the Trustees hereby direct that a Certificate of Trust
be filed with the Office of the Secretary of State of Delaware and do hereby
declare that all money and property contributed to the trust hereunder shall be
held and managed in trust under this Agreement for the benefit of the
Shareholders as herein set forth below.


                                   ARTICLE I
              NAME, DEFINITIONS, PURPOSE AND CERTIFICATE OF TRUST

         Section 1.1.  Name.  The name of the business trust created hereby is
"AIM Investment Funds," and the Trustees may transact the Trust's affairs in
that name. The Trust shall constitute a Delaware business trust in accordance
with the Delaware Act.

         Section 1.2.  Definitions.  Whenever used herein, unless otherwise
required by the context or specifically provided:

         (a)     "Affiliated Person," "Company," "Person," and "Principal
                 Underwriter" shall have the meanings given them in the 1940
                 Act, as modified by or interpreted by any applicable order or
                 orders of the Commission or any rules or regulations adopted
                 or interpretive releases of the Commission thereunder. The
                 term "Commission" shall have the meaning given it in the 1940
                 Act;

         (b)     "Agreement" means this Agreement and Declaration of Trust, as
                 it may be amended from time to time;

         (c)     "Bylaws" means the Bylaws referred to in Article IV, Section
                 4.1(e) hereof, as from time to time amended;
<PAGE>   2
         (d)     "Class" means a portion of Shares of a Portfolio of the Trust
                 established in accordance with the provisions of Article II,
                 Section 2.3(b) hereof;

         (e)     "Covered Person" means every person who is, or has been, a
                 Trustee or an officer or employee of the Trust;

         (f)     The "Delaware Act" refers to the Delaware Business Trust Act,
                 12 Del. C.Section  3801 et seq., as such Act may be amended
                 from time to time;

         (g)     "Majority Shareholder Vote" means "the vote of a majority of
                 the outstanding voting securities" (as defined in the 1940
                 Act) of the Trust, Portfolio, or Class, as applicable;

         (h)     The "1940 Act" refers to the Investment Company Act of 1940,
                 as amended from time to time;

         (i)     "Outstanding Shares" means Shares shown on the books of the
                 Trust or its transfer agent as then issued and outstanding,
                 but does not include Shares that have been repurchased or
                 redeemed by the Trust;

         (j)     "Portfolio" means a series of Shares of the Trust established
                 in accordance with the provisions of Article II, Section
                 2.3(a) hereof;

         (k)     "Shareholder" means a record owner of Outstanding Shares of
                 the Trust;

         (l)     "Shares" means, as to a Portfolio or any Class thereof, the
                 equal proportionate transferable units of beneficial interest
                 into which the beneficial interest of such Portfolio of the
                 Trust or such Class thereof shall be divided and may include
                 fractions of Shares as well as whole Shares;

         (m)     The "Trust" means AIM Investment Funds, the Delaware business
                 trust established hereby, and reference to the Trust, when
                 applicable to one or more Portfolios, shall refer to each such
                 Portfolio;

         (n)     The "Trustees" means the Persons who have signed this
                 Agreement as trustees so long as they shall continue to serve
                 as trustees of the Trust in accordance with the terms hereof,
                 and all other Persons who may from time to time be duly
                 appointed as Trustee in accordance with the provisions of
                 Article III, Section 3.4 hereof or elected as Trustee in
                 accordance with the provisions of Article III, Section 3.6
                 hereof, and reference herein to a Trustee or to the Trustees
                 shall refer to such Persons in their capacity as Trustees
                 hereunder; and

         (o)     "Trust Property" means any and all property, real or personal,
                 tangible or intangible, which is owned or held by or for the
                 account of the Trust or any Portfolio, or by the Trustees on
                 behalf of the Trust or any Portfolio.





                                       2
<PAGE>   3
         Section 1.3.  Purpose.  The purpose of the Trust is to conduct,
operate and carry on the business of a management investment company registered
under the 1940 Act through one or more Portfolios investing primarily in
securities and to carry on such other business as the Trustees may from time to
time determine pursuant to their authority under this Agreement.

         Section 1.4.  Certificate of Trust.  Immediately upon the execution of
this Agreement, the Trustees shall file a Certificate of Trust with respect to
the Trust in the Office of the Secretary of State of the State of Delaware
pursuant to the Delaware Act.


                                   ARTICLE II
                              BENEFICIAL INTEREST

         Section 2.1.  Shares of Beneficial Interest.  The beneficial interest
in the Trust shall be divided into an unlimited number of Shares, with par
value of $0.01 per Share.  The Trustees may, from time to time, (a) authorize
the division of the Shares into one or more series, each of which constitutes a
Portfolio, in accordance with Article II, Section 2.3(a) hereof, and (b) may
further authorize the division of the Shares of any Portfolio into one or more
separate and distinct Classes, in accordance with Article II, Section 2.3(b)
hereof.  All Shares issued hereunder, including without limitation, Shares
issued in connection with a dividend or other distribution in Shares or a split
or reverse split of Shares, shall be fully paid and nonassessable.

         Section 2.2.  Issuance of Shares.  The Trustees in their discretion
may, from time to time, without vote of the Shareholders, issue Shares, in
addition to the then issued and outstanding Shares and Shares held in the
treasury, to such party or parties and for such amount and type of
consideration, subject to applicable law, including cash or securities, at such
time or times and on such terms as the Trustees may deem appropriate, and may
in such manner acquire other assets (including the acquisition of assets
subject to, and in connection with, the assumption of liabilities) and
businesses.  In connection with any issuance of Shares, the Trustees may issue
fractional Shares and Shares held in the treasury.  The Trustees may from time
to time divide or combine the Shares into a greater or lesser number without
thereby changing the proportionate beneficial interests in the Trust.
Contributions to the Trust may be accepted for, and Shares shall be redeemed
as, whole Shares and/or 1/1,000th of a Share or integral multiples thereof.

         Section 2.3.  Establishment of Portfolios and Classes.  (a)  The Trust
shall consist of one or more separate and distinct Portfolios, each with an
unlimited number of Shares unless otherwise specified. The Trustees hereby
establish and designate the Portfolios listed on Schedule A attached hereto and
made a part hereof ("Schedule A"). Each additional Portfolio shall be
established by the adoption of a resolution by the Trustees and shall be
effective upon the date stated therein (or, if no such date is stated, upon the
date of such adoption).  The Shares of each Portfolio shall have the relative
rights and preferences provided for herein and such rights and preferences as
may be designated by the Trustees. The Trust shall maintain separate and
distinct records for each Portfolio and shall hold and account for the assets
belonging thereto separately from the other Trust Property and the assets
belonging to any other Portfolio. Each Share of a Portfolio shall represent an
equal





                                       3
<PAGE>   4
beneficial interest in the net assets belonging to that Portfolio, except to
the extent of expenses separately allocated to Classes thereof as permitted
herein.  A Portfolio may have exclusive voting rights with respect to matters
affecting only that Portfolio.

         (b)     The Trustees may divide the Shares of any Portfolio into two
or more Classes, each with an unlimited number of Shares unless otherwise
specified.  Each Class so established and designated shall represent a
Proportionate Interest (as defined in Article II, Section 2.3.2(c) hereof) in
the net assets belonging to that Portfolio and shall have identical voting,
dividend, liquidation, and other rights and be subject to the same terms and
conditions, except that (1) expenses, costs, charges, and reserves allocated to
a Class in accordance with Article II, Section 2.3.2(d) hereof may be borne
solely by that Class, (2) dividends declared and payable to a Class pursuant to
Article VII, Section 7.1, shall reflect the items separately allocated thereto
pursuant to the preceding clause, (3) each Class may have separate rights to
convert to another Class, exchange rights, and similar rights, each as
determined by the Trustees, and (4) each Class may have exclusive voting rights
with respect to matters affecting only that Class.  The Trustees hereby
establish for each Portfolio listed on Schedule A the Classes listed thereon.
Each additional Class for any or all Portfolios shall be established by the
adoption of a resolution by the Trustees and shall be effective upon the date
stated therein (or, if no such date is stated, upon the date of such adoption).

         Section 2.3.1.  Subject to Article VI, Section 6.1 of this Agreement,
the Trustees shall have full power and authority, in their sole discretion
without obtaining any prior authorization or vote of the Shareholders of any
Portfolio, or Class thereof, to establish and designate and to change in any
manner any Portfolio of Shares, or any Class or Classes thereof; to fix such
preferences, voting powers, rights, and privileges of any Portfolio, or Classes
thereof, as the Trustees may from time to time determine (but the Trustees may
not change the preferences, voting powers, rights, and privileges of
Outstanding Shares in a manner materially adverse to the Shareholders of such
Shares without the prior approval of the affected Shareholders); to divide or
combine the Shares of any Portfolio, or Classes thereof, into a greater or
lesser number; to classify or reclassify any issued Shares of any Portfolio, or
Classes thereof, into one or more Portfolios or Classes of Shares of a
Portfolio; and to take such other action with respect to the Shares as the
Trustees may deem desirable. A Portfolio and any Class thereof may issue any
number of Shares but need not issue any shares. At any time that there are no
Outstanding Shares of any particular Portfolio or Class previously established
and designated, the Trustees may abolish that Portfolio or Class and the
establishment and designation thereof.

         Section 2.3.2.  Unless the establishing resolution or any other
resolution adopted pursuant to this Section 2.3 otherwise provides, Shares of
each Portfolio or Class thereof established hereunder shall have the following
relative rights and preferences:

         (a)     Shareholders shall have no preemptive or other right to
                 subscribe to any additional Shares or other securities issued
                 by the Trust or the Trustees, whether of the same or other
                 Portfolio (or Class).

         (b)     All consideration received by the Trust for the issue or sale
                 of Shares of a particular Portfolio, together with all assets
                 in which such consideration is invested or





                                       4
<PAGE>   5
                 reinvested, all income, earnings, profits, and proceeds
                 thereof, including any proceeds derived from the sale,
                 exchange, or liquidation of such assets, and any funds or
                 payments derived from any reinvestment of such proceeds in
                 whatever form the same may be, shall be held and accounted for
                 separately from the other assets of the Trust and of every
                 other Portfolio and may be referred to herein as "assets
                 belonging to" that Portfolio.  The assets belonging to a
                 particular Portfolio shall belong to that Portfolio for all
                 purposes, and to no other Portfolio, subject only to the
                 rights of creditors of that Portfolio. In addition, any
                 assets, income, earnings, profits, or funds, or payments and
                 proceeds with respect thereto, which are not readily
                 identifiable as belonging to any particular Portfolio shall be
                 allocated by the Trustees between and among one or more of the
                 Portfolios for all purposes and such assets, income, earnings,
                 profits, or funds, or payments and proceeds with respect
                 thereto, shall be assets belonging to that Portfolio.

         (c)     Each Class of a Portfolio shall have a proportionate undivided
                 interest (as determined by or at the direction of, or pursuant
                 to authority granted by, the Trustees, consistent with
                 industry practice) ("Proportionate Interest") in the net
                 assets belonging to that Portfolio.  References herein to
                 assets, expenses, charges, costs, and reserves "allocable" or
                 "allocated" to a particular Class of a Portfolio shall mean
                 the aggregate amount of such item(s) of the Portfolio
                 multiplied by the Class's Proportionate Interest.

         (d)     A particular Portfolio shall be charged with the liabilities
                 of that Portfolio, and all expenses, costs, charges and
                 reserves attributable to any particular Portfolio shall be
                 borne by such Portfolio; provided that the Trustees may, in
                 their sole discretion, allocate or authorize the allocation of
                 particular expenses, costs, charges and/or reserves of a
                 Portfolio to less than all the Classes thereof, in which event
                 payment or other discharge of the expense(s), cost(s),
                 charge(s) and/or reserve(s) allocated to a particular Class
                 shall be chargeable first against the assets allocable to that
                 Class and shall be chargeable against the assets allocable to
                 the other Classes of that Portfolio only to the extent the
                 amount of the payment or other discharge exceeds such
                 particular Class's allocable assets.  Any general liabilities,
                 expenses, costs, charges or reserves of the Trust (or any
                 Portfolio) that are not readily identifiable as chargeable to
                 or bearable by any particular Portfolio (or any particular
                 Class) shall be allocated and charged by the Trustees between
                 or among any one or more of the Portfolios (or Classes) in
                 such manner as the Trustees in their sole discretion deem fair
                 and equitable.  Each such allocation shall be conclusive and
                 binding upon the Shareholders of all Portfolios (or Classes)
                 for all purposes.  Without limitation of the foregoing
                 provisions of this Subsection 2.3.2, the debts, liabilities,
                 obligations and expenses incurred, contracted for or otherwise
                 existing with respect to a particular Portfolio shall be
                 enforceable against the assets of such Portfolio only, and not
                 against the assets of the Trust generally or the assets
                 belonging to any other Portfolio.  Notice of this contractual
                 limitation on inter-Portfolio liabilities shall be set forth
                 in the Certificate of Trust described in Article I, Section
                 1.4 of this Agreement (whether originally or by amendment),
                 and upon the giving of such





                                       5
<PAGE>   6
                 notice in the Certificate of Trust, the statutory provisions
                 of Section 3804 of the Delaware Act relating to limitations on
                 inter-Portfolio liabilities (and the statutory effect under
                 Section 3804 of setting forth such notice in the Certificate
                 of Trust) shall become applicable to the Trust and each
                 Portfolio.

         All references to Shares in this Agreement shall be deemed to be
shares of any or all Portfolios, or Classes thereof, as the context may
require.  All provisions herein relating to the Trust shall apply equally to
each Portfolio of the Trust, and each Class thereof, except as the context
otherwise requires.

         Section 2.4.  Investment in the Trust.  Investments may be accepted by
the Trust from such Persons, at such times, on such terms, and for such
consideration, which may consist of cash or tangible or intangible property or
a combination thereof, as the Trustees from time to time may authorize.  At the
Trustees' sole discretion, such investments, subject to applicable law, may be
in the form of cash or securities in which the affected Portfolio is authorized
to invest, valued as provided in applicable law.  Each such investment shall be
credited to the individual Shareholder's account in the form of full and
fractional Shares of the Trust, in such Portfolio (or Class) as the Shareholder
shall select.

         Section 2.5.  Personal Liability of Shareholders.  As provided by
applicable law, no Shareholder of the Trust shall be personally liable for the
debts, liabilities, obligations, and expenses incurred by, contracted for, or
otherwise existing with respect to, the Trust or any Portfolio (or Class)
thereof.  Neither the Trust nor the Trustees, nor any officer, employee, or
agent of the Trust shall have any power to bind personally any Shareholder or,
except as provided herein or by applicable law, to call upon any Shareholder
for the payment of any sum of money or assessment whatsoever other than such as
the Shareholder may at any time personally agree to pay by way of subscription
for any Shares or otherwise.  The Shareholders shall be entitled, to the
fullest extent permitted by applicable law, to the same limitation of personal
liability as is extended under the Delaware General Corporation Law to
stockholders of private corporations for profit.  Every note, bond, contract,
or other undertaking issued by or on behalf of the Trust or the Trustees
relating to the Trust or to any Portfolio shall include a recitation limiting
the obligation represented thereby to the Trust and its assets or to one or
more Portfolios and the assets belonging thereto (but the omission of such a
recitation shall not operate to bind any Shareholder or Trustee of the Trust).

         Section 2.6.  Assent to Agreement.  Every Shareholder, by virtue of
having purchased a Share, shall be held to have expressly assented to, and
agreed to be bound by, the terms hereof.  The death of a Shareholder during the
continuance of the Trust shall not operate to terminate the same nor entitle
the representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to
rights of said decedent under this Trust.





                                       6
<PAGE>   7
                                  ARTICLE III
                                  THE TRUSTEES

         Section 3.1.  Management of the Trust.  The Trustees shall have
exclusive and absolute control over the Trust Property and over the business of
the Trust to the same extent as if the Trustees were the sole owners of the
Trust Property and business in their own right, but with such powers of
delegation as may be permitted by this Agreement.  The Trustees shall have
power to conduct the business of the Trust and carry on its operations in any
and all of its branches and maintain offices both within and without the State
of Delaware, in any and all states of the United States of America, in the
District of Columbia, in any and all commonwealths, territories, dependencies,
colonies, or possessions of the United States of America, and in any and all
foreign jurisdictions and to do all such other things and execute all such
instruments as they deem necessary, proper or desirable in order to promote the
interests of the Trust although such things are not herein specifically
mentioned. Any determination as to what is in the interests of the Trust made
by the Trustees in good faith shall be conclusive. In construing the provisions
of this Agreement, the presumption shall be in favor of a grant of power to the
Trustees.

         The enumeration of any specific power in this Agreement shall not be
construed as limiting the aforesaid power.  The powers of the Trustees may be
exercised without order of or resort to any court or other authority.

         Section 3.2.  Initial Trustees.  The initial Trustees shall be the 
persons named herein.

         Section 3.3.  Terms of Office of Trustees.  The Trustees shall hold
office during the lifetime of this Trust, and until its termination as herein
provided; except (a) that any Trustee may resign his trusteeship or may retire
by written instrument signed by him and delivered to the other Trustees, which
shall take effect upon such delivery or upon such later date as is specified
therein; (b) that any Trustee may be removed at any time by written instrument,
signed by at least two-thirds of the number of Trustees prior to such removal,
specifying the date when such removal shall become effective; (c) that any
Trustee who has died, become physically or mentally incapacitated by reason of
disease or otherwise, or is otherwise unable to serve, may be retired by
written instrument signed by a majority of the other Trustees, specifying the
date of his retirement; and (d) that a Trustee may be removed at any meeting of
the Shareholders of the Trust by a vote of the Shareholders owning at least
two-thirds of the Outstanding Shares.

         Section 3.4.  Vacancies and Appointment of Trustees.  A vacancy shall
occur in case of the declination to serve, death, resignation, retirement or
removal of a Trustee, or a Trustee is otherwise unable to serve, or an increase
in the number of Trustees. Whenever a vacancy in the Board of Trustees shall
occur, until such vacancy is filled, the other Trustees shall have all the
powers hereunder and the certification of the other Trustees of such vacancy
shall be conclusive. In the case of an existing vacancy, the remaining Trustees
may fill such vacancy by appointment of such other person as they in their
discretion shall see fit, or may leave such vacancy unfilled or may reduce the
number of Trustees to not less than two (2) Trustees. Such appointment shall be
evidenced by a written instrument signed by a majority of the Trustees in
office or by resolution of the Trustees,





                                       7
<PAGE>   8
duly adopted, which shall be recorded in the minutes of a meeting of the
Trustees, whereupon the appointment shall take effect.

         An appointment of a Trustee may be made by the Trustees then in office
in anticipation of a vacancy to occur by reason of retirement, resignation, or
removal of a Trustee or an increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at the time or
after the expected vacancy occurs. As soon as any Trustee appointed pursuant to
this Section 3.4 shall have accepted this appointment in writing and agreed in
writing to be bound by the terms of the Agreement, the Trust estate shall vest
in the new Trustee or Trustees, together with the continuing Trustees, without
any further act or conveyance, and he shall be deemed a Trustee hereunder.

         Section 3.5.  Temporary Absence of Trustee.  Any Trustee may, by power
of attorney, delegate his power for a period not exceeding six months at any
one time to any other Trustee or Trustees, provided that in no case shall less
than two Trustees personally exercise the other powers hereunder except as
herein otherwise expressly provided.

         Section 3.6.  Number of Trustees.  The number of Trustees shall
initially be five (5), and thereafter shall be such number as shall be fixed
from time to time by a majority of the Trustees; provided, however, that the
number of Trustees shall in no event be less than two (2) nor more than twelve
(12). The Shareholders shall elect the Trustees (other than the initial
Trustees) on such dates as the Trustees may fix from time to time.

         Section 3.7.  Effect of Death, Resignation, etc. of a Trustee.  The
declination to serve, death, resignation, retirement, removal, incapacity, or
inability of the Trustees, or any one of them, shall not operate to terminate
the Trust or to revoke any existing agency created pursuant to the terms of
this Trust Agreement.

         Section 3.8.  Ownership of Assets of the Trust.  The assets of the
Trust and of each Portfolio thereof shall be held separate and apart from any
assets now or hereafter held in any capacity other than as Trustee hereunder by
the Trustees or any successor Trustees. Legal title in all of the assets of the
Trust and the right to conduct any business shall at all times be considered as
vested in the Trustees on behalf of the Trust, except that the Trustees may
cause legal title to any Trust Property to be held by, or in the name of the
Trust, or in the name of any Person as nominee.  No Shareholder shall be deemed
to have a severable ownership in any individual asset of the Trust, or
belonging to any Portfolio, or allocable to any Class thereof, or any right of
partition or possession thereof, but each Shareholder shall have, except as
otherwise provided for herein, a proportionate undivided beneficial interest in
the Trust or in the assets belonging to the Portfolio (or allocable to the
Class) in which the Shareholder holds Shares. The Shares shall be personal
property giving only the rights specifically set forth in this Agreement or the
Delaware Act.





                                       8
<PAGE>   9
                                   ARTICLE IV
                             POWERS OF THE TRUSTEES

         Section 4.1.  Powers.  The Trustees in all instances shall act as
principals, and are and shall be free from the control of the Shareholders. The
Trustees shall have full power and authority to do any and all acts and to make
and execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust.
Without limiting the foregoing and subject to any applicable limitation in this
Agreement or the Bylaws of the Trust, the Trustees shall have power and
authority:

         (a)     To invest and reinvest cash and other property, and to hold
                 cash or other property uninvested, without in any event being
                 bound or limited by any present or future law or custom in
                 regard to investments by Trustees, and to sell, exchange,
                 lend, pledge, mortgage, hypothecate, write options on, and
                 lease any or all of the assets of the Trust;

         (b)     To operate as, and to carry on the business of, an investment
                 company, and exercise all the powers necessary and appropriate
                 to the conduct of such operations;

         (c)     To borrow money and in this connection issue notes or other
                 evidence of indebtedness; to secure borrowings by mortgaging,
                 pledging, or otherwise subjecting as security the Trust
                 Property; to endorse, guarantee, or undertake the performance
                 of an obligation or engagement of any other Person and to lend
                 Trust Property;

         (d)     To provide for the distribution of interests of the Trust
                 either through a principal underwriter in the manner hereafter
                 provided for or by the Trust itself, or both, or otherwise
                 pursuant to a plan of distribution of any kind;

         (e)     To adopt Bylaws not inconsistent with this Agreement providing
                 for the conduct of the business of the Trust and to amend and
                 repeal them to the extent that they do not reserve such right
                 to the shareholders; such Bylaws shall be deemed incorporated
                 and included in this Agreement;

         (f)     To elect and remove such officers and appoint and terminate
                 such agents as they consider appropriate;

         (g)     To employ one or more banks, trust companies or companies that
                 are members of a national securities exchange, or such other
                 domestic or foreign entities as custodians of any assets of
                 the Trust subject to any conditions set forth in this
                 Agreement or in the Bylaws;

         (h)     To retain one or more transfer agents or Shareholder servicing
                 agents, or both;

         (i)     To set record dates in the manner provided herein or in the
                 Bylaws;





                                       9
<PAGE>   10
         (j)     To delegate such authority as they consider desirable to any
                 officers of the Trust and to any investment adviser, manager,
                 administrator, custodian, underwriter, or other agent or
                 independent contractor;

         (k)     To sell or exchange any or all of the assets of the Trust,
                 subject to the provisions of Article VI, Section 6.1 hereof;

         (l)     To vote or give assent, or exercise any rights of ownership,
                 with respect to stock or other securities or property; and to
                 execute and deliver proxies and powers of attorney to such
                 person or persons as the Trustees shall deem proper, granting
                 to such person or persons such power and discretion with
                 relation to securities or property as the Trustee shall deem
                 proper;

         (m)     To exercise powers and rights of subscription or otherwise
                 which in any manner arise out of ownership of securities;

         (n)     To hold any security or property in a form not indicating any
                 trust, whether in bearer, book entry, unregistered, or other
                 negotiable form; or either in the name of the Trust or of a
                 Portfolio or of a custodian or a nominee or nominees, subject
                 in either case to proper safeguards according to the usual
                 practice of Delaware business trusts or investment companies;

         (o)     To establish separate and distinct Portfolios with separately
                 defined investment objectives and policies and distinct
                 investment purposes in accordance with the provisions of
                 Article II hereof and to establish Classes of such Portfolios
                 having relative rights, powers, and duties as they may provide
                 consistent with applicable law;

         (p)     Subject to the provisions of Section 3804 of the Delaware Act,
                 to allocate assets, liabilities, and expenses of the Trust to
                 a particular Portfolio or to apportion the same between or
                 among two or more Portfolios, provided that any liabilities or
                 expenses incurred by a particular Portfolio shall be payable
                 solely out of the assets belonging to that Portfolio as
                 provided for in Article II hereof;

         (q)     To consent to or participate in any plan for the
                 reorganization, consolidation, or merger of any corporation or
                 concern, any security of which is held in the Trust; to
                 consent to any contract, lease, mortgage, purchase, or sale of
                 property by such corporation or concern, and to pay calls or
                 subscriptions with respect to any security held in the Trust;

         (r)     To compromise, arbitrate, or otherwise adjust claims in favor
                 of or against the Trust or any matter in controversy
                 including, but not limited to, claims for taxes;





                                       10
<PAGE>   11
         (s)     To declare and pay dividends and make distributions of income
                 and of capital gains and capital to Shareholders in the manner
                 hereinafter provided;

         (t)     To establish, from time to time, a minimum investment for
                 Shareholders in the Trust or in one or more Portfolios or
                 Classes, and to require the redemption of the Shares of any
                 Shareholder whose investment is less than such minimum upon
                 giving notice to such Shareholder;

         (u)     Subject to the requirements of the 1940 Act, to establish one
                 or more committees, to delegate any of the powers of the
                 Trustees to said committees, and to adopt a committee charter
                 providing for such responsibilities, membership (including
                 Trustees, officers, or other agents of the Trust therein) and
                 any other characteristics of said committees as the Trustees
                 may deem proper. Notwithstanding the provisions of this
                 Article IV, and in addition to such provisions or any other
                 provision of this Agreement or of the Bylaws, the Trustees may
                 by resolution appoint a committee consisting of less than the
                 whole number of Trustees then in office, which committee may
                 be empowered to act for and bind the Trustees and the Trust,
                 as if the acts of such committee were the acts of all the
                 Trustees then in office, with respect to the institution,
                 prosecution, dismissal, settlement, review, or investigation
                 of any action, suit, or proceeding which shall be pending or
                 threatened to be brought before any court, administrative
                 agency, or other adjudicatory body;

         (v)     To interpret the investment policies, practices or limitations
                 of any Portfolios;

         (w)     To establish a registered office and have a registered agent
                 in the State of Delaware; and

         (x)     In general to carry on any other business in connection with
                 or incidental to any of the foregoing powers, to do everything
                 necessary, suitable, or proper for the accomplishment of any
                 purpose or the attainment of any object or the furtherance of
                 any power hereinbefore set forth, either alone or in
                 association with others, and to do every other act or thing
                 incidental or appurtenant to or growing out of or connected
                 with the aforesaid business or purposes, objects, or powers.

         The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees. Any action by one or
more of the Trustees in their capacity as such hereunder shall be deemed an
action on behalf of the Trust or the applicable Portfolio, and not an action in
an individual capacity.

         The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust.





                                       11
<PAGE>   12
         No one dealing with the Trustees shall be under any obligation to make
any inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the Trustees or
upon their order.

         Section 4.2.  Issuance and Repurchase of Shares.  The Trustees shall
have the power to issue, sell, repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, and otherwise deal in Shares and, subject to
the provisions set forth in Articles II and VII, to apply to any such
repurchase, redemption, retirement, cancellation, or acquisition of Shares any
funds or property of the Trust, or any assets belonging to the particular
Portfolio or any assets allocable to the particular Class, with respect to
which such Shares are issued.

         Section 4.3.  Action by the Trustees.  The Trustees shall act by
majority vote of those present at a meeting duly called (including a meeting by
telephonic or other electronic means, unless the 1940 Act requires that a
particular action be taken only at a meeting of the Trustees in person) at
which a quorum is present or by unanimous written consent of the Trustees (or
by written consent of a majority of the Trustees if the President of the Trust
determines that such exceptional circumstances exist, and are of such urgency,
as to make unanimous written consent impossible or impractical, which
determination shall be conclusive and binding on all Trustees and not otherwise
subject to challenge) without a meeting.  A majority of the Trustees shall
constitute a quorum at any meeting.  Meetings of the Trustees may be called
orally or in writing by the President of the Trust or by any two Trustees.
Notice of the time, date, and place of all meetings of the Trustees shall be
given to each Trustee by telephone, facsimile, electronic-mail, or other
electronic mechanism sent to his or her home or business address at least
twenty-four hours in advance of the meeting or in person at another meeting of
the Trustees or by written notice mailed to his or her home or business address
at least seventy-two hours in advance of the meeting.  Notice need not be given
to any Trustee who attends the meeting without objecting to the lack of notice
or who signs a waiver of notice either before or after the meeting. Subject to
the requirements of the 1940 Act, the Trustees by majority vote may delegate to
any Trustee or Trustees authority to approve particular matters or take
particular actions on behalf of the Trust. Any written consent or waiver may be
provided and delivered to the Trust by any means by which notice may be given
to a Trustee.

         Section 4.4.  Principal Transactions.  The Trustees may, on behalf of
the Trust, buy any securities from or sell any securities to, or lend any
assets of the Trust to, any Trustee or officer of the Trust or any firm of
which any such Trustee or officer is a member acting as principal, or have any
such dealings with any investment adviser, distributor, or transfer agent for
the Trust or with any Affiliated Person of such Person; and the Trust may
employ any such Person, or firm or Company in which such Person is an
Affiliated Person, as broker, legal counsel, registrar, investment adviser,
distributor, administrator, transfer agent, dividend disbursing agent,
custodian, or in any capacity upon customary terms, subject in all cases to
applicable laws, rules, and regulations and orders of regulatory authorities.

         Section 4.5.  Payment of Expenses by the Trust.  The Trustees are
authorized to pay or cause to be paid out of the principal or income of the
Trust or any Portfolio, or partly out of the principal and partly out of
income, and to charge or allocate to, between or among such one or more of the





                                       12
<PAGE>   13
Portfolios (or Classes), as they deem fair, all expenses, fees, charges, taxes,
and liabilities incurred or arising in connection with the Trust or Portfolio
(or Class), or in connection with the management thereof, including, but not
limited, to the Trustees' compensation and such expenses and charges for the
services of the Trust's officers, employees, investment adviser and manager,
administrator, principal underwriter, auditors, counsel, custodian, transfer
agent, Shareholder servicing agent, and such other agents or independent
contractors and such other expenses and charges as the Trustees may deem
necessary or proper to incur.

         Section 4.6.  Trustee Compensation.  The Trustees as such shall be
entitled to reasonable compensation from the Trust. They may fix the amount of
their compensation. Nothing herein shall in any way prevent the employment of
any Trustee for advisory, management, administrative, legal, accounting,
investment banking, underwriting, brokerage, or investment dealer or other
services and the payment for the same by the Trust.


                                   ARTICLE V
                 INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND
                                 TRANSFER AGENT

         Section 5.1.  Investment Adviser.  Subject to any vote of the
Shareholders pursuant to Article VI, Section 6.1(3)  that is required by the
1940 Act, the Trustees may in their discretion, from time to time, enter into
an investment advisory or management contract or contracts with respect to the
Trust or any Portfolio whereby the other party or parties to such contract or
contracts shall undertake to furnish the Trustees with such management,
investment advisory, statistical, and research facilities and services and such
other facilities and services, if any, and all upon such terms and conditions,
as the Trustees may in their discretion determine.

         The Trustees may authorize the investment adviser to employ, from time
to time, one or more sub-advisers to perform such of the acts and services of
the investment adviser, and upon such terms and conditions, as may be agreed
upon among the Trustees, the investment adviser, and the sub-adviser. Any
references in this Agreement to the investment adviser shall be deemed to
include such sub-advisers, unless the context otherwise requires.

         Section 5.2.  Other Service Contracts.  The Trustees may authorize the
engagement of a principal underwriter, transfer agent, administrator,
custodian, and similar service providers.

         Section 5.3.  Parties to Contract.  Any contract of the character
described in Sections 5.1 and 5.2 of this Article V may be entered into with
any corporation, firm, partnership, trust, or association, although one or more
of the Trustees or officers of the Trust may be an officer, director, trustee,
shareholder, or member of such other party to the contract.

         Section 5.4.  Miscellaneous.  The fact that (i) any of the
Shareholders, Trustees, or officers of the Trust is a shareholder, director,
officer, partner, trustee, employee, manager, adviser, principal underwriter or
distributor, or agent of or for any Company or of or for any parent or
affiliate of any Company, with which an advisory or administration contract, or
principal





                                       13
<PAGE>   14
underwriter's or distributor's contract, or transfer, shareholder servicing,
custodian, or other agency contract may have been or may hereafter be made, or
that any such Company, or any parent or affiliate thereof, is a Shareholder or
has an interest in the Trust, or that (ii) any Company with which an advisory
or administration contract or principal underwriter's or distributor's
contract, or transfer, shareholder servicing, custodian, or other agency
contract may have been or may hereafter be made also has an advisory or
administration contract, or principal underwriter's or distributor's contract,
or transfer, shareholder servicing, custodian, or other agency contract with
one or more other companies, or has other business or interests shall not
affect the validity of any such contract or disqualify any Shareholder,
Trustee, or officer of the Trust from voting upon or executing the same or
create any liability or accountability to the Trust or its Shareholders.


                                   ARTICLE VI
                    SHAREHOLDERS' VOTING POWERS AND MEETING

         Section 6.1.  Voting Powers.  The Shareholders shall have power to
vote only with respect to (1) the election of Trustees as provided in Article
III, Section 3.6, (2) the removal of a Trustee as provided in Article III,
Section 3.3(d), (3) any investment advisory contract to the extent required by
the 1940 Act, (4) termination of the Trust or a Portfolio or Class thereof as
provided in Article IX, Section 9.3, (5) amendment of this Agreement only as
provided in Article IX, Section 9.7, (6) the sale of all or substantially all
the assets of the Trust or belonging to any Portfolio, unless the primary
purpose of such sale is to change the Trust's domicile or form of organization
or form of business trust; (7) the merger or consolidation of the Trust or any
Portfolio with and into another Company or a series or portfolio thereof,
unless (A) the primary purpose of such merger or consolidation is to change the
Trust's domicile or form of organization or form of business trust, or (B)
after giving effect to such merger or consolidation, based on the number of
Outstanding Shares as of a date selected by the Trustees, the Shareholders of
the Trust or such Portfolio will have a majority of the outstanding shares of
the surviving Company or series or portfolio thereof, as the case may be; and
(8) such additional matters relating to the Trust as may be required by law or
as the Trustees may consider desirable.

         Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may make any action required or permitted by law, this
Agreement or any of the Bylaws of the Trust to be taken by Shareholders.

         On any matter submitted to a vote of the Shareholders, all Shares
shall be voted together, except when required by applicable law or when the
Trustees have determined that the matter affects the interests of one or more
Portfolios (or Classes), then only the Shareholders of all such Portfolios (or
Classes) shall be entitled to vote thereon. Each whole Share shall be entitled
to one vote as to any matter on which it is entitled to vote, and each
fractional Share shall be entitled to a proportionate fractional vote. The vote
necessary to approve any such matter shall be set forth in this Agreement or in
the Bylaws.





                                       14
<PAGE>   15
                                  ARTICLE VII
                         DISTRIBUTIONS AND REDEMPTIONS

         Section 7.1.  Distributions.  The Trustees may from time to time
declare and pay dividends and make other distributions with respect to any
Portfolio, or Class thereof, which may be from income, capital gains, or
capital. The amount of such dividends or distributions and the payment of them
and whether they are in cash or any other Trust Property shall be wholly in the
discretion of the Trustees. Dividends and other distributions may be paid
pursuant to a standing resolution adopted once or more often as the Trustees
determine. All dividends and other distributions on Shares of a particular
Portfolio or Class shall be distributed pro rata to the Shareholders of that
Portfolio or Class, as the case may be, in proportion to the number of Shares
of that Portfolio or Class they held on the record date established for such
payment, provided that such dividends and other distributions on Shares of a
Class shall appropriately reflect expenses allocated to that Class. The
Trustees may adopt and offer to Shareholders such dividend reinvestment plans,
cash distribution payout plans, or similar plans as the Trustees deem
appropriate.

         Section 7.2.  Redemptions.  Any holder of record of Shares of a
particular Portfolio, or Class thereof, shall have the right to require the
Trust to redeem his Shares, or any portion thereof, subject to such terms and
conditions as are set forth in the Bylaws or are prescribed by the Trustees.

         Section 7.3.  Redemption of Shares by Trustees.  Upon the terms and
conditions set forth in the Bylaws, the Trustees may call for the redemption of
the Shares of any Person or may refuse to transfer or issue Shares to any
Person to the extent that the same is necessary to comply with applicable law
or advisable to further the purposes of which the Trust is formed. To the
extent permitted by law, the Trustees may retain the proceeds of any redemption
of Shares required by them for payment of amounts due and owing by a
Shareholder to the Trust or any Portfolio.

         Section 7.4.  Redemption of De Minimis Accounts.  If, at any time,
when a request for transfer or redemption of Shares of any Portfolio is
received by the Trust or its agent, the value of the Shares of such Portfolio
in a Shareholder's account is less than Five Hundred Dollars ($500.00), or such
greater amount as the Trustees in their discretion shall have determined in
accordance with Article IV, Section 4.1(t) hereof, after giving effect to such
transfer or redemption, the Trust may, at any time following such transfer or
redemption and upon giving thirty (30) days' notice to the Shareholder, cause
the remaining Shares of such Portfolio in such Shareholder's account to be
redeemed at net asset value and in accordance with such procedures as are set
forth in the Bylaws.

         Section 7.5.  Suspension of Right of Redemption.  Notwithstanding
Section 7.2 of this Article VII, the Trustees may postpone payment of the
redemption price and suspend the Shareholders' right to require any Portfolio
or Class to redeem Shares during any period when and to the extent permissible
under the 1940 Act. Any such postponement and suspension shall take effect at
the time the Trustees shall specify, but not later than the close of business
on the business day next following the declaration thereof, and shall continue
until the Trustees declare the end thereof. If the right of redemption is
suspended, a Shareholder may either withdraw his or her request for redemption
or receive payment based on the net asset value per Share next determined after
the suspension terminates.





                                       15
<PAGE>   16
                                  ARTICLE VIII
                  LIMITATION OF LIABILITY AND INDEMNIFICATION

         Section 8.1.  Limitation of Liability.  A Trustee, when acting in such
capacity, shall not be personally liable to any person for any act, omission,
or obligation of the Trust or any Trustee; provided, however, that nothing
contained herein or in the Delaware Act shall protect any Trustee against any
liability to the Trust or to Shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of the office of
Trustee hereunder.

         Section 8.2.  Indemnification of Covered Persons.  Every Covered
Person shall be indemnified by the Trust to the fullest extent permitted by the
Delaware Act and other applicable law.

         Section 8.3.  Indemnification of Shareholders.  In case any
Shareholder or former Shareholder of the Trust shall be held to be personally
liable solely by reason of his being or having been a Shareholder of the Trust
or any Portfolio or Class and not because of his acts or omissions or for some
other reason, the Shareholder or former Shareholder (or his heirs, executors,
administrators, or other legal representatives, or, in the case of a
corporation or other entity, its corporate or general successor) shall be
entitled, out of the assets belonging to the applicable Portfolio (or allocable
to the applicable Class), to be held harmless from and indemnified against all
loss and expense arising from such liability in accordance with the Bylaws and
applicable law. The Trust, on behalf of the affected Portfolio (or Class),
shall, upon request by the Shareholder, assume the defense of any claim made
against the Shareholder for any act or obligation of that Portfolio (or Class).


                                   ARTICLE IX
                                 MISCELLANEOUS

         Section 9.1.  Trust Not a Partnership; Taxation.  It is hereby
expressly declared that a trust and not a partnership is created hereby. No
Trustee hereunder shall have any power to bind personally either the Trust's
officers or any Shareholder. All persons extending credit to, contracting with
or having any claim against the Trust or the Trustees shall look only to the
assets of the appropriate Portfolio or, until the Trustees shall have
established any separate Portfolio, of the Trust for payment under such credit,
contract, or claim; and neither the Shareholders nor the Trustee, nor any of
their agents, whether past, present, or future, shall be personally liable
therefor.

         It is intended that the Trust, or each Portfolio if there is more than
one Portfolio, be classified for income tax purposes as an association taxable
as a corporation, and the Trustees shall do all things that they, in their sole
discretion, determine are necessary to achieve that objective, including (if
they so determine) electing such classification on Internal Revenue Form 8832.
Any Trustee is hereby authorized to sign such form on behalf of the Trust or
any Portfolio, and the





                                       16
<PAGE>   17
Trustees may delegate such authority to any executive officer(s) of any
Portfolio's investment adviser. The Trustees, in their sole discretion and
without the vote or consent of the Shareholders, may amend this Agreement to
ensure that this objective is achieved.

         Section 9.2.  Trustee's Good Faith Action, Expert Advice, No Bond or
Surety.  The exercise by the Trustees of their powers and discretion hereunder
in good faith and with reasonable care under the circumstances then prevailing
shall be binding upon everyone interested. Subject to the provisions of Article
VIII hereof and to Section 9.1 of this Article IX, the Trustees shall not be
liable for errors of judgment or mistakes of fact or law. The Trustees may take
advice of counsel or other experts with respect to the meaning and operation of
this Agreement, and subject to the provisions of Article VIII hereof and
Section 9.1 of this Article IX, shall be under no liability for any act or
omission in accordance with such advice or for failing to follow such advice.
The Trustees shall not be required to give any bond as such, nor any surety if
a bond is obtained.

         Section 9.3.  Termination of Trust or Portfolio or Class.  (a)  The
Trust or any Portfolio (or Class) may be terminated by (1) a Majority
Shareholder Vote of the Trust or the affected Portfolio (or Class),
respectively, or (2) if there are fewer than 100 Shareholders of record of the
Trust or of such terminating Portfolio (or Class), the Trustees pursuant to
written notice to the Shareholders of the Trust or the affected Portfolio (or
Class).

         (b)     On termination of the Trust or any Portfolio pursuant to
paragraph (a),

                 (1)      the Trust or that Portfolio thereafter shall carry on
         no business except for the purpose of winding up its affairs,

                 (2)      the Trustees shall (i) proceed to wind up the affairs
         of the Trust or that Portfolio, and all powers of the Trustees under
         this Agreement with respect thereto shall continue until such affairs
         have been wound up, including the powers to fulfill or discharge the
         contracts of the Trust or that Portfolio, (ii) collect its assets or
         the assets belonging thereto, (iii) sell, convey, assign, exchange, or
         otherwise dispose of all or any part of those assets to one or more
         persons at public or private sale for consideration that may consist
         in whole or in part of cash, securities, or other property of any
         kind, (iv) discharge or pay its liabilities, and (v) do all other acts
         appropriate to liquidate its business, and

                 (3)      after paying or adequately providing for the payment
         of all liabilities, and upon receipt of such releases, indemnities,
         and refunding agreements as they deem necessary for their protection,
         the Trustees shall distribute the remaining assets ratably among the
         Shareholders of the Trust or that Portfolio.

         (c)     On termination of any Class pursuant to paragraph (a),

                 (1)      the Trust thereafter shall carry on no business with
         respect to that Class except for the purpose of winding up its
         affairs,





                                       17
<PAGE>   18
                 (2)      the Trustees shall (i) proceed to wind up all affairs
         respecting that Class, and all powers of the Trustees under this
         Agreement with respect thereto shall continue until such affairs have
         been wound up, including the powers to fulfill or discharge the
         contracts respecting that Class, and (ii) do all other acts
         appropriate to liquidate its business respecting that Class, and

                 (3)      the Trustees shall distribute ratably among the
         Shareholders of that Class, in cash or in kind, an amount equal to the
         net value of the assets allocable to that Class (after taking into
         account any fees, expenses, or charges allocated thereto), and in
         connection with any such distribution in cash the Trustees are
         authorized to sell, convey, assign, exchange, or otherwise dispose of
         such assets of the Portfolio of which that Class is a part as they
         deem necessary.

         (d)     On completion of distribution of the remaining assets pursuant
to paragraph (b)(3) (or the net value of allocable assets pursuant to paragraph
(c)(3)), the Trust or the affected Portfolio (or Class) shall terminate and the
Trustees and the Trust shall be discharged from all further liabilities and
duties hereunder with respect thereto and the rights and interests of all
parties therein shall be canceled and discharged. On termination of the Trust,
following completion of winding up of its business, the Trustees shall cause a
Certificate of Cancellation of the Trust's Certificate of Trust to be filed in
accordance with the Delaware Act, which Certificate may be signed by any one
Trustee.

         Section 9.4.  Sale of Assets; Merger and Consolidation.  Subject to
Article VI, Section 6.1 of this Agreement, the Trustees may cause (i) the Trust
or one or more of its Portfolios to the extent consistent with applicable law
to sell all or substantially all of its assets, or be merged into or
consolidated with another business trust or Company, (ii) the Shares of the
Trust or any Portfolio (or Class) to be converted into beneficial interests in
another business trust (or series thereof) created pursuant to this Section 9.4
of Article IX, or (iii) the Shares to be exchanged under or pursuant to any
state or federal statute to the extent permitted by law. In all respects not
governed by statute or applicable law, the Trustees shall have power to
prescribe the procedure necessary or appropriate to accomplish a sale of
assets, merger or consolidation including the power to create one or more
separate business trusts to which all or any part of the assets, liabilities,
profits or losses of the Trust may be transferred and to provide for the
conversion of Shares of the Trust or any Portfolio (or Class) into beneficial
interests in such separate business trust or trusts (or series or class
thereof).

         Section 9.5.  Filing of Copies, References, Headings.  The original or
a copy of this Agreement or any amendment hereto or any supplemental Agreement
shall be kept at the office of the Trust where it may be inspected by any
Shareholder.  In this Agreement or in any such amendment or supplemental
Agreement, references to this Agreement, and all expressions like "herein,"
"hereof," and "hereunder," shall be deemed to refer to this Agreement as
amended or affected by any such supplemental Agreement.  All expressions like
"his," "he," and "him," shall be deemed to include the feminine and neuter, as
well as masculine, genders. Headings are placed herein for convenience of
reference only and in case of any conflict, the text of this Agreement,





                                       18
<PAGE>   19
rather than the headings, shall control.  This Agreement may be executed in any
number of counterparts each of which shall be deemed an original.

         Section 9.6.  Governing Law.  The Trust and this Agreement, and the
rights, obligations and remedies of the Trustees and Shareholders hereunder,
are to be governed by and construed and administered according to the Delaware
Act and the other laws of the State of Delaware; provided, however, that there
shall not be applicable to the Trust, the Trustees, the Shareholders or this
Trust Agreement (a) the provisions of Section 3540 of Title 12 of the Delaware
Code or (b) any provisions of the laws (statutory or common) of the State of
Delaware (other than the Delaware Act) pertaining to trusts which relate to or
regulate (i) the filing with any court or governmental body or agency of
trustee accounts or schedules of trustee fees and charges, (ii) affirmative
requirements to post bonds for trustees, officers, agents, or employees of a
trust, (iii) the necessity for obtaining court or other governmental approval
concerning the acquisition, holding, or disposition of real or personal
property, (iv) fees or other sums payable to trustees, officers, agents, or
employees of a trust, (v) the allocation of receipts and expenditures to income
or principal, (vi) restrictions or limitations on the permissible nature,
amount, or concentration of trust investments or requirements relating to the
titling, storage, or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards or responsibilities or
limitations on the indemnification, acts or powers of trustees or other
Persons, which are inconsistent with the limitations of liabilities or
authorities and powers of the Trustees or officers of the Trust set forth or
referenced in this Agreement.

         The Trust shall be of the type commonly called a "business trust," and
without limiting the provisions hereof, the Trust may exercise all powers which
are ordinarily exercised by such a trust under Delaware law.  The Trust
specifically reserves the right to exercise any of the powers or privileges
afforded to trusts or actions that may be engaged in by trusts under the
Delaware Act, and the absence of a specific reference herein to any such power,
privilege, or action shall not imply that the Trust may not exercise such power
or privilege or take such actions, provided, however, that the exercise of any
such power, privilege, or action shall not otherwise violate applicable law.

         Section 9.7.  Amendments.  Except as specifically provided herein, the
Trustees may, without any Shareholder vote, amend this Agreement by making an
amendment, an Agreement supplemental hereto, or an amended and restated trust
instrument. Any amendment submitted to Shareholders that the Trustees determine
would affect the Shareholders of less than all Portfolios (or less than all
Classes thereof) shall be authorized by vote of only the Shareholders of the
affected Portfolio(s) (or Class(es)), and no vote shall be required of
Shareholders of any Portfolio (or Class) that is not affected.  Notwithstanding
anything else herein to the contrary, any amendment to Article VIII that would
have the effect of reducing the indemnification provided thereby to Covered
Persons or to Shareholders or former Shareholders, and any repeal or amendment
of this sentence shall each require the affirmative vote of Shareholders owning
at least two-thirds of the Outstanding Shares entitled to vote thereon.  A
certification signed by a majority of the Trustees setting forth an amendment
to this Agreement and reciting that it was duly adopted by the Shareholders or
by the Trustees as aforesaid, or a copy of this Agreement, as amended, executed
by a majority of the Trustees, shall be conclusive evidence of such amendment
when lodged among the records of the Trust.





                                       19
<PAGE>   20
         Section 9.8.  Provisions in Conflict with Law.  The provisions of this
Agreement are severable, and the Trustees shall determine, with the advice of
counsel, that any of such provisions is in conflict with applicable law the
conflicting provision shall be deemed never to have constituted a part of this
Agreement; provided, however, that such determination shall not affect any of
the remaining provisions of this Agreement or render invalid or improper any
action taken or omitted prior to such determination.  If any provision of this
Agreement shall be held invalid or enforceable in any jurisdiction, such
invalidity or unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any other
jurisdiction or any other provision of this Agreement in any jurisdiction.

         Section 9.9.  Shareholders' Right to Inspect Shareholder List.  One or
more Persons who together and for at least six months have been Shareholders of
at least five percent (5%) of the Outstanding Shares of any Class may present
to any officer or resident agent of the Trust a written request for a list of
its Shareholders.  Within twenty (20) days after such request is made, the
Trust shall prepare and have available on file at its principal office a list
verified under oath by one of its officers or its transfer agent or registrar
which sets forth the name and address of each Shareholder and the number of
Shares of each Class which the Shareholder holds.  The rights provided for
herein shall not extend to any Person who is a beneficial owner but not also a
record owner of Shares of the Trust.





                                       20
<PAGE>   21
         IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument this 7th day of May, 1998.



                                     /s/  WILLIAM J. GUILFOYLE
                                     ----------------------------------------
                                     William J. Guilfoyle, as Trustee
                                 

                                     /s/  C. DEREK ANDERSON                 
                                     ----------------------------------------
                                     C. Derek Anderson, as Trustee
                                 

                                     /s/  FRANK S. BAYLEY                    
                                     ----------------------------------------
                                     Frank S. Bayley, as Trustee
                                 

                                     /s/  RUTH H. QUIGLEY              
                                     ----------------------------------------
                                     Ruth H. Quigley, as Trustee
                                 

                                     /s/ ARTHUR C. PATTERSON        
                                     ----------------------------------------
                                     Arthur C. Patterson, as Trustee





                                       21
<PAGE>   22
                                   SCHEDULE A

         AIM Investment Funds shall be divided into the following Portfolios,
each of which shall have three Classes (Class A, Class B, and Advisor Class):


                             AIM Developing Markets Fund
                             AIM Emerging Markets Fund
                             AIM Global Growth & Income Fund
                             AIM Latin American Growth Fund
                             AIM Global Consumer Products and Services Fund
                             AIM Global Financial Services Fund
                             AIM Global Health Care Fund
                             AIM Global Infrastructure Fund
                             AIM Global Resources Fund
                             AIM Global Telecommunications Fund
                             AIM Global Government Income Fund
                             AIM Global High Income Fund
                             AIM Strategic Income Fund

Date: May 7, 1998





                                       22

<PAGE>   1
                                                                       EXHIBIT 2





                                     BYLAWS

                                       OF

                             AIM INVESTMENT FUNDS,
                           A DELAWARE BUSINESS TRUST

                         ADOPTED EFFECTIVE MAY 7, 1998
<PAGE>   2
                               TABLE OF CONTENTS

<TABLE>
<S>                                                                                                                     <C>
ARTICLE I OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.  Registered Office.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2.  Other Offices.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Number.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2.  Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 3.  Vacancy.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 4.  Delegation of Power.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 5.  Inability to Serve Full Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 6.  Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 7.  Meetings of the Trustees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 8.  Regular Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 9.  Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 10.  Action Without Meeting.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 11.  Designation, Powers, and Name of Committees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 12.  Minutes of Committee.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 13.  Compensation of Trustees.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE III OFFICERS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.  Executive Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.  Term of Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.  President.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4.  Chairman of the Board.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 5.  Other Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 6.  Secretary.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 7.  Treasurer.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 8.  Surety Bond.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARTICLE IV MEETINGS OF SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.  Purpose.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.  Nominations of Trustees.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.  Election of Trustees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.  Notice of Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.  Special Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 6.  Notice of Special Meeting.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 7.  Conduct of Special Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 8.  Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 9.  Organization of Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 10.  Voting Standard. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 11.  Voting Procedure.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 12.  Action Without Meeting.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>





                                       i
<PAGE>   3
<TABLE>
<S>                                                                                                                    <C>
ARTICLE V NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.  Methods of Giving Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.  Written Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE VI CERTIFICATES OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
Section 1.  Issuance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
Section 2.  Countersignature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
Section 3.  Lost Certificates.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
Section 4.  Transfer of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
Section 5.  Fixing Record Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
Section 6.  Registered Shareholders.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9

ARTICLE VII GENERAL PROVISIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
Section 1.  Dividends and Distributions.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
Section 2.  Redemptions.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
Section 3.  Indemnification.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
Section 4.  Advance Payments of Indemnifiable Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
Section 5.  Seal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
Section 6.  Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
Section 7.  Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11

ARTICLE VIII AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
Section 1.  Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
</TABLE>





                                       ii
<PAGE>   4
                                     BYLAWS

                                       OF

                             AIM INVESTMENT FUNDS,
                           A DELAWARE BUSINESS TRUST

               Capitalized terms not specifically defined herein
            shall have the meanings ascribed to them in the Trust's
               Agreement and Declaration of Trust ("Agreement").


                                   ARTICLE I

                                    OFFICES

         Section 1.  Registered Office.   The registered office of AIM
Investment Portfolios (the "Trust") shall be in the County of New Castle, State
of Delaware.

         Section 2.  Other Offices.  The Trust may also have offices at such
other places both within and without the State of Delaware as the Trustees may
from time to time determine or the business of the Trust may require.

                                   ARTICLE II

                                    TRUSTEES

         Section 1. Number.  The number of Trustees shall initially be five,
and thereafter shall be such number as shall be fixed from time to time by
resolution of the Board of Trustees; provided, however, that the number of
Trustees shall in no event be less than two nor more than twelve.

         Section 2.  Term.  The Trustees shall hold office during the lifetime
of the Trust, except (a) that any Trustee may resign his trusteeship or may
retire by written instrument signed by him and delivered to the other Trustees,
which shall take effect upon such delivery or upon such later date as is
specified therein; (b) that any Trustee may be removed at any time by written
instrument, signed by at least two-thirds of the number of Trustees prior to
such removal, specifying the date when such removal shall become effective; (c)
that any Trustee who has died, become physically or mentally incapacitated by
reason of disease or otherwise, or is otherwise unable to serve, may be retired
by written instrument signed by a majority of the other Trustees, specifying
the date of his retirement; and (d) that a Trustee may be removed at any
meeting of the shareholders of the Trust.

         Section 3.  Vacancy.  In case of the declination to serve, death,
resignation, retirement or removal of a Trustee, or a Trustee is otherwise
unable to serve, or an increase in the number of Trustees, a vacancy shall
occur.  Whenever a vacancy in the Trustees shall occur, until such vacancy is
filled, the other Trustees shall have all the powers hereunder and the
certification of
<PAGE>   5
the other Trustees of such vacancy shall be conclusive. In the case of an
existing vacancy, the remaining Trustees may fill such vacancy by appointing
such other person as they in their discretion shall see fit, or may leave such
vacancy unfilled or may reduce the number of Trustees to not less than two
Trustees. Such appointment shall be evidenced by a written instrument signed by
a majority of the Trustees in office or by resolution of the Trustees, duly
adopted, which shall be recorded in the minutes of a meeting of the Trustees,
whereupon the appointment shall take effect.

         An appointment of a Trustee may be made by the Trustees then in office
in anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As soon as any
Trustee appointed pursuant to Sections 2 and 3 of Article II of these Bylaws, or
elected pursuant to Section 3 of Article IV, and the Agreement shall have
accepted this appointment in writing and agreed in writing to be bound by the
terms of the Trust Agreement, the Trust estate shall vest in the new Trustee or
Trustees, together with the continuing Trustees, without any further act or
conveyance, and he shall be deemed a Trustee hereunder.

         Section 4.  Delegation of Power.  Any Trustee may, by power of
attorney, delegate his power for a period not exceeding six months at any one
time to any other Trustee or Trustees, provided that in no case shall less than
two Trustees personally exercise the other powers hereunder except as herein
otherwise expressly provided.

         Section 5.  Inability to Serve Full Term.  The declination to serve,
death, resignation, retirement, removal, incapacity, or inability of the
Trustees, or any one of them, shall not operate to terminate the Trust or to
revoke any existing agency created pursuant to the terms of the Agreement.

         Section 6.  Powers.  The Trustees shall have exclusive and absolute
control over the trust property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the trust property and
business in their own right, but with such powers of delegation as may be
permitted by the Agreement. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its
branches and maintain offices both within and without the State of Delaware, in
any and all states of the United States of America, in the District of
Columbia, in any and all commonwealths, territories, dependencies, colonies, or
possessions of the United States of America, and in any foreign jurisdiction
and to do all such other things and execute all such instruments as they deem
necessary, proper or desirable in order to promote the interests of the Trust
although such things are not herein specifically mentioned. Any determination
as to what is in the interests of the Trust made by the Trustees in good faith
shall be conclusive. In construing the provisions of these Bylaws and the
Agreement, the presumption shall be in favor of a grant of power to the
Trustees.

         Section 7.  Meetings of the Trustees.  The Trustees of the Trust may
hold meetings, both regular and special, either within or without the State of
Delaware.





                                       2
<PAGE>   6
         Section 8.  Regular Meetings.  Regular meetings of the Board of
Trustees shall be held each year, at such time and place as the Board of
Trustees may determine.

         Section 9.  Notice of Meetings.Notice of the time, date, and place of
all meetings of the Trustees shall be given to each Trustee by telephone,
facsimile, electronic-mail, or other electronic mechanism sent to his or her
home or business address at least twenty-four hours in advance of the meeting
or in person at another meeting of the Trustees or by written notice mailed to
his or her home or business address at least seventy-two hours in advance of
the meeting.

         Section 10.  Quorum.  At all meetings of the Trustees, a majority of
the Trustees then in office (but in no event less than two Trustees) shall
constitute a quorum for the transaction of business and the act of a majority
of the Trustees present at any meeting at which there is a quorum shall be the
act of the Board of Trustees, except as may be otherwise specifically provided
by applicable law or by the Agreement or these Bylaws. If a quorum shall not be
present at any meeting of the Board of Trustees, the Trustees present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.

         Section 11.  Action Without Meeting.  Unless otherwise restricted by
the Agreement or these Bylaws, any action required or permitted to be taken at
any meeting of the Board of Trustees or of any committee thereof may be taken
without a meeting by unanimous written consent of the Trustees or committee
members (or by written consent of a majority of the Trustees if the President
of the Trust determines that such exceptional circumstances exist, and are of
such urgency, as to make unanimous written consent impossible or impractical,
which determination shall be conclusive and binding on all Trustees and not
otherwise subject to challenge) and the writing or writings are filed with the
minutes of proceedings of the board or committee.

         Section 12.  Designation, Powers, and Name of Committees.  The Board
of Trustees may, by resolution passed by a majority of the whole Board,
designate one or more committees, each committee to consist of two or more of
the Trustees of the Trust. The Board may designate one or more Trustee as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of such committee. Each committee, to the extent provided
in the resolution, shall have and may exercise the powers of the Board of
Trustees in the management of the business and affairs of the Trust; provided,
however, that in the absence or disqualification of any member of such
committee or committees, the member or members thereof present at any meeting
and not disqualified from voting, whether or not such members constitute a
quorum, may unanimously appoint another member of the Board of Trustees to act
at the meeting in the place of any such absent or disqualified member. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the Board of Trustees.

         Section 13.  Minutes of Committee.  Each committee shall keep regular
minutes of its meetings and report the same to the Board of Trustees when
required.





                                       3
<PAGE>   7
         Section 14.  Compensation of Trustees.  The Trustees as such shall be
entitled to reasonable compensation for their services as determined from time
to time by the Board of Trustees. Nothing herein shall in any way prevent the
employment of any Trustee for advisory, management, administrative, legal,
accounting, investment banking, underwriting, brokerage, or investment dealer
or other services and the payment for the same by the Trust.

                                  ARTICLE III

                                    OFFICERS

         Section 1.  Executive Officers.  The initial executive officers of the
Trust shall be elected by the Board of Trustees as soon as practicable after
the organization of the Trust. The executive officers may include a Chairman of
the Board, and shall include a President, one or more Vice Presidents (the
number thereof to be determined by the Board of Trustees), a Secretary and a
Treasurer. The Chairman of the Board, if any, shall be selected from among the
Trustees.  The Board of Trustees may also in its discretion appoint Assistant
Vice Presidents, Assistant Secretaries, Assistant Treasurers, and other
officers, agents and employees, who shall have such authority and perform such
duties as the Board may determine. The Board of Trustees may fill any vacancy
which may occur in any office. Any two offices, except for those of President
and Vice President, may be held by the same person, but no officer shall
execute, acknowledge or verify any instrument on behalf of the Trust in more
than one capacity, if such instrument is required by law or by these Bylaws to
be executed, acknowledged or verified by two or more officers.

         Section 2.  Term of Office.  Unless otherwise specifically determined
by the Board of Trustees, the officers shall serve at the pleasure of the Board
of Trustees. If the Board of Trustees in its judgment finds that the best
interests of the Trust will be served, the Board of Trustees may remove any
officer of the Trust at any time with or without cause.  The Trustees may
delegate this power to the President with respect to any other officer.  Such
removal shall be without prejudice to the contract rights, if any, of the
person so removed.  Any officer may resign from office at any time by
delivering a written resignation to the Trustees or the President.  Unless
otherwise specified therein, such resignation shall take effect upon delivery.

         Section 3.  President.  The President shall be the chief executive
officer of the Trust and, subject to the Board of Trustees, shall generally
manage the business and affairs of the Trust. If there is no Chairman of the
Board, or if the Chairman of the Board has been appointed but is absent, the
President shall, if present, preside at all meetings of the shareholders and
the Board of Trustees.

         Section 4.  Chairman of the Board.  The Chairman of the Board, if any,
shall preside at all meetings of the shareholders and the Board of Trustees, if
the Chairman of the Board is present. The Chairman of the Board shall have such
other powers and duties as shall be determined by the Board of Trustees, and
shall undertake such other assignments as may be requested by the President.





                                       4
<PAGE>   8
         Section 5.  Other Officers.  The Chairman of the Board or one or more
Vice Presidents shall have and exercise such powers and duties of the President
in the absence or inability to act of the President, as may be assigned to
them, respectively, by the Board of Trustees or, to the extent not so assigned,
by the President.  In the absence or inability to act of the President, the
powers and duties of the President not otherwise assigned by the Board of
Trustees or the President shall devolve upon the Chairman of the Board, or in
the Chairman's absence, the Vice Presidents in the order of their election.

         Section 6.  Secretary.  The Secretary shall (a) have custody of the
seal of the Trust; (b) attend meetings of the shareholders, the Board of
Trustees, and any committees of Trustees and keep the minutes of such meetings
of shareholders, Board of Trustees and any committees thereof; and (c) issue
all notices of the Trust. The Secretary shall have charge of the shareholder
records and such other books and papers as the Board may direct, and shall
perform such other duties as may be incidental to the office or which are
assigned by the Board of Trustees. The Secretary shall also keep or cause to be
kept a shareholder book, which may be maintained by means of computer systems,
containing the names, alphabetically arranged, of all persons who are
shareholders of the Trust, showing their places of residence, the number and
class or series of any class of shares of beneficial interest held by them,
respectively, and the dates when they became the record owners thereof, and
such book shall be open for inspection as prescribed by the laws of the State
of Delaware.

         Section 7.  Treasurer.  The Treasurer shall have the care and custody
of the funds and securities of the Trust and shall deposit the same in the name
of the Trust in such bank or banks or other depositories, subject to withdrawal
in such manner as these Bylaws or the Board of Trustees may determine. The
Treasurer shall, if required by the Board of Trustees, give such bond for the
faithful discharge of duties in such form as the Board of Trustees may require.

         Section 8.  Surety Bond.  The Trustees may require any officer or
agent of the Trust to execute a bond (including, without limitation, any bond
required by the Investment Company Act of 1940, as amended ("1940 Act") and the
rules and regulations of the Securities and Exchange Commission ("Commission")
to the Trust in such sum and with such surety or sureties as the Trustees may
determine, conditioned upon the faithful performance of his or her duties to
the Trust, including responsibility for negligence and for the accounting of
any of the Trust's property, funds, or securities that may come into his or her
hands.

                                   ARTICLE IV

                            MEETINGS OF SHAREHOLDERS

         Section 1.  Purpose.  All meetings of the shareholders for the
election of Trustees shall be held at such place as may be fixed from time to
time by the Trustees, or at such other place either within or without the State
of Delaware as shall be designated from time to time by the Trustees and stated
in the notice indicating that a meeting has been called for such purpose.
Meetings of shareholders may be held for any purpose determined by the Trustees
and may be held at such time and place, within or without the State of Delaware
as shall be stated in the notice of the





                                       5
<PAGE>   9
meeting or in a duly executed waiver of notice thereof. At all meetings of the
shareholders, every shareholder of record entitled to vote thereat shall be
entitled to vote at such meeting either in person or by written proxy signed by
the shareholder or by his duly authorized attorney in fact. A shareholder may
duly authorize such attorney in fact through written, electronic, telephonic,
computerized, facsimile, telecommunication, telex or oral communication or by
any other form of communication. Unless a proxy provides otherwise, such proxy
is not valid more than eleven months after its date. A proxy with respect to
shares held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to exercise of the proxy the Trust receives
a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a shareholder shall be deemed
valid unless challenged at or prior to its exercise and the burden of proving
invalidity shall rest on the challenger.

         Section 2.  Nominations of Trustees.  Nominations of individuals for
election to the Board of Trustees shall be made by the Board of Trustees or a
nominating committee of the Board of Trustees, if one has been established (the
"Nominating Committee"). Any shareholder of the Trust may submit names of
individuals to be considered by the Nominating Committee or the Board of
Trustees, as applicable, provided, however, (i) that such person was a
shareholder of record at the time of submission of such names and is entitled
to vote at the meeting, and (ii) that the Nominating Committee or the Board of
Trustees, as applicable, shall make the final determination of persons to be
nominated.

         Section 3.  Election of Trustees.  All meetings of shareholders for
the purpose of electing Trustees shall be held on such date and at such time as
shall be designated from time to time by the Trustees and stated in the notice
of the meeting, at which the shareholders shall elect by a plurality vote any
number of Trustees as the notice for such meeting shall state are to be
elected, and transact such other business as may properly be brought before the
meeting in accordance with Section 1 of this Article IV.

         Section 4.  Notice of Meetings.  Written notice of any meeting stating
the place, date, and hour of the meeting shall be given to each shareholder
entitled to vote at such meeting not less than ten days before the date of the
meeting in accordance with Article V hereof.

         Section 5.  Special Meetings.  Special meetings of the shareholders,
for any purpose or purposes, unless otherwise prescribed by applicable law or
by the Agreement, may be called by any Trustee; provided, however, that the
Trustees shall promptly call a meeting of the shareholders solely for the
purpose of removing one or more Trustees, when requested in writing so to do by
the record holders of not less than ten percent of the outstanding shares of
the Trust.

         Section 6.  Notice of Special Meeting.  Written notice of a special
meeting stating the place, date, and hour of the meeting and the purpose of
purposes for which the meeting is called, shall be given not less than ten days
before the date of the meeting, to each shareholder entitled to vote at such
meeting.

         Section 7.  Conduct of Special Meeting.  Business transacted at any
special meeting of shareholders shall be limited to the purpose stated in the
notice.





                                       6
<PAGE>   10
         Section 8.  Quorum.  The holders of one-third of the shares of
beneficial interests that are issued and outstanding and entitled to vote
thereat, present in person or represented by proxy, shall constitute a quorum
at all meetings of the shareholders for the transaction of business except as
otherwise provided by applicable law or by the Agreement.  If, however, such
quorum shall not be present or represented at any meeting of the shareholders,
the vote of the holders of a majority of shares cast shall have power to
adjourn the meeting from time to time, without notice other than announcement
at the meeting, until a quorum shall be present or represented.  At such
adjourned meeting, at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified.

         Section 9.  Organization of Meetings.

         (a) The Chairman of the Board of Trustees shall preside at each
meeting of shareholders. In the absence of the Chairman of the Board, the
meeting shall be chaired by the President, or if the President shall not be
present, by a Vice President. In the absence of all such officers, the meeting
shall be chaired by a person elected for such purpose at the meeting. The
Secretary of the Trust, if present, shall act as Secretary of such meetings, or
if the Secretary is not present, an Assistant Secretary of the Trust shall so
act, and if no Assistant Secretary is present, then a person designated by the
Secretary of the Trust shall so act, and if the Secretary has not designated a
person, then the meeting shall elect a secretary for the meeting.

         (b) The Board of Trustees of the Trust shall be entitled to make such
rules and regulations for the conduct of meetings of shareholders as it shall
deem necessary, appropriate or convenient. Subject to such rules and
regulations of the Board of Trustees, if any, the chairman of the meeting shall
have the right and authority to prescribe such rules, regulations and
procedures and to do all such acts as, in the judgment of such chairman, are
necessary, appropriate or convenient for the proper conduct of the meeting,
including, without limitation, establishing: an agenda or order of business for
the meeting; rules and procedures for maintaining order at the meeting and the
safety of those present; limitations on participation in such meeting to
shareholders of record of the Trust and their duly authorized and constituted
proxies, and such other persons as the chairman shall permit; restrictions on
entry to the meeting after the time fixed for the commencement thereof;
limitations on the time allotted to questions or comments by participants; and
regulation of the opening and closing of the polls for balloting on matters
which are to be voted on by ballot, unless and to the extent the Board of
Trustees or the chairman of the meeting determines that meetings of
shareholders shall not be required to be held in accordance with the rules of
parliamentary procedure.

         Section 10.  Voting Standard.  When a quorum is present at any
meeting, the vote of the holders of a majority of the shares cast shall decide
any question brought before such meeting, unless the question is one on which,
by express provision of applicable law, the Agreement, these Bylaws, or
applicable contract, a different vote is required, in which case such express
provision shall govern and control the decision of such question.

         Section 11.  Voting Procedure.  Each whole share shall be entitled to
one vote, and each fractional share shall be entitled to a proportionate
fractional vote. On any matter submitted to a





                                       7
<PAGE>   11
vote of the shareholders, all shares shall be voted together, except when
required by applicable law or when the Trustees have determined that the matter
affects the interests of one or more Portfolios (or Classes), then only the
shareholders of such Portfolios (or Classes) shall be entitled to vote thereon.

         Section 12.  Action Without Meeting.  Unless otherwise provided in the
Agreement or applicable law, any action required to be taken at any meeting of
shareholders of the Trust, or any action which may be taken at any meeting of
such shareholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. Prompt notice of the taking of any such action without a meeting by
less than unanimous written consent shall be given to those shareholders who
have not consented in writing.

                                   ARTICLE V

                                    NOTICES

         Section 1.  Methods of Giving Notice.  Whenever, under the provisions
of applicable law or of the Agreement or of these Bylaws, notice is required to
be given to any Trustee or shareholder, it shall not, unless otherwise provided
herein, be construed to mean personal notice, but such notice may be given
orally in person, or by telephone (promptly confirmed in writing) or in
writing, by mail addressed to such Trustee or shareholder, at his address as it
appears on the records of the Trust, with postage thereon prepaid, and such
notice shall be deemed to be given at the time when the same shall be deposited
in the United States mail. Notice to Trustees or members of a committee may
also be given by telex, telegram, telecopier or via overnight courier.  If sent
by telex or telecopier, notice to a Trustee or member of a committee shall be
deemed to be given upon transmittal; if sent by telegram, notice to a Trustee
or member of a committee shall be deemed to be given when the telegram, so
addressed, is delivered to the telegraph company, and if sent via overnight
courier, notice to a Trustee or member of a committee shall be deemed to be
given when delivered against a receipt therefor.

         Section 2.  Written Waiver.  Whenever any notice is required to be
given under the provisions of applicable law or of the Agreement or of these
Bylaws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be
deemed equivalent thereto.

                                   ARTICLE VI

                             CERTIFICATES OF SHARES

         Section 1.  Issuance.  Upon request, every holder of shares in the
Trust shall be entitled to have a certificate, signed by, or in the name of the
Trust by, a Trustee, certifying the number of shares owned by him in the Trust.





                                       8
<PAGE>   12
         Section 2.  Countersignature.  Where a certificate is countersigned
(1) by a transfer agent other than the Trust or its employee, or, (2) by a
registrar other than the Trust or its employee, the signature of the Trustee
may be a facsimile.

         Section 3.  Lost Certificates.  The Board of Trustees may direct a new
certificate or certificates to be issued in place of any certificate or
certificates therefore issued by the Trust alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of the fact by the person claiming
the certificate to be lost, stolen or destroyed. When authorizing such issue of
a new certificate or certificates, the Board of Trustees may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require and/or
to give the Trust a bond in such sum as it may direct as indemnity against any
claim that may be made against the Trust with respect to the certificate
alleged to have been lost, stolen or destroyed.

         Section 4.  Transfer of Shares.  The Trustees shall make such rules as
they consider appropriate for the transfer of shares and similar matters. To
the extent certificates are issued in accordance with Section 1 of this Article
VI, upon surrender to the Trust or the transfer agent of the Trust of such
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
Trust to issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.

         Section 5.  Fixing Record Date.  In order that the Trustees may
determine the shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or to express consent to action in
writing without a meeting, or entitled to receive payment of any dividend or
other distribution of allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of beneficial interests
or for the purpose of any other lawful action, the Board of Trustees may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Trustees, and
which record date shall not be more than ninety nor less than ten days before
the date of such meeting, nor more than ten days after the date upon which the
resolution fixing the record date is adopted by the Board of Trustees for
action by shareholder consent in writing without a meeting, nor more than
ninety days prior to any other action. A determination of shareholders of
record entitled to notice of or to vote at a meeting of shareholders shall
apply to any adjournment of the meeting; provided, however, that the Board of
Trustees may fix a new record date for the adjourned meeting.

         Section 6.  Registered Shareholders.  The Trust shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to
interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice hereof, except as otherwise provided
by the laws of Delaware.





                                       9
<PAGE>   13
                                  ARTICLE VII

                               GENERAL PROVISIONS

         Section 1.  Dividends and Other Distributions.  The Trustees may from
time to time declare and pay dividends and make other distributions with
respect to any Portfolio, or Class thereof, which may be from income, capital
gains or capital. The amount of such dividends or other distributions and the
payment of them and whether they are in cash or any other Trust Property shall
be wholly in the discretion of the Trustees.

         Section 2.  Redemptions.  Any holder of record of shares of a
particular Portfolio, or Class thereof, shall have the right to require the
Trust to redeem his shares, or any portion thereof, subject to the terms and
conditions set forth in the registration statement in effect from time to time.
The redemption price may in any case or cases be paid wholly or partly in kind
if the Trustees determine that such payment is advisable in the interest of the
remaining shareholders of the Portfolio or Class thereof for which the shares
are being redeemed. Subject to the foregoing, the fair value, selection and
quantity of securities or other property so paid or delivered as all or part of
the redemption price may be determined by or under authority of the Trustees.
In no case shall the Trust be liable for any delay of any Person in
transferring securities selected for delivery as all or part of any payment in
kind.

         The Trustees may, at their option, and at any time, have the right to
redeem shares of any shareholder of a particular Portfolio or Class thereof in
accordance with Section 2 of this Article VII. The Trustees may refuse to
transfer or issue shares to any person to the extent that the same is necessary
to comply with applicable law or advisable to further the purposes for which the
Trust is formed.

         If, at any time when a request for transfer or redemption of Shares of
any Portfolio is received by the Trust or its agent, the value of the shares of
such Portfolio in a Shareholder's account is less than Five Hundred Dollars
($500.00), after giving effect to such transfer or redemption, the Trust may, at
any time following such transfer or redemption and upon giving thirty (30) days'
notice to the Shareholder, cause the remaining Shares of such Portfolio in such
Shareholder's account to be redeemed at net asset value in accordance with such
procedures set forth above.

         Section 3.  Indemnification.    Every person who is, or has been, a
Trustee or officer of the Trust shall be indemnified by the Trust to the
fullest extent permitted by the Delaware Business Trust Act, these Bylaws and
other applicable law.

         Section 4.  Advance Payments of Indemnifiable Expenses.  To the
maximum extent permitted by the Delaware Act and other applicable law, the
Trust or applicable Portfolio may advance to a Covered Person, in connection
with the preparation and presentation of a defense to any claim, action, suit,
or proceeding, expenses for which the Covered Person would ultimately be
entitled to indemnification; provided that the Trust or applicable Portfolio
has received an undertaking by or on behalf of such Covered Person that such
amount will be paid over by him to the Trust or applicable Portfolio if it is
ultimately determined that he is not entitled to





                                       10
<PAGE>   14
indemnification for such expenses, and further provided that (i) such Covered
Person shall have provided appropriate security for such undertaking, (ii) the
Trust is insured against losses arising out of any such advance payments, or
(iii) either a majority of the Trustees who are not interested persons (as
defined in the 1940 Act) of the Trust nor parties to the matter, or independent
legal counsel in a written opinion shall have determined, based upon a review
of readily available facts (as opposed to a full trial-type inquiry) that there
is reason to believe that such Covered Person will not be disqualified from
indemnification for such expenses.

         Section 5.  Seal.  The business seal shall have inscribed thereon the
name of the business trust, the year of its organization and the word "Business
Seal, Delaware."  The seal may be used by causing it or a facsimile thereof to
be impressed or affixed or otherwise reproduced.  Any officer or Trustee of the
Trust shall have authority to affix the corporate seal of the Trust to any
document requiring the same.

         Section 6.  Severability.  The provisions of these Bylaws are
severable.  If the Board of Trustees determines, with the advice of counsel,
that any provision hereof conflicts with the 1940 Act, the regulated investment
company provisions of the Internal Revenue Code, or other applicable laws and
regulations, the conflicting provision shall be deemed never to have
constituted a part of these Bylaws; provided, however, that such determination
shall not affect any of the remaining provisions of these Bylaws or render
invalid or improper any action taken or omitted prior to such determination.
If any provision hereof shall be held invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall attach only to such
provision only in such jurisdiction and shall not affect any other provision of
these Bylaws.

         Section 7.  Headings.  Headings are placed in these Bylaws for
convenience of reference only and in case of any conflict, the text of these
Bylaws rather than the headings shall control.

                                  ARTICLE VIII

                                   AMENDMENTS

         Section 1.  Amendments.  These Bylaws may be altered or repealed at
any regular or special meeting of the Board of Trustees without prior notice.
These Bylaws may also be altered or repealed at any special meeting of the
shareholders, but only if the Board of Trustees resolves to put a proposed
alteration or repealer to the vote of the shareholders and notice of such
alteration or repealer is contained in a notice of the special meeting being
held for such purpose.





                                       11

<PAGE>   1
                                                                  EXHIBIT 5(a)
                           AIM INVESTMENT FUNDS, INC.
               INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
                                    BETWEEN
                           AIM INVESTMENT FUNDS, INC.
                                      AND
                              A I M ADVISORS, INC.

         Contract made as of May 29, 1998, between AIM Investment Funds, Inc.,
a Maryland Corporation ("Company"), and A I M Advisors, Inc., a Delaware
corporation (the "Adviser").

         WHEREAS the Company is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company,
and intends to offer for public sale shares of AIM Global Health Care Fund, AIM
Global Telecommunications Fund, AIM Latin American Growth Fund, AIM Emerging
Markets Fund, AIM Global Growth & Income Fund, AIM Global Government Income
Fund, AIM Strategic Income Fund, and AIM Developing Markets Fund, each being a
series of the Company's shares of common stock; and

         WHEREAS the Company hereafter may establish additional series of its
shares of common stock (any such additional series, together with the series
named in the paragraph immediately preceding, are collectively referred to
herein as the "Funds," and singly may be referred to as a "Fund"); and

         WHEREAS the Company desires to retain Adviser as investment manager
and administrator to furnish certain investment advisory, portfolio management
and administration services to the Company and the Funds, and Adviser is
willing to furnish such services;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:

 1.  Appointment.  The Company hereby appoints Adviser as investment manager
and administrator of each Fund for the period and on the terms set forth in
this Contract. Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.

 2.  Duties as Investment Manager.

         (a)     Subject to the supervision of the Company's Board of Directors
("Board"), Adviser will provide a continuous investment program for each Fund,
including investment research and management with respect to all securities and
investments and cash equivalents of the Fund. Adviser will determine from time
to time what securities and other investments will be purchased, retained or
sold by each Fund, and the brokers and dealers through whom trades will be
executed.
<PAGE>   2
         (b)     Adviser agrees that in placing orders with brokers and dealers
it will attempt to obtain the best net results in terms of price and execution.
Consistent with this obligation Adviser may, in its discretion, purchase and
sell portfolio securities to and from brokers and dealers who sell shares of
the Funds or provide the Funds or Adviser's other clients with research,
analysis, advice and similar services. Adviser may pay to brokers and dealers,
in return for research and analysis, a higher commission or spread than may be
charged by other brokers and dealers, subject to Adviser's determining in good
faith that such commission or spread is reasonable in terms either of the
particular transaction or of the overall responsibility of Adviser to the Funds
and its other clients and that the total commissions or spreads paid by each
Fund will be reasonable in relation to the benefits to the Fund over the long
term.  In no instance will portfolio securities be purchased from or sold to
Adviser or any affiliated person thereof except in accordance with the federal
securities laws and the rules and regulations thereunder and any exemptive
orders currently in effect. Whenever Adviser simultaneously places orders to
purchase or sell the same security on behalf of a Fund and one or more other
accounts advised by Adviser, such orders will be allocated as to price and
amount among all such accounts in a manner believed to be equitable to each
account. The Company recognizes that in some cases this procedure may adversely
affect the results obtained for each Fund.

         (c)     Adviser will oversee the maintenance of all books and records
with respect to the securities transactions of the Funds, and will furnish the
Board with such periodic and special reports as the Board reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
Adviser hereby agrees that all records which it maintains for the Company are
the property of the Company, agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any records which it maintains for the Company
and which are required to be maintained by Rule 31a-1 under the 1940 Act, and
further agrees to surrender promptly to the Company any records which it
maintains for the Company upon request by the Company.

 3.  Duties as Administrator.  Adviser will administer the affairs of each Fund
subject to the supervision of the Board and the following understandings:

         (a)     Adviser will supervise all aspects of the operations of each
Fund, including the oversight of transfer agency and custodial services, except
as hereinafter set forth; provided, however, that nothing herein contained
shall be deemed to relieve or deprive the Board of its responsibility for
control of the conduct of the affairs of the Funds.

         (b)     At Adviser's expense, Adviser will provide the Company and the
Funds with such corporate, administrative and clerical personnel (including
officers of the Company) and services as are reasonably deemed necessary or
advisable by the Board.

         (c)     Adviser will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of each Fund's
prospectus, statement of additional information, proxy material, tax returns
and required reports with or to the Fund's
<PAGE>   3
shareholders, the Securities and Exchange Commission and other appropriate
federal or state regulatory authorities.

         (d)     Adviser will provide the Company and the Funds with, or obtain
for them, adequate office space and all necessary office equipment and
services, including telephone service, heat, utilities, stationery supplies and
similar items.

 4.  Further Duties.  In all matters relating to the performance of this
Contract, Adviser will act in conformity with the Articles of Incorporation,
By-Laws and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.

 5.  Delegation of Adviser's Duties as Investment Manager and Administrator.
With respect to one or more of the Funds, Adviser may enter into one or more
contracts ("Sub-Advisory or Sub-Administration Contract") with a sub-adviser or
sub-administrator in which Adviser delegates to such sub-adviser or
sub-administrator the performance of any or all of the services specified in
Paragraphs 2 and 3 of this Contract, provided that: (i) each Sub-Advisory and
Sub-Administration Contract imposes on the sub-adviser or sub-administrator
bound thereby all the duties and conditions to which Adviser is subject with
respect to the services under Paragraphs 2, 3 and 4 of this Contract; (ii) each
Sub-Advisory and Sub-Administration Contract meets all requirements of the 1940
Act and rules thereunder, and (iii) Adviser shall not enter into a Sub-Advisory
or Sub-Administration Contract unless it is approved by the Board prior to
implementation.

 6.  Services Not Exclusive.  The services furnished by Adviser hereunder are
not to be deemed exclusive and Adviser shall be free to furnish similar
services to others so long as its services under this Contract are not impaired
thereby. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of Adviser, who may also be a Director, officer
or employee of the Company, to engage in any other business or to devote his or
her time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature.

 7.  Expenses.

         (a)     During the term of this Contract, each Fund will bear all
expenses, not specifically assumed by Adviser, incurred in its operations and
the offering of its shares.

         (b)     Expenses borne by each Fund will include but not be limited to
the following: (i) all direct charges relating to the purchase and sale of
portfolio securities, including the cost (including brokerage commissions, if
any) of securities purchased or sold by the Fund and any losses incurred in
connection therewith; (ii) fees payable to and expenses incurred on behalf of
the Fund by Adviser under this Contract; (iii) investment consulting fees and
related costs; (iv) expenses of organizing the Company and the Fund; (v)
expenses of preparing filing reports and other documents with governmental and
<PAGE>   4
regulatory agencies; (vi) filing fees and expenses relating to the registration
and qualification of the Fund's shares and the Company under federal and/or
state securities laws and maintaining such registrations and qualifications;
(vii) costs incurred in connection with the issuance, sale or repurchase of the
Fund's shares of common stock; (viii) fees and salaries payable to the
Company's Directors who are not parties to this Contract or interested persons
of any such party ("Independent Directors"); (ix) all expenses incurred in
connection with the Independent Directors' services, including travel expenses;
(x) taxes (including any income or franchise taxes) and governmental fees; (xi)
costs of any liability, uncollectible items of deposit and other insurance and
fidelity bonds; (xii) any costs, expenses or losses arising out of a liability
of or claim for damages or other relief asserted against the Company or the
Fund for violation of any law; (xiii) interest charges; (xiv) legal, accounting
and auditing expenses, including legal fees of special counsel for the
Independent Directors; (xv) charges of custodians, transfer agents, pricing
agents and other agents; (xvi) expenses of disbursing dividends and
distributions; (xvii) costs of preparing share certificates; (xviii) expenses
of setting in type, printing and mailing prospectuses and supplements thereto,
statements of additional information and supplements thereto, reports, notices
and proxy materials for existing shareholders; (xix) any extraordinary expenses
(including fees and disbursements of counsel, costs of actions, suits or
proceedings to which the Company is a party and the expenses the Company may
incur as a result of its legal obligation to provide indemnification to its
officers, Directors, employees and agents) incurred by the Company or the Fund;
(xx) fees, voluntary assessments and other expenses incurred in connection with
membership in investment company organizations; (xxi) costs of mailing and
tabulating proxies and costs of meetings of shareholders, the Board and any
committees thereof; (xxii) the cost of investment company literature and other
publications provided by the Company to its Directors and officers; and (xxiii)
costs of mailing, stationery and communications equipment.

         (c)     All general expenses of the Company and joint expenses of the
Funds shall be allocated among each Fund on a basis deemed fair and equitable
by Adviser, subject to the Board's supervision.

         (d)     Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Directors of the Company who are not Independent Directors.

         (e)     The payment or assumption by Adviser of any expense of the
Company or any Fund that Adviser is not required by this Contract to pay or
assume shall not obligate Adviser to pay or assume the same or any similar
expense of the Company or any Fund on any subsequent occasion.

 8.  Compensation.

         (a)     For the services provided to a Fund under this Contract, the
Company shall pay the Adviser an annual fee, payable monthly, based upon the
average daily net assets of
<PAGE>   5
such Fund as forth in Appendix A attached hereto. Such compensation shall be
paid solely from the assets of such Fund.

         (b)     For the services provided under this Contract, each Fund as
hereafter may be established will pay to Adviser a fee in an amount to be
agreed upon in a written Appendix to this Contract executed by the Company on
behalf of such Fund and by Adviser.

         (c)     The fee shall be computed daily and paid monthly to Adviser on
or before the last business day of the next succeeding calendar month.

         (d)     If this Contract becomes effective or terminates before the
end of any month, the fee for the period from the effective date to the end of
the month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such
period bears to the full month in which such effectiveness or termination
occurs.

 9.  Limitation of Liability of Adviser and Indemnification.  Adviser shall not
be liable and each Fund shall indemnify Adviser and its directors, officers and
employees, for any costs or liabilities arising from any error of judgment or
mistake of law or any loss suffered by the Fund or the Company in connection
with the matters to which this Contract relates except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Adviser in
the performance by Adviser of its duties or from reckless disregard by Adviser
of its obligations and duties under this Contract. Any person, even though also
an officer, partner, employee, or agent of Adviser, who may be or become an
officer, Director, employee or agent of the Company shall be deemed, when
rendering services to a Fund or the Company or acting with respect to any
business of a Fund or the Company, to be rendering such service to or acting
solely for the Fund or the Company and not as an officer, partner, employee, or
agent or one under the control or direction of Adviser even though paid by it.

 10.  Duration and Termination.

         (a)     This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to any
Fund unless it has first been approved (i) by a vote of a majority of the
Independent Directors, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of that Fund's
outstanding voting securities.

         (b)     Unless sooner terminated as provided herein, this Contract
shall continue in effect for two years from the above written date. Thereafter,
if not terminated, with respect to each Fund this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Directors, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of that Fund.
<PAGE>   6
         (c)     Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Fund on sixty days' written notice to Adviser or by Adviser
at any time, without the payment of any penalty, on sixty days' written notice
to the Company. Termination of this Contract with respect to one Fund shall not
affect the continued effectiveness of this Contract with respect to any other
Fund. This Contract will automatically terminate in the event of its
assignment.

 11.  Amendment of this Contract.  No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Contract shall be
effective until approved by vote of a majority of the Fund's outstanding voting
securities, when required by the 1940 Act.

 12.  Governing Law.  This Contract shall be construed in accordance with the
laws of the State of Delaware (without regard to Delaware conflict or choice of
law provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.

 13.  License Agreement.  The Company shall have the non-exclusive right to use
the name "AIM" to designate any current or future series of shares only so long
as A I M Advisors, Inc. serves as investment manager or adviser to the Company
with respect to such series of shares.

  14.  Miscellaneous.  The captions in this Contract are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be
affected thereby. This Contract shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors. As used in this
Contract, the terms "majority of the outstanding voting securities,"
"interested person," "assignment," "broker," "dealer," "investment adviser,"
"national securities exchange," "net assets," "prospectus," "sale," "sell" and
"security" shall have the same meaning as such terms have in the 1940 Act,
subject to such exemption as may be granted by the Securities and Exchange
Commission by any rule, regulation or order.  Where the effect of a requirement
of the 1940 Act reflected in any provision of this Contract is made less
restrictive by a rule, regulation or order of the Securities and Exchange
Commission, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
<PAGE>   7
         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.


<TABLE>                                    
  <S>    <C>                               <C>
  Attest: /s/ MICHAEL A. SILVER        AIM INVESTMENT FUNDS, INC.
         ------------------------
              Michael A. Silver       
             Assistant Secretary         By: /s/ HELGE K. LEE
                                            -------------------------
                                         Name: Helge K. Lee
                                         Title:   Vice President and Secretary
                                      
  Attest: /s/ KATHLEEN J. PFLUEGER       A I M ADVISORS, INC.
         -------------------------                                      
    Name: Kathleen J. Pflueger           By: /s/ CAROL F. RELIHAN
   Title: Assistant Secretary               -------------------------
                                         Name: Carol F. Relihan
                                         Title: Senior Vice President
</TABLE>




<PAGE>   8
                                   APPENDIX A
                                       TO
               INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
                                       OF
                           AIM INVESTMENT FUNDS, INC.

         The Company shall pay the Adviser, out of the assets of a Fund, as
full compensation for all services rendered and all facilities furnished
hereunder, a management fee for such Fund set forth below. Such fee shall be
calculated by applying the following annual rates to the average daily net
assets of such Fund for the calendar year computed in the manner used for the
determination of the net asset value of shares of such Fund.

  AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM LATIN
                  AMERICAN GROWTH FUND, AIM EMERGING MARKETS
       FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM DEVELOPING MARKETS FUND



<TABLE>
<CAPTION>
NET ASSETS                                                           ANNUAL RATE
- ----------                                                           -----------
<S>                                                                     <C>
First $ 500 million . . . . . . . . . . . . . . . . . . . . . .          0.975%
Next $ 500 million  . . . . . . . . . . . . . . . . . . . . . .           0.95%
Next $ 500 million  . . . . . . . . . . . . . . . . . . . . . .          0.925%
On amounts thereafter . . . . . . . . . . . . . . . . . . . . .           0.90%
</TABLE>

          AIM GLOBAL GOVERNMENT INCOME FUND, AIM STRATEGIC INCOME FUND



<TABLE>
<CAPTION>
NET ASSETS                                                           ANNUAL RATE
- ----------                                                                     
<S>                                                                  <C>
First $ 500 million . . . . . . . . . . . . . . . . . . . . . .          0.725%
Next $ 1 billion  . . . . . . . . . . . . . . . . . . . . . . .           0.70%
Next $ 1 billion  . . . . . . . . . . . . . . . . . . . . . . .          0.675%
On amounts thereafter . . . . . . . . . . . . . . . . . . . . .           0.65%
</TABLE>






<PAGE>   1
                                                                    EXHIBIT 5(b)


                              AIM INVESTMENT FUNDS
                INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
                                     BETWEEN
                              AIM INVESTMENT FUNDS
                                       AND
                              A I M ADVISORS, INC.


         Contract made as of September 8, 1998, between AIM Investment Funds, a
Delaware business trust ("Company"), and A I M Advisors, Inc., a Delaware
corporation (the "Adviser").

         WHEREAS the Company is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company, and
intends to offer for public sale shares of AIM Global Health Care Fund, AIM
Global Telecommunications Fund, AIM Latin American Growth Fund, AIM Emerging
Markets Fund, AIM Global Growth & Income Fund, AIM Global Government Income
Fund, AIM Strategic Income Fund, and AIM Developing Markets Fund, each being a
series of the Company's shares of common stock; and

         WHEREAS the Company hereafter may establish additional series of its
shares of common stock (any such additional series, together with the series
named in the paragraph immediately preceding, are collectively referred to
herein as the "Funds," and singly may be referred to as a "Fund"); and

         WHEREAS the Company desires to retain Adviser as investment manager and
administrator to furnish certain investment advisory, portfolio management and
administration services to the Company and the Funds, and Adviser is willing to
furnish such services;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:

 1. Appointment. The Company hereby appoints Adviser as investment manager and
administrator of each Fund for the period and on the terms set forth in this
Contract. Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.

 2. Duties as Investment Manager.

         (a) Subject to the supervision of the Company's Board of Trustees
("Board"), Adviser will provide a continuous investment program for each Fund,
including investment research and management with respect to all securities 
and investments and cash equivalents of the Fund. Adviser will determine from 
time to time what securities and other investments will be purchased, 
retained or sold by each Fund, and the brokers and dealers through whom 
trades will be executed.

<PAGE>   2

         (b) Adviser agrees that in placing orders with brokers and dealers it
will attempt to obtain the best net results in terms of price and execution.
Consistent with this obligation Adviser may, in its discretion, purchase and
sell portfolio securities to and from brokers and dealers who sell shares of the
Funds or provide the Funds or Adviser's other clients with research, analysis,
advice and similar services. Adviser may pay to brokers and dealers, in return
for research and analysis, a higher commission or spread than may be charged by
other brokers and dealers, subject to Adviser's determining in good faith that
such commission or spread is reasonable in terms either of the particular
transaction or of the overall responsibility of Adviser to the Funds and its
other clients and that the total commissions or spreads paid by each Fund will
be reasonable in relation to the benefits to the Fund over the long term. In no
instance will portfolio securities be purchased from or sold to Adviser or any
affiliated person thereof except in accordance with the federal securities laws
and the rules and regulations thereunder and any exemptive orders currently in
effect. Whenever Adviser simultaneously places orders to purchase or sell the
same security on behalf of a Fund and one or more other accounts advised by
Adviser, such orders will be allocated as to price and amount among all such
accounts in a manner believed to be equitable to each account. The Company
recognizes that in some cases this procedure may adversely affect the results
obtained for each Fund.

         (c) Adviser will oversee the maintenance of all books and records with
respect to the securities transactions of the Funds, and will furnish the Board
with such periodic and special reports as the Board reasonably may request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, Adviser
hereby agrees that all records which it maintains for the Company are the
property of the Company, agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act any records which it maintains for the Company and
which are required to be maintained by Rule 31a-1 under the 1940 Act, and
further agrees to surrender promptly to the Company any records which it
maintains for the Company upon request by the Company.

 3. Duties as Administrator. Adviser will administer the affairs of each Fund
subject to the supervision of the Board and the following understandings:

         (a) Adviser will supervise all aspects of the operations of each Fund,
including the oversight of transfer agency and custodial services, except as
hereinafter set forth; provided, however, that nothing herein contained shall be
deemed to relieve or deprive the Board of its responsibility for control of the
conduct of the affairs of the Funds.

         (b) At Adviser's expense, Adviser will provide the Company and the
Funds with such corporate, administrative and clerical personnel (including
officers of the Company) and services as are reasonably deemed necessary or
advisable by the Board.

         (c) Adviser will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of each Fund's prospectus,
statement of additional information, proxy material, tax returns and required
reports with or to the Fund's 

<PAGE>   3

shareholders, the Securities and Exchange Commission and other appropriate
federal or state regulatory authorities.

         (d) Adviser will provide the Company and the Funds with, or obtain for
them, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.

 4. Further Duties. In all matters relating to the performance of this Contract,
Adviser will act in conformity with the Articles of Incorporation, By-Laws and
Registration Statement of the Company and with the instructions and directions
of the Board and will comply with the requirements of the 1940 Act, the rules
thereunder, and all other applicable federal and state laws and regulations.

 5. Delegation of Adviser's Duties as Investment Manager and Administrator. With
respect to one or more of the Funds, Adviser may enter into one or more
contracts ("Sub-Advisory or Sub-Administration Contract") with a sub-adviser or
sub-administrator in which Adviser delegates to such sub-adviser or
sub-administrator the performance of any or all of the services specified in
Paragraphs 2 and 3 of this Contract, provided that: (i) each Sub-Advisory and
Sub-Administration Contract imposes on the sub-adviser or sub-administrator
bound thereby all the duties and conditions to which Adviser is subject with
respect to the services under Paragraphs 2, 3 and 4 of this Contract; (ii) each
Sub-Advisory and Sub-Administration Contract meets all requirements of the 1940
Act and rules thereunder, and (iii) Adviser shall not enter into a Sub-Advisory
or Sub-Administration Contract unless it is approved by the Board prior to
implementation.

 6. Services Not Exclusive. The services furnished by Adviser hereunder are not
to be deemed exclusive and Adviser shall be free to furnish similar services to
others so long as its services under this Contract are not impaired thereby.
Nothing in this Contract shall limit or restrict the right of any director,
officer or employee of Adviser, who may also be a Trustee, officer or employee
of the Company, to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature.

 7.  Expenses.

         (a) During the term of this Contract, each Fund will bear all expenses,
not specifically assumed by Adviser, incurred in its operations and the offering
of its shares.

         (b) Expenses borne by each Fund will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Fund and any losses incurred in connection
therewith; (ii) fees payable to and expenses incurred on behalf of the Fund by
Adviser under this Contract; (iii) investment consulting fees and related costs;
(iv) expenses of organizing the Company and the Fund; (v) expenses of preparing
filing reports and other documents with governmental and 

<PAGE>   4

regulatory agencies; (vi) filing fees and expenses relating to the registration
and qualification of the Fund's shares and the Company under federal and/or
state securities laws and maintaining such registrations and qualifications;
(vii) costs incurred in connection with the issuance, sale or repurchase of the
Fund's shares of common stock; (viii) fees and salaries payable to the Company's
Trustees who are not parties to this Contract or interested persons of any such
party ("Independent Trustees"); (ix) all expenses incurred in connection with
the Independent Trustees' services, including travel expenses; (x) taxes
(including any income or franchise taxes) and governmental fees; (xi) costs of
any liability, uncollectible items of deposit and other insurance and fidelity
bonds; (xii) any costs, expenses or losses arising out of a liability of or
claim for damages or other relief asserted against the Company or the Fund for
violation of any law; (xiii) interest charges; (xiv) legal, accounting and
auditing expenses, including legal fees of special counsel for the Independent
Trustees; (xv) charges of custodians, transfer agents, pricing agents and other
agents; (xvi) expenses of disbursing dividends and distributions; (xvii) costs
of preparing share certificates; (xviii) expenses of setting in type, printing
and mailing prospectuses and supplements thereto, statements of additional
information and supplements thereto, reports, notices and proxy materials for
existing shareholders; (xix) any extraordinary expenses (including fees and
disbursements of counsel, costs of actions, suits or proceedings to which the
Company is a party and the expenses the Company may incur as a result of its
legal obligation to provide indemnification to its officers, Trustees, employees
and agents) incurred by the Company or the Fund; (xx) fees, voluntary
assessments and other expenses incurred in connection with membership in
investment company organizations; (xxi) costs of mailing and tabulating proxies
and costs of meetings of shareholders, the Board and any committees thereof;
(xxii) the cost of investment company literature and other publications provided
by the Company to its Trustees and officers; and (xxiii) costs of mailing,
stationery and communications equipment.

         (c) All general expenses of the Company and joint expenses of the Funds
shall be allocated among each Fund on a basis deemed fair and equitable by
Adviser, subject to the Board's supervision.

         (d) Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Trustees of the Company who are not Independent Trustees.

         (e) The payment or assumption by Adviser of any expense of the Company
or any Fund that Adviser is not required by this Contract to pay or assume shall
not obligate Adviser to pay or assume the same or any similar expense of the
Company or any Fund on any subsequent occasion.

 8.  Compensation.

         (a) For the services provided to a Fund under this Contract, the
Company shall pay the Adviser an annual fee, payable monthly, based upon the
average daily net assets of 

<PAGE>   5

such Fund as forth in Appendix A attached hereto. Such compensation shall be
paid solely from the assets of such Fund.

         (b) For the services provided under this Contract, each Fund as
hereafter may be established will pay to Adviser a fee in an amount to be agreed
upon in a written Appendix to this Contract executed by the Company on behalf of
such Fund and by Adviser.

         (c) The fee shall be computed daily and paid monthly to Adviser on or
before the last business day of the next succeeding calendar month.

         (d) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.

 9. Limitation of Liability of Adviser and Indemnification. Adviser shall not be
liable and each Fund shall indemnify Adviser and its directors, officers and
employees, for any costs or liabilities arising from any error of judgment or
mistake of law or any loss suffered by the Fund or the Company in connection
with the matters to which this Contract relates except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Adviser in the
performance by Adviser of its duties or from reckless disregard by Adviser of
its obligations and duties under this Contract. Any person, even though also an
officer, partner, employee, or agent of Adviser, who may be or become an
officer, Trustee, employee or agent of the Company shall be deemed, when
rendering services to a Fund or the Company or acting with respect to any
business of a Fund or the Company, to be rendering such service to or acting
solely for the Fund or the Company and not as an officer, partner, employee, or
agent or one under the control or direction of Adviser even though paid by it.

 10. Duration and Termination.

         (a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to any
Fund unless it has first been approved (i) by a vote of a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of that Fund's
outstanding voting securities.

         (b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to each Fund this Contract shall continue automatically
for successive periods not to exceed twelve months each, provided that such
continuance is specifically approved at least annually (i) by a vote of a
majority of the Independent Trustees cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by the Board or by vote of a
majority of the outstanding voting securities of that Fund.

<PAGE>   6

         (c) Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Fund on sixty days' written notice to Adviser or by Adviser at
any time, without the payment of any penalty, on sixty days' written notice to
the Company. Termination of this Contract with respect to one Fund shall not
affect the continued effectiveness of this Contract with respect to any other
Fund. This Contract will automatically terminate in the event of its assignment.

 11. Amendment of this Contract. No provision of this Contract may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, and no amendment of this Contract shall be effective
until approved by vote of a majority of the Fund's outstanding voting
securities, when required by the 1940 Act.

 12. Governing Law. This Contract shall be construed in accordance with the laws
of the State of Delaware (without regard to Delaware conflict or choice of law
provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.

 13. License Agreement. The Company shall have the non-exclusive right to use
the name "AIM" to designate any current or future series of shares only so long
as A I M Advisors, Inc. serves as investment manager or adviser to the Company
with respect to such series of shares.

 14. Miscellaneous. The captions in this Contract are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this Contract
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Contract shall not be affected thereby. This Contract
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors. As used in this Contract, the terms "majority of
the outstanding voting securities," "interested person," "assignment," "broker,"
"dealer," "investment adviser," "national securities exchange," "net assets,"
"prospectus," "sale," "sell" and "security" shall have the same meaning as such
terms have in the 1940 Act, subject to such exemption as may be granted by the
Securities and Exchange Commission by any rule, regulation or order. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Contract is made less restrictive by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.


<PAGE>   7


         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.


Attest: /s/ SAMUEL D. SIRKO               AIM INVESTMENT FUNDS
       -----------------------------
Name:       Samuel D. Sirko   
Title:      Assistant Secretary                   
                                          By: /s/ ROBERT H. GRAHAM
                                             -----------------------------
                                          Name:   Robert H. Graham
                                          Title:  President

Attest: /s/ KATHLEEN J. PFLUEGER          A I M ADVISORS, INC.
       -----------------------------
Name:       Kathleen J. Pflueger
Title:      Assistant Secretary 
                                          By: /s/ JOHN J. ARTHUR
                                             -----------------------------
                                          Name:   John J. Arthur
                                          Title:  Senior Vice President


<PAGE>   8



                                   APPENDIX A
                                       TO
                INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
                                       OF
                              AIM INVESTMENT FUNDS

         The Company shall pay the Adviser, out of the assets of a Fund, as full
compensation for all services rendered and all facilities furnished hereunder, a
management fee for such Fund set forth below. Such fee shall be calculated by
applying the following annual rates to the average daily net assets of such Fund
for the calendar year computed in the manner used for the determination of the
net asset value of shares of such Fund.

   AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM LATIN
      AMERICAN GROWTH FUND, AIM EMERGING MARKETS FUND, AIM GLOBAL GROWTH &
                    INCOME FUND, AIM DEVELOPING MARKETS FUND

<TABLE>
<CAPTION>

NET ASSETS                                                                             ANNUAL RATE
- ----------                                                                             -----------
<S>                                                                                    <C>   
First $ 500 million..................................................................... 0.975%
Next $ 500 million......................................................................  0.95%
Next $ 500 million...................................................................... 0.925%
On amounts thereafter...................................................................  0.90%
</TABLE>

          AIM GLOBAL GOVERNMENT INCOME FUND, AIM STRATEGIC INCOME FUND


<TABLE>
<CAPTION>
NET ASSETS                                                                             ANNUAL RATE
- ----------                                                                             -----------
<S>                                                                                      <C>  
First $ 500 million..................................................................... 0.725%
Next $ 1 billion........................................................................  0.70%
Next $ 1 billion........................................................................ 0.675%
On amounts thereafter...................................................................  0.65%
</TABLE>


<PAGE>   1
                                                                  EXHIBIT 5(c)
                            ADMINISTRATION CONTRACT
                                    BETWEEN
                           AIM INVESTMENT FUNDS, INC.
                                      AND
                              A I M ADVISORS, INC.

         Contract made as of May 29, 1998, between AIM Investment Funds, Inc.,
a Maryland Corporation ("Company"), and A I M Advisors, Inc., a Delaware
corporation (the "Administrator").

         WHEREAS the Company is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company,
and offers for public sale shares of AIM Global Consumer Products and Services
Fund, AIM Global Financial Services Fund, AIM Global Infrastructure Fund, AIM
Global Resources Fund and AIM Global High Income Fund, each being a series of
the Company's shares of common stock; and

         WHEREAS the Company hereafter may establish additional series of its
shares of common stock that invest substantially all of their assets in another
investment company (any such additional series, together with the series named
in the paragraph immediately preceding, are collectively referred to herein as
the "Funds," and singly may be referred to as a "Fund"); and

         WHEREAS the Company desires to retain Administrator as administrator
to furnish certain administration services to the Company and the Funds, and
Administrator is willing to furnish such services;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:

 1.  Appointment.  The Company hereby appoints Administrator as administrator
of each Fund for the period and on the terms set forth in this Contract.
Administrator accepts such appointment and agrees to render the services herein
set forth, for the compensation herein provided.

 2.  Duties as Administrator.  Administrator will administer the affairs of
each Fund subject to the supervision of the Company's Board of Directors
("Board") and the following understandings:

         (a)     Administrator will supervise all aspects of the operations of
each Fund, including the oversight of transfer agency and custodial services,
except as hereinafter set forth; provided, however, that nothing herein
contained shall be deemed to relieve or deprive the Board of its responsibility
for control of the conduct of the affairs of the Funds.
<PAGE>   2
         (b)     At Administrator's expense, Administrator will provide the
Company and the Funds with such corporate, administrative and clerical
personnel (including officers of the Company) and services as are reasonably
deemed necessary or advisable by the Board.

         (c)     Administrator will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of each Fund's
prospectus, statement of additional information, proxy material, tax returns
and required reports with or to the Fund's shareholders, the Securities and
Exchange Commission and other appropriate federal or state regulatory
authorities.

         (d)     Administrator will provide the Company and the Funds with, or
obtain for them, adequate office space and all necessary office equipment and
services, including telephone service, heat, utilities, stationery supplies and
similar items.

 3.  Further Duties.  In all matters relating to the performance of this
Contract, Administrator will act in conformity with the Articles of
Incorporation, By-Laws and Registration Statement of the Company and with the
instructions and directions of the Board and will comply with the requirements
of the 1940 Act, the rules thereunder, and all other applicable federal and
state laws and regulations.

 4.  Delegation of Administrator's Duties as Administrator.  With respect to
one or more of the Funds, Administrator may enter into one or more contracts
(each a "Sub-Administration Contract") with a sub-administrator pursuant to
which Administrator delegates to such sub-administrator the performance of any
or all of the services specified in Paragraph 2 of this Contract, provided
that: (i) each Sub-Administration Contract imposes on the sub-administrator
bound thereby all the duties and conditions to which Administrator is subject
with respect to the services under Paragraphs 2 and 3 of this Contract; (ii)
each Sub-Administration Contract meets all requirements of the 1940 Act and
rules thereunder, and (iii) Administrator shall not enter into a
Sub-Administration Contract unless it is approved by the Board prior to
implementation.

 5.  Services Not Exclusive.  The services furnished by Administrator hereunder
are not to be deemed exclusive and Administrator shall be free to furnish
similar services to others so long as its services under this Contract are not
impaired thereby. Nothing in this Contract shall limit or restrict the right of
any director, officer or employee of Administrator, who may also be a Director,
officer or employee of the Company, to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any other business, whether of a similar nature or a dissimilar nature.

 6.  Expenses.

         (a)     During the term of this Contract, each Fund will bear all
expenses, not specifically assumed by Administrator, incurred in its operations
and the offering of its shares.




                                      2
<PAGE>   3
         (b)     Expenses borne by each Fund will include but not be limited to
the following: (i) all direct charges relating to the purchase and sale of
portfolio securities, including the cost (including brokerage commissions, if
any) of securities purchased or sold by the Fund and any losses incurred in
connection therewith; (ii) fees payable to and expenses incurred on behalf of
the Fund by Administrator under this Contract; (iii) investment consulting fees
and related costs; (iv) expenses of organizing the Company and the Fund; (v)
expenses of preparing filing reports and other documents with governmental and
regulatory agencies; (vi) filing fees and expenses relating to the registration
and qualification of the Fund's shares and the Company under federal and/or
state securities laws and maintaining such registrations and qualifications;
(vii) costs incurred in connection with the issuance, sale or repurchase of the
Fund's shares of common stock; (viii) fees and salaries payable to the
Company's Directors who are not parties to this Contract or interested persons
of any such party ("Independent Directors"); (ix) all expenses incurred in
connection with the Independent Directors' services, including travel expenses;
(x) taxes (including any income or franchise taxes) and governmental fees; (xi)
costs of any liability, uncollectible items of deposit and other insurance and
fidelity bonds; (xii) any costs, expenses or losses arising out of a liability
of or claim for damages or other relief asserted against the Company or the
Fund for violation of any law; (xiii) interest charges; (xiv) legal, accounting
and auditing expenses, including legal fees of special counsel for the
Independent Directors; (xv) charges of custodians, transfer agents, pricing
agents and other agents; (xvi) expenses of disbursing dividends and
distributions; (xvii) costs of preparing share certificates; (xviii) expenses
of setting in type, printing and mailing prospectuses and supplements thereto,
statements of additional information and supplements thereto, reports, notices
and proxy materials for existing shareholders; (xix) any extraordinary expenses
(including fees and disbursements of counsel, costs of actions, suits or
proceedings to which the Company is a party and the expenses the Company may
incur as a result of its legal obligation to provide indemnification to its
officers, Directors, employees and agents) incurred by the Company or the Fund;
(xx) fees, voluntary assessments and other expenses incurred in connection with
membership in investment company organizations; (xxi) costs of mailing and
tabulating proxies and costs of meetings of shareholders, the Board and any
committees thereof; (xxii) the cost of investment company literature and other
publications provided by the Company to its Directors and officers; and (xxiii)
costs of mailing, stationery and communications equipment.

         (c)     All general expenses of the Company and joint expenses of the
Funds shall be allocated among each Fund on a basis deemed fair and equitable
by Administrator, subject to the Board's supervision.

         (d)     Administrator will assume the cost of any compensation for
services provided to the Company received by the officers of the Company and by
the Directors of the Company who are not Independent Directors.

         (e)     The payment or assumption by Administrator of any expense of
         the Company or any Fund that Administrator is not required by this
         Contract to pay or




                                      3
<PAGE>   4
         assume shall not obligate Administrator to pay or assume the same or
         any similar expense of the Company or any Fund on any subsequent
         occasion.

 7.  Compensation.

         (a)     For the services provided to a Fund under this Contract, the
Company shall pay the Administrator an annual fee, payable monthly, based upon
the average daily net assets of such Fund as forth in Appendix A attached
hereto. Such compensation shall be paid solely from the assets of such Fund.

         (b)     For the services provided under this Contract, each Fund as
hereafter may be established will pay to Administrator a fee in an amount to be
agreed upon in a written Appendix to this Contract executed by the Company on
behalf of such Fund and by Administrator.

         (c)     The fee shall be computed daily and paid monthly to
Administrator on or before the last business day of the next succeeding
calendar month.

         (d)     If this Contract becomes effective or terminates before the
end of any month, the fee for the period from the effective date to the end of
the month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such
period bears to the full month in which such effectiveness or termination
occurs.

 8.  Limitation of Liability of Administrator and Indemnification.
Administrator shall not be liable and each Fund shall indemnify Administrator
and its directors, officers and employees, for any costs or liabilities arising
from any error of judgment or mistake of law or any loss suffered by the Fund
or the Company in connection with the matters to which this Contract relates
except a loss resulting from willful misfeasance, bad faith or gross negligence
on the part of Administrator in the performance by Administrator of its duties
or from reckless disregard by Administrator of its obligations and duties under
this Contract. Any person, even though also an officer, partner, employee, or
agent of Administrator, who may be or become an officer, Director, employee or
agent of the Company shall be deemed, when rendering services to a Fund or the
Company or acting with respect to any business of a Fund or the Company, to be
rendering such service to or acting solely for the Fund or the Company and not
as an officer, partner, employee, or agent or one under the control or
direction of Administrator even though paid by it.

 9.  Duration and Termination.

         (a)     This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to any
Fund unless it has first been approved by a vote of a majority of the Company's
Directors.




                                      4
<PAGE>   5
         (b)     Unless sooner terminated as provided herein, this Contract
shall continue in effect for two years from the above written date. Thereafter,
if not terminated, with respect to each Fund this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually by the
Company's Board.

         (c)     Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Fund on sixty days' written notice to Administrator or by
Administrator at any time, without the payment of any penalty, on sixty days'
written notice to the Company. Termination of this Contract with respect to one
Fund shall not affect the continued effectiveness of this Contract with respect
to any other Fund. This Contract will automatically terminate in the event of
its assignment.

 10.  Amendment of this Contract.  No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.

 11.  Governing Law.  This Contract shall be construed in accordance with the
laws of the State of Delaware (without regard to Delaware conflict or choice of
law provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.

 12.  Miscellaneous.  The captions in this Contract are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be
affected thereby. This Contract shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors. As used in this
Contract, the terms "majority of the outstanding voting securities,"
"interested person," "assignment," "broker," "dealer," "investment adviser,"
"national securities exchange," "net assets," "prospectus," "sale," "sell" and
"security" shall have the same meaning as such terms have in the 1940 Act,
subject to such exemption as may be granted by the Securities and Exchange
Commission by any rule, regulation or order.  Where the effect of a requirement
of the 1940 Act reflected in any provision of this Contract is made less
restrictive by a rule, regulation or order of the Securities and Exchange
Commission, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.




                                      5
<PAGE>   6
         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.


<TABLE>
  <S>    <C>                             <C>
  Attest: /s/ MICHAEL A. SILVER        AIM INVESTMENT FUNDS, INC.
         ------------------------
              Michael A. Silver       
             Assistant Secretary         By: /s/ HELGE K. LEE
                                            -------------------------
                                         Name: Helge K. Lee
                                         Title:   Vice President and Secretary
                                      
  Attest: /s/ KATHLEEN J. PFLUEGER       A I M ADVISORS, INC.
         -------------------------                                      
    Name: Kathleen J. Pflueger           By: /s/ CAROL F. RELIHAN
   Title: Assistant Secretary               -------------------------
                                         Name: Carol F. Relihan
                                         Title: Senior Vice President

</TABLE>




                                      6
<PAGE>   7
                                   APPENDIX A
                                       TO
                            ADMINISTRATION CONTRACT
                                       OF
                           AIM INVESTMENT FUNDS, INC.

         The Company shall pay the Administrator, out of the assets of a Fund,
as full compensation for all services rendered and all facilities furnished
hereunder, an administration fee for such Fund set forth below. Such fee shall
be calculated by applying the following annual rates to the average daily net
assets of such Fund for the calendar year computed in the manner used for the
determination of the net asset value of shares of such Fund.


<TABLE>
<CAPTION>
FUND                                                                 ANNUAL RATE
- ----                                                                 -----------
<S>                                                                  <C>
AIM Global Consumer Products and Services Fund                          0.25%
AIM Global Financial Services Fund                                      0.25%
AIM Global Infrastructure Fund                                          0.25%
AIM Global Resources Fund                                               0.25%
AIM Global High Income Fund                                             0.25%
</TABLE>




                                      7

<PAGE>   1
                                                                    EXHIBIT 5(d)


                             ADMINISTRATION CONTRACT
                                     BETWEEN
                              AIM INVESTMENT FUNDS
                                       AND
                              A I M ADVISORS, INC.


         Contract made as of September 8, 1998, between AIM Investment Funds, a
Delaware business trust ("Company"), and A I M Advisors, Inc., a Delaware
corporation (the "Administrator").

         WHEREAS the Company is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company, and
offers for public sale shares of AIM Global Consumer Products and Services Fund,
AIM Global Financial Services Fund, AIM Global Infrastructure Fund, AIM Global
Resources Fund and AIM Emerging Markets Debt Fund (formerly known as AIM Global 
High Income Fund), each being a series of the Company's shares of common stock; 
and

         WHEREAS the Company hereafter may establish additional series of its
shares of common stock that invest substantially all of their assets in another
investment company (any such additional series, together with the series named
in the paragraph immediately preceding, are collectively referred to herein as
the "Funds," and singly may be referred to as a "Fund"); and

         WHEREAS the Company desires to retain Administrator as administrator to
furnish certain administration services to the Company and the Funds, and
Administrator is willing to furnish such services;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:

 1. Appointment. The Company hereby appoints Administrator as administrator of
each Fund for the period and on the terms set forth in this Contract.
Administrator accepts such appointment and agrees to render the services herein
set forth, for the compensation herein provided.

 2. Duties as Administrator. Administrator will administer the affairs of each
Fund subject to the supervision of the Company's Board of Trustees ("Board")
and the following understandings:

         (a) Administrator will supervise all aspects of the operations of each
Fund, including the oversight of transfer agency and custodial services, except
as hereinafter set forth; provided, however, that nothing herein contained shall
be deemed to relieve or deprive the Board of its responsibility for control of
the conduct of the affairs of the Funds.

<PAGE>   2

         (b) At Administrator's expense, Administrator will provide the Company
and the Funds with such corporate, administrative and clerical personnel
(including officers of the Company) and services as are reasonably deemed
necessary or advisable by the Board.

         (c) Administrator will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of each Fund's
prospectus, statement of additional information, proxy material, tax returns and
required reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.

         (d) Administrator will provide the Company and the Funds with, or
obtain for them, adequate office space and all necessary office equipment and
services, including telephone service, heat, utilities, stationery supplies and
similar items.

 3. Further Duties. In all matters relating to the performance of this Contract,
Administrator will act in conformity with the Articles of Incorporation, By-Laws
and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.

 4. Delegation of Administrator's Duties as Administrator. With respect to one
or more of the Funds, Administrator may enter into one or more contracts
(each a "Sub-Administration Contract") with a sub-administrator pursuant to
which Administrator delegates to such sub-administrator the performance of any 
or all of the services specified in Paragraph 2 of this Contract, provided that:
(i) each Sub-Administration Contract imposes on the sub-administrator bound 
thereby all the duties and conditions to which Administrator is subject with 
respect to the services under Paragraphs 2 and 3 of this Contract; (ii) each 
Sub-Administration Contract meets all requirements of the 1940 Act and rules 
thereunder, and (iii) Administrator shall not enter into a Sub-Administration 
Contract unless it is approved by the Board prior to implementation.

 5. Services Not Exclusive. The services furnished by Administrator hereunder
are not to be deemed exclusive and Administrator shall be free to furnish
similar services to others so long as its services under this Contract are not
impaired thereby. Nothing in this Contract shall limit or restrict the right of
any director, officer or employee of Administrator, who may also be a Trustee,
officer or employee of the Company, to engage in any other business or to devote
his or her time and attention in part to the management or other aspects of any
other business, whether of a similar nature or a dissimilar nature.

 6.  Expenses.

         (a) During the term of this Contract, each Fund will bear all expenses,
not specifically assumed by Administrator, incurred in its operations and the
offering of its shares.




                                       2
<PAGE>   3

         (b) Expenses borne by each Fund will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Fund and any losses incurred in connection
therewith; (ii) fees payable to and expenses incurred on behalf of the Fund by
Administrator under this Contract; (iii) investment consulting fees and related
costs; (iv) expenses of organizing the Company and the Fund; (v) expenses of
preparing filing reports and other documents with governmental and regulatory
agencies; (vi) filing fees and expenses relating to the registration and
qualification of the Fund's shares and the Company under federal and/or state
securities laws and maintaining such registrations and qualifications; (vii)
costs incurred in connection with the issuance, sale or repurchase of the Fund's
shares of common stock; (viii) fees and salaries payable to the Company's
Trustees who are not parties to this Contract or interested persons of any such
party ("Independent Trustees"); (ix) all expenses incurred in connection with
the Independent Trustees' services, including travel expenses; (x) taxes
(including any income or franchise taxes) and governmental fees; (xi) costs of
any liability, uncollectible items of deposit and other insurance and fidelity
bonds; (xii) any costs, expenses or losses arising out of a liability of or
claim for damages or other relief asserted against the Company or the Fund for
violation of any law; (xiii) interest charges; (xiv) legal, accounting and
auditing expenses, including legal fees of special counsel for the Independent
Trustees; (xv) charges of custodians, transfer agents, pricing agents and other
agents; (xvi) expenses of disbursing dividends and distributions; (xvii) costs
of preparing share certificates; (xviii) expenses of setting in type, printing
and mailing prospectuses and supplements thereto, statements of additional
information and supplements thereto, reports, notices and proxy materials for
existing shareholders; (xix) any extraordinary expenses (including fees and
disbursements of counsel, costs of actions, suits or proceedings to which the
Company is a party and the expenses the Company may incur as a result of its
legal obligation to provide indemnification to its officers, Trustees, employees
and agents) incurred by the Company or the Fund; (xx) fees, voluntary
assessments and other expenses incurred in connection with membership in
investment company organizations; (xxi) costs of mailing and tabulating proxies
and costs of meetings of shareholders, the Board and any committees thereof;
(xxii) the cost of investment company literature and other publications provided
by the Company to its Trustees and officers; and (xxiii) costs of mailing,
stationery and communications equipment.

         (c) All general expenses of the Company and joint expenses of the Funds
shall be allocated among each Fund on a basis deemed fair and equitable by
Administrator, subject to the Board's supervision.

         (d) Administrator will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Trustees of the Company who are not Independent Trustees.

         (e) The payment or assumption by Administrator of any expense of the
Company or any Fund that Administrator is not required by this Contract to pay
or 




                                       3
<PAGE>   4
assume shall not obligate Administrator to pay or assume the same or any
similar expense of the Company or any Fund on any subsequent occasion.

 7.  Compensation.

         (a) For the services provided to a Fund under this Contract, the
Company shall pay the Administrator an annual fee, payable monthly, based upon
the average daily net assets of such Fund as forth in Appendix A attached
hereto. Such compensation shall be paid solely from the assets of such Fund.

         (b) For the services provided under this Contract, each Fund as
hereafter may be established will pay to Administrator a fee in an amount to be
agreed upon in a written Appendix to this Contract executed by the Company on
behalf of such Fund and by Administrator.

         (c) The fee shall be computed daily and paid monthly to Administrator
on or before the last business day of the next succeeding calendar month.

         (d) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.

 8. Limitation of Liability of Administrator and Indemnification. Administrator
shall not be liable and each Fund shall indemnify Administrator and its
directors, officers and employees, for any costs or liabilities arising from any
error of judgment or mistake of law or any loss suffered by the Fund or the
Company in connection with the matters to which this Contract relates except a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of Administrator in the performance by Administrator of its duties or from
reckless disregard by Administrator of its obligations and duties under this
Contract. Any person, even though also an officer, partner, employee, or agent
of Administrator, who may be or become an officer, Trustee, employee or agent of
the Company shall be deemed, when rendering services to a Fund or the Company or
acting with respect to any business of a Fund or the Company, to be rendering
such service to or acting solely for the Fund or the Company and not as an
officer, partner, employee, or agent or one under the control or direction of
Administrator even though paid by it.

 9.  Duration and Termination.

         (a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to any
Fund unless it has first been approved by a vote of a majority of the Company's
Trustees.



                                       4
<PAGE>   5

         (b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to each Fund this Contract shall continue automatically
for successive periods not to exceed twelve months each, provided that such
continuance is specifically approved at least annually by the Company's Board.

         (c) Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Fund on sixty days' written notice to Administrator or by
Administrator at any time, without the payment of any penalty, on sixty days'
written notice to the Company. Termination of this Contract with respect to one
Fund shall not affect the continued effectiveness of this Contract with respect
to any other Fund. This Contract will automatically terminate in the event of
its assignment.

 10. Amendment of this Contract. No provision of this Contract may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.

 11. Governing Law. This Contract shall be construed in accordance with the laws
of the State of Delaware (without regard to Delaware conflict or choice of law
provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.

 12. Miscellaneous. The captions in this Contract are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this Contract
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Contract shall not be affected thereby. This Contract
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors. As used in this Contract, the terms "majority of
the outstanding voting securities," "interested person," "assignment," "broker,"
"dealer," "investment adviser," "national securities exchange," "net assets,"
"prospectus," "sale," "sell" and "security" shall have the same meaning as such
terms have in the 1940 Act, subject to such exemption as may be granted by the
Securities and Exchange Commission by any rule, regulation or order. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Contract is made less restrictive by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.





                                       5
<PAGE>   6




         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.


Attest: /s/ SAMUEL D. SIRKO            AIM INVESTMENT FUNDS
       -------------------------
Name:       Samuel D. Sirko
Title:      Assistant Secretary                   
                                       By: /s/ ROBERT H. GRAHAM
                                          --------------------------
                                       Name:   Robert H. Graham
                                       Title:  President


Attest: /s/ KATHLEEN J. PFLUEGER       A I M ADVISORS, INC.
       -------------------------
Name:       Kathleen J. Pflueger
Title:      Assistant Secretary        
                                       By: /s/ JOHN J. ARTHUR
                                          --------------------------
                                       Name:   John J. Arthur
                                       Title:  Senior Vice President




                                       6
<PAGE>   7



                                   APPENDIX A
                                       TO
                             ADMINISTRATION CONTRACT
                                       OF
                              AIM INVESTMENT FUNDS

         The Company shall pay the Administrator, out of the assets of a Fund,
as full compensation for all services rendered and all facilities furnished
hereunder, an administration fee for such Fund set forth below. Such fee shall
be calculated by applying the following annual rates to the average daily net
assets of such Fund for the calendar year computed in the manner used for the
determination of the net asset value of shares of such Fund.

<TABLE>
<CAPTION>

FUND                                                         ANNUAL RATE
- ----                                                         -----------
<S>                                                          <C>
AIM Global Consumer Products and Services Fund                     0.25%
AIM Global Financial Services Fund                                 0.25%
AIM Global Infrastructure Fund                                     0.25%
AIM Global Resources Fund                                          0.25%
AIM Emerging Markets Debt Fund                                     0.25%

</TABLE>

<PAGE>   1
                                                                   EXHIBIT 5(e)

                           AIM INVESTMENT FUNDS, INC.
                           SUB-ADMINISTRATION CONTRACT
                                     BETWEEN
                              A I M ADVISORS, INC.
                                       AND
                               INVESCO (NY), INC.

         Contract made as of May 29, 1998, between A I M Advisors, Inc., a
Delaware corporation ("Administrator"), and INVESCO (NY), INC., a California
corporation ("Sub-Administrator").

         WHEREAS Administrator has entered into an Administration Contract with
AIM Investment Funds, Inc. (the "Company"), an open-end management investment
company registered under the Investment Company Act of 1940, as amended ("1940
Act"), with respect to AIM Global Consumer Products and Services Fund, AIM
Global Financial Services Fund, AIM Global Infrastructure Fund, AIM Global
Resources Fund and AIM Global High Income Fund, each being a series of the
Company's shares of common stock (collectively, the "Funds" and singly, a
"Fund"); and

         WHEREAS Administrator desires to retain Sub-Administrator as
sub-administrator to furnish certain administrative services to the Funds, and
Sub-Administrator is willing to furnish such services;

         NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:

 1. Appointment. Administrator hereby appoints Sub-Administrator as
sub-administrator of each Fund for the period and on the terms set forth in this
Contract. Sub-Administrator accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.

 2. Duties as Sub-Administrator. Sub-Administrator will administer the affairs
of each Fund subject to the supervision of the Company's Board of Directors
("Board"), the Administrator and the following understandings:

         (a) Sub-Administrator will supervise all aspects of the operations of
each Fund, including the oversight of transfer agency and custodial services
except as hereinafter set forth; provided, however, that nothing herein
contained shall be deemed to relieve or deprive the Board of its responsibility
for control of the conduct of the affairs of the Funds.

         (b) At Sub-Administrator's expense, Sub-Administrator will provide the
Company and the Funds with such corporate, administrative and clerical personnel
(including officers of the Company) and services as are reasonably deemed
necessary or advisable by the Board.


<PAGE>   2

         (c) Sub-Administrator will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of each Fund's
prospectus, statement of additional information, proxy material, tax returns and
required reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.

         (d) Sub-Administrator will provide the Company and the Funds with, or
obtain for them, adequate office space and all necessary office equipment and
services, including telephone service, heat, utilities, stationery supplies and
similar items.

 3. Further Duties. In all matters relating to the performance of this Contract,
Sub-Administrator will act in conformity with the Articles of Incorporation,
By-Laws and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.

 4. Services Not Exclusive. The services furnished by Sub-Administrator
hereunder are not to be deemed exclusive and Sub-Administrator shall be free to
furnish similar services to others so long as its services under this Contract
are not impaired thereby. Nothing in this Contract shall limit or restrict the
right of any director, officer or employee of Sub-Administrator, who may also be
a Director, officer or employee of the Company, to engage in any other business
or to devote his or her time and attention in part to the management or other
aspects of any other business, whether of a similar nature or a dissimilar
nature.

 5.  Expenses.

         (a) During the term of this Contract, each Fund will bear all expenses,
not specifically assumed by Administrator and Sub-Administrator, incurred in its
operations and the offering of its shares.

         (b) Expenses borne by each Fund will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Fund and any losses incurred in connection
therewith; (ii) fees payable to and expenses incurred on behalf of the Fund by
Sub-Administrator under this Contract; (iii) investment consulting fees and
related costs; (iv) expenses of organizing the Company and the Fund; (v)
expenses of preparing and filing reports and other documents with governmental
and regulatory agencies; (vi) filing fees and expenses relating to the
registration and qualification of the Fund's shares and the Company under
federal and/or state securities laws and maintaining such registrations and
qualifications; (vii) costs incurred in connection with the issuance, sale or
repurchase of the Fund's shares of common stock; (viii) fees and salaries
payable to the Company's Directors who are not parties to this Contract or
interested persons of any such party ("Independent Directors"); (ix) all
expenses incurred in connection with the Independent Directors' services,
including travel expenses; 


<PAGE>   3


(x) taxes (including any income or franchise taxes) and governmental fees; (xi)
costs of any liability, uncollectible items of deposit and other insurance and
fidelity bonds; (xii) any costs, expenses or losses arising out of a liability
of or claim for damages or other relief asserted against the Company or the Fund
for violation of any law; (xiii) interest charges; (xiv) legal, accounting and
auditing expenses, including legal fees of special counsel for the Independent
Directors; (xv) charges of custodians, transfer agents, pricing agents and other
agents; (xvi) expenses of disbursing dividends and distributions; (xvii) costs
of preparing share certificates; (xviii) expenses of setting in type, printing
and mailing prospectuses and supplements thereto, statements of additional
information and supplements thereto, reports, notices and proxy materials for
existing shareholders; (xix) any extraordinary expenses (including fees and
disbursements of counsel, costs of actions, suits or proceedings to which the
Company is a party and the expenses the Company may incur as a result of its
legal obligation to provide indemnification to its officers, Directors,
employees and agents) incurred by the Company or the Fund; (xx) fees, voluntary
assessments and other expenses incurred in connection with membership in
investment company organizations; (xxi) costs of mailing and tabulating proxies
and costs of meetings of shareholders, the Board and any committees thereof;
(xxii) the cost of investment company literature and other publications provided
by the Company to its Directors and officers; and (xxiii) costs of mailing,
stationery and communications equipment.

         (c) Sub-Administrator will assume the cost of any compensation for
services provided to the Company received by the officers of the Company and by
the Directors of the Company who are not Independent Directors.

         (d) The payment or assumption by Sub-Administrator of any expense of
the Company or any Fund that Sub-Administrator is not required by this Contract
to pay or assume shall not obligate Sub-Administrator to pay or assume the same
or any similar expense of the Company or any Fund on any subsequent occasion.

 6. Compensation.

         (a) The Sub-Administrator will not be paid any special compensation for
the services provided to a Fund under this Contract.

         (b) For the services provided under this Contract to each Fund as
hereafter may be established, Administrator will pay to Sub-Administrator a fee
in an amount to be agreed upon in a written Appendix to this Contract executed
by Administrator and by Sub-Administrator.

 7. Limitation of Liability of Sub-Administrator and Indemnification.
Sub-Administrator shall not be liable for any costs or liabilities arising from
any error of judgment or mistake of law or any loss suffered by the Fund or the
Company in connection with the matters to which this Contract relates except a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of Sub-Administrator in the performance by Sub-Administrator of its duties
or from reckless disregard by Sub-Administrator of its obligations and duties


<PAGE>   4


under this Contract. Any person, even though also an officer, partner, employee,
or agent of Sub-Administrator, who may be or become a Director, officer,
employee or agent of the Company, shall be deemed, when rendering services to a
Fund or the Company or acting with respect to any business of a Fund or the
Company to be rendering such service to or acting solely for the Fund or the
Company and not as an officer, partner, employee, or agent or one under the
control or direction of Sub-Administrator even though paid by it.

 8. Duration and Termination.

         (a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to any
Fund unless it has first been approved by a vote of a majority of the Company's
Directors.

         (b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to each Fund, this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually by the
Company's Board.

         (c) Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Fund on sixty days' written notice to Sub-Administrator or by
Sub-Administrator at any time, without the payment of any penalty, on sixty
days' written notice to the Company. Termination of this Contract with respect
to one Fund shall not affect the continued effectiveness of this Contract with
respect to any other Fund. This Contract will automatically terminate in the
event of its assignment.

 9. Amendment. No provision of this Contract may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.

 10. Governing Law. This Contract shall be construed in accordance with the laws
of the State of Delaware (without regard to Delaware conflict or choice of law
provisions) and

<PAGE>   5


the 1940 Act. To the extent that the applicable laws of the State of Delaware
conflict with the applicable provisions of the 1940 Act, the latter shall
control.

 11. Miscellaneous. The captions in this Contract are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. If any provision of this
Contract shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Contract shall not be affected thereby. This
Contract shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors. As used in this Contract, the terms
"majority of the outstanding voting securities," "interested person,"
"assignment," "broker," "dealer," "investment adviser," "national securities
exchange," "net assets," "prospectus," "sale," "sell" and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act reflected
in any provision of this Contract is made less restrictive by a rule, regulation
or order of the Securities and Exchange Commission, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.

         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.


Attest: /s/ KATHLEEN J. PFLUEGER      A I M ADVISORS, INC.
        ------------------------
  Name: Kathleen J. Pflueger          By: /s/ CAROL F. RELIHAN
                                          -----------------------
                                      Name: Carol F. Relihan
                                      Title: Senior Vice President

Attest: /s/ MICHAEL A. SILVER         INVESCO (NY), INC.
        ----------------------        By: /s/ HELGE K. LEE
        Michael A. Silver                 -----------------------
                                      Name:  Helge K. Lee
                                      Title: Chief Legal and Compliance Officer
                                             and Secretary



<PAGE>   1
                                                                    EXHIBIT 5(f)


                              AIM INVESTMENT FUNDS
                          SUB-ADMINISTRATION CONTRACT
                                    BETWEEN
                              A I M ADVISORS, INC.
                                      AND
                               INVESCO (NY), INC.

         Contract made as of September 8, 1998, between A I M Advisors, Inc., a
Delaware corporation ("Administrator"), and INVESCO (NY), INC., a California
corporation ("Sub-Administrator").

         WHEREAS Administrator has entered into an Administration Contract with
AIM Investment Funds, Inc. (the "Company"), an open-end management investment
company registered under the Investment Company Act of 1940, as amended ("1940
Act"), with respect to AIM Global Consumer Products and Services Fund, AIM
Global Financial Services Fund, AIM Global Infrastructure Fund, AIM Global
Resources Fund and AIM Emerging Markets Debt Fund (formerly known as AIM Global
High Income Fund), each being a series of the Company's shares of common stock
(collectively, the "Funds" and singly, a "Fund"); and

         WHEREAS Administrator desires to retain Sub-Administrator as
sub-administrator to furnish certain administrative services to the Funds, and
Sub-Administrator is willing to furnish such services;

         NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:

1. Appointment. Administrator hereby appoints Sub-Administrator as
sub-administrator of each Fund for the period and on the terms set forth in
this Contract. Sub-Administrator accepts such appointment and agrees to render
the services herein set forth, for the compensation herein provided.

2. Duties as Sub-Administrator. Sub-Administrator will administer the affairs
of each Fund subject to the supervision of the Company's Board of Trustees
("Board"), the Administrator and the following understandings:

         (a) Sub-Administrator will supervise all aspects of the operations of
each Fund, including the oversight of transfer agency and custodial services
except as hereinafter set forth; provided, however, that nothing herein
contained shall be deemed to relieve or deprive the Board of its responsibility
for control of the conduct of the affairs of the Funds.

         (b) At Sub-Administrator's expense, Sub-Administrator will provide the
Company and the Funds with such corporate, administrative and clerical
personnel (including officers of the Company) and services as are reasonably
deemed necessary or advisable by the Board.

<PAGE>   2


         (c) Sub-Administrator will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of each Fund's
prospectus, statement of additional information, proxy material, tax returns
and required reports with or to the Fund's shareholders, the Securities and
Exchange Commission and other appropriate federal or state regulatory
authorities.

         (d) Sub-Administrator will provide the Company and the Funds with, or
obtain for them, adequate office space and all necessary office equipment and
services, including telephone service, heat, utilities, stationery supplies and
similar items.

3. Further Duties. In all matters relating to the performance of this
Contract, Sub-Administrator will act in conformity with the Articles of
Incorporation, By-Laws and Registration Statement of the Company and with the
instructions and directions of the Board and will comply with the requirements
of the 1940 Act, the rules thereunder, and all other applicable federal and
state laws and regulations.

4. Services Not Exclusive. The services furnished by Sub-Administrator
hereunder are not to be deemed exclusive and Sub-Administrator shall be free to
furnish similar services to others so long as its services under this Contract
are not impaired thereby. Nothing in this Contract shall limit or restrict the
right of any director, officer or employee of Sub-Administrator, who may also
be a Trustee, officer or employee of the Company, to engage in any other
business or to devote his or her time and attention in part to the management
or other aspects of any other business, whether of a similar nature or a
dissimilar nature.

5.  Expenses.

         (a) During the term of this Contract, each Fund will bear all
expenses, not specifically assumed by Administrator and Sub-Administrator,
incurred in its operations and the offering of its shares.

         (b) Expenses borne by each Fund will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of
portfolio securities, including the cost (including brokerage commissions, if
any) of securities purchased or sold by the Fund and any losses incurred in
connection therewith; (ii) fees payable to and expenses incurred on behalf of
the Fund by Sub-Administrator under this Contract; (iii) investment consulting
fees and related costs; (iv) expenses of organizing the Company and the Fund;
(v) expenses of preparing and filing reports and other documents with
governmental and regulatory agencies; (vi) filing fees and expenses relating to
the registration and qualification of the Fund's shares and the Company under
federal and/or state securities laws and maintaining such registrations and
qualifications; (vii) costs incurred in connection with the issuance, sale or
repurchase of the Fund's shares of common stock; (viii) fees and salaries
payable to the Company's Trustees who are not parties to this Contract or
interested persons of any such party ("Independent Trustees"); (ix) all
expenses incurred in connection with the Independent Trustees' services,
including travel expenses; (x) taxes (including any income or franchise taxes)
and governmental fees; (xi) costs of any 

<PAGE>   3
liability, uncollectible items of deposit and other insurance and fidelity
bonds; (xii) any costs, expenses or losses arising out of a liability of or
claim for damages or other relief asserted against the Company or the Fund for
violation of any law; (xiii) interest charges; (xiv) legal, accounting and
auditing expenses, including legal fees of special counsel for the Independent
Trustees; (xv) charges of custodians, transfer agents, pricing agents and other
agents; (xvi) expenses of disbursing dividends and distributions; (xvii) costs
of preparing share certificates; (xviii) expenses of setting in type, printing
and mailing prospectuses and supplements thereto, statements of additional
information and supplements thereto, reports, notices and proxy materials for
existing shareholders; (xix) any extraordinary expenses (including fees and
disbursements of counsel, costs of actions, suits or proceedings to which the
Company is a party and the expenses the Company may incur as a result of its
legal obligation to provide indemnification to its officers, Trustees, employees
and agents) incurred by the Company or the Fund; (xx) fees, voluntary
assessments and other expenses incurred in connection with membership in
investment company organizations; (xxi) costs of mailing and tabulating proxies
and costs of meetings of shareholders, the Board and any committees thereof;
(xxii) the cost of investment company literature and other publications provided
by the Company to its Trustees and officers; and (xxiii) costs of mailing,
stationery and communications equipment.

         (c) Sub-Administrator will assume the cost of any compensation for
services provided to the Company received by the officers of the Company and by
the Trustees of the Company who are not Independent Trustees.

         (d) The payment or assumption by Sub-Administrator of any expense of
the Company or any Fund that Sub-Administrator is not required by this Contract
to pay or assume shall not obligate Sub-Administrator to pay or assume the same
or any similar expense of the Company or any Fund on any subsequent occasion.

6.  Compensation.

         (a) The Sub-Administrator will not be paid any special compensation
for the services provided to a Fund under this Contract.

         (b) For the services provided under this Contract to each Fund as
hereafter may be established, Administrator will pay to Sub-Administrator a fee
in an amount to be agreed upon in a written Appendix to this Contract executed
by Administrator and by Sub-Administrator.

7. Limitation of Liability of Sub-Administrator and Indemnification.
Sub-Administrator shall not be liable for any costs or liabilities arising from
any error of judgment or mistake of law or any loss suffered by the Fund or the
Company in connection with the matters to which this Contract relates except a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of Sub-Administrator in the performance by Sub-Administrator of its duties
or from reckless disregard by Sub-Administrator of its obligations and duties
under this Contract. Any person, even though also an officer, partner,
employee, or agent of 

<PAGE>   4

Sub-Administrator, who may be or become a Trustee, officer, employee or agent
of the Company, shall be deemed, when rendering services to a Fund or the
Company or acting with respect to any business of a Fund or the Company to be
rendering such service to or acting solely for the Fund or the Company and not
as an officer, partner, employee, or agent or one under the control or
direction of Sub-Administrator even though paid by it.

8.  Duration and Termination.

         (a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to any
Fund unless it has first been approved by a vote of a majority of the Company's
Trustees.

         (b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if
not terminated, with respect to each Fund, this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually by the
Company's Board.

         (c) Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Fund on sixty days' written notice to Sub-Administrator or by
Sub-Administrator at any time, without the payment of any penalty, on sixty
days' written notice to the Company. Termination of this Contract with respect
to one Fund shall not affect the continued effectiveness of this Contract with
respect to any other Fund. This Contract will automatically terminate in the
event of its assignment.

9. Amendment. No provision of this Contract may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.

10. Governing Law. This Contract shall be construed in accordance with the
laws of the State of Delaware (without regard to Delaware conflict or choice of
law provisions) and

<PAGE>   5

the 1940 Act. To the extent that the applicable laws of the State of Delaware
conflict with the applicable provisions of the 1940 Act, the latter shall
control.

11. Miscellaneous. The captions in this Contract are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. If any provision of this
Contract shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Contract shall not be affected thereby. This
Contract shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors. As used in this Contract, the terms
"majority of the outstanding voting securities," "interested person,"
"assignment," "broker," "dealer," "investment adviser," "national securities
exchange," "net assets," "prospectus," "sale," "sell" and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act
reflected in any provision of this Contract is made less restrictive by a rule,
regulation or order of the Securities and Exchange Commission, whether of
special or general application, such provision shall be deemed to incorporate
the effect of such rule, regulation or order.

         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.


Attest: /s/ KATHLEEN J. PFLUEGER                   A I M ADVISORS, INC.
       -------------------------
Title:      Secretary                              By: /s/ JOHN J. ARTHUR   
                                                      --------------------------
                                                   Name:   John J. Arthur
                                                   Title:  Senior Vice President

Attest: /s/ ILLEGIBLE                              INVESCO (NY), INC.
       ------------------------
                                                   By: /s/ DANIEL WALTCHER
                                                      ------------------------
                                                   Name:   Daniel Waltcher
                                                   Title:  Managing Director
                                                          
                                                          



<PAGE>   1
                                                                    EXHIBIT 5(g)


                           AIM INVESTMENT FUNDS, INC.
                  SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
                                     BETWEEN
                              A I M ADVISORS, INC.
                                       AND
                               INVESCO (NY), INC.

         Contract made as of May 29, 1998, between A I M Advisors, Inc., a
Delaware corporation ("Adviser"), and INVESCO (NY), INC., a California
corporation ("Sub-Adviser").

         WHEREAS Adviser has entered into an Investment Management and
Administration Contract with AIM Investment Funds, Inc. ("Company"), an open-end
management investment company registered under the Investment Company Act of
1940, as amended ("1940 Act"), with respect to AIM Global Health Care Fund, AIM
Global Telecommunications Fund, AIM Latin American Growth Fund, AIM Emerging
Markets Fund, AIM Global Growth & Income Fund, AIM Global Government Income
Fund, AIM Strategic Income Fund, and AIM Developing Markets Fund, each Fund
being a series of the Company's shares of common stock; and

         WHEREAS Adviser desires to retain Sub-Adviser as sub-adviser and
sub-administrator to furnish certain advisory and administrative services to the
Funds, and Sub-Adviser is willing to furnish such services;

         NOW THEREFORE, in consideration of the promises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:

1. Appointment. Adviser hereby appoints Sub-Adviser as sub-adviser and
sub-administrator of each Fund for the period and on the terms set forth in this
Contract. Sub-Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.

2. Duties as Sub-Adviser.

         (a) Subject to the supervision of the Company's Board of Directors
("Board") and Adviser, the Sub-Adviser will provide a continuous investment
program for each Fund, including investment research and management, with
respect to all securities and investments and cash equivalents of the Fund. The
Sub-Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by each Fund, and the brokers
and dealers through whom trades will be executed.

         (b) The Sub-Adviser agrees that, in placing orders with brokers and
dealers, it will attempt to obtain the best net result in terms of price and
execution. Consistent with this obligation, the Sub-Adviser may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who sell shares of the Funds or provide the Funds, 





<PAGE>   2

Adviser's other clients, or Sub-Adviser's other clients with research, analysis,
advice and similar services. The Sub-Adviser may pay to brokers and dealers, in
return for such research and analysis, a higher commission or spread than may be
charged by other brokers and dealers, subject to the Sub-Adviser determining in
good faith that such commission or spread is reasonable in terms either of the
particular transaction or of the overall responsibility of the Adviser and the
Sub-Adviser to the Funds and their other clients and that the total commissions
or spreads paid by each Fund will be reasonable in relation to the benefits to
the Fund over the long term. In no instance will portfolio securities be
purchased from or sold to the Sub-Adviser, or any affiliated person thereof,
except in accordance with the federal securities laws and the rules and
regulations thereunder and any exemptive orders currently in effect. Whenever
the Sub-Adviser simultaneously places orders to purchase or sell the same
security on behalf of a Fund and one or more other accounts advised by the
Sub-Adviser, such orders will be allocated as to price and amount among all such
accounts in a manner believed to be equitable to each account.

         (c) The Sub-Adviser will maintain all books and records with respect to
the securities transactions of the Funds, and will furnish the Board and Adviser
with such periodic and special reports as the Board or Adviser reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Sub-Adviser hereby agrees that all records which it maintains for the
Company are the property of the Company, agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any records which it maintains for
the Company and which are required to be maintained by Rule 31a-1 under the 1940
Act, and further agrees to surrender promptly to the Company any records which
it maintains for the Company upon request by the Company.

3. Duties as Sub-Administrator. Sub-Adviser will administer the affairs of each
Fund subject to the supervision of the Company's Board of Directors ("Board"),
the Adviser and the following understandings:

         (a) Sub-Adviser will supervise all aspects of the operations of each
Fund, including the oversight of transfer agency and custodial services except
as hereinafter set forth; provided, however, that nothing herein contained shall
be deemed to relieve or deprive the Board of its responsibility for control of
the conduct of the affairs of the Funds.

         (b) At Sub-Adviser's expense, Sub-Adviser will provide the Company and
the Funds with such corporate, administrative and clerical personnel (including
officers of the Company) and services as are reasonably deemed necessary or
advisable by the Board.

         (c) Sub-Adviser will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of each Fund's
prospectus, statement of additional information, proxy material, tax returns and
required reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.


<PAGE>   3

         (d) Sub-Adviser will provide the Company and the Funds with, or obtain
for them, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.

4. Further Duties. In all matters relating to the performance of this Contract,
Sub-Adviser will act in conformity with the Articles of Incorporation, By-Laws
and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.

5. Services Not Exclusive. The services furnished by Sub-Adviser hereunder are
not to be deemed exclusive and Sub-Adviser shall be free to furnish similar
services to others so long as its services under this Contract are not impaired
thereby. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of Sub-Adviser, who may also be a Director,
officer or employee of the Company, to engage in any other business or to devote
his or her time and attention in part to the management or other aspects of any
other business, whether of a similar nature or a dissimilar nature.

6. Expenses.

         (a) During the term of this Contract, each Fund will bear all expenses,
not specifically assumed by Adviser and Sub-Adviser, incurred in its operations
and the offering of its shares.

         (b) Expenses borne by each Fund will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Fund and any losses incurred in connection
therewith; (ii) fees payable to and expenses incurred on behalf of the Fund by
Sub-Adviser under this Contract; (iii) investment consulting fees and related
costs; (iv) expenses of organizing the Company and the Fund; (v) expenses of
preparing and filing reports and other documents with governmental and
regulatory agencies; (vi) filing fees and expenses relating to the registration
and qualification of the Fund's shares and the Company under federal and/or
state securities laws and maintaining such registrations and qualifications;
(vii) costs incurred in connection with the issuance, sale or repurchase of the
Fund's shares of common stock; (viii) fees and salaries payable to the Company's
Directors who are not parties to this Contract or interested persons of any such
party ("Independent Directors"); (ix) all expenses incurred in connection with
the Independent Directors' services, including travel expenses; (x) taxes
(including any income or franchise taxes) and governmental fees; (xi) costs of
any liability, uncollectible items of deposit and other insurance and fidelity
bonds; (xii) any costs, expenses or losses arising out of a liability of or
claim for damages or other relief asserted against the Company or the Fund for
violation of any law; (xiii) interest charges; (xiv) legal, accounting and
auditing expenses, including legal fees of special counsel for the Independent
Directors; (xv) charges of custodians, transfer agents, pricing agents and other
agents; (xvi) expenses of disbursing dividends and distributions; (xvii) costs
of preparing 


<PAGE>   4

share certificates; (xviii) expenses of setting in type, printing and mailing
prospectuses and supplements thereto, statements of additional information,
reports, notices and proxy materials for existing shareholders; (xix) any
extraordinary expenses (including fees and disbursements of counsel, costs of
actions, suits or proceedings to which the Company is a party and the expenses
the Company may incur as a result of its legal obligation to provide
indemnification to its officers, Directors, employees and agents) incurred by
the Company; (xx) fees, voluntary assessments and other expenses incurred in
connection with membership in investment company organizations; (xxi) costs of
mailing and tabulating proxies and costs of meetings of shareholders, the Board
and any committees thereof; (xxii) the cost of investment company literature and
other publications provided by the Company to its Directors and officers; and
(xxiii) costs of mailing, stationery and communications equipment.

         (c) Sub-Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Directors of the Company who are not Independent Directors.

         (d) The payment or assumption by Sub-Adviser of any expense of the
Company or any Fund that Sub-Adviser is not required by this Contract to pay or
assume shall not obligate Sub-Adviser to pay or assume the same or any similar
expense of the Company or any Fund on any subsequent occasion.

7. Compensation.

         (a) For the services provided to a Fund under this Contract, Adviser
will pay Sub-Adviser a fee, computed weekly and paid monthly, as set forth in
Appendix A hereto.

         (b) For the services provided under this Contract to each Fund as
hereafter may be established, Adviser will pay to Sub-Adviser a fee in an amount
to be agreed upon in a written Appendix to this Contract executed by Adviser and
by Sub-Adviser.

         (c) The fee shall be computed weekly and paid monthly to Sub-Adviser on
or before the last business day of the next succeeding calendar month.

         (d) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.

8. Limitation of Liability of Sub-Adviser and Indemnification. Sub-Adviser shall
not be liable for any costs or liabilities arising from any error of judgment or
mistake of law or any loss suffered by the Fund or the Company in connection
with the matters to which this Contract relates except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Sub-Adviser in
the performance by Sub-Adviser of its duties or 




<PAGE>   5

from reckless disregard by Sub-Adviser of its obligations and duties under this
Contract. Any person, even though also an officer, partner, employee, or agent
of Sub-Adviser, who may be or become a Director, officer, employee or agent of
the Company, shall be deemed, when rendering services to a Fund or the Company
or acting with respect to any business of a Fund or the Company to be rendering
such service to or acting solely for the Fund or the Company and not as an
officer, partner, employee, or agent or one under the control or direction of
Sub-Adviser even though paid by it.

9. Duration and Termination.

         (a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to any
Fund unless it has first been approved (i) by a vote of a majority of the
Independent Directors, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of that Fund's
outstanding voting securities.

         (b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to each Fund, this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Directors, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of that Fund.

         (c) Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Fund on sixty days' written notice to Sub-Adviser or by
Sub-Adviser at any time, without the payment of any penalty, on sixty days'
written notice to the Company. Termination of this Contract with respect to one
Fund shall not affect the continued effectiveness of this Contract with respect
to any other Fund.
This Contract will automatically terminate in the event of its assignment.

10. Amendment. No provision of this Contract may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Contract shall be effective until approved by
vote of a majority of the Fund's outstanding voting securities, when required by
the 1940 Act.

11. Governing Law. This Contract shall be construed in accordance with the laws
of the State of Delaware (without regard to Delaware conflict or choice of law
provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.

12. Miscellaneous. The captions in this Contract are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their 



<PAGE>   6

construction or effect. If any provision of this Contract shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Contract shall not be affected thereby. This Contract shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors. As used in this Contract, the terms "majority of the outstanding
voting securities," "interested person," "assignment," "broker," "dealer,"
"investment adviser," "national securities exchange," "net assets,"
"prospectus," "sale," "sell" and "security" shall have the same meaning as such
terms have in the 1940 Act, subject to such exemption as may be granted by the
Securities and Exchange Commission by any rule, regulation or order. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Contract is made less restrictive by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.


<PAGE>   7




         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.


                                            AIM ADVISORS, INC.

Attest: /s/ KATHLEEN J. PFLUEGER            By: /s/ CAROL F. RELIHAN
        ------------------------                -------------------------------
        Assistant Secretary                 Name:   Carol F. Relihan
                                            Title:  Senior Vice President &
                                                        Secretary

                                            INVESCO (NY), INC.

Attest: /s/ MICHAEL A. SILVER               By: /s/ HELGE K. LEE
        ----------------------                  -------------------------------
          Michael A. Silver                 Name: Helge K. Lee
                                            Title: Chief Legal and Compliance
                                                        Officer and Secretary


<PAGE>   8



                                   APPENDIX A
                                       TO
                  SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
                           AIM INVESTMENT FUNDS, INC.


   AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM LATIN
      AMERICAN GROWTH FUND, AIM EMERGING MARKETS FUND, AIM GLOBAL GROWTH &
                    INCOME FUND, AIM DEVELOPING MARKETS FUND



<TABLE>
<CAPTION>
NET ASSETS                                                    ANNUAL RATE
- ----------                                                    -----------
<S>                                                               <C>  
First $ 500 million.........................................      0.39%
Next $ 500 million..........................................      0.38%
Next $ 500 million..........................................      0.37%
On amounts thereafter.......................................      0.36%
</TABLE>

          AIM GLOBAL GOVERNMENT INCOME FUND, AIM STRATEGIC INCOME FUND

<TABLE>
<CAPTION>
NET ASSETS                                                     ANNUAL RATE
- ----------                                                     -----------
<S>                                                               <C>  
First $ 500 million..........................................     0.29%
Next $ 1 billion.............................................     0.28%
Next $ 1 billion.............................................     0.27%
On amounts thereafter........................................     0.26%
</TABLE>




<PAGE>   1
                                                                    EXHIBIT 5(h)


                              AIM INVESTMENT FUNDS
                  SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
                                     BETWEEN
                              A I M ADVISORS, INC.
                                       AND
                               INVESCO (NY), INC.

         Contract made as of September 8, 1998, between A I M Advisors, Inc., a
Delaware corporation ("Adviser"), and INVESCO (NY), Inc., a California
corporation ("Sub-Adviser").

         WHEREAS Adviser has entered into an Investment Management and
Administration Contract with AIM Investment Funds ("Company"), an open-end
management investment company registered under the Investment Company Act of
1940, as amended ("1940 Act"), with respect to AIM Global Health Care Fund, AIM
Global Telecommunications Fund, AIM Latin American Growth Fund, AIM Emerging
Markets Fund, AIM Global Growth & Income Fund, AIM Global Government Income
Fund, AIM Strategic Income Fund, and AIM Developing Markets Fund, each Fund
being a series of the Company's shares of beneficial interest; and

         WHEREAS Adviser desires to retain Sub-Adviser as sub-adviser and
sub-administrator to furnish certain advisory and administrative services to the
Funds, and Sub-Adviser is willing to furnish such services;

         NOW THEREFORE, in consideration of the promises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:

1. Appointment. Adviser hereby appoints Sub-Adviser as sub-adviser and
sub-administrator of each Fund for the period and on the terms set forth in this
Contract. Sub-Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.

2. Duties as Sub-Adviser.

         (a) Subject to the supervision of the Company's Board of Trustees
("Board") and Adviser, the Sub-Adviser will provide a continuous investment
program for each Fund, including investment research and management, with
respect to all securities and investments and cash equivalents of the Fund. The
Sub-Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by each Fund, and the brokers
and dealers through whom trades will be executed.

         (b) The Sub-Adviser agrees that, in placing orders with brokers and
dealers, it will attempt to obtain the best net result in terms of price and
execution. Consistent with this obligation, the Sub-Adviser may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who sell shares of the Funds or provide the Funds, 



<PAGE>   2

Adviser's other clients, or Sub-Adviser's other clients with research, analysis,
advice and similar services. The Sub-Adviser may pay to brokers and dealers, in
return for such research and analysis, a higher commission or spread than may be
charged by other brokers and dealers, subject to the Sub-Adviser determining in
good faith that such commission or spread is reasonable in terms either of the
particular transaction or of the overall responsibility of the Adviser and the
Sub-Adviser to the Funds and their other clients and that the total commissions
or spreads paid by each Fund will be reasonable in relation to the benefits to
the Fund over the long term. In no instance will portfolio securities be
purchased from or sold to the Sub-Adviser, or any affiliated person thereof,
except in accordance with the federal securities laws and the rules and
regulations thereunder and any exemptive orders currently in effect. Whenever
the Sub-Adviser simultaneously places orders to purchase or sell the same
security on behalf of a Fund and one or more other accounts advised by the
Sub-Adviser, such orders will be allocated as to price and amount among all such
accounts in a manner believed to be equitable to each account.

         (c) The Sub-Adviser will maintain all books and records with respect to
the securities transactions of the Funds, and will furnish the Board and Adviser
with such periodic and special reports as the Board or Adviser reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Sub-Adviser hereby agrees that all records which it maintains for the
Company are the property of the Company, agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any records which it maintains for
the Company and which are required to be maintained by Rule 31a-1 under the 1940
Act, and further agrees to surrender promptly to the Company any records which
it maintains for the Company upon request by the Company.

3. Duties as Sub-Administrator. Sub-Adviser will administer the affairs of each
Fund subject to the supervision of the Company's Board of Trustees ("Board"),
the Adviser and the following understandings:

         (a) Sub-Adviser will supervise all aspects of the operations of each
Fund, including the oversight of transfer agency and custodial services except
as hereinafter set forth; provided, however, that nothing herein contained shall
be deemed to relieve or deprive the Board of its responsibility for control of
the conduct of the affairs of the Funds.

         (b) At Sub-Adviser's expense, Sub-Adviser will provide the Company and
the Funds with such corporate, administrative and clerical personnel (including
officers of the Company) and services as are reasonably deemed necessary or
advisable by the Board.

         (c) Sub-Adviser will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of each Fund's
prospectus, statement of additional information, proxy material, tax returns and
required reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.

<PAGE>   3

         (d) Sub-Adviser will provide the Company and the Funds with, or obtain
for them, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.

4. Further Duties. In all matters relating to the performance of this Contract,
Sub-Adviser will act in conformity with the Agreement and Declaration of Trust,
By-Laws and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.

5. Services Not Exclusive. The services furnished by Sub-Adviser hereunder are
not to be deemed exclusive and Sub-Adviser shall be free to furnish similar
services to others so long as its services under this Contract are not impaired
thereby. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of Sub-Adviser, who may also be a Trustee, officer
or employee of the Company, to engage in any other business or to devote his or
her time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature.

6. Expenses.

         (a) During the term of this Contract, each Fund will bear all expenses,
not specifically assumed by Adviser and Sub-Adviser, incurred in its operations
and the offering of its shares.

         (b) Expenses borne by each Fund will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Fund and any losses incurred in connection
therewith; (ii) fees payable to and expenses incurred on behalf of the Fund by
Sub-Adviser under this Contract; (iii) investment consulting fees and related
costs; (iv) expenses of organizing the Company and the Fund; (v) expenses of
preparing and filing reports and other documents with governmental and
regulatory agencies; (vi) filing fees and expenses relating to the registration
and qualification of the Fund's shares and the Company under federal and/or
state securities laws and maintaining such registrations and qualifications;
(vii) costs incurred in connection with the issuance, sale or repurchase of the
Fund's shares of beneficial interest; (viii) fees and salaries payable to the
Company's Trustees who are not parties to this Contract or interested persons of
any such party ("Independent Trustees"); (ix) all expenses incurred in
connection with the Independent Trustees' services, including travel expenses;
(x) taxes (including any income or franchise taxes) and governmental fees; (xi)
costs of any liability, uncollectible items of deposit and other insurance and
fidelity bonds; (xii) any costs, expenses or losses arising out of a liability
of or claim for damages or other relief asserted against the Company or the Fund
for violation of any law; (xiii) interest charges; (xiv) legal, accounting and
auditing expenses, including legal fees of special counsel for the Independent
Trustees; (xv) charges of custodians, transfer agents, pricing agents and other
agents; (xvi) expenses of disbursing dividends and distributions; 



<PAGE>   4

(xvii) costs of preparing share certificates; (xviii) expenses of setting in
type, printing and mailing prospectuses and supplements thereto, statements of
additional information, reports, notices and proxy materials for existing
shareholders; (xix) any extraordinary expenses (including fees and disbursements
of counsel, costs of actions, suits or proceedings to which the Company is a
party and the expenses the Company may incur as a result of its legal obligation
to provide indemnification to its officers, Trustees, employees and agents)
incurred by the Company; (xx) fees, voluntary assessments and other expenses
incurred in connection with membership in investment company organizations;
(xxi) costs of mailing and tabulating proxies and costs of meetings of
shareholders, the Board and any committees thereof; (xxii) the cost of
investment company literature and other publications provided by the Company to
its Trustees and officers; and (xxiii) costs of mailing, stationery and
communications equipment.

         (c) Sub-Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Trustees of the Company who are not Independent Trustees.

         (d) The payment or assumption by Sub-Adviser of any expense of the
Company or any Fund that Sub-Adviser is not required by this Contract to pay or
assume shall not obligate Sub-Adviser to pay or assume the same or any similar
expense of the Company or any Fund on any subsequent occasion.

7. Compensation.

         (a) For the services provided to a Fund under this Contract, Adviser
will pay Sub-Adviser a fee, computed weekly and paid monthly, as set forth in
Appendix A hereto.

         (b) For the services provided under this Contract to each Fund as
hereafter may be established, Adviser will pay to Sub-Adviser a fee in an amount
to be agreed upon in a written Appendix to this Contract executed by Adviser and
by Sub-Adviser.

         (c) The fee shall be computed weekly and paid monthly to Sub-Adviser on
or before the last business day of the next succeeding calendar month.

         (d) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.

8. Limitation of Liability of Sub-Adviser and Indemnification. Sub-Adviser shall
not be liable for any costs or liabilities arising from any error of judgment or
mistake of law or any loss suffered by the Fund or the Company in connection
with the matters to which this Contract relates except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Sub-Adviser in
the performance by Sub-Adviser of its duties or 



<PAGE>   5

from reckless disregard by Sub-Adviser of its obligations and duties under this
Contract. Any person, even though also an officer, partner, employee, or agent
of Sub-Adviser, who may be or become a Trustee, officer, employee or agent of
the Company, shall be deemed, when rendering services to a Fund or the Company
or acting with respect to any business of a Fund or the Company to be rendering
such service to or acting solely for the Fund or the Company and not as an
officer, partner, employee, or agent or one under the control or direction of
Sub-Adviser even though paid by it.

9. Duration and Termination.

         (a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to any
Fund unless it has first been approved (i) by a vote of a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of that Fund's
outstanding voting securities.

         (b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to each Fund, this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of that Fund.

         (c) Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Fund on sixty days' written notice to Sub-Adviser or by
Sub-Adviser at any time, without the payment of any penalty, on sixty days'
written notice to the Company. Termination of this Contract with respect to one
Fund shall not affect the continued effectiveness of this Contract with respect
to any other Fund.
This Contract will automatically terminate in the event of its assignment.

10. Amendment. No provision of this Contract may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Contract shall be effective until approved by
vote of a majority of the Fund's outstanding voting securities, when required by
the 1940 Act.

11. Governing Law. This Contract shall be construed in accordance with the laws
of the State of Delaware (without regard to Delaware conflict or choice of law
provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.

12. Miscellaneous. The captions in this Contract are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their 




<PAGE>   6

construction or effect. If any provision of this Contract shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Contract shall not be affected thereby. This Contract shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors. As used in this Contract, the terms "majority of the outstanding
voting securities," "interested person," "assignment," "broker," "dealer,"
"investment adviser," "national securities exchange," "net assets,"
"prospectus," "sale," "sell" and "security" shall have the same meaning as such
terms have in the 1940 Act, subject to such exemption as may be granted by the
Securities and Exchange Commission by any rule, regulation or order. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Contract is made less restrictive by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.

         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.


                                            AIM ADVISORS, INC.

Attest: /s/ KATHLEEN J. PFLUEGER            By: /s/ CAROL F. RELIHAN
        ------------------------                -------------------------------
            Assistant Secretary             Name:   Carol F. Relihan
                                            Title:  Senior Vice President &
                                                      Secretary

                                            INVESCO (NY), INC.

Attest: /s/ ILLEGIBLE                       By: /s/ DANIEL R. WALTCHER
        ----------------------                  -------------------------------
                                            Name:   Daniel R. Waltcher
                                            Title:  Managing Director
                                                   

<PAGE>   7



                                   APPENDIX A
                                       TO
                  SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
                              AIM INVESTMENT FUNDS


   
   AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM LATIN
      AMERICAN GROWTH FUND, AIM EMERGING MARKETS FUND, AIM GLOBAL GROWTH &
                    INCOME FUND, AIM DEVELOPING MARKETS FUND
    



<TABLE>
<CAPTION>
NET ASSETS                                                       ANNUAL RATE
- ----------                                                       -----------
<S>                                                              <C>  
First $ 500 million.........................................        0.39%
Next $ 500 million..........................................        0.38%
Next $ 500 million..........................................        0.37%
On amounts thereafter.......................................        0.36%
</TABLE>

          AIM GLOBAL GOVERNMENT INCOME FUND, AIM STRATEGIC INCOME FUND


<TABLE>
<CAPTION>
NET ASSETS                                                       ANNUAL RATE
- ----------                                                       -----------
<S>                                                                 <C>  
First $ 500 million..........................................       0.29%
Next $ 1 billion.............................................       0.28%
Next $ 1 billion.............................................       0.27%
On amounts thereafter........................................       0.26%
</TABLE>




<PAGE>   1
                                                                    EXHIBIT 5(i)

                           GLOBAL INVESTMENT PORTFOLIO
                INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
                                     BETWEEN
                           GLOBAL INVESTMENT PORTFOLIO
                                       AND
                              A I M ADVISORS, INC.

         Contract made as of May 29, 1998, between Global Investment Portfolio,
a Delaware business trust ("Company), and A I M Advisors, Inc., a Delaware
corporation (the "Adviser").

         WHEREAS the Company is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company and
has established the following subtrusts with each subtrust having its own assets
and investment policies: Global Consumer Products and Services Portfolio, Global
Financial Services Portfolio, Global Infrastructure Portfolio and Global Natural
Resources Portfolio (collectively, the "Funds" and singly a "Fund"); and

         WHEREAS the Company desires to retain Adviser as investment manager and
administrator to furnish certain investment advisory, portfolio management and
administration services to the Company and the Funds, and Adviser is willing to
furnish such services;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:

 1. Appointment. The Company hereby appoints Adviser as investment manager and
administrator of each Fund for the period and on the terms set forth in this
Contract. Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.

 2. Duties as Investment Manager.

         (a) Subject to the supervision of the Company's Board of Trustees
("Board"), Adviser will provide a continuous investment program for each Fund,
including investment research and management with respect to all securities and
investments and cash equivalents of the Fund. Adviser will determine from time
to time what securities and other investments will be purchased, retained or
sold by each Fund, and the brokers and dealers through whom trades will be
executed.

         (b) Adviser agrees that in placing orders with brokers and dealers it
will attempt to obtain the best net results in terms of price and execution.
Consistent with this obligation Adviser may, in its discretion, purchase and
sell portfolio securities to and from brokers and dealers who sell shares of the
Funds or provide the Funds or Adviser's other clients with research, analysis,
advice and similar services. Adviser may pay to brokers and dealers, in 

<PAGE>   2

return for research and analysis, a higher commission or spread than may be 
charged by other brokers and dealers, subject to Adviser's determining in 
good faith that such commission or spread is reasonable in terms either of the 
particular transaction or of the overall responsibility of Adviser to the Funds 
and its other clients and that the total commissions or spreads paid by each 
Fund will be reasonable in relation to the benefits to the Fund over the long 
term. In no instance will portfolio securities be purchased from or sold to 
Adviser or any affiliated person thereof except in accordance with the federal 
securities laws and the rules and regulations thereunder and any exemptive 
orders currently in effect. Whenever Adviser simultaneously places orders to 
purchase or sell the same security on behalf of a Fund and one or more other 
accounts advised by Adviser, such orders will be allocated as to price and 
amount among all such accounts in a manner believed to be equitable to each 
account. The Company recognizes that in some cases this procedure may adversely
affect the results obtained for each Fund.

         (c) Adviser will oversee the maintenance of all books and records with
respect to the securities transactions of the Funds, and will furnish the Board
with such periodic and special reports as the Board reasonably may request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, Adviser
hereby agrees that all records which it maintains for the Company are the
property of the Company, agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act any records which it maintains for the Company and
which are required to be maintained by Rule 31a-1 under the 1940 Act, and
further agrees to surrender promptly to the Company any records which it
maintains for the Company upon request by the Company.

 3. Duties as Administrator. Adviser will administer the affairs of each Fund
subject to the supervision of the Board and the following understandings:

         (a) Adviser will supervise all aspects of the operations of each Fund,
including the oversight of transfer agency and custodial services, except as
hereinafter set forth; provided, however, that nothing herein contained shall be
deemed to relieve or deprive the Board of its responsibility for control of the
conduct of the affairs of the Funds.

         (b) At Adviser's expense, Adviser will provide the Company and the
Funds with such corporate, administrative and clerical personnel (including
officers of the Company) and services as are reasonably deemed necessary or
advisable by the Board.

         (c) Adviser will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of each Fund's proxy
material, tax returns and required reports with or to the Fund's shareholders,
the Securities and Exchange Commission and other appropriate federal or state
regulatory authorities.

         (d) Adviser will provide the Company and the Funds with, or obtain for
them, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.

<PAGE>   3

 4. Further Duties. In all matters relating to the performance of this Contract,
Adviser will act in conformity with the Agreement and Declaration of Trust,
By-Laws and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.

 5. Delegation of Adviser's Duties as Investment Manager and Administrator. With
respect to one or more of the Funds, Adviser may enter into one or more
contracts ("Sub-Advisory or Sub-Administration Contract") with a sub-adviser or
sub-administrator in which Adviser delegates to such sub-adviser or
sub-administrator the performance of any or all of the services specified in
Paragraphs 2 and 3 of this Contract, provided that: (i) each Sub-Advisory and
Sub-Administration Contract imposes on the sub-adviser or sub-administrator
bound thereby all the duties and conditions to which Adviser is subject with
respect to the services under Paragraphs 2, 3 and 4 of this Contract; (ii) each
Sub-Advisory and Sub-Administration Contract meets all requirements of the 1940
Act and rules thereunder, and (iii) Adviser shall not enter into a Sub-Advisory
or Sub-Administration Contract unless it is approved by the Board prior to
implementation.

 6. Services Not Exclusive. The services furnished by Adviser hereunder are not
to be deemed exclusive and Adviser shall be free to furnish similar services to
others so long as its services under this Contract are not impaired thereby.
Nothing in this Contract shall limit or restrict the right of any director,
officer or employee of Adviser, who may also be a Trustee, officer or employee
of the Company, to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature.

 7. Expenses.

         (a) During the term of this Contract, each Fund will bear all expenses,
not specifically assumed by Adviser.

         (b) Expenses borne by each Fund will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Fund and any losses incurred in connection
therewith; (ii) fees payable to and expenses incurred on behalf of the Fund by
Adviser under this Contract; (iii) investment consulting fees and related costs;
(iv) expenses of organizing the Company and the Fund; (v) expenses of preparing
filing reports and other documents with governmental and regulatory agencies;
(vi) filing fees and expenses relating to the registration and qualification of
the Fund's shares and the Company under federal and/or state securities laws and
maintaining such registrations and qualifications; (vii) costs incurred in
connection with the issuance, sale or repurchase of the Fund's shares of
beneficial interest; (viii) fees and salaries payable to the Company's Trustees
who are not parties to this Contract or interested persons of any such party
("Independent Trustees"); (ix) all expenses incurred in connection with the
Independent Trustees' services, including travel expenses; (x) taxes 


<PAGE>   4
(including any income or franchise taxes) and governmental fees; (xi) costs of 
any liability, uncollectible items of deposit and other insurance and fidelity
bonds; (xii) any costs, expenses or losses arising out of a liability of or
claim for damages or other relief asserted against the Company or the Fund for
violation of any law; (xiii) interest charges; (xiv) legal, accounting and
auditing expenses, including legal fees of special counsel for the Independent
Trustees; (xv) charges of custodians, transfer agents, pricing agents and other
agents; (xvi) expenses of disbursing dividends and distributions; (xvii)
expenses of setting in type, printing and mailing reports, notices and proxy
materials for existing shareholders; (xviii) any extraordinary expenses
(including fees and disbursements of counsel, costs of actions, suits or
proceedings to which the Company is a party and the expenses the Company may
incur as a result of its legal obligation to provide indemnification to its
officers, Trustees, employees and agents) incurred by the Company or the Fund;
(xix) fees, voluntary assessments and other expenses incurred in connection with
membership in investment company organizations; (xx) costs of mailing and
tabulating proxies and costs of meetings of shareholders, the Board and any
committees thereof; (xxi) the cost of investment company literature and other
publications provided by the Company to its Trustees and officers; and (xxii)
costs of mailing, stationery and communications equipment.

         (c) All general expenses of the Company and joint expenses of the Funds
shall be allocated among each Fund on a basis deemed fair and equitable by
Adviser, subject to the Board's supervision.

         (d) Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Trustees of the Company who are not Independent Trustees.

         (e) The payment or assumption by Adviser of any expense of the Company
or any Fund that Adviser is not required by this Contract to pay or assume shall
not obligate Adviser to pay or assume the same or any similar expense of the
Company or any Fund on any subsequent occasion.

 8. Compensation.

         (a) For the services provided to a Fund under this Contract, the
Company shall pay the Adviser an annual fee, payable monthly, based upon the
average daily net assets of such Fund as forth in Appendix A attached hereto.
Such compensation shall be paid solely from the assets of such Fund.

         (b) For the services provided under this Contract, each Fund as
hereafter may be established will pay to Adviser a fee in an amount to be agreed
upon in a written Appendix to this Contract executed by the Company on behalf of
such Fund and by Adviser.

         (c) The fee shall be computed daily and paid monthly to Adviser on or
before the last business day of the next succeeding calendar month.

<PAGE>   5
         (d) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.

 9. Limitation of Liability of Adviser and Indemnification. Adviser shall not be
liable and each Fund shall indemnify Adviser and its directors, officers and
employees, for any costs or liabilities arising from any error of judgment or
mistake of law or any loss suffered by the Fund or the Company in connection
with the matters to which this Contract relates except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Adviser in the
performance by Adviser of its duties or from reckless disregard by Adviser of
its obligations and duties under this Contract. Any person, even though also an
officer, partner, employee, or agent of Adviser, who may be or become an
officer, Trustee, employee or agent of the Company shall be deemed, when
rendering services to a Fund or the Company or acting with respect to any
business of a Fund or the Company, to be rendering such service to or acting
solely for the Fund or the Company and not as an officer, partner, employee, or
agent or one under the control or direction of Adviser even though paid by it.

10. Duration and Termination.

         (a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to any
Fund unless it has first been approved (i) by a vote of a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of that Fund's
outstanding voting securities.

         (b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to each Fund this Contract shall continue automatically
for successive periods not to exceed twelve months each, provided that such
continuance is specifically approved at least annually (i) by a vote of a
majority of the Independent Trustees, cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by the Board or by vote of a
majority of the outstanding voting securities of that Fund.

         (c) Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Fund on sixty days' written notice to Adviser or by Adviser at
any time, without the payment of any penalty, on sixty days' written notice to
the Company. Termination of this Contract with respect to one Fund shall not
affect the continued effectiveness of this Contract with respect to any other
Fund. This Contract will automatically terminate in the event of its assignment.

<PAGE>   6

11. Amendment of this Contract. No provision of this Contract may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, and no amendment of this Contract shall be effective
until approved by vote of a majority of the Fund's outstanding voting
securities, when required by the 1940 Act.

12. Governing Law. This Contract shall be construed in accordance with the laws
of the State of Delaware (without regard to Delaware conflict or choice of law
provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.

13. License Agreement. The Company shall have the non-exclusive right to use
the name "AIM" to designate any current or future series of shares only so long
as A I M Advisors, Inc. serves as investment manager or adviser to the Company
with respect to such series of shares.

14. Limitation of Shareholder Liability. It is expressly agreed that the
obligations of the Company hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Company
personally, but shall only bind the assets and property of the Funds, as
provided in the Company's Agreement and Declaration of Trust. The execution and
delivery of this Contract have been authorized by the Trustees of the Company
and shareholders of the Funds, and this Contract has been executed and delivered
by an authorized officer of the Company acting as such; neither such
authorization by such Trustees and shareholders nor such execution and delivery
by such officer shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, but shall bind only the
assets and property of the Funds, as provided in the Company's Agreement and
Declaration of Trust.

15. Miscellaneous. The captions in this Contract are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this Contract
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Contract shall not be affected thereby. This Contract
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors. As used in this Contract, the terms "majority of
the outstanding voting securities," "interested person," "assignment," "broker,"
"dealer," "investment adviser," "national securities exchange," "net assets,"
"prospectus," "sale," "sell" and "security" shall have the same meaning as such
terms have in the 1940 Act, subject to such exemption as may be granted by the
Securities and Exchange Commission by any rule, regulation or order. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Contract is made less restrictive by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.


<PAGE>   7
         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.



Attest:                                   GLOBAL INVESTMENT PORTFOLIO

By: /s/ MICHAEL A. SILVER                 By:/s/ HELGE K. LEE
   ----------------------------              --------------------------------
Name:  Michael A. Silver                  Name:  Helge K. Lee
Title: Assistant Secretary                Title: Vice President and Secretary

Attest:                                   A I M ADVISORS, INC.

By:/s/ KATHLEEN J. PFLUEGER               By:/s/ CAROL F. RELIHAN
   ----------------------------              ---------------------------------
Name:  Kathleen J. Pflueger               Name:  Carol F. Relihan
Title: Assistant Secretary                Title: Senior Vice President


<PAGE>   8


                                   APPENDIX A
                                       TO
                INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
                                       OF
                           GLOBAL INVESTMENT PORTFOLIO

         The Company shall pay the Adviser, out of the assets of a Fund, as full
compensation for all services rendered and all facilities furnished hereunder, a
management fee for such Fund set forth below. Such fee shall be calculated by
applying the following annual rates to the average daily net assets of such Fund
for the calendar year computed in the manner used for the determination of the
net asset value of shares of such Fund.

    GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO, GLOBAL FINANCIAL SERVICES
 PORTFOLIO, GLOBAL INFRASTRUCTURE PORTFOLIO, GLOBAL NATURAL RESOURCES PORTFOLIO



NET ASSETS                                                 ANNUAL RATE
- ----------                                                 -----------
First $ 500 million...................................            .725%
Next $ 500 million....................................             .70%
Next $ 500 million....................................            .675%
On amounts thereafter.................................             .65%



<PAGE>   1

                                                                    EXHIBIT 5(j)

                           GLOBAL INVESTMENT PORTFOLIO
                  SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
                                     BETWEEN
                              A I M ADVISORS, INC.
                                       AND
                               INVESCO (NY), INC.

         Contract made as of May 29, 1998, between A I M Advisors, Inc., a
Delaware corporation ("Adviser"), and INVESCO (NY), INC., a California
corporation ("Sub-Adviser").

         WHEREAS Adviser has entered into an Investment Management and
Administration Contract with Global Investment Portfolio ("Company"), an
open-end management investment company registered under the Investment Company
Act of 1940, as amended ("1940 Act"), which has established several subtrusts
with each subtrust having its own assets and investment policies; and

         WHEREAS Adviser desires to retain Sub-Adviser as sub-adviser and
sub-administrator to furnish certain advisory and administrative services to the
Funds, and Sub-Adviser is willing to furnish such services;

         NOW THEREFORE, in consideration of the promises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:

1. Appointment. Adviser hereby appoints Sub-Adviser as sub-adviser and
sub-administrator of each Fund for the period and on the terms set forth in this
Contract. Sub-Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.

2. Duties as Sub-Adviser.

         (a) Subject to the supervision of the Company's Board of Trustees
("Board") and Adviser, the Sub-Adviser will provide a continuous investment
program for each Fund, including investment research and management, with
respect to all securities and investments and cash equivalents of the Fund. The
Sub-Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by each Fund, and the brokers
and dealers through whom trades will be executed.

         (b) The Sub-Adviser agrees that, in placing orders with brokers and
dealers, it will attempt to obtain the best net result in terms of price and
execution. Consistent with this obligation, the Sub-Adviser may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who sell shares of the Funds or provide the Funds, Adviser's other
clients, or Sub-Adviser's other clients with research, analysis, advice and
similar services. The Sub-Adviser may pay to brokers and dealers, in return for
such research and analysis, a higher commission or spread than may be charged by
other brokers




<PAGE>   2

and dealers, subject to the Sub-Adviser determining in good faith that such
commission or spread is reasonable in terms either of the particular transaction
or of the overall responsibility of the Adviser and the Sub-Adviser to the Funds
and their other clients and that the total commissions or spreads paid by each
Fund will be reasonable in relation to the benefits to the Fund over the long
term. In no instance will portfolio securities be purchased from or sold to the
Sub-Adviser, or any affiliated person thereof, except in accordance with the
federal securities laws and the rules and regulations thereunder and any
exemptive orders currently in effect. Whenever the Sub-Adviser simultaneously
places orders to purchase or sell the same security on behalf of a Fund and one
or more other accounts advised by the Sub-Adviser, such orders will be allocated
as to price and amount among all such accounts in a manner believed to be
equitable to each account.

         (c) The Sub-Adviser will maintain all books and records with respect to
the securities transactions of the Funds, and will furnish the Board and Adviser
with such periodic and special reports as the Board or Adviser reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Sub-Adviser hereby agrees that all records which it maintains for the
Company are the property of the Company, agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any records which it maintains for
the Company and which are required to be maintained by Rule 31a-1 under the 1940
Act, and further agrees to surrender promptly to the Company any records which
it maintains for the Company upon request by the Company.

3. Duties as Sub-Administrator. Sub-Adviser will administer the affairs of each
Fund subject to the supervision of the Company's Board of Trustees ("Board"),
the Adviser and the following understandings:

         (a) Sub-Adviser will supervise all aspects of the operations of each
Fund, including the oversight of transfer agency and custodial services except
as hereinafter set forth; provided, however, that nothing herein contained shall
be deemed to relieve or deprive the Board of its responsibility for control of
the conduct of the affairs of the Funds.

         (b) At Sub-Adviser's expense, Sub-Adviser will provide the Company and
the Funds with such corporate, administrative and clerical personnel (including
officers of the Company) and services as are reasonably deemed necessary or
advisable by the Board.

         (c) Sub-Adviser will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of each Fund's
proxy material, tax returns and required reports with or to the Fund's
shareholders, the Securities and Exchange Commission and other appropriate
federal or state regulatory authorities.

         (d) Sub-Adviser will provide the Company and the Funds with, or obtain
for them, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.


<PAGE>   3

4. Further Duties. In all matters relating to the performance of this Contract,
Sub-Adviser will act in conformity with the Agreement and Declaration of Trust,
By-Laws and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.

5. Services Not Exclusive. The services furnished by Sub-Adviser hereunder are
not to be deemed exclusive and Sub-Adviser shall be free to furnish similar
services to others so long as its services under this Contract are not impaired
thereby. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of Sub-Adviser, who may also be a Trustee, officer
or employee of the Company, to engage in any other business or to devote his or
her time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature.

6. Expenses.

         (a) During the term of this Contract, each Fund will bear all expenses,
not specifically assumed by Sub-Adviser, incurred in its operations.

         (b) Expenses borne by each Fund will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Fund and any losses incurred in connection
therewith; (ii) fees payable to and expenses incurred on behalf of the Fund by
Sub-Adviser under this Contract; (iii) investment consulting fees and related
costs; (iv) expenses of organizing the Company and the Fund; (v) expenses of
preparing and filing reports and other documents with governmental and
regulatory agencies; (vi) filing fees and expenses relating to the registration
and qualification of the Fund's shares and the Company under federal and/or
state securities laws and maintaining such registrations and qualifications;
(vii) costs incurred in connection with the issuance, sale or repurchase of the
Fund's shares of beneficial interest; (viii) fees and salaries payable to the
Company's Trustees who are not parties to this Contract or interested persons of
any such party ("Independent Trustees"); (ix) all expenses incurred in
connection with the Independent Trustees' services, including travel expenses;
(x) taxes (including any income or franchise taxes) and governmental fees; (xi)
costs of any liability, uncollectible items of deposit and other insurance and
fidelity bonds; (xii) any costs, expenses or losses arising out of a liability
of or claim for damages or other relief asserted against the Company or the Fund
for violation of any law; (xiii) interest charges; (xiv) legal, accounting and
auditing expenses, including legal fees of special counsel for the Independent
Trustees; (xv) charges of custodians, transfer agents, pricing agents and other
agents; (xvi) expenses of disbursing dividends and distributions; (xvii)
expenses of setting in type, printing and mailing reports, notices and proxy
materials for existing shareholders; (xviii) any extraordinary expenses
(including fees and disbursements of counsel, costs of actions, suits or
proceedings to which the Company is a party and the expenses the Company may
incur as a result of its legal obligation to provide indemnification to its
officers, Trustees, employees and agents) incurred by the Company; 



<PAGE>   4

(xix) fees, voluntary assessments and other expenses incurred in connection with
membership in investment company organizations; (xx) costs of mailing and
tabulating proxies and costs of meetings of shareholders, the Board and any
committees thereof; (xxi) the cost of investment company literature and other
publications provided by the Company to its Trustees and officers; and (xxii)
costs of mailing, stationery and communications equipment.

         (c) Sub-Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Trustees of the Company who are not Independent Trustees.

         (d) The payment or assumption by Sub-Adviser of any expense of the
Company or any Fund that Sub-Adviser is not required by this Contract to pay or
assume shall not obligate Sub-Adviser to pay or assume the same or any similar
expense of the Company or any Fund on any subsequent occasion.

7. Compensation.

         (a) For the services provided to a Fund under this Contract, Adviser
will pay Sub-Adviser a fee, computed weekly and paid monthly, as set forth in
Appendix A hereto.

         (b) For the services provided under this Contract to each Fund as
hereafter may be established, Adviser will pay to Sub-Adviser a fee in an amount
to be agreed upon in a written Appendix to this Contract executed by Adviser and
by Sub-Adviser.

         (c) The fee shall be computed weekly and paid monthly to Sub-Adviser on
or before the last business day of the next succeeding calendar month.

         (d) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.

8. Limitation of Liability of Sub-Adviser and Indemnification. Sub-Adviser shall
not be liable for any costs or liabilities arising from any error of judgment or
mistake of law or any loss suffered by the Fund or the Company in connection
with the matters to which this Contract relates except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Sub-Adviser in
the performance by Sub-Adviser of its duties or from reckless disregard by
Sub-Adviser of its obligations and duties under this Contract. Any person, even
though also an officer, partner, employee, or agent of Sub-Adviser, who may be
or become a Trustee, officer, employee or agent of the Company, shall be deemed,
when rendering services to a Fund or the Company or acting with respect to any
business of a Fund or the Company to be rendering such service to or acting
solely for the Fund or the 


<PAGE>   5

Company and not as an officer, partner, employee, or agent or one under the
control or direction of Sub-Adviser even though paid by it.

9. Duration and Termination.

         (a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to any
Fund unless it has first been approved (i) by a vote of a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of that Fund's
outstanding voting securities.

         (b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to each Fund, this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of that Fund.

         (c) Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Fund on sixty days' written notice to Sub-Adviser or by
Sub-Adviser at any time, without the payment of any penalty, on sixty days'
written notice to the Company. Termination of this Contract with respect to one
Fund shall not affect the continued effectiveness of this Contract with respect
to any other Fund.
This Contract will automatically terminate in the event of its assignment.

10. Amendment. No provision of this Contract may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Contract shall be effective until approved by
vote of a majority of the Fund's outstanding voting securities, when required by
the 1940 Act.

11. Governing Law. This Contract shall be construed in accordance with the laws
of the State of Delaware (without regard to Delaware conflict or choice of law
provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.

12. Miscellaneous. The captions in this Contract are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this Contract
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Contract shall not be affected thereby. This Contract
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors. As used in this Contract, the terms "majority of
the outstanding voting securities," "interested person," "assignment," "broker,"
"dealer," 




<PAGE>   6

"investment adviser," "national securities exchange," "net assets,"
"prospectus," "sale," "sell" and "security" shall have the same meaning as such
terms have in the 1940 Act, subject to such exemption as may be granted by the
Securities and Exchange Commission by any rule, regulation or order. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Contract is made less restrictive by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.

         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.


                                       AIM ADVISORS, INC.

Attest: /s/ KATHLEEN J. PFLUEGER       By: /s/ CAROL F. RELIHAN
       ---------------------------        -------------------------------------
Name:  Kathleen J. Pflueger            Name:  Carol F. Relihan
Title: Assistant Secretary             Title: Senior Vice President & Secretary
                                              

                                       INVESCO (NY), INC.

Attest: /s/ MICHAEL A. SILVER          By: /s/ HELGE K. LEE
       ---------------------------        -------------------------------
          Michael A. Silver            Name:  Helge K. Lee
                                       Title: Chief Legal and Compliance
                                              Officer and Secretary



<PAGE>   7



                                   APPENDIX A
                                       TO
                  SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT


  GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO, GLOBAL FINANCIAL SERVICES
PORTFOLIO, GLOBAL INFRASTRUCTURE PORTFOLIO, GLOBAL NATURAL RESOURCES PORTFOLIO



<TABLE>
<CAPTION>
NET ASSETS                                                      ANNUAL RATE
- ----------                                                      -----------
<S>                                                            <C>  
First $ 500 million...........................................     0.39%
Next $ 500 million............................................     0.38%
Next $ 500 million............................................     0.37%
On amounts thereafter.........................................     0.36%
</TABLE>




<PAGE>   1


                                                                    EXHIBIT 5(k)

                          GLOBAL HIGH INCOME PORTFOLIO
                INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
                                     BETWEEN
                          GLOBAL HIGH INCOME PORTFOLIO
                                       AND
                              A I M ADVISORS, INC.

         Contract made as of May 29, 1998, between Global High Income Portfolio,
a Delaware business trust ("Company), and A I M Advisors, Inc., a Delaware
corporation (the "Adviser").

         WHEREAS the Company is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company, and

         WHEREAS the Company desires to retain Adviser as investment manager and
administrator to furnish certain investment advisory, portfolio management and
administration services to the Company, and Adviser is willing to furnish such
services;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:

 1. Appointment. The Company hereby appoints Adviser as investment manager and
administrator of the Company for the period and on the terms set forth in this
Contract. Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.

 2. Duties as Investment Manager.

         (a) Subject to the supervision of the Company's Board of Trustees
("Board"), Adviser will provide a continuous investment program for the Company,
including investment research and management with respect to all securities and
investments and cash equivalents of the Company. Adviser will determine from
time to time what securities and other investments will be purchased, retained
or sold by the Company, and the brokers and dealers through whom trades will be
executed.

         (b) Adviser agrees that in placing orders with brokers and dealers it
will attempt to obtain the best net results in terms of price and execution.
Consistent with this obligation Adviser may, in its discretion, purchase and
sell portfolio securities to and from brokers and dealers who sell shares of the
Company or provide the Company or Adviser's other clients with research,
analysis, advice and similar services. Adviser may pay to brokers and dealers,
in return for research and analysis, a higher commission or spread than may be
charged by other brokers and dealers, subject to Adviser's determining in good
faith that such commission or spread is reasonable in terms either of the
particular transaction or of the overall responsibility of Adviser to the
Company and its other clients and that the total commissions or spreads paid by
the Company will be reasonable in relation to the benefits 

<PAGE>   2
to the Company over the long term. In no instance will portfolio securities be
purchased from or sold to Adviser or any affiliated person thereof except in
accordance with the federal securities laws and the rules and regulations
thereunder and any exemptive orders currently in effect. Whenever Adviser
simultaneously places orders to purchase or sell the same security on behalf of
a Company and one or more other accounts advised by Adviser, such orders will be
allocated as to price and amount among all such accounts in a manner believed to
be equitable to each account. The Company recognizes that in some cases this
procedure may adversely affect the results obtained for the Company.

         (c) Adviser will oversee the maintenance of all books and records with
respect to the securities transactions of the Company, and will furnish the
Board with such periodic and special reports as the Board reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
Adviser hereby agrees that all records which it maintains for the Company are
the property of the Company, agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any records which it maintains for the Company and
which are required to be maintained by Rule 31a-1 under the 1940 Act, and
further agrees to surrender promptly to the Company any records which it
maintains for the Company upon request by the Company.

 3. Duties as Administrator. Adviser will administer the affairs of the Company
subject to the supervision of the Board and the following understandings:

         (a) Adviser will supervise all aspects of the operations of the
Company, including the oversight of transfer agency and custodial services,
except as hereinafter set forth; provided, however, that nothing herein
contained shall be deemed to relieve or deprive the Board of its responsibility
for control of the conduct of the affairs of the Company.

         (b) At Adviser's expense, Adviser will provide the Company with such
corporate, administrative and clerical personnel (including officers of the
Company) and services as are reasonably deemed necessary or advisable by the
Board.

         (c) Adviser will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of the Company's proxy
material, tax returns and required reports with or to the Company's
shareholders, the Securities and Exchange Commission and other appropriate
federal or state regulatory authorities.

         (d) Adviser will provide the Company with, or obtain for it, adequate
office space and all necessary office equipment and services, including
telephone service, heat, utilities, stationery supplies and similar items.

 4. Further Duties. In all matters relating to the performance of this Contract,
Adviser will act in conformity with the Agreement and Declaration of Trust,
By-Laws and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.

<PAGE>   3

 5. Delegation of Adviser's Duties as Investment Manager and Administrator. With
respect to the Company, Adviser may enter into one or more contracts
("Sub-Advisory or Sub-Administration Contract") with a sub-adviser or
sub-administrator in which Adviser delegates to such sub-adviser or
sub-administrator the performance of any or all of the services specified in
Paragraphs 2 and 3 of this Contract, provided that: (i) each Sub-Advisory and
Sub-Administration Contract imposes on the sub-adviser or sub-administrator
bound thereby all the duties and conditions to which Adviser is subject with
respect to the services under Paragraphs 2, 3 and 4 of this Contract; (ii) each
Sub-Advisory and Sub-Administration Contract meets all requirements of the 1940
Act and rules thereunder, and (iii) Adviser shall not enter into a Sub-Advisory
or Sub-Administration Contract unless it is approved by the Board prior to
implementation.

 6. Services Not Exclusive. The services furnished by Adviser hereunder are not
to be deemed exclusive and Adviser shall be free to furnish similar services to
others so long as its services under this Contract are not impaired thereby.
Nothing in this Contract shall limit or restrict the right of any director,
officer or employee of Adviser, who may also be a Trustee, officer or employee
of the Company, to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature.

 7. Expenses.

         (a) During the term of this Contract, the Company will bear all
expenses, not specifically assumed by Adviser.

         (b) Expenses borne by the Company will include but not be limited to
the following: (i) all direct charges relating to the purchase and sale of
portfolio securities, including the cost (including brokerage commissions, if
any) of securities purchased or sold by the Company and any losses incurred in
connection therewith; (ii) fees payable to and expenses incurred on behalf of
the Company by Adviser under this Contract; (iii) investment consulting fees and
related costs; (iv) expenses of organizing the Company; (v) expenses of
preparing filing reports and other documents with governmental and regulatory
agencies; (vi) filing fees and expenses relating to the registration and
qualification of the Company's shares and the Company under federal and/or state
securities laws and maintaining such registrations and qualifications; (vii)
costs incurred in connection with the issuance, sale or repurchase of the
Company's shares of beneficial interest; (viii) fees and salaries payable to the
Company's Trustees who are not parties to this Contract or interested persons of
any such party ("Independent Trustees"); (ix) all expenses incurred in
connection with the Independent Trustees' services, including travel expenses;
(x) taxes (including any income or franchise taxes) and governmental fees; (xi)
costs of any liability, uncollectible items of deposit and other insurance and
fidelity bonds; (xii) any costs, expenses or losses arising out of a liability
of or claim for damages or other relief 
<PAGE>   4
asserted against the Company for violation of any law; (xiii) interest charges;
(xiv) legal, accounting and auditing expenses, including legal fees of special
counsel for the Independent Trustees; (xv) charges of custodians, transfer
agents, pricing agents and other agents; (xvi) expenses of disbursing dividends
and distributions; (xvii) expenses of setting in type, printing and mailing
reports, notices and proxy materials for existing shareholders; (xviii) any
extraordinary expenses (including fees and disbursements of counsel, costs of
actions, suits or proceedings to which the Company is a party and the expenses
the Company may incur as a result of its legal obligation to provide
indemnification to its officers, Trustees, employees and agents) incurred by the
Company; (xix) fees, voluntary assessments and other expenses incurred in
connection with membership in investment company organizations; (xx) costs of
mailing and tabulating proxies and costs of meetings of shareholders, the Board
and any committees thereof; (xxi) the cost of investment company literature and
other publications provided by the Company to its Trustees and officers; and
(xxii) costs of mailing, stationery and communications equipment.

         (c) Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Trustees of the Company who are not Independent Trustees.

         (d) The payment or assumption by Adviser of any expense of the Company
that Adviser is not required by this Contract to pay or assume shall not
obligate Adviser to pay or assume the same or any similar expense of the Company
on any subsequent occasion.

 8. Compensation.

         (a) For the services provided to the Company under this Contract, the
Company shall pay the Adviser an annual fee, payable monthly, based upon the
average daily net assets of the Company as forth in Appendix A attached hereto.
Such compensation shall be paid solely from the assets of the Company. The
Company will also pay the Adviser a fee equal to 2% of the Company's total
investment income calculated in accordance with generally accepted accounting
principles, adjusted daily for currency revaluations, on a marked to market
basis, of the Company's assets; provided, however, that during any fiscal year
this amount shall not exceed 2% of the Company's total investment income
calculated in accordance with generally accepted accounting principles.

         (b) The fee shall be computed daily and paid monthly to Adviser on or
before the last business day of the next succeeding calendar month.

         (c) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.

<PAGE>   5

9.  Limitation of Liability of Adviser and Indemnification. Adviser shall not be
liable and the Company shall indemnify Adviser and its directors, officers and
employees, for any costs or liabilities arising from any error of judgment or
mistake of law or any loss suffered by the Company in connection with the
matters to which this Contract relates except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of Adviser in the
performance by Adviser of its duties or from reckless disregard by Adviser of
its obligations and duties under this Contract. Any person, even though also an
officer, partner, employee, or agent of Adviser, who may be or become an
officer, Trustee, employee or agent of the Company shall be deemed, when
rendering services to the Company or acting with respect to any business of the
Company, to be rendering such service to or acting solely for the Company and
not as an officer, partner, employee, or agent or one under the control or
direction of Adviser even though paid by it.

10. Duration and Termination.

         (a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to the
Company unless it has first been approved (i) by a vote of a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of the Company's
outstanding voting securities.

         (b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to the Company this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of the Company.

         (c) Notwithstanding the foregoing, with respect to the Company this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Company on sixty days' written notice to Adviser or by Adviser
at any time, without the payment of any penalty, on sixty days' written notice
to the Company. This Contract will automatically terminate in the event of its
assignment.

11. Amendment of this Contract. No provision of this Contract may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, and no amendment of this Contract shall be effective
until approved by vote of a majority of the Company's outstanding voting
securities, when required by the 1940 Act.

12. Governing Law. This Contract shall be construed in accordance with the laws
of the State of Delaware (without regard to Delaware conflict or choice of law
provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.

<PAGE>   6

13. License Agreement. The Company shall have the non-exclusive right to use
the name "AIM" to designate any current or future series of shares only so long
as A I M Advisors, Inc. serves as investment manager or adviser to the Company
with respect to such series of shares.

14. Limitation of Shareholder Liability. It is expressly agreed that the
obligations of the Company hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Company
personally, but shall only bind the assets and property of the Company, as
provided in the Company's Agreement and Declaration of Trust. The execution and
delivery of this Contract have been authorized by the Trustees of the Company
and shareholders of the Company, and this Contract has been executed and
delivered by an authorized officer of the Company acting as such; neither such
authorization by such Trustees and shareholders nor such execution and delivery
by such officer shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, but shall bind only the
assets and property of the Company, as provided in the Company's Agreement and
Declaration of Trust.

15. Miscellaneous. The captions in this Contract are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this Contract
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Contract shall not be affected thereby. This Contract
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors. As used in this Contract, the terms "majority of
the outstanding voting securities," "interested person," "assignment," "broker,"
"dealer," "investment adviser," "national securities exchange," "net assets,"
"prospectus," "sale," "sell" and "security" shall have the same meaning as such
terms have in the 1940 Act, subject to such exemption as may be granted by the
Securities and Exchange Commission by any rule, regulation or order. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Contract is made less restrictive by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.

         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.


Attest:                                    GLOBAL HIGH INCOME PORTFOLIO

   
By: /s/ MICHAEL A. SILVER                  By: /s/ HELGE K. LEE
   ---------------------------                --------------------------------
Name:   Michael A. Silver                  Name:  Helge K. Lee
Title:  Assistant Secretary                Title: Vice President and Secretary
    

Attest:                                    A I M ADVISORS, INC.

   
By: /s/ KATHLEEN J. PFLUEGER               By: /s/ CAROL F. RELIHAN
   ---------------------------                --------------------------------
Name:   Kathleen J. Pflueger               Name:   Carol F. Relihan
Title:  Assistant Secretary                Title:  Senior Vice President
    


<PAGE>   7


                                   APPENDIX A
                                       TO
                INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
                                       OF
                          GLOBAL HIGH INCOME PORTFOLIO

         In addition to amounts otherwise payable under Section 8(a) of the
Contract, the Company shall pay the Adviser, out of the assets of the Company,
as full compensation for all services rendered and all facilities furnished
hereunder, a management fee for the Company set forth below. Such fee shall be
calculated by applying the following annual rates to the average daily net
assets of the Company for the calendar year computed in the manner used for the
determination of the net asset value of shares of the Company.

                          GLOBAL HIGH INCOME PORTFOLIO


NET ASSETS                                                  ANNUAL RATE
- ----------                                                  -----------
First $ 500 million.................................               .475%
Next $ 1 billion....................................                .45%
Next $ 1 billion....................................               .425%
On amounts thereafter...............................                .40%




<PAGE>   1


                                                                    EXHIBIT 5(l)

                          GLOBAL HIGH INCOME PORTFOLIO
                  SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
                                     BETWEEN
                              A I M ADVISORS, INC.
                                       AND
                               INVESCO (NY), INC.

         Contract made as of May 29, 1998, between A I M Advisors, Inc., a
Delaware corporation ("Adviser"), and INVESCO (NY), INC., a California
corporation ("Sub-Adviser").

         WHEREAS Adviser has entered into an Investment Management and
Administration Contract with Global High Income Portfolio ("Company"), an
open-end management investment company registered under the Investment Company
Act of 1940, as amended ("1940 Act"); and

         WHEREAS Adviser desires to retain Sub-Adviser as sub-adviser and
sub-administrator to furnish certain advisory and administrative services to the
Funds, and Sub-Adviser is willing to furnish such services;

         NOW THEREFORE, in consideration of the promises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:

1. Appointment. Adviser hereby appoints Sub-Adviser as sub-adviser and
sub-administrator of each Fund for the period and on the terms set forth in this
Contract. Sub-Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.

2. Duties as Sub-Adviser.

         (a) Subject to the supervision of the Company's Board of Trustees
("Board") and Adviser, the Sub-Adviser will provide a continuous investment
program for each Fund, including investment research and management, with
respect to all securities and investments and cash equivalents of the Fund. The
Sub-Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by each Fund, and the brokers
and dealers through whom trades will be executed.

         (b) The Sub-Adviser agrees that, in placing orders with brokers and
dealers, it will attempt to obtain the best net result in terms of price and
execution. Consistent with this obligation, the Sub-Adviser may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who sell shares of the Funds or provide the Funds, Adviser's other
clients, or Sub-Adviser's other clients with research, analysis, advice and
similar services. The Sub-Adviser may pay to brokers and dealers, in return for
such research and analysis, a higher commission or spread than may be charged by
other brokers and dealers, subject to the Sub-Adviser determining in good faith
that such commission or 




<PAGE>   2

spread is reasonable in terms either of the particular transaction or of the
overall responsibility of the Adviser and the Sub-Adviser to the Funds and their
other clients and that the total commissions or spreads paid by each Fund will
be reasonable in relation to the benefits to the Fund over the long term. In no
instance will portfolio securities be purchased from or sold to the Sub-Adviser,
or any affiliated person thereof, except in accordance with the federal
securities laws and the rules and regulations thereunder and any exemptive
orders currently in effect. Whenever the Sub-Adviser simultaneously places
orders to purchase or sell the same security on behalf of a Fund and one or more
other accounts advised by the Sub-Adviser, such orders will be allocated as to
price and amount among all such accounts in a manner believed to be equitable to
each account.

         (c) The Sub-Adviser will maintain all books and records with respect to
the securities transactions of the Funds, and will furnish the Board and Adviser
with such periodic and special reports as the Board or Adviser reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Sub-Adviser hereby agrees that all records which it maintains for the
Company are the property of the Company, agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any records which it maintains for
the Company and which are required to be maintained by Rule 31a-1 under the 1940
Act, and further agrees to surrender promptly to the Company any records which
it maintains for the Company upon request by the Company.

3. Duties as Sub-Administrator. Sub-Adviser will administer the affairs of each
Fund subject to the supervision of the Company's Board of Trustees ("Board"),
the Adviser and the following understandings:

         (a) Sub-Adviser will supervise all aspects of the operations of each
Fund, including the oversight of transfer agency and custodial services except
as hereinafter set forth; provided, however, that nothing herein contained shall
be deemed to relieve or deprive the Board of its responsibility for control of
the conduct of the affairs of the Funds.

         (b) At Sub-Adviser's expense, Sub-Adviser will provide the Company and
the Funds with such corporate, administrative and clerical personnel (including
officers of the Company) and services as are reasonably deemed necessary or
advisable by the Board.

         (c) Sub-Adviser will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of each Fund's
proxy material, tax returns and required reports with or to the Fund's
shareholders, the Securities and Exchange Commission and other appropriate
federal or state regulatory authorities.

         (d) Sub-Adviser will provide the Company and the Funds with, or obtain
for them, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.

4. Further Duties. In all matters relating to the performance of this Contract,
Sub-Adviser will act in conformity with the Agreement and Declaration of Trust,
By-Laws and 



<PAGE>   3

Registration Statement of the Company and with the instructions and directions
of the Board and will comply with the requirements of the 1940 Act, the rules
thereunder, and all other applicable federal and state laws and regulations.

5. Services Not Exclusive. The services furnished by Sub-Adviser hereunder are
not to be deemed exclusive and Sub-Adviser shall be free to furnish similar
services to others so long as its services under this Contract are not impaired
thereby. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of Sub-Adviser, who may also be a Trustee, officer
or employee of the Company, to engage in any other business or to devote his or
her time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature.

6. Expenses.

         (a) During the term of this Contract, each Fund will bear all expenses,
not specifically assumed by Sub-Adviser, incurred in its operations.

         (b) Expenses borne by each Fund will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Fund and any losses incurred in connection
therewith; (ii) fees payable to and expenses incurred on behalf of the Fund by
Sub-Adviser under this Contract; (iii) investment consulting fees and related
costs; (iv) expenses of organizing the Company and the Fund; (v) expenses of
preparing and filing reports and other documents with governmental and
regulatory agencies; (vi) filing fees and expenses relating to the registration
and qualification of the Fund's shares and the Company under federal and/or
state securities laws and maintaining such registrations and qualifications;
(vii) costs incurred in connection with the issuance, sale or repurchase of the
Fund's shares of beneficial interest; (viii) fees and salaries payable to the
Company's Trustees who are not parties to this Contract or interested persons of
any such party ("Independent Trustees"); (ix) all expenses incurred in
connection with the Independent Trustees' services, including travel expenses;
(x) taxes (including any income or franchise taxes) and governmental fees; (xi)
costs of any liability, uncollectible items of deposit and other insurance and
fidelity bonds; (xii) any costs, expenses or losses arising out of a liability
of or claim for damages or other relief asserted against the Company or the Fund
for violation of any law; (xiii) interest charges; (xiv) legal, accounting and
auditing expenses, including legal fees of special counsel for the Independent
Trustees; (xv) charges of custodians, transfer agents, pricing agents and other
agents; (xvi) expenses of disbursing dividends and distributions; (xvii)
expenses of setting in type, printing and mailing reports, notices and proxy
materials for existing shareholders; (xviii) any extraordinary expenses
(including fees and disbursements of counsel, costs of actions, suits or
proceedings to which the Company is a party and the expenses the Company may
incur as a result of its legal obligation to provide indemnification to its
officers, Trustees, employees and agents) incurred by the Company; (xix) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (xx) costs of mailing and tabulating



<PAGE>   4

proxies and costs of meetings of shareholders, the Board and any committees
thereof; (xxi) the cost of investment company literature and other publications
provided by the Company to its Trustees and officers; and (xxii) costs of
mailing, stationery and communications equipment.

         (c) Sub-Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Trustees of the Company who are not Independent Trustees.

         (d) The payment or assumption by Sub-Adviser of any expense of the
Company or any Fund that Sub-Adviser is not required by this Contract to pay or
assume shall not obligate Sub-Adviser to pay or assume the same or any similar
expense of the Company or any Fund on any subsequent occasion.

7. Compensation.

         (a) For the services provided to a Fund under this Contract, Adviser
will pay Sub-Adviser a fee, computed weekly and paid monthly, as set forth in
Appendix A hereto. Adviser will also pay Sub-Adviser a fee equal to 0.8% of the
Portfolio's total investment income calculated in accordance with generally
accepted accounting principles, adjusted daily for currency revaluations, on a
marked to market basis, of the Portfolio's assets; provided, however, that
during any fiscal year this amount shall not exceed 0.8% of the Portfolio's
total investment income calculated in accordance with generally accepted
accounting principles.

         (b) For the services provided under this Contract to each Fund as
hereafter may be established, Adviser will pay to Sub-Adviser a fee in an amount
to be agreed upon in a written Appendix to this Contract executed by Adviser and
by Sub-Adviser.

         (c) The fee shall be computed weekly and paid monthly to Sub-Adviser on
or before the last business day of the next succeeding calendar month.

         (d) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.

8. Limitation of Liability of Sub-Adviser and Indemnification. Sub-Adviser shall
not be liable for any costs or liabilities arising from any error of judgment or
mistake of law or any loss suffered by the Fund or the Company in connection
with the matters to which this Contract relates except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Sub-Adviser in
the performance by Sub-Adviser of its duties or from reckless disregard by
Sub-Adviser of its obligations and duties under this Contract. Any person, even
though also an officer, partner, employee, or agent of Sub-Adviser, who



<PAGE>   5

may be or become a Trustee, officer, employee or agent of the Company, shall be
deemed, when rendering services to a Fund or the Company or acting with respect
to any business of a Fund or the Company to be rendering such service to or
acting solely for the Fund or the Company and not as an officer, partner,
employee, or agent or one under the control or direction of Sub-Adviser even
though paid by it.

9. Duration and Termination.

         (a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to any
Fund unless it has first been approved (i) by a vote of a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of that Fund's
outstanding voting securities.

         (b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to each Fund, this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of that Fund.

         (c) Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Fund on sixty days' written notice to Sub-Adviser or by
Sub-Adviser at any time, without the payment of any penalty, on sixty days'
written notice to the Company. Termination of this Contract with respect to one
Fund shall not affect the continued effectiveness of this Contract with respect
to any other Fund. This Contract will automatically terminate in the event of
its assignment.

10. Amendment. No provision of this Contract may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Contract shall be effective until approved by
vote of a majority of the Fund's outstanding voting securities, when required by
the 1940 Act.

11. Governing Law. This Contract shall be construed in accordance with the laws
of the State of Delaware (without regard to Delaware conflict or choice of law
provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.

12. Miscellaneous. The captions in this Contract are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this Contract
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Contract shall not be affected



<PAGE>   6

thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
the terms "majority of the outstanding voting securities," "interested person,"
"assignment," "broker," "dealer," "investment adviser," "national securities
exchange," "net assets," "prospectus," "sale," "sell" and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act reflected
in any provision of this Contract is made less restrictive by a rule, regulation
or order of the Securities and Exchange Commission, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.

         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.


                                            AIM ADVISORS, INC.

   
Attest: /s/ KATHLEEN J. PFLUEGER            By: /s/ CAROL F. RELIHAN
        ------------------------                -------------------------------
Name:       Kathleen J. Pflueger            Name:   Carol F. Relihan
Title:      Assistant Secretary             Title:  Senior Vice President &
                                                    Secretary
    

                                            INVESCO (NY), INC.

   
Attest: /s/ MICHAEL A. SILVER               By: /s/ HELGE K. LEE
        ----------------------                  -------------------------------
          Michael A. Silver                 Name: Helge K. Lee
                                            Title: Chief Legal and Compliance
                                                   Officer and Secretary
    




<PAGE>   7



                                   APPENDIX A
                                       TO
                  SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT



                          GLOBAL HIGH INCOME PORTFOLIO

              0.8% of the Portfolio's total investment income, plus


<TABLE>
<CAPTION>
NET ASSETS                                                        ANNUAL RATE
- ----------                                                        -----------
<S>                                                               <C>
First $ 500 million.........................................        0.29%
Next $ 1 billion............................................        0.28%
Next $ 1 billion............................................        0.27%
On amounts thereafter.......................................        0.26%
</TABLE>





<PAGE>   1
                                                                  EXHIBIT 6(a)
                             DISTRIBUTION AGREEMENT

                                    BETWEEN

                           AIM INVESTMENT FUNDS, INC.

                                      AND

                            A I M DISTRIBUTORS, INC.

                                 CLASS A SHARES


         THIS AGREEMENT made this 29th day of May, 1998, by and between AIM
Investment Funds, Inc., a Maryland Corporation (the "Company"), with respect to
the series of common stock set forth on Appendix A to this Agreement, and any
applicable classes thereof, (the "Portfolios"), and A I M Distributors, Inc., a
Delaware corporation (the "Distributor").

                              W I T N E S S E T H:

         In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged,
the parties hereto agree as follows:

         FIRST:  The Company on behalf of the Portfolios hereby appoints the
Distributor as its exclusive agent for the sale of shares of the Portfolios to
the public directly and through investment dealers and financial institutions
in the United States and throughout the world.

         SECOND:  The Company shall not sell any shares of the Portfolios
except through the Distributor and under the terms and conditions set forth in
paragraph FOURTH below.  Notwithstanding the provisions of the foregoing
sentence, however:

         (A)     the Company may issue shares of the Portfolios to any other
investment company or personal holding company, or to the shareholders thereof,
in exchange for all or a majority of the shares or assets of any such company;
and

         (B)     the Company may issue shares of the Portfolios at their net
asset value in connection with certain classes of transactions or to certain
classes of persons, in accordance with Rule 22d-1 under the Investment Company
Act of 1940, as amended (the "1940 Act"), provided that any such class is
specified in the then current prospectus of the applicable Portfolio.

         THIRD:  The Distributor hereby accepts appointment as exclusive agent
for the sale of the shares of the Portfolios and agrees that it will use its
best efforts to sell such shares; provided, however, that:

         (A)     the Distributor may, and when requested by the Company on
behalf of a Portfolio shall, suspend its efforts to effectuate such sales at
any time when, in the opinion of the Distributor or of the Company, no sales
should be made because of market or other economic considerations or abnormal
circumstances of any kind; and
<PAGE>   2
         (B)     the Company may withdraw the offering of the shares of a
Portfolio (i) at any time with the consent of the Distributor, or (ii) without
such consent when so required by the provisions of any statute or of any order,
rule or regulation of any governmental body having jurisdiction.  It is
mutually understood and agreed that the Distributor does not undertake to sell
any specific amount of the shares of the Portfolios.  The Company shall have
the right to specify minimum amounts for initial and subsequent orders for the
purchase of shares of any Portfolio.

         FOURTH:

         (A)     The public offering price of Class A shares of a Portfolio
(the "offering price") shall be the net asset value per share of the applicable
Portfolio plus a sales charge, if any.  Net asset value per share shall be
determined in accordance with the provisions of the then current prospectus and
statement of additional information of the applicable Portfolio.  The sales
charge shall be established by the Distributor, may reflect scheduled
variations in, or the elimination of, sales charges on sales of a Portfolio's
Class A shares either generally to the public, or to any specified class of
investors or in connection with any specified class of transactions, in
accordance with Rule 22d-1 and as set forth in the then current prospectus and
statement of additional information of the applicable Portfolio.  The
Distributor shall apply any scheduled variation in, or elimination of, the
selling commission uniformly to all offerees in the class specified.  The
Distributor shall be entitled to receive the amount of any applicable
contingent deferred sales charge that has been subtracted from gross redemption
proceeds (the "CDSC"), provided that the Shares being redeemed were (i) issued
by a Portfolio during the term of this Agreement and any predecessor Agreement
between the Company and the Distributor or Distributor's predecessor, GT
Global, Inc. ("GT Global"), or (ii) issued by a Portfolio during or after the
term of this Agreement or any predecessor Agreement between the Company and the
Distributor or GT Global in one or a series of free exchanges of Shares for
shares of the same class of another portfolio, which can be traced to Shares or
shares of the same class of another portfolio initially issued by a Portfolio
or such other portfolio during the term of this Agreement, any predecessor
Agreement or any other distribution agreement with the Distributor or GT Global
with respect to such other portfolio (the "Distributor's Earned CDSC").  The
Company shall pay or cause the Company's transfer agent to pay the
Distributor's Earned CDSC to the Distributor on the date net redemption
proceeds are payable to the redeeming shareholder.

         (B)     The Company shall allow directly to investment dealers and
other financial institutions through whom Class A shares of the Portfolios are
sold such portion of the sales charge as may be payable to them and specified
by the Distributor, up to but not exceeding the amount of the total sales
charge.  The difference between any commissions so payable and the total sales
charges included in the offering price shall be paid to the Distributor.

         (C)     No provision of this Agreement shall be deemed to prohibit any
payments by a Portfolio to the Distributor or by a Portfolio or the Distributor
to investment dealers, financial institutions and 401(k) plan service providers
where such payments are made under a distribution plan adopted by the Company
on behalf of a Portfolio pursuant to Rule 12b-1 under the 1940 Act.

         FIFTH:  The Distributor shall act as agent of the Company on behalf of
the Portfolios in connection with the sale and repurchase of shares of the
Portfolios.  Except with respect to such sales and repurchases, the Distributor
shall act as principal in all matters relating to the promotion of the sale of
shares of the Portfolios and shall enter into all of its own engagements,
agreements and contracts as principal on its own account.  The Distributor
shall enter into agreements with investment dealers and financial institutions
selected by the Distributor, authorizing such investment dealers and financial




                                      2
<PAGE>   3
institutions to offer and sell shares of the Portfolios to the public upon the
terms and conditions set forth therein, which shall not be inconsistent with
the provisions of this Agreement.  Each agreement shall provide that the
investment dealer and financial institution shall act as a principal, and not
as an agent, of the Company on behalf of the Portfolios.

         SIXTH:  The Portfolios shall bear:

         (A)     the expenses of qualification of shares of the Portfolios for
sale in connection with such public offerings in such states as shall be
selected by the Distributor, and of continuing the qualification therein until
the Distributor notifies the Company that it does not wish such qualification
continued; and

         (B)     all legal expenses in connection with the foregoing.

         SEVENTH:

         (A)     The Distributor shall bear the expenses of printing from the
final proof and distributing the Portfolios' prospectuses and statements of
additional inforrnation (including supplements thereto) relating to public
offerings made by the Distributor pursuant to this Agreement (which shall not
include those prospectuses and statements of additional information, and
supplements thereto, to be distributed to shareholders of the Portfolios), and
any other promotional or sales literature used by the Distributor or furnished
by the Distributor to dealers in connection with such public offerings, and
expenses of advertising in connection with such public offerings.

         (B)     The Distributor may be reimbursed for all or a portion of such
expenses, or may receive reasonable compensation for distribution related
services, to the extent permitted by a distribution plan adopted by the Company
on behalf of a Portfolio pursuant to Rule 12b-1 under the 1940 Act.

         EIGHTH:  The Distributor will accept orders for the purchase of shares
of the Portfolios only to the extent of purchase orders actually received and
not in excess of such orders, and it will not avail itself of any opportunity
of making a profit by expediting or withholding orders.  It is mutually
understood and agreed that the Company may reject purchase orders where, in the
judgment of the Company, such rejection is in the best interest of the Company.

         NINTH:  The Company, on behalf of the Portfolios, and the Distributor
shall each comply with all applicable provisions of the 1940 Act, the
Securities Act of 1933 and all other federal and state laws, rules and
regulations governing the issuance and sale of shares of the Portfolios.

         TENTH:

         (A)     In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Distributor, the Company on behalf of the Portfolios agrees to indemnify
the Distributor against any and all claims, demands, liabilities and expenses
which the Distributor may incur under the Securities Act of 1933, or common law
or otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of a
Portfolio, or any omission to state a material fact therein, the omission of
which makes any statement contained therein misleading, unless such statement
or omission was made in reliance upon, and in conformity with, information
furnished to the Company or a Portfolio in connection therewith by or on behalf
of the Distributor.  The Distributor agrees to indemnify the Company and the
Portfolios against any and all claims, demands, liabilities and expenses which
the Company or a




                                      3
<PAGE>   4
Portfolio may incur arising out of or based upon any act or deed of the
Distributor or its sales representatives which has not been authorized by the
Company or a Portfolio in its prospectus or in this Agreement.

         (B)     The Distributor agrees to indemnify the Company and the
Portfolios against any and all claims, demands, liabilities and expenses which
the Company or the Portfolios may incur under the Securities Act of 1933, or
common law or otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in any registration statement or
prospectus of a Portfolio, or any omission to state a material fact therein if
such statement or omission was made in reliance upon, and in conformity with,
information furnished to the Company or a Portfolio in connection therewith by
or on behalf of the Distributor.

         (C)     Notwithstanding any other provision of this Agreement, the
Distributor shall not be liable for any errors of the Portfolios' transfer
agent(s), or for any failure of any such transfer agent to perform its duties.

         ELEVENTH:  Nothing herein contained shall require the Company to take
any action contrary to any provision of its Articles of Incorporation, or to
any applicable statute or regulation.

         TWELFTH:  This Agreement shall become effective with respect to each
Portfolio as of the date hereof, shall continue in force and effect until two
years from the date hereof, and shall continue in force and effect from year to
year thereafter, provided, that such continuance is specifically approved with
respect to such Portfolio at least annually (a)(i) by the Board of Directors of
the Company or (ii) by the vote of a majority of the outstanding voting
securities (as defined in Section 2(a)(42) of the 1940 Act), and (b) by vote of
a majority of the Company's Directors who are not parties to this Agreement or
"interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of any
party to this Agreement cast in person at a meeting called for such purpose.

         THIRTEENTH:

         (A)     This Agreement may be terminated with respect to any Portfolio
at any time, without the payment of any penalty, by vote of the Board of
Directors of the Company or by vote of a majority of the outstanding voting
securities of the applicable Portfolio, or by the Distributor, on sixty (60)
days' written notice to the other party.

         (B)     This Agreement shall automatically terminate in the event of
its assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act.

         FOURTEENTH:  Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed postage prepaid, to the other party at such
address as the other party may designate for the receipt of notices.  Until
further notice to the other party, it is agreed that the addresses of both the
Company and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston,
Texas 77046.

         FIFTEENTH:  This Agreement shall be deemed to be a contract made in
the State of Delaware and governed by, construed in accordance with and
enforced pursuant to the internal laws of the State of Delaware without
reference to its conflicts of laws rules.




                                      4
<PAGE>   5
         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.


                                        AIM INVESTMENT FUNDS, INC.
<TABLE>
<S>                                                <C>


                                                   By: /s/ WILLIAM J. GUILFOYLE
                                                       ------------------------------------------------------
                                                        Name:  William J. Guilfoyle
                                                        Title: President


Attest:


/s/ MICHAEL A. SILVER                                           
- -------------------------------------------
Name:  Michael A. Silver
Title: Assistant Secretary


                                                   A I M DISTRIBUTORS, INC.


                                                   By: /s/ JOHN CALDWELL
                                                       ------------------------------------------------------
                                                        Name:  John Caldwell
                                                        Title: Senior Vice President


Attest:

/s/ KATHLEEN J. PFLUEGER                                           
- -------------------------------------------
Name: Kathleen J. Pflueger
Title: Secretary
</TABLE>




                                      5
<PAGE>   6
                                   APPENDIX A
                                       TO
                             DISTRIBUTION AGREEMENT
                                       OF
                           AIM INVESTMENT FUNDS, INC.

CLASS A SHARES
- --------------

AIM Global Health Care Fund
AIM Global Telecommunications Fund
AIM Global Financial Services Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Consumer Products and Services Fund
AIM Latin American Growth Fund
AIM Emerging Markets Fund
AIM Global Growth & Income Fund
AIM Global Government Income Fund
AIM Strategic Income Fund
AIM Global High Income Fund
AIM Developing Markets Fund




                                      6

<PAGE>   1
                                                                    EXHIBIT 6(b)

                             DISTRIBUTION AGREEMENT

                                     BETWEEN

                              AIM INVESTMENT FUNDS

                                       AND

                            A I M DISTRIBUTORS, INC.

                                 CLASS A SHARES


         THIS AGREEMENT made this 8th day of September, 1998, by and between AIM
Investment Funds, a Delaware business trust (the "Company"), with respect to the
series of common stock set forth on Appendix A to this Agreement, and any
applicable classes thereof, (the "Portfolios"), and A I M Distributors, Inc., a
Delaware corporation (the "Distributor").

                              W I T N E S S E T H:

         In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto agree as follows:

         FIRST: The Company on behalf of the Portfolios hereby appoints the
Distributor as its exclusive agent for the sale of shares of the Portfolios to
the public directly and through investment dealers and financial institutions in
the United States and throughout the world.

         SECOND: The Company shall not sell any shares of the Portfolios except
through the Distributor and under the terms and conditions set forth in
paragraph FOURTH below. Notwithstanding the provisions of the foregoing
sentence, however:

         (A) the Company may issue shares of the Portfolios to any other 
investment company or personal holding company, or to the shareholders thereof,
in exchange for all or a majority of the shares or assets of any such company;
and

         (B) the Company may issue shares of the Portfolios at their net asset 
value in connection with certain classes of transactions or to certain classes
of persons, in accordance with Rule 22d-1 under the Investment Company Act of
1940, as amended (the "1940 Act"), provided that any such class is specified in
the then current prospectus of the applicable Portfolio.

         THIRD: The Distributor hereby accepts appointment as exclusive agent
for the sale of the shares of the Portfolios and agrees that it will use its
best efforts to sell such shares; provided, however, that:

         (A) the Distributor may, and when requested by the Company on behalf 
of a Portfolio shall, suspend its efforts to effectuate such sales at any time
when, in the opinion of the Distributor or of the Company, no sales should be
made because of market or other economic considerations or abnormal
circumstances of any kind; and
<PAGE>   2

         (B) the Company may withdraw the offering of the shares of a Portfolio 
(i) at any time with the consent of the Distributor, or (ii) without such
consent when so required by the provisions of any statute or of any order, rule
or regulation of any governmental body having jurisdiction. It is mutually
understood and agreed that the Distributor does not undertake to sell any
specific amount of the shares of the Portfolios. The Company shall have the
right to specify minimum amounts for initial and subsequent orders for the
purchase of shares of any Portfolio.

         FOURTH:

         (A) the public offering price of Class A shares of a Portfolio (the
"offering price") shall be the net asset value per share of the applicable
Portfolio plus a sales charge, if any. Net asset value per share shall be
determined in accordance with the provisions of the then current prospectus and
statement of additional information of the applicable Portfolio. The sales
charge shall be established by the Distributor, may reflect scheduled variations
in, or the elimination of, sales charges on sales of a Portfolio's Class A
shares either generally to the public, or to any specified class of investors or
in connection with any specified class of transactions, in accordance with Rule
22d-1 and as set forth in the then current prospectus and statement of
additional information of the applicable Portfolio. The Distributor shall apply
any scheduled variation in, or elimination of, the selling commission uniformly
to all offerees in the class specified. The Distributor shall be entitled to
receive the amount of any applicable contingent deferred sales charge that has
been subtracted from gross redemption proceeds (the "CDSC"), provided that the
Shares being redeemed were (i) issued by a Portfolio during the term of this
Agreement and any predecessor Agreement between the Company and the Distributor
or Distributor's predecessor, GT Global, Inc. ("GT Global"), or (ii) issued by a
Portfolio during or after the term of this Agreement or any predecessor
Agreement between the Company and the Distributor or GT Global in one or a
series of free exchanges of Shares for shares of the same class of another
portfolio, which can be traced to Shares or shares of the same class of another
portfolio initially issued by a Portfolio or such other portfolio during the
term of this Agreement, any predecessor Agreement or any other distribution
agreement with the Distributor or GT Global with respect to such other portfolio
(the "Distributor's Earned CDSC"). The Company shall pay or cause the Company's
transfer agent to pay the Distributor's Earned CDSC to the Distributor on the
date net redemption proceeds are payable to the redeeming shareholder.

         (B) the Company shall allow directly to investment dealers and other
financial institutions through whom Class A shares of the Portfolios are sold
such portion of the sales charge as may be payable to them and specified by the
Distributor, up to but not exceeding the amount of the total sales charge. The
difference between any commissions so payable and the total sales charges
included in the offering price shall be paid to the Distributor.

         (C) no provision of this Agreement shall be deemed to prohibit any 
payments by a Portfolio to the Distributor or by a Portfolio or the Distributor
to investment dealers, financial institutions and 401(k) plan service providers
where such payments are made under a distribution plan adopted by the Company on
behalf of a Portfolio pursuant to Rule 12b-1 under the 1940 Act.

         FIFTH: The Distributor shall act as agent of the Company on behalf of
the Portfolios in connection with the sale and repurchase of shares of the
Portfolios. Except with respect to such sales and repurchases, the Distributor
shall act as principal in all matters relating to the promotion of the sale of
shares of the Portfolios and shall enter into all of its own engagements,
agreements and contracts as principal on its own account. The Distributor shall
enter into agreements with investment dealers and financial 

                                       2
<PAGE>   3

institutions selected by the Distributor, authorizing such investment dealers
and financial institutions to offer and sell shares of the Portfolios to the
public upon the terms and conditions set forth therein, which shall not be
inconsistent with the provisions of this Agreement. Each agreement shall provide
that the investment dealer and financial institution shall act as a principal,
and not as an agent, of the Company on behalf of the Portfolios.

         SIXTH:  The Portfolios shall bear:

         (A) the expenses of qualification of shares of the Portfolios for sale
in connection with such public offerings in such states as shall be selected by
the Distributor, and of continuing the qualification therein until the
Distributor notifies the Company that it does not wish such qualification
continued; and

         (B) all legal expenses in connection with the foregoing.

         SEVENTH:

         (A) the Distributor shall bear the expenses of printing from the final
proof and distributing the Portfolios' prospectuses and statements of additional
information (including supplements thereto) relating to public offerings made
by the Distributor pursuant to this Agreement (which shall not include those
prospectuses and statements of additional information, and supplements thereto,
to be distributed to shareholders of the Portfolios), and any other promotional
or sales literature used by the Distributor or furnished by the Distributor to
dealers in connection with such public offerings, and expenses of advertising in
connection with such public offerings.

         (B) the Distributor may be reimbursed for all or a portion of such
expenses, or may receive reasonable compensation for distribution related
services, to the extent permitted by a distribution plan adopted by the Company
on behalf of a Portfolio pursuant to Rule 12b-1 under the 1940 Act.

         EIGHTH: The Distributor will accept orders for the purchase of shares
of the Portfolios only to the extent of purchase orders actually received and
not in excess of such orders, and it will not avail itself of any opportunity of
making a profit by expediting or withholding orders. It is mutually understood
and agreed that the Company may reject purchase orders where, in the judgment of
the Company, such rejection is in the best interest of the Company.

         NINTH: The Company, on behalf of the Portfolios, and the Distributor
shall each comply with all applicable provisions of the 1940 Act, the Securities
Act of 1933 and all other federal and state laws, rules and regulations
governing the issuance and sale of shares of the Portfolios.

         TENTH:

         (A) in the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Company on behalf of the Portfolios agrees to indemnify the
Distributor against any and all claims, demands, liabilities and expenses which
the Distributor may incur under the Securities Act of 1933, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of a
Portfolio, or any omission to state a material fact therein, the omission of
which makes any statement contained therein misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company or a Portfolio in connection therewith by or on behalf
of the Distributor. The Distributor agrees to indemnify the Company and the
Portfolios against any and all claims, demands, liabilities and expenses which
the Company or a 

                                       3
<PAGE>   4

Portfolio may incur arising out of or based upon any act or deed of the
Distributor or its sales representatives which has not been authorized by the
Company or a Portfolio in its prospectus or in this Agreement.

         (B) the Distributor agrees to indemnify the Company and the Portfolios
against any and all claims, demands, liabilities and expenses which the Company
or the Portfolios may incur under the Securities Act of 1933, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of a
Portfolio, or any omission to state a material fact therein if such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company or a Portfolio in connection therewith by or on behalf
of the Distributor.

         (C) notwithstanding any other provision of this Agreement, the 
Distributor shall not be liable for any errors of the Portfolios' transfer
agent(s), or for any failure of any such transfer agent to perform its duties.

         ELEVENTH: Nothing herein contained shall require the Company to take 
any action contrary to any provision of its Articles of Incorporation, or to any
applicable statute or regulation.

         TWELFTH: This Agreement shall become effective with respect to each
Portfolio as of the date hereof, shall continue in force and effect until two
years from the date hereof, and shall continue in force and effect from year to
year thereafter, provided, that such continuance is specifically approved with
respect to such Portfolio at least annually (a)(i) by the Board of Trustees of
the Company or (ii) by the vote of a majority of the outstanding voting
securities (as defined in Section 2(a)(42) of the 1940 Act), and (b) by vote of
a majority of the Company's Trustees who are not parties to this Agreement or
"interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of any
party to this Agreement cast in person at a meeting called for such purpose.

         THIRTEENTH:

         (A) this Agreement may be terminated with respect to any Portfolio at 
any time, without the payment of any penalty, by vote of the Board of Trustees
of the Company or by vote of a majority of the outstanding voting securities of
the applicable Portfolio, or by the Distributor, on sixty (60) days' written
notice to the other party.

         (B) this Agreement shall automatically terminate in the event of its
assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act.

         FOURTEENTH: Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed postage prepaid, to the other party at such
address as the other party may designate for the receipt of notices. Until
further notice to the other party, it is agreed that the addresses of both the
Company and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston,
Texas 77046.

         FIFTEENTH: This Agreement shall be deemed to be a contract made in the
State of Delaware and governed by, construed in accordance with and enforced
pursuant to the internal laws of the State of Delaware without reference to its
conflicts of laws rules.

                                       4

<PAGE>   5



         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.



                                       AIM INVESTMENT FUNDS


                                       By:   /s/ ROBERT H. GRAHAM
                                          ---------------------------------
                                          Name:  Robert H. Graham
                                          Title: President


Attest:

   /s/ SAMUEL D. SIRKO
- ----------------------------
Name:  Samuel D. Sirko
Title: Assistant Secretary


                                       A I M DISTRIBUTORS, INC.


                                       By:    /s/ W. GARY LITTLEPAGE
                                           --------------------------------
                                           Name:  W. Gary Littlepage 
                                           Title: Senior Vice President


Attest:
   /s/ KATHLEEN J. PFLUEGER
- ----------------------------
Name:  Kathleen J. Pflueger
Title: Secretary



                                       5

<PAGE>   6



                                   APPENDIX A
                                       TO
                             DISTRIBUTION AGREEMENT
                                       OF
                              AIM INVESTMENT FUNDS

CLASS A SHARES

AIM Global Health Care Fund
AIM Global Telecommunications Fund
AIM Global Financial Services Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Consumer Products and Services Fund 
AIM Latin American Growth Fund
AIM Emerging Markets Fund 
AIM Global Growth & Income Fund 
AIM Global Government Income Fund 
AIM Strategic Income Fund 
AIM Global High Income Fund 
AIM Developing Markets Fund



                                       6

<PAGE>   1
                                                                   EXHIBIT 6(c)
                             DISTRIBUTION AGREEMENT

                                    BETWEEN

                           AIM INVESTMENT FUNDS, INC.

                                      AND

                            A I M DISTRIBUTORS, INC.

                                 CLASS B SHARES


         THIS AGREEMENT made this 29th day of May, 1998, by and between AIM
Investment Funds, Inc., a Maryland Corporation (the "Company"), with respect to
each of the Class B shares (the "Shares") of each series of shares of common
stock set forth on Schedule A to this agreement (the "Portfolios"), and A I M
Distributors, Inc., a Delaware corporation (the "Distributor").

                              W I T N E S S E T H:

         In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged,
the parties hereto agree as follows:

         FIRST:  The Company hereby appoints the Distributor as its exclusive
agent for the sale of the Shares to the public directly and through investment
dealers in the United States and throughout the world.  If subsequent to the
termination of the Distributor's services to the Company pursuant to this
Agreement, the Company retains the services of another distributor, the
distribution agreement with such distributor shall contain provisions
comparable to Clauses FOURTH and SEVENTH hereof and Exhibit A hereto, and
without limiting the generality of the foregoing, will require such distributor
to maintain and make available to the Distributor records regarding sales,
redemptions and reinvestments of Shares necessary to implement the terms of
Clauses FOURTH, SEVENTH and EIGHTH hereof.

         SECOND:  The Company shall not sell any Shares except through the
Distributor and under the terms and conditions set forth in paragraph FOURTH
below.  Notwithstanding the provisions of the foregoing sentence, however:

         (A)     the Company may issue Shares to any other investment company
or personal holding company, or to the shareholders thereof, in exchange for
all or a majority of the shares or assets of any such company;

         (B)     the Company may issue Shares at their net asset value in
connection with certain classes of transactions or to certain classes of
persons, in accordance with Rule 22d-1 under the Investment Company Act of
1940, as amended (the "1940 Act"), provided that any such class is specified in
the then current prospectus of the applicable Shares; and

         (C)     the Company shall have the right to specify minimum amounts
for initial and subsequent orders for the purchase of Shares.
<PAGE>   2
         THIRD:  The Distributor hereby accepts appointment as exclusive agent
for the sale of the Shares and agrees that it will use its best efforts to sell
such Shares; provided, however, that:

         (A)     the Distributor may, and when requested by the Company on
behalf of the Shares shall, suspend its efforts to effectuate such sales at any
time when, in the opinion of the Distributor or of the Company, no sales should
be made because of market or other economic considerations or abnormal
circumstances of any kind;

         (B)     the Company may withdraw the offering of the Shares (i) at any
time with the consent of the Distributor, or (ii) without such consent when so
required by the provisions of any statute or of any order, rule or regulation
of any governmental body having jurisdiction; and

         (C)     the Distributor, as agent, does not undertake to sell any
specific amount of the Shares.

         FOURTH:

         (A)     The public offering price of the Shares shall be the net asset
value per share of the applicable Shares.  Net asset value per share shall be
determined in accordance with the provisions of the then current prospectus and
statement of additional information of the applicable Portfolio.  The
Distributor may establish a schedule of contingent deferred sales charges to be
imposed at the time of redemption of the Shares, and such schedule shall be
disclosed in the current prospectus of each Portfolio.  Such schedule of
contingent deferred sales charges may reflect variations in or waivers of such
charges on redemptions of Shares, either generally to the public or to any
specified class of shareholders and/or in connection with any specified class
of transactions, in accordance with applicable rules and regulations and
exemptive relief granted by the Securities and Exchange Commission, and as set
forth in the Portfolios' current prospectus(es).  The Distributor and the
Company shall apply any then applicable scheduled variation in or waiver of
contingent deferred sales charges uniformly to all shareholders and/or all
transactions belonging to a specified class.

         (B)     The Distributor may pay to investment dealers and other
financial institutions through whom Shares are sold, such sales commission as
the Distributor may specify from time to time.  Payment of any such sales
commissions shall be the sole obligation of the Distributor.

         (C)     No provision of this Agreement shall be deemed to prohibit any
payments by the Company to the Distributor or by the Company or the Distributor
to investment dealers, financial institutions and 401(k) plan service providers
where such payments are made under a distribution plan adopted by the Company
pursuant to Rule 12b-1 under the 1940 Act.

         (D)     The Company shall redeem the Shares from shareholders in
accordance with the terms set forth from time to time in the current prospectus
and statement of additional information of each Portfolio.  The price to be
paid to a shareholder to redeem the Shares shall be equal to the net asset
value of the Shares being redeemed ("gross redemption proceeds"), less any
applicable contingent deferred sales charge, calculated pursuant to the then
applicable schedule of contingent deferred sales charges ("net redemption
proceeds").  The Distributor shall be entitled to receive the amount of the
contingent deferred sales charge that has been subtracted from gross redemption
proceeds (the "CDSC"), provided that the Shares being redeemed were (i) issued
by a Portfolio during the term of this Agreement and any predecessor Agreement
between the Company and the Distributor or Distributor's predecessor, GT
Global, Inc. ("GT Global"), or (ii) issued by a Portfolio during or after the
term of this Agreement or any predecessor Agreement between the Company and the
Distributor or GT Global in one or a series of free




                                      2
<PAGE>   3
exchanges of Shares for Class B shares of another portfolio, which can be
traced to Shares or Class B shares of another portfolio initially issued by a
Portfolio or such other portfolio during the term of this Agreement, any
predecessor Agreement or any other distribution agreement with the Distributor
or GT Global with respect to such other portfolio (the "Distributor's Earned
CDSC").  The Company shall pay or cause the Company's transfer agent to pay the
Distributor's Earned CDSC to the Distributor on the date net redemption
proceeds are payable to the redeeming shareholder.

         (E)     The Distributor shall maintain adequate books and records to
identify Shares (i) issued by a Portfolio during the term of this Agreement and
any predecessor Agreement between the Company and the Distributor or GT Global
or (ii) issued by a Portfolio during or after the term of this Agreement or any
predecessor Agreement between the Company and the Distributor or GT Global in
one or a series of free exchanges of Shares for class B shares of another
portfolio, which can be traced to Shares or class B shares of another portfolio
initially issued by a Portfolio or such other portfolio during the term of this
Agreement, any predecessor Agreement or any other distribution agreement with
the Distributor or GT Global with respect to such other portfolio and shall
calculate the Distributor's Earned CDSC, if any, with respect to such Shares,
upon their redemption.  The Company shall be entitled to rely on Distributor's
books, records and calculations with respect to Distributor's Earned CDSC.

         FIFTH:  The Distributor shall act as an agent of the Company in
connection with the sale and redemption of Shares.  Except with respect to such
sales and redemptions, the Distributor shall act as principal in all matters
relating to the promotion of the sale of Shares and shall enter into all of its
own engagements, agreements and contracts as principal on its own account.  The
Distributor shall enter into agreements with investment dealers and financial
institutions selected by the Distributor, authorizing such investment dealers
and financial institutions to offer and sell the Shares to the public upon the
terms and conditions set forth therein, which shall not be inconsistent with
the provisions of this Agreement.  Each agreement shall provide that the
investment dealer or financial institution shall act as a principal, and not as
an agent, of the Company.

         SIXTH:  The Shares shall bear:

         (A)     the expenses of qualification of Shares for sale in connection
with such public offerings in such states as shall be selected by the
Distributor, and of continuing the qualification therein until the Distributor
notifies the Company that it does not wish such qualification continued; and

         (B)     all legal expenses in connection with the foregoing.

         SEVENTH:

         (A)     The Distributor shall bear the expenses of printing from the
final proof and distributing the prospectuses and statements of additional
information for the Shares (including supplements thereto) relating to public
offerings made by the Company pursuant to such prospectuses (which shall not
include those prospectuses and statements of additional information, and
supplements thereto, to be distributed to existing shareholders of the Shares),
and any other promotional or sales literature used by the Distributor or
furnished by the Distributor to dealers in connection with such public
offerings, and expenses of advertising in connection with such public
offerings.

         (B)     Subject to the limitations, if any, of applicable law
including the NASD Conduct Rules (formerly, the NASD Rules of Fair Practice)
regarding asset-based sales charges, the Company shall pay to the Distributor
as a reimbursement for all or a portion of such expenses, or as reasonable




                                      3
<PAGE>   4
compensation for distribution of the Shares, an asset-based sales charge in an
amount equal to 0.75% per annum of the average daily net asset value of the
Shares of each Portfolio from time to time (the "Distributor's 12b-1 Share"),
such sales charge to be payable pursuant to the distribution plan adopted
pursuant to Rule 12b-1 under the 1940 Act (the "Plan").  The Distributor's
12b-1 Share shall be a percentage, which shall be recomputed periodically (but
not less than monthly) in accordance with Exhibit A to this Agreement.  The
Distributor's 12b-1 Share shall accrue daily and be paid to the Distributor as
soon as practicable after the end of each calendar month within which it
accrues but in any event within 10 business days after the end of each such
calendar month (unless the Distributor shall specify a later date in written
instructions to the Company) provided, however, that any notices and
calculation required by Section EIGHTH: (B) and (C) have been received by the
Company.

         (C)     The Distributor shall maintain adequate books and records to
permit calculations periodically (but not less than monthly) of, and shall
calculate on a monthly basis, the Distributor's 12b-1 Share to be paid to the
Distributor.  The Company shall be entitled to rely on Distributor's books,
records and calculations relating to Distributor's 12b-1 Share.

         EIGHTH:

         (A)     The Distributor may, from time to time, assign, transfer or
pledge ("Transfer") to one or more designees (each an "Assignee"), its rights
to all or a designated portion of (i) the Distributor's 12b-1 Share (but not
the Distributor's duties and obligations pursuant hereto or pursuant to the
Plan), and (ii) the Distributor's Earned CDSC, free and clear of any offsets or
claims the Company may have against the Distributor.  Each such Assignee's
ownership interest in a Transfer of a designated portion of a Distributor's
12b-1 Share and a Distributor's Earned CDSC is hereinafter referred to as an
"Assignee's 12b-1 Portion" and an "Assignee's CDSC Portion," respectively.  A
Transfer pursuant to this Section EIGHTH: (A) shall not reduce or extinguish
any claim of the Company against the Distributor.

         (B)     The Distributor shall promptly notify the Company in writing
of each Transfer pursuant to Section EIGHTH: (A) by providing the Company with
the name and address of each such Assignee.

         (C)     The Distributor may direct the Company to pay directly to an
Assignee such Assignee's 12b-1 Portion and Assignee's CDSC Portion.  In such
event, Distributor shall provide the Company with a monthly calculation of (i)
the Distributor's Earned CDSC and Distributor's 12b-1 Share and (ii) each
Assignee's 12b-1 Portion and Assignee's CDSC Portion, if any, for such month
(the "Monthly Calculation").  The Monthly Calculation shall be provided to the
Company by the Distributor promptly after the close of each month or such other
time as agreed to by the Company and the Distributor which allows timely
payment of the Distributor's 12b-1 Share and Distributor's Earned CDSC and/or
the Assignee's 12b-1 Portion and Assignee's CDSC Portion.  The Company shall
not be liable for any interest on such payments occasioned by delayed delivery
of the Monthly Calculation by the Distributor.  In such event following receipt
from the Distributor of (i) notice of Transfer referred to in Section EIGHTH:
(B) and (ii) each Monthly Calculation, the Company shall make all payments
directly to the Assignee or Assignees in accordance with the information
provided in such notice and Monthly Calculation, on the same terms and
conditions as if such payments were to be paid directly to the Distributor.
The Company shall be entitled to rely on Distributor's notices, and Monthly
Calculations in respect of amounts to be paid pursuant to this Section EIGHTH:
(B).

         (D)     Alternatively, in connection with a Transfer the Distributor
may direct the Company to pay all of such Distributor's 12b-1 Share and
Distributor's Earned CDSC from time to time to a depository or collection agent
designated by any Assignee, which depository or collection agent may be




                                      4
<PAGE>   5
delegated the duty of dividing such Distributor's 12b-1 Share and Distributor's
Earned CDSC between the Assignee's 12b-1 Portion and Assignee's CDSC Portion
and the balance of the Distributor's 12b-1 Share (such balance, when
distributed to the Distributor by the depository or collection agent, the
"Distributor's 12b-1 Portion") and of the Distributor's Earned CDSC (such
balance, when distributed to the Distributor by the depository or collection
agent, the "Distributor's Earned CDSC Portion"), in which case only the
Distributor's 12b-1 Portion and Distributor's Earned CDSC Portion may be
subject to offsets or claims the Company may have against the Distributor.

         (E)     The Company shall not amend the Plan to reduce the amount
payable to the Distributor or any Assignee under Section SEVENTH: (B) hereof
with respect to the Shares for any Shares which have been issued prior to the
date of such amendment.

         NINTH:  The Distributor will accept orders for the purchase of Shares
only to the extent of purchase orders actually received and not in excess of
such orders, and it will not avail itself of any opportunity of making a profit
by expediting or withholding orders.

         TENTH:

         (A)     Pursuant to the Plan and this Agreement, the Distributor, as
agent, shall enter into Shareholder Service Agreements with investment dealers,
financial institutions and certain 401(K) plan service providers (collectively
"Service Providers") selected by the Distributor for the provision of certain
continuing personal services to customers of such Service Providers who have
purchased Shares.  Such agreements shall authorize Service Providers to provide
continuing personal shareholder services to their customers upon the terms and
conditions set forth therein, which shall not be inconsistent with the
provisions of this Agreement.  Each Shareholder Service Agreement shall provide
that the Service Provider shall act as principal, and not as an agent of the
Company.

         (B)     Shareholder Service Agreements may provide that the Service
Providers may receive a service fee in the amount of 0.25% of the average daily
net assets of the Shares held by customers of such Service Providers provided
that such Service Providers furnish continuing personal shareholder services to
their customers in respect of such Shares.  The continuing personal services to
be rendered by Service Providers under the Shareholder Service Agreements may
include, but shall not be limited to, some or all of the following:
distributing sales literature; answering routine customer inquiries concerning
the Company; assisting customers in changing dividend elections, options,
account designations and addresses, and in enrolling in any of several special
investment plans offered in connection with the purchase of Shares; assisting
in the establishment and maintenance of or establishing and maintaining
customer accounts and records and the processing of purchase and redemption
transactions; performing subaccounting; investing dividends and any capital
gains distributions automatically in the Company's shares; providing periodic
statements showing a customer's account balance and the integration of such
statements with those of other transactions and balances in the customer's
account serviced by the Service Provider; forwarding applicable prospectus,
proxy statements, reports and notices to customers who hold Shares and
providing such other information and services as the Company or the customers
may reasonably request.

         (C)     The Distributor may advance service fees payable to Service
Providers pursuant to the Plan or any other distribution plan adopted by the
Company with respect to Shares of one or more of the Portfolios pursuant to
Rule 12b-1 under the 1940 Act; and thereafter the Distributor may be reimbursed
for such advances through retention of service fee payments during the period
for which the service fees were advanced.




                                      5
<PAGE>   6
         ELEVENTH:  The Company and the Distributor shall each comply with all
applicable provisions of the 1940 Act, the Securities Act of 1933, as amended,
and of all other federal and state laws, rules and regulations governing the
issuance and sale of the Shares.

         TWELFTH:

         (A)     In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Distributor, the Company shall indemnify the Distributor against any and
all claims, demands, liabilities and expenses which the Distributor may incur
under the Securities Act of 1933, or common law or otherwise, arising out of or
based upon any alleged untrue statement of a material fact contained in any
registration statement or prospectus of the Shares, or any omission to state a
material fact therein, the omission of which makes any statement contained
therein misleading, unless such statement or omission was made in reliance
upon, and in conformity with, information furnished to the Company in
connection therewith by or on behalf of the Distributor.  The Distributor shall
indemnify the Company and the Shares against any and all claims, demands,
liabilities and expenses which the Company or the Shares may incur arising out
of or based upon (i) any act or deed of the Distributor or its sales
representatives which has not been authorized by the Company in its prospectus
or in this Agreement and (ii) the Company's reliance on the Distributor's
books, records, calculations and notices in Sections FOURTH: (E), SEVENTH: (C),
EIGHTH: (B), EIGHTH: (C) and EIGHTH: (D).

         (B)     The Distributor shall indemnify the Company and the Shares
against any and all claims, demands, liabilities and expenses which the Company
or the Shares may incur under the Securities Act of 1933, as amended, or common
law or otherwise, arising out of or based upon any alleged untrue statement of
a material fact contained in any registration statement or prospectus of the
Shares, or any omission to state a material fact therein if such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company in connection therewith by or on behalf of the
Distributor.

         (C)     Notwithstanding any other provision of this Agreement, the
Distributor shall not be liable for any errors of the transfer agent(s) of the
Shares, or for any failure of any such transfer agent to perform its duties.

         THIRTEENTH:  Nothing herein contained shall require the Company to
take any action contrary to any provision of its Articles of Incorporation, as
amended, or to any applicable statute or regulation.

         FOURTEENTH:  This Agreement shall become effective with respect to the
Shares of each Portfolio upon its approval by the Board of Directors of the
Company and by vote of a majority of the Company's Directors who are not
interested parties to this Agreement or "interested persons" (as defined in
Section 2(a)(19) of the 1940 Act) of any party to this Agreement cast in person
at a meeting called for such purpose, shall continue in force and effect until
two years from the date hereof, and from year to year thereafter, provided,
that such continuance is specifically approved with respect to the Shares of
each Portfolio at least annually (a)(i) by the Board of Directors of the
Company or (ii) by the vote of a majority of the outstanding Shares of such
class of such Portfolio, and (b) by vote of a majority of the Company's
Directors who are not parties to this Agreement or "interested persons" (as
defined in Section 2(a)(19) of the 1940 Act) of any party to this Agreement
cast in person at a meeting called for such purpose.

         FIFTEENTH:




                                      6
<PAGE>   7
         (A)     This Agreement may be terminated with respect to the Shares of
any Portfolio, at any time, without the payment of any penalty, by vote of the
Board of Directors of the Company or by vote of a majority of the outstanding
Shares of such Portfolio, or by the Distributor, on sixty (60) days' written
notice to the other party; and

         (B)     This Agreement shall also automatically terminate in the event
of its assignment, the term "assignment" having the meaning set forth in
Section 2(a)(4) of the 1940 Act; provided, that, subject to the provisions of
the following sentence, if this Agreement is terminated for any reason, the
obligations of the Company and the Distributor pursuant to Sections FOURTH:
(D), FOURTH: (E), SEVENTH: (B), SEVENTH: (C), EIGHTH: (A) through (E) and
TWELFTH: (A) of this Agreement will continue and survive any such termination.
Notwithstanding the foregoing, upon Complete Termination of the Plan (as such
term is defined in Section 8 of the Plan in effect at the date of this
Agreement), the obligations of the Company pursuant to the terms of Sections
SEVENTH: (B), EIGHTH: (A), EIGHTH: (C), EIGHTH: (D) and EIGHTH: (E) (with
respect to payments of Distributor's 12b-1 Share and Assignee's 12b-1 Portion)
of this Agreement shall terminate.  A termination of the Plan with respect to
any or all Shares of any or all Portfolios shall not affect the obligations of
the Company pursuant to Sections FOURTH: (D), EIGHTH: (A), EIGHTH: (C), EIGHTH:
(D) and EIGHTH: (E) (with respect to payments of Distributor's Earned CDSC or
Assignee's CDSC Portion) hereof or of the obligations of the Distributor
pursuant to Section FOURTH: (E) or EIGHTH: (B) hereof.

         (C)     The Transfer of the Distributor's rights to Distributor's
12b-1 Share or Distributor's Earned CDSC shall not cause a termination of this
Agreement or be deemed to be an assignment for purposes of Section FIFTEENTH:
(B) above.

         SIXTEENTH:  Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed postage prepaid, to the other party at such
address as the other party may designate for the receipt of notices.  Until
further notice to the other party, the addresses of both the Company and the
Distributor shall be 11 Greenway Plaza, Suite 100, Houston. Texas 77046-1173.

         SEVENTEENTH:  This Agreement shall be deemed to be a contract made in
the State of Delaware and governed by, construed in accordance with and
enforced pursuant to the internal laws of the State of Delaware without
reference to its conflicts of laws rules.




                                      7
<PAGE>   8
         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.

<TABLE>
<S>                                                <C>
                                                   AIM INVESTMENT FUNDS, INC.


                                                   By: /s/ WILLIAM J. GUILFOYLE
                                                       ------------------------------------------------------
                                                        Name:  William J. Guilfoyle
                                                        Title: President


Attest:


/s/ MICHAEL A. SILVER                                           
- -------------------------------------------
Name:  Michael A. Silver
Title: Assistant Secretary


                                                   A I M DISTRIBUTORS, INC.


                                                   By: /s/ JOHN CALDWELL
                                                       ------------------------------------------------------
                                                        Name:  John Caldwell
                                                        Title: Senior Vice President


Attest:

/s/ KATHLEEN J. PFLUEGER                                           
- -------------------------------------------
Name: Kathleen J. Pflueger
Title: Secretary
</TABLE>




                                      8
<PAGE>   9
                                   SCHEDULE A
                                       TO
                             DISTRIBUTION AGREEMENT
                                       OF
                           AIM INVESTMENT FUNDS, INC.

CLASS B SHARES
- --------------

AIM Global Health Care Fund
AIM Global Telecommunications Fund
AIM Global Financial Services Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Consumer Products and Services Fund
AIM Latin American Growth Fund
AIM Emerging Markets Fund
AIM Global Growth & Income Fund
AIM Global Government Income Fund
AIM Strategic Income Fund
AIM Global High Income Fund
AIM Developing Markets Fund




                                      9
<PAGE>   10
                                   EXHIBIT A


         The Distributor's 12b-1 Share in respect of each Portfolio shall be
100 percent until such time as the Distributor shall cease to serve as
exclusive distributor of the Shares of such Portfolio and thereafter shall be a
percentage, recomputed first on the date of any termination of the
Distributor's services as exclusive distributor of Shares of any Portfolio and
thereafter periodically (but not less than monthly), representing the
percentage of Shares of such Portfolio outstanding on each such computation
date allocated to the Distributor in accordance with the following rules:

                 1.       DEFINITIONS.  For purposes of this Exhibit A defined
terms used herein shall have the meaning assigned to such terms in the
Distribution Agreement and the following terms shall have the following
meanings:

                          "Commission Shares" shall mean shares of the
Portfolio or another portfolio the redemption of which would, in the absence of
the application of some standard waiver provision, give rise to the payment of
a CDSC and shall include Commission Shares which due to the expiration of the
CDSC period no longer bear a CDSC.

                          "Distributor" shall mean the Distributor and the
Distributor's predecessor, GT Global, Inc.

                          "Other Distributor" shall mean each person appointed
as the exclusive distributor for the Shares of the Portfolio after the
Distributor ceases to serve in that capacity.

                 2.       ALLOCATION RULES.  In determining the Distributor's
12b-1 Share in respect of a particular Portfolio:

                          (a)     There shall be allocated to the Distributor
and each Other Distributor all Commission Shares of such Portfolio which were
sold while such Distributor or such Other Distributor, as the case may be, was
the exclusive distributor for the Shares of the Portfolio, determined in
accordance with the transfer records maintained for such Portfolio.

                          (b)     Reinvested Shares:  On the date that any
Shares are issued by a Portfolio as a result of the reinvestment of dividends
or other distributions, whether ordinary income, capital gains or
exempt-interest dividend or distributions ("Reinvested Shares"), Reinvested
Shares shall be allocated to the Distributor and each Other Distributor in a
number obtained by multiplying the total number of Reinvested Shares issued on
such date by a fraction, the numerator of which is the total number of all
Shares outstanding in such Fund as of the opening of business on such date and
allocated to the Distributor or Other Distributor as of such date of
determination pursuant to these allocation procedures and the denominator is
the total number of Shares outstanding as of the opening of business on such
date.

                          (c)     Exchange Shares:  There shall be allocated to
the Distributor and each Other Distributor, as the case may be, all Commission
Shares of such Portfolio which were issued during or after the period referred
to in (a) as a consequence of one or more free exchanges of Commission Shares
of the Portfolio or of another portfolio (other than Free Appreciation Shares)
(the "Exchange Shares"), which in accordance with the transfer records
maintained for such Portfolio can be traced to Commission Shares of the
Portfolio or another portfolio initially issued by the Company or such other




                                     A-1
<PAGE>   11
portfolio during the time the Distributor or such Other Distributor, as the
case may be, was the exclusive distributor for the Shares of the Portfolio or
such other portfolio.

                          (d)     Free Appreciation Shares:  Shares (other than
Exchange Shares) that were acquired by the holders of such Shares in a free
exchange of Shares of any other Portfolio, which represent the appreciated
value of the Shares of the exiting portfolio over the initial purchase price
paid for the Shares being redeemed and exchanged and for which the original
purchase date and the original purchase price are not identified on an on-going
basis, shall be allocated to the Distributor and each Other Distributor ("Free
Appreciation Shares") daily in a number obtained by multiplying the total
number of Free Appreciation Shares issued by the exiting portfolio on such date
by a fraction, the numerator of which is the total number of all Shares
outstanding as of the opening of business on such date allocated to the
Distributor or such Other Distributor as of such date of determination pursuant
to these allocation procedures and the denominator is the total number of
Shares outstanding as of the opening of business on such date.

                          (e)     Redeemed Shares:  Shares (other than
Reinvested Shares and Free Appreciation Shares) that are redeemed will be
allocated to the Distributor and each Other Distributor to the extent such
Share was previously allocated to the Distributor or such Other Distributor in
accordance with the rules set forth in 2(a) or (c) above.  Reinvested Shares
and Free Appreciation Shares that are redeemed will be allocated to the
Distributor and each Other Distributor daily in an amount equal to the number
of Free Appreciation Shares and Reinvested Shares of such Portfolio being
redeemed on such date, which amount is obtained by multiplying the total number
of Free Appreciation Shares and Reinvested Shares being redeemed by such
Portfolio on such date by a fraction, the numerator of which is the total
number of all Free Appreciation Shares and Reinvested Shares of such Portfolio
outstanding as of the opening of business on such date allocated to the
Distributor or to such Other Distributor as of such date of determination and
the denominator is the total number of Free Appreciation Shares and Reinvested
Shares of such Portfolio outstanding as of the opening of business on such
date.

         The Fund shall use its best efforts to assure that the transfer agents
and sub-transfer agents for each Portfolio maintain the data necessary to
implement the foregoing rules.  If, notwithstanding the foregoing, the transfer
agents or sub-transfer agents for such Portfolio are unable to maintain the
data necessary to implement the foregoing rules as written, and if the
Distributor shall cease to serve as exclusive distributor of the Shares of the
Portfolio, the Distributor and the Portfolio agree to negotiate in good faith
with each other, with the transfer agents and sub-transfer agents for such
Portfolio and with any third party that has obtained an interest in the
Distributor's 12b-1 Share in respect of such Portfolio with a view to arriving
at mutually satisfactory modifications to the foregoing rules designed to
accomplish substantially identical results on the basis of data which can be
made available.




                                     A-2

<PAGE>   1
                                                                    EXHIBIT 6(d)


                             DISTRIBUTION AGREEMENT

                                    BETWEEN

                              AIM INVESTMENT FUNDS

                                      AND

                            A I M DISTRIBUTORS, INC.

                                 CLASS B SHARES


         THIS AGREEMENT made this 8th day of September, 1998, by and between
AIM Investment Funds, a Delaware business trust (the "Company"), with respect
to each of the Class B shares (the "Shares") of each series of shares of common
stock set forth on Schedule A to this agreement (the "Portfolios"), and A I M
Distributors, Inc., a Delaware corporation (the "Distributor").

                              W I T N E S S E T H:

         In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged,
the parties hereto agree as follows:

         FIRST: The Company hereby appoints the Distributor as its exclusive 
agent for the sale of the Shares to the public directly and through investment
dealers in the United States and throughout the world. If subsequent to the
termination of the Distributor's services to the Company pursuant to this
Agreement, the Company retains the services of another distributor, the
distribution agreement with such distributor shall contain provisions
comparable to Clauses FOURTH and SEVENTH hereof and Exhibit A hereto, and
without limiting the generality of the foregoing, will require such distributor
to maintain and make available to the Distributor records regarding sales,
redemptions and reinvestments of Shares necessary to implement the terms of
Clauses FOURTH, SEVENTH and EIGHTH hereof.

         SECOND:  The Company shall not sell any Shares except through the 
Distributor and under the terms and conditions set forth in paragraph FOURTH
below. Notwithstanding the provisions of the foregoing sentence, however:

         (A)     the Company may issue Shares to any other investment company or
personal holding company, or to the shareholders thereof, in exchange for all
or a majority of the shares or assets of any such company;

         (B)     the Company may issue Shares at their net asset value in 
connection with certain classes of transactions or to certain classes of
persons, in accordance with Rule 22d-1 under the Investment Company Act of
1940, as amended (the "1940 Act"), provided that any such class is specified in
the then current prospectus of the applicable Shares; and

         (C)     the Company shall have the right to specify minimum amounts for
initial and subsequent orders for the purchase of Shares.


<PAGE>   2

         THIRD: The Distributor hereby accepts appointment as exclusive agent 
for the sale of the Shares and agrees that it will use its best efforts to sell
such Shares; provided, however, that:

         (A)     the Distributor may, and when requested by the Company on 
behalf of the Shares shall, suspend its efforts to effectuate such sales at any
time when, in the opinion of the Distributor or of the Company, no sales should
be made because of market or other economic considerations or abnormal
circumstances of any kind;

         (B)     the Company may withdraw the offering of the Shares (i) at any
time with the consent of the Distributor, or (ii) without such consent when so
required by the provisions of any statute or of any order, rule or regulation
of any governmental body having jurisdiction; and

         (C)     the Distributor, as agent, does not undertake to sell any 
specific amount of the Shares.

         FOURTH:

         (A)     The public offering price of the Shares shall be the net asset
value per share of the applicable Shares. Net asset value per share shall be
determined in accordance with the provisions of the then current prospectus and
statement of additional information of the applicable Portfolio. The
Distributor may establish a schedule of contingent deferred sales charges to be
imposed at the time of redemption of the Shares, and such schedule shall be
disclosed in the current prospectus of each Portfolio. Such schedule of
contingent deferred sales charges may reflect variations in or waivers of such
charges on redemptions of Shares, either generally to the public or to any
specified class of shareholders and/or in connection with any specified class
of transactions, in accordance with applicable rules and regulations and
exemptive relief granted by the Securities and Exchange Commission, and as set
forth in the Portfolios' current prospectus(es). The Distributor and the
Company shall apply any then applicable scheduled variation in or waiver of
contingent deferred sales charges uniformly to all shareholders and/or all
transactions belonging to a specified class.

         (B)     The Distributor may pay to investment dealers and other
financial institutions through whom Shares are sold, such sales commission as
the Distributor may specify from time to time. Payment of any such sales
commissions shall be the sole obligation of the Distributor.

         (C)     No provision of this Agreement shall be deemed to prohibit any
payments by the Company to the Distributor or by the Company or the Distributor
to investment dealers, financial institutions and 401(k) plan service providers
where such payments are made under a distribution plan adopted by the Company
pursuant to Rule 12b-1 under the 1940 Act.

         (D)     The Company shall redeem the Shares from shareholders in
accordance with the terms set forth from time to time in the current prospectus
and statement of additional information of each Portfolio. The price to be paid
to a shareholder to redeem the Shares shall be equal to the net asset value of
the Shares being redeemed ("gross redemption proceeds"), less any applicable
contingent deferred sales charge, calculated pursuant to the then applicable
schedule of contingent deferred sales charges ("net redemption proceeds"). The
Distributor shall be entitled to receive the amount of the contingent deferred
sales charge that has been subtracted from gross redemption proceeds (the
"CDSC"), provided that the Shares being redeemed were (i) issued by a Portfolio
during the term of this Agreement and any predecessor Agreement between the
Company and the Distributor or Distributor's predecessor, GT Global, Inc. ("GT
Global"), or (ii) issued by a Portfolio during or after the term of this
Agreement or any predecessor Agreement between the Company and the Distributor
or GT Global in one or a series of free 


                                       2

<PAGE>   3

exchanges of Shares for Class B shares of another portfolio, which can be
traced to Shares or Class B shares of another portfolio initially issued by a
Portfolio or such other portfolio during the term of this Agreement, any
predecessor Agreement or any other distribution agreement with the Distributor
or GT Global with respect to such other portfolio (the "Distributor's Earned
CDSC"). The Company shall pay or cause the Company's transfer agent to pay the
Distributor's Earned CDSC to the Distributor on the date net redemption
proceeds are payable to the redeeming shareholder.

         (E)     The Distributor shall maintain adequate books and records to
identify Shares (i) issued by a Portfolio during the term of this Agreement and
any predecessor Agreement between the Company and the Distributor or GT Global
or (ii) issued by a Portfolio during or after the term of this Agreement or any
predecessor Agreement between the Company and the Distributor or GT Global in
one or a series of free exchanges of Shares for class B shares of another
portfolio, which can be traced to Shares or class B shares of another portfolio
initially issued by a Portfolio or such other portfolio during the term of this
Agreement, any predecessor Agreement or any other distribution agreement with
the Distributor or GT Global with respect to such other portfolio and shall
calculate the Distributor's Earned CDSC, if any, with respect to such Shares,
upon their redemption. The Company shall be entitled to rely on Distributor's
books, records and calculations with respect to Distributor's Earned CDSC.

          FIFTH: The Distributor shall act as an agent of the Company in
connection with the sale and redemption of Shares. Except with respect to such
sales and redemptions, the Distributor shall act as principal in all matters
relating to the promotion of the sale of Shares and shall enter into all of its
own engagements, agreements and contracts as principal on its own account. The
Distributor shall enter into agreements with investment dealers and financial
institutions selected by the Distributor, authorizing such investment dealers
and financial institutions to offer and sell the Shares to the public upon the
terms and conditions set forth therein, which shall not be inconsistent with
the provisions of this Agreement. Each agreement shall provide that the
investment dealer or financial institution shall act as a principal, and not as
an agent, of the Company.

          SIXTH: The Shares shall bear:

         (A)     the expenses of qualification of Shares for sale in connection
with such public offerings in such states as shall be selected by the
Distributor, and of continuing the qualification therein until the Distributor
notifies the Company that it does not wish such qualification continued; and

         (B)     all legal expenses in connection with the foregoing.

         SEVENTH:

         (A)     The Distributor shall bear the expenses of printing from the
final proof and distributing the prospectuses and statements of additional
information for the Shares (including supplements thereto) relating to public
offerings made by the Company pursuant to such prospectuses (which shall not
include those prospectuses and statements of additional information, and
supplements thereto, to be distributed to existing shareholders of the Shares),
and any other promotional or sales literature used by the Distributor or
furnished by the Distributor to dealers in connection with such public
offerings, and expenses of advertising in connection with such public
offerings.

         (B)     Subject to the limitations, if any, of applicable law
including the NASD Conduct Rules (formerly, the NASD Rules of Fair Practice)
regarding asset-based sales charges, the Company shall pay to the Distributor
as a reimbursement for all or a portion of such expenses, or as reasonable

                                       3
<PAGE>   4

compensation for distribution of the Shares, an asset-based sales charge in an
amount equal to 0.75% per annum of the average daily net asset value of the
Shares of each Portfolio from time to time (the "Distributor's 12b-1 Share"),
such sales charge to be payable pursuant to the distribution plan adopted
pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). The Distributor's 12b-1
Share shall be a percentage, which shall be recomputed periodically (but not
less than monthly) in accordance with Exhibit A to this Agreement. The
Distributor's 12b-1 Share shall accrue daily and be paid to the Distributor as
soon as practicable after the end of each calendar month within which it
accrues but in any event within 10 business days after the end of each such
calendar month (unless the Distributor shall specify a later date in written
instructions to the Company) provided, however, that any notices and
calculation required by Section EIGHTH: (B) and (C) have been received by the
Company.

         (C)     The Distributor shall maintain adequate books and records to
permit calculations periodically (but not less than monthly) of, and shall
calculate on a monthly basis, the Distributor's 12b-1 Share to be paid to the
Distributor. The Company shall be entitled to rely on Distributor's books,
records and calculations relating to Distributor's 12b-1 Share.

          EIGHTH:

         (A)     The Distributor may, from time to time, assign, transfer or
pledge ("Transfer") to one or more designees (each an "Assignee"), its rights
to all or a designated portion of (i) the Distributor's 12b-1 Share (but not
the Distributor's duties and obligations pursuant hereto or pursuant to the
Plan), and (ii) the Distributor's Earned CDSC, free and clear of any offsets or
claims the Company may have against the Distributor. Each such Assignee's
ownership interest in a Transfer of a designated portion of a Distributor's
12b-1 Share and a Distributor's Earned CDSC is hereinafter referred to as an
"Assignee's 12b-1 Portion" and an "Assignee's CDSC Portion," respectively. A
Transfer pursuant to this Section EIGHTH: (A) shall not reduce or extinguish
any claim of the Company against the Distributor.

         (B)     The Distributor shall promptly notify the Company in writing of
each Transfer pursuant to Section EIGHTH: (A) by providing the Company with the
name and address of each such Assignee.

         (C)     The Distributor may direct the Company to pay directly to an
Assignee such Assignee's 12b-1 Portion and Assignee's CDSC Portion. In such
event, Distributor shall provide the Company with a monthly calculation of (i)
the Distributor's Earned CDSC and Distributor's 12b-1 Share and (ii) each
Assignee's 12b-1 Portion and Assignee's CDSC Portion, if any, for such month
(the "Monthly Calculation"). The Monthly Calculation shall be provided to the
Company by the Distributor promptly after the close of each month or such other
time as agreed to by the Company and the Distributor which allows timely
payment of the Distributor's 12b-1 Share and Distributor's Earned CDSC and/or
the Assignee's 12b-1 Portion and Assignee's CDSC Portion. The Company shall not
be liable for any interest on such payments occasioned by delayed delivery of
the Monthly Calculation by the Distributor. In such event following receipt
from the Distributor of (i) notice of Transfer referred to in Section EIGHTH:
(B) and (ii) each Monthly Calculation, the Company shall make all payments
directly to the Assignee or Assignees in accordance with the information
provided in such notice and Monthly Calculation, on the same terms and
conditions as if such payments were to be paid directly to the Distributor. The
Company shall be entitled to rely on Distributor's notices, and Monthly
Calculations in respect of amounts to be paid pursuant to this Section EIGHTH:
(B).

         (D)     Alternatively, in connection with a Transfer the Distributor
may direct the Company to pay all of such Distributor's 12b-1 Share and
Distributor's Earned CDSC from time to time to a depository or collection agent
designated by any Assignee, which depository or collection agent may be


                                       4

<PAGE>   5

delegated the duty of dividing such Distributor's 12b-1 Share and Distributor's
Earned CDSC between the Assignee's 12b-1 Portion and Assignee's CDSC Portion
and the balance of the Distributor's 12b-1 Share (such balance, when
distributed to the Distributor by the depository or collection agent, the
"Distributor's 12b-1 Portion") and of the Distributor's Earned CDSC (such
balance, when distributed to the Distributor by the depository or collection
agent, the "Distributor's Earned CDSC Portion"), in which case only the
Distributor's 12b-1 Portion and Distributor's Earned CDSC Portion may be
subject to offsets or claims the Company may have against the Distributor.

         (E)     The Company shall not amend the Plan to reduce the amount
payable to the Distributor or any Assignee under Section SEVENTH: (B) hereof
with respect to the Shares for any Shares which have been issued prior to the
date of such amendment.

         NINTH:  The Distributor will accept orders for the purchase of Shares
only to the extent of purchase orders actually received and not in excess of
such orders, and it will not avail itself of any opportunity of making a profit
by expediting or withholding orders.

         TENTH:  

         (A)     Pursuant to the Plan and this Agreement, the Distributor, as
agent, shall enter into Shareholder Service Agreements with investment dealers,
financial institutions and certain 401(K) plan service providers (collectively
"Service Providers") selected by the Distributor for the provision of certain
continuing personal services to customers of such Service Providers who have
purchased Shares. Such agreements shall authorize Service Providers to provide
continuing personal shareholder services to their customers upon the terms and
conditions set forth therein, which shall not be inconsistent with the
provisions of this Agreement. Each Shareholder Service Agreement shall provide
that the Service Provider shall act as principal, and not as an agent of the
Company.

         (B)     Shareholder Service Agreements may provide that the Service
Providers may receive a service fee in the amount of 0.25% of the average daily
net assets of the Shares held by customers of such Service Providers provided
that such Service Providers furnish continuing personal shareholder services to
their customers in respect of such Shares. The continuing personal services to
be rendered by Service Providers under the Shareholder Service Agreements may
include, but shall not be limited to, some or all of the following:
distributing sales literature; answering routine customer inquiries concerning
the Company; assisting customers in changing dividend elections, options,
account designations and addresses, and in enrolling in any of several special
investment plans offered in connection with the purchase of Shares; assisting
in the establishment and maintenance of or establishing and maintaining
customer accounts and records and the processing of purchase and redemption
transactions; performing subaccounting; investing dividends and any capital
gains distributions automatically in the Company's shares; providing periodic
statements showing a customer's account balance and the integration of such
statements with those of other transactions and balances in the customer's
account serviced by the Service Provider; forwarding applicable prospectus,
proxy statements, reports and notices to customers who hold Shares and
providing such other information and services as the Company or the customers
may reasonably request.

         (C)     The Distributor may advance service fees payable to Service
Providers pursuant to the Plan or any other distribution plan adopted by the
Company with respect to Shares of one or more of the Portfolios pursuant to
Rule 12b-1 under the 1940 Act; and thereafter the Distributor may be reimbursed
for such advances through retention of service fee payments during the period
for which the service fees were advanced.


                                       5


<PAGE>   6

         ELEVENTH: The Company and the Distributor shall each comply with all
applicable provisions of the 1940 Act, the Securities Act of 1933, as amended,
and of all other federal and state laws, rules and regulations governing the
issuance and sale of the Shares.

         TWELFTH:

         (A)     In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Distributor, the Company shall indemnify the Distributor against any and
all claims, demands, liabilities and expenses which the Distributor may incur
under the Securities Act of 1933, or common law or otherwise, arising out of or
based upon any alleged untrue statement of a material fact contained in any
registration statement or prospectus of the Shares, or any omission to state a
material fact therein, the omission of which makes any statement contained
therein misleading, unless such statement or omission was made in reliance
upon, and in conformity with, information furnished to the Company in
connection therewith by or on behalf of the Distributor. The Distributor shall
indemnify the Company and the Shares against any and all claims, demands,
liabilities and expenses which the Company or the Shares may incur arising out
of or based upon (i) any act or deed of the Distributor or its sales
representatives which has not been authorized by the Company in its prospectus
or in this Agreement and (ii) the Company's reliance on the Distributor's
books, records, calculations and notices in Sections FOURTH: (E), SEVENTH: (C),
EIGHTH: (B), EIGHTH: (C) and EIGHTH: (D).

         (B)     The Distributor shall indemnify the Company and the Shares
against any and all claims, demands, liabilities and expenses which the Company
or the Shares may incur under the Securities Act of 1933, as amended, or common
law or otherwise, arising out of or based upon any alleged untrue statement of
a material fact contained in any registration statement or prospectus of the
Shares, or any omission to state a material fact therein if such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company in connection therewith by or on behalf of the
Distributor.

         (C)     Notwithstanding any other provision of this Agreement, the
Distributor shall not be liable for any errors of the transfer agent(s) of the
Shares, or for any failure of any such transfer agent to perform its duties.

         THIRTEENTH: Nothing herein contained shall require the Company to take
any action contrary to any provision of its Articles of Incorporation, as
amended, or to any applicable statute or regulation.

         FOURTEENTH: This Agreement shall become effective with respect to the
Shares of each Portfolio upon its approval by the Board of Trustees of the
Company and by vote of a majority of the Company's Trustees who are not
interested parties to this Agreement or "interested persons" (as defined in
Section 2(a)(19) of the 1940 Act) of any party to this Agreement cast in person
at a meeting called for such purpose, shall continue in force and effect until
two years from the date hereof, and from year to year thereafter, provided,
that such continuance is specifically approved with respect to the Shares of
each Portfolio at least annually (a)(i) by the Board of Trustees of the Company
or (ii) by the vote of a majority of the outstanding Shares of such class of
such Portfolio, and (b) by vote of a majority of the Company's Trustees who are
not parties to this Agreement or "interested persons" (as defined in Section
2(a)(19) of the 1940 Act) of any party to this Agreement cast in person at a
meeting called for such purpose.



                                       6

<PAGE>   7
         FIFTEENTH:

         (A)     This Agreement may be terminated with respect to the Shares of
any Portfolio, at any time, without the payment of any penalty, by vote of the
Board of Trustees of the Company or by vote of a majority of the outstanding
Shares of such Portfolio, or by the Distributor, on sixty (60) days' written
notice to the other party; and

         (B)     This Agreement shall also automatically terminate in the event
of its assignment, the term "assignment" having the meaning set forth in
Section 2(a)(4) of the 1940 Act; provided, that, subject to the provisions of
the following sentence, if this Agreement is terminated for any reason, the
obligations of the Company and the Distributor pursuant to Sections FOURTH:
(D), FOURTH: (E), SEVENTH: (B), SEVENTH: (C), EIGHTH: (A) through (E) and
TWELFTH: (A) of this Agreement will continue and survive any such termination.
Notwithstanding the foregoing, upon Complete Termination of the Plan (as such
term is defined in Section 8 of the Plan in effect at the date of this
Agreement), the obligations of the Company pursuant to the terms of Sections
SEVENTH: (B), EIGHTH: (A), EIGHTH: (C), EIGHTH: (D) and EIGHTH: (E) (with
respect to payments of Distributor's 12b-1 Share and Assignee's 12b-1 Portion)
of this Agreement shall terminate. A termination of the Plan with respect to
any or all Shares of any or all Portfolios shall not affect the obligations of
the Company pursuant to Sections FOURTH: (D), EIGHTH: (A), EIGHTH: (C), EIGHTH:
(D) and EIGHTH: (E) (with respect to payments of Distributor's Earned CDSC or
Assignee's CDSC Portion) hereof or of the obligations of the Distributor
pursuant to Section FOURTH: (E) or EIGHTH: (B) hereof.

         (C)     The Transfer of the Distributor's rights to Distributor's
12b-1 Share or Distributor's Earned CDSC shall not cause a termination of this
Agreement or be deemed to be an assignment for purposes of Section FIFTEENTH:
(B) above.

         SIXTEENTH: Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed postage prepaid, to the other party at such
address as the other party may designate for the receipt of notices. Until
further notice to the other party, the addresses of both the Company and the
Distributor shall be 11 Greenway Plaza, Suite 100, Houston. Texas 77046-1173.

         SEVENTEENTH: This Agreement shall be deemed to be a contract made in
the State of Delaware and governed by, construed in accordance with and
enforced pursuant to the internal laws of the State of Delaware without
reference to its conflicts of laws rules.


                                       7
<PAGE>   8


         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.


                                      AIM INVESTMENT FUNDS


                                      By:    /s/ ROBERT H. GRAHAM
                                         ---------------------------------    
                                          Name:  Robert H. Graham
                                          Title: President


Attest:

   /s/ SAMUEL D. SIRKO
- ----------------------------
Name:  Samuel D. Sirko 
Title: Assistant Secretary


                                      A I M DISTRIBUTORS, INC.


                                      By:    /s/ W. GARY LITTLEPAGE
                                         ---------------------------------    
                                          Name:  W. Gary Littlepage
                                          Title: Senior Vice President


Attest:
    /s/ KATHLEEN J. PFLUEGER
- ----------------------------
Name:   Kathleen J. Pflueger 
Title:  Secretary

                                       8

<PAGE>   9


                                   SCHEDULE A
                                       TO
                             DISTRIBUTION AGREEMENT
                                       OF
                              AIM INVESTMENT FUNDS

CLASS B SHARES

AIM Global Health Care Fund
AIM Global Telecommunications Fund
AIM Global Financial Services Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Consumer Products and Services Fund 
AIM Latin American Growth Fund
AIM Emerging Markets Fund 
AIM Global Growth & Income Fund 
AIM Global Government Income Fund 
AIM Strategic Income Fund 
AIM Global High Income Fund 
AIM Developing Markets Fund



                                       9

<PAGE>   10
                                   EXHIBIT A


         The Distributor's 12b-1 Share in respect of each Portfolio shall be
100 percent until such time as the Distributor shall cease to serve as
exclusive distributor of the Shares of such Portfolio and thereafter shall be a
percentage, recomputed first on the date of any termination of the
Distributor's services as exclusive distributor of Shares of any Portfolio and
thereafter periodically (but not less than monthly), representing the
percentage of Shares of such Portfolio outstanding on each such computation
date allocated to the Distributor in accordance with the following rules:

         1.      DEFINITIONS. For purposes of this Exhibit A defined terms used
herein shall have the meaning assigned to such terms in the Distribution
Agreement and the following terms shall have the following meanings:

                 "Commission Shares" shall mean shares of the Portfolio or 
another portfolio the redemption of which would, in the absence of the
application of some standard waiver provision, give rise to the payment of a
CDSC and shall include Commission Shares which due to the expiration of the
CDSC period no longer bear a CDSC.

                  "Distributor" shall mean the Distributor and the Distributor's
predecessor, GT Global, Inc.

                  "Other Distributor" shall mean each person appointed as the 
exclusive distributor for the Shares of the Portfolio after the Distributor
ceases to serve in that capacity.

         2.      ALLOCATION RULES. In determining the Distributor's 12b-1 Share
in respect of a particular Portfolio:

                 (a)     There shall be allocated to the Distributor and each
Other Distributor all Commission Shares of such Portfolio which were sold while
such Distributor or such Other Distributor, as the case may be, was the
exclusive distributor for the Shares of the Portfolio, determined in accordance
with the transfer records maintained for such Portfolio.

                 (b)     Reinvested Shares: On the date that any Shares are
issued by a Portfolio as a result of the reinvestment of dividends or other
distributions, whether ordinary income, capital gains or exempt-interest
dividend or distributions ("Reinvested Shares"), Reinvested Shares shall be
allocated to the Distributor and each Other Distributor in a number obtained by
multiplying the total number of Reinvested Shares issued on such date by a
fraction, the numerator of which is the total number of all Shares outstanding
in such Fund as of the opening of business on such date and allocated to the
Distributor or Other Distributor as of such date of determination pursuant to
these allocation procedures and the denominator is the total number of Shares
outstanding as of the opening of business on such date.

                 (c)     Exchange Shares: There shall be allocated to the
Distributor and each Other Distributor, as the case may be, all Commission
Shares of such Portfolio which were issued during or after the period referred
to in (a) as a consequence of one or more free exchanges of Commission Shares
of the Portfolio or of another portfolio (other than Free Appreciation Shares)
(the "Exchange Shares"), which in accordance with the transfer records
maintained for such Portfolio can be traced to Commission Shares of the
Portfolio or another portfolio initially issued by the Company or such other

                                      A-1

<PAGE>   11

portfolio during the time the Distributor or such Other Distributor, as the
case may be, was the exclusive distributor for the Shares of the Portfolio or
such other portfolio.

                 (d)     Free Appreciation Shares: Shares (other than Exchange
Shares) that were acquired by the holders of such Shares in a free exchange of
Shares of any other Portfolio, which represent the appreciated value of the
Shares of the exiting portfolio over the initial purchase price paid for the
Shares being redeemed and exchanged and for which the original purchase date
and the original purchase price are not identified on an on-going basis, shall
be allocated to the Distributor and each Other Distributor ("Free Appreciation
Shares") daily in a number obtained by multiplying the total number of Free
Appreciation Shares issued by the exiting portfolio on such date by a fraction,
the numerator of which is the total number of all Shares outstanding as of the
opening of business on such date allocated to the Distributor or such Other
Distributor as of such date of determination pursuant to these allocation
procedures and the denominator is the total number of Shares outstanding as of
the opening of business on such date.

                 (e)     Redeemed Shares: Shares (other than Reinvested Shares
and Free Appreciation Shares) that are redeemed will be allocated to the
Distributor and each Other Distributor to the extent such Share was previously
allocated to the Distributor or such Other Distributor in accordance with the
rules set forth in 2(a) or (c) above. Reinvested Shares and Free Appreciation
Shares that are redeemed will be allocated to the Distributor and each Other
Distributor daily in an amount equal to the number of Free Appreciation Shares
and Reinvested Shares of such Portfolio being redeemed on such date, which
amount is obtained by multiplying the total number of Free Appreciation Shares
and Reinvested Shares being redeemed by such Portfolio on such date by a
fraction, the numerator of which is the total number of all Free Appreciation
Shares and Reinvested Shares of such Portfolio outstanding as of the opening of
business on such date allocated to the Distributor or to such Other Distributor
as of such date of determination and the denominator is the total number of
Free Appreciation Shares and Reinvested Shares of such Portfolio outstanding as
of the opening of business on such date.

         The Fund shall use its best efforts to assure that the transfer agents
and sub-transfer agents for each Portfolio maintain the data necessary to
implement the foregoing rules. If, notwithstanding the foregoing, the transfer
agents or sub-transfer agents for such Portfolio are unable to maintain the
data necessary to implement the foregoing rules as written, and if the
Distributor shall cease to serve as exclusive distributor of the Shares of the
Portfolio, the Distributor and the Portfolio agree to negotiate in good faith
with each other, with the transfer agents and sub-transfer agents for such
Portfolio and with any third party that has obtained an interest in the
Distributor's 12b-1 Share in respect of such Portfolio with a view to arriving
at mutually satisfactory modifications to the foregoing rules designed to
accomplish substantially identical results on the basis of data which can be
made available.



                                      A-2

<PAGE>   1
                                                                   EXHIBIT 6(e)
                             DISTRIBUTION AGREEMENT

                                    BETWEEN

                           AIM INVESTMENT FUNDS, INC.

                                      AND

                            A I M DISTRIBUTORS, INC.

                              ADVISOR CLASS SHARES


         THIS AGREEMENT made this 29th day  of May, 1998, by and between AIM
Investment Funds, Inc., a Maryland Corporation (the "Company"), with respect to
the Advisor Class shares (the "Shares") of each series of  common stock set
forth on Appendix A to this  Agreement (the "Portfolios"), and  A I M
Distributors, Inc., a Delaware corporation (the "Distributor").

W I T N E S S E T H:

         In consideration of the mutual covenants  herein contained and other
good and  valuable consideration, the receipt whereof is hereby acknowledged,
the parties hereto agree as follows:

         FIRST:  The Company on behalf of the Portfolios hereby appoints the
Distributor as its exclusive agent for the sale of Shares to the public
directly and through investment dealers and financial institutions in the
United States and throughout the world.

         SECOND:  The Company shall not sell any Shares except through the
Distributor and under the terms and conditions set forth in paragraph FOURTH
below.  Notwithstanding the provisions of the foregoing sentence, however:

        (A)   the Company may issue Shares to any other investment company
or personal holding company, or to the shareholders thereof, in exchange for
all or a majority of the shares or assets of any such company; and

        (B)    the Company shall have the right to specify minimum
amounts for initial and subsequent orders for the purchase of Shares in
connection with certain classes of transactions or to certain classes of
persons, in accordance with Rule 22d-1 under the Investment Company Act of
1940, as amended (the "1940 Act"), provided that any such class is specified
in the then current prospectus of the applicable Portfolio.

        THIRD:  The Distributor hereby accepts appointment as exclusive agent
for the sale of the Shares and agrees that it will use its best efforts to
sell such Shares; provided, however, that:
<PAGE>   2

        (A)    the Distributor may, and when requested by the Company
on behalf of the Shares shall, suspend its efforts to effectuate such sales
at any time when, in the opinion of the Distributor or of the Company, no
sales should be made because of market or other economic considerations or
abnormal circumstances of any kind;

        (B)    the Company may withdraw the offering of the Shares (i) at
any time with the consent of the Distributor, or (ii) without such consent
when so required by the provisions of any statute or of any order, rule or
regulation of any governmental body having jurisdiction; and

        (C)    the Distributor, as agent, does not undertake to sell any
specific amount of the Shares.

         FOURTH:

         (A)    The public offering price of Shares (the offering price)
shall be the net asset value per share of the applicable Portfolio.  Net
asset value per share shall be determined in accordance with the provisions
of the then current prospectus and statement of additional information
of the applicable Portfolio.

        FIFTH:   The Distributor shall act as agent of the Company in
connection with the sale and repurchase of Shares.  Except with respect to such
sales and repurchases, the Distributor shall act as principal in all matters
relating to the promotion of the sale of Shares and shall enter into all of its
own engagements, agreements and contracts as principal on its own account.  The
Distributor shall enter into agreements with investment dealers and financial
institutions selected by the Distributor, authorizing such investment dealers
and financial institutions to offer and sell the Shares to the public upon the
terms and conditions set forth therein, which shall not be inconsistent with
the provisions of this Agreement. Each agreement shall provide that the
investment dealer and financial institution shall act as a principal, and not
as an agent, of the Company.

        SIXTH:  The Shares shall bear:

         (A)     the expenses of qualification of Shares for sale in
connection with such public offerings in such states as shall be selected by
the Distributor, and of continuing the qualification therein until the
Distributor notifies the Company that it does not wish such qualification
continued; and

         (B)     all legal expenses in connection with the foregoing.

        SEVENTH:  The Distributor shall bear the expenses of printing from 
the final proof and distributing the prospectuses and statements of
additional information for the Shares (including supplements thereto)
relating to public offerings made by the Company pursuant to such
prospectuses (which shall not include those prospectuses and statements
of additional information, and supplements thereto, to be distributed to
existing shareholders of the Shares), and any other promotional or sales
literature used by the Distributor or furnished by the





                                      2
<PAGE>   3

Distributor to dealers in connection with such public offerings, and
expenses of advertising in connection with such public offerings.

        EIGHTH:  The Distributor will accept orders for the purchase of Shares
only to the extent of purchase orders actually received and not in excess of
such orders, and it will not avail itself of any opportunity of making a profit
by expediting or withholding orders.  It is mutually understood and agreed that
the Company may reject purchase orders where, in the judgment of the Company,
such rejection is in the best interest of the Company.

        NINTH:  The Company, on behalf of the Portfolios, and the Distributor
shall each comply with all applicable provisions of the 1940 Act, the
Securities Act of 1933 and all other federal and state laws, rules and
regulations governing the issuance and sale of Shares.

        TENTH:

        (A)    In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the
part of the Distributor, the Company on behalf of the Portfolios agrees to
indemnify the Distributor against any and all claims, demands, liabilities and
expenses which the Distributor may incur under the Securities Act of 1933, or
common law or otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in any registration statement or
prospectus of a Portfolio, or any omission to state a material fact
therein, the omission of which makes any statement contained therein
misleading, unless such statement or omission was made in reliance upon, and
in conformity with, information furnished to the Company or a Portfolio in
connection therewith by or on behalf of the Distributor. The Distributor
agrees to indemnify the Company and the Portfolios against any and all
claims, demands, liabilities and expenses which the Company or a Portfolio may
incur arising out of or based upon any act or deed of the Distributor or its
sales representatives which has not been authorized by the Company or a
Portfolio in its prospectus or in this Agreement.

         (B)   The Distributor agrees to indemnify the Company and the
Portfolios against any and all claims, demands, liabilities and expenses
which the Company or the Portfolios may incur under the Securities Act of
1933, or common law or otherwise, arising out of or based upon any alleged
untrue statement of a material fact contained in any registration statement
or prospectus of a Portfolio, or any omission to state a material fact
therein if such statement or omission was made in reliance upon, and in
conformity with, information furnished to the Company or a Portfolio in
connection therewith by or on behalf of the Distributor.

         (C)   Notwithstanding any other provision of this Agreement, the
Distributor shall not be liable for any errors of the Portfolios transfer
agent(s), or for any failure of any such transfer agent to perform its duties.

        ELEVENTH:  Nothing herein contained shall require the Company to take
any action contrary to any provision of its Agreement and Declaration of Trust,
or to any applicable statute or regulation.





                                      3
<PAGE>   4

        TWELFTH:  This Agreement shall become effective with respect to the
Shares of each Portfolio as of the date hereof, shall continue in force and
effect for two years from the date hereof, and shall continue in force and
effect from year to year thereafter, provided, that such continuance is
specifically approved with respect to such Portfolio at least annually (a)(i)
by the Board of Trustees of the Company or (ii) by the vote of a majority of
the outstanding voting securities (as defined in Section 2(a)(42) of the 1940
Act), and (b) by vote of a majority of the Company's trustees who are not
parties to this Agreement or "interested persons" (as defined in Section
2(a)(19) of the 1940 Act) of any party to this Agreement cast in person at a
meeting called for such purpose.

        THIRTEENTH:

         (A)   This Agreement may be terminated with respect to the Shares
of any Portfolio at any time, without the payment of any penalty, by vote of
the Board of Trustees of the Company or by vote of a majority of the
outstanding voting securities of the applicable Portfolio, or by the
Distributor, on sixty (60) days' written notice to the other party.

         (B)    This Agreement shall automatically terminate in the event
of its assignment, the term "assignment" having the meaning set forth in
Section 2(a)(4) of the 1940 Act.

        FOURTEENTH:  Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed postage prepaid, to the other party at such
address as the other party may designate for the receipt of notices. Until
further notice to the other party, it is agreed that the addresses of both the
Company and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston,
Texas 77046.

        FIFTEENTH:   This Agreement shall be deemed to be a contract made
in the State of Delaware and governed by, construed in accordance with and
enforced pursuant to the internal laws of the State of Delaware without
reference to its conflicts of laws rules.





                                      4
<PAGE>   5

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
duplicate on the day and year first above written.



<TABLE>
<S>                                                <C>
                                                   AIM INVESTMENT FUNDS, INC.


                                                   By: /s/ WILLIAM J. GUILFOYLE
                                                       ------------------------------------------------------
                                                        Name:  William J. Guilfoyle
                                                        Title: President


Attest:


/s/ MICHAEL A. SILVER                                           
- -------------------------------------------
Name:  Michael A. Silver
Title: Assistant Secretary


                                                   A I M DISTRIBUTORS, INC.


                                                   By: /s/ JOHN CALDWELL
                                                       ------------------------------------------------------
                                                        Name:  John Caldwell
                                                        Title: Senior Vice President


Attest:

/s/ KATHLEEN J. PFLUEGER                                           
- -------------------------------------------
Name: Kathleen J. Pflueger
Title: Secretary
</TABLE>





                                      5
<PAGE>   6


                                   APPENDIX A
                                       TO
                             DISTRIBUTION AGREEMENT
                                       OF
                           AIM INVESTMENT FUNDS, INC.

ADVISOR CLASS SHARES
- --------------------
AIM Global Health Care Fund
AIM Global Telecommunications Fund
AIM Global Financial Services Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Consumer Products and Services Fund
AIM Latin American Growth Fund
AIM Emerging Markets Fund
AIM Global Growth & Income Fund
AIM Strategic Income Fund
AIM Global High Income Fund
AIM Global Government Income Fund
AIM Developing Markets Fund





                                      6

<PAGE>   1
                                                                    EXHIBIT 6(f)


                             DISTRIBUTION AGREEMENT

                                     BETWEEN

                              AIM INVESTMENT FUNDS

                                       AND

                            A I M DISTRIBUTORS, INC.

                              ADVISOR CLASS SHARES


         THIS AGREEMENT made this 8th day of September, 1998, by and between AIM
Investment Funds, a Delaware business trust (the "Company"), with respect to the
Advisor Class shares (the "Shares") of each series of common stock set forth on
Appendix A to this Agreement (the "Portfolios"), and A I M Distributors, Inc., a
Delaware corporation (the "Distributor").

W I T N E S S E T H:

         In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto agree as follows:

         FIRST: The Company on behalf of the Portfolios hereby appoints the
Distributor as its exclusive agent for the sale of Shares to the public directly
and through investment dealers and financial institutions in the United States
and throughout the world.

         SECOND: The Company shall not sell any Shares except through the
Distributor and under the terms and conditions set forth in paragraph FOURTH
below. Notwithstanding the provisions of the foregoing sentence, however:

         (A) the Company may issue Shares to any other investment company or
personal holding company, or to the shareholders thereof, in exchange for all or
a majority of the shares or assets of any such company; and

         (B) the Company shall have the right to specify minimum amounts for
initial and subsequent orders for the purchase of Shares in connection with
certain classes of transactions or to certain classes of persons, in accordance
with Rule 22d-1 under the Investment Company Act of 1940, as amended (the "1940
Act"), provided that any such class is specified in the then current prospectus
of the applicable Portfolio.

         THIRD: The Distributor hereby accepts appointment as exclusive agent
for the sale of the Shares and agrees that it will use its best efforts to sell
such Shares; provided, however, that:

                                       
<PAGE>   2


         (A) the Distributor may, and when requested by the Company on behalf of
the Shares shall, suspend its efforts to effectuate such sales at any time when,
in the opinion of the Distributor or of the Company, no sales should be made
because of market or other economic considerations or abnormal circumstances of
any kind;

         (B) the Company may withdraw the offering of the Shares (i) at any time
with the consent of the Distributor, or (ii) without such consent when so
required by the provisions of any statute or of any order, rule or regulation of
any governmental body having jurisdiction; and

         (C) the Distributor, as agent, does not undertake to sell any specific
amount of the Shares.

          FOURTH:

         (A) The public offering price of Shares (the "offering price") shall be
the net asset value per share of the applicable Portfolio. Net asset value per
share shall be determined in accordance with the provisions of the then current
prospectus and statement of additional information of the applicable Portfolio.

         FIFTH: The Distributor shall act as agent of the Company in connection
with the sale and repurchase of Shares. Except with respect to such sales and
repurchases, the Distributor shall act as principal in all matters relating to
the promotion of the sale of Shares and shall enter into all of its own
engagements, agreements and contracts as principal on its own account. The
Distributor shall enter into agreements with investment dealers and financial
institutions selected by the Distributor, authorizing such investment dealers
and financial institutions to offer and sell the Shares to the public upon the
terms and conditions set forth therein, which shall not be inconsistent with the
provisions of this Agreement. Each agreement shall provide that the investment
dealer and financial institution shall act as a principal, and not as an agent,
of the Company.

         SIXTH:  The Shares shall bear:

         (A) the expenses of qualification of Shares for sale in connection with
such public offerings in such states as shall be selected by the Distributor,
and of continuing the qualification therein until the Distributor notifies the
Company that it does not wish such qualification continued; and

         (B) all legal expenses in connection with the foregoing.

         SEVENTH: The Distributor shall bear the expenses of printing from the
final proof and distributing the prospectuses and statements of additional
information for the Shares (including supplements thereto) relating to public
offerings made by the Company pursuant to such prospectuses (which shall not
include those prospectuses and statements of additional information, and
supplements thereto, to be distributed to existing shareholders of the Shares),
and any other promotional or sales literature used by the Distributor or
furnished by the 


                                       2
<PAGE>   3

Distributor to dealers in connection with such public offerings, and expenses of
advertising in connection with such public offerings.

         EIGHTH: The Distributor will accept orders for the purchase of Shares
only to the extent of purchase orders actually received and not in excess of
such orders, and it will not avail itself of any opportunity of making a profit
by expediting or withholding orders. It is mutually understood and agreed that
the Company may reject purchase orders where, in the judgment of the Company,
such rejection is in the best interest of the Company.

         NINTH: The Company, on behalf of the Portfolios, and the Distributor
shall each comply with all applicable provisions of the 1940 Act, the Securities
Act of 1933 and all other federal and state laws, rules and regulations
governing the issuance and sale of Shares.

         TENTH:

         (A) In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Company on behalf of the Portfolios agrees to indemnify the
Distributor against any and all claims, demands, liabilities and expenses which
the Distributor may incur under the Securities Act of 1933, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of a
Portfolio, or any omission to state a material fact therein, the omission of
which makes any statement contained therein misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company or a Portfolio in connection therewith by or on behalf
of the Distributor. The Distributor agrees to indemnify the Company and the
Portfolios against any and all claims, demands, liabilities and expenses which
the Company or a Portfolio may incur arising out of or based upon any act or
deed of the Distributor or its sales representatives which has not been
authorized by the Company or a Portfolio in its prospectus or in this Agreement.

         (B) The Distributor agrees to indemnify the Company and the Portfolios
against any and all claims, demands, liabilities and expenses which the Company
or the Portfolios may incur under the Securities Act of 1933, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of a
Portfolio, or any omission to state a material fact therein if such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company or a Portfolio in connection therewith by or on behalf
of the Distributor.

         (C) Notwithstanding any other provision of this Agreement, the
Distributor shall not be liable for any errors of the Portfolios' transfer
agent(s), or for any failure of any such transfer agent to perform its duties.

         ELEVENTH: Nothing herein contained shall require the Company to take
any action contrary to any provision of its Agreement and Declaration of Trust,
or to any applicable statute or regulation.


                                       3
<PAGE>   4


         TWELFTH: This Agreement shall become effective with respect to the
Shares of each Portfolio as of the date hereof, shall continue in force and
effect for two years from the date hereof, and shall continue in force and
effect from year to year thereafter, provided, that such continuance is
specifically approved with respect to such Portfolio at least annually (a)(i) by
the Board of Trustees of the Company or (ii) by the vote of a majority of the
outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act),
and (b) by vote of a majority of the Company's trustees who are not parties to
this Agreement or "interested persons" (as defined in Section 2(a)(19) of the
1940 Act) of any party to this Agreement cast in person at a meeting called for
such purpose.

         THIRTEENTH:

         (A) This Agreement may be terminated with respect to the Shares of any
Portfolio at any time, without the payment of any penalty, by vote of the Board
of Trustees of the Company or by vote of a majority of the outstanding voting
securities of the applicable Portfolio, or by the Distributor, on sixty (60)
days' written notice to the other party.

         (B) This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act.

         FOURTEENTH: Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed postage prepaid, to the other party at such
address as the other party may designate for the receipt of notices. Until
further notice to the other party, it is agreed that the addresses of both the
Company and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston,
Texas 77046.

         FIFTEENTH: This Agreement shall be deemed to be a contract made in the
State of Delaware and governed by, construed in accordance with and enforced
pursuant to the internal laws of the State of Delaware without reference to its
conflicts of laws rules.


                                       4

<PAGE>   5



         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.



                                           AIM INVESTMENT FUNDS


                                           By:   /s/ ROBERT H. GRAHAM
                                              --------------------------------
                                              Name:  Robert H. Graham
                                              Title: President


Attest:

   /s/ SAMUEL D. SIRKO
- ---------------------------------
Name:  Samuel D. Sirko
Title: Assistant Secretary


                                           A I M DISTRIBUTORS, INC.


                                           By:   /s/ W. GARY LITTLEPAGE
                                              ---------------------------------
                                              Name:  W. Gary Littlepage
                                              Title: Senior Vice President


Attest:

    /s/ KATHLEEN J. PFLUEGER
- ---------------------------------
Name:   Kathleen J. Pflueger
Title:  Secretary







                                       5
<PAGE>   6



                                   APPENDIX A
                                       TO
                             DISTRIBUTION AGREEMENT
                                       OF
                              AIM INVESTMENT FUNDS

ADVISOR CLASS SHARES

AIM Global Health Care Fund
AIM Global Telecommunications Fund
AIM Global Financial Services Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Consumer Products and Services Fund 
AIM Latin American Growth Fund
AIM Emerging Markets Fund 
AIM Global Growth & Income Fund 
AIM Strategic Income Fund
AIM Global Government Income Fund
AIM Global High Income Fund
AIM Developing Markets Fund










                                       6

<PAGE>   1
                                                                 EXHIBIT 9(a)(1)





                     TRANSFER AGENCY AND SERVICE AGREEMENT

                                    BETWEEN

                              AIM INVESTMENT FUNDS

                                      AND

                           A I M FUND SERVICES, INC.
<PAGE>   2
<TABLE>
<CAPTION>
                                                    TABLE OF CONTENTS
<S>                                                                                                                  <C>
                                                                                                                     PAGE

ARTICLE 1        TERMS OF APPOINTMENT; DUTIES OF THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE 2        FEES AND EXPENSES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

ARTICLE 3        REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . . 3

ARTICLE 4        REPRESENTATIONS AND WARRANTIES OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ARTICLE 5        INDEMNIFICATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE 6        COVENANTS OF THE FUND AND THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARTICLE 7        TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE 8        ADDITIONAL FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE 9        ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE 10       AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

ARTICLE 11       TEXAS LAW TO APPLY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

ARTICLE 12       MERGER OF AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

ARTICLE 13       COUNTERPART. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

ARTICLE 14       LIMITATION OF SHAREHOLDER LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>





<PAGE>   3
                     TRANSFER AGENCY AND SERVICE AGREEMENT
 
         AGREEMENT made as of the _______ day of __________, 1998, by and
between AIM INVESTMENT FUNDS, as Delaware business trust, having its principal
office and place of business at 11 Greenway Plaza, Suite 100, Houston, Texas
77046 (the "Fund"), and A I M Fund Services, Inc., a Delaware corporation
having its principal office and place of business at 11 Greenway Plaza, Suite
100, Houston, Texas 77046 (the "Transfer Agent").

         WHEREAS, the Transfer Agent is registered as such with the Securities
and Exchange Commission (the "SEC"); and

         WHEREAS, the Fund is authorized to issue shares in separate series and
classes, with each such series representing interests in a separate portfolio
of securities and other assets and each such class having different
distribution arrangements; and

         WHEREAS, the Fund on behalf of each portfolio thereof (the
"Portfolios") desires to appoint the Transfer Agent as its transfer agent, and
agent in connection with certain other activities, with respect to the
Portfolios, and the Transfer Agent desires to accept such appointment;

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:

                                   ARTICLE 1
               TERMS OF APPOINTMENT; DUTIES OF THE TRANSFER AGENT

         1.01    Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints the Transfer Agent to act as,
and the Transfer Agent agrees to act as, its transfer agent for the authorized
and issued shares of beneficial interest of the Fund representing interests of
each of the respective Portfolios ("Shares"), dividend disbursing agent, and
agent in connection with any accumulation or similar plans provided to
shareholders of each of the Portfolios (the "Shareholders"), including without
limitation any periodic investment plan or periodic withdrawal program, as
provided in the currently effective prospectus and statement of additional
information (the "Prospectus") of the Fund on behalf of the Portfolios.

         1.02    The Transfer Agent agrees that it will perform the following
services:

         (a)     The Transfer Agent shall, in accordance with procedures
established from time to time by agreement between the Fund on behalf of each
of the Portfolios, as applicable, and the Transfer Agent:

                 (i)      receive for acceptance, orders for the purchase of
                          Shares, and promptly deliver payment and appropriate
                          documentation thereof to the Custodian of the Fund
                          authorized pursuant to the Agreement and Declaration
                          of Trust and Bylaws of the Fund (the "Custodian");

                 (ii)     pursuant to purchase orders, issue the appropriate
                          number of Shares and hold such Shares in the
                          appropriate Shareholder account;





                                      1
<PAGE>   4
                 (iii)    receive for acceptance redemption requests and 
                          redemption directions and deliver the appropriate
                          documentation thereof to the Custodian;

                 (iv)     at the appropriate time as and when it receives 
                          monies paid to it by the Custodian with respect to any
                          redemption, pay over or cause to be paid over in the 
                          appropriate manner such monies as instructed by the 
                          Fund;

                 (v)      effect transfers of Shares by the registered owners 
                          thereof upon receipt of appropriate instructions;

                 (vi)     prepare and transmit payments for dividends and 
                          distributions declared by the Fund on behalf of
                          the Shares;

                 (vii)    maintain records of account for and advise the 
                          Fund and its Shareholders as to the foregoing; and 

                 (viii)   record the issuance of Shares of the Fund and
                          maintain pursuant to SEC Rule 17Ad-10(e) a record
                          of the total number of Shares which are authorized, 
                          based upon data provided to it by the Fund,
                          and issued and outstanding.

         The Transfer Agent shall also provide the Fund on a regular basis with
the total number of Shares which are authorized and issued and outstanding and
shall have no obligation, when recording the issuance of Shares, to monitor the
issuance of such Shares or to take cognizance of any laws relating to the issue
or sale of such Shares, which function shall be the sole responsibility of the
Fund.

         (b)     In addition to the services set forth in the above paragraph
(a), the Transfer Agent shall: (i) perform the customary services of a transfer
agent, including but not limited to: maintaining all Shareholder accounts,
mailing Shareholder reports and prospectuses to current Shareholders, preparing
and mailing confirmation forms and statements of accounts to Shareholders for
all purchases and redemptions of Shares and other confirmable transactions in
Shareholder accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information.

         (c)     Procedures as to who shall provide certain of these services
in Article 1 may be established from time to time by agreement between the Fund
on behalf of each Portfolio and the Transfer Agent.  The Transfer Agent may at
times perform only a portion of these services and the Fund  or its agent may
perform these services on the Fund's behalf.

                                   ARTICLE 2
                               FEES AND EXPENSES

         2.01    For performance by the Transfer Agent pursuant to this
Agreement, the Fund agrees on behalf of each of the Portfolios to pay the
Transfer Agent fees as set out in the initial fee schedule attached hereto.
Such fees and out-of-pocket expenses and advances identified under Section 2.02
below may be changed from time to time subject to mutual written agreement
between the Fund and the Transfer Agent.





                                      2
<PAGE>   5
         2.02    In addition to the fee paid under Section 2.01 above, the Fund
agrees to reimburse the Transfer Agent for out-of-pocket expenses or advances
incurred by the Transfer Agent for the items set out in the fee schedule
attached hereto.  In addition, any other expenses incurred by the Transfer
Agent at the request or with the consent of the Fund, will be reimbursed by the
Fund on behalf of the applicable Shares.

         2.03    The Fund agrees on behalf of each of the Portfolios to pay all
fees and reimbursable expenses following the mailing of the respective billing
notice.  Postage for mailing of dividends, proxies, Fund reports and other
mailings to all Shareholder accounts shall be advanced to the Transfer Agent by
the Fund at least seven (7) days prior to the mailing date of such materials.

                                   ARTICLE 3
              REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT

         The Transfer Agent represents and warrants to the Fund that:

         3.01    It is a corporation duly organized and existing and in good
standing under the laws of the state of Delaware.  
        
         3.02    It is duly qualified to carry on its business in Delaware and
in Texas. 

         3.03    It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform this Agreement. 
        
         3.04    All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.  

         3.05    It has and will continue to have access to the necessary 
facilities, equipment and personnel to perform its duties and obligations 
under this Agreement.  

         3.06    It is registered as a Transfer Agent as required by the 
federal securities laws.

         3.07    This Agreement is a legal, valid and binding obligation to it.

                                   ARTICLE 4
                   REPRESENTATIONS AND WARRANTIES OF THE FUND

         The Fund represents and warrants to the Transfer Agent that: 

         4.01    It is a business trust duly organized and existing and in good
standing under the laws of Delaware.  

         4.02    It is empowered under applicable laws and by its
Agreement and Declaration of Trust and Bylaws to enter into and perform this
Delaware.  

         4.03    All corporate proceedings required by said Agreement and
Declaration of Trust and Bylaws have been taken to authorize it to enter into
and perform this Agreement.





                                      3
<PAGE>   6
         4.04    It is an open-end, diversified management investment company 
registered under the Investment Company Act of 1940, as amended.

         4.05    A registration statement under the Securities Act of 1933, as
amended on behalf of each of the Portfolios is currently effective and will
remain effective, with respect to all Shares of the Fund being offered for
sale.

                                   ARTICLE 5
                                INDEMNIFICATION

         5.01    The Transfer Agent shall not be responsible for, and the Fund
shall on behalf of the applicable Portfolio, indemnify and hold the Transfer
Agent harmless from and against, any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable
to:

         (a)     all actions of the Transfer Agent or its agents or
subcontractors required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith and without negligence or willful
misconduct;

         (b)     the Fund's lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation or warranty of
the Fund hereunder;

         (c)     the reliance on or use by the Transfer Agent or its agents or
subcontractors of information, records and documents or services which (i) are
received or relied upon by the Transfer Agent or its agents or subcontractors
and/or furnished to it or performed by on behalf of the Fund, and (ii) have
been prepared, maintained and/or performed by the Fund or any other person or
firm on behalf of the Fund; provided such actions are taken in good faith and
without negligence or willful misconduct;

         (d)     the reliance on, or the carrying out by the Transfer Agent or
its agents or subcontractors of any instructions or requests of the Fund on
behalf of the applicable Portfolio; provided such actions are taken in good
faith and without negligence or willful misconduct; or

         (e)     the offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state or in
violation of any stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of such Shares in such
state.

         5.02    The Transfer Agent shall indemnify and hold the Fund harmless
from and against any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to any action
or failure or omission to act by the Transfer Agent as result of the Transfer
Agent's lack of good faith, negligence or willful misconduct.

         5.03    At any time the Transfer Agent may apply to any officer of the
Fund for instructions, and may consult with legal counsel with respect to any
matter arising in connection with the services to be performed by the Transfer
Agent under this Agreement, and the Transfer Agent and its agents or
subcontractors shall not be liable to and shall be indemnified by the Fund on
behalf of the applicable Portfolio for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel.  The
Transfer Agent shall be protected and indemnified in acting upon





                                      4
<PAGE>   7
any paper or document furnished by or on behalf of the Fund, reasonably
believed to be genuine and to have been signed by the proper person or persons,
or upon any instruction, information, data, records or documents provided to
the Transfer Agent or its agents or subcontractors by machine readable input,
telex, CRT data entry or other similar means authorized by the Fund, and shall
not be held to have notice of any change of authority of any person, until
receipt of written notice thereof from the Fund.

         5.04    In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to
the other for any damages resulting from such failure to perform or otherwise
from such causes.

         5.05    Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for
any consequential damages arising out of any act or failure to act hereunder.

         5.06    In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim.  The
party who may be required to indemnify shall have the option to participate
with the party seeking indemnification in the defense of such claim.  The party
seeking indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to indemnify it
except with the other party's prior written consent.

                                   ARTICLE 6
                  COVENANTS OF THE FUND AND THE TRANSFER AGENT

         6.01    The Fund shall, upon request, on behalf of each of the
Portfolios promptly furnish to the Transfer Agent the following:

         (a)     a certified copy of the resolution of the Board of Trustees of
the Fund authorizing the appointment of the Transfer Agent and the execution
and delivery of this Agreement; and

         (b)     a copy of the Agreement and Declaration of Trust and Bylaws of
the Fund and all amendments thereto.

         6.02    The Transfer Agent shall keep records relating to the services
to be performed hereunder, in the form and manner as it may deem advisable.  To
the extent required by Section 31 of the Investment Company Act of 1940, as
amended, and the Rules thereunder, the Transfer Agent agrees that all such
records prepared or maintained by the Transfer Agent relating to the services
to be performed by the Transfer Agent hereunder are the property of the Fund
and will be preserved, maintained and made available in accordance with such
Section and Rules, and will be surrendered promptly to the Fund on and in
accordance with its request.

         6.03    The Transfer Agent and the Fund agree that all books, records,
information and data pertaining to the business of the other party which are
exchanged or received pursuant to the





                                      5
<PAGE>   8
negotiation or the carrying out of this Agreement shall remain confidential,
and shall not be voluntarily disclosed to any other person, except as may be
required by law.

         6.04    In case of any requests or demands for the inspection of the
Shareholder records of the Fund, the Transfer Agent will endeavor to notify the
Fund and to secure instructions from an authorized officer of the Fund as to
such inspection.  The Transfer Agent reserves the right, however, to exhibit
the Shareholder records to any person whenever it is advised by its counsel
that it may be held liable for the failure to exhibit the Shareholder records
to such person.

                                   ARTICLE 7
                            TERMINATION OF AGREEMENT

         7.01    This Agreement may be terminated by either party upon sixty
(60) days written notice to the other.

         7.02    Should the Fund exercise its right to terminate this
Agreement, all out-of-pocket expenses associated with the movement of records
and material will be borne by the Fund on behalf of the applicable Portfolios.
Additionally, the Transfer Agent reserves the right to charge for any other
reasonable expenses associated with such termination and/or a charge equivalent
to the average of three (3) months' fees.

                                   ARTICLE 8
                                ADDITIONAL FUNDS

         8.01    In the event that the Fund establishes one or more series of
Shares in addition to the Portfolios with respect to which it desires to have
the Transfer Agent render services as transfer agent under the terms hereof, it
shall so notify the Transfer Agent in writing, and if the Transfer Agent agrees
in writing to provide such services, such series of Shares shall become a
Portfolio hereunder.

                                   ARTICLE 9
                                   ASSIGNMENT

         9.01    Except as provided in Section 9.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.

         9.02    This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.

         9.03    The Transfer Agent may, without further consent on the part of
the Fund, subcontract for the performance hereof with any entity which is duly
registered as a transfer agent pursuant to Section 17A(c)(1) of the Securities
Exchange Act of 1934 as amended ("Section 17A(c)(1)"); provided, however, that
the Transfer Agent shall be as fully responsible to the Fund for the acts and
omissions of any subcontractor as it is for its own acts and omissions.





                                      6
<PAGE>   9
                                   ARTICLE 10
                                   AMENDMENT

         10.01   This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a resolution
of the Board of Trustees of the Fund.

                                   ARTICLE 11
                               TEXAS LAW TO APPLY

         11.01   This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Texas.

                                   ARTICLE 12
                              MERGER OF AGREEMENT

         12.01   This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.

                                   ARTICLE 13
                                  COUNTERPARTS

         13.01   This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

                                   ARTICLE 14
                      LIMITATION OF SHAREHOLDER LIABILITY

         14.01   Notice is hereby given that this Agreement is being executed
by the Fund by a duly authorized officer thereof acting as such and not
individually.  The obligations of this Agreement are not binding upon any of
the Trustees, officers, shareholders or the investment advisor of the Fund
individually but are binding only upon the assets and property belonging to the
Fund, on its own behalf or on behalf of a Portfolio, for the benefit of which
the Trustees or officers have caused this Agreement to be executed.





                                      7
<PAGE>   10
         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.

                                         AIM INVESTMENT FUNDS
                                 
                                 
                                 
                                         By:                                 
                                            ---------------------------------
                                             President
                                 
                                 
ATTEST:                          
                                 
                                 
                                 
- --------------------------
Assistant Secretary              
                                 
                                 
                                 
                                 
                                 
                                         A I M FUND SERVICES, INC.
                                 
                                 
                                 
                                         By:                                 
                                            ---------------------------------
                                             President
                                 

ATTEST:


                                                 
- --------------------------
Assistant Secretary





                                      8
<PAGE>   11
                                  FEE SCHEDULE


 1.  For performance by the Transfer Agent pursuant to this Agreement, the Fund
     agrees on behalf of each of the Portfolios to pay the Transfer Agent an
     annualized fee for shareholder accounts that are open during any monthly
     period as set forth below, and an annualized fee of $.70 per shareholder
     account that is closed during any monthly period.  Both fees shall be
     billed by the Transfer Agent monthly in arrears on a prorated basis of
     1/12 of the annualized fee for all such accounts.
                                                                 Per Account Fee
                        Fund Type                                    Annualized
                        ---------                                    ----------
                        Class A Annual/Semi-Annual Dividends           $15.15
                        Class A Quarterly & Monthly Dividend            17.15
                        Class A Daily Accrual                           19.65

                        Class B                                         19.65
                                                              
                        Advisor Class                                   19.65


 2.  The Transfer Agent shall provide the various mutual funds that are advised
     by A I M Advisors, Inc. or its affiliates and distributed by A I M
     Distributors, Inc. (the "AIM Funds") with an annualized credit to the
     monthly billings of (a) $1.50 for each open account in excess of 100,000
     open AIM Funds Accounts up to and including 125,000 open AIM Funds
     Accounts; (b) $1.75 for each open account in excess of 125,000 open AIM
     Funds Accounts up to and including 150,000 open AIM Funds Accounts; (c)
     $2.00 for each open AIM Funds Account in excess of 150,000 open AIM Funds
     Accounts up to and including 200,000 open AIM Funds Accounts; (d) $2.25
     for each open AIM Funds Account in excess of 200,000 open AIM Funds
     Accounts up to and including 500,000 open AIM Funds Accounts; (e) $2.50
     for each open AIM Funds Account in excess of 500,000 open AIM Funds
     Accounts up to and including 1,000,000 open AIM Funds Accounts; and (f)
     $3.00 for each open AIM Funds Account in excess of 1,000,000 open AIM
     Funds Accounts.


 3.  In addition, beginning on the anniversary date of the execution of the
     Remote Services Agreement with The Shareholder Services Group, Inc., and
     on each subsequent anniversary date, the per account fees shall each be
     increased by a percentage amount equal to the percentage increase in the
     then current Consumer Price Index (all urban consumers) or its successor
     index, though in no event shall such increase be greater than a 7%
     increase over the previous fees.


 4.  Other Fees

     IRA Annual Maintenance     $10 per IRA account per year (paid by investor 
     Fees                       per tax I.D. number).
                                  
     Balance Credit             The total fees due to the Transfer Agent from 
                                all funds affiliated with the Fund shall be 
                                reduced by an amount equal to one half of 
                                investment income earned by the Transfer Agent 
                                on the DDA balances of the disbursement 
                                accounts for those funds.





                                      9
<PAGE>   12
     Remote Services Fee        $3.60 per open account per year, payable 
                                monthly and $1.80 per closed account per 
                                year, payable monthly.


 5.  OUT-OF-POCKET EXPENSES

     The Fund shall reimburse the Transfer Agent monthly for applicable
     out-of-pocket expenses, including, but not limited to the following items:

          -   Microfiche/microfilm production & equipment
          -   Magnetic media tapes and freight
          -   Printing costs, including, without limitation, certificates, 
              envelopes, checks, stationery, confirmations and statements
          -   Postage (bulk, pre-sort, ZIP+4, bar coding, first class) direct 
              pass through to the Fund
          -   Due diligence mailings
          -   Telephone and telecommunication costs, including all lease, 
              maintenance and line costs
          -   Ad hoc reports
          -   Proxy solicitations, mailings and tabulations
          -   Daily & Distribution advice mailings
          -   Shipping, Certified and Overnight mail and insurance
          -   Year-end form production and mailings
          -   Terminals, communication lines, printers and other equipment and 
              any expenses incurred in connection with such terminals and lines
          -   Duplicating services
          -   Courier services
          -   Banking charges, including without limitation incoming and 
              outgoing wire charges @ $8.00 per wire
          -   Rendering fees as billed
          -   Federal Reserve charges for check clearance
          -   Record retention, retrieval and destruction costs, including, 
              but not limited to exit fees charged by
              third party record keeping vendors
          -   Third party audit reviews
          -   All client specific Systems enhancements will be at the Funds'
              cost.
          -   Certificate Insurance
          -   Such other miscellaneous expenses reasonably incurred by the 
              Transfer Agent in performing its duties and responsibilities 
              under this Agreement
          -   Check writing fee of $.75 per check redemption.

     The Fund agrees that postage and mailing expenses will be paid on the day
     of or prior to mailing.  In addition, the Fund will promptly reimburse the
     Transfer Agent for any other unscheduled expenses incurred by the Transfer
     Agent whenever the Fund and the Transfer Agent mutually agree that such
     expenses are not otherwise properly borne by the Transfer Agent as part of
     its duties and obligations under the Agreement.





                                      10



<PAGE>   1
                                                                EXHIBIT 9(a)(2)

                                 REMOTE ACCESS
                                 -------------
                                      AND
                                      ---
                           RELATED SERVICES AGREEMENT
                           --------------------------

     AGREEMENT dated as December 23, 1994 between each registered investment
company listed on the signature pages hereof, either for itself or, with respect
to each such company that is a series investment company, on behalf of each of
the series or class named on the signature pages hereof (the "Fund") and THE
SHAREHOLDER SERVICES GROUP, INC. ("TSSG"), a Massachusetts corporation with
principal offices at One Exchange Place, Boston, Massachusetts 02109.

                              W I T N E S S E T H
                              -------------------

     That for and in consideration of the mutual promises hereinafter set forth,
the Fund and TSSG agree as follows:

1.   Appointment of TSSG. The Fund appoints TSSG as servicing agent to provide
     and support remote terminal access through dedicated transmission lines to
     its computerized data processing record keeping system for Fund shareholder
     accounting more fully described on the attached Schedule A (the "TSSG
     System") installed on TSSG computer hardware and using TSSG software ("TSSG
     Facilities") to provide and support remote terminal access to the TSSG
     System and the TSSG Facilities for the maintenance of Fund shareholder
     records, processing of information and generation of information with
     respect thereto. TSSG hereby accepts such appointment for the compensation
     described below.

2.   Oral and Written Instructions. "Written Instructions" shall mean a written
     communication signed by a person reasonably believed by TSSG to be a person
     named on the list of authorized persons as it may be amended by amendment
     provided by the Fund to TSSG from time to time ("Schedule B"). "Oral
     Instructions" shall mean instructions, other than Written Instructions,
     actually received by TSSG from a person reasonably believed by TSSG to be
     an Authorized Person listed on Schedule B. Written communication shall
     include manually executed originals and authorized electronic
     transmissions, including telefacsimile of a manually executed original or
     other process.

3.   Compensation.

     (a)  The Fund will compensate TSSG for the performance of its obligations
          hereunder in accordance with the Fee Schedule attached hereto as
          Schedule C. Such fees may be adjusted from time to time by attaching
          to or substituting for Schedule C a revised Fee Schedule, dated and
          signed by an authorized officer of each party hereto.

<PAGE>   2
     (b)  In addition to the fees payable pursuant to Schedule C, the Fund will
          pay all out-of-pocket expenses incurred by TSSG in performing its
          duties hereunder. Out-of-pocket expenses shall include the items
          specified in the written schedule of out-of-pocket charges attached
          hereto as Schedule D. Upon written approval of the Fund, Schedule D
          may be modified by TSSG. The Fund agrees to approve all reasonable
          changes in Schedule D. Unscheduled out-of-pocket expenses shall be
          limited to those out-of-pocket expenses directly related to TSSG's
          performance of its obligations hereunder. 

     (c)  TSSG will provide an invoice as soon as practicable after the end of
          each calendar month detailed in accordance with Schedule C and
          Schedule D. The Fund will pay to TSSG the amount so billed within
          fifteen (15) days after the Fund's receipt of the invoice.

4.   Duties of TSSG.

     (a)  Subject to the provisions of this Agreement, the Fund hereby agrees to
          use or employ the TSSG System and the TSSG Facilities to maintain
          certain Fund shareholder records and generate output with respect to
          the Fund's shareholders, and subject to the provisions of this
          Agreement, TSSG will provide the use of the TSSG System and the TSSG
          Facilities to maintain Fund shareholder records and generate such
          output with respect to the Fund's shareholders.
 
     (b)  TSSG agrees to provide to the Fund at its facility located at Eleven
          Greenway Plaza, Suite 1919, Houston, Texas 77046 or at such other
          location as may be mutually agreed upon in writing by TSSG and the
          Fund (the "Fund Facility") remote access to the use of information
          processing capabilities of the TSSG System as it may be modified from
          time to time by TSSG.

5.   Changes and Modifications.

     (a)  During the term of this Agreement, TSSG will make available for Fund
          use, without additional costs, all modifications and improvements to
          the TSSG System (excluding those modifications and improvements TSSG
          views as additional products and/or those developed exclusively for
          other TSSG  clients) made in the ordinary course of business. In
          addition, TSSG will use its best efforts to make reasonable changes to
          the TSSG System requested by the Fund, subject to payment of
          additional fees as mutually agreed upon in writing and as reflected in
          Schedule C.

     (b)  TSSG shall have the right, at any time, and from time to time, to
          alter and modify any systems, programs, procedures or facilities used
          or employed in performing its duties and obligations hereunder (a
          "System Modification"), provided that no

                                       2
<PAGE>   3
          System Modification shall, without the consent of the Fund, materially
          adversely change or affect the operations and procedures of the Fund
          in using or employing the TSSG System or the TSSG Facilities
          hereunder. TSSG will use its best efforts to notify the Fund in
          writing at least five business days prior to implementing any System
          Modification which impacts or effects AFS' day to day operations, and
          in any event by 8 a.m. CST the following business day.

     (c)  TSSG agrees to make any System Modifications necessary to meet
          federal, state or local government or self-regulatory organization
          requirements ("Regulatory Adherence Enhancements") in a timely
          fashion. TSSG agrees to advise the Fund promptly upon notification of
          any change in or receipt of any information or advice concerning any
          change in the requirements of any federal, state, local or
          self-regulatory organization which might require such System
          Modifications. The Fund shall obtain any additional software required
          to comply with such changes in federal, state, and local government or
          self regulatory organization requirements. Regulatory Adherence
          Enhancements shall be limited to technically and commercially
          practical System modifications which are within the scope of the
          functions, capabilities and any database of the TSSG System. TSSG will
          provide Regulatory Adherence Enhancements only after final
          specification, agreed upon by TSSG, the Fund and affected third
          parties, have been established and delivered to TSSG.
 
     (d)  During the term of this Agreement TSSG shall expend no less than
          $1,000,000 (one million dollars) per calendar year for the enhancement
          and maintenance of TSSG's recordkeeping and associated system that are
          utilized by TSSG to provide services to the Fund under this Agreement
          (or a successor Remote Service Agreement). At least once each calendar
          year, TSSG shall provide the Fund with a schedule of the enhancements
          planned by the TSSG for the succeeding 12 month period.

6.   Duties of the Fund.

     (a)  The Fund will transmit all information and data required by TSSG
          hereunder to the TSSG Facilities in the format and form specified by
          TSSG, so that the output produced by the Fund shall be complete and
          accurate when it is generated by the TSSG System and the TSSG
          Facilities. The Fund shall be responsible and liable for the costs and
          expenses of regenerating any output if the Fund provides nonconforming
          or erroneous data or shall have failed to transmit any such data or
          information or verify any such data and information when it is
          generated by the TSSG System and the TSSG Facilities.

     (b)  In the event the Fund shall erroneously transmit information or shall
          transmit incorrect information or data to the TSSG System or the TSSG
          Facilities, the Fund 


                                       3
<PAGE>   4
          shall correct such information and data and retransmit the same to the
          TSSG System or to the TSSG Facilities. Upon consent of the Fund, which
          shall not be unreasonably withheld, TSSG shall take the necessary
          steps at Fund expense to correct any files affected by the original
          incorrect transmission.

     (c)  In the event the TSSG System malfunctions or a TSSG programming error 
          (other than programming changes made pursuant to paragraph 5(a)
          above), causes an error or mistake in any of the output generated by
          the TSSG System under the terms of this Agreement, TSSG will, at its
          expense, correct and retransmit such output so long as the Fund has
          notified TSSG of such error or mistake within five (5) business days
          of its discovery and the data used to generate such output is
          available as set forth in Schedule E attached hereto.

          If such data is available as set forth in Schedule E, the Fund shall
          take reasonable necessary steps to manually correct any records due to
          a TSSG system malfunction or programming error that TSSG is unable to
          correct systematically and the parties shall mutually agree upon the
          allocation of expenses related to such manual processing.

7.   System Access and Training.

     (a)  TSSG shall provide the Fund on-line access as provided for and set 
          forth in the attached Schedule F, and agrees to meet the performance
          standards set forth therein. Additional access to the TSSG System may
          be arranged by mutual agreement of the parties.

     (b)  The Fund will reimburse TSSG for any reasonable costs and expenses 
          incurred for training hereunder. All travel and other out-of-pocket
          expenses incurred by Fund personnel in connection with and during the
          training periods shall be borne by the Fund.

8.   Indemnification. TSSG shall not be responsible for and the Fund shall 
     indemnify and hold TSSG harmless from and against any and all claims,
     costs, expenses (including reasonable attorneys' fees), losses, damages,
     charges, payments and liabilities of any sort or kind which may be asserted
     against TSSG or for which TSSG may be held to be liable (a "Claim")
     arising out of or attributable to any of the following:

     (a)  Any actions of TSSG required to be taken pursuant to this Agreement 
          unless such Claim resulted from a negligent act or omission to act or
          bad faith by TSSG in the performance of its duties hereunder.

     (b)  The Fund's failure to use and employ the TSSG System and the TSSG 
          Facilities in accordance with the procedures set forth in any on-line
          documentation made


                                       4
<PAGE>   5
          available to the Fund, the Fund's failure to utilize the control
          procedures set forth and described in the on-line user documentation,
          or the Fund's failure to verify promptly reports or output received
          through use of the TSSG System and the TSSG Facilities.

     (c)  The Fund's errors and mistakes in the use of the TSSG System, TSSG
          Facilities and control procedures.

     (d)  TSSG's reasonable reliance on, or reasonable use of information, data,
          records and documents received by TSSG from the Fund in the
          performance of TSSG's duties and obligations hereunder.

     (e)  The reliance on, or the implementation of, any Written or Oral
          Instructions or any other instructions or requests of the Fund.

     (f)  The Fund's refusal or failure to comply with the terms of this
          Agreement, or any Claim which arises out of the Fund's negligence or
          misconduct or the breach of any representation or warranty of the Fund
          made herein.

     (g)  Unavailability of communications or utilities facilities or other
          equipment failures provided TSSG has maintained such equipment
          appropriately, Acts of God, acts of the public enemy,
          governmentally-mandated priorities in allocating its services, labor
          disputes, fires, floods, strikes, riots or war or other causes beyond
          its control.

9.   Standard of Care.

     (a)  TSSG shall at all times act in good faith and agrees to use its best
          efforts within commercially reasonable standards to insure the
          accuracy of all services performed under this Agreement, but assumes
          no responsibility and shall not be liable for loss or damage due to
          errors unless said errors are caused by its negligence, bad faith, or
          willful misconduct or that of its employees.

     (b)  Notwithstanding the foregoing Section 9(a) or anything else contained
          in this Agreement to the contrary, TSSG's liability hereunder shall,
          in no event exceed four million dollars ($4,000,000.00).

          The parties agree to review the limitation of liability provision set
          forth in this Section 9(b) on an annual basis.

10.  Instructions. TSSG may apply at any time to a person listed as an
     Authorized Person identified on Schedule B for instructions with respect to
     any matter arising in connection with this Agreement. TSSG may also consult
     with legal counsel for the Fund or, at

                                       5
<PAGE>   6
     TSSG's expense, its own legal counsel with respect to actions to be taken
     hereunder. TSSG shall not be liable for, and shall be indemnified by the
     Fund against, any Claim arising from any action taken or omitted to be
     taken by TSSG in good faith  in reliance upon such instruction from the
     Fund or upon the advice of such legal counsel.

11.  Consequential Damages. In no event and under no circumstances shall either
     party under this Agreement be liable to the other party for consequential
     or indirect loss of profits, reputation or business or any other special
     damages under any provision of this Agreement or for any act or failure to
     act hereunder.

12.  Covenants of TSSG.

     (a)  TSSG shall maintain the appropriate computer files of all required
          information and data transmitted to the TSSG Facilities by the Fund,
          provided, however, that TSSG shall not be responsible or liable for
          any damage, alterations, modifications thereto or failure to maintain
          the same if the Fund made, or TSSG made at the Fund's request, such
          changes, alterations or modifications or if the Fund causes the
          failure. It is expressly understood that all such shareholder records
          transmitted by the Fund and maintained by TSSG remain the exclusive
          property of the Fund.

     (b)  All information furnished by the Fund to TSSG is confidential and TSSG
          agrees that it shall not disclose such information to any third party
          except pursuant to Written or Oral Instructions received from the Fund
          or to the extent that TSSG is required by law to make such disclosure.

13.  Covenants of the Fund. The Fund shall utilize and employ all reasonable
     control procedures available under the TSSG System of which the Fund may be
     advised. The Fund will promptly advise TSSG of any errors or mistakes in
     the data or information transmitted to the TSSG Facilities or in the
     records maintained by TSSG or output generated hereunder. The Fund will
     verify the accuracy of all output it receives consistent with industry
     custom and practice by utilizing proper auditing procedures.

     All information furnished to or obtained by the Fund pertaining to the TSSG
     Facilities, the TSSG System, or TSSG procedures, data bases and programs is
     confidential and proprietary to TSSG. The Fund shall not disclose such
     information to any third party except to the extent that the Fund is
     required by law to make such disclosures.

14.  Term and Termination.

     (a)  This Agreement shall become effective on the date first set forth
          above and shall continue in effect through December 31, 1997 ("Initial
          Term").


                                       6


<PAGE>   7
     (b)  Unless it is the intention of either party for this Agreement to 
          terminate upon the expiration of the Initial Term, within six (6) 
          months prior to the end of the Initial Term but no later than such 
          date, AIM and TSSG will negotiate diligently and in good faith and 
          either (i) enter into an agreement extending the term of this 
          Agreement; or (ii) enter into a new agreement for TSSG to provide 
          remote services substantially similar to those contemplated hereunder.

     (c)  Notwithstanding the foregoing, if a party hereto is guilty of a 
          material failure to perform its duties and obligations hereunder 
          (a "Defaulting Party") the other party (the "Non-Defaulting Party") 
          may give written notice thereof to the Defaulting Party, and if such 
          material breach shall not have been remedied within thirty (30) days 
          after such written notice is given, then the Non-Defaulting Party may 
          terminate this Agreement by giving thirty (30) days written notice of 
          such termination to the Defaulting Party. If TSSG is the 
          Non-Defaulting Party, its termination of this Agreement shall not 
          constitute a waiver of any other rights or remedies of TSSG with 
          respect to services performed prior to such termination or rights of 
          TSSG to be reimbursed for out-of-pocket expenses. In all cases, 
          termination by the Non-Defaulting Party shall not constitute a 
          waiver by the Non-Defaulting Party of any other rights it might have 
          under this Agreement or otherwise against the Defaulting Party.

15.  Post-Termination Procedures. Upon termination for any reason by either
     party to this Agreement TSSG shall promptly, at the Fund's expense, provide
     immediate and full access to the Fund data files on magnetic tape in 
     machine readable form and shall cooperate with the Fund in its efforts to 
     transfer all such data files to another person chosen by the Fund. In 
     addition, TSSG agrees to return, at the expense of the terminating party,
     all backup tapes and other storage media upon which Fund data is then
     stored.

16.  Amendment. This Agreement may only be amended or modified by written 
     agreement executed by both parties.

17.  Assignment. This Agreement and any interest hereunder shall inure to
     the benefit of and be binding upon the Parties and their respective
     successors, legal representatives and permitted assigns including the
     successor entity in any merger or reorganization of the Funds. Except as
     otherwise expressly provided for in this Agreement, neither Party may
     assign or delegate this Agreement or any of its rights or obligations
     without the other Party's prior approval which shall not be unreasonably
     withheld. Upon prior notice to the Fund, TSSG may assign this Agreement to
     (i) any person in connection with the merger or consolidation of TSSG into
     such person, or the sale of all or substantially all of the assets of TSSG
     to such person or (ii) any direct or indirect subsidiary of First Data
     Corporation in connection with any corporate reorganization. Any attempt to
     assign, delegate or otherwise transfer this Agreement in violation of this
     Section will be voidable by the other party.

                                       7
<PAGE>   8
18.  Subcontracting. TSSG may subcontract to agents the services required to be
     performed pursuant to this Agreement and the Schedules hereto, if any. The
     appointment of any such agent shall not relieve TSSG of its
     responsibilities hereunder.

19.  Use of TSSG's Name. The Fund shall not use TSSG's name in any Prospectus,
     Statement of Additional Information, Shareholders's Report, sales
     literature or other material relating to the Fund without TSSG's prior
     written approval unless such use is required by law or merely refers in
     accurate terms to the services rendered hereunder. Any reference to TSSG
     shall include a statement to the effect that it is an indirect, wholly
     owned subsidiary of First Data Corporation.

20.  Use of the Fund's Name. Except as provided herein, TSSG shall not use the
     name of the Fund, its Advisor or material relating to any of them on any
     documents or forms (other than internal documents) without the Fund's prior
     written approval unless such use is required by law or merely refers in
     accurate terms to the services rendered hereunder.

21.  Security.

     (a)  TSSG will provide the Fund with a User Identifier (also known as
          "User I.D.") and a User Password. TSSG will also assign the initial
          Operator Password to each of the Fund's employees who are authorized
          to access the TSSG System. The Operator Passwords may be changed at
          any time in the discretion of the Fund without any notice to or
          knowledge of TSSG by using procedures set forth in the user manual.

     (b)  The Fund agrees that it is responsible for selection, use and
          protection of the confidentiality of passwords; however, TSSG may for
          security reasons at any time and from time to time, upon seven days
          written notice to the Fund (or immediately upon notice by telephone,
          confirmed in writing, in the event of an emergency), deny access to
          the TSSG System until one or more User I.D.s is changed by the Fund.

     (c)  TSSG will provide the Fund with online procedures enabling the Fund to
          reset passwords, correct password violations and add/change/delete
          User I.D.s within existing security profiles.

     (d)  TSSG will use its best efforts to ensure that the Fund's data files
          which are input into the TSSG System will remain confidential and
          protected from unauthorized access by third persons. Specifically,
          TSSG will adhere to its normal security procedures for protection of
          computer-stored files or programs from unauthorized access. It is
          agreed that such procedures will be subject to review by the Fund and
          audit by its independent accountants and that TSSG will take under
          advisement 

                                       8
<PAGE>   9
          recommendations of such independent accountants concerning changes to
          such procedures.

     (e)  The Fund or duly authorized independent auditors will have the right
          upon 5 business days' notice under this Agreement to perform on-site
          audits of records and accounts directly pertaining to Fund shareholder
          accounts serviced by TSSG facilities in accordance with reasonable
          procedures and at reasonable frequencies.

     (f)  The parties agree that all tapes, books, user manuals, instructions,
          records, information and data pertaining to the business of the other
          party, the TSSG System and the Fund clients services by the Fund which
          are exchanged or received pursuant to the negotiation of or carrying
          out of this Agreement shall remain confidential except to the extent
          required by applicable laws, and shall not be voluntarily disclosed to
          any other person and that all such tapes, books, reference manuals,
          instructions, records, information and data in the possession of each
          of the parties hereto shall be returned to the party from whom it was
          obtained upon the termination or expiration of this Agreement.

     (g)  The Fund acknowledges that TSSG has proprietary rights in and to the
          TSSG System and any other TSSG programs, data basis, supporting
          documentation or procedures ("TSSG Protected Information") of which
          the Fund or its employees or agents become aware as a result of the
          Fund's access to the TSSG System or TSSG Facilities and that the TSSG
          Protected Information constitutes confidential material and trade
          secrets of TSSG. The Fund agrees to maintain the confidentiality of
          the TSSG Protected Information. The Fund acknowledges that any
          unauthorized use, misuse, disclosure or taking of TSSG Protected
          Information which is confidential or which is a trade secret, whether
          residing or existing internally or externally to a computer, computer
          system or computer network, or the knowing and unauthorized accessing
          or causing to be accessed of any computer, computer system or computer
          network, may be subject to civil liabilities and criminal penalties
          under applicable law. The Fund will advise all of its employees and
          agents who have access to any TSSG Protected Information or to any
          computer equipment capable of accessing TSSG Facilities of the
          foregoing.

22. Additional Funds. In the event that additional funds, within the same family
as the Funds, are established ("Additional Funds") and such Additional Funds
desire to avail themselves of the benefits of and become a party to this
Agreement, the Additional Funds shall notify TSSG in writing, and if TSSG agrees
in writing, such Additional Funds shall become a party to this Agreement.


                                       9
<PAGE>   10
23.  Miscellaneous.

     (a)  Notices. Any notice or other instrument authorized or required by this
          Agreement to be given in writing to the Fund or TSSG shall be
          sufficiently given if addressed to that party and received by it at
          its office set forth below or at such other place as it may from time
          to time designate in writing.

          To:  AIM Family of Funds
               c/o John Caldwell, President
               AIM Fund Services, Inc.
               Eleven Greenway Plaza, Suite 1919
               Houston, Texas 77046
               Attention: William Kleh, Secretary

               with a copy to:
               Fund Legal Department at the same address
               Attention: Carol Relihan, VP and General Counsel 

          To:  The Shareholder Services Group, Inc.
               One Exchange Place
               Boston, Massachusetts 02109
               Attention: Robert F. Radin, President

               with a copy to:
               General Counsel at the same address

     (b)  Successors. This Agreement shall extend to and shall be binding upon
          the parties hereto, and their respective successors upon the parties
          hereto, and their respective successors and assigns; provided,
          however, that this Agreement may not be assigned without the written
          consent of the other party.

     (c)  Governing Law. This Agreement shall be governed exclusively by and
          interpreted in accordance with the internal substantive laws of the
          Commonwealth of Massachusetts without reference to the choice of the
          law provisions thereof.

     (d)  Severability. If any term, provision, covenant or restriction of this
          Agreement is held by a court of competent jurisdiction to be invalid,
          void or unenforceable, the remainder of the terms, provisions,
          covenants and restrictions of this Agreement shall remain in full
          force and effect and shall in no way be affected, impaired or
          invalidated.



                                       10
<PAGE>   11
     (e)  Counterparts. This Agreement may be executed in any number of
          counterparts, each of which shall be deemed to be an original, but all
          of which together will constitute only one instrument.

     (f)  Captions. The captions of this Agreement are included for convenience
          of reference only and in no way define or delimit any of the
          provisions hereof or otherwise affect their construction or effect.

     (g)  Sole Agreement. This Agreement constitutes the entire agreement
          between the parties hereto and supersedes any prior agreement with
          respect to the subject matter hereof.

     (h)  Specific Performance. Each of the parties hereto agrees that the other
          party would be irreparably damaged by breaches of this Agreement
          relating to confidential or proprietary information and accordingly
          each agrees that each of them is entitled, without bond or other
          security, to an injunction or injunctions to prevent breaches of the
          provisions of this Agreement relating to such information.

     (i)  It is understood and agreed that all services performed hereunder by
          TSSG shall be as an independent contractor and not as an employee,
          joint venturer, or partner of the Fund. This Agreement is between the
          Fund and TSSG, and there are no third party beneficiaries hereto.

     (j)  Limitation of Shareholder Liability. Notice is hereby given that the
          Declaration of Trust of each Fund which is a Delaware business trust,
          is on file with the Secretary of State of Delaware, and this Agreement
          was executed on behalf of each such Trust by a duly authorized officer
          thereof acting as such and not individually. The obligations of this
          Agreement are not binding upon any of the Trustees, officers or
          Shareholders of any such Trust individually but are binding only upon
          the assets and property of the respective portfolio of each such Trust
          for the benefit of which the Trustees have caused this Agreement to be
          executed.



                                       11



<PAGE>   12
     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.


                              AIM EQUITY FUNDS, INC.
                              on behalf of the Retail Classes of its AIM Charter
                              Fund, AIM Constellation Fund, AIM Weingarten Fund
                              and AIM Aggressive Growth Fund Portfolios

                              By: /s/ ROBERT H. GRAHAM
                                 ------------------
                              Title: President
                                    ---------------

                              AIM FUNDS GROUP,
                              on behalf of the Class A and Class B Shares of its
                              AIM Balanced Fund, AIM Government Securities Fund,
                              AIM Growth Fund, AIM High Yield Fund, AIM Income
                              Fund, AIM Municipal Bond Fund, AIM Utilities Fund
                              and AIM Value Fund portfolios and on behalf of the
                              Class A, Class B and Class C Shares of its AIM
                              Money Market Fund Portfolio

                              By: /s/ ROBERT H. GRAHAM
                                 ------------------
                              Title: President
                                    ---------------

                              AIM INTERNATIONAL FUNDS, INC.,
                              on behalf of the Class A and Class B shares of its
                              AIM International Equity Fund, AIM Global
                              Aggressive Growth Fund, AIM Global Growth Fund and
                              AIM Global Income Fund Portfolios

                              By: /s/ ROBERT H. GRAHAM
                                 ---------------------
                              Title: President
                                    ------------------



                                       12
<PAGE>   13
                              AIM INVESTMENT SECURITIES FUNDS,
                              on behalf of its AIM Adjustable Rate Government
                              Fund portfolio and the AIM Limited Maturity
                              Treasury Shares class of its Limited Maturity
                              Treasury Portfolio

                              By: /s/ ROBERT H. GRAHAM
                                 ---------------------
                              Title: President
                                    ------------------

                              AIM TAX-EXEMPT FUNDS, INC.,
                              on behalf of its AIM Tax-Exempt Cash Fund and AIM
                              Tax-Exempt Bond Fund of Connecticut portfolios and
                              the AIM Tax-Free Intermediate Shares class of its
                              Intermediate Portfolio

                              By: /s/ ROBERT H. GRAHAM
                                 ---------------------
                              Title: President
                                    ------------------

                              THE SHAREHOLDER SERVICES GROUP, INC.

                              By: /s/ JACK PUTNER
                                 ----------------
                              Title: EVP - COO
                                    -------------

                                       13


<PAGE>   14
                                   SCHEDULE A
                        SYSTEM FEATURES AND CAPABILITIES

The FSR System consists of computer hardware, operating system software and 
application software which contains functions as defined below. The operating 
environment configuration consists of IBM-compatible mainframe computers 
running on an MVS operating system. The configuration includes controllers, 
direct access storage devices, tape drives, security access software and other 
operating system hardware and software that enable TSSG to meet the contractual 
commitments herein.

The Transfer Agent Application includes Job Control Language (JCL), Catalog 
Procedures (PROCS) and program modules written primarily in COBOL.

The FSR Transfer Agency System supports the following subsystems and third 
party systems:

NSCC (National Securities Clearing Corporation) support:

   - FundSERV
   - Networking
   - Commissions
   - Exchanges
   - ACATS (Automated Customer Account Transfer System)
   - TNET

Cost basis accounting

UNISYS Interface

Sales file download

Price Waterhouse Blue Sky download

File downloads to support DDA (Demand Deposit Account) Reconciliation
 
<PAGE>   15
Year-End Statements and Tax Reporting:
   - 1099D
   - 1099R
   - 1042S
   - 5498
   - 1099B

Transmission send/receive functionality for broker/dealers and other third
parties

Electronic Funds Transfer processing to move in and out of funds using automated
clearing house facilities

KMS Microfilm Interface

Third part interfaces with:
     Applied Mailing Systems for print/mail support
     Microdata for checkbook production
     Mellon and Texas Commerce for banking services
     Other third party software packages i.e. ACE/DISC

<PAGE>   16
                                   SCHEDULE B
                AIM FAMILY OF FUNDS - LIST OF AUTHORIZED PERSONS



                             /s/ ROBERT H. GRAHAM
                            -----------------------
                                 Robert Graham
                     President, A I M Management Group Inc.



                            /s/ JOHN CALDWELL (JACK)
                            ------------------------
                                 Jack Caldwell
                      President, A I M Fund Services, Inc.



                             /s/ CAROL F. RELIHAN
                            -----------------------
                                 Carol Relihan
                         Secretary and General Counsel,
                          A I M Management Group Inc.



                               /s/ NANCY MARTIN
                            -----------------------
                                  Nancy Martin
                      Counsel, A I M Management Group Inc.
                                        
<PAGE>   17
                                   SCHEDULE C
                                  FEE SCHEDULE

I.   SHAREHOLDER ACCOUNT FEES. The fund shall pay the following fees
     ("Shareholder Account Fees"):

For the period beginning on the date of this Agreement, and continuing through 
December 31, 1997, the Fund shall pay TSSG an annualized fee of $3.60 per 
shareholder account that is open during any monthly period ("Open Account 
Fee"). The Fund also shall pay TSSG an annualized fee of $1.80 per shareholder 
account that is closed during any monthly period ("Closed Account Fee") (The 
Open Account Fees and the Closed Account Fees hereafter collectively referred 
to as "Shareholder Account Fees"). The Shareholder Account Fees shall be billed 
by TSSG monthly in arrears on a prorated basis of 1/12 of the annualized fee 
for all such accounts.

In addition, beginning on the one year anniversary date of this Agreement, and 
on each yearly anniversary date thereafter, the Shareholder Account fees may be 
increased by TSSG in an amount equal to the lesser of (i) the cumulative 
percentage increase in the Consumer Price Index for all Urban Consumers (CPI-U) 
U.S. City Average, All Items (unadjusted -- (1982-84 + 100), published by the 
U.S. Department of Labor, or (ii) seven percent (7%) of the Shareholder Account 
Fees charged by TSSG to the Fund for the preceding twelve (12) month period.

II.  FEES FOR DEDICATED PROGRAMMING SUPPORT

TSSG and the Fund will jointly determine the level of dedicated system 
resources required to meet the Fund's enhancement priorities. At the Fund's 
expense, TSSG agrees to use reasonable efforts to make dedicated programming 
support available for all projects required by the Fund. The amount of the 
resources required and the projects to be worked on shall be determined jointly 
based upon joint periodic review of project requirements; however, the Fund 
will decide the priorities which will be assigned to each project and will 
determine what projects the dedicated resources are to work on. Such resources 
will be charged to the Fund at the rates set forth below. All enhancement, 
improvements, modifications or new features added to the TSSG System shall be, 
and shall remain, the confidential, exclusive property of, and proprietary to, 
TSSG. Request for software changes may be initiated by those representatives of 
the Fund identified in Exhibit 1 of this Schedule C. The Fund will use its best 
efforts to notify TSSG in writing of requests for software changes within 72 
hours of an initial verbal request. TSSG reserves the right to stop work on a 
request for which written specifications have not been received.


                                       1
<PAGE>   18
a.       SUPPORT TO BE PROVIDED TO THE FUND FREE OF CHARGE. TSSG will provide 
         the following support at no additional cost to the fund:

     1.  Coding to correct deficiencies in the system, unless such deficiencies 
         are included in item (II)(b)(9) below in which event the Fund will be
         charged for such services. A system deficiency is defined as a system
         process which does not operate according to the design of the computer
         application or system specifications. To correct system deficiencies,
         TSSG will, at its own expense, expend whatever resources are necessary
         to analyze the deficiency and apply an appropriate remedy, in the form
         of corrected application code as expeditiously as possible. An
         alternate process, in the form of a functional work around, may be a
         suitable substitute for the actual system fix, if the level of effort
         to develop the system fix is deemed to be impractical or the elapsed
         time to develop and apply the fix extends beyond the reasonable time
         needed. For deficiencies identified by the Fund, the use of a
         functional work around as an alternate process shall be mutually agreed
         upon by the parties.

         TSSG will evaluate all reported referrals, to validate deficiency 
         status or reclassify as a system enhancement, based on the above 
         definition.

     2.  Simple Maintenance determined to be core processing.

     3.  TSSG generated (i.e., internal) requests to extend system 
         functionality and ensure industry competitiveness.

     4.  Enhancements required to comply with regulatory changes; provided, 
         however, TSSG will only make such changes to the extent that they are
         technically and commercially practical and are within the scope of the
         software functions, capabilities and database.

b.       SUPPORT TO BE PROVIDED TO THE FUND, BUT WHICH WILL BE BILLED AS 
         "DEDICATED PROGRAMING SUPPORT": The following activities are examples
         of "dedicated programming support" which will be billed to the Fund:

     1.  Customized form output (i.e., statements, confirmation statements, 
         commission statements).
     2.  Customized reports.
     3.  Addition of new features (enhancements) requested by the Fund.
     4.  Addition of existing features not used by the Fund.
     5.  Addition of new funds to the fund group.
     6.  Customized year-end processing.
     7.  Conversions from other systems to FSR subsequent to initial funds 
         being live.

(continued on next page)


                                       2
<PAGE>   19
     8.  Clean-up/Recovery project resulting from Fund error or causes beyond
         the reasonable control of either party.
     9.  System "fixes" - coding to correct errors attributable to code
         developed, and currently maintained by the dedicated teams.
     10. Customization of existing functions specific to the Fund.
     11. Program documentation as requested by the Fund.

     Software Exclusivity. The Fund may choose to have exclusive use of
     enhancement software developed by its dedicated programming staff. Such
     exclusivity would extend for a period of nine (9) months from the date the
     enhancement is placed into the production libraries. Software exclusivity
     would be waived if the Fund accepts either of the following conditions:

     a).  If prior to implementation, TSSG or other TSSG clients agree to share
          in the expense of the enhancements.

     b).  At any time during the 9 months following implementation, TSSG or
          other TSSG clients agree to share the expense for the enhancements.

     Access and Capability. The Funds' dedicated programmers will have access
     and capability to update any part of the System. However, depending on the
     skill set of the programmers, as well as the scope of the requested
     enhancement, it may be in the best interest of both the Fund and TSSG to
     utilize non-dedicated programmers to address certain enhancements. In
     addition, because many programs are shared by multiple clients, some
     enhancements may require approval from those clients. These enhancements
     should be handled on an item by item basis.

c.       FEES FOR DEDICATED PERSONNEL WHICH WILL BE BILLED TO THE FUND. TSSG
         will bill the Fund monthly in arrears on a prorated basis of 1/12 of
         the following annualized charges for each person dedicated to the
         following positions:

<TABLE>

         <S>                                       <C>
         Manager                                   $100,000
         Programmer                                $ 90,000
         Business System Analyst/Tester            $ 85,000
        
         Non-dedicated programmer-hourly charge    $100 per hour

</TABLE>

TSSG may adjust these salaries on the anniversary date of this agreement to 
reflect salary increases, provided that they do not exceed seven percent (7%) 
of the fees charged to the Fund for the identical positions during the 
immediately preceding twelve (12) month period.


                                       3
<PAGE>   20
                                   SCHEDULE C
                                   EXHIBIT 1
                              AIM FAMILY OF FUNDS
                         AUTHORIZED PERSONS REQUESTING
                              SYSTEM MODIFICATIONS


                              /s/ JOHN CALDWELL
                           -------------------------
                                 John Caldwell


                              /s/ RICHARD SNYDER
                             ---------------------
                                 Richard Snyder


                            /s/ JOSEPH CHARPENTIER
                            ----------------------
                               Joseph Charpentier


                               /s/ MARC VARGAS
                             ---------------------
                                  Marc Vargas


                                       4
<PAGE>   21
                                   SCHEDULED
                             OUT-OF-POCKET EXPENSES

The Fund shall reimburse TSSG monthly for applicable out-of-pocket expenses, 
including, but not limited to the following items:

     -  Microfiche/microfilm production 
     -  Magnetic media tapes and freight
     -  Telephone and telecommunication cost, including all lease, maintenance
        and line costs
     -  NSCC transaction charges at $.15/per financial transaction
     -  Shipping, Certified and Overnight mail and insurance
     -  Year-End form production and mailings
     -  Terminals, communication lines, printers and other equipment and any 
        expenses incurred in connection with such terminals and lines
     -  Duplicating services, as per-approved by the Fund
     -  Courier services
     -  Due Diligence Mailings
     -  Rendering fees as billed
     -  Overtime, as pre-approved by the Fund
     -  Temporary staff, as pre-approved by the Fund
     -  Travel and entertainment, as pre-approved by the Fund
     -  Record retention, retrieval and destruction costs, including, but not 
        limited to exit fees charged by third party record keeping vendors
     -  Third party audit review
     -  All conversion costs: including System start up costs, but excluding
        costs associated with conversations between TSSG systems.
     -  Such other miscellaneous expenses reasonably incurred by TSSG in
        performing its duties and responsibilities under this Agreement. Such
        expenses incurred with consent of the Fund, not to be unreasonably
        withheld.
     -  The costs associated with the Year-End Support Services set forth on
        the attached Exhibit 1 of this Schedule D.
     -  The costs associated with the Broker Dealer Support Services set forth
        on the attached Exhibit 2 of this Schedule D.
<PAGE>   22
                            EXHIBIT 1 OF SCHEDULE D


Year-End Support Services: Flat rate of $.12/per shareholder account open as of 
December 31, 1994.

The services listed below will be performed by TSSG for the Fund in support of 
reporting for tax year 1994 and compliance mailings for calendar year 1994. 
TSSG assumes responsibility for performing the services in compliance with 
current IRS rules and regulations.

(a)   Up-front year-end planning and communication of year-end related system 
      modifications.

(b)   Production of IRS required tax forms and amended/corrected tax forms as 
      requested by the Fund.

(c)   Production of IRS required 1099 magnetic tape filings.

(d)   Production of tax forms on microfiche.

(e)   Maintenance of year-end data files and the handling of transaction code 
      updates to those files.

(f)   Submission of year-end jobs.

(g)   B-notice processing as follows:         
      -  receipt of B-notice listing from IRS or 
      -  AFS upload of data entry of all accounts to B-Notice subsystem
      -  execution and generation of B-Notice defense reports
      -  analysis of B-Notice Defense Reports to ensure accurate coding
      -  coordination of mailings with vendor, including generation of vendor
         tapes
      -  notification to Client Services of anticipated and actual mailing
         dates, including volume, sample letters and confirmation of the date
         backup withholding will be imposed if no response is received
      -  systematic upload of W-9 responses as volumes warrant

(h)   Correction processing resulting from the monthly review of the year-end 
      files - "balancing."

(i)   Production of cost basis information on 1099B forms.

(j)   All required state filings as requested by the Fund.

(k)   All IRS required mailings requested by the Fund: B-Notice, Safe Harbor, 
      W-9, TEFRA election, IRS Penalty Notice, and TIN solicitation.
<PAGE>   23

                       EXHIBIT 1 OF SCHEDULE D (cont'd)



(1)    C-Notice processing as follows:
       o    receipt of C-Notice; imposition and release letters as received
            from Fund or IRS
       o    performance of search function to identify all accounts associated
            with the notice 
       o    provide written instructions to Fund for proper account coding

(m)    Initialization of Fund File in support of balancing tax reporting data
<PAGE>   24
                            EXHIBIT 2 OF SCHEDULE D




Broker/Dealer Support: Annualized fee of $.03/per shareholder account open
during any monthly period.

(a)      NSCC Testing

(b)      Back-up for NSCC redemption release

(c)      Research and Problem Resolution

(d)      Compliance and Support





<PAGE>   25
                                   SCHEDULE E
                     DATA RETENTION AND RECOVERY STANDARDS




Data files included in the System are backed up according to a defined
retention schedule.  This ensures availability of data for processing and
application recovery as well as compliance with regulatory requirements.
Critical files that are included in the retention process:

Shareholder Master
Shareholder History
Fund File
Dealer File
Global File
Certificate File
Broker/Client Cross Reference File
Additional Address File
Maintenance History File
Blue Sky Master
Price File
Rate File
Order Clearance File

These files are backed up as follows: daily and retained for six generations;
weekly and retained for 5 generations.  The Shareholder Master, Shareholder
History and Fund Files are also backed up annually and retained for 7
generations.

In addition, the Acceptance File containing post-processing daily activity, and
the Daily File containing pre-processing transaction input, are backed up daily
and retained for six generations.





<PAGE>   26
                                   SCHEDULE F
                         SYSTEM AVAILABILITY STANDARDS




These systems standards shall apply on business days.

<TABLE>
         <S>     <C>
         o       On-line systems availability between 7:00 a.m. and 7:00 p.m. CST - 95% measured monthly.

         o       Average response time (7:00 a.m. to 7:00 p.m. CST) of 3 seconds or less, in response to the system
                 employed by A I M Fund Services, Inc. as of September 1. 1994 - 95% measured monthly.

         o       Daily report bundles in queue for transmission no later than 7:00 a.m. CST each business day - 95%
                 measured monthly each bundle measured separately.

         o       Daily job PFSRXOED containing the Acceptance File download in queue for transmission no later than 4:00
                 a.m. CST each business day - 95% measured monthly.

         o       Daily job PFSRXCAD containing the Cap Stock File download in queue for transmission no later than 6:30
                 a.m. CST each business day - 95% measured monthly.

         o       Weekly job PFSXOHW containing the Dealer File download in queue for transmission no later than 9:00
                 a.m. CST each Saturday - 95% measured quarterly.
</TABLE>




<PAGE>   1
                                                               EXHIBIT 9(a)(3)

                        AMENDMENT NUMBER 1 TO THE REMOTE
                     ACCESS AND RELATED SERVICES AGREEMENT


         This Amendment Number 1 effective October 4, 1995 is made to the
Remote Access and Related Services Agreement dated December 23, 1994 (the
"Remote Agreement") by and between each registered investment company listed on
the signature pages hereof, either for itself or, with respect to each such
company that is a series investment company, on behalf of each of the series or
class named on the signature pages hereof (the "Fund") and THE SHAREHOLDER
SERVICES GROUP, INC. ("TSSG"), a Massachusetts corporation with principal
offices at One Exchange Place, Boston, Massachusetts 02109.

         WHEREAS, the Fund desires to incorporate any changes or deletions to
those registered investment companies listed on the signature page of the
Remote Agreement as set forth on the signature page hereof;

         WHEREAS, the Fund in connection with its access to the TSSG System,
desires to access and use TSSG's proprietary software known as the Structured
Query Language Application Programming Interface Product Release 5.0 (the
"SQL/API Product"); and

         WHEREAS, TSSG desires to provide such access to the Fund solely in
conjunction with the Fund's use of the TSSG System.

         In consideration of their mutual promises contained herein, the Fund
and TSSG agree to modify the Remote Access and Related Services Agreement (the
"Remote Agreement") as follows:

1.       TSSG grants to the Fund a non-transferable and non-exclusive license
         to access and use TSSG's SQL/API Product, maintained on the TSSG
         System at the TSSG Facility, solely to process data with respect to
         the Fund's internal business.  The Fund is authorized to use the
         SQL/API product only in connection with the Fund's remote use of the
         TSSG System.  The Fund shall be prohibited from the further sale,
         lease, transfer, license or sub-license, assignment or marketing in
         any manner of the SQL/API Product, or any other proprietary software
         used in conjunction with the TSSG System.  The Fund shall also be
         prohibited from the sale, lease, transfer, license, sub-license,
         assignment, or marketing in any manner of any software product
         developed in conjunction with the SQL/API Product.

2.       It is acknowledged that the Fund acquires only the right to use the
         SQL/API Product while the Remote Agreement is in effect between the
         parties and such right and said license shall terminate upon
         termination of the Remote Agreement.  The Fund acknowledges that it
         does not acquire any rights of ownership in the SQL/API Product.  This
         Agreement and the license granted pursuant hereto may not be assigned,
         sublicensed or transferred.


<PAGE>   2

3.       The Fund shall not have the right to use the SQL/API Product other
         than in connection with the use of the TSSG System in compliance with
         the  Remote Agreement.  The Fund may use the SQL/API Product to access
         the TSSG System using only TSSG Proprietary Software or software
         developed internally by the Fund.

4.       EXCEPT AS EXPRESSLY PROVIDED FOR IN THIS AMENDMENT, TSSG MAKES NO
         REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, TO THE FUND OR ANY
         OTHER PERSON, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING
         QUALITY, SUITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR
         PURPOSE OR OTHERWISE (IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM OR
         USAGE OF TRADE) OR ANY SERVICES PROVIDED UNDER THIS AGREEMENT.

5.       Infringement Indemnity   TSSG shall defend, at its expense, any action
         brought against the Fund to the extent that is based on a claim that
         the SQL/API Product infringes a United States copyright or duly issued
         patent, or misappropriates the trade secrets of a third party.  TSSG
         shall indemnify and hold harmless the Fund against damages and costs
         (including penalties, interest and reasonable attorney's fees) finally
         awarded against the Fund directly attributable to such claim provided
         that the Fund gives TSSG prompt written notice of such claim,
         reasonable assistance and sole authority to defend or settle such
         claim.  If the SQL/API Product becomes, or in TSSG's opinion is likely
         to become, the subject of such a claim then TSSG may, at its option:
         (a) procure for the Fund the right to use the SQL/API Product free of
         any liability for infringement or (b) replace or modify the SQL/API
         Product to make it noninfringing.  If TSSG is unable or determines
         that it is commercially impracticable to undertake clause (a) or (b)
         of this Section 5, the Fund will cease to use the directly affected
         portion of the SQL/API Product, and if such SQL/API Product is in the
         Fund's control, the Fund shall return or destroy it, and (c) TSSG will
         grant to the Fund a pro-rata credit for the annual maintenance fee
         that the Fund paid computed by dividing such fee by the total number
         of months in the then current term of the license for the SQL/API
         Product and multiplying the result by the number of months left in the
         unexpired license term for the SQL/API Product.

         TSSG shall have no obligation under this Section 5 if the alleged
         infringement or violation is based upon the use of the SQL/API Product
         in combination with other equipment or other software not furnished by
         TSSG or if such claim arises from TSSG's compliance with the Fund's
         designs, specifications or instructions or from the Fund's
         modification of the SQL/API Product.

         THIS SECTION STATES THE ENTIRE LIABILITY OF TSSG CONCERNING PATENT,
         COPYRIGHT, TRADE SECRET OR OTHER PROPRIETARY RIGHTS INFRINGEMENT.



                                      2


<PAGE>   3
6.       Notwithstanding anything in this Amendment to the contrary, the Fund's
         license to use the SQL/API Product will automatically terminate upon
         termination of the Remote Agreement.  This Amendment will terminate
         automatically in the event of a breach of the sublicense.

7.       TSSG shall take reasonable measures to enforce appropriate compliance
         with the foregoing restrictions up to and including the institution
         and diligent prosecution of proper legal proceedings.

8.       The Fund will agree to compensate TSSG for all fees as referenced on
         the attached Schedule #1 to this Amendment, and such other schedules
         as may be agreed upon between the parties from time to time.

The Agreement as modified by this Amendment ("Modified Agreement") constitutes
the entire agreement between the parties with respect to the subject matter
hereof.  The Modified Agreement supersedes all prior and contemporaneous
agreements between the parties in connection with the subject matter hereof.
No officer, employee, servant or other agent of either party is authorized to
make any representation, warranty or other promise not expressly contained
herein with respect to the subject matter hereof.





<PAGE>   4

         The parties to this Amendment have caused it to be executed by their
duly authorized officers as of the date and year referenced above.

<TABLE>
<S>                                                         <C>
AIM EQUITY FUNDS, INC.                                      AIM INVESTMENT SECURITIES FUNDS,
on behalf of the Class A and B Shares of                    on behalf of its AIM Limited Maturity
the Retail Classes of its AIM Charter Fund                  Treasury Shares
and AIM Weingarten Fund, and on behalf of the
Class A Shares of the Retail Classes
of AIM Constellation Fund and AIM                           By: /s/ ROBERT H. GRAHAM                                             
Aggressive Growth Fund Portfolios                               -----------------------------------------------
                                                                                                               
                                                            Title: President                                            
By: /s/ ROBERT H. GRAHAM                                          ---------------------------------------------
    -----------------------------------------------
                                                   
Title: President                                            AIM TAX-EXEMPT FUNDS, INC.,
      ---------------------------------------------         on behalf of its AIM Tax-Exempt Cash Fund and AIM
                                                            Tax-Exempt Bond Fund of Connecticut Portfolios and
                                                            the AIM Tax-Free Intermediate Shares of its
AIM FUNDS GROUP,                                            Intermediate Portfolio
on behalf of the Class A and Class B
Shares of its AIM Balanced Fund, AIM
Intermediate Government Fund, AIM Growth                    By: /s/ ROBERT H. GRAHAM                           
Fund, AIM High Yield Fund, AIM Income                           -----------------------------------------------
Fund, AIM Municipal Bond Fund, AIM Global                                                                      
Utilities Fund and AIM Value Fund Portfolios                Title: President                                   
and on behalf of the Class A, Class B and Class C                 ---------------------------------------------
Shares of its AIM Money Market Fund Portfolio               


By: /s/ ROBERT H. GRAHAM                                    THE SHAREHOLDER SERVICES
    -----------------------------------------------         GROUP, INC.
                                                   
Title: President                                   
      ---------------------------------------------         By: /s/ JACK P. KUTNER
                                                               ------------------------------------------------

AIM INTERNATIONAL FUNDS, INC.,                              Title: EVP - COO
of its AIM International Equity Fund, AIM Global                  ---------------------------------------------
Aggressive Growth Fund, AIM Global Growth Fund and
AIM Global Income Fund Portfolios


By: /s/ ROBERT H. GRAHAM                           
    -----------------------------------------------
                                                   
Title: President                                   
      ---------------------------------------------

</TABLE>


                                       4

<PAGE>   5
                       SCHEDULE #1 TO AMENDMENT NUMBER 1
                                  SQL/API FEES


Listed below are TSSG's License Fees for the SQL/API Product


o        One Time License Fee                               $30,000

o        Annual Maintenance Fee(1) billed                   $15,000
         quarterly in advance beginning the
         first month of the Agreement

o        On-Going Development Cost(2)                       $    125 per hour

o        Out of Pocket Expenses                             Per the existing
                                                            Remote Agreement
                                                            dated 12/23/94.


The Fund and TSSG intend to implement initially Release 5.0 of the SQL/API
Product on 150 Workstations.  For additional workstations beyond the 150
licensed, the Fund shall pay TSSG the then-current license, usage and support
fees for each additional Workstation


__________________________________

        (1) The increase in the maintenance fee after the first year will be 
equal to the lesser of (i) the previous year's 12 month average increase in the
Consumer Price Index (CPI) or (ii) seven percent (7%) of the maintenance fee 
charged by TSSG for the preceding twelve month period.

        (2) Development work includes product installation, customization and 
enhancements requested by the Fund.



<PAGE>   1
                                                              EXHIBIT 9(a)(4)



                       ADDENDUM NUMBER 2 TO THE REMOTE
                    ACCESS AND RELATED SERVICES AGREEMENT

        This Amendment Number 2 effective October 12, 1995 is made to the
Remote Access and Related Services Agreement dated December 23, 1994 (the
"Remote Agreement") by and between each registered investment company listed on
the signature pages hereof, either for itself or, with respect to each such
company that is a series investment company, on behalf of each of the series or
class named on the signature pages hereof (the "Fund") and THE SHAREHOLDER
SERVICES GROUP, INC. ("TSSG"), a Massachusetts corporation with principal
offices at One Exchange Place, Boston, Massachusetts 02109.

        WHEREAS, the Fund desires to incorporate any changes or deletions to
those registered investment companies listed on the signature page of the
Remote Agreement as set forth on the signature page hereof;

        WHEREAS, the Fund desires to use an additional product to the TSSG
System known as the Price Rate Capture System (the "PRAT Application"); and

        WHEREAS, TSSG desires to provide the PRAT Application to the Fund
solely in conjunction with the Fund's use of the TSSG System;

        In consideration of their mutual promises contained herein, the Fund
and TSSG agree to modify the Remote Access and Related Services Agreement (the
"Remote Agreement") as follows:

1.      Modify Schedule D to include the attached Exhibit 3 to Schedule D

        The Agreement as modified by this Addendum ("Modified Agreement")
constitutes the entire agreement between the parties with respect to the
subject matter hereof.  The Modified Agreement supersedes all prior and
contemporaneous agreements between the parties in connection with the subject
matter hereof.  No officer, employee, servant or other agent of either party is
authorized to make any representation, warranty or other promise not expressly
contained herein with respect to the subject matter hereof.

        The parties to this Addendum have caused it to be executed by their
duly authorized officers as of the date and year referenced above.

<TABLE>
<CAPTION>

<S>                                                    <C>
AIM EQUITY FUNDS, INC.                                 AIM FUNDS GROUP,
on behalf of the Class A and B Shares of the Retail    on behalf of the Class A and Class B Shares of its
Classes of its AIM Charter Fund and AIM                AIM Balanced Fund, AIM Intermediate Government
Weingarten Fund, and on behalf of the Class A          Fund, AIM Growth Fund, AIM High Yield Fund,
Shares of the Retail Classes of AIM Constellation      AIM Income Fund, AIM Municipal Bond Fund,
Fund and AIM Aggressive Growth Fund Portfolios          AIM Global Utilities Fund and AIM Value Fund
                                                       Portfolios and on behalf of the Class A, Class B and
BY:/s/ Robert H. Graham                                Class C Shares of its AIM Money Market Fund Portfolio
   --------------------------
Title: President                                       By:/s/ Robert H. Graham
      -----------------------                             --------------------------
                                                       Title: President
                                                              ----------------------

                                                       AIM INTERNATIONAL FUNDS, INC.
                                                       on behalf of the Class A and Class B Shares of its
                                                       AIM International Equity Fund, AIM Global
                                                       Aggressive Growth Fund, AIM Global Growth Fund
                                                       and AIM Global Income Fund Portfolios

                                                       By:/s/ Robert H. Graham
                                                          --------------------------
                                                       Title: President
                                                             -----------------------
</TABLE>

<PAGE>   2
AIM INVESTMENT SECURITIES FUNDS,
on behalf of its AIM Limited Maturity Treasury
Shares

By:/s/ Robert H. GRAHAM
   --------------------------
Title: President
      -----------------------

AIM TAX-EXEMPT FUNDS, INC.,
on behalf of its AIM Tax-Exempt Cash Fund and
AIM Tax-Exempt Bond Fund of Connecticut
Portfolios and the AIM Tax-Free Intermediate Shares
of its Intermediate Portfolio

By:/s/ Robert H. GRAHAM
   --------------------------
Title: President            
      -----------------------

THE SHAREHOLDER SERVICES GROUP,
INC.

By:/s/ JACK PUTNER
   --------------------------
Title: COO - EVP
      -----------------------


<PAGE>   3

                                  SCHEDULE D
                            OUT-OF-POCKET EXPENSES


The Fund shall reimburse TSSG monthly for applicable out-of-pocket expenses,
including, but not limited to the following items:

           o   Microfiche/microfilm production
           o   Magnetic media tapes and freight
           o   Telephone and telecommunication costs, including all lease,
               maintenance and line costs
           o   NSCC transaction charges at $.15/per financial transaction
           o   Shipping, Certified and Overnight mail and insurance
           o   Year-End form production and mailings
           o   Terminals, communication lines, printers and other equipment and
               any expenses incurred in connection with such terminals and lines
           o   Duplicating services, as pre-approved by the Fund
           o   Courier services
           o   Due Diligence Mailings
           o   Rendering fees as billed
           o   Overtime, as pre-approved by the Fund
           o   Temporary staff, as pre-approved by the Fund
           o   Travel and entertainment, as pre-approved by the Fund
           o   Record retention, retrieval and destruction costs, including,
               but not limited to exit fees charged by third party record
               keeping vendors
           o   Third party audit review
           o   All conversion costs: including System start up costs, but
               excluding costs associated with conversations between TSSG
               systems.
           o   Such other miscellaneous expenses reasonably incurred by TSSG in
               performing its duties and responsibilities under this Agreement.
               Such expenses incurred with consent of the Fund, not to be 
               unreasonably withheld.
           o   The costs associated with the Year-End Support Services set
               forth on the attached Exhibit 1 of this Schedule D.
           o   The costs associated with the Broker Dealer Support Services set
               forth on the attached Exhibit 2 of this Schedule D.
           o   The costs associated with the Price Rate Transmission Services
               set forth on the attached Exhibit 3 of this Schedule D.


<PAGE>   4
                           EXHIBIT 3 TO SCHEDULE D


Price Rate Capture System Services (PRAT)
- - -----------------------------------------
The PRAT Application will accept prices and dividend rates from the Fund
Accounting Department of A I M Advisors, Inc. electronically and post them to
the TSSG Pricing System.  The PRAT Application will run interconnected via
Local Area Network hardware and software.

The fees for the PRAT Service shall be as follows:

          o     One Time Set Up Fee           $5,000.

          o     Annual Fee*                   $7,500.


*The annual fee provides system and personnel resources required to support a
maximum average of 50 transmissions per month.  A charge of $30.00 per
transmission will be assessed for all transmissions incurred in excess of the
average 2 per day per month.


<PAGE>   1
                                                           EXHIBIT 9(a)(5)



                        AMENDMENT NUMBER 3 TO THE REMOTE
                     ACCESS AND RELATED SERVICES AGREEMENT


         THIS AMENDMENT, dated as of February 1, 1997 is made to the Remote
Access and Related Services Agreement dated December 23, 1994, as amended (the
"Agreement") between each registered investment company listed on the attached
Exhibit 1 hereof, (the "Fund") and The Shareholder Services Group, Inc., now
known as First Data Investor Services Group, Inc. ("FDISG").

                                   WITNESSETH

         WHEREAS, the Fund and FDISG desire to further amend the Agreement to
reflect certain changes thereto.

         NOW THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree that as of the date first referenced above, the
Agreement shall be amended as follows:

1.       All references to "THE SHAREHOLDER SERVICES GROUP, INC." are hereby
deleted and replaced with "FIRST DATA INVESTOR SERVICES GROUP, INC." and all
references to "TSSG" are hereby deleted and replaced with "FDISG".

2.       Delete the second sentence from Section 3(c) and replace with the
following:

         "The Fund will pay to FDISG the amount so billed by Federal Funds Wire
         within fifteen (15) business days after the Fund's receipt of the
         invoice."

3.       Section 4(b) of the Agreement is hereby deleted in its entirety and
replaced with the following new Section 4(b):

         "FDISG agrees to provide to the Fund at its facilities located at 11
         Greenway Plaza, Suite 100, Houston, Texas 77046, 12 Greenway Plaza,
         Houston, Texas 77046, 301 Congress Street, Suite 1700, Austin, Texas
         78701 and 12503 East Euclid Drive, Suite 250, Englewood, CO 80111 or
         at such other locations as may be mutually agreed upon in writing by
         FDISG and the Fund (the "Fund Facility") remote access to the use of
         information processing capabilities of the FDISG System as it may be
         modified from time to time by FDISG."

4.       Section 12 of the Agreement is hereby amended by adding the following
new Sections 12(c), through 12(i):

         "(c)    FDISG shall retain title to and ownership of the FDISG System,
                 including any and all data bases, computer programs, screen
                 formats, report formats, interactive design techniques,
                 derivative works, inventions, discoveries, patentable or
                 copyrightable matters, concepts, expertise, patents,
                 copyrights, trade secrets, and

<PAGE>   2





                 other related legal rights utilized in connection with the
                 services provided by FDISG to the Fund hereunder other than
                 shareholder account and transaction information which shall
                 remain the exclusive property of the Fund.

          (d)    FDISG hereby grants to the Fund and the Fund accepts a limited
                 license to the FDISG System for the sole and limited purpose
                 of having FDISG provide the services contemplated hereunder
                 and nothing contained in this Agreement shall be construed or
                 interpreted otherwise and subject to Section 15 such license
                 shall immediately terminate with the termination of this
                 Agreement.

          (e)    The transmission of account inquiry and transaction
                 information, including but not limited to maintenances,
                 exchanges, purchases and redemptions, shall be limited to
                 direct entry to the FDISG System by means of on-line mainframe
                 terminal entry or PC emulation of such mainframe terminal
                 entry and any other non-conforming method of transmission of
                 information to the FDISG System is strictly prohibited without
                 the prior written consent of FDISG.

          (f)    FDISG warrants that the FDISG System shall include, at no 
                 additional cost to the Fund, design and performance
                 capabilities so that prior to, during, and after the calendar
                 year 2000, the FDISG System will not malfunction, produce
                 invalid or incorrect results, or abnormally cease to function
                 due to the year 2000 date change.  In connection with the
                 foregoing, FDISG agrees to provide the Fund with periodic
                 quarterly updates with respect to FDISG compliance with this 
                 provision.

          (g)    Other than CPU Authorization Passwords, FDISG represents and
                 warrants to the Fund the software products provided by FDISG
                 hereunder (the "Products") do not contain any "back door" or
                 concealed access devices, any block or protection feature
                 which prevents the Fund from making additional copies of such
                 Products as permitted by this Agreement or any "self-help"
                 code, "Unauthorized Code", "software locks" or any other
                 similar devices which, upon the occurrence of a certain date
                 or event, the passage of a certain amount of time, or taking
                 of any action (or failure to take action) by or on behalf of
                 FDISG, will cause such Products or any software or system with
                 such Products are used to be destroyed, erased, damaged, or
                 otherwise made inoperable.  "Unauthorized Code" shall mean any
                 virus, Trojan horse, worm, or other software routines designed
                 to permit unauthorized access: to disable, or otherwise harm
                 software, hardware, or data; or to perform any other such
                 actions.
        
          (h)    Provided the Fund gives FDISG reasonable written notice, 
                 reasonable assistance, including assistance from the Fund's
                 employees, agents, affiliates and to the extent possible
                 independent contractors (collectively, "FUND'S AGENTS"), and
                 sole authority to defend or settle the action, then FDISG
                 shall do the following ("INFRINGEMENT INDEMNIFICATION"): (a)
                 defend or settle, at its expense, any action brought against
                 the Fund or the Fund's Agents to the extent the action is
                 based on a claim that the Fund's use of the FDISG System 
                 infringes a duly issued United

<PAGE>   3

                 States' patent or copyright or violates a third party's
                 proprietary trade secrets or other similar intellectual
                 property rights ("INFRINGEMENT"); and (b) pay damages and
                 costs finally awarded against the Fund or the Fund's Agents
                 directly attributable to such claim.  FDISG shall have no
                 Infringement Indemnification obligation if the alleged
                 Infringement is based upon the Fund's use of the FDISG System
                 with equipment or software not furnished or approved by FDISG
                 or if such claim arises from FDISG's compliance with the Fund's
                 designs, or from the Fund's modifications of the Software. 
                 The Infringement Indemnification states FDISG's entire
                 liability for Infringement and shall be the Fund's sole and 
                 exclusive remedy for such claims.

          (i)    Within sixty (60) days after the execution of this Amendment,
                 FDISG and the Fund shall enter into an escrow agreement
                 relating to the source code for (i) the FDISG proprietary
                 software used in connection with the FDISG System (as defined
                 in Section 1 of the Agreement: (ii) the "Software" (as that
                 term is defined in Schedule G), including the Third Party
                 Software set forth in Sections 2.1.1 and 2.1.2 of Exhibit 1 of
                 Schedule G; and (iii) the "FDISG Software" as that term is
                 defined in Schedule H (collectively, the "Source Code")
                 substantially in the form attached as Exhibit 2 of this
                 Amendment Number 3 ("Exhibit 2").  Promptly after signing the
                 escrow agreement, FDISG shall forward the agreement to the
                 escrow agent with a copy of the Source Code to be deposited
                 into escrow.  FDISG agrees to update the Source Code held by
                 the escrow agent on a quarterly basis.  The Fund shall be
                 responsible and pay for all fees of the escrow agent.  The
                 Source Code may be released to the Fund only if (i) FDISG
                 ceases to do business, makes an assignment for the benefit of
                 creditors, becomes insolvent (as revealed by its books and
                 records or otherwise), is generally unable to pay its debts as
                 such debts become due, or commences, or has commenced against
                 it a case under any chapter of state or federal bankruptcy
                 laws; and FDISG fails to cure any such event within sixty (60)
                 days after receiving notice from the Fund; and (ii) the Fund
                 has paid all amounts due to FDISG under this Agreement.  Upon
                 receipt of the Source Code from the escrow agent, the Fund
                 shall a have license to use the Software solely as set forth
                 herein for the remaining current term of the Agreement subject
                 to Section 15, which use shall be expanded to include the
                 right to modify the software solely in connection with support,
                 maintenance and operation of the software and not for any 
                 other purpose or person."

5.       Sections 14(a) and (b) of the Agreement are hereby deleted from the
Agreement and replaced with the following new Sections 14(a) and (b):

          (a)    This Agreement which became effective as of December 23, 1994
                 is hereby extended effective February 1, 1997 and shall
                 continue through January 31, 2000 (the "Initial Term").  Upon
                 the expiration of the Initial Term, this Agreement shall
                 automatically renew for successive terms of one (1) year
                 ("Renewal Terms") each, unless the Fund or FDISG provides
                 written notice to the other of its intent not to
<PAGE>   4





                 renew.  Such notice must be received not less than one-hundred
                 and eighty (180) days prior to the expiration of the Initial
                 Term or the then current Renewal Term.

          (b)    Notwithstanding the foregoing Section 14(a), in the event the 
                 Fund provides notice of its intent to terminate as set forth in
                 Section 14(a), the Fund may extend the term of the Agreement
                 for up to an additional one-hundred and eighty (180) days (the
                 "Extension Period") by providing FDISG with written notice of
                 its intent to do so.  Such notice must be received no later
                 than one-hundred and eighty (180) days prior to the expiration
                 of the Initial Term. During the Extension Period, the Fund may
                 terminate this Agreement at any time on thirty (30) days       
                 written notice.

6.       Section 15 is hereby amended by adding the following sentence to the
end of the paragraph:

         "FDISG agrees to provide reasonable, supervised system access until
         the Fund's conversion to another provider is complete".

7.       Section 23(a) is hereby amended by deleting the information regarding
notices and inserting the following


                To:      The AIM Family of Funds
                         c/o A I M Fund Services, Inc.
                         Eleven Greenway Plaza, Suite 100
                         Houston, Texas 77046
                         Attention: John Caldwell, President

                         with copy to:
                         Fund Legal Counsel at same address
                         Attention: Carol F. Relihan, Senior Vice President & 
                         General Counsel

                To:      First Data Investor Services Group, Inc.
                         4400 Computer Drive
                         Westborough, MA 02109
                         Attention: President

                         with copy to : General Counsel (same address)


8.       Section 23 is hereby amended by adding the following new sub-section 
(k):

         "(k)    Notwithstanding the indemnity provided by the Fund in Section 
                 8(g), FDISG agrees to use commercially reasonable efforts to
                 maintain a Disaster Recovery Plan, at no cost to the Fund,
                 designed to minimize the impact of any unforeseen business
                 interruption or outage that renders the FDISG System or FDISG
                 Facility inoperable, a summary of which is attached hereto as
                 Schedule I."
<PAGE>   5





9.       Schedule C is hereby deleted in its entirety and replaced with the
attached revised Schedule C.

10.      Exhibit 1 and Exhibit 2 of Schedule D are hereby deleted in their
entirety.

11.      Schedule F is hereby deleted in its entirety and replaced with the
attached revised Schedule F.

12.      Addendum Number 2 to the Agreement is hereby deleted in its entirety
and the new revised Schedule D - Out of Pocket Expenses as referenced in
Section 3(b) is hereby added to the Agreement.

13.      In addition to the foregoing, FDISG shall provide the Fund with a
software license to FDISG's proprietary IMPRESS Plus software and system in
accordance with the terms of and as more fully described in IMPRESS Plus
Software and Support Terms annexed hereto as Schedule G and incorporated
herein.

14.      In addition to the foregoing, FDISG shall provide the Fund with a
software license to FDISG's proprietary Accounting Control Environment +
("ACE +") software in accordance with the terms of and as more fully described
in the ACE + Software and Support Terms annexed hereto as Schedule H and
incorporated herein.

         The Agreement, as previously amended and as amended by this Amendment,
("Modified Agreement") constitutes the entire agreement between the parties
with respect to the subject matter hereof. The Modified Agreement supersedes all
prior and contemporaneous agreements between the parties in connection with the
subject matter hereof. No officer, employee, servant or other agent of either
party is authorized to make any representation, warranty, or other promises not
expressly contained herein with respect to the subject matter hereof.
<PAGE>   6





         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their duly authorized officers, as of the day and year first
above written.



On behalf of the Funds and respective Portfolios and Classes set forth in
Exhibit 1 attached hereto as may be amended from time to time.



By: /s/ ROBERT H. GRAHAM
   -------------------------------------

Title: President                        
      ----------------------------------



FIRST DATA INVESTOR SERVICES GROUP, INC.


By: /s/ GERALD G. KOKOS                 
   -------------------------------------

Title: Executive Vice President         
      ----------------------------------
<PAGE>   7





                                   EXHIBIT 1

                                 LIST OF FUNDS


<TABLE>
<S>                                                    <C>
AIM EQUITY FUNDS, INC.
      Portfolios:                                              Classes:
   AIM Blue Chip Fund                                   Class A and B Shares
   AIM Capital Development Fund                         Class A and B Shares
   AIM Charter Fund                                     Class A and B Shares 
   AIM Weingarten Fund                                  Class A and B Shares 
   AIM Aggressive Growth Fund                           Class A Shares       
   AIM Constellation Fund                               Class A Shares       
                                                                             


AIM FUNDS GROUP
        Portfolios:                                            Classes:
   AIM Balanced Fund                                    Class A and Class B Shares    
   AIM Global Utilities Fund                            Class A and Class B Shares    
   AIM Growth Fund                                      Class A and Class B Shares    
   AIM High Yield Fund                                  Class A and Class B Shares    
   AIM Income Fund                                      Class A and Class B Shares    
   AIM Intermediate Government Fund                     Class A and Class B Shares    
   AIM Municipal Bond Fund                              Class A and Class B Shares    
   AIM Value Fund                                       Class A and Class B Shares    
   AIM Money Market Fund                                Class A, Class B, and         
                                                        AIM Cash Reserve Shares       
                                                                                      


AIM INTERNATIONAL FUNDS, INC.
         Portfolios:                                           Classes:
   AIM International Equity Fund                        Class A and Class B Shares 
   AIM Global Aggressive Growth Fund                    Class A and Class B Shares 
   AIM Global Growth Fund                               Class A and Class B Shares 
   AIM Global Income Fund                               Class A and Class B Shares 


AIM INVESTMENT SECURITIES FUNDS
         Portfolios:                                           Classes:
   Limited Maturity Treasury Portfolio                  AIM Limited Maturity Treasury Shares 


AIM TAX-EXEMPT FUNDS, INC.                             
         Portfolios:                                          Classes:
   AIM Tax-Exempt Cash Fund                             n/a
   AIM Tax-Exempt Bond Fund of Connecticut              n/a
   Intermediate Portfolio                               AIM Tax-Free Intermediate Shares
</TABLE>
<PAGE>   8





                                   EXHIBIT 2

                             PREFERRED REGISTRATION



                          TECHNOLOGY ESCROW AGREEMENT

                           Account Number __________

                                    Recitals

       This Preferred Registration Technology Escrow Agreement including any
Exhibits ("Agreement") is effective this ______ day of _____ 1997, by and among
Data Securities International, Inc. ("DSI"), a Delaware corporation, First Data
Investor Services Group, Inc. ("Depositor"), and each registered investment
company listed on the attached Schedule A hereof ("Preferred Registrant").

       WHEREAS, Depositor has entered into a certain Remote Access and
Related Services Agreement dated December 23, 1994, as amended by Amendment
Number 3 dated as of February 1, 1997 (the "Remote Agreement") with the
Preferred Registrant which pursuant thereto certain proprietary software, as
described in Section 12(i) of the Remote Agreement, in object-code form and
other materials of Depositor have been licensed to Preferred Registrant (the
"Software");

       WHEREAS, Depositor and Preferred Registrant desire the Agreement to be
supplementary to said contract pursuant to 11 United States Code Section
365(n);

       WHEREAS, availability of or access to the source code and other
proprietary data related to the Software is critical to Preferred Registrant in
the conduct of its business;

       WHEREAS, Depositor has deposited or will deposit with DSI such source
code and other proprietary data to provide for retention, administration and
controlled access for Preferred Registration under conditions specified herein;

       NOW THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in consideration of the promises, mutual
covenants and conditions contained herein, the parties hereto agree as follows:

1.     Deposit Account.  Following the delivery of the executed Agreement, DSI
       shall open a deposit account ("Deposit Account") for Depositor.  The
       opening of the Deposit Account means that DSI shall establish an account
       ledger in the name of Depositor, assign a deposit account number
       ("Deposit Account Number"), calendar renewal notices to be sent to
       Depositor as provided in Section 30, and request the initial deposit
       ("Initial Deposit") from Depositor.  Depositor has an obligation to make
       the Initial Deposit.  In the event that Depositor has not made the
       Initial Deposit within sixty (60) days of the execution of this



                                       1
<PAGE>   9
       Agreement, DSI shall request the initial Deposit from Depositor and
       notify Preferred Registrant that such Initial Deposit has not been
       received.

2.     Preferred Registration Account.  Following the execution and delivery of
       the Agreement, DSI shall open a registration account ("Registration
       Account") for Preferred Registrant.  The opening of the Registration
       Account means that DSI shall establish under the Deposit Account an
       account ledger with a unique registration number ("Registration Number")
       in the name of Preferred Registrant, calendar renewal notices to be sent
       to Preferred Registrant as provided in Section 30, and request the
       Initial Deposit from Depositor.  DSI shall notify Preferred Registrant
       upon receipt of Initial Deposit.

3.     Term of Agreement.  The Agreement will commence on the effective date
       and continue through January 31, 2000, unless terminated earlier as
       provided in the Agreement.  The Agreement may be extended for one (1)
       year terms.

4.     Exhibit A, Notices and Communications.  Notices and invoices to
       Depositor, Preferred Registrant or DSI should be sent to the parties at
       the addresses identified in the Exhibit A.

       Documents, payment of fees, deposits of material, and any written
       communication should be sent to the DSI offices as identified in the
       Exhibit A.

       Depositor and Preferred Registrant agree to each name their respective
       designated contact ("Designated Contact") to receive notices from DSI
       and to act on their behalf in the performance of their obligations as
       set forth in the Agreement.  Depositor and Preferred Registrant agree to
       notify DSI immediately in the event of a change of their Designated
       Contact in the manner stipulated in Exhibit A.

5.     Exhibit B and Deposit Material.  Depositor will submit proprietary data
       and related material ("Deposit Material") to DSI for retention and
       administration in the Deposit Account.

       The Deposit Material will be submitted together with a completed
       document called a "Description of Deposit Material", hereinafter
       referred to as Exhibit B. Each Exhibit B should be signed by Depositor
       prior to submission to DSI and will be signed by DSI upon completion of
       the Deposit Material inspection.

       Depositor represents and warrants that it lawfully possesses all Deposit
       Material, can transfer Deposit Material to DSI and has the authority to
       store Deposit Material in accordance with the terms of the Agreement.

6.     Deposit Material Inspection.  Upon receipt of an Exhibit B and Deposit
       Material, DSI will be responsible only for reasonably matching the
       labeling of the materials to the item descriptions listed on the Exhibit
       B and validating the count of the materials to the quantity listed on
       the Exhibit B. DSI will not be responsible for any other claims made by


                                       2
<PAGE>   10





       the Depositor on the Exhibit B. Acceptance will occur when DSI concludes
       that the Deposit Material Inspection is complete.  Upon acceptance DSI
       will sign the Exhibit B and assign it the next Exhibit B number.  DSI
       shall issue a copy of the Exhibit B to Depositor and Preferred
       Registrant within ten (10) days of acceptance.

7.     Initial Deposit.  The Initial Deposit will consist of all material
       initially supplied by Depositor to DSI.

8.     Deposit Changes.  Depositor may desire or may be obligated to update the
       Deposit Account with supplemental or replacement Deposit Material of
       technology releases.

       Supplemental Deposit ("Supplemental") is Deposit Material which is to be
       added to the Deposit Account.

       Replacement Deposit ("Replacement") is Deposit Material which will
       replace existing Deposit Material as identified by any one or more
       Exhibit B(s) in the Deposit Account. Replaced Deposit Material will be
       destroyed or returned to Depositor.

9.     Deposit.  The existing deposit ("Deposit") means all Exhibit B(s) and
       their associated Deposit Material currently in DSI's possession.
       Destroyed or returned Deposit Material is not part of the Deposit;
       however, DSI shall keep records of the destruction or return of Deposit
       Material.

10.    Replacement Option.  Within ten (10) days of receipt of Replacement from
       Depositor, DSI will send a letter to Preferred Registrant stating that
       Depositor requests to replace existing Deposit Material, and DSI will
       include a copy of the new Exhibit B(s) listing the new Deposit Material.

       Preferred Registrant has twenty (20) days from the mailing of such
       letter by DSI to instruct DSI to retain the existing Deposit Material
       held by DSI, and if so instructed, DSI will change the Replacement to a
       Supplemental.  Conversion to Supplemental may cause an additional
       storage unit fee as specified by  DSI's Fee and Services Schedule.

       If Preferred Registrant does not instruct DSI to retain the existing
       Deposit Material, DSI shall permit such Deposit Material to be replaced
       with the Replacement.  Within ten (10) days of acceptance of the
       Replacement by DSI, DSI shall issue a copy of the executed Exhibit B(s)
       to Depositor and Preferred Registrant.  DSI will either destroy or
       return to Depositor all Deposit Material replaced by the Replacement.

11.    Storage Unit.  DSI will store the Deposit in defined units of space,
       called storage units.  The cost of the first storage unit will be
       included in the annual Deposit Account fee.

12.    Deposit Obligations of Confidentiality. DSI agrees to establish a locked
       receptacle in which it shall place the Deposit and shall put the
       receptacle under the administration of




                                       3
<PAGE>   11
         one or more of its officers, selected by DSI, whose identity shall be
         available to Depositor at all times.  DSI shall exercise a
         professional level of care in carrying out the terms of the Agreement.

         DSI acknowledges Depositor's assertion that the Deposit shall contain
         proprietary data and that DSI has an obligation to preserve and
         protect the confidentiality of the Deposit.

         Except as provided for in the Agreement, DSI agrees that it shall not
         divulge, disclose, make available to third parties, or make any use
         whatsoever of the Deposit.

13.      Audit Rights.  DSI agrees to keep records of the activities undertaken
         and materials prepared pursuant to the Agreement.  DSI may issue to
         Depositor and Preferred Registrant an annual report profiling the
         Deposit Account.  Such annual report will identify the Depositor,
         Preferred Registrant, the current Designated Contacts, selected
         special services, and the Exhibit B history, which includes Deposit
         Material acceptance and destruction or return dates.

         Upon reasonable notice, during normal business hours and during the
         term of the Agreement, Depositor or Preferred Registrant will be
         entitled to inspect the records of DSI pertaining to the Agreement,
         and accompanied by an employee of DSI, inspect the physical status and
         condition of the Deposit.  The Deposit may not be changed during the
         audit.

14.      Renewal Period of Agreement.  Upon payment of the initial fee or
         renewal fee, the Agreement will be in full force and will have an
         initial period of at least one (1) year unless otherwise specified.
         The Agreement may be renewed for additional periods upon receipt by
         DSI of the specified renewal fees prior to the last day of the period
         ("Expiration Date").  DSI may extend the period of the Agreement to
         cover the processing of any outstanding instruction made during any
         period of the Agreement.

         Preferred Registrant has the right to pay renewal fees and other
         related fees.  In the event Preferred Registrant pays the renewal fees
         and Depositor is of the opinion that any necessary condition for
         renewal is not met, Depositor may so notify DSI and Preferred
         Registrant in writing.  The resulting dispute will be resolved
         pursuant to the dispute resolution process defined in Section 25.

15.      Expiration.  If the Agreement is not renewed, or is otherwise
         terminated, all duties and obligations of DSI to Depositor and
         Preferred Registrant will terminate.  If Depositor requests the return
         of the Deposit, DSI shall return the Deposit to Depositor only after
         any outstanding invoices and the Deposit return fee are paid.  If the
         fees are not received by the Expiration Date of the Agreement, DSI, at
         its option, may destroy the Deposit.

16.      Certification by Depositor.  Depositor represents to Preferred
         Registrant that:





                                       4
<PAGE>   12
         a.      The Deposit delivered to DSI consists of the following: source
                 code deposited on computer magnetic media; all necessary and
                 available information, proprietary information, and technical
                 documentation which will enable a reasonably skilled
                 programmer of Preferred Registrant to create, maintain and/or
                 enhance the Software without the aid of Depositor or any other
                 person or reference to any other materials; maintenance tools
                 (test programs and program specifications); proprietary or
                 third party system utilities (compiler and assembler
                 descriptions); description of the system/program generation;
                 descriptions and locations of programs not owned by Depositor
                 but required for use and/or support; and names of key
                 developers for the technology on Depositor's staff.

         b.      The Deposit will be defined in the Exhibit B(s).

         These representations shall be deemed to be made continuously
         throughout the term of the Agreement.


17.      Indemnification.  Depositor and Preferred Registrant agree to defend
         and indemnify DSI and hold DSI harmless from and against any and all
         claims, actions and suits, whether in contract or in tort, and from
         and against any and all liabilities, losses, damages, costs, charges,
         penalties, counsel fees, and other expenses of any nature (including,
         without limitation, settlement costs) incurred by DSI as a result of
         performance of the Agreement except in the event of a judgment which
         specifies that DSI acted with gross negligence or willful misconduct.

18.      Filing for Release of Deposit by Preferred Registrant.  Upon notice to
         DSI by Preferred Registrant of the occurrence of a release condition
         as defined in Section 21 and payment of the release request fee, DSI
         shall notify Depositor by certified mail or commercial express mail
         service with a copy of the notice from Preferred Registrant.  If
         Depositor provides contrary instruction within ten (1O) days of the
         mailing of the notice to Depositor, DSI shall not deliver a copy of
         the Deposit to Preferred Registrant.

19.      Contrary Instruction.  "Contrary Instruction" is the filing of an
         instruction with DSI by Depositor stating that a Contrary Instruction
         is in effect.  Such Contrary Instruction means an officer of Depositor
         warrants that a release condition has not occurred or has been cured.
         DSI shall send a copy of the instruction by certified mail or
         commercial express mail service to Preferred Registrant.  DSI shall
         notify both Depositor and Preferred Registrant that there is a dispute
         to be resolved pursuant to Section 25.  Upon receipt of Contrary
         Instruction, DSI shall continue to store the Deposit pending Depositor
         and Preferred Registrant joint instruction, resolution pursuant to
         Section 25, order by a court of competent jurisdiction, or termination
         by non-renewal of the Agreement.
        
20.      Release of Deposit to Preferred Registrant.  Pursuant to Section 18, if
         DSI does not receive Contrary Instruction from Depositor, DSI is
         authorized to release the Deposit, or if more than one Preferred       
         Registrant is registered to the Deposit, a copy of the Deposit,



                                       5
<PAGE>   13
         to the Preferred Registrant filing for release following receipt of 
         any fees due to DSI including Deposit copying and delivery fees.

21.      Release Conditions of Deposit to Preferred Registrant.

         Release conditions are:

         a.        Depositor ceases to do business, makes an assignment for the
                   benefit of creditors, becomes insolvent (as revealed by its
                   books and records or otherwise), is generally unable to pay
                   its debts as such debts become due, or commences, or has
                   commenced against it a case under any chapter of state or
                   federal bankruptcy laws; and Depositor fails to cure any such
                   event within 60 days after receiving notice from Preferred
                   Registrant; and

         b.        Preferred Registrant has paid all amounts due Depositor under
                   the Remote Agreement.


22.      Grant of Use License.  Subject to the terms and conditions of the
         Agreement, Depositor hereby transfers and upon execution by DSI, DSI
         hereby accepts a non-exclusive, nontransferable, royalty-free license
         ("Use License") for the unexpired term of the Remote Agreement subject
         to Section 15 thereof which DSI will transfer to Preferred Registrant
         upon controlled release of the Deposit as described in the Agreement.
         The Use License will be solely for Preferred Registrant's internal
         purposes in connection with support, maintenance, and operation of the
         Software solely as set forth in the Remote Agreement and not for any
         other purpose or person.

23.      Use License Representation.  Depositor represents and warrants to
         Preferred Registrant and DSI that it has no knowledge of any
         incumbrance or infringement of the Deposit, or that any claim has been
         made that the Deposit infringes any patent, trade secret, copyright or
         other proprietary right of any third party.  Depositor warrants that it
         has the full right, power, and ability to enter into and perform the
         Agreement, to grant the foregoing Use License, and to permit the
         Deposit to be placed with DSI.

24.      Conditions Following Release.  Following a release and subject to
         payment to DSI of all outstanding fees, DSI shall transfer the Use
         License to Preferred Registrant.  Additionally Preferred Registrant
         shall be required to maintain the confidentiality of the released      
         Deposit.

25.      Disputes.  In the event of a dispute, DSI shall so notify Depositor and
         Preferred Registrant in writing.  Upon agreement of the parties at the
         time of a dispute, such dispute will be settled by arbitration in
         accordance with the commercial rules of the American Arbitration
         Association ("AAA").  Unless otherwise agreed to by Depositor and
         Preferred Registrant, arbitration will take place in San Diego,
         California, USA.
        


                                       6
<PAGE>   14
26.      Verification Rights. Depositor grants to Preferred Registrant the
         option to verify the Deposit for accuracy, completeness and
         sufficiency. Depositor agrees to permit DSI and at least one employee
         of Preferred Registrant to be present at Depositor's facility to
         verify, audit and inspect of the Deposit for the benefit of Preferred
         Registrant. If DSI is present or is selected to perform the
         verification, DSI will be paid according to DSI's then current
         verification service hourly rates and any out of pocket expenses.

27.      General. DSI may act in reliance upon any instruction, instrument, or
         signature believed to be genuine and may assume that any employee
         giving any written notice, request, advice or instruction in
         connection with or relating to the Agreement has apparent authority
         and has been duly authorized to do so. DSI may provide copies of the
         Agreement or account history information to any employee of Depositor
         or Preferred Registrant upon their request. For purposes of
         termination or replacement, Deposit Material shall be returned only to
         Depositor's Designated Contact, unless otherwise instructed by
         Depositor's Designated Contact.

         DSI is not responsible for failure to fulfill its obligations under the
         Agreement due to causes beyond DSI's control.

         The Agreement is to be governed by and construed in accordance with
         the laws of the State of California.

         The Agreement constitutes the entire agreement between the parties
         concerning the subject matter hereof, and supersedes all previous
         communications, representations, understandings, and agreements,
         either oral or written, between the parties. The Agreement may be
         amended only in a writing signed by the parties.

         If any provision of the Agreement is held by any court to be invalid
         or unenforceable, that provision will be severed from the Agreement
         and any remaining provisions will continue in full force.

28.      Title to Media. Subject to the terms of the Agreement, title to the
         media, upon which the proprietary data is written or stored, is and
         shall be irrevocably vested in DSI.  Notwithstanding the foregoing,
         Depositor will retain ownership of the proprietary data contained on
         the media including all copyright, trade secret, patent or other
         intellectual property ownership rights subsisting in such proprietary
         data.

29.      Termination of Rights. The Use License as described above will
         terminate in the event that the Agreement is terminated without the
         Use License transferring to Preferred Registrant.

30.      Fees. Fees are due upon receipt of signed contract, receipt of Deposit
         Material, or when service is requested, whichever is earliest. If
         invoiced fees are not paid within sixty (60) days of the date of the
         invoice, DSI may terminate the Agreement. If the payment is not

                                       7
<PAGE>   15
         timely received by DSI, DSI shall have the right to accrue and collect
         interest at the rate of one and one-half percent per month (18% per
         annum) from the date of the invoice for all late payments.

         Renewal fees will be due in full upon the receipt of invoice unless
         otherwise specified by the invoice. In the event that renewal fees are
         not received thirty (30) days prior to the Expiration Date, DSI shall
         so notify Depositor and Preferred Registrant. If the renewal fees are
         not received by the Expiration Date, DSI may terminate the Agreement
         without further notice and without liability of DSI to Depositor or
         Preferred Registrant.

         DSI shall not be required to process any request for service unless
         the payment for such request shall be made or provided for in a manner
         satisfactory to DSI.

         All service fees and renewal fees will be those specified in DSI's Fee
         and Services Schedule in effect at the time of renewal or request for
         service, except as otherwise agreed. For any increase in DSI's
         standard fees, DSI shall notify Depositor and Preferred Registrant at
         least ninety (90) days prior to the renewal of the Agreement. For any
         service not listed on the Fee and Services Schedule, DSI shall provide
         a quote prior to rendering such service.

         Fees invoiced by DSI are the responsibility of the Preferred
         Registrant and as such all invoices in accordance with this Agreement
         are to be sent to the Preferred Registrant.

                                       8

<PAGE>   16
On behalf of the Investment Companies
and respective Portfolios and Classes
set forth in Schedule A attached
hereto as may be amended from
time to time.

<TABLE>
<S>                                         <C>
By:                                         FIRST DATA INVESTOR SERVICES
   ---------------------------------        GROUP, INC.
Name:
     -------------------------------        By:
Title:                                         ---------------------------------
      ------------------------------        Name:
                                                 -------------------------------
                                            Title:
                                                  ------------------------------

DATA SECURITIES
INTERNATIONAL, INC.

By:
   ---------------------------------
Name:
     -------------------------------
Title:
      ------------------------------
</TABLE>
<PAGE>   17
                                   SCHEDULE A
                                 LIST OF FUNDS


AIM EQUITY FUNDS, INC.


<TABLE>
<CAPTION>
         Portfolios:                                          Classes:                           
<S>                                                  <C>
     AIM Blue Chip Fund                              Class A and B Shares                        
     AIM Capital Development Fund                    Class A and B Shares                        
     AIM Charter Fund                                Class A and B Shares                        
     AIM Weingarten Fund                             Class A and B Shares                        
     AIM Aggressive Growth Fund                      Class A Shares                              
     AIM Constellation Fund                          Class A Shares                              

</TABLE>
              
AIM FUNDS GROUP

<TABLE>
<CAPTION>
         Portfolios:                                          Classes:                           
<S>                                                  <C>
     AIM Balanced Fund                               Class A and Class B Shares                  
     AIM Global Utilities Fund                       Class A and Class B Shares                  
     AIM Growth Fund                                 Class A and Class B Shares                  
     AIM High Yield Fund                             Class A and Class B Shares                  
     AIM Income Fund                                 Class A and Class B Shares                  
     AIM Intermediate Government Fund                Class A and Class B Shares                  
     AIM Municipal Bond Fund                         Class A and Class B Shares                  
     AIM Value Fund                                  Class A and Class B Shares                  
     AIM Money Market Fund                           Class A, Class B and AIM Cash Reserve Shares

</TABLE>
               
AIM INTERNATIONAL FUNDS, INC.  

<TABLE>
<CAPTION>
         Portfolios:                                          Classes:                           
<S>                                                  <C>
     AIM International Equity Fund                   Class A and Class B Shares                  
     AIM Global Aggressive Growth Fund               Class A and Class B Shares                  
     AIM Global Growth Fund                          Class A and Class B Shares                  
     AIM Global Income Fund                          Class A and Class B Shares                  

</TABLE>
                                
AIM INVESTMENT SECURITIES FUNDS 

<TABLE>
<CAPTION>
         Portfolios:                                          Classes:                           
<S>                                                  <C>
     Limited Maturity Treasury Portfolio             AIM Limited Maturity Treasury Shares        

</TABLE>
                                
AIM TAX-EXEMPT FUNDS, INC.      

<TABLE>
<CAPTION>
         Portfolios:                                          Classes:                           
<S>                                                  <C>
     AIM Tax-Exempt Cash Fund                        n/a                                         
     AIM Tax-Exempt Bond Fund of Connecticut         n/a                                         
     Intermediate Portfolio                          AIM Tax-Free Intermediate Shares            

</TABLE>
<PAGE>   18
EXHIBIT A

                             DESIGNATED CONTACT

                          Account Number:  __________



<TABLE>
<S>                                                    <C>
NOTICES, DEPOSIT MATERIAL RETURNS AND                  INVOICES TO DEPOSITOR SHOULD BE ADDRESSED TO:
COMMUNICATION, INCLUDING DELINQUENCIES TO                                                           
DEPOSITOR SHOULD BE ADDRESSED TO:                      ------------------------------------------------     
                                                                                                    
        [Company Name/Address]                         ------------------------------------------------     
- ----------------------------------------                                                            
                                                       ------------------------------------------------     
- ----------------------------------------                                                            
                                                       ------------------------------------------------     
- ----------------------------------------                                                            
                                                       Invoice Contact:                             
- ----------------------------------------                               --------------------------------                             
Designated Contact:                                                                                 
                   ---------------------                                                            
Telephone:                                                                                             
          ------------------------------                                                               
Facsimile:                                                                                             
          ------------------------------                                                                   
State of Incorporation:                                                                                
                       -----------------                                                                   
                                                                                                       

NOTICES AND COMMUNICATION, INCLUDING                   INVOICES TO PREFERRED REGISTRANT SHOULD BE          
DELINQUENCIES TO PREFERRED REGISTRANT                  ADDRESSED TO:                                   
SHOULD BE ADDRESSED TO:                                                                                    
                                                       ----------------------------------------------- 
First Data Investor Services Group, Inc.               
4400 Computer Drive                                    -----------------------------------------------     
Westborough, MA 01581                                                                                  
                                                       ----------------------------------------------- 
                                                                                                       
                                                       ----------------------------------------------- 

Designated Contact:                                    Invoice Contact:                                
                   ---------------------                               ------------------------------- 
Telephone:                                                                                             
          ------------------------------    
Facsimile:                                                                                             
          ------------------------------

Requests from Depositor or Preferred Registrant        INVOICE INQUIRIES AND FEE REMITTANCES TO DSI    
Contact should be given Contact or authorized          SHOULD BE ADDRESSED TO:                         
employee Registrant.                                                                                   
                                                       DSI                                             
CONTRACTS, DEPOSIT MATERIAL AND NOTICES TO DSI         Attn:    Accounts Receivable                    
SHOULD BE ADDRESSED TO:                                                                                
                                                                                                       
DSI                                                                                                    
Attn:    Contract Administration                                                                       
                                                                                                       
                                                       Telephone:                                      
                                                                 -------------------------------------
                                                       Facsimile:                                      
                                                                 -------------------------------------
Telephone:                            
          ------------------------------
Facsimile:                            
          ------------------------------                            
Date:                                        
     -----------------------------------         

</TABLE>
<PAGE>   19
EXHIBIT B

                       DESCRIPTION OF DEPOSIT MATERIAL

Deposit Account Number:
                       --------------------------------------------------------
Depositor Company Name:
                       --------------------------------------------------------
 

DEPOSIT TYPE:

       Initial           Supplemental             Replacement
- ------            ------                   ------

If Replacement:          Destroy Deposit          Return Deposit
                  ------                   ------

ENVIRONMENT:

Host System CPU/OS:
                   ------------------------------------------------------------
Version:
        -----------------------------------------------------------------------
Backup:
       ------------------------------------------------------------------------

Source System CPU/OS:
                     ----------------------------------------------------------
Version:
        -----------------------------------------------------------------------
Compiler:
         ----------------------------------------------------------------------
Special Instructions:
                     ----------------------------------------------------------

DEPOSIT MATERIAL:

Exhibit B Name:                    Version:
                -----------------          ------------------------------------

<TABLE>
<CAPTION>
Item Label Description            Media            Quantity
<S>                               <C>              <C>





</TABLE>

<TABLE>
<S>                                              <C>
For Depositor, I certify that the above          For DSI, I received the above described
described Deposit Material was sent to DSI:      Deposit Material subject to the terms on
                                                 the reverse side of this Exhibit:

By:                                              By:
   ---------------------------------------          ---------------------------------------

Print Name:                                      Print Name:
           -------------------------------                  -------------------------------

Date:                                            Date of Acceptance:
     -------------------------------------                          -----------------------

                                                 ISE:            EXHIBIT B#:
                                                     ---------              ---------------
</TABLE>













<PAGE>   20
                                   SCHEDULE C
                                  FEE SCHEDULE

I.       SHAREHOLDER ACCOUNT FEES.  The Fund shall pay the following fees:
         ("Shareholder Account Fees"):

For the period beginning on the date of this Agreement, and continuing through
January 31, 2000, the Fund shall pay FDISG an annualized fee for shareholder
accounts open during any monthly period ("Open Account Fee") as follows:

<TABLE>
<CAPTION>
Account Volume                    Fee
<S>                               <C>
1-1.5 million                     $3.60/shareholder account
Exceeding 1.5 million             $2.25/shareholder account
</TABLE>

The Fund also shall pay FDISG an annualized fee of $1.80 per shareholder
account that is closed during any monthly period ("Closed Account Fee") (The
Open Account Fees and Closed Account Fees hereafter collectively referred to as
"Shareholder Account Fees"). The Shareholder Account Fees shall be billed by
FDISG monthly in arrears on a prorated basis of 1/12 of the annualized fee for
all such accounts.

FDISG will provide a credit to the Shareholder Account Fees of one million
dollars in the years 1998 and 1999. The credit shall be applied as a reduction
of $83,333.33 on each monthly fee bill in 1998 and 1999.

In addition, on January 1 of the years 1998, 1999, and 2000 the Shareholder
Account fees may be increased by FDISG in an amount equal to the lesser of (i)
the cumulative percentage increase in the Consumer Price Index for all Urban
Consumers (CPI-U) U.S. City Average, All Items (unadjusted - (1982-84 + 100),
published by the U.S. Department of Labor, or (ii) seven percent (7%) of the
Shareholder Account Fees charged by FDISG to the Fund for the preceding twelve
(12) month period.

In return for the Shareholder Account Fees, FDISG agrees to provide the
following to the Fund:

o        Remote Access to FDISG's FSR System
o        License for 512 IMPRESS Plus software installations valued at 2.5
         million dollars. Includes six weeks of technical and user training
         (train-the-trainer).
o        License for up to 10 copies of FDISG's ACE+ (Automate Control
         Environment) software as further defined in Schedule H
o        Dedicated Programming Support equivalent to I Systems Manager, 4
         Programmers, and 2 Business Systems Analysts
o        Implementation of a Separate FSR processing cycle by September 15,
         1997, as more fully described in the attached Exhibit 3 of this
         Schedule C.
o        Implementation of the core TA system functionality identified in
         Exhibit 1 of this Schedule C.
<PAGE>   21
o        Implementation of IWT functionality as identified in Exhibit 2 of this
         Schedule C
o        Continued use of FDISG's Price/Rate Transmission (PRAT) application.
         The PRAT Application will accept prices and dividend rates from the
         Fund Accounting Department of the Fund electronically and post them to
         the FDISG Pricing System. The PRAT application will run interconnected
         via Local Area Network hardware and software.

II.      DEDICATED PROGRAMMING SUPPORT

FDISG and the Fund will jointly determine the level of dedicated system
resources required to meet the Fund's enhancement priorities. FDISG agrees to
use reasonable efforts to make dedicated programming support available for all
projects required by the Fund. The amount of the resources required and the
projects to be worked on shall be determined jointly based upon joint periodic
review of project requirements; however, the Fund will decide the priorities
which will be assigned to each project and will determine what projects the
dedicated resources are to work on. All enhancements, improvements,
modifications or new features added to the FDISG System shall be, and shall
remain, the confidential, exclusive property of, and proprietary to, FDISG. The
parties agree to use best efforts to ensure that all enhancements to FDISG's
System, whether made by the Dedicated Team or otherwise, shall be made in a
manner that will not adversely effect the operational efficiency or
functionality of the FDISG System. Request for software changes may be
initiated by those representatives of the Fund identified in Exhibit 4 of this
Schedule C. The Fund will use its best efforts to notify FDISG in writing of
requests for software changes within 72 hours of an initial verbal request.
FDISG reserves the right to stop work on a request for which written
specifications have not been received.

a.       SUPPORT PROVIDED TO THE FUND PERFORMED IN GROUPS OTHER
         THAN THE DEDICATED PROGRAMMING TEAM

         1.      Coding to correct deficiencies in the system, unless such
                 deficiencies are included in item (II)(b)(9) below in which
                 event the Fund will be charged for such services. A system
                 deficiency is defined as a system process which does not
                 operate according to the design of the computer application or
                 system specifications. To correct system deficiencies, FDISG
                 will, at its own expense, expend whatever resources are
                 necessary to analyze the deficiency and apply an appropriate
                 remedy, in the form of corrected application code as
                 expeditiously as possible. An alternate process, in the form
                 of a functional work around, may be a suitable substitute for
                 the actual system fix, if the level of effort to develop the
                 system fix is deemed to be impractical or the elapsed time to
                 develop and apply the fix extends beyond the reasonable time
                 needed. For deficiencies identified by the Fund, the use of a
                 functional work around as an alternate process shall be
                 mutually agreed upon by the parties.

                 FDISG will evaluate all reported referrals, to validate
                 deficiency status or reclassify as a system enhancement, based
                 on the above definition. 

         2.      Simple Maintenance determined to be core processing.
<PAGE>   22
         3.      FDISG generated (i.e., internal) requests to extend system
                 functionality and ensure industry competitiveness.

         4.      Enhancements required to comply with regulatory changes;
                 provided, however, FDISG will make such changes to the extent
                 that they are technically and commercially practical and are
                 within the scope of the software functions, capabilities and
                 database. FDISG agrees to use good faith in determining
                 whether such changes are technically and commercially
                 reasonable and agrees to negotiate with the Fund in good faith
                 to resolve any such issues.

b.       EXAMPLES OF ACTIVITY TO BE PROVIDED TO THE FUND WHICH WILL
         BE PERFORMED BY THE DEDICATED PROGRAMMING TEAM:

          1.     Customized form output (i.e., statements, confirmation
                 statements, commission statements).
          2.     Customized reports.
          3.     Addition of new features (enhancements) requested by the Fund.
          4.     Addition of existing features not used by the Fund.
          5.     Addition of new funds to the fund group.
          6.     Customized year-end processing.
          7.     Conversions from other systems to FSR subsequent to initial
                 funds being live.
          8.     Clean-up/Recovery project resulting from Fund error or causes
                 beyond the reasonable control of either party.
          9.     System "fixes" - coding to correct errors attributable to
                 code developed and currently maintained by the dedicated
                 teams.
         10.     Customization of existing functions specific to the Fund    
         11.     Program documentation as requested by the Fund.

         Software Exclusivity. The Fund may choose to have exclusive use of
         enhancement software developed by its dedicated programming staff. Such
         exclusivity would extend for a period of nine (9) months from the date
         the enhancement is placed into the production libraries. Software
         exclusivity would be waived if the Fund accepts either of the
         following conditions:

         a)      If prior to implementation, FDISG or other FDISG clients agree
                 to share in the expense of the enhancements.
         b)      At any time during the 9 months following implementation,
                 FDISG or other FDISG clients agree to share the expense for
                 the enhancements.

         Access and Capability. The Funds' dedicated programmers will have
         access and capability to update any part of the System. However,
         depending on the skill set of the programmers, as well as the scope of
         the requested enhancement, it may be in the best interest of both the
         Fund and FDISG to utilize non-dedicated programmers to address
<PAGE>   23
         certain enhancements. In addition, because many programs are shared by
         multiple clients, some enhancements may require approval from those
         clients. These enhancements should be handled on an item by item
         basis.

III.     ADDITIONAL FEES

         a.      If the Fund chooses to use resources in addition to the
                 Dedicated Programming Team to accomplish work as outlined in
                 Section II.b, the following rates will apply:

<TABLE>
<CAPTION>
                                            Annual          Hourly
                                            ------          ------
                 <S>                       <C>              <C>
                 Programmer                $100,000         $135/hr
                 Business Systems Analyst  $ 90,000         $100/hr
                 Acceptance Tester         $ 85,000         $ 90/hr
</TABLE>

                 These rates apply to development and customization on all
                 software covered under this agreement (i.e. core TA system,
                 IMPRESS Plus, ACE+).

         b.      IMPRESS Plus Maintenance and Support Fees - The Fund will be
                 billed a monthly fee of $64,000 (fee based on $1500 per
                 workstation per year for 512 workstation license). Billing to
                 commence on the earlier of a) first production usage of
                 IMPRESS Plus software or b) August 1, 1997. Maintenance and
                 Support Fees include:

                 o        All third party software maintenance charges from
                          software licensed in Exhibit 1 of Schedule G
                 o        Full IMPRESS Plus applications support (bug fixes,
                          application assistance, etc.)
                 o        Remote Dial-in IMPRESS Plus application support (if
                          needed)
                 o        Subsequent interim and major releases for all
                          licensed IMPRESS Plus products
                 o        7x24 Help Desk Support for IMPRESS Plus applications
                 o        Full support through First Data for third party
                          applications licensed in Exhibit 1 of Schedule G
                 o        Participation in IMPRESS Plus User Group

         c.      IMPRESS Plus Installation Fees - Billable to the Fund at
                 $135/hr. (Estimate for 512 IMPRESS Plus workstations is 1100
                 hours). Installation includes:

                 o        IMPRESS Plus application installation
                 o        IMPRESS Plus third party software installation
                 o        Network Design Assistance
                 o        Hardware Configuration Assistance
                 o        Workflow analysis
<PAGE>   24
                 o        Project Management
                 o        Post Installation Support

         d.      On each anniversary date of this Agreement, FDISG may adjust
                 the hourly and annual rates to reflect salary increases
                 and/or to maintain competitive rates in attracting qualified
                 personnel. Such annual increase will not exceed seven percent
                 (7%).

         e.      IMPRESS Plus Maintenance and Support and EMPRESS Plus
                 Installation Fees do not include the following:

                 o        Hardware
                 o        Network and Server Software not listed in Exhibit 1
                          of Schedule G
                 o        Customization or application integration
                 o        Support for IMPRESS Plus applications customized or
                          built by the Fund (see Section 3 of Exhibit 3 of
                          Schedule G)
                 o        Installation, Integration and On-going Support of
                          hardware, network, and software components not
                          included in Schedule G
                 o        Travel Expenses for install and support staff for
                          on-site visits (billed separately per Schedule D)
                 o        Application Source Code

         f.      IMPRESS Plus Maintenance and Support and IMPRESS Plus
                 Installation Fees for Separate Test or Training System.

                 Maintenance and Support Fees - The Fund will be billed a
                 monthly fee of $2,666.66 (based on $1000 per workstation per
                 year with a minimum 32 workstation license). Billing to
                 commence on first production usage of IMPRESS Plus software in
                 the Training or Test environment. Maintenance and Support
                 includes items listed in Section III.b above.

                 Installation Fees - Billable to the Fund at $135/hr. (Estimate
                 for 32 IMPRESS Plus workstations is 200 hours). Installation
                 includes items listed in Section III.c above.
<PAGE>   25
         g.      Fees for IMPRESS Plus workstations in excess of 512:

<TABLE>
<CAPTION>
                 o        Number of workstations ordered    One-time License Fee
                                           <S>              <C>
                                           32               $1300/workstation
                                           64               $1000/workstation
                                           128              waived
                                           256              waived
</TABLE>
                 o        Maintenance and Support - $1500 per workstation per
                          year; billable on first production usage of IMPRESS
                          Plus software; includes items listed in Section III.b
                          above
                 o        Installation Fees - Billable to the Fund at $135/hr;
                          includes items listed in Section III.c above

                 The Fund agrees to pay a minimum of 18 months Maintenance and
                 Support for each workstation in excess of 512.
<PAGE>   26
                           Exhibit 1 of Schedule C


<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRTY  REFERRAL  DESCRIPTION                        APRIL      MAY     JUNE     JULY      AUG     SEPT      OCT      NOV     DEC'97
====================================================================================================================================
<S>   <C>       <C>                     <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>       <C>      <C>
                LOI SYSTEMMATIC                             Specs
 1      26610   DEFAULT/RECALCULATION PROBLEM              Received
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                     XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
                *Recalc does not include all
                purchases applied to the LOI.*
                Dealer comm credit not posted in
                recalc.* No adjustment code to
                adjust underwriter. * Trades
                outside LOI period included in
                recalc.* No ability to turn off
                systematic recalc.                                
====================================================================================================================================
====================================================================================================================================
                PRODUCE CHECKS ON NT2 ACCOUNTS                Specs
 2      19164   WITH DIRECT REDEMPTIONS                      Received
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                      XXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
                Checks should be produced for
                direct reds on NT2 accounts.
                Transactions post to history, yet
                no checks are produced. Update
                DRDM0750 to allow.
====================================================================================================================================
====================================================================================================================================
 3      25276   WIRE ORDER PROCESSING PROBLEM                                 Specs 
                                                                             Received               
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                      XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
                Wire order cancel/replacements
                (OPR/OPC) do not update master
                controls if not double Qc'd. If not
                double Qc'd both trades appear
                as new purchase orders.
====================================================================================================================================
====================================================================================================================================
                                                                      Specs
 4      24262   CERTIFICATE REPORT MISSING DATA                      Received
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                              XXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
                PFSR135D-R12 does not include
                the work of several days in 1996.
                Unable to reconcile certificate
                issues without adhocs to identify
                missing data.
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------


</TABLE>
<PAGE>   27
                           Exhibit 1 of Schedule C


<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRTY  REFERRAL  DESCRIPTION                        APRIL      MAY     JUNE     JULY      AUG     SEPT      OCT      NOV     DEC'97
====================================================================================================================================
<S>   <C>       <C>                     <C>      <C>      <C>      <C>      <C>      <C>      <C>     <C>      <C>      <C>
                NSCC REPORT PNSC802D -                                         Specs
                INCORRECT COMMISSIONS ON                                     Received
5     26768     SPLIT REPS
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                     XXXXXXXXXXXXXXXXXX      
- ------------------------------------------------------------------------------------------------------------------------------------
                This report overestimates the
                commission paid to split reps.
                NSCC regulation requires
                settlement by this report,
                resulting in overpayments.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
                NSCC REJECT REPORT PNSCSPSD-                                             Specs
                R01 - MULTI PAGE REJECT                                                 RECEIVED
6     26769     DELETIONS AND TRUNCATIONS                                               
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                              XXXXXXXXXXXXXXXXXX         
- ------------------------------------------------------------------------------------------------------------------------------------
                NSCC rejects for a dealer that
                run for more than one page are
                dropping accounts, resulting in
                inconsistancies from one page to
                the next.  Also truncation pro-
                blems with Settlement Value, 
                Commission Amount and Fund Owes
                Dealer amount.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
                ONLINE EDIT PREVENTING USE OF                                            Specs
7    26772      CDSC EXEMPT OPTION 3.                                                   Received 
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                              XXXXXXXXXXXXXXXXXXXXXXXXXXX           
- ------------------------------------------------------------------------------------------------------------------------------------
                Exempt option 3 grosses up
                CDSC on SWiPs, ensuring
                consistent dollar amount
                swips.  For funds allowing
                CDSC-free SWIPs, edit pre-
                venting a shareholder
                redeeming an amount
                greater than 12% annually
                from having a SWIP with a set
                dollar amount.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>
<PAGE>   28
                           Exhibit 1 of Schedule C


<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRTY  REFERRAL  DESCRIPTION                        APRIL      MAY     JUNE     JULY     AUG     SEPT      OCT      NOV     DEC'97
====================================================================================================================================
<S>   <C>       <C>                     <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>       <C>      <C>
                LOIMNT DELETING          Specs
                BROKER CLIENT          Received
8     23849     NUMBER
- ------------------------------------------------------------------------------------------------------------------------------------
                                                  XXXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
                Systematic completion
                of an LOI removes the
                Broker Client Number
                form the account in
                error. Absence of the 
                BRCN causes problems
                for the dealer.
                Maintenance journals
                are reviewed to
                identify these accounts
                and re-add the BRCN.
====================================================================================================================================
====================================================================================================================================
                NET INDICATOR NOT                                             Specs
                CARRYING TO QC SCREEN                                        Received
9     26155     AND NO MISMATCH WARNING
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                      XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
                When entering a wire
                order redemption as a
                "net" amount trade, the
                net indicator is not
                carried forward in the 
                QC process, and does not
                provide a mismatch
                warning. The trade then
                processes as "gross", 
                the default.
====================================================================================================================================
====================================================================================================================================
                ASSIGNMENT OF CLOSED                                                   Specs
11    26770     ACCOUNTS ON QA RECORD                                                 Received
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                               XXXXXXXXXXXXXXXXXXX 
- ------------------------------------------------------------------------------------------------------------------------------------
                If a QA record is
                manually created and
                the master account is
                not designated, FSR
                assigns the first
                account entered. If
                this account is
                closed, a consolidated
                statement will not
                print. Results in
                additional phone calls
                andduplicate statement
                requests.
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>
<PAGE>   29
                           Exhibit 1 of Schedule C


<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRTY  REFERRAL  DESCRIPTION                        APRIL      MAY     JUNE     JULY      AUG     SEPT      OCT      NOV     DEC'97
====================================================================================================================================
<S>   <C>       <C>                                <C>        <C>     <C>      <C>       <C>     <C>       <C>      <C>     <C>
                 REASSIGNMENT OF MASTER ACCOUNT                                         Specs
 12    26771     NUMBER                                                                Received
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                XXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
                 When a master account closes
                 AIM would like the master
                 account status to be reassigned
                 systematically to an open account
                 within the QA cluster. Currently
                 this is a time consuming manual
                 process.

====================================================================================================================================

====================================================================================================================================
                                                                      Specs
 13    26611     DIVIDEND CONTROL REPORT PROBLEMS                   Received
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                               XXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
                 The Dividend and Capital Gain
                 reports do not match the
                 summary reports.
====================================================================================================================================

====================================================================================================================================
                 DUPLICATE STATEMENTS BY DBR NOT                                 Specs
 14    26612     AVAILABLE                                                      Received
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                         XXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
                 AFS would like the ability to
                 request duplicate statements by
                 dealer, dealer/branch,
                 dealer/branch/rep. Current
                 functionality is by fund/account.

====================================================================================================================================

====================================================================================================================================
                 PAC'S NOT RUNNING ON CAPITAL                 Specs
 16    26154     DEVELOPMENT ACCOUNTS                        Received
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                      XXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
                 Accounts opened via merger
                 subscription with converted PAC
                 information, when the PAC is
                 turned on, do not run. Deletion
                 and reestablishment of the PAC
                 data does not resolve the issue.
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>
<PAGE>   30
                           Exhibit 1 of Schedule C


<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRTY  REFERRAL  DESCRIPTION                          APRIL      MAY     JUNE     JULY      AUG     SEPT      OCT      NOV     DEC'97
====================================================================================================================================
<S>   <C>       <C>                           <C>    <C>        <C>     <C>      <C>       <C>     <C>       <C>      <C>     <C>
                FUNDSERV REDEMPTION SHOWS                                                                                       
                INCORRECT SHARE AMOUNT ON                                                  Specs
17    25763     HISTORY                                                                   Received
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
                Several examples of FundSERV
                reds where the less than the 
                full amount of shares appear
                redeemed in the line of 
                history, but the account is
                left with a zero balance. The
                correct amount is paid through
                the NSCC. Control balancing 
                problems result.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>   31
                            EXHIBIT 2 OF SCHEDULE C

                               IWT FUNCTIONALITY

<TABLE>
<CAPTION>
- ----------------------------     ----------------------------
         NEW ACCOUNT                      FINANCIALS
- ----------------------------     ----------------------------
<S>                              <C>
                                  CASHIERING REPORT
- ----------------------------     ----------------------------
 ACCOUNT OPTIONS                  EXCEPTION WAIVER
- ----------------------------     ----------------------------
   AUTO EXCHANGE                  ENHANCED QC
- ----------------------------     ----------------------------
   BANK ADDRESS                   
- ----------------------------     ----------------------------
   AIP                            FINANCIAL QC
- ----------------------------     ----------------------------
   BANK WIRE                      IMBALANCE REPORT
- ----------------------------     ----------------------------
   BENEFICIARY                    INTERNAL ASSET MOVE
- ----------------------------     ----------------------------
   CHECKWRITING                     EXCHANGE
- ----------------------------     ----------------------------
   DIVIDENDS/CAPGAIN                TRANSFER
- ----------------------------     ----------------------------
   SWP                            PURCHASES
- ----------------------------     ----------------------------
   TELEPHONE RED                  REDEMPTIONS
- ----------------------------     ----------------------------

- ----------------------------     ----------------------------
 ACCOUNT SEARCH                   
- ----------------------------     ----------------------------
 ACCOUNT SETUP                    
- ----------------------------     ----------------------------

- ----------------------------     ----------------------------
 DEALER                           
- ----------------------------     ----------------------------
   DEALER OFFICE REP LIST         
- ----------------------------     ----------------------------
   DEALER ALPHA SEARCH            
- ----------------------------     ----------------------------

- ----------------------------     ----------------------------
 FINANCIAL INQUIRY                
- ----------------------------     ----------------------------

- ----------------------------     ----------------------------
 GROUP MASTER ADD                 
- ----------------------------     ----------------------------
   LOI/ROA                        
- ----------------------------     ----------------------------
   ACCOUNT LINK/UNLINK            
- ----------------------------     ----------------------------
 IWT ACCOUNT LIST                 
- ----------------------------     ----------------------------
 PROCESSED ITEM LIST              
- ----------------------------     ----------------------------
</TABLE>

<PAGE>   32
                            EXHIBIT 3 OF SCHEDULE C

                          AIM SEPARATE CYCLE OVERVIEW

This project removes AIM from all FSR regions, files, jobstreams, control
cards, etc. and establishes them with their own. It will allow AIM to have more
control over their processing and removes any unexpected complications caused
by dependency on the activities of other management companies.

                                     VOLUME

        o        1700+ Jobstreams (JCL, Procs, and Control Cards) to evaluate
        o        Approximately 70% of these will qualify for processing 
                 (create new AIM and modify FSR)
        o        * Files to convert
        o        * GDGs
        o        * additional Tapes/Cartridges
        o        * additional DASD required
        o        * additional Tape Mounts
        *        These figures are currently being researched.

                           AFFECTED AREAS/DEPARTMENTS

        o        AIM Client Services - John Corey
        o        Atest - Kathy McNeil, Steve Carlson
        o        BOSS Application - Tom Farnsworth (B)
        o        Capacity Planning - Ron Larue
        o        Corporate Actions - Joe Viens
        o        DASD - John Dryer, Janet Rose (B)
        o        Database Administration (DBA) for On-line - Steve Powers (B)
        o        DCX - Linda Messore, Ann Stadtherr
        o        ESG - Connie Ciulla, Arthur Roy
        o        Express Delivery - Don Morgan
        o        FSR - Tom Woislow, Bill VonHandorf, Bill Quigley, Bob Reilly,
                 Ray Bennison
        o        NSCC - Carl Damelio
        o        Print Mail - Helene Grunes (B)
        o        Tape Operations - Don Chappell
        o        SCE - Ed Oelerich, Ellen Rhode
        o        Tax/CBA - Ed Boyle
        o        Transmissions - Frank Pitzi

Because of the large volume of work to be done and the number of departments
involved we are developing a "phased in" development and implementation
approach. This will cause the least impact to both our client and our own
internal departments. It will require tight project management and dedicated
point people both from AIM and our own departments. Each phase will migrate up
through test, acceptance and production.
<PAGE>   33
PHASE 1 - START-UP FILES

The foundation of this approach is to create six basic files with an AIM
high-level qualifier on a daily basis from the FSR system which can be used by
jobs which read them but not update them (see Phase 2). They would be deleted
at the beginning of the next day's cycle and recreated by the FSR cycle. These
files are:

                 P03AIM.PRIV.MASTER.DATE
                 P03AIM.PRIV.BATCH.DATE
                 P03AIM.PRIV.MASTER.FUND
                 P03AIM.PRIV.BATCH.FUND
                 P03AIM.PRIV.TRANS.ACCEPT1 
                 P03AIM.PRIV.TRANS.DIVIDEND

The first four files would be copied from FSR files to AIM files in a new
temporary AIM job which would run daily.

The last two files, trans.accept1 and trans.dividend, currently exist with
different names in FSR. Job PFSR13DD (FSR/FED WIRE) now creates
P03FSR.TEMP.XMITOUT.ACCEPT1.AIM which contains all accept records for AIM. Job
PFSR13ED (FSR/FED WIRE) now creates P03FSR.TEMP.XMITOUT.DIV.AIM which contains
all dividend records for AIM. These files are input to AIM transmission jobs
(PFSRXCGD and PFSRXCLD) and the FSR/POST BACKUPS job (PFSR71HD).

We would rename P03FSR.PRIV.TRANS.ACCEPT1 and P03FSR.PRIV.TRANS.DIVIDEND to
P03AIM.PRIV.TRANS.ACCEPT1 and P03AIM.PRIV.TRANS.DIVIDEND in jobs PFSR13DD and
PFSR13ED. We would rename the transmission jobs to PAIMxxxx modify them
replacing FSR references with AIM, set up the appropriate schedule and move
them up the regions. We would place an override in PFSR71HD which would now
reference the PO3AIM file for backup. Once tested and QA'd by us and AIM we
would replace the FSR transmission jobs with the new AIM jobs.

RESULT OF PHASE 1

We now have three production jobs running in the AIM region and we have set up
the 6 basic AIM files which will be the basis for Phase 2.
<PAGE>   34
PHASE 2 - REPORTS, TRANSMISSIONS, AND AIM-ONLY JOBS

This phase involves converting jobs which do not update any of the master files.
They may read them and create temporary files but updating will wait for phase
3. Phase 2 jobstreams will include mainly report and transmission jobs as well
as any AIM-only jobs. We will be adding new schedule entries (CA-7) for AIM and
modifying existing FSR schedules where needed paying special attention to
triggers, requirements and dependencies. We will add new Express Delivery
entries for AIM reports and delete the AIM entries from the FSR system.

The actual migration of reports and transmission files from the FSR cycle to
the AIM cycle will be on a specific schedule. As we introduce reports to the
AIM cycle they will be available in SAR from both FSR and AIM cycles for a week
to allow AIM to review them. They will then be turned off in SAR for FSR. We
will provide AIM with a report schedule each week to aid this process.
Transmission files will be tested using record counts and selective file
compares. AIM-only jobs will also parallel for a week where feasible.

An example of a Phase 2 job is PFSR143D (FSR/AUTOEX). This job reads the batch
fund file, the batch date file and the trans.accept1 file to produce reports.
All these files are available in the AIM region.

Phase 2 work to be done described in a programmer's template includes (but is
not limited to):

        Copy and rename the JCL jobs.
        Modify procs and/or control cards if necessary for the test/acpt/prod 
        regions.
        Verify that JCL, procs and control cards follow our current standards.
        Create high-level overrides for FSR read-only files.
        Change Express Delivery for AIM output and set up the FSR RID entry to 
        be deleted in n days.
        Schedule the new AIM jobs with the same requirements and dependencies 
        as the FSR jobs but using the appropriate high level qualifier. This 
        requires tight control on the status of all jobs.
        Change the schedules of any jobs which are dependent upon the FSR job 
        to be dependent upon the new AIM job. Note: this will not be the case 
        with all AIM jobs.
        Move it up the regions testing at appropriate points.
        Review the output (First Data and AIM).
        After a week inhibit AIM output from FSR jobs from going to SAR. Only 
        AIM output from AIM jobs will be available in SAR.

The key to the success of this phase is an aggressive implementation schedule
and active participation by AIM representatives in checking and validating the
output.

RESULT OF PHASE 2

We now have report-only jobs (not associated with the actual updating of
files), most of the transmission jobs and all AIM-only jobs which are not
associated with updating files in AIM production. All converted reports and
files have been signed off by AIM. These AIM activities are also being
processed in FSR. We have gone as far as possible without updating files.
<PAGE>   35
PHASE 3 - ANCILLARY FILES AND SYSTEMS

This phase includes updating ancillary files and their associated jobstreams.
Examples of this type may include Bluesky, history, cert or check files, etc.
These files are not mainstream and tend to be localized in how they are
updated. In order to qualify for Phase 3 the Management Company must be the
high order sort key field.

There are two approaches we will use depending upon the main file's on-line
considerations. The first approach involves converting the main file once along
with all associated jobs and the other involves splitting out AIM from FSR at
the start of the cycle, updating it in AIM jobs and merging it back in FSR at
the end. Either approach will involve multiple jobs per master file.

For example, The Bluesky File is only used by 3 jobs: PFSRS07D which creates
the batch file, PFSR190D which updates the file and does an AIM-only extract,
and PFSR194D which does reports. In this case, we would split the FSR Bluesky
File into AIM-only and all other. The FSR Bluesky subsystem would then be
cloned for AIM and the result would be two separate Bluesky subsystems. Online
would access the appropriate Bluesky file.

Other subsystems may be too routed in our core to fully separate out and would
be better served breaking out AIM at the beginning of its cycle, updating in
AIM-only jobs and remerging it at the end of the cycle. Any special jobs used
for splitting out files or merging them after update will have to be backed out
in Phase 4.

All activities described in Phase 2 apply here as well.

RESULT OF PHASE 3

We have now isolated and converted any subsystems not bound to core processing.
Most AIM reports and transmissions are being produced in the AIM region. We are
updating some master files and have done everything possible surrounding the
core without touching it. We are ready for Phase 4.
<PAGE>   36
PHASE 4 - THE CORE

This phase deals with updates to our core master files, our functional
processes, converting large volume files (ShareA and its splits, history, lots,
global, etc.) and includes all jobstreams that have not yet been converted.
Additionally, it includes backing out any special split or merge jobs as well
as special overrides introduced in earlier phases. This will be the largest
phase. On-line will now access all AIM-only files.

Many of the activities done in the previous phases will be performed here as
well. Because so many programs interact with the core modules there is no easy
way to break this activity up. As always we will need our AIM partners to help
in the QA activities for this hefty stage.

It is possible to combine Phases 3 and 4 if it were felt to be desirable.
However, it is our intention to have all peripheral completed before attacking
the core so there will be no unnecessary distractions. Additionally, for
development contention reasons, we would like to turn these modules over as
expeditiously as possible.

All AIM-related activities, programs, control cards, overrides, splits, merges,
etc. will be removed from all FSR jobs.

RESULT OF PHASE 4

All AIM processing is now contained in its own region and runs under its own
schedule. On-line accesses AIM-only files.  FSR no longer has any AIM
processing relationship with the exception of any files which are to be merged
from both regions for transmission or system reasons.
<PAGE>   37

                            EXHIBIT 4 of SCHEDULE C

               AUTHORIZED PERSONS REQUESTING SYSTEM MODIFICATIONS





              ---------------------------------------------------
                                John Caldwell
                      President, A I M Fund Services, Inc.



              ---------------------------------------------------
                               Joseph Charpentier
              Assistant Vice President, A I M Fund Services, Inc.



              ---------------------------------------------------
                                 Tony D. Green
                Senior Vice President, A I M Fund Services, Inc.



              ---------------------------------------------------
                     Jean Miller, Director of Applications
                        Information Technology Services
                              A I M Advisors, Inc.
<PAGE>   38
                                   SCHEDULE D

                             OUT-OF-POCKET EXPENSES

The Fund shall reimburse FDISG monthly for applicable out-of-pocket expenses,
including, but not limited to the following items:

        o       Microfiche/microfilm production
        o       Magnetic media tapes and freight
        o       Telephone and telecommunication costs, including all lease, 
                maintenance and line costs
        o       NSCC transaction charges at $.15/per financial transaction, 
                $.10/per same day trade confirmations
        o       Shipping, Certified and Overnight mail and insurance
        o       Year-End form production and mailings
        o       Terminals, communication lines, printers and other equipment 
                and any expenses incurred in connection with such terminals 
                and lines
        o       Duplicating services, as pre-approved by the Fund
        o       Courier services
        o       Due Diligence Mailings
        o       Rendering fees as billed
        o       Overtime, as pre-approved by the Fund
        o       Temporary staff, as pre-approved by the Fund
        o       Travel and related expenses, as pre-approved by the Fund
        o       System training, as pre-approved by the Fund
        o       Record retention, retrieval and destruction costs, including, 
                but not limited to exit fees charged by third party record 
                keeping vendors
        o       Third party audit review
        o       All conversion costs: including System start up costs, but 
                excluding costs associated with conversions between FDISG 
                systems
        o       Such other miscellaneous expenses reasonably incurred by FDISG 
                in performing its duties and responsibilities under this 
                Agreement
<PAGE>   39
                                   SCHEDULE F

                             PERFORMANCE STANDARDS

I        STANDARDS FOR RESOLUTION OF SYSTEM DEFICIENCIES

"SYSTEM DEFICIENCY" - A system process which does not operate according to the
design of the computer application or system specifications, and is not a
result of any act or failure to act by the Fund.

1.       FIRE CALL - A System Deficiency with at least one of the following
         characteristics:

         1.      Potential or real financial exposure in excess of $100,000, or
         2.      Causes the Fund to be out of compliance with a major
                 regulatory requirement, or 
         3.      Causes incorrect transaction processing and/or shareholder 
                 confirmations with no reasonable manual workaround available 
                 either at the Fund or in FDISG's systems

         FDISG Response: Analysis and resolution within 36 hours or 2 nightly
         processing cycles

2.       CRITICAL DEFICIENCY - A System Deficiency with at least one of the
         following characteristics:

         o       Potential or real financial exposure estimated from
                 $25,000-$100,000 or,
         o       Manual workaround requires substantial manual effort and
                 carries a high potential for error

         FDISG Response: Impact Analysis within 3 business days of initial
         notification; Determination of problem cause within 5 business days of
         initial notification; Problem resolution within an average of 30
         business days of initial notification

3.       NON-CRITICAL DEFICIENCY - All other System Deficiencies

         FDISG Response: Impact Analysis within 3 business days of initial
         notification; Determination of problem cause within an average of 15
         business days of initial notification; Problem resolution and target
         dates to be determined on an item-by-item basis jointly by the Fund
         and FDISG.
<PAGE>   40
II       STANDARDS FOR ON-LINE SYSTEMS AVAILABILITY AND RESPONSE TIME

These standards shall apply on business days of the Funds.

         o       On-line systems availability between 7:00 a.m. and 7:00 p.m
                 Central Time ("CT") - 99% of hours available measured monthly.

         o       Average response time (7:00 a.m. to 7:00 p.m. CT) of 3 seconds
                 or less, measured end-to-end, in response to the system
                 employed by A I M Fund Services, Inc. as of September 1, 1994
                 - 99% measured monthly.

III      STANDARDS FOR DELIVERY OF SYSTEM REPORTS

         o       CRITICAL REPORTS - The following report bundles in queue and
                 ready to begin transmission no later than 7:00 a.m. CT each
                 business day - a cumulative of two late bundles permitted per
                 month:

                 EFSR047H
                 EFSR601H

                 Changes to critical report bundles must be jointly approved by
                 an FDISG Client Service Officer and an authorized requestor of
                 the Fund as listed in Exhibit 4 of Schedule C.

         o       All other nightly report bundles in queue and ready to begin
                 transmission no later than 7:00 a.m. CT each business day -
                 95% measured monthly.
<PAGE>   41
IV       STANDARDS FOR DELIVERY OF FILE TRANSMISSIONS

         o       CRITICAL FILES - The following jobs in queue and ready to
                 begin transmission no later than 4:30 CT each business day of
                 the Fund - a cumulative of two late files permitted per month:

<TABLE>
<CAPTION>
                 JOB NAME         FREQUENCY        APPLICATION
                 --------         ---------        -----------
                 <S>              <C>              <C>
                 PFSRXCAD         Daily            Cap Stock File
                 PFSRXCYD         Daily            DISC Cap Stock File
                 PFSRXCTD         Daily            DISC ACH File
                 PFSRXCVD         Daily            DISC NSCC Green Sheets File
</TABLE>

         o       The following jobs in queue and ready to begin transmission no
                 later than 4:30 CT each business day of the Fund - 95%
                 measured monthly

<TABLE>
<CAPTION>
                 JOB NAME         FREQUENCY        APPLICATION
                 --------         ---------        -----------
                 <S>              <C>              <C>
                 PFSRXCGD         Daily            Acceptance File
                 PFSRXCKD         Daily            Dealer File
                 PFSRXCHD         Daily            Order File
                 PFSRXCID         Daily            ShareA Master File
                 PFSRXCJD         Daily            Fund File
                 PFSRXCMD         Daily            Lot History File
                 PFSRXCND         Daily            Lot Maintenance File
                 PFSRXCLD         Periodic.        Dividend Activity
</TABLE>

                 The standards will not apply on business days with the
                 following activity: Processing of Year-end Dividend and
                 Capital Gain Activity, Annual Trustee Fee Payment; Year-end
                 File Initialization.

V        STANDARDS FOR THE FUND

All inbound transmissions (i.e. SIAC, various third parties) and fund prices in
receipt by FDISG by 8:00 p.m. CT

VI       RIGHT TO AUDIT

The Fund shall have the option, on an annual basis, to audit the reports used
to measure the standards listed in this Schedule F. Notice of an audit will be
given 14 days in advance, and the audit will not last more than one day.
<PAGE>   42
VII      PENALTIES/INCENTIVES

FDISG agrees to achieve the performance levels specified in Schedule F,
Sections II, III, and IV, and semiannually (as of each June 30th and December
31st) to adjust the monthly Account Fee Invoice to reflect any
penalties/incentives as outlined below. Penalties for a given business day will
be applied only if the Standards of the Fund in Section V are achieved.

ON-LINE SYSTEMS AVAILABILITY - MONTHLY

For each one-tenth of 1% under 99%, the monthly Account Fees will be reduced by
the same percentage. The monthly maximum percentage penalty reduction will be
3% of the monthly bill. For each one-tenth of 1% in excess of 99% up to a
maximum of 1%, the monthly Account Fees will be increased by the same
percentage.

ON-LINE SYSTEMS AVAILABILITY - DAILY

If systems availability on any given business day is less than 80%, the monthly
account Fees will be reduced by the percentage of systems availability below
80% for that day times 1/30 of the monthly Account Fees.

REPORT AVAILABILITY - CRITICAL REPORTS

Monthly Account Fees will be reduced by $250.00 for each late instance greater
than the allowable error rate, up to a maximum of $500.00 per day. For each
month within the allowable error rate, monthly Account Fees shall be increased
by $1,000.

FILE TRANSMISSIONS - CRITICAL FILES

Monthly Account Fees will be reduced by $500.00 for each late instance greater
than the allowable error rate with a maximum penalty of $10,000 per month. For
each month within the allowable error rate, monthly Account Fees shall be
increased by $1,000.

The Performance Standards and related penalties set forth in this Schedule F
shall not apply in the event of any occurrence defined in Section 8(g) of the
Agreement.
<PAGE>   43
                                   SCHEDULE G

                    IMPRESS PLUS SOFTWARE AND SUPPORT TERMS

ARTICLE 1 - SYSTEM, SUPPORT AND IMPLEMENTATION

1.1      Software and Support. FDISG shall provide or has previously provided
to the Fund and the Fund shall acquire from FDISG the right to use the computer
software programs set forth in Exhibit 1 of this Schedule G (the "Software"),
for the fees indicated in Schedule C of Amendment Number 3 to the Agreement.
Software includes related user manuals and reference guides (collectively,
"DOCUMENTATION"). One copy of the Documentation shall be provided to the Fund
at no additional cost. FDISG shall provide only the machine readable object
version of the Software and not source code.  Additional terms and conditions
concerning the Software are set forth in Exhibits 1 of Schedule G ("EXHIBIT 1")
and Exhibit 1.1 of Schedule G ("EXHIBIT 1.1") (collectively, the "SOFTWARE
EXHIBITS"). Subject to the terms and conditions set forth in this Schedule G,
FDISG grants to the Fund and the Fund accepts from FDISG the non-exclusive,
non-transferable license to use the Software during the term of the Agreement
("LICENSE"). Some software components ("THIRD PARTY SOFTWARE") required to be
used with the Software were developed by a third party ("THIRD PARTY VENDOR").
Third Party Software is licensed to the Fund only pursuant to: (a) shrink
wrapped or other agreements between the Third Party Vendor and the Fund and (b)
the specifically indicated terms and conditions in this Schedule G. The
Software Exhibits shall indicate which Third Party Software the Fund is
required to obtain and license from FDISG and which Third Party Software the
Fund shall be solely responsible to obtain and license. As part of the
Software, FDISG shall provide the Fund with the interfaces set forth in Exhibit
1, between the Software and Third Party Software ("INTERFACES"). FDISG shall
provide the software support services ("SOFTWARE SUPPORT") so designated in
Exhibit 3 of Schedule G ("EXHIBIT 3").  Software Support shall include a
License to error corrections, minor enhancements and interim upgrades to the
Software which are made generally available to FDISG client's of the Software
under Software Support, but shall not include a License to substantial added
functionality, new interfaces, new architecture, new platforms or other major
software development efforts, as determined solely by FDISG.

1.2      Ownership. FDISG or its licensors shall retain tide to and ownership
of the Software, copies, derivative works, inventions, discoveries, patentable
or copyrightable matter, concepts, expertise, techniques, patents, copyrights,
trade secrets and other related legal rights ("PROPRIETARY INFORMATION"). FDISG
reserves all rights in the Proprietary Information not expressly granted to the
Fund in this Schedule G. Upon FDISG's reasonable request, the Fund shall inform
FDISG in writing of the quantity and location of any Software.

1.3      Equipment, System Implementation and Access. Fund is responsible for
acquiring, installing and maintaining the data processing and related equipment
("EQUIPMENT") set forth in Exhibit 2.1 of Schedule G with respect to production
equipment and Exhibit 2.2 of Schedule G with respect to Test/Training equipment
(collectively, ("EXHIBIT 2"). Additional terms and conditions concerning the
Equipment are set forth in Exhibit 2. The Equipment identified in Exhibit 2
represents the minimum equipment configuration required to properly operate the
Software. FDISG disclaims responsibility for the performance of the Software in
the event that the Fund utilizes equipment different than that which is set
forth in Exhibit 2. FDISG and the Fund shall (a) within a reasonable time after
the Effective Date, agree upon the tasks required to implement the Software,
Third Party Software and Equipment ("SYSTEM") and the party responsible and
time frames for each task ("SCOPE OF WORK"); (b) perform their respective
assigned tasks according to the Scope of Work; and (c) if not the party
assigned to a task, cooperate with the responsible party. To the extent the
Scope of Work is incomplete, FDISG shall follow its reasonable and customary
practices. Upon prior notice by FDISG to the Fund, the Fund shall give
reasonable access to the System to FDISG, FDISG's employees. affiliates,
representatives, agents, contractors, licensors and suppliers ("FDISG'S
AGENTS") who are providing services under the Agreement or auditing adherence
to the Agreement.

1.4      Use of Software. Fund may use the Software during the term of this
Agreement only on the Equipment and only to process the Fund's data for
internal business purposes (which shall not, for purposes of this Agreement,
include use by Fund to provide services to its customers on a service bureau
basis) and solely in connection with the Fund's use of the FDISG System and
only at the locations identified in the Agreement. If the Equipment is
inoperative due to malfunction, the license grant shall, upon written notice to
FDISG, be temporarily extended to authorize the Fund to use the Software on any
other equipment approved in writing by FDISG until the Equipment is returned to
operable condition. FDISG, in its reasonable discretion, may suspend any
Software Support while the Software is being used on such other Equipment. No
right is granted for use of the Software by any third party or by the Fund to
process for any third party, or for any other purpose whatsoever, except as
expressly provided in this paragraph. Except as otherwise specifically stated
herein, the Fund shall not modify, re-engineer, decompile or reverse engineer
the Software or otherwise attempt to obtain any source code without FDISG's
prior written consent.
<PAGE>   44
1.5      Software Installation and Acceptance. FDISG shall advise the Fund that
the Software as listed in Exhibit 1 is installed and functioning on the
Equipment ("Software Installation Date") so that implementation and training
activities can proceed. The Fund shall be deemed to have accepted the Software
sixty (60) days after Software Installation Date or sixty (60) days after the
Fund's first use of any Software component to process live production data
("SOFTWARE ACCEPTANCE DATE").

1.6      Copies of Software. The Fund may not copy the software except for
backup and archival purposes only, and the Fund shall include on all copies of
the Software all copyright and other proprietary notices or legends included on
the Software. The provisions of this Paragraph do not apply to Fund data files
in machine-readable form.

1.7      No-Export. The Software shall not be shipped or used by the Fund
outside the United States. The Fund shall comply with all applicable export and
re-export restrictions and regulations of the U.S. Department of Commerce or
other U.S. agency or authority. The Software shall not be transferred to a
prohibited country or otherwise in violation of any such restrictions or
regulations.

1.8      Termination. Terms and conditions of this Schedule G which require
their performance after the termination of the Agreement, including but not
limited to the License and Software use restrictions, limitations of liability,
indemnification, and confidentiality obligations, shall survive and be
enforceable despite the termination of the Agreement.

ARTICLE 2 - WARRANTIES AND REPRESENTATIONS

2.1      Software Warranties and Remedies. For the term of the Agreement, FDISG
warrants ("PERFORMANCE WARRANTY") that the Software shall perform on the
Equipment substantially in accordance with the Documentation and shall enable
the Funds to meet the requirements set forth in Section 240.17a-4 of the
Securities Exchange Act of 1934, except for Directly Obtained Third Party
Software as set forth in Section 2.2 below. The timely correction of errors
and deficiencies in the Software pursuant to Software Support shall be Fund's
sole and exclusive remedy for the Performance Warranty. FDISG warrants ("RIGHTS
WARRANTY") it has the right to license the Software in accordance with the
Agreement. Provided the Fund gives FDISG timely written notice, reasonable
assistance, including assistance from the Fund's employees, agents, independent
contractors and affiliates (collectively, "FUND'S AGENTS"), and sole authority
to defend or settle the action, then FDISG shall do the following
("INFRINGEMENT INDEMNIFICATION"): (a) defend or settle, at its expense, any
action brought against the Fund or the Fund's Agents to the extent the action is
based on a claim that the Software infringes a duly issued United States'
patent or copyright or violates a third party's proprietary trade secrets or
other similar intellectual property rights ("INFRINGEMENT"); and (b) pay
damages and costs finally awarded against the Fund or the Fund's Agents
directly attributable to such claim. FDISG shall have no Infringement
Indemnification obligation if the alleged Infringement is based upon the Fund's
use of the Software with equipment or software not furnished or approved by
FDISG or if such claim arises from FDISG's compliance with the Fund's designs,
or from the Fund's modifications of the Software. The Infringement
Indemnification states FDISG's entire liability for Infringement and shall be
the Fund's sole and exclusive remedy for the Rights Warranty.

2.2      Directly Obtained Third Party Software Warranties. All warranties for
the Directly Obtained Third Party Software identified Section 2.2 of Exhibit 1,
if any, are specifically set forth in the applicable agreements supplied by the
Third Party Vendors of such products.

2.3      Exclusion of Warranties. THE WARRANTIES SET FORTH IN PARAGRAPH 2.1
ABOVE AS TO THE SOFTWARE AND IN PARAGRAPH 2.2 ABOVE AS TO THIRD PARTY SOFTWARE
ARE IN LIEU OF ALL OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, ARISING
OUT OF OR RELATED TO THIS SCHEDULE G. FDISG SPECIFICALLY DISCLAIMS ALL OTHER
WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY,
NONINFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE.

2.4      Fund Responsibility. The System is an information system only,
designed to assist the Fund and the Fund's Agents in performing their
professional activities and is not intended to replace the professional skill
and judgment of the Fund's Agents. Fund shall be solely responsible for: (a)
acts or omissions of the Fund's Agents in entering data into the System,
including its accuracy and adequacy; (b) checking the correctness and accuracy
of the System output and data; and (c) any use of or reliance upon the System
output by the Fund's Agents. Except for the Infringement Indemnification and as
limited by applicable law, the Fund shall indemnify, defend and hold FDISG and
FDISG's Agents harmless from any losses, costs, damages, and liabilities,
including without limitation, reasonable attorneys' fees and court costs,
relating to any claim by any third party arising from or related to the Fund's
and the Fund's Agents' use of the System or System output.

ARTICLE 3 - MISCELLANEOUS
<PAGE>   45

3.1      Confidentiality Obligations. Each party shall keep confidential any
information relating to the other party's business which is clearly designated
or described in writing to be confidential ("CONFIDENTIAL INFORMATION"). Each
party shall keep and instruct its employees and agents to keep such information
confidential by using at least the same care and discretion as used with that
party's own confidential information. Information shall not be subject to such
confidentiality obligations if it is: (a) in the public domain, (b) known to a
party prior to the time of disclosure by the other party, (c) lawfully and
rightfully disclosed to a party by a third party on a non-confidential basis,
(d) developed by a party without reference to Confidential Information or (e)
required to be disclosed by law. If either party, its employees or agents
breaches or threatens to breach the obligations relating to use of the
Confidential Information, the other party may obtain injunctive relief, in
addition to its other remedies, inadequate monetary damages and irreparable
harm being acknowledged.

3.2      Confidential and Privileged Information. The Proprietary Information,
other FDISG software and related information, and the Agreement are
Confidential Information of FDISG and FDISG's Agents. Absent FDISG's written
permission, Fund shall not duplicate FDISG's Confidential Information. Fund
accepts full responsibility for complying with all laws, rules and regulations
concerning use and disclosure of privileged data regarding any information
placed or stored in the System or output from the System.
<PAGE>   46
                            EXHIBIT 1 OF SCHEDULE G

                                    SOFTWARE

1.       FDISG Software.

1.1      FDISG Software includes the following IMPRESS Plus products which are
further described in Exhibit 1.1 ("Specifications"):

                 IMPRESS Plus Workflow/Image Release 5.3
                 IMPRESS Plus Intelligent Workstations (IWT) Release 5.3 for FSR
                 IMPRESS Plus Customer Service System Release 5.3

1.2      Interfaces. Except as agreed in writing, FDISG shall not be required
to modify the Software or the Interfaces to accommodate changes made by the
Fund's vendor to its portion of the interface. If the Fund's vendor needs
information about the Software, then the vendor must first execute a
nondisclosure agreement in form and content reasonably acceptable to FDISG.
FDISG shall not be liable for any delay or degradation to the Software or
Equipment attributable to the Fund's use of Interfaces.

1.3      Customization. The listed products are licensed for IMPRESS Plus use
and customization only. Use of these tools to develop or customize non-IMPRESS
Plus applications is not permitted without the express written authorization of
FDISG.

2.       Third Party Software.

2.1      FDISG Provided Third Party Software. The following Third Party
Software is licensed to the Fund directly by FDISG subject to the terms of the
Agreement:

2.1.1    BancTec Software. The following Third Party Software is licensed
directly to the Fund by FDISG subject to the mandatory BancTec ("BancTec")
terms and conditions set forth in Attachment 1 of this Exhibit 1 of Schedule G
("Attachment 1"), attached and incorporated by reference. To the extent that
the terms of Attachment 1 conflict with or differ from the other terms and
conditions in the Agreement, the terms of Attachment 1 shall prevail with
respect to the following BancTec Software ("BancTec Software"):

             Informix                  Multi-User with 512 maximum users
             XDP Storage Manager       Multi-User with 512 maximum users
             FloWare                   Multi-User with 512 maximum users
             Application Designer      Single-User with 512 maximum users

2.1.2    Pegasystems Software. The following Third Party Software is licensed
directly to the Fund by FDISG subject to the mandatory Pegasystems
("Pegasystems") terms and conditions set forth in Attachment 2 of this Exhibit
1 of Schedule G ("Attachment 2"), attached and incorporated by reference. To
the extent that the terms of Attachment 2 conflict with or differ from the
other terms and conditions in the Agreement, the terms of Attachment 2 shall
prevail with respect to the following Pegasystems Software ("Pegasystems
Software"):

             Product Name             Version       Function
             PegaSHARES               RES 6.2       Workflow Engine
             PegaENVIRONMENT          ENV 4.2       Operating Shell
             PegaPRISM                Prism 5.1     Image Viewer
             PegaStorage Manager      Stor 2.1      Image Librarian
             PegaREACH                Real.0        Desktop Graphical Interface

2.2      Directly Obtained Third Party Software. The following Third Party,
Software is separately licensed by the Third Party Vendor directly to the Fund
subject to the respective terms and conditions of any "shrink-wrapped" or
<PAGE>   47
other agreements between the Third Party Vendor and the Fund. The Third Party
Software in the Required Column must be obtained by the Fund. The Third Party
Software in the Optional column is helpful but not required unless the
indicated features are being used. The Fund accepts the provisions of such
agreements, including the warranty provisions, if any, and agrees to comply
with the terms set forth in such agreements:


<TABLE>
<CAPTION>
Required:                                                Optional: 
<S>                                                      <C>
- - Microsoft DOS 6.2 or higher                            - ALCOM LanFax Redirector V2.15gl or greater    
- - Microsoft Windows 95 or NT 4.0                             (required if using fax)                      
- - Microsoft Office 95 or better                          - HiJaak PRO 2.0 or greater for Windows         
- - Microsoft NT Server 3.5                                   (required if using fax)                      
- - Microsoft NTSQL Database 4.x and client                - Word for Windows 6.Oc or greater (required if 
   Licenses                                                 using fax)                                   
- - Microsoft TCP/IP Stack                                 - Quarterdeck QEMM 7.X or greater (required if  
- - Novell NetWare 3.11 or greater                            using fax)                                   
- - SNA Server 3.0 or higher                               - CGS Computer Associates, Inc. Scanlib software
- - UNIX for selected Image Server platform                   (required for Ricoh scanners)                
- - UNIX ESQL/C Compiler for selected                      - Powersoft PowerViewer (required for adhoc     
   UNIX platform                                            reports)                                     
- - MDI Gateway for DB2 by                                 - 3270 Windows emulation package                
   MicroDecisionware Inc., A Sybase client                  (usually Rumba for Windows by WaUData)       
- - Sybase Open Client NetLibrary for the
   selected TCP/IP stack
</TABLE>
<PAGE>   48
                    ATTACHMENT 1 OF EXHIBIT 1 OF SCHEDULE G

                              TERMS AND CONDITIONS

                                    BANCTEC

1.       Each BancTec Software Package listed in Exhibit 1 of Schedule G
("Program") which is identified as "Multi-User Program" is licensed for
installation on a single network server computer which is supplied by BancTec,
FDISG, or a third party, and which is electronically linked with one or more
workstations having access to the Program. If Section 2.1.1 of Exhibit 1 of
Schedule G ("Exhibit 1") designates a maximum number of users authorized to
simultaneously access the Multi-User Program, no access will be permitted in
excess of such maximum number. In all other cases, Multi-User Program is
authorized to be accessed by all workstations which are configured to
communicate with that network server computer.

2.       Each Program listed in Exhibit 1 identified as "Single-User Software"
is licensed for installation and use on a single computer.

3.       Each Program listed in Exhibit 1 identified as an "Unlimited User
Program" is licensed for use by Client after ordering a copy of the Program.
Once ordered, the Fund may make unlimited copies of such Programs at no
additional charge.

4.       Each Program listed in Exhibit 1 identified as a "Device Program" is
licensed for use solely to facilitate the operation of the corresponding
equipment device. If a Device Program is used for more than one device, the
license must be upgraded in accordance with Exhibit 1.

5.       Each Program listed in Exhibit 1 identified as a "Development-User
Program" is licensed for installation and use on a single computer for
development and testing purposes. The license for Development-User Programs
also includes a license for production use on a single computer.

6.       Each Program listed in Exhibit 1 identified as a "Production-User 
Program" consists of necessary runtime modules and associated link libraries
for inclusion with custom software applications. Production-User Programs are
not licensed for use in the development of custom software applications and may
be either Multi-User or Single-User Programs.

7.       Only a nontransferable, nonexclusive, perpetual license to use the
Programs and related BancTec documentation for its own internal use (including,
without limitation, providing processing services to third parties in a service
bureau or facilities management environment) is granted to the Fund.

8.       BancTec or its vendors retain all title to the Programs, and all
copies thereof, and no title to the Programs, or any intellectual property in
the Programs, is being transferred; provided, however, nothing contained herein
shall give BancTec or its vendors any right, title or interest in the Software.

9.       The Programs shall not be copied, except as specifically authorized
under an Exhibit to this Agreement and except for backup or archival purposes.
All such copies shall contain all copyright and other proprietary notices or
legends of BancTec or its vendors contained in the Programs delivered under
this Agreement.

10.      The Programs shall not be modified, reverse assembled or decompiled by
the Fund. No attempt shall be made by the Fund to derive source code from the
Programs.

11.      The Programs will not be shipped or used by FDISG or the Fund to
Africa or the Middle East. All applicable export and re-export restrictions and
regulations of the U.S. Department of Commerce or other U.S. agency or
<PAGE>   49
authority shall be complied with. The Programs shall not be transferred to a
prohibited country or otherwise in violation of any such restrictions or
regulations.


12.      Each Program is copyrighted and contains proprietary and confidential
trade secret information of BancTec and its vendors. Each sublicensee of the
Programs shall protect the confidentiality of the Programs with at least the
same standard of care used to protect the Fund's own similar confidential
information.

13.      BancTec and its vendors are each a direct and intended beneficiary of
the sublicenses granted for the Programs and may enforce such sublicenses
directly against sublicenses of the Programs.

14.      Neither BancTec nor its vendors shall be liable to the Fund for any
general, special, direct, indirect, consequential, incidental, or other damages
arising out of the sublicense of the Programs.

15.      The license granted to the Fund of the Programs may be terminated,
either immediately or after a notice period not exceeding thirty (30) days,
upon violation by the Fund of any of the terms or conditions of the Agreement,
including but not limited to Attachment 1.

16.      Upon termination of the license grant to the Fund to use the Program
or the Agreement, the Fund shall return all copies of the Programs to FDISG.
<PAGE>   50
                    ATTACHMENT 2 OF EXHIBIT 1 OF SCHEDULE G

                        PEGASYSTEMS TERMS AND CONDITIONS

In addition to the terms of the Agreement, the following terms shall apply with
respect to the Pegasystems Software:

1.       The Fund is prohibited from assigning, timesharing, renting, or
hypothecating any of the Pegasystems Software, without prior written approval
of Pegasystems.

2.       The Fund is prohibited from passing or transferring any right, title,
or interest to the Pegasystems Software to any third party.

3.       The Fund is prohibit from publicizing or disseminating any results of
any benchmark or other testing of the Pegasystems Software.

4.       To the fullest extent permitted by applicable law, (i) Pegasystems
shall have no liability to the Fund for damages and claims, whether direct,
indirect, incidental, consequential, or punitive, and all attorneys' fees and
costs, arising from the Fund's use of the Pegasystems Software, and (ii) the
Fund shall have no rights to assert claims for damages against Pegasystems,
including claims against Pegasystems as a third party beneficiary of this
agreement.

5.       Pegasystems, Inc. is a third party beneficiary of this agreement to
the extent permitted by applicable law.
<PAGE>   51
                                       IMPRESSive Technology, IMPRESSive Results

                           EXHIBIT 1.1 OF SCHEDULE G

                                 SPECIFICATIONS

                               TABLE OF CONTENTS

<TABLE>
<S>      <C>                                                              <C>
I.       PRODUCT OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . Page 1
                                                                          
II.      PRODUCT BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . Page 3
                                                                          
III.     TECHNICAL OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . Page 5
                                                                          
IV.      HIGH LEVEL OVERVIEW OF IMPRESS Plus FUNCTIONALITY  . . . . . . . Page 6

         A.      Workflow Management

         B.      Image Processing

         C.      Intelligent Workstation Processing

         D.      Customer Service System
</TABLE>

This item is the property of First Data Investor Services Group (First Data) of
Boston, Massachusetts, and contains confidential and trade secret information.
This item may not be transferred from the custody or control of First Data
except as authorized by, and then only by way of loan for limited purposes. It
must be returned to First Data upon request and, in all events, upon completion
of the purpose of the loan. Neither this item nor the information it contains
may be used or disclosed to persons not having a need for such use or
disclosure consistent with the purpose of the loan, without the prior written
consent of First Data.

                  Copyright First Data Investor Services Group
                                1994, 1995, 1996
                              ALL RIGHTS RESERVED

This media contains unpublished, confidential, and proprietary information of
First Data Investor Services Group. No disclosure or use of any portion of
these materials may be made without the express written consent of First Data 
Investor Services Group.
<PAGE>   52
                                       IMPRESSive Technology, IMPRESSive Results

I.       PRODUCT OVERVIEW

         IMPRESS Plus is First Data's workstation product. Designed to be a
         cost-effective customer service and workflow management solution, it
         takes an integrated approach to transfer agent service and processing
         applications.  IMPRESS Plus uses an open, three-tiered, client/server
         architecture that provides both the flexibility and scalability to
         address client's customization and growth needs.

         IMPRESS Plus's valuable benefits include:

         o       Extensive management tools and employee empowerment via
                 intelligent workstation technologies.

         o       A lower cost of processing delivery through workflow routing
                 and document imaging.

         o       Efficient customer service through reduced research time,
                 automated inquiry tracking and correspondence tracking.

         o       State-of-the-art three-tiered client/server architecture
                 backed by relational databases and open systems.

         o       Client configurable screens, dialogue scripts, and workflow
                 rules for those components which use the Pegaysystems
                 technology.

         o       Automated correspondence generation.

         IMPRESS Plus consists of these major components:

         1.)     A SOPHISTICATED MANAGEMENT WORKFLOW TOOL that contributes to
                 streamlining the flow of information on an enterprise-wide
                 basis. Automated workflow processes are systematically created
                 and the user's process is automatically documented at the same
                 time. Product users can continuously examine and redesign
                 their current processes, managing them interactively, focusing
                 on improving organizational productivity and quality.

         2.)     AN IMAGE PROCESSING SYSTEM that has the ability to scan
                 incoming documents, store them digitally and automatically
                 route them to the appropriate processing department thereby
                 eliminating paper from the workflow. This system also allows
                 for long term storage of documents and document retrieval.
                 Users can modify workflow and business rules on site.

         3.)     AN INTELLIGENT WORKSTATION APPLICATION (IWT) that improves
                 data entry speed and service quality by using graphical user
                 interface tools that seamlessly connect the user's desktop to
                 First Data's transfer agent processing systems, office
                 automation tools, correspondence/service tracking and
                 policy/procedure access systems.

         4.)     A CUSTOMER SERVICE SYSTEM that automates and enhances the
                 correspondence and customer servicing areas in mutual fund
                 operations. Customer Service staff can log all activity, such
                 as phone calls, letters, transactions, etc., while interacting
                 with customers. The system enables the service representative
                 to perform transactions over the phone, create "electronic
                 forms" consisting of instructions for other processors, and
                 dynamically sends work items to other staff electronically.
                 The Customer Service System is designed to enhance the quality
                 and efficiency of the service provided to customers through
                 the use of state-of-the-art client/server technology.
<PAGE>   53
                                       IMPRESSive Technology, IMPRESSive Results

II.       PRODUCT BENEFITS

         o       Allows clients to process transactions and customer
                 correspondence quickly and efficiently.

         o       Allows clients to be at the leading edge of technology to
                 maintain competitiveness and to effectively deliver quality
                 service.

         o       IMPRESS Plus enables the organization to:

                        -  enhance service responsiveness and quality
                        -  streamline workflow and improve document control by 
                           eliminating paper
                        -  increase employee productivity and participation
                        -  have access to real-time production statistics
                        -  enhance organization cohesion and effectiveness
                        -  reduce manual tasks
                        -  increase accuracy by using intelligent rules-based 
                           applications
                        -  reduce processing costs
                        -  Tie Customer Service Reps to sales

         o       The IMPRESS Plus workflow tools allow business/operational
                 workflows to be set up. Automated workflow processes are
                 created and the user's process is automatically documented at
                 the same time. Product users can continuously examine and
                 redesign their business processes and manage them
                 interactively, focusing on improving organizational
                 productivity and quality.

         o       IMPRESS Plus is a scaleable and flexible solution that allows
                 the user to choose an enterprise-wide or a departmental
                 solution. It allows the client to determine an implementation
                 strategy that meets their strategic plans and goals.

         o       The IMPRESS Plus product platform allows the user to build
                 upon and utilize future First Data services such as
                 information delivery of shareholder/investor data, sales and
                 marketing data and customer service processing.

         o       IMPRESS Plus is modular to support increasing volumes,
                 increasing numbers of users and future advances in component
                 technologies. This allows for functional as well as
                 enterprise-wide solution.

         o       The IMPRESS Plus product's UNIX and NT-based platform allows
                 for the flexibility and growth needed to market position and
                 grow in the '90s to meet the demands of the mutual fund
                 industry.

         o       IMPRESS Plus is developed to run in an open systems
                 environment, so that the application has the ability to
                 incorporate diverse hardware choices, such as servers,
                 scanners and printers.

         Additional benefits that can be provided through customization of
         certain products include:

         o       Ability for AIM Funds operations associates to customize
                 interfaces, rules, scripts, etc. based on predefined "levels"
                 of operators. Levels may range from entire organization right
                 down to the individual CSR.

         o       Creation of an Integrated Service Backbone within the AIM
                 organization designed to allow consistent processing of
                 service items, documents, correspondence, etc. regardless of
                 where they originated.  (Internet, scan mail, fax, phone,
                 etc.)

         o       Optional ability to link VRU to the desktop via CTI and
                 related technologies for more efficiency and quality in
                 servicing.
<PAGE>   54
                                       IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS



o    Ability for AIM Funds operations associates to change workflow rules,
     scripts, menus, screens, etc. associated with the front end servicing
     applications as they see fit to effectively run their business efficiently
     and with highest regard to quality.



o    Ability for AIM Funds to introduce intelligent, 'point of contact'
     scripting for service associates in the front end selling process.
     Through the customized rules capability, AIM Funds can set up random
     sales, campaigns, or promotions.  In addition, IMPRESS Plus can be told
     when to prompt CSR's that selected promotions apply to the customer at
     hand based on data points in the customer's profile, recent activity, or
     the like.
<PAGE>   55
                                       IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS



III.     TECHNICAL OVERVIEW

         First Data's combined Customer Service, Workflow, Image and
         Intelligent Workstation (IWT) technologies enable users to display the
         digitized image of a shareholder form on the workstation along with
         other service, data entry and office automation applications.  This
         allows a user to enter information directly from the image without
         having to look away from the screen or handle paper.  IMPRESS Plus
         will have access to First Data's transfer agent processing system,
         office automation tools, and correspondence tracking and
         policy/procedure access systems.  First Data has developed the
         workflow and image capabilities of the system to meet the needs of the
         financial industry.

         The Customer Service and Intelligent Workstation applications improve
         data entry speed and quality by using graphical user interface tools
         and LAN/WAN topologies to seamlessly connect the users desktop to the
         mainframe servers.  These tools and technologies will significantly
         off-load transactions and query processing from the mainframe by
         putting these capabilities on the desktops and empowering the
         end-user.

         IMPRESS Plus is designed to run in an open systems environment. It has
         the ability to incorporate various workstation platforms due to a
         common set of access routines and open communication architecture.
         IMPRESS Plus supports high-performance networking architectures
         including Novell's SPX/IPX as well as the UNIX TCP/IP standard.  SNA
         connectivity is supported for LU6.2, 3270, and 5250 communications.
         The application supports Microsoft Windows 3.11, Windows 95, and NT
         client workstations, multiple UNIX server back-end platforms, and the
         latest client/server database technologies offered by the INFORMIX and
         Microsoft database systems.

         IMPRESS Plus contains a state-of-the-art integration API (application
         programming interface) that allows other applications, including
         customer-specific applications, to be seamlessly integrated into
         IMPRESS Plus.

         The Customer Service and IWT applications have been designed with an
         object-based architecture that allows one common application to
         support First Data's multiple back-end transfer agent systems.  They
         are designed around First Data's newly defined and implemented
         corporate data model.  This model represents the future data source
         for First Data's common transfer agent application.  This object-based
         architecture allows for a high level of client customization and
         integration.
<PAGE>   56
                                       IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS


IV. HIGH LEVEL OVERVIEW OF IMPRESS PLUS FUNCTIONALITY

                   WORKFLOW MANAGEMENT FUNCTIONALITY OVERVIEW


WORKFLOW         DYNAMIC WORKFLOW DESIGN AND MONITORING
MANAGEMENT
                 IMPRESS Plus provides a set of client/server based tools that
                 allow designers and authorized system users to build workflow
                 rules to be implemented on the work floor.  These rules can be
                 built and implemented, then changed as required by trained
                 administrators.

                 GENERIC WORKFLOW AVAILABLE FOR ALL TRANSACTIONS

                 IMPRESS Plus offers a generic wordflow that can be used for
                 any transaction type that is designated in an operation.
                 Liquidations, correspondence, new accounts, etc. are just some
                 examples of transactions that can be processed through this
                 generic workflow. Should the workflow need to be customized or
                 altered, it can be.

                 WORK FLOW MONITORING

                 IMPRESS Plus provides the following work flow monitoring
                 activities in a real time mode:

                 o        Allow users with the proper security access to
                          monitor the status of workflow activities or entire
                          work flow maps
                 o        Monitor work-in-process items via a graphical display
                          which produces bar graphs in a variety of
                          presentation formats
                 o        Monitor multiple statistics simultaneously on a
                          graphical display.

                 PRIORITIZATION OF WORK

                 IMPRESS Plus allows the setting of a default priority of items
                 during workflow design, and, in addition, dynamically during
                 work in process.  During work in process, an item's priority
                 is based on its transaction type, its default or subsequently
                 manually altered priority setting, as well as its age in the
                 activity queue.
<PAGE>   57
                                       IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS

WORKFLOW                  MANUAL ROUTING OF ITEMS
MANAGEMENT
(CONTINUED)               IMPRESS Plus allows items to be manually routed to
                          workflow map destinations, or, in some cases, to
                          specific end users by those users with authorization
                          to do so.

                          AUTOMATIC ROUTING OF WORK

                          IMPRESS Plus routes work items to the next
                          destination on a pre-defined set of workflow rules.
                          These rules can be overridden by the user when 
                          necessary.

                          ITEM COPY ROUTING

                          IMPRESS Plus allows users to make "copies" of items
                          within the workflow and route them to other workflow
                          activities.  This is commonly used when an individual
                          processing the work determines that an item must be
                          forwarded to another processing department or review
                          the steps because it is actually two or more
                          transactions.

                          ENHANCED QUALITY CONTROL

                          IMPRESS Plus allows for random or pre-determined QC,
                          statistical QC, or other more intelligent or
                          selective QC means.

                          ENHANCED QUALITY ASSURANCE

                          IMPRESS Plus allows for random or pre-determined QA,
                          statistical QA, or other more intelligent or
                          selective QA means.
<PAGE>   58
                                       IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS

                                                    IMAGE FUNCTIONALITY OVERVIEW


IMAGE                     DOCUMENT SCAN, STORE, ROUTE, AND RETRIEVE
PROCESSING
                          IMPRESS Plus captures, through scanning, electronic
                          images OF documents, stores these electronic images
                          on magnetic disk, and subsequently allows for
                          retrieval of the electronic images.  IMPRESS Plus
                          allows images to be accessed for image quality review
                          and provides for the rescanning of images determined
                          to be of unacceptable quality.  Following the
                          completion of scanning and any image quality review,
                          items are automatically routed to subsequent
                          activities, based on a predefined set of workflow
                          rules.

                          ELECTRONIC DOCUMENT IMAGE PRESENTATION AND
                          MANIPULATION

                          IMPRESS Plus allows images to be viewed on image-
                          enabled workstations.  Multi-page documents can be
                          scrolled through, and selected portions of an image
                          can be magnified.

IMAGE                     CROSS-REFERENCE TO PHYSICAL DOCUMENT LOCATION
TRACKING
AND RETRIEVAL             IMPRESS Plus is designed so that the image database
                          stores the location of the physical document for each
                          document image.  This location - known as a storage
                          box - is entered into the system while scanning
                          documents.

                          INDEXING OF IMAGES

                          IMPRESS Plus automatically assigns a unique indexing
                          number to each document that is created through
                          scanning.  The unique indexing number consists of a
                          system-generated number that can subsequently be used
                          to cross-reference an item to a mainframe transfer
                          agent system.  In addition, IMPRESS Plus allows for
                          the alternate indexing of documents by other user-
                          entered fields such as fund/account.

                          SOURCE KEY GENERATION AND DISPLAY

                          Each transaction type processed within IMPRESS Plus
                          receives a unique identifier that can be used to link
                          an item to the First Data transfer agent system.
                          This key may also be used for document retrieval.

IMAGE                     SCANNING, INDEXING, AND STORAGE OF DOCUMENTS
TRACKING                  PROCESSED PRIOR TO IMAGE WORKFLOW
AND RETRIEVAL
(CONTINUED)               Through the IMPRESS Plus merge facility, users can
                          scan documents processed prior to the installation of
                          IMPRESS Plus.  The merge facility allows you to
                          associate documents with existing, already scanned
                          and indexed documents, making them available for
                          future inquiry using IMPRESS Plus.

                          IMAGE ARCHIVAL AND SUBSEQUENT RETRIEVAL FROM OPTICAL
                          STORAGE

                          IMPRESS Plus provides storage and backup functions
                          for data objects, is designed to handle media
                          management, and communicates with the database
                          management system.  IMPRESS Plus supports archival of
                          items to magnetic or selected WORM (Write Once
<PAGE>   59
                                       IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS


                          Read Many) optical media.  Archival from magnetic to
                          optical media criteria are set during installation
                          time.

                          PRINTING OF IMAGES

                          IMPRESS Plus allows you to print copies of document
                          images at LAN-based printers equipped with the
                          appropriate print server components.

                          REAL-TIME ADMINISTRATION TOOLS

                          IMPRESS Plus offers an administration function that
                          allows authorized users to add and maintain user
                          profiles, funds, transaction types, locations, and
                          other client site-specific data.  This tool also
                          allows authorized users to change courier status,
                          determine the status of work that may have been
                          affected by an environmental mishap, and perform
                          other administrative tasks.

                          DOCUMENT/ACTIVITY HISTORY AND AUTOMATIC UPDATE

                          IMPRESS Plus automatically records and stores
                          document/activity history statistics on audit trail
                          logs during workflow activities, and produces
                          standard reports for such items as:

                          o       Workflow activity type
                          o       Date/time/user of each activity
                          o       Beginning/ending date/time of each activity
                          o       Last update user/date/time

ADMINISTRATIVE            IMPRESS Plus allows much of this activity history to
FUNCTIONS                 be viewed on-line in various portions of the
(CONTINUED)               application.

                          PRODUCTIVITY REPORTING AND QUALITY/TIMELINESS
                          REPORTING

                          IMPRESS Plus logs document/activity history
                          statistics to produce standard productivity reports
                          that can be run at the client's request.

                          ADHOC REPORTING

                          IMPRESS Plus provides a suite of standard reports
                          that can be customized.  A client can also create
                          their own additional reports.

                          QUALITY CONTROL PROCESSING

                          IMPRESS Plus currently allows for processing
                          activities to be reviewed for quality by routing them
                          to a Quality Control queue.  Authorized users can
                          then QC work items.  Future IMPRESS Plus releases
                          will include various rule-based options for selective
                          quality control.  IMPRESS Plus prevents users from
                          quality control checking their own work.

                          ACCESS SECURITY

                          IMPRESS Plus image processing provides security
                          access in the form of user logons and user profiles.
                          Users must have a user ID to access the system and
                          are further constrained by their user profile.  The
                          client assigns user IDs for staff to access the
                          system and specifies the parameters of each user
                          profile.  These profiles limit users to performing
<PAGE>   60
                                       IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS

                          only those specific activities for which they have
                          been given permission (e.g. processing, scan, etc.).
                          It is recommended that the logon IDs match the user's
                          logon ID from the First Data transfer agent system.

VALUE-ADDED               SHAREHOLDER ACCOUNTING SYSTEM ACCESS
FUNCTIONALITY
                          IMPRESS Plus allows workstation access to First
                          Data's transfer agent recordkeeping system. 3270
                          terminal emulation is accomplished through a
                          Windows-based software application.  Keyboard mapping
                          is limited to the technical capabilities of the
                          emulation software and/or hardware.

                          DYNAMIC DATA EXCHANGE (DDE) FUNCTIONALITY

                          IMPRESS Plus will allow for Dynamic Data Exchange at
                          selected points in application modules when necessary
                          to transfer data between processes.  An example would
                          be the passing of a source key stored on a transfer
                          agent system history line to the imaging inquiry
                          screen for a customer service operator.

                          ON-LINE HELP FOR USERS

                          IMPRESS Plus offers a comprehensive on-line help
                          system that follows Microsoft Windows help system
                          conventions.  It is designed to serve both new users
                          learning how to use the system and more experienced
                          users who may occasionally need assistance or
                          additional information.

                          SYSTEM ADMINISTRATION PROCEDURES

                          IMPRESS Plus System Administration is made easier for
                          designated IMPRESS Plus technical support staff due
                          to the IMPRESS Plus Systems Administration and
                          Procedures manual and related documentation.
<PAGE>   61
                                       IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS

                                              INTELLIGENT WORKSTATION PROCESSING
                                                    (IWT) FUNCTIONALITY OVERVIEW


INTELLIGENT               IWT is designed with a graphic interface ("GUI")
WORKSTATION               which will provide an intelligent real-time interface
PROCESSING                to the First Data transfer agent system for the
(IWT)                     following transaction activity:

                          NEW ACCOUNT SETUP

                          The IWT new account setup application is designed to
                          provide a MS/Windows graphic interface ("GUI") to
                          allow an intelligent real-time interface to the First
                          Data transfer agent system.  New account setup
                          functionality includes:

                          o       new account setup entry
                          o       dealer/rep list
                          o       TIN list for shareholder list
                          o       systematic city and state population based on
                                  entry of a 5 digit zip code 
                          o       dividend/cap gain addresses
                          o       beneficiary addresses 
                          o       statement addresses
                          o       ABA lookup and validation
                          o       fund list
                          o       wire and ACH bank addresses

                          Financial Transactions

                          The IWT financial transaction entry application is
                          designed to provide a MS/Windows graphic interface
                          ("GUI") to allow an intelligent real-time interface
                          to the First Data transfer agent system.  Financial
                          transaction entry functionality includes:

                          o       telephone redemptions
                          o       telephone exchange
                          o       exchange processing
                          o       transfer processing
                          o       redemption processing
                          o       subscription processing

                          Group
                          
                          o       linking and linking of accts by ROA, confirm,
                                  L01, plan
<PAGE>   62
                                      IMPRESSIVE TECHNOLOGY, IMPRESSIVE RESULTS

                                    CUSTOMER SERVICE & ENHANCED INQUIRY SYSTEMS
                                                         FUNCTIONALITY OVERVIEW


CUSTOMER                  The Customer Service System is a client/server based,
SERVICE                   graphical user interface (GUI) system designed to
SYSTEM                    provide an intelligent real-time application to
                          enable clients to improve the quality of the service
                          provided to both shareholders and broker dealers.
                          This system provides functionality in the following
                          areas:

        
        
                          CONTACT TRACKING AND MANAGEMENT

                          A key feature of the Customer Service System will be
                          the ability to track and report on all interaction
                          with an end customer, be it a shareholder or
                          broker/dealer.  Designed for ease of use by a
                          customer service representative, this system will
                          allow for the logging of telephone calls and
                          correspondence, the creation and updating of service
                          items, the processing and resolution of customer
                          issues to insure customer satisfaction at the end of
                          any contact.  In addition, via reason codes and aging
                          information, management is empowered with the use of
                          statistical and trending reports regarding contact
                          made with their customer base .

                          CORRESPONDENCE GENERATION AND TRACKING

                          The Customer Service System is closely integrated to
                          word processing to allow for the automatic generation
                          of outgoing correspondence related to service items.
                          A service representative can choose from customized
                          pre-defined letters to generate high quality customer
                          correspondence.

                          TELEPHONE TRADING

                          Authorized customer service system users will be able
                          to perform transactions while on the telephone with
                          customers by invoking simplified graphical data entry
                          screens.  In addition, customer service
                          representatives can create electronic forms
                          consisting of processing instructions for other
                          departments and dynamically send route these work
                          items via the workflow manager.

CUSTOMER                  ENHANCED INQUIRY
SERVICE
SYSTEM                    The Enhanced Inquiry windows provide enriched and
(Continued)               user-friendly replacements for legacy transfer agent
                          inquiry screens.  Examples of the inquiry functions
                          are search for customer information by name, account
                          number and social security number, account
                          information, financial transaction history, service
                          history, and correspondence history.

<PAGE>   63
                          EXHIBIT 2.1 OF SCHEDULE G
                                  EQUIPMENT

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
           IMPRESS IMAGE PRODUCTION HARDWARE AND SYSTEMS SOFTWARE
- ---------------------------------------------------------------------------------------------------------
PRODUCT                    Description                                                         QTY
<S>                        <C>                                                         <C>     <C>    <C>
                           486/66 DX, 200 MB HG, 16 MB RAM, Network Intface
                           Card, VGA Monitor, Windows 3.1, Novell LWP 5.0,
Print Servers              Parallel Cable for printer                                           10
- ---------------------------------------------------------------------------------------------------------
                           HP IV+ / 5 Laser Printer with 6 MB Ram, Jet Direct for
Printers                   other printing can be installed                                      10
- ---------------------------------------------------------------------------------------------------------
                           P100 or greater, 540 MB HG, 16 MB RAM, Network
                           Interface Card, Cornerstone DP120 Mono, Image
                           Accel2 PCI, Adaptec 1542cp SCSI Card, SCSI Cable,
Scan Server                Terminator.                                                           5
- ---------------------------------------------------------------------------------------------------------
                           Ricoh IS-520 SCSI with Ink Jet Endorser. SCSI
Mid Speed Scanner          Version                                                               5
- ---------------------------------------------------------------------------------------------------------
                           Sun SPARCstation 5 Model 170, 17" Color Display,
                           48MB RAM, 2X2.1 GB Int disks, 4mm Tape, 3.5"
                           Floppy Drive, CD-ROM, Solaris 2.5.1, Solarais
                           Answerbooks, 1 @ X1053A, Solaris 2.5.1 SDK Kit,
Kodak Scan Server          Solaris 2.5.1 Motif ToolKit, SUN Professional C 4.0                   3
- ---------------------------------------------------------------------------------------------------------
High Speed Scanner         Kodak 923D Scanners                                                   3
- ---------------------------------------------------------------------------------------------------------
                           Sun ULTRAserver 6000, 12 250MHZ CPU's, 17" Color
                           Display, 1.2GB RAM, 2x9 GB Int disks, DG Clariion 42
                           Gb Raid 5 disk array, 4mm Tape, CD-ROM, Solaris
                           2.5.1. Answerbooks, 35/7OGb DLT Tape Changer, 1 @
                           1053A, 1 @ X1052A, 2 @ X1062, Fast
Image Server               Ethernet/FDDI/ATM                                                      1
- ---------------------------------------------------------------------------------------------------------
                           CYGNET 1802 with (3) Philips LD6100 Optical Drives,
Jukebox Optical            SCSI Cable, RS-232 Null Modem Cable                                   1
- ---------------------------------------------------------------------------------------------------------
                           P100 or greater, 540 MB HG, 32 MB RAM, Network
                           Interface Adapter, 15" SVGA Monitor, Resolution of at
                           least 1024 x 768, Windows 3.1, Hiijack Pro for
Fax Controller PC          Windows, Microsoft Word 6.X                                           1
- ---------------------------------------------------------------------------------------------------------
                           Tower Style P90 or greater, 2 GB HG, 32 MB RAM,
                           Network interface adapter, 14" VGA Monitor, (4)
                           Gamalink CP4/LSI Fax Cards (4) Lines per card,
FAX Server**               QEMM 8.X, Allcom LANFAX 2.15gl/2.2gl                                  1
- ---------------------------------------------------------------------------------------------------------
                           Existing File Server with at least 500 MB of disk space
Novell File Servers        available                                                        2 or 3
- ---------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------
**The fax server will require analog modem lines a max of 16 lines would
- ---------------------------------------------------------------------------------------------------------
be required for the hardware listed above.
- ---------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------
UPS                        OnLine UPS Equipment (SUN, Optical) (10 KVA)                          1
- ---------------------------------------------------------------------------------------------------------
UPS                        OnLine UPS Equipment (SUN) (1.4 KVA)                                  3
- ---------------------------------------------------------------------------------------------------------
UPS                        OnLine UPS Equipment (FAX HW) (1 KVA)                                 2
- ---------------------------------------------------------------------------------------------------------

</TABLE>
<PAGE>   64
                          EXHIBIT 2.1 OF SCHEDULE G
                                   EQUIPMENT
<TABLE>
- ---------------------------------------------------------------------------------------------------------
<S>                        <C>                                                      <C>     <C>      <C>
                           28.8 K Modem, lines, and cables (SUN for remote
Remote Link                suppor)                                                           1
- ---------------------------------------------------------------------------------------------------------
                           Equipment to maintain a routed  or switched network
                           environment with no more that 25-30 clients per
Network Hardware           network segment.                                                 
- ---------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------
                           Pentium 90 or greater with 24-32MB ram. Display
                           should optimally support Image resolutions of
                           1600X1280 but other resolutions can be supported for
Workstations               casual use. (1280X1024)                                           400
- ---------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------
                           Software required on all workstations
- ---------------------------------------------------------------------------------------------------------
                           Windows 95, Windows NT
- ---------------------------------------------------------------------------------------------------------
                           Microsoft Word 6.X or Greater
- ---------------------------------------------------------------------------------------------------------
                           Microsoft TCP/IP Stack
- ---------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>   65
                           EXHIBIT 2.2 OF SCHEDULE G
                                   EQUIPMENT

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
IMPRESS Test/Training Hardware and Systems Software
- -------------------------------------------------------------------------------------------------------
PRODUCT               DESCRIPTION                                                         QTY
<S>                   <C>                                                        <C>      <C>      <C>
                      486/66 DX, 200 MB HG, 16 MB RAM, Network Intface
                      Card, VGA Monitor, Windows 3.1, Novell LWP 5.0,
Print Server          Parallel Cable for printer                                            1
- -------------------------------------------------------------------------------------------------------
                      HP IV+/5 Laser Printer with 6 MB Ram, Jet Direct for
Printer               other printing can be installed                                       1
- ------------------------------------------------------------------------------------------------------- 
                      P100 or greater, 540 MB HG, 16 MB RAM, Network
                      Interface Card, Cornerstone DP 120 Mono, Image
                      Accel2 PCI, Adaptec 1542cp SCSI Card, SCSI Cable
Scan Server           Terminator                                                            1
- -------------------------------------------------------------------------------------------------------
                      Ricoh IS-420 SCSI with Ink Jet Endorser, SCSI
Low Speed Scanner     Version                                                               1
- -------------------------------------------------------------------------------------------------------
                      Sun ULTRAserver 1, 250MHZ CPU, 17" Color Display,
                      128MB RAM, 2X2.1 GB Int disks, SUN 4GB External
                      Disk Pack, (2) 4mm Tape Drives, CD-ROM, Solaris
Image Server          2.5.1, Answerbooks, 1 @ 1053A, 1 @ X1052A.                            1
- -------------------------------------------------------------------------------------------------------
                      Phillips LD6100 Optical Drive Differential, SCSI Cable
Standalone Optical    SCSI Differential Terminator.                                         1
- -------------------------------------------------------------------------------------------------------
                      P100 or greater, 540 MB HG, 32 MB RAM, Network
                      Interface Adapter, 15" SVGA Monitor, Resolution of at
                      least 1024 X 768, Windows 3.1, Hijack Pro for
Fax Controller PC     Windows, Microsoft Word 6.X                                           1
- -------------------------------------------------------------------------------------------------------
                      Tower Style P90 or greater, 1 GB HG, 32 MB RAM,
                      Network interface adapter, 14" VGA Monitor, (1)
                      Gamalink CP4/LSI Fax Cards (4) Lines per card,
FAX Server**          QEMM 8.X, Allcom LANFAX 2.15gl/2.2gl                                   1      
- -------------------------------------------------------------------------------------------------------
                      Existing File Server with at least 500 MB of disk space
Novell File Servers   available                                                              1
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
** THE FAX SERVER WILL REQUIRE ANALOG MODEM LINES A MAX OF 4 LINES WOULD BE
REQUIRED FOR THE HARDWARE LISTED ABOVE.
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
UPS                   OnLine UPS Equipment (FAX) (1 KVA)                                     1
- -------------------------------------------------------------------------------------------------------
UPS                   OnLine UPS Equipment (SUN, Optical) (3 KVA)                            1
- -------------------------------------------------------------------------------------------------------
                      28.8 K Modem, lines, and cables (SUN for remote
Remote Link           suppor)                                                                1
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
                      Pentium 90 or greater with 24-32 MBram. Display
                      should optimally support image resolutions of
                      1600X1280 but other resolutions can be supported for
Workstations          casual use. (128X1024)                                                10
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
                      Software required on all workstations
- -------------------------------------------------------------------------------------------------------
                      Windows 95, Windows NT
- -------------------------------------------------------------------------------------------------------
                      Microsoft Word 6.X or Greater
- -------------------------------------------------------------------------------------------------------
                      Microsoft TCP/IP Stack
- -------------------------------------------------------------------------------------------------------
</TABLE>

  
<PAGE>   66
                            EXHIBIT 3 OF SCHEDULE G

                         MAINTENANCE AND SUPPORT TERMS

These terms are based on an IMPRESS User network environment of up to 512 Users
and the associated server(s), as described in Exhibits 1 and 2 of this Schedule
G.

1.  Software Support.FDISG shall provide the following Software support
services ("Software Support"):

1.1.     FDISG shall provide the Fund with full System Administration Guide(s)
for FDISG Software.

1.2.     FDISG will have a Response Center (help desk) to provide 24 hours a
day, 7 days a week to designated client contacts.

1.3.     FDISG shall use reasonable efforts to resolve all Software failures
through; (a) remote support to the Fund's information systems staff ("Fund's
Staff"); (b) coordination of Third Party Vendor support (on-site or remotely);
(c) coordination of other subcontractors' actions; or (d) direct on-site
support by FDISG personnel.

1.4.     FDISG shall investigate errors in the Software reported by the Fund
which prevent substantial compliance with the then current Documentation and to
initiate the corrective action, if any, which FDISG considers reasonable and
appropriate, including but not limited to temporary fixes, patches and
corrective releases to FDISG's clients generally.  Notwithstanding the
foregoing, if reported errors result from or arise out of. (i) malfunctions of
equipment other than the Equipment, (ii) improper Fund operator procedure or
misuse of the system by the Fund, (iii) modifications or changes made to the
system without FDISG's prior written approval, (iv) causes beyond the
reasonable control of either party, or (v) user developed features such as
those users may develop with form generators, ad hoc report writers and user
customized screens, then FDISG shall have no responsibility for investigating
the error or making the correction, except as the parties may otherwise agree
to in writing.  The Fund shall pay FDISG's then current time and materials
charges plus reasonable travel and out-of-pocket expenses incurred in
investigating and attempting to correct any such errors.

1.5.     FDISG shall from time to time provide bug fixes, error corrections,
maintenance, minor enhancements, upgrades and updates to the Software which are
generally made available by FDISG to its similar customers as part of Software
Support ("Updates").  The cost of the Updates is included in the fees and other
charges identified in Schedule C of the Agreement, if the updates are supplied
to the Fund using FDISG's standard update facility.  FDISG installation
assistance for the new Updates may be required and, is billable to the Fund as
an Additional Service.  During the term of the Agreement, FDISG will use
reasonable efforts to provide the Fund with not less than thirty (30) days
prior written notice of FDISG's intent issue a new update of Software.  The
Fund shall implement an Update within ninety (90) days of receipt.  Any support
by FDISG of any prior release of the Software after such ninety (90) day period
shall be at FDISG's sole discretion and as an Additional Service.

1.6.     Software Support, the License, and the Software shall not include any
modification to the Software which contains any substantial added functionality
(including any significant new interface features), as determined solely by
FDISG or any new architecture or any significant modification of the Software
which contains any substantial added or different functionality, whether or not
such new functionality is coupled with any change in software architecture or
hardware platform ("New Products").  New Products shall be provided and
licensed to the Fund as an Additional Service.

1.7.     FDISG may decline to support the Software if (i) the Software or
Equipment was added to or changed without FDISG's prior approval; (ii) the Fund
does not perform the Software Support; or (iii) FDISG determines that such
support would adversely affect the Scope of Work.

1.8      Software Support for the FDISG Software shall conform to the standards
set forth in Section I of Schedule F.

2.  The Fund's Maintenance and Support Responsibilities.  The Fund's facility
will have all of the required security, space, electrical power source,
communications lines, heating, ventilation and cooling, and other physical
<PAGE>   67
requirements reasonably necessary for the installation and proper operation of
the Equipment.  The Fund's users will first direct all questions and problem to
the Fund's Staff for proper call tracking and problem resolution.  The Fund's
Staff will coordinate all facility issues at the site and will serve as primary
contact for FDISG when planning installs, upgrades and other equipment changes.
The Fund's Staff shall:

2.1.     Identify designated client contacts, one for Operations and one
technical systems administrator, to function as single points of contact for
discussion, review and resolution of problems with FDISG.

2.2.     Perform initial problem determination and symptom documentation.

2.3.     Be responsible for all system hardware and network hardware components
and shrink-wrap software from a maintenance, support and problem resolution
standpoint.

2.4.     Provide (a) data back-up and recovery, (b) preventive maintenance,
and (c) perform server administration tasks as described in the Systems
Administration Guide(s) and Third Party Software documentation.

2.5.     Maintain all network and trouble-log documentation required by FDISG
or by third-party vendors.  FDISG shall be allowed to review such documentation
if necessary to resolve support issues.

2.6.     Be available during normal business hours and reachable for support 24
hours a day, 7 days a week, as required.  The Fund shall maintain the
appropriate staff level to adequately perform the maintenance support functions
specified.  This staff should have experience in network administration,
troubleshooting, Microsoft Windows, workstation memory management, and UNIX and
NT systems administration.

2.7.     Consult with FDISG before performing any work that may affect the
Software or performance of the System, including installation, upgrading, or
unplanned maintenance affecting Equipment

2.8.     The fund is responsible for maintenance and support of customized code
unless contracted with FDISG.

3.  Support of Customized Code. (Code changed by Fund or FDISG on a customized
basis)

3.1      Software Revisions.  At times, FDISG will provide software updates to
components (third party or FDISG software) to either enhance the product or
address quality deficiencies.  FDISG is responsible for notifying the Fund of
these updates, and what changes have been made.  The Fund is responsible for
installing the updates and modifying any code which they have customized to
accommodate these enhancements.  Assistance can be provided by FDISG at stated
billable rates.

3.2      Support of Modified Code.  FDISG will provide application, technical
and workflow support for modified code only on a time and materials basis.
FDISG may request the replacement of the modified code with the original code
in order to assist in the determination of the problem source.

3.3      Mainframe Resource Utilization.  If customized code requires greater
FDISG mainframe CICS, DASD, or CPU resources than the base FDISG delivered
IMPRESS Plus solution, FDISG reserves the right to charge the Fund for this
usage.  If there is concern that excessive resource utilization could impair
the mainframe system, FDISG reserves the right to disallow this modified code
from executing on the mainframe.  The Fund is advised to consult with FDISG in
order to determine if planned customization may negatively impact mainframe
resources.

4.  Roles and Responsibilities.

4.1      FDISG shall not be responsible for the support of any Directly
Obtained Third Party Software or any other third party products.  The Fund is
responsible for network connectivity, Operating Systems, gateways, and other
third party products.  FDISG is not responsible for hardware not listed in
Exhibit 2 of Schedule G or software not listed in Sections 1, 2.1.1, or 2.1.2
of Exhibit 1 of Schedule G, unless specifically covered in a separate
agreement.

4.2      Additional support tasks may be provided on a time and material basis.
This may include workflow analysis, customization, network design, third party
product installation and additional training.
<PAGE>   68
                                   SCHEDULE H

                       ACE + SOFTWARE AND SUPPORT TERMS

ARTICLE 1 - SYSTEM, SUPPORT AND IMPLEMENTATION

1.1      Software and Support.  FDISG shall provide or has previously provided
to the Fund and the Fund shall acquire from FDISG the right to use the computer
software programs set forth in Exhibit 1 of this Schedule H (the "SOFTWARE"),
for the fees indicated in Schedule C of Amendment Number 3 to the Agreement.
Software includes related user manuals and reference guides (collectively,
"DOCUMENTATION").  One copy of the Documentation shall be provided to the Fund
at no additional cost.  FDISG shall provide only the machine readable object
version of the Software and not source code.  Additional terms and conditions
concerning the Software are set forth in Exhibit 1 of Schedule H ("Exhibit 1").
Subject to the terms and conditions set forth in this Schedule H, FDISG grants
to the Fund and the Fund accepts from FDISG the non-exclusive, non-transferable
license to use the Software during the term of the Agreement ("LICENSE").  Some
software components ("THIRD PARTY SOFTWARE") required to be used with the
Software were developed by a third party ("THIRD PARTY VENDOR").  Third Party
Software is licensed to the Fund only pursuant to shrink wrapped or other
agreements between the Third Party Vendor and the Fund directly.  Exhibit 1
shall indicate the Third Party Software that the Fund is responsible to obtain
and license.  FDISG shall provide the Fund with all error corrections, minor
enhancements and interim upgrades to the Software which are made generally
available to FDISG client's of the Software ("SOFTWARE SUPPORT"), but shall not
provide a License to any substantial added functionality, new interfaces, new
architecture, new platforms or other major software development efforts, as
determined solely by FDISG.

1.2      Ownership. FDISG or its licensor shall retain title to and ownership
of the Software, copies, derivative works, inventions, discoveries, patentable
or copyrightable matter, concepts, expertise, techniques, patents, copyrights,
trade secrets and other related legal rights ("PROPRIETARY INFORMATION").
FDISG reserves all rights in the Proprietary Information not expressly granted
to the Fund in this Schedule H. Upon FDISG's request, the Fund shall inform
FDISG in writing of the quantity and location of any Software.

1.3      Equipment, System Implementation and Access. Fund is responsible for
acquiring, installing and maintaining the data processing and related equipment
("EQUIPMENT") also set forth in Exhibit 1 of Schedule H. Additional terms and
conditions concerning the Equipment are also set forth in Exhibit 1. The
Equipment identified in Exhibit 1 represents the minimum equipment requirements
to run the Software.  FDISG disclaims responsibility for the performance of the
Software in the event that the Fund utilizes equipment different than that
which is set forth in Exhibit 1. FDISG and the Fund shall (a) within a
reasonable time after the Effective Date, agree upon the tasks required to
implement the Software, Third Party Software and Equipment ("SYSTEM") and the
party responsible and time frames for each task ("SCOPE OF WORK"); (b) perform
their respective assigned tasks according to the Scope of Work; and (c) if not
the party assigned to a task, cooperate with the responsible party.  To the
extent the Scope of Work is incomplete, FDISG shall follow its reasonable and
customary practices.  Upon prior notice by FDISG to the Fund, the Fund shall
give reasonable access to the System to FDISG, FDISG's employees, affiliates,
representatives, agents, contractors, licensors and suppliers ("FDISG'S
AGENTS") who are providing services under the Agreement or auditing adherence
to the Agreement.

1.4      Use of Software.  Fund may use the Software during the term of this
Agreement only on the Equipment and only to process the Fund's data for
internal business purposes (which shall not, for purposes of this Agreement,
include use by Fund to provide services to its customers on a service bureau
basis) in connection with the Fund's use of the FDISG System and only at the
locations identified in the Agreement.  If the Equipment is inoperative due to
malfunction, the license grant shall, upon written notice to FDISG, be
temporarily extended to authorize the Fund to use the Software on any other
equipment approved in writing by FDISG until the Equipment is returned to
operable condition.  FDISG, in its reasonable discretion, may suspend any
Software Support while the Software is being used on such other Equipment.  No
right is granted for use of the Software by any third party or by the Fund to
process for any third party, or for any other purpose whatsoever, except as
expressly provided in this paragraph..

1.5      Software Installation and Acceptance.  FDISG shall advise the Fund
that the Software as listed in Exhibit 1 is installed and functioning on the
Equipment ("Software Installation Date") so that implementation and training
activities can proceed.  The Fund shall be deemed to have accepted the Software
thirty (30) days after Software Installation Date or thirty (30) days after the
Fund's first use of Software to process live production data ("SOFTWARE
ACCEPTANCE DATE").

1.6      Copies of Software. The Fund may not copy the software except for
backup and archival purposes only, and the Fund shall include on all copies of
the Software all copyright and other proprietary notices or legends included on
the Software.  The provisions of this Paragraph do not apply to Fund data files
in machine-readable form.
<PAGE>   69
1.7      No-Export. The Software shall not be shipped or used by the fund
outside the United States.  The Fund shall comply with all applicable export
and re-export restrictions and regulations of the U.S. Department of Commerce
or other U.S. agency or authority.  The Software shall not be transferred to a
prohibited country or otherwise in violation of any such restrictions or
regulations.

1.8      Termination.  Terms and conditions of this Schedule H which require
their performance after the termination of the Agreement, including but not
limited to the License and Software use restrictions, limitations of liability,
indemnification, and confidentiality obligations, shall survive and be
enforceable despite the termination of the Agreement.

ARTICLE 2 - WARRANTIES AND REPRESENTATIONS

2.1      Software. For the term of the Agreement, FDISG warrants ("Performance
Warranty") that the Software shall perform on the Equipment substantially in
accordance with the Documentation, except for Third Party Software as set forth
in Paragraph 2.2 below.  The timely correction of errors and deficiencies in
the Software shall be Fund's sole and exclusive remedy for the Performance
Warranty.  FDISG warrants ("Rights Warranty") it has the right to license the
Software in accordance with the Agreement.  Provided the Fund gives FDISG
timely written notice, reasonable assistance, including assistance from the
Fund's employees, agents, independent contractors and affiliates (collectively,
"Fund's Agents"), and sole authority to defend or settle the action, then FDISG
shall do the following ("Infringement Indemnification"): (a) defend or settle,
at its expense, any action brought against the Fund or the Fund's Agents to the
extent the action is based on a claim that the Software infringes a duly issued
United States' patent or copyright or violates a third party's proprietary
trade secrets or other similar intellectual property rights ("Infringement");
and (b) pay damages and costs finally awarded against the Fund or the Fund's
Agents directly attributable to such claim.  FDISG shall have no Infringement
Indemnification obligation if the alleged Infringement is based upon the Fund's
use of the Software with equipment or software not furnished or approved by
FDISG or if such claim arises from FDISG's compliance with the Fund's designs,
or from the Fund's modifications of the Software.  The Infringement
Indemnification states FDISG's entire liability for Infringement and shall be
the Fund's sole and exclusive remedy for the Rights Warranty.

2.2      Third Party Warranties. All warranties for the Third Party Software,
if any, are specifically set forth in the Software Exhibits, Exhibit 1 or in
the applicable agreements supplied by the Third Party Vendors.  Subject to the
terms of the Exhibit 1 and to the extent permitted by FDISG's suppliers, FDISG
conveys to Fund all Third Party Software warranties made by the Third Party
Vendors.

2.3      Exclusion of Warranties.  THE WARRANTIES SET FORTH IN PARAGRAPH 2.1 
ABOVE AS TO THE SOFTWARE AND IN PARAGRAPH 2.2 ABOVE AS TO THIRD PARTY SOFTWARE
ARE IN LIEU OF ALL OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, ARISING
OUT OF OR RELATED TO THIS SCHEDULE G. FDISG SPECIFICALLY DISCLAIMS ALL OTHER
WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY,
NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE.

2.4      Fund Responsibility.  The System is an information system only,
designed to assist the Fund and the Fund's Agents in performing their 
professional activities and is not intended to replace the professional skill
and judgment of the Fund's Agents. Fund shall be solely responsible for: (a)
acts or omissions of the Fund's Agents in entering data into the System,
including its accuracy and adequacy; (b) checking the correctness and accuracy
of the System output and data; and (c) any use of or reliance upon the System
output by the Fund's Agents.  Except for the Infringement Indemnification and
as limited by applicable law, the Fund shall indemnify, defend and hold FDISG
and FDISG's Agents harmless from any losses, costs, damages, and liabilities,
including without limitation, reasonable attorneys' fees and court costs,
relating to any claim by any third party arising from or related to the Fund's
and the Fund's Agents' use of the System or System output.

ARTICLE 3 - MISCELLANEOUS

3.1      Confidentiality Obligations.  Each party shall keep confidential any
information relating to the other party's business which is clearly designated
or described in writing to be confidential ("Confidential Information").  Each
party shall keep and instruct its employees and agents to keep such information
confidential by using at least the same care and discretion as used with that
party's own confidential information.  Information shall not be subject to such
confidentiality obligations if it is: (a) in the public domain, (b) known to a
party, prior to the time of disclosure by the other party, (c) lawfully and
rightfully disclosed to a party by a third party on a non-confidential basis,
(d) developed by a party without reference to Confidential Information or (e)
required to be disclosed by law.  If either party, its employees or agents
breaches or threatens to breach the obligations relating to use of the
Confidential
<PAGE>   70
Information, the other party may obtain injunctive relief, in addition to its
other remedies, inadequate monetary damages and irreparable harm being
acknowledged.

3.2      Confidential and Privileged Information. The Proprietary Information,
other FDISG software and related information, and the Agreement are
Confidential Information of FDISG and FDISG's Agents.  Absent FDISG's written
permission, Fund shall not duplicate FDISG's Confidential Information.  Fund
accepts full responsibility for complying with all laws, rules and regulations
concerning use and disclosure of privileged data regarding any information
placed or stored in the System or output from the System.  Fund shall not
modify or reverse engineer the Software without FDISG's prior written consent.
<PAGE>   71

                            EXHIBIT 1 OF SCHEDULE H
                               SOFTWARE/HARDWARE

1.       FDISG Software.

1.1      FDISG Software includes the following products:

                          ACE +

2.       Third Party Software.

2.1      Directly Obtained Third-Party Software. The following Third Party
Software are separately licensed by the Third Party Vendor directly to the Fund
subject to the respective terms and conditions of "shrink-wrapped" or other
agreements between the Third Party Vendor and the Fund. The Third Party
Software in the Required Column must be obtained by the Fund. The Third Party
Software in the Optional column is helpful but not required unless the
indicated features are being used. The Fund accepts the provisions of such
agreements, including the warranty provisions, if any, and agrees to comply
with the terms set forth in such agreements:


<TABLE>
<CAPTION>
  Required               Optional
  --------               --------
  <S>                    <C>
  Windows 3.1            Reachout PC Link (for external FDISG Support of ACE +)
  DOS 3.3 or higher   
</TABLE>

3.       Hardware.

3.1      It is recommended that ACE + run on a PC Network (LAN) to fully use its
database features. The network should have at least 200 Mb of available disk
space. ACE + will also run on an individual local (hard) drive. PC
specifications are:

         o       2 or more IBM PC Compatible 486/66 (486/33 minimum) Mhz (or
                 Pentium) with 16 Mb Ram (8 Mb minimum)
         o       500 Mb Local (hard) drives (for backup only)
         o       External Fax/Modems (9600 baud or greater)(for PC faxing or
                 Reachout only)
         o       HP Laserjet 4 w/ Windows Drivers

3.2      PC/Mainframe Connection: ACE + data is based on mainframe ASCII files.
These files must be transmitted from the mainframe to LAN or PC. This can be
accomplished various ways. FDISG uses a mainframe to Gateway and BARR/SNA
transmission.
<PAGE>   72

                                   SCHEDULE I
                           DISASTER RECOVERY SUMMARY

OVERVIEW

First Data's data center is a free standing building that is self sufficient
with back-up water supply, fuel storage, and diesel generator backup. The
building is protected with 24 hour on site guard protection as well as security
camera coverage throughout the property. Access is by picture ID only and all
doors are protected with card key access.  Additionally, all systems are
protected by ACF2 Security. Security is audited on a regular basis.

Additionally, First Data maintains a reliable, tested disaster recovery system.

A tape backup system is set up on a daily rotation schedule with a full backup
of all data. The backup jobs run automatically every night and all tapes are
sent off-site on a daily basis to a physically secured facility. A business
resumption site has been established in our Providence facility. This Hot Site
is fully equipped with equipment, wiring and supplies in the case of a disaster
or business recovery.

A disaster is defined as any unforeseen business interruption or outage that
renders the data center or telecommunications network inoperable or
inaccessible for an undetermined amount of time suspending normal processing.
First Data's Disaster Recovery Plan provides us with the required procedures
and resource references to execute a full recovery of the data center and
associated critical processing.

This Plan addresses:

         o       Computer and communications equipment
         o       Programs, data and documentation
         o       Building and environmental concerns
         o       Fire detection and building evacuation
         o       Personnel, and
         o       Client Liaisons.

Due to contractual requirements, the data center must provide on-line
accessibility and processing availability within 24 hours of a declared
disaster. Total "downtime" is not to exceed 48 hours.

All outages that affect any client are considered priority one and all
available resources will be utilized to resolve outages, failures or slowdowns.

APPROACH

In a disaster situation, numerous issues and tasks must be addressed
immediately. To ensure all get equal attention, "teams" have been developed.
These teams are comprised of experienced First Data personnel responsible to
execute specific assigned functions critical to the overall recovery. Each team
will activate their procedures concurrently to affect a full system recovery at
the hot site. Some of the teams will act as support teams providing
<PAGE>   73
financial, administrative, and logistical coordination. The remaining recovery
teams will address more specific data and telecommunications issues.

o    Support Teams
         Financial/Administrative Support
         Human Resources/Corporate Communications
         Applications Team
         Client Liaison Team

o    Recovery Teams
         Management Teams
         Systems Software
         Data Center Operations
         Vendor
         Telecommunications Team
         Production Control
         Facilities/Hardware

Each team will be headed by a team leader and a designated alternate. If, for
any reason, the team leader is unavailable, the alternate will assume
responsibility for the team notification and progress reporting to the team
management.

Dial backup capabilities, diverse routing of communications circuits and
triangulation present the best options for insuring continued system access in
the event of a communications failure. First Data can demonstrate each of these
capabilities at the client's request.

TESTING SUMMARY

First Data/FDT has contracted with Comdisco to provide hotsite disaster
recovery and backup services. First Data's overall goal is to establish network
connectivity for on-line and transmission capability, restore the application
and recover forward to a point in time and then re-process a batch cycle.

Using Comdisco's site at North Bergen, the First Data Technology (FDT)
operating system will be recovered while testing FDISG recoverability for all
network and application platforms.

The recovery will take place remotely with FDT, using the Business Recovery
Facilities (BRF) in Denver, and Westboro staff working out of the new BRF
in Tewksbury, MA. Comdisco will have staff at both BRFs, as well as North
Bergen, to assist whenever needed.

Tests are conducted annually. The test runs for 48 contiguous hours. Multiple
shifts will be required for FDT, FDISG, and Comdisco staff. Specific staff
requirements will be determined as the scope of the test becomes more clearly
defined.

The systems recovery portion of the test will take place at the Comdisco site in
New Jersey utilizing an IBM ES9000 with related peripherals. All the equipment
used in testing is 

<PAGE>   74

compatible with the FDT hardware located in Denver. All tape mounts will be
handled by Comdisco staff in New Jersey, and the telecommunications testing
will be staffed by FDT with Comdisco assisting in New Jersey.

FDISG Test Objectives

o    Test recoverability from both of Comdisco's new Business Recovery
     Facilities 
o    Test transmission and network connectivity with clients 
o    Check and verify tape volumes stored offsite 
o    Benchmark the restore time for all (500) DASD volumes 
o    Ship all tapes from Denver to New Jersey 
o    Document (CDRS/FDISG) connectivity procedures 
o    Recover all applications to previous business cycle

<PAGE>   1






                                                                 EXHIBIT 9(a)(6)

                                   EXHIBIT 1

                                 LIST OF FUNDS


AIM ADVISOR FUNDS, INC.
<TABLE>
<CAPTION>
                 Portfolios:                                Classes:
         <S>                                       <C>
         AIM Advisor Cash Management Fund          Class A and Class C Shares
         AIM Advisor Flex Fund                     Class A and Class C Shares
         AIM Advisor Income Fund                   Class A and Class C Shares
         AIM Advisor International Value Fund      Class A and Class C Shares
         AIM Advisor Large Cap Value Fund          Class A and Class C Shares
         AIM Advisor MultiFlex Fund                Class A and Class C Shares
         AIM Advisor Real Estate Fund              Class A and Class C Shares
</TABLE>

AIM EQUITY FUNDS, INC.
<TABLE>
<CAPTION>
                 Portfolios:                                Classes:
         <S>                                       <C>
         AIM Blue Chip Fund                        Class A, Class B and Class C Shares
         AIM Capital Development Fund              Class A, Class B and Class C Shares
         AIM Charter Fund                          Class A, Class B and Class C Shares
         AIM Weingarten Fund                       Class A, Class B and Class C Shares
         AIM Aggressive Growth Fund                Class A Shares
         AIM Constellation Fund                    Class A and Class C Shares
</TABLE>

AIM FUNDS GROUP
<TABLE>
<CAPTION>
                 Portfolios:                                Classes:
         <S>                                       <C>
         AIM Balanced Fund                         Class A, Class B and Class C Shares
         AIM Global Utilities Fund                 Class A, Class B and Class C Shares
         AIM Growth Fund                           Class A, Class B and Class C Shares
         AIM High Yield Fund                       Class A, Class B and Class C Shares
         AIM Income Fund                           Class A, Class B and Class C Shares
         AIM Intermediate Government Fund          Class A, Class B and Class C Shares
         AIM Municipal Bond Fund                   Class A, Class B and Class C Shares
         AIM Value Fund                            Class A, Class B and Class C Shares
         AIM Money Market Fund                     Class A, Class B, Class C and AIM Cash
                                                          Reserve Shares
</TABLE>

AIM INTERNATIONAL FUNDS, INC.
<TABLE>
<CAPTION>
                 Portfolios:                                        Classes:
         <S>                                       <C>
         AIM International Equity Fund             Class A, Class B and Class C Shares
         AIM Global Aggressive Growth Fund         Class A, Class B and Class C Shares
         AIM Global Growth Fund                    Class A, Class B and Class C Shares
         AIM Global Income Fund                    Class A, Class B and Class C Shares
         AIM Asian Growth Fund                     Class A, Class B and Class C Shares
         AIM European Development Fund             Class A, Class B and Class C Shares
</TABLE>
<PAGE>   2
AIM INVESTMENT SECURITIES FUNDS
<TABLE>
<CAPTION>
                 Portfolios:                                        Classes:
<S>                                                         <C>
         Limited Maturity Treasury Portfolio                AIM Limited Maturity Treasury Shares
</TABLE>
AIM TAX-EXEMPT FUNDS, INC.
<TABLE>
<CAPTION>
                 Portfolios:                                        Classes:
         <S>                                                <C>
         AIM Tax-Exempt Cash Fund                           Class A Shares
         AIM Tax-Exempt Bond Fund
           Of Connecticut                                   Class A Shares
         Intermediate Portfolio                             AIM Tax-Free Intermediate Shares -
                                                                    Class A
</TABLE>


On behalf of the Funds and respective Portfolios and Classes as set forth in
this Exhibit 1, which may be amended from time to time.


By:    /s/ ROBERT H. GRAHAM

Title:   President                        


FIRST DATA INVESTOR SERVICES GROUP, INC.


By:   /s/ LEONARD A. WEISS    

Title:   EVP AND CFO                      



Effective as of August 4, 1997.







<PAGE>   1


                                                                 EXHIBIT 9(a)(7)


                                   EXHIBIT 2

                             PREFERRED REGISTRATION



                          TECHNOLOGY ESCROW AGREEMENT

                      Account Number 0609111-00002-0109001

                                    Recitals

     This Preferred Registration Technology Escrow Agreement including any
Exhibits ("Agreement") is effective this 10th day of September 1997, by and
among Data Securities International, Inc. ("DSI"), a Delaware corporation, First
Data Investor Services Group, Inc. ("Depositor"), and each registered investment
company listed on the attached Schedule A hereof ("Preferred Registrant").

       WHEREAS, Depositor has entered into a certain Remote Access and
Related Services Agreement dated December 23, 1994, as amended by Amendment
Number 3 dated as of February 1, 1997 (the "Remote Agreement") with the
Preferred Registrant which pursuant thereto certain proprietary software, as
described in Section 12(i) of the Remote Agreement, in object-code form and
other materials of Depositor have been licensed to Preferred Registrant (the
"Software");

       WHEREAS, Depositor and Preferred Registrant desire the Agreement to be
supplementary to said contract pursuant to 11 United States Code Section
365(n);

       WHEREAS, availability of or access to the source code and other
proprietary data related to the Software is critical to Preferred Registrant in
the conduct of its business;

       WHEREAS, Depositor has deposited or will deposit with DSI such source
code and other proprietary data to provide for retention, administration and
controlled access for Preferred Registration under conditions specified herein;

       NOW THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in consideration of the promises, mutual
covenants and conditions contained herein, the parties hereto agree as follows:

1.     Deposit Account.  Following the delivery of the executed Agreement, DSI
       shall open a deposit account ("Deposit Account") for Depositor.  The
       opening of the Deposit Account means that DSI shall establish an account
       ledger in the name of Depositor, assign a deposit account number
       ("Deposit Account Number"), calendar renewal notices to be sent to
       Depositor as provided in Section 30, and request the initial deposit
       ("Initial Deposit") from Depositor.  Depositor has an obligation to make
       the Initial Deposit.  In the event that Depositor has not made the
       Initial Deposit within sixty (60) days of the execution of this



                                       1
<PAGE>   2
       Agreement, DSI shall request the initial Deposit from Depositor and
       notify Preferred Registrant that such Initial Deposit has not been
       received.

2.     Preferred Registration Account.  Following the execution and delivery of
       the Agreement, DSI shall open a registration account ("Registration
       Account") for Preferred Registrant.  The opening of the Registration
       Account means that DSI shall establish under the Deposit Account an
       account ledger with a unique registration number ("Registration Number")
       in the name of Preferred Registrant, calendar renewal notices to be sent
       to Preferred Registrant as provided in Section 30, and request the
       Initial Deposit from Depositor.  DSI shall notify Preferred Registrant
       upon receipt of Initial Deposit.

3.     Term of Agreement.  The Agreement will commence on the effective date
       and continue through January 31, 2000, unless terminated earlier as
       provided in the Agreement.  The Agreement may be extended for one (1)
       year terms.

4.     Exhibit A, Notices and Communications.  Notices and invoices to
       Depositor, Preferred Registrant or DSI should be sent to the parties at
       the addresses identified in the Exhibit A.

       Documents, payment of fees, deposits of material, and any written
       communication should be sent to the DSI offices as identified in the
       Exhibit A.

       Depositor and Preferred Registrant agree to each name their respective
       designated contact ("Designated Contact") to receive notices from DSI
       and to act on their behalf in the performance of their obligations as
       set forth in the Agreement.  Depositor and Preferred Registrant agree to
       notify DSI immediately in the event of a change of their Designated
       Contact in the manner stipulated in Exhibit A.

5.     Exhibit B and Deposit Material.  Depositor will submit proprietary data
       and related material ("Deposit Material") to DSI for retention and
       administration in the Deposit Account.

       The Deposit Material will be submitted together with a completed
       document called a "Description of Deposit Material", hereinafter
       referred to as Exhibit B. Each Exhibit B should be signed by Depositor
       prior to submission to DSI and will be signed by DSI upon completion of
       the Deposit Material inspection.

       Depositor represents and warrants that it lawfully possesses all Deposit
       Material, can transfer Deposit Material to DSI and has the authority to
       store Deposit Material in accordance with the terms of the Agreement.

6.     Deposit Material Inspection.  Upon receipt of an Exhibit B and Deposit
       Material, DSI will be responsible only for reasonably matching the
       labeling of the materials to the item descriptions listed on the Exhibit
       B and validating the count of the materials to the quantity listed on
       the Exhibit B. DSI will not be responsible for any other claims made by


                                       2
<PAGE>   3





       the Depositor on the Exhibit B. Acceptance will occur when DSI concludes
       that the Deposit Material Inspection is complete.  Upon acceptance DSI
       will sign the Exhibit B and assign it the next Exhibit B number.  DSI
       shall issue a copy of the Exhibit B to Depositor and Preferred
       Registrant within ten (10) days of acceptance.

7.     Initial Deposit.  The Initial Deposit will consist of all material
       initially supplied by Depositor to DSI.

8.     Deposit Changes.  Depositor may desire or may be obligated to update the
       Deposit Account with supplemental or replacement Deposit Material of
       technology releases.

       Supplemental Deposit ("Supplemental") is Deposit Material which is to be
       added to the Deposit Account.

       Replacement Deposit ("Replacement") is Deposit Material which will
       replace existing Deposit Material as identified by any one or more
       Exhibit B(s) in the Deposit Account. Replaced Deposit Material will be
       destroyed or returned to Depositor.

9.     Deposit.  The existing deposit ("Deposit") means all Exhibit B(s) and
       their associated Deposit Material currently in DSI's possession.
       Destroyed or returned Deposit Material is not part of the Deposit;
       however, DSI shall keep records of the destruction or return of Deposit
       Material.

10.    Replacement Option.  Within ten (10) days of receipt of Replacement from
       Depositor, DSI will send a letter to Preferred Registrant stating that
       Depositor requests to replace existing Deposit Material, and DSI will
       include a copy of the new Exhibit B(s) listing the new Deposit Material.

       Preferred Registrant has twenty (20) days from the mailing of such
       letter by DSI to instruct DSI to retain the existing Deposit Material
       held by DSI, and if so instructed, DSI will change the Replacement to a
       Supplemental.  Conversion to Supplemental may cause an additional
       storage unit fee as specified by  DSI's Fee and Services Schedule.

       If Preferred Registrant does not instruct DSI to retain the existing
       Deposit Material, DSI shall permit such Deposit Material to be replaced
       with the Replacement.  Within ten (10) days of acceptance of the
       Replacement by DSI, DSI shall issue a copy of the executed Exhibit B(s)
       to Depositor and Preferred Registrant.  DSI will either destroy or
       return to Depositor all Deposit Material replaced by the Replacement.

11.    Storage Unit.  DSI will store the Deposit in defined units of space,
       called storage units.  The cost of the first storage unit will be
       included in the annual Deposit Account fee.

12.    Deposit Obligations of Confidentiality. DSI agrees to establish a locked
       receptacle in which it shall place the Deposit and shall put the
       receptacle under the administration of




                                       3
<PAGE>   4
         one or more of its officers, selected by DSI, whose identity shall be
         available to Depositor at all times.  DSI shall exercise a
         professional level of care in carrying out the terms of the Agreement.

         DSI acknowledges Depositor's assertion that the Deposit shall contain
         proprietary data and that DSI has an obligation to preserve and
         protect the confidentiality of the Deposit.

         Except as provided for in the Agreement, DSI agrees that it shall not
         divulge, disclose, make available to third parties, or make any use
         whatsoever of the Deposit.

13.      Audit Rights.  DSI agrees to keep records of the activities undertaken
         and materials prepared pursuant to the Agreement.  DSI may issue to
         Depositor and Preferred Registrant an annual report profiling the
         Deposit Account.  Such annual report will identify the Depositor,
         Preferred Registrant, the current Designated Contacts, selected
         special services, and the Exhibit B history, which includes Deposit
         Material acceptance and destruction or return dates.

         Upon reasonable notice, during normal business hours and during the
         term of the Agreement, Depositor or Preferred Registrant will be
         entitled to inspect the records of DSI pertaining to the Agreement,
         and accompanied by an employee of DSI, inspect the physical status and
         condition of the Deposit.  The Deposit may not be changed during the
         audit.

14.      Renewal Period of Agreement.  Upon payment of the initial fee or
         renewal fee, the Agreement will be in full force and will have an
         initial period of at least one (1) year unless otherwise specified.
         The Agreement may be renewed for additional periods upon receipt by
         DSI of the specified renewal fees prior to the last day of the period
         ("Expiration Date").  DSI may extend the period of the Agreement to
         cover the processing of any outstanding instruction made during any
         period of the Agreement.

         Preferred Registrant has the right to pay renewal fees and other
         related fees.  In the event Preferred Registrant pays the renewal fees
         and Depositor is of the opinion that any necessary condition for
         renewal is not met, Depositor may so notify DSI and Preferred
         Registrant in writing.  The resulting dispute will be resolved
         pursuant to the dispute resolution process defined in Section 25.

15.      Expiration.  If the Agreement is not renewed, or is otherwise
         terminated, all duties and obligations of DSI to Depositor and
         Preferred Registrant will terminate.  If Depositor requests the return
         of the Deposit, DSI shall return the Deposit to Depositor only after
         any outstanding invoices and the Deposit return fee are paid.  If the
         fees are not received by the Expiration Date of the Agreement, DSI, at
         its option, may destroy the Deposit.

16.      Certification by Depositor.  Depositor represents to Preferred
         Registrant that:





                                       4
<PAGE>   5
         a.      The Deposit delivered to DSI consists of the following: source
                 code deposited on computer magnetic media; all necessary and
                 available information, proprietary information, and technical
                 documentation which will enable a reasonably skilled
                 programmer of Preferred Registrant to create, maintain and/or
                 enhance the Software without the aid of Depositor or any other
                 person or reference to any other materials; maintenance tools
                 (test programs and program specifications); proprietary or
                 third party system utilities (compiler and assembler
                 descriptions); description of the system/program generation;
                 descriptions and locations of programs not owned by Depositor
                 but required for use and/or support; and names of key
                 developers for the technology on Depositor's staff.

         b.      The Deposit will be defined in the Exhibit B(s).

         These representations shall be deemed to be made continuously
         throughout the term of the Agreement.


17.      Indemnification.  Depositor and Preferred Registrant agree to defend
         and indemnify DSI and hold DSI harmless from and against any and all
         claims, actions and suits, whether in contract or in tort, and from
         and against any and all liabilities, losses, damages, costs, charges,
         penalties, counsel fees, and other expenses of any nature (including,
         without limitation, settlement costs) incurred by DSI as a result of
         performance of the Agreement except in the event of a judgment which
         specifies that DSI acted with gross negligence or willful misconduct.

18.      Filing for Release of Deposit by Preferred Registrant.  Upon notice to
         DSI by Preferred Registrant of the occurrence of a release condition
         as defined in Section 21 and payment of the release request fee, DSI
         shall notify Depositor by certified mail or commercial express mail
         service with a copy of the notice from Preferred Registrant.  If
         Depositor provides contrary instruction within ten (1O) days of the
         mailing of the notice to Depositor, DSI shall not deliver a copy of
         the Deposit to Preferred Registrant.

19.      Contrary Instruction.  "Contrary Instruction" is the filing of an
         instruction with DSI by Depositor stating that a Contrary Instruction
         is in effect.  Such Contrary Instruction means an officer of Depositor
         warrants that a release condition has not occurred or has been cured.
         DSI shall send a copy of the instruction by certified mail or
         commercial express mail service to Preferred Registrant.  DSI shall
         notify both Depositor and Preferred Registrant that there is a dispute
         to be resolved pursuant to Section 25.  Upon receipt of Contrary
         Instruction, DSI shall continue to store the Deposit pending Depositor
         and Preferred Registrant joint instruction, resolution pursuant to
         Section 25, order by a court of competent jurisdiction, or termination
         by non-renewal of the Agreement.
        
20.      Release of Deposit to Preferred Registrant.  Pursuant to Section 18, if
         DSI does not receive Contrary Instruction from Depositor, DSI is
         authorized to release the Deposit, or if more than one Preferred       
         Registrant is registered to the Deposit, a copy of the Deposit,



                                       5
<PAGE>   6
         to the Preferred Registrant filing for release following receipt of 
         any fees due to DSI including Deposit copying and delivery fees.

21.      Release Conditions of Deposit to Preferred Registrant.

         Release conditions are:

         a.        Depositor ceases to do business, makes an assignment for the
                   benefit of creditors, becomes insolvent (as revealed by its
                   books and records or otherwise), is generally unable to pay
                   its debts as such debts become due, or commences, or has
                   commenced against it a case under any chapter of state or
                   federal bankruptcy laws; and Depositor fails to cure any such
                   event within 60 days after receiving notice from Preferred
                   Registrant; and

         b.        Preferred Registrant has paid all amounts due Depositor under
                   the Remote Agreement.


22.      Grant of Use License.  Subject to the terms and conditions of the
         Agreement, Depositor hereby transfers and upon execution by DSI, DSI
         hereby accepts a non-exclusive, nontransferable, royalty-free license
         ("Use License") for the unexpired term of the Remote Agreement subject
         to Section 15 thereof which DSI will transfer to Preferred Registrant
         upon controlled release of the Deposit as described in the Agreement.
         The Use License will be solely for Preferred Registrant's internal
         purposes in connection with support, maintenance, and operation of the
         Software solely as set forth in the Remote Agreement and not for any
         other purpose or person.

23.      Use License Representation.  Depositor represents and warrants to
         Preferred Registrant and DSI that it has no knowledge of any
         incumbrance or infringement of the Deposit, or that any claim has been
         made that the Deposit infringes any patent, trade secret, copyright or
         other proprietary right of any third party.  Depositor warrants that it
         has the full right, power, and ability to enter into and perform the
         Agreement, to grant the foregoing Use License, and to permit the
         Deposit to be placed with DSI.

24.      Conditions Following Release.  Following a release and subject to
         payment to DSI of all outstanding fees, DSI shall transfer the Use
         License to Preferred Registrant.  Additionally Preferred Registrant
         shall be required to maintain the confidentiality of the released      
         Deposit.

25.      Disputes.  In the event of a dispute, DSI shall so notify Depositor and
         Preferred Registrant in writing.  Upon agreement of the parties at the
         time of a dispute, such dispute will be settled by arbitration in
         accordance with the commercial rules of the American Arbitration
         Association ("AAA").  Unless otherwise agreed to by Depositor and
         Preferred Registrant, arbitration will take place in San Diego,
         California, USA.
        


                                       6
<PAGE>   7
26.      Verification Rights. Depositor grants to Preferred Registrant the
         option to verify the Deposit for accuracy, completeness and
         sufficiency. Depositor agrees to permit DSI and at least one employee
         of Preferred Registrant to be present at Depositor's facility to
         verify, audit and inspect of the Deposit for the benefit of Preferred
         Registrant. If DSI is present or is selected to perform the
         verification, DSI will be paid according to DSI's then current
         verification service hourly rates and any out of pocket expenses.

27.      General. DSI may act in reliance upon any instruction, instrument, or
         signature believed to be genuine and may assume that any employee
         giving any written notice, request, advice or instruction in
         connection with or relating to the Agreement has apparent authority
         and has been duly authorized to do so. DSI may provide copies of the
         Agreement or account history information to any employee of Depositor
         or Preferred Registrant upon their request. For purposes of
         termination or replacement, Deposit Material shall be returned only to
         Depositor's Designated Contact, unless otherwise instructed by
         Depositor's Designated Contact.

         DSI is not responsible for failure to fulfill its obligations under the
         Agreement due to causes beyond DSI's control.

         The Agreement is to be governed by and construed in accordance with
         the laws of the State of California.

         The Agreement constitutes the entire agreement between the parties
         concerning the subject matter hereof, and supersedes all previous
         communications, representations, understandings, and agreements,
         either oral or written, between the parties. The Agreement may be
         amended only in a writing signed by the parties.

         If any provision of the Agreement is held by any court to be invalid
         or unenforceable, that provision will be severed from the Agreement
         and any remaining provisions will continue in full force.

28.      Title to Media. Subject to the terms of the Agreement, title to the
         media, upon which the proprietary data is written or stored, is and
         shall be irrevocably vested in DSI.  Notwithstanding the foregoing,
         Depositor will retain ownership of the proprietary data contained on
         the media including all copyright, trade secret, patent or other
         intellectual property ownership rights subsisting in such proprietary
         data.

29.      Termination of Rights. The Use License as described above will
         terminate in the event that the Agreement is terminated without the
         Use License transferring to Preferred Registrant.

30.      Fees. Fees are due upon receipt of signed contract, receipt of Deposit
         Material, or when service is requested, whichever is earliest. If
         invoiced fees are not paid within sixty (60) days of the date of the
         invoice, DSI may terminate the Agreement. If the payment is not

                                       7
<PAGE>   8
         timely received by DSI, DSI shall have the right to accrue and collect
         interest at the rate of one and one-half percent per month (18% per
         annum) from the date of the invoice for all late payments.

         Renewal fees will be due in full upon the receipt of invoice unless
         otherwise specified by the invoice. In the event that renewal fees are
         not received thirty (30) days prior to the Expiration Date, DSI shall
         so notify Depositor and Preferred Registrant. If the renewal fees are
         not received by the Expiration Date, DSI may terminate the Agreement
         without further notice and without liability of DSI to Depositor or
         Preferred Registrant.

         DSI shall not be required to process any request for service unless
         the payment for such request shall be made or provided for in a manner
         satisfactory to DSI.

         All service fees and renewal fees will be those specified in DSI's Fee
         and Services Schedule in effect at the time of renewal or request for
         service, except as otherwise agreed. For any increase in DSI's
         standard fees, DSI shall notify Depositor and Preferred Registrant at
         least ninety (90) days prior to the renewal of the Agreement. For any
         service not listed on the Fee and Services Schedule, DSI shall provide
         a quote prior to rendering such service.

         Fees invoiced by DSI are the responsibility of the Preferred
         Registrant and as such all invoices in accordance with this Agreement
         are to be sent to the Preferred Registrant.

                                       8

<PAGE>   9
On behalf of the Investment Companies
and respective Portfolios and Classes
set forth in Schedule A attached
hereto as may be amended from
time to time.

<TABLE>
<S>                                         <C>
By:/s/ ROBERT H. GRAHAM                     FIRST DATA INVESTOR SERVICES
   ---------------------------------        GROUP, INC.
Name:  Robert H. Graham
     -------------------------------        By:/s/ ILLEGIBLE
Title: President                               ---------------------------------
      ------------------------------        Name:  ILLEGIBLE
                                                 -------------------------------
                                            Title: Executive Vice President
                                                  ------------------------------

DATA SECURITIES
INTERNATIONAL, INC.

By:/s/ CHRISTIE WOODWARD
   ---------------------------------
Name:  Christie Woodward
     -------------------------------
Title: Contract Administrator
      ------------------------------
</TABLE>
<PAGE>   10

                                   SCHEDULE A
                                 LIST OF FUNDS



AIM ADVISOR FUNDS, INC.
<TABLE>
<CAPTION>
                 Portfolios:                                Classes:
         <S>                                       <C>
         AIM Advisor Cash Management Fund          Class A and Class C Shares
         AIM Advisor Flex Fund                     Class A and Class C Shares
         AIM Advisor Income Fund                   Class A and Class C Shares
         AIM Advisor International Value Fund      Class A and Class C Shares
         AIM Advisor Large Cap Value Fund          Class A and Class C Shares
         AIM Advisor MultiFlex Fund                Class A and Class C Shares
         AIM Advisor Real Estate Fund              Class A and Class C Shares
</TABLE>
                                  



AIM EQUITY FUNDS, INC.


<TABLE>
<CAPTION>
         Portfolios:                                          Classes:                           
<S>                                                  <C>
     AIM Blue Chip Fund                              Class A, Class B Shares and Class C Shares                       
     AIM Capital Development Fund                    Class A, Class B Shares and Class C Shares                        
     AIM Charter Fund                                Class A, Class B Shares and Class C Shares                       
     AIM Weingarten Fund                             Class A, Class B Shares and Class C Shares                       
     AIM Aggressive Growth Fund                      Class A Shares                           
     AIM Constellation Fund                          Class A Shares and Class C Shares                             

</TABLE>
              
AIM FUNDS GROUP

<TABLE>
<CAPTION>
         Portfolios:                                          Classes:                           
<S>                                                  <C>
     AIM Balanced Fund                               Class A, Class B Shares and Class C Shares                 
     AIM Global Utilities Fund                       Class A, Class B Shares and Class C Shares                  
     AIM Growth Fund                                 Class A, Class B Shares and Class C Shares                 
     AIM High Yield Fund                             Class A, Class B Shares and Class C Shares                 
     AIM Income Fund                                 Class A, Class B Shares and Class C Shares                 
     AIM Intermediate Government Fund                Class A, Class B Shares and Class C Shares                 
     AIM Municipal Bond Fund                         Class A, Class B Shares and Class C Shares                 
     AIM Value Fund                                  Class A, Class B Shares and Class C Shares                 
     AIM Money Market Fund                           Class A, Class B, Class C and AIM Cash Reserve Shares

</TABLE>
               
AIM INTERNATIONAL FUNDS, INC.  

<TABLE>
<CAPTION>
         Portfolios:                                          Classes:                           
<S>                                                  <C>
     AIM International Equity Fund                   Class A, Class B Shares and Class C Shares                 
     AIM Global Aggressive Growth Fund               Class A, Class B Shares and Class C Shares                 
     AIM Global Growth Fund                          Class A, Class B Shares and Class C Shares                 
     AIM Global Income Fund                          Class A, Class B Shares and Class C Shares                 
     AIM Asian Growth Fund                           Class A, Class B Shares and Class C Shares
     AIM European Development Fund                   Class A, Class B Shares and Class C Shares
</TABLE>
                                
AIM INVESTMENT SECURITIES FUNDS 

<TABLE>
<CAPTION>
         Portfolios:                                          Classes:                           
<S>                                                  <C>
     Limited Maturity Treasury Portfolio             AIM Limited Maturity Treasury Shares        

</TABLE>
                                
AIM TAX-EXEMPT FUNDS, INC.      

<TABLE>
<CAPTION>
         Portfolios:                                          Classes:                           
<S>                                                  <C>
     AIM Tax-Exempt Cash Fund                        Class A Shares                                         
     AIM Tax-Exempt Bond Fund of Connecticut         Class A Shares                                         
     Intermediate Portfolio                          AIM Tax-Free Intermediate Shares- Class A            

</TABLE>
<PAGE>   11
EXHIBIT A

                             DESIGNATED CONTACT

                    Account Number:  0609111-00002-01090011



<TABLE>
<S>                                                    <C>
NOTICES, DEPOSIT MATERIAL RETURNS AND                  INVOICES TO DEPOSITOR SHOULD BE ADDRESSED TO:
COMMUNICATION, INCLUDING DELINQUENCIES TO              First Data Investor Services Group, Inc.                           
DEPOSITOR SHOULD BE ADDRESSED TO:                      ------------------------------------------------     
                                                       4400 Computer Drive                                             
First Data Investor Services Group, Inc.               ------------------------------------------------     
- ----------------------------------------               Westboro, MA 01581                                             
4400 Computer Drive                                    ------------------------------------------------     
- ----------------------------------------                                                            
Westboro, MA 01581                                     ------------------------------------------------     
- ----------------------------------------                                                            
                                                       Invoice Contact: Brendan Bowen                            
- ----------------------------------------                               --------------------------------                   
Designated Contact: John Corey                                                                                
                   ---------------------                                                            
Telephone: (508)871-9601                                                                                            
          ------------------------------                                                               
Facsimile:                                                                                             
          ------------------------------                                                                   
State of Incorporation: Massachusetts                                                                               
                       -----------------                                                                   
                                                                                                       

NOTICES AND COMMUNICATION, INCLUDING                   INVOICES TO PREFERRED REGISTRANT SHOULD BE          
DELINQUENCIES TO PREFERRED REGISTRANT                  ADDRESSED TO:                                   
SHOULD BE ADDRESSED TO:                                AIM Fund Services, Inc.                                                    
                                                       ----------------------------------------------- 
AIM Fund Services, Inc.                                Eleven Greenway Plaza
Eleven Greenway Plaza                                  -----------------------------------------------     
Houston, Texas 77046                                   Houston, Tx 77046                                                
                                                       ----------------------------------------------- 
                                                                                                       
                                                       ----------------------------------------------- 

Designated Contact: Jack Caldwell                      Invoice Contact: Jack Caldwell                               
                   ---------------------                               ------------------------------- 
Telephone: (713)214-1633                                                                                            
          ------------------------------    
Facsimile:                                                                                             
          ------------------------------

Requests from Depositor or Preferred Registrant        INVOICE INQUIRIES AND FEE REMITTANCES TO DSI    
Contact should be given Contact or authorized          SHOULD BE ADDRESSED TO:                         
employee Registrant.                                                                                   
                                                       DSI                                             
CONTRACTS, DEPOSIT MATERIAL AND NOTICES TO DSI         Attn:    Accounts Receivable                    
SHOULD BE ADDRESSED TO:                                                                                
                                                                                                       
DSI                                                                                                    
Attn:    Contract Administration                                                                       
                                                                                                       
                                                       Telephone:                                      
                                                                 -------------------------------------
                                                       Facsimile:                                      
                                                                 -------------------------------------
Telephone:                            
          ------------------------------
Facsimile:                            
          ------------------------------                            
Date:                                        
     -----------------------------------         

</TABLE>
<PAGE>   12
EXHIBIT B

                       DESCRIPTION OF DEPOSIT MATERIAL

Deposit Account Number:  0609111-00002
                       --------------------------------------------------------
Depositor Company Name:  First Data Investor Services Group
                       --------------------------------------------------------
 

DEPOSIT TYPE:

  X    Initial           Supplemental             Replacement
- ------            ------                   ------

If Replacement:          Destroy Deposit          Return Deposit
                  ------                   ------

ENVIRONMENT:

Host System CPU/OS: MS Windows 3.11 or MS/Windows 95 OS on Intel X86 processor
                    based PC
                   ------------------------------------------------------------
Version: 
        -----------------------------------------------------------------------
Backup:
       ------------------------------------------------------------------------

Source System CPU/OS: MS Windows 3.11 OS on Intel Pentium 133 MHz PC
                     ----------------------------------------------------------
Version:
        -----------------------------------------------------------------------
Compiler:Impress Imaging-Plexus AD v4.1, Informix ESQL v2.2, MS Visual C++v4.1
         ----------------------------------------------------------------------
         Impress Clearinghouse & Toolbar-MS Visual C++ v4.1
         ---------------------------------------------------------------------- 
         ACE Plus - MS Visual Basic 4.0, MS Access v2.0
         ----------------------------------------------------------------------
Special Instructions:
                     ----------------------------------------------------------

DEPOSIT MATERIAL:
                                                       
Exhibit B Name: Impress Imaging System        Version: V5.2.06.01
                ----------------------                -------------------------
                Impress Clearinghouse                  V5.2.02.01
                ----------------------                -------------------------
                Impress Toolbar                        V5.2.01.01    
                ----------------------                -------------------------
                ACE Plus                               V2.05.07
                ----------------------                -------------------------


<TABLE>
<CAPTION>
Item Label Description            Media            Quantity
<S>                               <C>              <C>

AIM Funds Source,                 CD               1     
August 8, 1997
Case Arrived cracked     DSI
    


</TABLE>

<TABLE>
<S>                                              <C>
For Depositor, I certify that the above          For DSI, I received the above described
described Deposit Material was sent to DSI:      Deposit Material subject to the terms on
                                                 the reverse side of this Exhibit:

By:/s/ ILLEGIBLE                                 By: /S/ CHRISTIE WOODWARD
   ---------------------------------------          ---------------------------------------

Print Name: ILLEGIBLE                            Print Name: CHRISTIE WOODWARD
           -------------------------------                  -------------------------------

Date: 9-3-97                                     Date of Acceptance: 9-10-97
     -------------------------------------                          -----------------------
</TABLE>
<PAGE>   13
EXHIBIT B

                        DESCRIPTION OF DEPOSIT MATERIAL

Deposit Account Number:  0609111-00002
                        ------------------------------------------------------

Depositor Company Name:  First Data Investor Services Group
                        ------------------------------------------------------

DEPOSIT TYPE:
[X]  Initial   [ ]  Supplemental   [ ]  Replacement

If Replacement:  [ ]  Destroy Deposit  [ ]  Return Deposit


ENVIRONMENT:
Host System CPU/OS:  3090/MVS
                    ------------------------------------------------------------
Version: 
         -----------------------------------------------------------------------
Backup:
        ------------------------------------------------------------------------
Source System CPU/OS:  3090/MVS
                      ----------------------------------------------------------
Version:
         -----------------------------------------------------------------------
Compiler:  Standard IBM Compiler
          ----------------------------------------------------------------------
Special Instructions: 
                      ----------------------------------------------------------

DEPOSIT MATERIAL:
Exhibit B Name:  FSR Source Code-931761      Version:
                ----------------------------          --------------------------
FSR JCL-931384


 Item Label Description                 Media          Quantity

 DSN-P03AIM.PRIV.VENDOR.SEA.CSSP        Data Tape         1
 ROD_PANLIB VOLSER-932154               DSI
 DSN_P03AIMPRIV.VENDOR.SEQ.ESC          Data Tape         1
 ROW.TAPE VOLSER=932155



<TABLE>
<S>                                                    <C>
For Depositor, I certify that the above described      For DSI, I received the above described Deposit
Deposit Material was sent to DSI:                      Material subject to the terms on the reverse side
                                                       of this Exhibit:


By: /s/ NOT LEGIBLE                                    By:  /s/ CHRISTIE WOODWARD
   ----------------------------------------------          ---------------------------------------------

Print Name: NOT LEGIBLE                                Print Name:  CHRISTIE WOODWARD 
           --------------------------------------                  -------------------------------------

Date:  NOT LEGIBLE                                     Date of Acceptance:  NOT LEGIBLE
      -------------------------------------------                          ----------------------------- 
</TABLE>

<PAGE>   1
                                                                    EXHIBIT 9(b)


                   FUND ACCOUNTING AND PRICING AGENT AGREEMENT


         This Fund Accounting and Pricing Agent Agreement (the "Agreement") is
made as of September 8, 1998, by and between AIM Investment Funds (the
"Company") and INVESCO (NY), INC. ("INVESCO (NY)").

         WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company;

         WHEREAS, the Company currently operates 13 separate mutual funds, each
organized as a separate and distinct series consisting of shares of beneficial
interest (such existing funds and such funds as may hereafter be established
being referred to in this Agreement as the "Funds" and singly as a "Fund");

         WHEREAS, the Company is part of a complex of investment companies that
are sub-advised and/or sub-administered by INVESCO (NY) and with which INVESCO
(NY) has entered into Fund Accounting and Pricing Agent Agreements (the "INVESCO
(NY) Funds");

         WHEREAS, the Company desires to retain INVESCO (NY) to act as its
accounting and pricing agent, and INVESCO (NY) is willing to act in such
capacities.

         NOW, THEREFORE, in consideration of the foregoing and the terms and
conditions hereinafter set forth, the Company and INVESCO (NY) hereby agree as
follows:

              SECTION 1. APPOINTMENT. The Company hereby appoints INVESCO
         (NY) to act as the accounting and pricing agent for each Fund for the
         period and on the terms and conditions set forth in this Agreement.
         INVESCO (NY) hereby accepts such appointment and agrees to render the
         services set forth for the compensation herein provided.

              SECTION 2. DEFINITIONS. As used in this Agreement and in addition
         to the terms defined elsewhere herein, the following terms shall have
         the meanings assigned to them in this Section:

                   (a) "Authorized Person" means any officer of the Company and
         any other person, whether or not any such person is an officer or
         employee of the Company, duly authorized by the Board of Trustees (the
         "Board"), the President or any Vice President of the Fund to give Oral
         and/or Written Instructions on behalf of the Company or any Fund.

                   (b) "Commission" means the Securities and Exchange
          Commission.

                   (c) "Custodian" means the custodian or custodians employed by
          the Company to maintain custody of the Fund's assets.
<PAGE>   2

               (d) "Governing Documents" means the Articles of Incorporation,
     By-Laws and other applicable charter documents of the Company, all as they
     may be amended from time to time.

               (e) "Oral Instruction" means oral instructions actually received
     by INVESCO (NY) from an Authorized Person or from a person reasonably
     believed by INVESCO (NY) to be an Authorized Person, provided that, any
     Oral Instruction shall be promptly confirmed by Written Instructions.

               (f) "Prospectus" means the current prospectus and statement of
     additional information of a Fund, taken together.

               (g) "Shares" means shares of beneficial interest of any of the
     Funds.

               (h) "Shareholder" means any owner of Shares.

               (i) "Written Instructions" means written instructions delivered
     by hand, mail, tested telegram or telex, cable or facsimile sending device
     received by INVESCO (NY) and signed by an Authorized Person.

         SECTION 3. COMPLIANCE WITH LAWS, ETC. In performing its
responsibilities hereunder, INVESCO (NY) shall comply with all terms and
provisions of the Governing Documents, the Prospectus and all applicable state
and federal laws including, without limitation, the 1940 Act and the rules and
regulations promulgated by the Commission thereunder.

         SECTION 4. SERVICES. In consideration of the compensation payable
hereunder and subject to the supervision and control of the Company's Boards,
INVESCO (NY) shall provide the following services to the Funds:

         (a) PRICING AGENT. As pricing agent, INVESCO (NY) shall:

                  (1) Obtain security market quotes from services approved by
         the investment manager of the Funds or, if such quotes are unavailable,
         then obtain such prices from the investment manager of the Funds or
         from such sources as the investment manager may direct, and, in either
         case, calculate the market value of the Funds' investments; and

                  (2) Value the assets of the Funds and compute the net asset
         value per Share of the Funds at such dates and times and in the manner
         specified in the then currently effective Prospectus and transmit to
         the Funds' investment manager.

         (b) ACCOUNTING AGENT. As fund accounting agent, INVESCO (NY) shall:



                                     - 2 -
<PAGE>   3

                  (1) Calculate the net income of each Fund;

                  (2) Calculate capital gains or losses for each Fund from the
         sale or disposition of assets, if any;

                  (3) Maintain the general ledger and other accounts, books and
         financial records of the Company, as required under Section 31(a) of
         the 1940 Act and the rules promulgated by the Commission thereunder in
         connection with the services provided by INVESCO (NY);

                  (4) Perform the following functions on a daily basis:

                      (A) journalize each Fund's investment, capital share and
                  income and expense activities;

                      (B) reconcile cash and investment balances of each Fund
                  with the Custodian and provide the Funds' investment manager
                  with the beginning cash balance available for investment
                  purposes and update the cash availability throughout the day
                  as required by the investment manager;

                      (C) verify investment buy/sell trade tickets received from
                  a Fund's investment manager and transmit trades to a Fund's
                  Custodian for proper settlement;

                      (D) maintain individual ledgers for investment securities;

                      (E) maintain historical tax lots for investment
                  securities;

                      (F) calculate various contractual expenses (e.g., advisory
                  and custody fees);

                      (G) post to and prepare the Funds' statement of assets and
                  liabilities and statement of operations; and

                      (H) monitor expense accruals and notify an Authorized
                  Person of any proposed adjustments;

                  (5) Receive and act upon notices, Oral and Written
         Instructions, certificates, instruments or other communications from a
         Fund's shareholder servicing and transfer agent;

                  (6) Assist in the preparation of financial statements
         semiannually 




                                     - 3 -
<PAGE>   4

         which will include the following items:

                      (A) schedule of investments;

                      (B) statement of assets and liabilities;

                      (C) statement of operations;

                      (D) changes in net assets;

                      (E) cash statement; and

                      (F) schedule of capital gains and losses;

                  (7) Prepare monthly security transaction listings;

                  (8) Prepare quarterly broker security transactions summaries;
         and

                  (9) At the reasonable request of the Company, assist in the
         preparation of various reports or other financial documents required by
         federal, state and other appropriate laws and regulations.

         SECTION 5. COMPENSATION. As compensation for the services rendered by
INVESCO (NY) hereunder during the term of the Agreement, each Fund shall pay to
INVESCO (NY) monthly such fees as shall be agreed to from time to time by the
Company and INVESCO (NY), in writing and attached hereto as Schedule A. In
addition, as may be agreed to from time to time in writing by the Company and
INVESCO (NY), each Fund shall reimburse INVESCO (NY) for certain expenses that
it incurs in rendering services with respect to that Fund under this Agreement.

         SECTION 6. RELIANCE BY INVESCO (NY) ON INSTRUCTIONS. Unless otherwise
provided in this Agreement, INVESCO (NY) shall act only upon Oral or Written
Instructions. INVESCO (NY) shall be entitled to rely upon any such Instructions
actually received by it under this Agreement. The Company agrees that INVESCO
(NY) shall incur no liability to the Company or any of the Funds in acting upon
Oral or Written Instructions given to INVESCO (NY) hereunder, provided that,
such Instructions reasonably appear to have been received from an Authorized
Person.

         SECTION 7. COOPERATION WITH AGENTS OF THE COMPANY. INVESCO (NY) shall
cooperate with the Company's agents and employees, including, without
limitation, their independent accountants, and shall take all reasonable action
in the performance of its obligations under this Agreement to assure that all
necessary information is made available to such agents to the extent necessary
in the performance of their duties to the Company.



                                     - 4 -
<PAGE>   5

         SECTION 8. CONFIDENTIALITY. INVESCO (NY), on behalf of itself and its
employees, agrees to treat confidentially all records and other information
relating to the Company and the Funds except when requested to divulge such
information by duly constituted authorities provided that notification and prior
approval is obtained from the Company, which approval shall not be unreasonably
withheld and may not be withheld if INVESCO (NY), in its judgment, may be
subject to civil or criminal contempt proceedings for failure to comply.

         SECTION 9. STANDARD OF CARE. In the performance of its responsibilities
hereunder, INVESCO (NY) shall exercise care and diligence in the performance of
its duties and act in good faith and use its best efforts to ensure the accuracy
and completeness of all services under this Agreement. In performing services
hereunder, INVESCO (NY):

          (a) shall be under no duty to take any action on behalf of the Company
     or the Funds except as specifically set forth herein or as may be
     specifically agreed to by INVESCO (NY) in writing, and in computing the net
     asset value per Share of a Fund, INVESCO (NY) may rely upon any information
     furnished to it including, without limitation, information (1) as to the
     accrual of liabilities of a Fund and as to liabilities of a Fund not
     appearing on the books of account kept by INVESCO (NY), (2) as to the
     existence, status and proper treatment of reserves, if any, authorized by a
     Fund, (3) as to the sources of quotations to be used in computing net asset
     value, (4) as to the fair value to be assigned to any securities or other
     property for which price quotations are not readily available and (5) as to
     the sources of information with respect to "corporate actions" affecting
     portfolio securities of a Fund (information as to "corporate actions" shall
     include information as to dividends, distributions, interest payments,
     prepayments, stock splits, stock dividends, rights offerings, conversions,
     exchanges, recapitalizations, mergers, redemptions, calls, maturity dates
     and similar actions, including ex-dividend and record dates and the amounts
     and terms thereof);

          (b) shall be responsible and liable for all losses, damages and costs
     (including reasonable attorneys' fees) incurred by the Company or any Fund
     which is due to or caused by INVESCO (NY)'s negligence in the performance
     of its duties under this Agreement or for INVESCO (NY)'s negligent failure
     to perform such duties as are specifically assumed by INVESCO (NY) in this
     Agreement, provided that, to the extend that duties, obligations and
     responsibilities are not expressly set forth in this Agreement, INVESCO
     (NY) shall not be liable for any act or omission that does not constitute
     willful misfeasance, bad faith or negligence on the part of INVESCO (NY) or
     reckless disregard by INVESCO (NY) of such duties, obligations and
     responsibilities; and

          (c) without limiting the generality of the foregoing, INVESCO (NY)
     shall not, in connection with INVESCO (NY)'s duties under this Agreement,
     be under any duty or obligation to inquire into and shall not be liable for
     or in respect of:

               (1) the validity or invalidity or authority or lack of authority
          of any Oral or Written Instruction, notice or other instrument which
          conforms 



                                     - 5 -
<PAGE>   6

          to the applicable requirements of this Agreement, if any and that
          INVESCO (NY) reasonably believes to be genuine; and

               (2) delays or errors or loss of data occurring by reason of
          circumstances beyond INVESCO (NY)'s control including, without
          limitation, acts of civil or military authorities, national
          emergencies, labor difficulties, fire, mechanical breakdown, denial of
          access, earthquake, flood or catastrophe, acts of God, insurrection,
          war, riots, or failure of the mails, transportation, communication or
          power supply.

Notwithstanding any other provisions of this Agreement, the following provisions
shall apply with respect to INVESCO (NY)'s computation of a Fund's net asset
value: INVESCO (NY) shall be held to the exercise of reasonable care in
computing and determining net asset value as provided in Section 4(a), above,
but shall not be held accountable or liable for any losses, damages or expenses
of a Fund or any Shareholder or former Shareholder may incur arising from or
based upon errors or delays in the determination of such net asset value unless
such error or delay was due to INVESCO (NY)'s negligence or willful misfeasance
in the computation and determination of such net asset value. The parties hereto
acknowledge, however, that INVESCO (NY) causing an error or delay in the
determination of net asset value may, but does not in and of itself, constitute
negligence or willful misfeasance. In no event shall INVESCO (NY) be liable or
responsible to the Company or a Fund or any other party for any error or delay
which continued or was undetected after the date of an audit of the Company or
any Fund performed by the certified public accountants employed by the Company
if, in the exercise of reasonable care in accordance with generally accepted
accounting principles, such accountants should have become aware of such error
or delay in the course of performing such audit. INVESCO (NY)'s liability for
any such negligence or willful misfeasance which results in an error in
determination of such net asset value be limited to the direct out-of-pocket
loss a Fund and/or any Shareholder or former Shareholder shall actually incur.

         Without limiting the generality of the foregoing, INVESCO (NY) shall
not be held accountable or liable to a Fund a Shareholder or former Shareholder
or any other person for any delays or losses, damages or expenses any of them
may suffer or incur resulting from (1) INVESCO (NY)'s failure to receive timely
and suitable notification concerning quotations, corporate actions or similar
matters relating to or affecting portfolio securities of a Fund or (2) any
errors in the computation of a net asset value based upon or arising out of
quotations or information as to corporate actions if received by INVESCO (NY)
from a source that INVESCO (NY) was authorized to rely upon. Nevertheless,
INVESCO (NY) will use its best judgment in determining whether to verify through
other sources any information that it has received as to quotations or corporate
actions if INVESCO (NY) has reason to believe that any such information is
incorrect.

         SECTION 10. RECEIPT OF ADVICE. If INVESCO (NY) is in doubt as to any
action to be taken or omitted by it, INVESCO (NY) may request, and shall be
entitled to rely upon, directions and advice from the Company, including Oral or
Written Instructions where 





                                     - 6 -
<PAGE>   7

appropriate, or from counsel of its own choosing (who may also be counsel for
the Company or any Fund), with respect to any question of law. In case of
conflict between directions, advice or Oral and Written Instructions received by
INVESCO (NY) pursuant to this Section, INVESCO (NY) shall be entitled to rely on
and follow the advice received from counsel as described above. INVESCO (NY)
shall be protected in any action or in action that it takes in reliance on any
directions, advice or Oral or Written Instructions received pursuant to this
Section that INVESCO (NY), after the receipt of the same, in good faith believes
to be consistent with such directions, advice or Oral or Written Instructions,
as the case may be. Notwithstanding the foregoing, nothing in this Section shall
be construed as imposing on INVESCO (NY) any obligation to seek such directions,
advice or Oral or Written Instruction, or to act in accordance with them when
received, unless the same is a condition to INVESCO (NY)'s properly taking or
omitting to take such action under the terms of this Agreement.

         SECTION 11. INDEMNIFICATION OF INVESCO (NY). The Company agrees to
indemnify and hold harmless INVESCO (NY) and its officers, Trustees, employees,
nominees and subcontractors, if any, from all taxes, charges, expenses,
assessments, claims and liabilities, including, without limitation, liabilities
arising under the 1940 Act, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the Commodities Exchange Act and
any state or foreign securities or blue sky laws, and expenses, including,
without limitation, reasonable attorneys' fees and disbursements, arising
directly or indirectly from any action or thing that INVESCO (NY) takes or omits
to take or do:

          (a) at the request or on the direction of or in reliance upon the
     advice of the Company;

          (b) upon Oral or Written Instructions; or

          (c) in the performance by INVESCO (NY) of its responsibilities under
     this Agreement;

provided that, INVESCO (NY) shall not be indemnified against any liability to
the Company or the Funds, or any expenses incident thereto, arising out of
INVESCO (NY)'s own willful misfeasance, bad faith or negligence or reckless
disregard of its duties in connection with the performance of its duties and
obligations specifically described in this Agreement.

         SECTION 12. INDEMNIFICATION OF THE COMPANY. INVESCO (NY) agrees to
indemnify and hold harmless the Company and its officers, trustees, Trustees and
employees, from all taxes, charges, expenses, assessments, claims and
liabilities, including, without limitation, liabilities arising under the 1940
Act, the Securities Act of 1933, as amended, the Securities Exchange Act of
1934, as amended, the Commodities Exchange Act and any state or foreign
securities or blue sky laws, and expenses, including, without limitation,
reasonable attorneys' fees and disbursements, arising directly or indirectly
from any action or omission of INVESCO (NY) that does not meet the standard of
care to which INVESCO (NY) is subject under Section 9, above.




                                     - 7 -
<PAGE>   8

         SECTION 13. LIMITATION OF LIABILITY OF SHAREHOLDERS AND TRUSTEES OF THE
COMPANY. It is expressly agreed that the obligations of the Company hereunder
shall not be binding upon any of the shareholders, directors, Trustees,
officers, nominees, agents or employees of the Company personally, but shall
only bind the assets and property of the applicable Funds, as provided in the
Governing Documents. The execution and delivery of this Agreement has been
authorized by the Board of the Company, and this Agreement has been executed and
delivered by an authorized officer of the Company acting as such, and neither
such authorization by the Board nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the assets and property
of the applicable Fund as provided in the Governing Documents.

         SECTION 14. DURATION AND TERMINATION. This Agreement shall continue
with respect to the Company and each Fund until termination with respect to the
Company, or with respect to one or more Funds, is effected by the Company or
INVESCO (NY) upon sixty days' prior written notice to the other. In the event of
the "assignment" of this Agreement within the meaning of the 1940 Act, this
Agreement shall terminate automatically.

         SECTION 15. NOTICES. All notices and other communications hereunder,
including Written Instructions, shall be in writing or by confirming telegram,
cable, telex or facsimile sending device. Notices with respect to a party shall
be directed to such address as may from time to time be designated by that party
to the other.

         SECTION 16. FURTHER ACTIONS. The Company and INVESCO (NY) agree to
perform such further acts and to execute such further documents as may be
necessary or appropriate to effect the purposes of this Agreement.

         SECTION 17. AMENDMENTS. This Agreement, or any part thereof, may be
amended only by an instrument in writing signed by the Company and INVESCO (NY).

         SECTION 18. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.

         SECTION 19. SHAREHOLDER LIABILITY. It is expressly agreed that the
obligations of the Company hereunder shall not be binding upon any of the
Trustees, Shareholders, nominees, officers, agents or employees of the Company
personally, but shall only bind the assets and property of the Funds, as
provided in the Company's Agreement and Declaration of Trust. The execution and
delivery of this Agreement has been authorized by the Trustees of the Company
and this Agreement has been executed and delivered by an authorized officer of
the Company acting as such; neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the assets 





                                     - 8 -
<PAGE>   9

and property of the Funds, as provided in the Company's Agreement and
Declaration of Trust.

         SECTION 20. MISCELLANEOUS. This Agreement embodies the entire agreement
and understanding between the Company and INVESCO (NY) and supersedes all prior
agreements and understandings relating to the subject matter hereof, provided
that the Company and INVESCO (NY) may embody in one or more separate documents
their agreement or agreements with respect to such matters that this Agreement
provides may be later agreed to by and between the Company and INVESCO (NY) from
time to time. The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement shall be governed
by and construed in accordance with California law. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the Company
and INVESCO (NY) and their respective successors.

         IN WITNESS WHEREOF, the Company and INVESCO (NY) have caused this
Agreement to be executed by their officers designated below as of this day,
month and year first above written.

                                   AIM INVESTMENT FUNDS

                                   By:
                                            ---------------------------------
                                            Kenneth W. Chancey
                                            Vice President and Principal
                                            Accounting Officer

                                   Attest:
                                            ---------------------------------
                                            Michael A. Silver
                                            Assistant Secretary


                                   INVESCO (NY), INC.

                                   By:
                                            ---------------------------------
                                            Helge K. Lee
                                            Chief Legal and Compliance Officer
                                             and Secretary

                                   Attest:
                                            ---------------------------------
                                            Michael A. Silver





                                     - 9 -
<PAGE>   10




                                   SCHEDULE A

                     FUND ACCOUNTING AND PRICING AGENT FEES

     The Fund shall pay a Fee to INVESCO (NY) determined as a percentage of the
Fund's net assets. The annualized rate at which the fee is paid (the Fee Rate)
and the Fee shall be calculated as set forth below:

o    An Asset Multiplier is determined by multiplying .0003 times the first $5
     billion in average net assets of the INVESCO (NY) Funds plus .0002 times
     the net assets over $5 billion.

o    The Fee Rate is determined by dividing the Asset Multiplier by the net
     assets of the INVESCO (NY) Funds.

o    The Monthly Fee is determined then by multiplying the average daily Fee
     Rate by the number of days in the month and by the Fund's average daily net
     assets then dividing by 365/or 366

Example: For Fund X having $100 million in average net assets during December
1997, in which the INVESCO (NY) Funds have average net assets of $8 billion:

Asset Multiplier = (.0003) ($5 billion) + (.0002) ($3 billion) = $2.1 million

Fee Rate = $2.1 million = .0002625
           ------------
            $8 billion

Monthly Fee = (31) (.0002625) ($100 million) = $2,229.45
             -----
             (365)





                                     - 10 -

<PAGE>   1


                                                                 EXHIBIT 9(c)(5)


                            A I M DISTRIBUTORS, INC.
                         SHAREHOLDER SERVICE AGREEMENT

                      (BROKERS FOR BANK TRUST DEPARTMENTS)

  [LOGO APPEARS HERE]
A I M Distributors, Inc.

                                              _________________________, 19_____

A I M Distributors, Inc.
11 Greenway Plaza, Suite 1919
Houston, Texas  77046-1173

Gentlemen:

       We desire to enter into an Agreement with A I M Distributors, Inc. ("AIM
Distributors") as agent on behalf of the funds listed on Schedule A hereto,
which may be amended from time to time by AIM Distributors (the "Funds"), for
the servicing of our clients who are shareholders of, and the administration of
accounts in, the Funds.  We understand that this Shareholder Service Agreement
(the "Agreement") has been adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the "1940 Act") by each of the Funds, under a Distribution
Plan (the "Plan") adopted pursuant to said Rule, and is subject to applicable
rules of the National Association of Securities Dealers, Inc. ("NASD").  This
Agreement defines the services to be provided by us for which we are to receive
payments pursuant to the Plan.  The Plan and the Agreement have been approved
by a majority of the directors or trustees of the applicable Fund, including a
majority of directors or trustees who are not interested persons of the
applicable Fund, and who have no direct or indirect financial interest in the
operation of the Plan or related agreements, by votes cast in person at a
meeting called for the purpose of voting on the Plan.  Such approval included a
determination by the directors or trustees of the applicable Fund, in the
exercise of their reasonable business judgement and in light of their fiduciary
duties, that there is a reasonable likelihood that the Plan will benefit the
Fund and the holders of its Shares.  The terms and conditions of this Agreement
shall be as follows:

1.     To the extent that we provide continuing personal shareholder services
       and administrative support services to our customers who may from time
       to time own shares of the Funds of record or beneficially, including but
       not limited to, forwarding sales literature, answering routine customer
       inquiries regarding the Funds, assisting customers in changing dividend
       options, account designations and addresses, and in enrolling into any
       of several special investment plans offered in connection with the
       purchase of the Funds' shares, assisting in the establishment and
       maintenance of customer accounts and records and in the processing of
       purchase and redemption transactions, investing dividends and capital
       gains distributions automatically in shares of the Funds and providing
       such other services as AIM Distributors or the customer may reasonably
       request, you shall pay us a fee periodically.  We represent that we
       shall accept fees hereunder only so long as we continue to provide such
       personal shareholder services.

2.     We agree to transmit to AIM Distributors in a timely manner, all
       purchase orders and redemption requests of our clients and to forward to
       each client all proxy statements, periodic

<PAGE>   2
Shareholder Service Agreement                                            Page 2
(Brokers for Bank Trust Departments)


       shareholder reports and other communications received from AIM
       Distributors by us relating to shares of the Funds owned by our clients.
       AIM Distributors, on behalf of the Funds, agrees to pay all
       out-of-pocket expenses actually incurred by us in connection with the
       transfer by us of such proxy statements and reports to our clients as
       required under applicable laws or regulations.

3.     We agree to transfer to AIM Distributors in a timely manner as set forth
       in the applicable prospectus, federal funds in an amount equal to the
       amount of all purchase orders placed by us and accepted by AIM
       Distributors.  In the event that AIM Distributors fails to receive such
       federal funds on such date (other than through the fault of AIM
       Distributors), we shall indemnify the applicable Fund and AIM
       Distributors against any expense (including overdraft charges) incurred
       by the applicable Fund and/or AIM Distributors as a result of the
       failure to receive such federal funds.

4.     We agree to make available upon AIM Distributors's request, such
       information relating to our clients who are beneficial owners of Fund
       shares and their transactions in such shares as may be required by
       applicable laws and regulations or as may be reasonably requested by AIM
       Distributors.

5.     We agree to transfer record ownership of a client's Fund shares to the
       client promptly upon the request of a client.  In addition, record
       ownership will be promptly transferred to the client in the event that
       the person or entity ceases to be our client.

6.     Neither we nor any of our employees or agents are authorized to make any
       representation to our clients concerning the Funds except those
       contained in the then current prospectuses applicable to the Funds,
       copies of which will be supplied to us by AIM Distributors; and we shall
       have no authority to act as agent for any Fund or AIM Distributors.
       Neither a Fund, nor A I M Advisors, Inc. ("AIM") will be a party, nor
       will they be represented as a party, to any agreement that we may enter
       into with our clients and neither a Fund nor AIM shall participate,
       directly or indirectly, in any compensation that we may receive from our
       clients in connection with our acting on their behalf with respect to
       this Agreement.

7.     In consideration of the services and facilities described herein, we
       shall receive a maximum annual service fee and asset-based sales charge,
       payable monthly, as set forth on Schedule A hereto.  We understand that
       this Agreement and the payment of such service fees and asset-based
       sales charge has been authorized and approved by the Board of Directors
       or Trustees of the applicable Fund, and that the payment of fees
       thereunder is subject to limitations imposed by the rules of the NASD.

8.     AIM Distributors reserves the right, in its discretion and without
       notice, to suspend the sale of any Fund or withdraw the sale of shares
       of a Fund, or upon notice to us, to amend this Agreement.  We agree that
       any order to purchase shares of the Funds placed by us after notice of
       any amendment to this Agreement has been sent to us shall constitute our
       agreement to any such amendment.

9.     All communications to AIM Distributors shall be duly given if mailed to
       A I M Distributors, Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas
       77046-1173.  Any notice to us shall be duly given if mailed to us at the
       address specified by us in this





<PAGE>   3

Shareholder Service Agreement                                            Page 3
(Brokers for Bank Trust Departments)

       Agreement or to such other address as we shall have designated in
       writing to AIM Distributors.

10.    This Agreement may be terminated at any time by AIM Distributors on not
       less than 60 days' written notice to us at our principal place of
       business.  We, on 60 days' written notice addressed to AIM Distributors
       at its principal place of business, may terminate this Agreement.  AIM
       Distributors may also terminate this Agreement for cause on violation
       by us of any of the provisions of this Agreement, said termination to
       become effective on the date of mailing notice to us of such
       termination.  AIM Distributors's failure to terminate for any cause
       shall not constitute a waiver of AIM Distributors's right to terminate
       at a later date for any such cause.  This Agreement may be terminated
       with respect to any Fund at any time by the vote of a majority of the
       directors or trustees of such Fund who are disinterested directors or by
       a vote of a majority of the Fund's outstanding shares, on not less than
       60 days' written notice to us at our principal place of business.  This
       Agreement will be terminated by any act which terminates the Selected
       Dealer Agreement between us and AIM Distributors or a Fund's
       Distribution Plan, and in any event, shall terminate automatically in
       the event of its assignment by us, the term "assignment" for this
       purpose having the meaning defined in Section 2(a)(4) of the 1940 Act.

11.    We represent that our activities on behalf of our clients and pursuant
       to this Agreement either (i) are not such as to require our registration
       as a broker-dealer in the state(s) in which we engage in such
       activities, or (ii) we are registered as a broker-dealer in the state(s)
       in which we engage in such activities.  We represent that we are
       registered as a broker-dealer with the NASD if required under applicable
       law.

12.    This Agreement and all rights and obligations of the parties hereunder
       shall be governed by and construed under the laws of the State of Texas.
       This Agreement may be executed in counterparts, each of which shall be
       deemed an original but all of which shall constitute the same
       instrument.  This Agreement shall not relieve us or AIM Distributors
       from any obligations either may have under any other agreements between
       us.

13.    This Agreement shall become effective as of the date when it is executed
       and dated by AIM Distributors.





<PAGE>   4

Shareholder Service Agreement                                            Page 4
(Brokers for Bank Trust Departments)


       The undersigned agrees to abide by the foregoing terms and conditions.




                                                                          
                                      ------------------------------------
                                      (Firm Name)                         
                                                                          
                                                                          
                                      ------------------------------------
                                      (Address)                           
                                                                          
                                                                          
                                      ------------------------------------
                                      City/State/Zip/County               
                                                                          

                                      By:                                 
                                             -----------------------------
                                                                          
                                      Name:                               
                                             -----------------------------
                                                                          
                                      Title:                              
                                             -----------------------------
                                                                          
                                      Dated:                              
                                             -----------------------------
                                                       


ACCEPTED:

A I M DISTRIBUTORS, INC.


By:                                                               
          ---------------------------
                                     
Name:                                
          ---------------------------
                                     
Title:                               
          ---------------------------
                                     
Dated:                               
          ---------------------------


                     Please sign both copies and return to:
                            A I M Distributors, Inc.
                         11 Greenway Plaza, Suite 1919
                           Houston, Texas 77046-1173





<PAGE>   5

Shareholder Service Agreement                                            Page 5
(Brokers for Bank Trust Departments)

                                   SCHEDULE A
<TABLE>
<CAPTION>
          Funds                                                              Fees
          -----                                                              ----
<S>                                                                      <C>
AIM Advisor Funds, Inc.
          AIM Advisor Flex Fund
          AIM Advisor International Value Fund
          AIM Advisor Large Cap Value Fund
          AIM Advisor MultiFlex Fund
          AIM Advisor Real Estate Fund

AIM Equity Funds, Inc.
          AIM Blue Chip Fund
          AIM Capital Development Fund
          AIM Charter Fund (Retail Class)
          AIM Constellation Fund (Retail Class)
          AIM Weingarten Fund (Retail Class)
          *AIM Aggressive Growth Fund

AIM Funds Group
          AIM Balanced Fund
          AIM Global Utilities Fund
          AIM High Yield Fund
          AIM Income Fund
          AIM Intermediate Government Fund
          AIM Money Market Fund
          AIM Municipal Bond Fund
          AIM Select Growth Fund
          AIM Value Fund

AIM International Funds, Inc.
          AIM Asian Growth Fund
          AIM European Development Fund
          AIM International Equity Fund
          AIM Global Aggressive Growth Fund
          AIM Global Growth Fund
          AIM Global Income Fund

AIM Investment Securities Funds
          AIM Limited Maturity Treasury Fund

AIM Special Opportunities Funds
          AIM Small Cap Opportunities Fund

AIM Tax-Exempt Funds, Inc.
          AIM High Income Municipal Fund
          AIM Tax-Exempt Cash Fund
          AIM Tax-Exempt Bond Fund of Connecticut
</TABLE>





__________________________________

     *   Shares of AIM Aggressive Growth Fund may only be sold to current
         shareholders who maintain open accounts in AIM Aggressive Growth Fund.



<PAGE>   6

Shareholder Service Agreement                                           Page 6
(Brokers for Bank Trust Departments)


THE FOLLOWING FUNDS ARE ADDED AS OF THE CLOSE OF BUSINESS MAY 29, 1998:


<TABLE>
<CAPTION>
          Funds                                                              Fees
          -----                                                              ----
<S>                                                                      <C>
AIM Basic Value Fund
AIM Developing Markets Fund
AIM Dollar Fund
AIM Emerging Markets Fund
AIM Emerging Markets Debt Fund
AIM Europe Growth Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
AIM Global Government Income Fund
AIM Global Growth and Income Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Telecommunications Fund
AIM Global Trends Fund
AIM International Growth Fund
AIM Japan Growth Fund
AIM Latin American Growth Fund
AIM Mid Cap Equity Fund
AIM New Pacific Growth Fund
AIM Small Cap Growth Fund
AIM Strategic Income Fund
AIM Worldwide Growth Fund
</TABLE>





<PAGE>   7
                            A I M DISTRIBUTORS, INC.
[AIM Logo]                SHAREHOLDER SERVICE AGREEMENT

                            (BANK TRUST DEPARTMENTS)


        A I M Distributors, Inc.

                                              _________________________, 19_____

A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas  77046-1173

Gentlemen:

       We desire to enter into an Agreement with A I M Distributors, Inc. ("AIM
Distributors") as agent on behalf of the funds listed on Schedule A hereto (the
"Funds"), for the servicing of our clients who are shareholders of, and the
administration of accounts in, the Funds.  We understand that this Shareholder
Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "1940 Act") by each of the Funds,
under a Distribution Plan (the "Plan") adopted pursuant to said Rule, and is
subject to applicable rules of the National Association of Securities Dealers,
Inc. ("NASD").  This Agreement defines the services to be provided by us for
which we are to receive payments pursuant to the Plan.  The Plan and the
Agreement have been approved by a majority of the directors or trustees of the
applicable Fund, including a majority of directors or trustees who are not
interested persons of the applicable Fund, and who have no direct or indirect
financial interest in the operation of the Plan or related agreements, by votes
cast in person at a meeting called for the purpose of voting on the Plan.  Such
approval included a determination by the directors or trustees of the
applicable Fund, in the exercise of their reasonable business judgement and in
light of their fiduciary duties, that there is a reasonable likelihood that the
Plan will benefit the Fund and the holders of its Shares.  The terms and
conditions of this Agreement shall be as follows:

1.     To the extent that we provide continuing personal shareholder services
       and administrative support services to our customers who may from time
       to time own shares of the Funds of record or beneficially, including but
       not limited to, forwarding sales literature, answering routine customer
       inquiries regarding the Funds, assisting customers in changing dividend
       options, account designations and addresses, and in enrolling into any
       of several special investment plans offered in connection with the
       purchase of the Funds' shares, assisting in the establishment and
       maintenance of customer accounts and records and in the processing of
       purchase and redemption transactions, investing dividends and capital
       gains distributions automatically in shares of the Funds and providing
       such other services as AIM Distributors or the customer may reasonably
       request, you shall pay us a fee periodically.  We represent that we
       shall accept fees hereunder only so long as we continue to provide such
       personal shareholder services.

2.     We agree to transmit to AIM Distributors in a timely manner, all
       purchase orders and redemption requests of our clients and to forward to
       each client all proxy statements, periodic shareholder reports and other
       communications received from AIM Distributors by us relating
<PAGE>   8
Shareholder Service Agreement                                             Page 2
(Bank Trust Departments)

       to shares of the Funds owned by our clients.  AIM Distributors, on
       behalf of the Funds, agrees to pay all out-of-pocket expenses actually
       incurred by us in connection with the transfer by us of such proxy
       statements and reports to our clients as required under applicable laws
       or regulations.

3.     We agree to make available upon AIM Distributors's request, such
       information relating to our clients who are beneficial owners of Fund
       shares and their transactions in such shares as may be required by
       applicable laws and regulations or as may be reasonably requested by AIM
       Distributors.

4.     We agree to transfer record ownership of a client's Fund shares to the
       client promptly upon the request of a client.  In addition, record
       ownership will be promptly transferred to the client in the event that
       the person or entity ceases to be our client.

5.     Neither we nor any of our employees or agents are authorized to make any
       representation to our clients concerning the Funds except those
       contained in the then current prospectuses applicable to the Funds,
       copies of which will be supplied to us by AIM Distributors; and we shall
       have no authority to act as agent for any Fund or AIM Distributors.
       Neither a Fund, nor A I M Advisors, Inc. ("AIM") will be a party, nor
       will they be represented as a party, to any agreement that we may enter
       into with our clients and neither a Fund nor AIM shall participate,
       directly or indirectly, in any compensation that we may receive from our
       clients in connection with our acting on their behalf with respect to
       this Agreement.

6.     In consideration of the services and facilities described herein, we
       shall receive a maximum annual service fee and asset-based sales charge,
       payable monthly, as set forth on Schedule A hereto.  We understand that
       this Agreement and the payment of such service fees and asset-based
       sales charge has been authorized and approved by the Board of Directors
       or Trustees of the applicable Fund, and that the payment of fees
       thereunder is subject to limitations imposed by the rules of the NASD.

7.     AIM Distributors reserves the right, in its discretion and without
       notice, to suspend the sale of any Fund or withdraw the sale of shares
       of a Fund, or upon notice to us, to amend this Agreement.  We agree that
       any order to purchase shares of the Funds placed by us after notice of
       any amendment to this Agreement has been sent to us shall constitute our
       agreement to any such amendment.

8.     All communications to AIM Distributors shall be duly given if mailed to
       A I M Distributors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas
       77046-1173.  Any notice to us shall be duly given if mailed to us at the
       address specified by us in this Agreement or to such other address as we
       shall have designated in writing to AIM Distributors.

9.     This Agreement may be terminated at any time by AIM Distributors on not
       less than 60 days' written notice to us at our principal place of
       business.  We, on 60 days' written notice addressed to AIM Distributors
       at its principal place of business, may terminate this Agreement.  AIM
       Distributors may also terminate this Agreement for cause on violation by
       us of any of the provisions of this Agreement, said termination to
       become effective on the date of mailing notice to us of such
       termination.  AIM Distributors's failure to terminate for any cause
       shall not constitute a waiver of AIM Distributors's right to terminate
       at a later date for
<PAGE>   9

Shareholder Service Agreement                                      Page 3
(Bank Trust Departments)

       any such cause.  This Agreement may be terminated with respect to any
       Fund at any time by the vote of a majority of the directors or trustees
       of such Fund who are disinterested directors or by a vote of a majority
       of the Fund's outstanding shares, on not less than 60 days' written
       notice to us at our principal place of business.  This Agreement will be
       terminated by any act which terminates the Agreement for Purchase of
       Shares of The AIM Family of Funds(R) between us and AIM Distributors or
       a Fund's Distribution Plan, and in any event, it shall terminate
       automatically in the event of its assignment by us, the term
       "assignment" for this purpose having the meaning defined in Section
       2(a)(4) of the 1940 Act.

10.    We represent that our activities on behalf of our clients and pursuant
       to this Agreement either (i) are not such as to require our registration
       as a broker-dealer in the state(s) in which we engage in such
       activities, or (ii) we are registered as a broker-dealer in the state(s)
       in which we engage in such activities.  We represent that we are
       registered as a broker-dealer with the NASD if required under applicable
       law.

11.    This Agreement and the Agreement for Purchase of Shares of The AIM
       Family of Funds(R) through Bank Trust Departments constitute the entire
       agreement between us and AIM Distributors and supersede all prior oral
       or written agreements between the parties hereto.  This Agreement may be
       executed in counterparts, each of which shall be deemed an original but
       all of which shall constitute the same instrument.

12.    This Agreement and all rights and obligations of the parties hereunder
       shall be governed by and construed under the laws of the State of Texas.

13.    This Agreement shall become effective as of the date when it is executed
       and dated by AIM Distributors.
<PAGE>   10
Shareholder Service Agreement                                           Page 4
(Bank Trust Departments)


       The undersigned agrees to abide by the foregoing terms and conditions.


                       
                                                                     
                                     -----------------------------------
                                     (Firm Name)


                                     -----------------------------------
                                     (Address)


                                     -----------------------------------
                                     City/State/Zip/County


                                     By:
                                            ----------------------------

                                     Name:
                                            ----------------------------

                                     Title:
                                            ----------------------------

                                     Dated:
                                            ----------------------------
                                                                             


ACCEPTED:

A I M DISTRIBUTORS, INC.


By:                                                               
          ------------------------
                                  
Name:                             
          ------------------------
                                  
Title:                            
          ------------------------
                                  
Dated:                            
          ------------------------


                     Please sign both copies and return to:
                            A I M Distributors, Inc.
                          11 Greenway Plaza, Suite 100
                           Houston, Texas 77046-1173
<PAGE>   11
Shareholder Service Agreement                                             Page 5
(Bank Trust Departments)

                                   SCHEDULE A
<TABLE>
<CAPTION>
          Funds                                                              Fees
          -----                                                              ----
<S>                                                                        <C>
AIM Advisor Funds, Inc.
          AIM Advisor Flex Fund
          AIM Advisor International Value Fund
          AIM Advisor Large Cap Value Fund
          AIM Advisor MultiFlex Fund
          AIM Advisor Real Estate Fund

AIM Equity Funds, Inc.
          AIM Blue Chip Fund
          AIM Capital Development Fund
          AIM Charter Fund (Retail Class)
          AIM Constellation Fund (Retail Class)
          AIM Weingarten Fund (Retail Class)
          AIM Aggressive Growth Fund *

AIM Funds Group
          AIM Balanced Fund
          AIM Global Utilities Fund
          AIM High Yield Fund
          AIM Income Fund
          AIM Intermediate Government Fund
          AIM Money Market Fund
          AIM Municipal Bond Fund
          AIM Select Growth Fund
          AIM Value Fund

AIM International Funds, Inc.
          AIM Asian Growth Fund
          AIM European Development Fund
          AIM Global Aggressive Growth Fund
          AIM Global Growth Fund
          AIM Global Income Fund
          AIM International Equity Fund

AIM Investment Securities Funds
          AIM Limited Maturity Treasury Fund

AIM Special Opportunities Funds
          AIM Small Cap Opportunities Fund

AIM Tax-Exempt Funds, Inc.
          AIM High Income Municipal Fund
          AIM Tax-Exempt Cash Fund
          AIM Tax-Exempt Bond Fund of Connecticut
</TABLE>





__________________________________

     * Shares of AIM Aggressive Growth Fund may only be sold to current
shareholders who maintain open accounts in AIM Aggressive Growth Fund.
<PAGE>   12
Shareholder Service Agreement                                             Page 6
(Bank Trust Departments)

THE FOLLOWING FUNDS ARE ADDED AS OF THE CLOSE OF BUSINESS MAY 29, 1998:


<TABLE>
<CAPTION>
          Funds                                                                                         Fees
          -----                                                                                         ----
<S>                                                                                                     <C>
AIM Basic Value Fund
AIM Developing Markets Fund
AIM Dollar Fund
AIM Emerging Markets Fund
AIM Emerging Markets Debt Fund
AIM Europe Growth Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
AIM Global Government Income Fund
AIM Global Growth and Income Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Telecommunications Fund
AIM Global Trends Fund
AIM International Growth Fund
AIM Japan Growth Fund
AIM Latin American Growth Fund
AIM Mid Cap Equity Fund
AIM New Pacific Growth Fund
AIM Small Cap Growth Fund
AIM Strategic Income Fund
AIM Worldwide Growth Fund
</TABLE>

<PAGE>   1
                                                                   EXHIBIT 10(a)


                                August 24, 1998


AIM Investment Funds
50 California Street, 27th Floor
San Francisco, California  94111

Ladies and Gentlemen:

         You have requested our opinion, as counsel to AIM Investment Funds
("Trust"), as to certain matters regarding the issuance of Shares of Trust. (As
used in this letter, the term "Shares" means the Class A, Class B, and Advisor
Class shares of beneficial interest in each series of Trust listed in Schedule
A attached to this opinion (each, a "Portfolio").)

         As such counsel, we have examined certified or other copies, believed
by us to be genuine, of Trust's Agreement and Declaration of Trust dated as of
May 7, 1998 ("Agreement"), and Bylaws and such other documents relating to its
organization and operation as we have deemed relevant to our opinion, as set
forth herein. Our opinion is limited to the laws and facts in existence on the
date hereof, and it is further limited to the laws (other than the conflict of
law rules) of the State of Delaware that in our experience are normally
applicable to the issuance of shares of beneficial interest by business trusts
and to the Securities Act of 1933 ("1933 Act"), the Investment Company Act of
1940 ("1940 Act") and the regulations of the Securities and Exchange Commission
("SEC") thereunder. With respect to matters governed by the laws of the State
of Delaware (excluding the securities laws thereof), we have relied solely on
the opinion of Potter Anderson & Corroon, LLP, Delaware counsel to Trust, an
executed copy of which is appended hereto as Exhibit A.

         Based on the foregoing, we are of the opinion that Trust has been duly
organized as a business trust under the laws of the State of Delaware and is
validly existing thereunder; that the issuance of the Shares has been duly
authorized by Trust; and that, when sold in accordance with the terms
contemplated by Trust's registration statement on Form N-1A (File No. 33-19338)
("Registration Statement"), including receipt by Trust of full payment for the
Shares and compliance with the 1933 Act and the 1940 Act, the Shares will have
been legally issued, fully paid, and non-assessable.

         We note, however, that Trust is an entity of the type commonly known
as a "Delaware business trust." The Delaware Business Trust Act, 12 Del. C. ss.
3801 et seq. ("Delaware Act"), provides that shareholders of a Delaware
business trust are entitled to the same limitation of

<PAGE>   2
AIM Investment Funds
August 24, 1998
Page 2


personal liability extended to stockholders of a Delaware corporation. Thus,
under Delaware law, shareholders will not be personally liable for the
obligations of Trust. This limitation of liability may not be absolute,
however, as it is possible that a non-Delaware court would not uphold this
provision of the Delaware Act.

         Consistent with the Delaware Act, the Agreement includes an express
disclaimer of shareholder liability for the debts, liabilities, obligations,
and expenses incurred by, contracted for, or otherwise existing with respect to
Trust or any Portfolio (or class) thereof. The Agreement also requires that
every note, bond, contract, or other undertaking issued by or on behalf of
Trust or its trustees relating to Trust or to any Portfolio include a
recitation limiting the obligation represented thereby to Trust and its assets
or to one or more Portfolios and the assets belonging thereto (but provides
that the omission of such a recitation shall not operate to bind any
shareholder or trustee of Trust). Furthermore, the Agreement states that the
debts, liabilities, obligations, and expenses incurred by, contracted for, or
otherwise existing with respect to a particular Portfolio shall be enforceable
against the assets of such Portfolio only, and not against the assets of Trust
generally or the assets belonging to any other Portfolio. Finally, the
Agreement further provides (1) for indemnification from the assets belonging to
the applicable Portfolio (or allocable to the applicable class) for all loss
and expense of any shareholder held personally liable for the obligations of
Trust or any Portfolio (or class) by virtue of ownership of Shares of Trust or
such Portfolio (or class), and (2) for Trust, on behalf of the affected
Portfolio (or class), to assume the defense of any claim against the
shareholder for any act or obligation of that Portfolio (or class). Thus, the
risk of a shareholder's incurring financial loss because of shareholder
liability is limited to circumstances in which (a) a court refused to apply
Delaware law or otherwise failed to give full effect to the Agreement or
contractual provisions limiting shareholder liability and (b) Trust was unable
to meet its obligations.

         We hereby consent to this opinion accompanying Post-Effective
Amendment No. 55 to the Registration Statement when it is filed with the SEC
and to the reference to our firm in the prospectuses that are being filed as 
part of such amendment.


                                          Very truly yours,

                                          KIRKPATRICK & LOCKHART LLP





                                          By:   /s/ R. DARRELL MOUNTS
                                                R. Darrell Mounts


<PAGE>   3
AIM Investment Funds
August 24, 1998
Page 3


                                   SCHEDULE A


AIM INVESTMENT FUNDS, INC.
AIM Developing Markets Fund
AIM Emerging Markets Fund
AIM Global Growth & Income Fund
AIM Latin American Growth Fund
AIM Global Consumer Products and Services Fund 
AIM Global Financial Services Fund 
AIM Global Health Care Fund 
AIM Global Infrastructure Fund 
AIM Global Resources Fund 
AIM Global Telecommunications Fund 
AIM Global Government Income Fund 
AIM Emerging Markets Debt Fund 
AIM Strategic Income Fund




<PAGE>   1
                                                                   EXHIBIT 10(b)


                 [POTTER ANDERSON & CORROON LLP LETTERHEAD]

                              August 24, 1998



 To Each of the Addresses Listed
on Schedule I Attached Hereto

                  Re:      AIM Investment Funds

Ladies and Gentlemen:

                  We have acted as special Delaware counsel for AIM
Investment Funds, a Delaware business trust (the "Trust"), in connection
with the proposed issuance of shares (collectively, the "Shares") of Class
A, Class B, and Advisor Class (collectively, the "Classes") of AIM Global
Financial Services Fund, AIM Global Infrastructure Fund, AIM Global
Resources Fund, AIM Global Consumer Products and Services Fund, AIM Global
Health Care Fund, AIM Global Telecommunications Fund, AIM Global Government
Income Fund, AIM Emerging Markets Debt Fund, AIM Strategic Income
Fund, AIM Global Growth & Income Fund, AIM Emerging Markets Fund, AIM
Developing Markets Fund and AIM Latin American Growth Fund (collectively
the "Portfolios") as designated on Schedule A to that certain Agreement and
Declaration of Trust dated as of May 7, 1998, entered into among William J.
Guilfoyle, C. Derek Anderson, Frank S. Bayley, Arthur C. Patterson, and
Ruth H. Quigley, as Trustees, and any future Shareholders of the Trust (the
"Declaration"). Initially capitalized terms used herein and not otherwise
defined are used herein as defined in the Declaration.

                  For purposes of giving the opinions hereinafter set
forth, we have examined only the following documents and have conducted no
independent factual investigation of our own:

                  1. The Certificate of Trust for the Trust, dated as of
May 7, 1998, as filed in the Office of the Secretary of State of the State
of Delaware (the "Secretary of State") on May 7, 1998;

                  2.       The Declaration;
<PAGE>   2
                  3.       The By-laws of the Trust;

                  4. Resolutions of the Trustees (the "Conversion
Resolutions") approving that certain plan of conversion and termination
(the "Plan of Conversion") by and between the Trust and G.T. Investment
Funds, Inc., now known as AIM Investment Funds, Inc. (the "Company");

                  5.       The Plan of Conversion;

                  6. Resolutions of the Trustees (the "18f-3 Resolutions"
and, together with the Conversion Resolutions, the "Resolutions") adopting
that certain plan pursuant to Rule 18f-3 under the Investment Company Act
of 1940 (the "18f-3 Plan");

                  7. A Certificate of Good Standing for the Trust, dated
August 24, 1998, obtained from the Secretary of State; and

                  8. The registration statement on Form N-1A filed with the
Securities and Exchange Commission on or about August 24, 1998, pursuant to
the Securities Act of 1933, as amended, covering the Shares (the
"Registration Statement").

                  As to certain facts material to the opinions expressed
herein, we have relied upon the representations and warranties contained in
the documents examined by us.

                  Based upon the foregoing, and upon an examination of such
questions of law of the State of Delaware as we have considered necessary
or appropriate, and subject to the assumptions, qualifications, limitations
and exceptions set forth herein, we are of the opinion that:

                  1. The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware Act.

                  2. Each Portfolio has been duly created and is validly
existing as a series under Section 3804 of the Delaware Act.

                  3. The Declaration constitutes the legal, valid and
binding obligation of the Trustees, enforceable against the Trustees, in
accordance with its terms.

                  4. Subject to the other qualifications set forth herein
(including, without limitation, paragraph 5 below), the Shares have been
duly authorized and when (a) the actions referred to in the Plan of
Conversion shall have occurred, and (b) the Shares shall have been
otherwise issued and sold in accordance with the Declaration, the
Resolutions, the Plan of Conversion, the 18f-3 Plan, and the By-laws, such
Shares will be validly issued, fully paid, and non-assessable undivided
beneficial interests in the assets of the respective Portfolios of which
such Shares form a part, as the case may be.

                  5. When and if the actions referred to in paragraph 4
have occurred, the holders of the Shares as beneficial owners of the Shares
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware, except that such holders of
Shares may be obligated to provide indemnity and/or security in connection
with the issuance of replacement 
<PAGE>   3
certificates for lost or destroyed certificates, if any, representing such 
Shares, if such holders request certificates in accordance with the By-laws 
and such certificates are lost.

                  In addition to the assumptions and qualifications set
forth above, all of the foregoing opinions contained herein are subject to
the following assumptions, qualifications, limitations and exceptions:

                           a. The foregoing opinions are limited to the laws 
of the State of Delaware presently in effect, excluding the securities laws 
thereof. We have not considered and express no opinion on the laws of any 
other jurisdiction, including, without limitation, federal laws and rules 
and regulations relating thereto.

                           b. We have assumed the due execution and delivery by
each party listed as a party to the Plan of Conversion. We have further assumed
the due authorization by the Company of the Plan of Conversion. We have assumed
further that the Company has the full corporate power, authority, and legal
right to execute, deliver and perform the Plan of Conversion. We also have
assumed that the Company is a corporation validly existing and in good standing
under the laws of its jurisdiction of organization. We have also assumed that
the Plan of Conversion does not result in the breach of the terms of, and does
not contravene the Company's constituent documents, any contractual restriction
binding on any party to the Plan of Conversion, or any law, rule or regulation
applicable to such parties (exclusive of the Trust, but only to the extent of
any Delaware law, rule or regulation). In addition, we have assumed the legal
capacity of any natural persons who are parties to any of the documents examined
by us.

                           c. The foregoing opinion regarding the 
enforceability of the Declaration is subject to (i) applicable bankruptcy,
insolvency, moratorium, fraudulent conveyance, fraudulent transfer and
similar laws relating to or affecting creditors rights generally including,
without limitation, the Delaware Uniform Fraudulent Conveyance Act, the
provisions of the United States Bankruptcy Code and the Delaware insolvency
statutes, (ii) principles of equity including, without limitation, concepts
of materiality, good faith, fair dealing, conscionability and
reasonableness (regardless of whether such enforceability is considered in
a proceeding in equity or at law), (iii) applicable law relating to
fiduciary duties, and (iv) public policy limitations with respect to
exculpation, contribution and indemnity provisions.


                           d. We have assumed that all signatures on documents 
examined by us are genuine, that all documents submitted to us as originals
are authentic and that all documents submitted to us as copies conform with 
the originals.

                           e. We have assumed that the Declaration, the 
By-laws, the Plan of Conversion, the Resolutions and the 18f-3 Plan, 
collectively, constitute the entire agreement with respect to the subject
matter thereof, including (i) with respect to the creation, dissolution and 
winding up of the Trust and each Portfolio, (ii) the terms applicable to 
the Shares, and (iii) the power and authority of the Trustees.

                           f. We have assumed that to the extent any
additional rights and/or preferences are stated in the 18f-3 Plan, such 
additional rights and/or preferences (x) are enforceable in accordance with 
their terms, and (y) do not conflict with the Certificate of Trust,
<PAGE>   4
the Declaration, the By-laws, the Plan of Conversion, or any statute, rule 
or regulation applicable to the Trust or any Portfolio.

                           g. We have assumed that the Plan of Conversion
is the legal, valid and binding obligation of the parties thereto, enforceable 
against such parties in accordance with its terms.

                           h. We have assumed that no event set forth in
Section 9.3(a) of the Declaration has occurred with respect to the Trust or any 
Portfolio.

                           i. Notwithstanding any provision in the 
Declaration to the contrary, we note that upon the occurrence of an event
set forth in Section 9.3(a) thereof, with respect to the Trust or a
Portfolio, as the case may be, the Trust or such Portfolio, as applicable,
cannot make any payments or distributions to the Shareholders thereof until
their respective creditors' claims are either paid in full or reasonable
provision for payment thereof has been made.

                           j. With respect to the enforceability of any 
provision of the Declaration wherein the parties provide for the
appointment of a liquidator, we note that upon the application of any
beneficial owner, the Delaware Court of Chancery has the power, upon cause
shown, to wind up the affairs of a Delaware business trust or Portfolio
thereof and in connection therewith to appoint a liquidating trustee other
than the one agreed to by the beneficial owners thereof.

                           k. We have assumed that none of the By-laws, 
the Resolutions, the Plan of Conversion, or the 18f-3 Plan has been
amended, modified, or revoked in any manner from the date of its adoption,
and that each of the By-laws, the Resolutions, the Plan of Conversion, and
the 18f-3 Plan remains in full force and effect on the date hereof.

                           l. We have assumed that the Trust maintains
separate and distinct records for each Portfolio and that the Trust and the
Trustees hold and account for the assets belonging to each such Portfolio
separately from the other assets of any other Portfolio and the assets of
the Trust generally, if any.

                           m.  We note that we do not assume responsibility 
for the contents of the Registration Statement.

                  This opinion is rendered solely for your benefit in
connection with the matters set forth herein and, without our prior written
consent, may not be furnished (except that it may be furnished to any
federal, state or local regulatory agencies or regulators having
appropriate jurisdiction and entitled to such disclosure) or quoted to, or
relied upon by, any other person or entity for any purpose. Kirkpatrick &
Lockhart LLP may rely on this opinion with respect to the matters set forth
herein in connection with its opinion being delivered on even date
herewith.

                  We consent to the filing of this opinion with the
Securities and Exchange Commission as an exhibit to the Registration
Statement. In giving the foregoing consent, we do not thereby admit that we
come within the category of Persons whose consent is required under 
<PAGE>   5
Section 7 of the Securities Act of 1933, as amended, or the rules and 
regulations of the Securities and Exchange Commission thereunder.



                                          Very truly yours,

                                                  
                                          /s/ POTTER ANDERSON & CORROON LLP
<PAGE>   6


                                 Schedule I


AIM Investment Funds
50 California Street
27th Floor
San Francisco, California 94111

AIM Investment Funds, Inc.
50 California Street
27th Floor
San Francisco, California 94111




<PAGE>   1
                                                                      EXHIBIT 11

                    [PRICEWATERHOUSECOOPERS LLP LETTERHEAD]


                       CONSENT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of AIM Investment Funds, Inc. (formerly G.T.
Investment Funds, Inc.):

     We hereby consent to the inclusion of our reports dated December 15, 1997
and June 17, 1998 on our audits of the financial statements and financial
highlights of AIM Developing Markets Fund, AIM Emerging Markets Fund and AIM
Latin American Growth Fund (formerly, GT Global Developing Markets Fund, GT
Global Emerging Markets Fund and GT Global Latin America Growth Fund,
respectively) as of October 31, 1997 and April 30, 1998, respectively, in the
Statement of Additional Information with respect to the Post-Effective
Amendment to the Registration Statement on Form N-1A under the Securities Act
of 1933, as amended, of AIM Investment Funds, Inc. We further consent to the
reference to our Firm under the caption "Financial Highlights" in the
Prospectus and "Independent Accountants" in the Statement of Additional
Information.



                                             /s/ PRICEWATERHOUSECOOPERS LLP
                                                 PRICEWATERHOUSECOOPERS LLP

Boston, Massachusetts
August 25, 1998
<PAGE>   2


                    [PRICEWATERHOUSECOOPERS LLP LETTERHEAD]


                       CONSENT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of AIM Investment Funds, Inc. (formerly G.T.
Investment Funds, Inc.):

         We hereby consent to the inclusion of our report dated December 15,
1997 on our audits of the financial statements and financial highlights of AIM
Global Consumer Products and Services Fund, AIM Global Financial Services Fund,
AIM Global Infrastructure Fund, AIM Global Telecommunications Fund, AIM Global
Health Care Fund and AIM Global Resources Fund (formerly, GT Global Consumer
Products and Services Fund, GT Global Financial Services Fund, GT Global
Infrastructure Fund, GT Global Telecommunications Fund, GT Global Health Care
Fund, and GT Global Natural Resources Fund, respectively) as of October 31,
1997 in the Statement of Additional Information with respect to the
Post-Effective Amendment to the Registration Statement on Form N-1A under the
Securities Act of 1933, as amended, of AIM Investment Funds, Inc. We further
consent to the reference to our Firm under the caption "Financial Highlights"
in the Prospectus and "Independent Accountants" in the Statement of Additional
Information.



                                               /s/ PRICEWATERHOUSECOOPERS LLP
                                                   PRICEWATERHOUSECOOPERS LLP

Boston, Massachusetts
August 25, 1998
<PAGE>   3

                    [PRICEWATERHOUSECOOPERS LLP LETTERHEAD]


                       CONSENT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of AIM Investment Funds, Inc. (formerly G.T.
Investment Funds, Inc.):

      We hereby consent to the inclusion of our report dated December 15, 1997
on our audits of the financial statements and financial highlights of AIM
Emerging Markets Debt Fund, AIM Global Government Income Fund, AIM Strategic
Income Fund and AIM Global Growth and Income Fund (formerly, GT Global High
Income Fund, GT Global Government Income Fund, GT Global Strategic Income Fund
and GT Global Growth and Income Fund, respectively) as of October 31, 1997, and
to the inclusion of our report dated June 15, 1998 on our audit of the
financial statements and financial highlights of AIM Emerging Market Debt Fund
and AIM Strategic Income Fund (formerly GT Global High Income Fund, and GT
Global Strategic Income Fund, respectively) as of April 30, 1998 in the
Statement of Additional Information with respect to the Post-Effective
Amendment to the Registration Statement on Form N-1A under the Securities Act
of 1933, as amended, of AIM Investment Funds, Inc. We further consent to the
reference to our Firm under the caption "Financial Highlights" in the
Prospectus and "Independent Accountants" in the Statement of Additional
Information.


                                         /s/ PRICEWATERHOUSECOOPERS LLP
                                             PRICEWATERHOUSECOOPERS LLP

Boston, Massachusetts
August 25, 1998
 

<PAGE>   1
                                                                    EXHIBIT 18

                               MULTIPLE CLASS PLAN
                                       OF
                              AIM INVESTMENT FUNDS
                            AIM INVESTMENT PORTFOLIOS
                                AIM GROWTH SERIES
                                AIM SERIES TRUST

1.  This Multiple Class Plan ("Plan") adopted in accordance with Rule 18f-3
    under the Act shall govern the terms and conditions under which the Funds
    may issue separate Classes of Shares representing interests in one or more
    Portfolios of each Fund.

2.  Definitions. As used herein, the terms set forth below shall have the
    meanings ascribed to them below.

    a. Act - Investment Company Act of 1940, as amended.

    b. Advisor Class Shares - shall mean those Shares of a Fund designated as
       Advisor Class Shares in the Fund's organizing documents.

    c. CDSC - contingent deferred sales charge.

    d. CDSC Period - the period of years following acquisition of Shares during
       which such Shares may be assessed a CDSC upon redemption.

    e. Class - a class of Shares of a Fund representing an interest in a
       Portfolio.

    f. Class A Shares - shall mean those Shares designated as Class A Shares in
       the Fund's organizing documents, as well as those Shares deemed to be
       Class A Shares for purposes of this Plan.

    g. Class B Shares - shall mean those Shares designated as Class B Shares in
       the Fund's organizing documents.

    h. Class C Shares - shall mean those Shares designated as Class C Shares in
       the Fund's organizing documents, as well as those Shares deemed to be
       Class C Shares for purposes of this Plan. Class C Shares may not be
       available for each Fund.

    i. Directors - the directors or trustees of a Fund.

    j. Distribution Expenses - expenses incurred in activities which are
       primarily intended to result in the distribution and sale of Shares as
       defined in a Plan of Distribution and/or agreements relating thereto.


<PAGE>   2

    k. Distribution Fee - a fee paid by a Fund to the Distributor to compensate
       the Distributor for Distribution Expenses.

    l. Distributor - A I M Distributors, Inc. or Fund Management Company, as
       applicable.

    m. Fund - each of AIM Investment Funds, AIM Investment Portfolios, AIM
       Growth Series, and AIM Series Trust.

    n. Plan of Distribution - any plan adopted under Rule 12b-1 under the Act
       with respect to payment of a Distribution Fee.

    o. Portfolio - a series of the Shares of a Fund constituting a separate
       investment portfolio of the Fund.

    p. Service Fee - a fee paid to financial intermediaries for the ongoing
       provision of personal services to Fund shareholders and/or the
       maintenance of shareholder accounts.

    q. Share - a share of common stock or of beneficial interest in a Fund, as
       applicable.

3. Allocation of Income and Expenses.

    a. Distribution and Service Fees - Each Class shall bear directly any and
       all Distribution Fees and/or Service Fees payable by such Class pursuant
       to a Plan of Distribution adopted by the Fund with respect to such Class.

    b. Allocation of Other Expenses - Each Class shall bear proportionately all
       other expenses incurred by a Fund based on the relative net assets
       attributable to each such Class.

    c. Allocation of Income, Gains, and Losses - Except to the extent provided
       in the following sentence, each Portfolio will allocate income and
       realized and unrealized capital gains and losses to a Class based on the
       relative net assets of each Class. Notwithstanding the foregoing, each
       Portfolio that declares dividends on a daily basis will allocate income
       on the basis of settled shares.

    d. Waiver and Reimbursement of Expenses - A Portfolio's adviser, 
       underwriter, or any other provider of services to the Portfolio may
       waive or reimburse the expenses of a particular Class or Classes.

4.  Distribution and Servicing Arrangements. The distribution and servicing
    arrangements identified below will apply for the following Classes offered
    by a Fund with respect to a Portfolio. The provisions of the Fund's
    prospectus describing the distribution and servicing arrangements in detail
    are incorporated herein by this reference.

    a. Class A Shares. Class A Shares shall be offered at net asset value plus a
       front-end sales charge as approved from time to time by the Directors and
       set forth in the Fund's



                                       2
<PAGE>   3

       prospectus, which may be reduced or eliminated for certain money market
       fund shares, for larger purchases, under a combined purchase privilege,
       under a right of accumulation, under a letter of intent or for certain
       categories of purchasers as permitted by Rule 22(d) of the Act and as set
       forth in the Fund's prospectus. Class A Shares that are not subject to a
       front-end sales charge as a result of the foregoing shall be subject to a
       CDSC for the CDSC Period set forth in Section 5(a) of this Plan if so
       provided in the Fund's prospectus. The offering price of Shares subject
       to a front-end sales charge shall be computed in accordance with Rule
       22c-1 and Section 22(d) of the Act and the rules and regulations
       thereunder. Class A Shares shall be subject to ongoing Service Fees
       and/or Distribution Fees approved from time to time by the Directors and
       set forth in the Fund's prospectus.

    b. Class B Shares. Class B Shares shall be (i) offered at net asset value,
       (ii) subject to a CDSC for the CDSC Period set forth in Section 5(b),
       (iii) subject to ongoing Service Fees and Distribution Fees approved from
       time to time by the Directors and set forth in the Fund's prospectus, and
       (iv) to the extent provided for in the Fund's prospectus, converted to
       Class A Shares eight years from the end of the calendar month in which
       the shareholder's order to purchase was accepted as set forth in the
       Fund's prospectus, except that Class B Shares of AIM Series Trust which
       were acquired prior to June 1, 1998 shall convert to Class A Shares as of
       the close of business on the last business day of the month in which the
       seventh anniversary of the initial issuance of such Class B Shares
       occurs.

    c. Class C Shares. Class C Shares shall be (i) offered at net asset value,
       (ii) subject to a CDSC for the CDSC Period set forth in Section 5(c), and
       (iii) subject to ongoing service Fees and Distribution Fees approved from
       time to time by the Directors and set forth in the Fund's prospectus.

    d. Advisor Class Shares. Advisor Class Shares shall be (i) offered at net
       asset value and (ii) offered only to certain categories of investors as
       approved from time to time by the Trustees and as set forth in the Fund's
       prospectus.

5.  CDSC. A CDSC shall be imposed upon redemptions of Class A Shares that do not
    incur a front-end sales charge and of Class B Shares and Class C Shares as
    follows:

    a. Class A Shares. The CDSC Period for Class A Shares shall be the period
       set forth in the Fund's prospectus. The CDSC Rate shall be as set forth
       in the Fund's prospectus, the relevant portions of which are incorporated
       herein by this reference. No CDSC shall be imposed on Class A Shares
       unless so provided in a Fund's prospectus.

    b. Class B Shares. The CDSC Period for the Class B Shares shall be six
       years. The CDSC Rate for the Class B Shares shall be as set forth in the
       Fund's prospectus, the relevant portions of which are incorporated herein
       by this reference.



                                    3
<PAGE>   4
    c. Class C Shares. The CDSC Period for the Class C Shares shall be one year.
       The CDSC Rate for the Class C Shares shall be as set forth in the Fund's
       prospectus, the relevant portions of which are incorporated herein by
       reference.

    d. Method of Calculation. The CDSC shall be assessed on an amount equal to
       the lesser of the then current market value or the cost of the Shares
       being redeemed. No CDSC shall be imposed on increases in the net asset
       value of the Shares being redeemed above the initial purchase price. No
       CDSC shall be assessed on Shares derived from reinvestment of dividends
       or capital gains distributions. The order in which Shares are to be
       redeemed when not all of such Shares would be subject to a CDSC shall be
       determined by the Distributor in accordance with the provisions of Rule
       6c-10 under the Act.

    e. Waiver. The Distributor may in its discretion waive a CDSC otherwise due
       upon the redemption of Shares and disclosed in the Fund's prospectus or
       statement of additional information and, for the Class A Shares, as
       allowed under Rule 6c-10 under the Act.

6.  Exchange Privileges. Exchanges of Shares shall be permitted as follows:

    a. Class A Shares may be exchanged for Class A Shares of such other mutual
       funds as are disclosed in the Fund's prospectus, subject to such terms
       and limitations as disclosed in the Fund's prospectus and statement of
       additional information.

    b. Class B Shares may be exchanged for Class B Shares of such other mutual
       funds as are disclosed in the Fund's prospectus, subject to such terms
       and limitations as disclosed in the Fund's prospectus and statement of
       additional information.

    c. Class C Shares may be exchanged for Class C Shares of such other mutual
       funds as are disclosed in the Fund's prospectus, subject to such terms
       and limitations as disclosed in the Fund's prospectus and statement of
       additional information.

    d. Advisor Class Shares may be exchanged for Advisor Class Shares of such
       other mutual funds as are disclosed in the Fund's prospectus, subject to
       such terms and limitations as disclosed in the Fund's prospectus and
       statement of additional information.

    e. Depending upon the Portfolio from which and into which an exchange is
       being made and when the shares were purchased, shares being acquired in
       an exchange may be acquired at their offering price, at their net asset
       value or by paying the difference in sales charges, as disclosed in the
       Fund's prospectus and statement of additional information.

    f. CDSC Computation. The CDSC payable upon redemption of Class A Shares,
       Class B Shares, and Class C Shares subject to a CDSC shall be computed in
       the manner described in the Fund's prospectus.

7.  Service and Distribution Fees. The Service Fee and Distribution Fee
    applicable to any Class shall be those set forth in the Fund's prospectus,
    relevant portions of which are incorporated



                                       4
<PAGE>   5
     herein by this reference. All other terms and conditions with respect to
     Service Fees and Distribution Fees shall be governed by the Plan of
     Distribution adopted by the Fund with respect to such fees and Rule 12b-1
     under the Act.

8.  Conversion of Class B Shares.

    a. Shares Received upon Reinvestment of Dividends and Distributions - Shares
       purchased through the reinvestment of dividends and distributions paid on
       Shares subject to conversion shall be treated as if held in a separate
       sub-account. Each time any Shares in a shareholder's account (other than
       Shares held in the sub-account) convert to Class A Shares, a
       proportionate number of Shares held in the sub-account shall also convert
       to Class A Shares.

    b. Conversions on Basis of Relative Net Asset Value - All conversions shall
       be effected on the basis of the relative net asset values of the two
       Classes without the imposition of any sales load or other charge.

    c. Amendments to Plan of Distribution for Class A Shares - If any amendment
       is proposed to the Plan of Distribution under which Service Fees and
       Distribution Fees are paid with respect to Class A Shares of a Fund that
       would increase materially the amount to be borne by those Class A Shares,
       then no Class B Shares shall convert into Class A Shares of that Fund
       until the holders of Class B Shares of that Fund have also approved the
       proposed amendment. If the holders of such Class B Shares do not approve
       the proposed amendment, the Directors of the Fund and the Distributor
       shall take such action as is necessary to ensure that the Class voting
       against the amendment shall convert into another Class identical in all
       material respects to Class A Shares of the Fund as constituted prior to
       the amendment.

9.  This Plan shall not take effect until a majority of the Directors of a Fund,
    including a majority of the Directors who are not interested persons of the
    Fund, shall find that the Plan, as proposed and including the expense
    allocations, is in the best interests of each Class individually and the
    Fund as a whole.

10. This Plan may not be amended to materially change the provisions of this
    Plan unless such amendment is approved in the manner specified in Section 9
    above.



                                       5


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